THE FUTURE OF
BUSINESS TRAVEL
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2022 | Annual Report
Reconnect. Rebuild.
Rediscover. Reimagine.
2022 has been a year of reconnection, during which our business has demonstrated a tenacity and
appetite to rebuild, rediscover and reimagine the future of business travel; to consider how business
travel will operate and influence growth and prosperity in a post-COVID-19 environment, to redefine
the value of travel management expertise, and to redesign our service and technology offering to
meet the needs of a new and evolving travel landscape.
As travel activity returns at pace around the world, our business and employees have embraced the
‘travel reset’ by designing new and enhanced customer solutions to support safer, more sustainable
and more effective business travel.
Travel is back, and our business is primed for the
rebound – larger, stronger, more relevant and
impactful than ever before.
22
In this report
Financial Highlights
Chairman's Report
Managing Director's Report
Board of Directors
Executive Team
Sustainability Report
Financial Report
4
6
8
10
12
14
46
3
CORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022
Financial
Highlights.
$5.1B
TOTAL TRANSACTION VALUE
$388.7M
$59.8M
UNDERLYING EBITDA
$3.1M
TOTAL REVENUE AND OTHER INCOME
STATUTORY NPAT ATTRIBUTABLE TO OWNERS
$142.1M
CASH
$18.52
CLOSING SHARE PRICE
2021 ‒ 2022 Performance Highlights
Rapid acceleration in performance as COVID-19 becomes endemic
USA, EU, AU/NZ regions all profitable for the year on an underlying EBITDA basis, with 4Q22 acceleration in activity
providing strong momentum into FY23.
CTM is a much larger business post-COVID-19
Estimated to be fourth largest global travel manager in the world. Key acquisitions of Travel & Transport, Tramada,
Helloworld Corporate and Safe2Travel through the COVID-19 cycle creating transformational change. On full recovery,
the business is approximately 75% larger than pre-COVID-19 with most exposure in regions with the strongest organic
growth opportunity.
Environment primed for CTM market share gains
CTM’s customer value proposition of expert service, innovative technology and ROI is highly relevant to customers in
the complex recovery environment. Strong new client wins due to enhanced reputation in this environment.
Balance sheet strength
With no debt and $142.1 million cash, CTM has a resilient balance sheet to manage through the recovery period
and beyond.
44
Total revenue and other income generated by region
Corporate Travel Management operates across four continents and, supported by our global network of
partners, has the ability to service customers in every corner of the world.
NORTH
AMERICA
EUROPE
$83.9M
AUS/NZ
$69.8M
ASIA
$17.3M
$217.7M
$388.7M
TOTAL REVENUE AND
OTHER INCOME
NORTH AMERICA
EUROPE
56%
22%
ASIA
4%
TOTAL REVENUE
AND OTHER INCOME
TOTAL REVENUE
AND OTHER INCOME
TOTAL REVENUE
AND OTHER INCOME
AUS/NZ
18%
TOTAL REVENUE
AND OTHER INCOME
5
CORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Chairman’s
Report
Dear Shareholder
Year in review
After two years of significant operating challenges for the
Company and the travel industry globally, Corporate Travel
Management has benefited from a strong rebound in activity in all
of the markets in which government-mandated travel restrictions
have begun to ease. CTM’s flexible and resilient business model
enabled the Group to adapt quickly to the disruptions from border
closures, quarantine requirements and other travel restrictions,
while maintaining a robust financial position.
The CTM value proposition of personalised customer service and
proprietary technology has strengthened the Group’s competitive
position in supporting customers’ travel needs in the complex
and fast-changing environment resulting from the pandemic.
Combined with CTM’s global scale and financial strength, this
focus on customers resulted in the Company gaining market share
in all of its operating regions and allowed the Group to grow and
diversify through targeted acquisitions during the year. The Group
has emerged from the extraordinary challenges of the last two
years a larger, more efficient and diversified business.
The Group has emerged from the extraordinary challenges of
the last two years a larger, more efficient and diversified business.
Financial Performance
Dividend
The financial performance of the Group reflects the
significant impact from the COVID-19 operating
environment. The Group reported a statutory Net
Profit After Tax attributable to owners of $3.1 million
compared to the prior year loss of $55.4 million. Excluding
one-off or non-recurring items, underlying Net Profit
Before Tax was $22.3 million. This was a resilient
performance in the face of major volatility in corporate
travel activity, underpinned by a combination of prudent
cost management and a diversified revenue stream
from our clients globally.
The Group maintained its strong liquidity position,
finishing the year with $142.1 million in cash, no debt
and committed available facilities of $100 million at
30 June 2022. The Group’s strong financial position
enabled it to refinance its debt facilities , reduce
costs and increase flexibility.
Revenues grew through the year, accelerating in the
fourth quarter. The investment in staffing levels and in
proprietary technology positioned CTM to be able to
service its customers effectively as corporate travel activity
recovered rapidly, in all regions except Asia, where travel
restrictions in China remain in place.
In view of the Group’s performance in the final quarter of
the financial year and the outlook for FY23, the Directors
determined to pay an unfranked dividend of 5 cents per
share on 5 October 2022. It remains the Board’s policy
to provide shareholders with returns through dividends
equivalent to 50% of the Group’s Net Profit After Tax in
future periods.
Acquisitions and Capital Raising
The acquisition of Helloworld’s corporate and
entertainment travel business in Australia and New
Zealand (ANZ), which was announced on 15 December
2021, is highly complementary to CTM’s existing ANZ
operations. The acquisition gives the Group an established
presence in a number of attractive industry verticals,
including entertainment, film, music and the arts,
which are expected to perform strongly as the market
returns to more normal levels of corporate travel activity.
Since acquisition CTM has focussed on resourcing the
Helloworld corporate business creating clear cultural
alignment, offering maximum value to customers through
personalised service and technology.
The acquisition was funded by a combination of cash
6
($100 million) and CTM shares
($84.8 million) issued to Helloworld.
The cash component was funded
by a fully underwritten institutional
placement and share purchase plan.
We were delighted by the strong
support for the capital raising and
we thank our shareholders for their
participation.
The Group extended its Asian
footprint with the acquisition of
Safe2Travel in Singapore in April
2022, and the opening of a Japan
office in May 2022. These additions
will allow CTM to meet increasing
customer demand for domestic and
international travel in the region, in
anticipation of activity rebounding
once restrictions are fully lifted
across Asia.
The integration of the Travel and
Transport business, which was
acquired in October 2020, has been
largely completed. This acquisition
has given CTM an expanded footprint
in North America, the world’s largest
corporate travel market, which is now
returning to pre-pandemic levels of
corporate travel activity. CTM North
America has capitalised on this
opportunity and is leading the
Group in terms of client wins.
In July 2022, the Group acquired
1000 Mile Travel Group, a network
of independent experts specialising
in personalised SME business travel
services across Australia and the
UK. 1000 Mile Travel Group is a
complementary extension to CTM’s
services amid heightened demand
for travel expertise to support a
rapidly rebounding market.
Sustainability
As part of our growing commitment
to sustainability, CTM appointed
our first Global Head of ESG and
Sustainability during the year.
This role will assist in driving
thought leadership on ESG
principles, data collection and
focus on the material risks and
opportunities that we believe will
underpin CTM’s sustainability over
the medium to long term.
Year ahead
CTM is primed to benefit from the
recovery in corporate travel as activity
returns to pre-pandemic levels across
all of our major markets. Through the
acquisitions that have been made
over the last two years, with the
strong support of our shareholders,
and our continued investment in our
technology, people and processes,
CTM is a larger, more efficient and
more diversified business than before
the onset of the enormous disruption
caused by COVID-19.
Despite some challenges in airports
and airlines re-establishing their
operating rhythms, we also expect
that CTM will recover more quickly
than the corporate travel sector in
general. Emerging travel patterns
and customer feedback show us that
customers place a high value on face
to face connection, especially after
two years of travel restrictions. Our
value proposition of personalised
service, proprietary technology and
measurable value for customers, is
well-suited to meet this demand.
CTM continues to build its future
with prudent planning and risk
management at the centre of
business strategy, and remains
confident our business model
supports the Group’s return
to sustainable growth in
shareholder value.
On behalf of the Directors, I would
like to thank all CTM team members
for their continued efforts to deliver
personalised travel experiences for
our customers. I would also like to
thank our clients and shareholders
for your continued support.
Yours sincerely,
Ewen Crouch AM
Chairman,
Corporate Travel Management
Limited
17 August 2022
Our 2021/22 Sustainability Report
is centred around four key pillars
– Governance, Planet, People and
Prosperity – that align to our guiding
reporting framework provided by
the World Economic Forum. We
recognise the need to continue to
enhance our sustainability reporting.
Our continued success is dependent
on meeting the expectations of
our key stakeholders, including
our customers, staff, investors
and financiers. We continue to
engage with our stakeholders on
sustainability matters to understand
their views and insights as ESG
expectations and reporting standards
evolve. In the year ahead, we are also
taking concrete steps to improve key
focus areas relating to data maturity
and reporting on material issues.
People and Remuneration
The rebound in travel activity has
supported an increase in employee
numbers. It has been particularly
pleasing to welcome many former
employees back to the Group.
This is an endorsement of CTM’s
organisational culture, which is a key
differentiator for our business and a
critical part of the Group’s success.
Nevertheless, recruitment remains
a challenge across the travel
industry and is impacting the travel
experience in all markets. CTM is
implementing a range of programs
across all regions to broaden the
focus of recruitment and attract a
new generation of professionals to
the industry. The Group has also
continued to invest in improving
automation and streamlining
processes, to create greater
efficiencies and allow more time
for our people to offer personalised
service to address complex customer
service demands.
As explained in more detail in the
Remuneration Report, this year for
the first time, the Non-executive
Directors exercised discretion to
vest a tranche of the Company’s long
term share incentive plan.
This reflected both the comparative
strength of the Company’s
performance across the sector
during the last 2 years as well as
conforming the treatment
of executives and employees
between regions.
7
CORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Managing
Director's Report
FY22 has been a stop-start year with a number of COVID-19
variants restricting travel in the second and third quarters of
the financial year. However, as COVID-19 became endemic, we
experienced a rapid rebound in travel in the fourth quarter as
regional and international travel restrictions lifted at speed around
the world. Our customers and employees have embraced the
opportunity to reconnect through travel with renewed energy and
an unwavering optimism for the future of travel.
Our customers’ actions speak confidently to the value of face-
to-face connectivity in a post-COVID-19 world, with 4Q22 Group
revenue exceeding that of the same period in FY19 (pre-COVID-19).
CTM’s Global Customer Survey, conducted in May 2022, found that
80% of respondents expect to travel more or the same amount in
the coming 12 months as they did pre-pandemic.
During the pandemic, we committed to maintaining a healthy
level of service and technology resources within our businesses
to support our customers’ ongoing travel needs in a complex and
fast-changing environment. That said, resourcing remains the
travel industry’s most significant challenge.
The wider travel industry continues to face unprecedented
staffing challenges across every travel vertical, from airline
crews and service agents to baggage handlers, hospitality
staff and beyond. The knock-on effect on customer service
experiences can be felt across every customer touchpoint
and remains our number one priority as we move into the
new financial year. Our teams have delivered innovation
in our employee recruitment, training, onboarding
and retention initiatives to ensure we are attracting
and retaining the best talent in the industry. We have
implemented a range of new recruitment programs,
including ‘CTM Onboard’ and ‘CTM Academy’ to fast-track
new entrants and returning travel talent to the front-line
servicing teams in just three weeks, providing near-
immediate gains for our customers and workforce. Our
teams continue to deliver enhanced internal efficiencies
by implementing advanced automation and new
technologies across every area of business operations,
providing our employees with more time to deliver high-
touch customer service experiences.
People & Culture
CTM has emerged from the pandemic a larger, stronger
and more relevant travel provider, closing the FY22 year
with 2,855 FTE employees across four global regions.
Our people and culture are the cornerstone of CTM’s
success, and our team's ongoing commitment to
service excellence and innovation continues to ensure
our business remains agile and responsive to the fast-
changing needs of our customers and the travel industry.
Central to our People strategy is ensuring that our
workplaces and corporate culture foster a strong sense
of empowerment, collaboration and innovation whilst
supporting equality of opportunity and a healthy work-life
balance. Our employees have shown incredible resilience,
commitment and comradery through a challenging
period of physical disconnection. This year, we were
excited to welcome our teams back to our office spaces to
reconnect with peers, while continuing to support a blend
of in-office, work-from-home and remote employment to
support our employees’ and customers’ needs.
We are equally delighted to have resumed a range of
highly valued employee initiatives throughout the year,
including our CTM Star awards, face-to-face meetings,
community engagement and fund-raising initiatives,
social events, client engagement events, and our
employee engagement survey ‘The Vibe’. Employee
engagement and satisfaction is central to our ongoing
business performance, and we are pleased that our Vibe
survey results demonstrate 89% staff engagement in
all regions, with highlights being a 99% score for staff
prepared to 'go the extra mile’ for our clients and a 98%
score for both empowerment and being an inclusive
workplace with equal opportunity for all in terms of
progress and development at CTM. These results bode
well for our customers and staff into FY23.
8
Growth and Diversification
Sustainability
CTM’s financial performance
throughout the pandemic
positioned the business to
capitalise upon a number of
further strategic opportunities
throughout the year. These
include the acquisitions of
Helloworld Corporate and
entertainment businesses
(Australia and New Zealand)
and Safe2Travel (Singapore).
After the financial year, CTM
acquired 1000 Mile Travel Group, a
network of independent experts
specialising in personalised SME
business travel services across
Australia and the UK. CTM also
established an office in Tokyo,
Japan to support client growth
in the region.
These acquisitions present our
business with exciting growth and
diversification opportunities in
high performing travel verticals,
regions and operating models,
including SME business travel and
global corporate travel. Each of
these businesses, their employees
and customers will benefit from
CTM’s global buying power,
servicing capabilities, proprietary
technologies, and global network.
CTM today is estimated to be the
fourth largest corporate travel
management company in the
world. Our goal has never been
to be the biggest, but purely to
be the best travel management
provider, employer and partner
in every market we operate
in. As our company, team and
capabilities continue to expand
globally, our ability to offer
superior global servicing and
technology solutions to meet the
needs of complex global travel
programs continues to grow. In
FY22, our newly formed Global
Customer Solutions (GCS) team
developed and delivered an
enhanced service and technology
framework specifically for the
global travel program segment,
underpinned by CTM’s enviable
financial stability, global scale,
buying power, proprietary
technology and global network
to develop a truly unique offering
for global customers.
Sustainability remains a key focus
for our business, our employees,
our clients and the broader travel
industry. We are delighted to have
appointed a new role of Global
Head of ESG & Sustainability in
FY22, at a pivotal time as global
travel activity returns at speed.
Being a service industry, CTM’s
carbon footprint is relatively light.
We recognise and embrace the
opportunity we have to make
a positive impact on the planet
by putting our technology
and insights into the hands of
thousands of businesses across
the globe, to enable them to
make more informed travel
decisions. In FY22, we continued
to invest in delivering sustainable
travel solutions to our customers,
including enhanced carbon
insights, tracking and offsetting
capabilities via our online booking
tool, Lightning, as well as advanced
carbon and traveller wellness
reporting in our CTM Data Hub
reporting tools, and through
our carbon offset program in
partnership with South Pole.
In Conclusion
As we enter the new financial
year, I would like to take this
opportunity to thank the Board,
management team and all CTM
employees for their continued
commitment to excellence. Their
passion and dedication to CTM and
the travel industry remains central
to our business’s outstanding
performance in FY22 and beyond.
I also wish to thank our valued
customers, suppliers, partners and
shareholders for your ongoing
support throughout the year,
and I look forward to delivering
continued value through our
partnership in the year ahead.
Yours sincerely,
Jamie Pherous
Managing Director,
Corporate Travel Management
Limited
17 August 2022
Strategic
initiatives
The Group focused on the
following key strategic
initiatives for FY22.
Continued Organic Growth:
― Enhancing our value
proposition to meet client
needs across the CTM global
network, including a team
dedicated to the strategic
global client segment.
Technology Developments
Adapted to COVID-19:
― This included our Covid
Data Hub, carbon insights
and other enhancements to
our Lightning booking tool
to better inform clients as
they return to travel.
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.
Staff Recruitment:
― We welcomed back
approximately 950 staff
during the second half of
FY22 and invested heavily in
‘out of the box’ recruitment
programs to offer those
outside of travel the
opportunity to build a
career at CTM.
Integration in North America:
― After the acquisition of
Travel and Transport in
October 2020, our goal was
to move all clients onto one
platform and this is largely
complete, providing a
sound and scalable growth
platform into future years
for this region.
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CORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Board of Directors
Jamie Pherous
Managing Director
Jamie Pherous founded Corporate
Travel Management Limited (CTM) in
1994. He has built the Group from its
headquarters in Brisbane to become
one of the world’s largest travel
management companies.
Prior to establishing CTM, Jamie
was employed by Arthur Andersen,
now EY, as a qualified Chartered
Accountant, specialising in
business services and financial
consulting, notably in Australia,
Papua New Guinea and the
United Arab Emirates.
Sophia (Sophie)
Mitchell
Independent Non-Executive
Director
Sophie Mitchell has over 30 years of
corporate advisory, capital markets
and equity research experience. She
retired from Morgans in June 2019
after over a decade as an Executive
Director in Morgans Corporate and,
prior to this, she was Morgans Head
of Research.
Sophie now concentrates on her
Board roles and is the Chairman
of ASX-listed Apollo Tourism &
Leisure Limited. She is also a Non-
executive Director of Morgans
Holdings (Australia) Limited and the
Morgans Foundation Limited, Chair
and Independent Non-executive
Director of Healthcare Logic Global
Limited (unlisted public company –
Healthcare Software), and Chairman
of Australian Super’s Queensland
Advisory Council.
She was a Non-executive Director
of Silver Chef Limited (September
2011 – December 2019), Flagship
Investments Limited, Australia
Council for the Arts, and a
member of the Takeovers Panel
between 2009 and 2018.
Ewen Crouch AM
Chairman, Independent
Non-Executive Director
Ewen Crouch was a Partner at
Allens from 1988 – 2013. He served
as a member of the firm’s board
for 11 years, including four years as
Chairman of Partners. His other roles
at Allens included Co-Head Mergers
& Acquisitions and Equity Capital
Markets from 2004 – 2010, Executive
Partner – Asian Offices from 1999 –
2004 and Deputy Managing Partner
from 1993 – 1996. He was a director
of Mission Australia from 1995,
including as Chairman from 2009,
until retiring in November 2016.
Mr Crouch is a Non-executive
Director of BlueScope Steel Limited
(since March 2013) and Chair and
Non-executive Director of AnteoTech
Limited (since April 2022). He is a
Fellow of the Australian Institute of
Company Directors and a director
of Jawun (since September 2015).
He served as a member of the
Takeovers Panel from 2010-2015, as
a member of the Commonwealth
Remuneration Tribunal from
2015 – 2019, as a director of Sydney
Symphony Orchestra from 2009 –
2020 and as a Non-executive Director
of Westpac Banking Corporation
from 2013 to 2019.
10
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. 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 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. She is
also a Director of the Australian
Federation of Travel Agents.
Jon Brett
Independent Non-Executive
Director
Jon Brett was formerly an Executive
Director of Investec Wentworth
Private Equity Limited, and an
executive of Investec Bank (Australia)
Limited. He was also the CEO of
Techway Limited which pioneered
internet banking in Australia. Jon
brings extensive strategic, board and
management experience to CTM,
particularly in the areas of finance
and corporate advisory.
Jon is currently Executive Chairman
of Stridecorp Equity Partners,
an AFSL licensed fund manager
specialising in private equity. John is a
Non-executive Director of Mobilicom
Limited (since September 2018).
His former directorships include
Godfreys Group Limited, The Pas
Group Limited, Deputy President of
the NRMA and Vocus Group Limited
since its listing on the ASX.
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CORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Executive Team
Jamie Pherous
Managing Director
Jamie Pherous founded Corporate Travel Management Limited (CTM) in
Brisbane in 1994. He has built the Group from its headquarters in Brisbane to
become one of the world’s largest travel management companies.
Prior to establishing CTM, Jamie was employed by Arthur Andersen, now EY,
as a qualified Chartered Accountant, specialising in business services and
financial consulting, notably in Australia, Papua New Guinea and the United
Arab Emirates.
Cale Bennett
Global Chief Financial Officer
Cale Bennett joined CTM in August 2019, before becoming Global CFO in March
2021. Prior to joining CTM, Cale held senior finance roles in ASX listed entities
in the banking, entertainment, and transportation industries. Cale’s corporate
background includes five years spent as Group Treasurer of an ASX-100
company, driving a commercial approach that resulted in significant financial
outcomes. A strong interest in technology has also led Cale to both co-found
and advise start-ups in the fintech industry.
Laura Ruffles
Global Chief Operating Officer
Laura Ruffles is CTM’s Global Chief Operating 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 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.
She is also a Director of the Australian Federation of Travel Agents.
Kevin O'Malley
CEO North America
Kevin O’Malley has more than 25 years of travel industry experience, and joined
CTM from the Travel and Transport acquisition in 2020. His leadership style,
industry acumen and genuine interest in the success of clients and staff make
him an integral member of the CTM executive team. Kevin is committed to
advancing the travel industry, acting as advisory board member among several
key industry groups, and also cultivates his local community by serving on several
boards for Nebraska-based educational institutions and charitable foundations.
As CEO, North America, Kevin is responsible for ensuring the highest level of
personal service, innovation and return on investment to our customers, while
leveraging CTM’s global strategy to benefit regional clients and staff. Prior to
joining the travel industry, Kevin worked as a CPA for both Deloitte and Lutz.
12
Debbie Carling
CEO UK & Europe
Debbie Carling has worked in the travel industry for more than 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.
Greg McCarthy
CEO Australia & New Zealand
Greg McCarthy has extensive executive level experience in the travel industry
having held several leadership positions. He founded two travel management
companies in Australia, building them up from small operations to highly
successful medium-sized businesses, with a strong focus on customer
retention and superior service levels. 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
Larry Lo is responsible for the 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, Larry manages the CTM
business in Hong Kong, Mainland China, Taiwan, Singapore and Japan. He
currently serves on the Executive Committee of the Society of IATA Passenger
Agents (SIPA) and IATA Agency Programme Joint Council – Hong Kong (APJC),
and a Director of World Travel Agents Associations Alliance (WTAAA).
13
CORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Sustainability
Report
Our Purpose
Our Sustainability Strategy
Principles of Governance
Planet
People
Prosperity
Conclusion
16
18
22
28
32
36
44
1414
Driving sustainability
throughout our business
Corporate Travel Management Limited ('CTM' or 'the
Company') presents its FY22 Sustainability Report which
provides an update on progress during the year and
plans for FY23. CTM continues to work towards improving
oversight and management of sustainability issues and
risks over the long term.
CTM’s Sustainability Strategy continued to evolve in FY22 but not at the speed the Board would have liked, with the
prioritisation of shorter-term issues required to manage the disruptive impacts of COVID-19 and the challenges created
from the rapid recovery in demand in the fourth quarter.
CTM appointed a Global Head of ESG and Sustainability to oversee ESG in May 2022 who will review and oversee execution
of our global Sustainability Strategy with the support of the Board and the senior leadership team globally. In FY23, we will
focus on better defining sustainability materiality, including a deeper understanding of key stakeholders’ perspectives and
development of a relevant data set to assist monitor the execution of our Sustainability Strategy into the future.
In FY22, we measured our Scope 1, 2 and Scope 3, Category 6 – Employee Travel GHG emissions, allowing us to better
understand its carbon footprint. In FY23, we will develop Scope 1 and 2 GHG emission targets and further define and
measure our Scope 3 GHG emissions that are material to the business.
Our Sustainability Strategy has four key pillars – Governance, Planet, People and Prosperity. The following report provides
an update on FY22 achievements and developments, and an outlook for FY23 under these four pillars.
Looking further ahead, our longer-term success is dependent on meeting the expectations of our key stakeholders
including our people, clients, suppliers, industry partners, shareholders, investors and financiers. In FY23, we want to
deepen our understanding of our stakeholder expectations and adjust our Sustainability Strategy to reflect priorities.
By combining innovative thinking with long-term planning and collaboration, we are confident that we can balance
economic drivers with environmental, social and governance sustainability initiatives for the benefit of all our stakeholders.
We have drawn on the following resources to guide us in our sustainability journey:
15
CORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Our Purpose
Established in 1994, CTM’s clear purpose has remained
unchanged; that is to continue to deliver an enhanced value
proposition to our clients and their corporate travellers.
CTM’s culture is founded on the principle of empowering its people through good processes coupled with excellent
training. Our commitment to deliver a strong return on investment to clients is underpinned by intuitive industry-leading
technology and highly personalised service. The sustainability performance we deliver within CTM is inextricably linked to
our vision, mission and values, summarised below.
Our purpose is to be recognised as the global leader in travel management solutions, an innovative and inspiring company
of choice for our stakeholders which improves customer experience and brings positive change.
Our Vision
To be recognised as the global leader in travel
management solutions – an entrepreneurial, innovative
and inspiring company of choice for employees, customers,
partners and shareholders.
Our Mission
To be travel management leaders in all regions in which
we operate, using innovative technology to improve the
customer experience and bring positive change to the
market.
Our Values
Exceed to Service
Excellence is a habit
not an act
Innovate to
Generate
Innovation in thinking
and doing what
nobody else does
Trust to Succeed
Belief is what
makes a person,
team, company and
community stronger
Empowered to
Achieve
The power to make
the right decision to
achieve great results
Collaborate to
Perform
Recognise to
Reward
Through teamwork
wonderful things will
be achieved
Celebrate and
acknowledge when
we have accomplished
something special
Play to Win
People are successful
when they have fun in
what the do
16
17
CORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Our Sustainability Strategy
In developing the Sustainability Strategy, CTM has drawn
on our Purpose, Mission and Values, and focus areas based
on the World Economic Forum’s ('WEF’s') reporting pillars:
Principles of Governance, Planet, People and Prosperity.
Our Sustainability Strategy
Our Purpose: To drive environmental, social and governance sustainability principles which provide long-term
support to our business, stakeholders and the communities in which we operate.
Our sustainability
pillars
Governance
Planet
People
Prosperity
Our long-term
commitment
To provide good
governance beyond
compliance to
create long-term
value for our
stakeholders
To enable a socially
responsible
mindset to
proactively reduce
our impact on the
environment
To support our
people reach
their potential
with dignity and
equality in a healthy
environment
To deliver a positive
impact to our
stakeholders in
harmony with our
progress
Data Visibility &
Reporting
Carbon Emissions
Provide an equal
opportunity for all
Positive contribution
to employment
Our key
focus area
Accreditation &
Disclosures
Stakeholder
Engagement
Resource Efficiency
Health & Wellbeing
Community Benefits
Carbon Offsets
Skills & Development
Technology & Innovation
Our sustainability purpose is aligned to the United Nations Sustainable Development Goals (SDGs) which are the blueprint
to achieve a more suitainable future. We have identified seven that inform our objectives to deliver the greatest impact.
18
Stakeholders and
stakeholder engagement
Financiers
Employees
CTM values stakeholder engagement, which
we believe is vital to build and expand on
issues that impact our stakeholders and their
decisions, provides critical foundations for
short-, medium- and long-term strategy
and performance monitoring, and allows
resources to be targeted on key focus areas
of material importance.
CTM’s key stakeholders are illustrated in
the diagram, right.
Regulatory
Bodies
Clients
Suppliers/
Partners
Investors
The table below sets out how we engage with each of our material stakeholder groups:
Stakeholder
Engagement Methods
Employees
― Communication including business update sessions, intranet and newsletters
― Regular face to face employee and leader meetings, and monthly check-ins
― Feedback loops including our annual VIBE Surveys
― Training sessions providing awareness to sustainability strategy and initiatives
Clients
challenges for short to long-term needs
― Participation in industry events and conferences
― Direct client engagement on key focus issues and emerging business and sustainability
― Annual General Meeting and Investor roadshows
Investors (Including
Reporting Disclosures)
― Direct engagement with larger shareholders, advisors and analysts
― ASX releases, interim and full year result reporting and presentations
― Participation in investment market events and conferences
Suppliers / Partners
― Discussions, questionnaires and audits throughout the procurement process
― Direct engagement with suppliers / partners throughout the contract lifecycle
― Participation in industry events and conferences
― Modern Slavery Surveys
Regulatory Bodies
― Membership of and participation in industry associations
― Policy submissions, participation in working groups and engagement meetings
― Liaison with regulators in the jurisdictions in which we operate
― Submission of recognised sustainability rating questionnaires
Financiers
― Direct engagement
― Participation in industry events and conferences
19
CORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Materiality of
sustainability topics
Materiality identifies topics
that substantively influence
and impact the assessments,
decisions, actions and
performance of CTM and / or
its stakeholders in the short,
medium and / or long term.
Based on initial stakeholder
feedback, the following
sustainability aspects have
been identified in the
materiality diagram.
2020
Materiality Topics
Key:
Governance
People
Planet
Prosperity
Environmental
sustainability
Data privacy
and security
Climate change
and GHG emissions
Cost
effectiveness
Business
ethics
Responsible
digitisation
Responsible
procurement
Customer
satisfaction
Health, safety and
wellbeing
Anti-corruption
and bribery
Diversity and
equality
Responsible
investment and
financing
Board composition
and diversity
Responsible
and sustainable
travel
Positive
community
impact
Resource
efficiency
Policy
development
Skills
pipeline
Executive
compensation
Waste
reduction and
recycling
Colleague
attraction and
retention
Social
sustainability
Innovation and
technology
l
s
r
e
d
o
h
e
k
a
t
s
o
t
t
n
a
v
e
e
R
l
Relevant to CTM
Aligned to CTM’s Sustainability Pillars; Governance, Planet, People and Prosperity, the material issues
identified, above are discussed within this report. Consistent with our purpose and values, these material
issues are addressed in our FY23 Sustainability Strategy.
Looking ahead to FY23
In FY23, CTM will implement a focused framework to facilitate our understanding of the materiality of our
stakeholders’ short-, medium- and long-term sustainability challenges. A consistent approach to assessing
the materiality requirements of our stakeholders will be developed to meet the AA1000 Accountability
Principles and AA1000 Stakeholder Engagement Standards.
21
CORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022
Principles of Governance
CTM’s Governance model is fundamental
to achieving our long-term sustainability.
Defining and monitoring our purpose, governance framework, ethics and integrity,
and risk management framework, together provide the material governance
foundations required to create long-term value for our stakeholders.
2222
Governance framework
We recognise the importance of good corporate
governance practices which oversees the setting,
monitoring and execution of a company’s aspirations
towards effective management of economic,
environmental and social aspects and impacts.
CTM’s Board of Directors provides strategic direction
and oversight of management practices to protect and
enhance the reputation of CTM to our stakeholders.
The Board regularly reviews our governance
practices in light of CTM’s corporate governance and
industry developments, applicable legislation and
standards, as well as stakeholder expectations.
Ethics and integrity
CTM values the fundamental principles of ensuring all
business dealings and interactions with all stakeholders,
including employees, clients, customers, suppliers and
the general public are conducted professionally, legally,
ethically and with honesty and integrity at all times.
CTM’s Code of Conduct is based on that principle.
At CTM, we believe that good governance practices
are fundamental to:
― The long-term performance and sustainability of CTM
― The delivery of strategic objectives
― Contributing to the preservation and growth of
shareholder value.
Details of our Governance framework can be found within
our Corporate Governance Statement on our website.
We have annual training requirements for all staff
to ensure they understand their responsibilities
with regards to our policies and procedures
relating to Code of Conduct, Whistleblower, Anti-
Bribery and Corruption, Risk Management, Privacy,
Securities Trading, Workplace Health and Safety,
Equal Opportunity and Diversity policies.
Achievements in FY22
CTM learning portal
launched for all
compliance training
Consistent modules
delivered across the
globe
Locally specific
compliance modules
aligned to each
region’s legislation
Monthly individual
user reporting
Automated
compliance assigned
training for all new
starters
Nil CTM policy
breaches reported
Nil Whistleblower
issues
Details of our policies concerning ethical and integral conduct can be found on our website.
23
CORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Modern Slavery
Our assessment and understanding of CTM’s exposure to
Modern Slavery risks has resulted in an outcome of Very
Low – Low risk of modern slavery within our supply chain.
We will continue our efforts to ensure the network we
partner with is a market where people are never exploited.
Further details regarding our approach to Modern Slavery
risks can be found on our website.
Risk oversight
Risk management forms a core part of our
day-to-day business. The risk management framework,
which is overseen by the Audit and Risk Committee,
enables the implementation of risk management
approaches that appropriately manage different types of
risk and connect with CTM’s business plan. CTM’s senior
leadership team and management is responsible for
the identification, evaluation and monitoring of material
enterprise risks on an ongoing basis as well as embedding
a culture throughout CTM that promotes awareness of
potential exposures created by risk.
The material issues addressed in
this report were identified by CTM personnel
who engage regularly with each of our stakeholder
groups. Material aspects and impacts identified through
this process are further assessed alongside the business's
materiality analysis to further form our short-, medium-
and long-term sustainability goals and targets. Further
details on both the Audit and Risk Committee Charter and
Remuneration and Sustainability Charter
can be found on our website.
In addition to managing our own risks, we have
continued to support our clients with sophisticated risk
management tools, including traveller tracking and
emergency communications, and the CTM COVID Hub
to support our clients’ employees to travel more safely,
efficiently and cost-effectively. In support of our clients
during the post-COVID-19 environment, we have further
enhanced our COVID Hub to focus on pre-trip intelligence
and traveller preparation by providing real-time global
data and information relating to travel restrictions such as
border controls, quarantine requirements, travel permits
and destination health insights.
24
Opportunity oversight
This risk framework also enables CTM to be in a
position to capitalise on opportunities aligned with
CTM’s strategic direction, such as the acquisitions
of Helloworld Travel Limited's corporate and
entertainment brands this financial year. This
further allows CTM to expand the scale, technology
and talent our business offers to industry.
Data security and privacy
As a travel management provider, CTM collects,
uses, stores and protects large amounts
of confidential and personally identifiable
information (PII) to facilitate travel bookings and
associated travel. As such, we take information
security and privacy very seriously and have
implemented a robust information security
framework across the entire business that includes
appropriate security policies and procedures, staff
and contractor security awareness programs, and
technical security measures which are regularly
reviewed and updated.
CTM is certified to internationally recognised
security and compliance standards including
ISO/IEC 27001:2013 International Standard for
Information Security Management, Payment Card
Industry Data Security Standard (PCI-DSS) and
Service Organisational Control (SOC2).
25
CORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Performance against FY22 Governance Pillar goals
Theme
What
Initiative
Goal
Status
Governance
Data availability
Capture and report quarterly
(where appropriate) on
material items
Define the reporting framework
regarding the definition,
accountabilities, frequency of
data capture and reporting
transparency
Ongoing
1. Document a stakeholder
engagement framework
before 1H 2022
1. Engage with stakeholders to
understand what is important
to them regarding
sustainability at CTM
Complete
Governance
Stakeholder
engagement
2. Develop and perform
stakeholder engagement
surveys before Q2 2022
3. Include questions about
sustainability in The Vibe
employee survey in FY22
2. Determine how the results
from the engagement surveys
are to be used / reported
Complete
Data Security
and Privacy
Appropriate
use, storage
and protection
of confidential
information
1. No reportable breaches
Nil
Training, policies and security
measures kept up to date
2. All privacy and data security
training completed
Ongoing
3. All policies up to date
Complete
A FY22 Governance Pillar goal was to seek ISO26001:2010 accreditation – Guide to Social Responsibility. After consideration,
CTM has decided to align its operations and performance to the requirements of recognised reporting platforms to
provide our stakeholders and shareholders a robust viewpoint into CTM’s sustainability performance including business
conduct, financial risk planning and social cultures embedded within the business.
Looking ahead to FY23
CTM will continue its review of relevant policies to ensure
the correct level of governance standards are implemented
as per CTM’s values. CTM strives to continually improve its
approach to and delivery of good governance principles.
CTM will implement a rigorous Climate Risk and
Opportunity Assessment process in accordance with
the recognised Task Force on Climate Related Financial
Disclosures (TCFD) to ensure the Transitional and Physical
risks applicable to CTM are identified, disclosed and
integrated into CTM’s operating rhythm.
2626
27
CORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Planet
CTM is committed to a range
of initiatives that support
incorporating sustainability
into our business practice.
In every region we operate, we implement initiatives with
the aim to reduce our environmental footprint across every
aspect of our business. In line with our Environmental Policy,
CTM is committed to a range of initiatives that support
building sustainability into our business practices, including
the following commitments:
― Reducing our environmental footprint
― Fostering innovation through strategic partnerships
― Engaging, educating and inspiring our people to
make a difference to the environment, and
― Developing a Net Zero (carbon positive) plan.
2828
Direct impact
As well as supporting our clients and customers to reduce their carbon footprint(s), CTM actively strives to
reduce our GHG emissions as far as practicable. In FY22, our identified Scope 1, 2 and Scope 3 GHG emissions
were as follows:
Scope 1
Scope 2
Scope GHG Emissions Source
FY21
Purchase of gas for heating
NA
FY22
6 tCO2e
Scope 3 – Category 6
Employee air travel
235tCO2e
515tCO2e
Purchase of electricity
936tCO2e
1,403tCO2e
% change
NA
49.9%
119.1%
The 49.9% increase in Scope 2 emissions from the purchase of electricity reflects the growth of the business
through acquisition and the return of people to our office buildings during FY22. CTM will continue to assess
and scrutinise the property portfolio to ensure it is fit for purpose and representative of our employee needs.
CTM's Scope 3 - Category 6 GHG emissions increased with a return to business travel by our employees. 100%
of the Scope 3 GHG emissions generated by our employees’ air travel were exchanged for Carbon Credits
Units through our partnership with South Pole including investing in sustainability projects including the
Changbin and Taichung Wind Project in Taiwan, Crow Lake Wind Farm Project in the United States and the
Mount Sandy Conservation Project in Australia.
In addition to our own air travel, CTM has a direct impact on the environment from our actions and
behaviours within the offices we occupy. We continue to focus on material and resource management by
focusing on the following:
CTM's goal is for all office equipment to be treated as a resuable commodity.
― All paper, if utilised,
is recycled through
a reputable service
provider
― Packaging cardboard
is recycled through
a reputable service
provider
― All ink cartridges for
― Redundant IT
copiers and printers are
returned to be refilled
or recycled
― All kitchen items are
reusable, eliminating
single use items
equipment is recycled
through social
enterprises where
possible
― Old office furniture
and unused office
supplies are donated
where possible
As part of CTM awareness communications throughout the business, we encourage our people to actively
join environmental initiatives such as Recycling Week and Earth Hour.
Redundant IT equipment is administered through LiteHaus International.
LiteHaus International utilised these materials for repurposing, putting digital
devices in the hands of people who do not have the means to obtain these
devices across Australia, Papua New Guinea and beyond the Pacific. LiteHaus'
mission is to fight digital illiteracy, provide access to digital technologies within
underprivileged communities and, by doing so, affording
them the abilities to become leaders and succeeders in
their communities and beyond. Items not suitable for
repurposing are further deconstructed and recycled.
29
CORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Impact from our value chain
We are aware that the upstream and downstream
activities in our value chain also have an impact on the
environment. Our approach to ensure our longer-term
sustainability is to deliver innovative travel solutions which
assist our clients to achieve their own sustainability goals.
We have developed a CTM Climate+ program in
partnership with South Pole providing an ‘ecosystem’ of
services and technology solutions that help customers
improve the sustainability of their travel program.
CTM’s Climate+ program consists of an ‘ecosystem’ of services and technology solutions that help customers
improve the sustainability of their travel program by:
The CTM Climate+ Ecosystem
― Making more informed travel decisions
― Understanding the impact of these travel decisions
― Making a difference to people, communities and the environment
MORE INFORMED
DECISIONS
UNDERSTANDING
YOUR IMPACT
MAKING A
DIFFERENCE
CTM’s proprietary online booking tool (OBT) Lightning
puts the user front and centre of the travel booking
process, empowering them to make more sustainable
travel decisions with:
CTM’s Data Hub reporting tool gives customers visibility
of their travel program’s carbon footprint. Our at-a-glance
summary snapshots can be dissected down to individual
traveller, trip and supplier levels.
― Carbon Budgeting – allows companies to set carbon
― Total CO2 emissions by month
― Average CO2 emissions per trip and per traveller
― CO2 emissions by service type (air / hotel / car / rail)
and by service provider
― CO2 emissions by fare class.
budgets by region, team or individual
― CTM Greener Choice – allows a user to select the
lowest carbon footprint for air, hotel and car using
industry-leading granular calculation methods
― Ability to filter and preference car results for EV and
Hybrid vehicles
― Carbon Approvals – once carbon budgets have been
exhausted, a Carbon Approver can be assigned for
necessary trips
― Carbon Offsets – customers are invited to offset their
travel program’s carbon footprint through the CTM
Climate+ program.
30
Image courtesy of South Pole
Partnerships to improve outcomes
In FY22, CTM announced its partnership with Delta Airlines to
support a multi-year sustainable aviation fuel agreement which
will reduce lifecycle emissions by 209 metric tons of carbon
dioxide – equivalent to the amount of carbon sequestered by
256 acres of forest. CTM will continue to forge these supply partner
relationships through FY23 and beyond
to continually enhance the sustainability
performance we provide to our business and
to our clients to ensure travel related impacts
are reduced as far as reasonably practicable.
Looking towards FY23
As part of the FY23 Sustainability Strategy, CTM will strive to better
understand and manage the impact we have on the environment.
To this extent, further data maturity is required in FY23, which will
help us develop and implement clear carbon reduction objectives
and targets through a Net Zero (Carbon Positive) plan.
In FY23, CTM will deepen our understanding of our clients’ travel
needs and objectives to assist the ongoing development of
sustainable travel solutions which reduce negative environmental
impacts. We will also increase our understanding of our suppliers’
sustainability strategies to expand the range of greener travel
options for our customers.
Performance against FY22 Planet Pillar goals
Theme
What
Initiative
Goal
Climate Change
Greenhouse
Offset of carbon emissions from
100% offset all CTM employees’ travel
gas emissions
our employees’ travel
in FY22
Status
Complete
Waste Elimination
Paper usage
Decrease paper usage
Every CTM office has initiatives in place
to reduce paper use
Ongoing
Single use
items
Decrease single use items
Every CTM office has initiatives in place
to reduce the use of single use items
Ongoing
Waste Reduction
Recycling
Recycling options
Every CTM office has recycling and / or
Continual
waste reduction initiatives available
improvement
Energy / Resource
Track and
of energy and resources, including
recording system for resource
Consumption
record in FY22
electricity, gas, oil, waste and
consumption visibility across the
Identify, track and record the use
Develop and implement a data
water consumption
business by Oct 2021
Continual
improvement of
Scope 3 visibility
31
CORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 People
Our long-term creation of value is dependent
on attracting and retaining talented staff.
CTM’s People initiatives focus on diversity, health & safety, and training & development. The combination
of these initiatives alongside our remuneration structure, policy and procedure framework, and innovation focus,
underpin CTM’s workplace culture.
Employee engagement
CTM uses employee surveys and feedback loops to provide insights into workplace culture and employee engagement.
This has included comprehensive annual employee surveys (the Vibe Survey), new starter and exit surveys, informal and
formal complaint handling procedures and quick employee pulse surveys. The information gathered is used to adjust and
set our annual people and sustainability strategies to ensure we address issues which may impact on our ability to attract
and retain talented people.
In FY22, the annual Vibe Survey was completed in November 2021, with a global response rate of 75%
and an overall engagement score of 89%. Highlights include:
― 98% engagement score relating to employees feeling empowered
― 96% engagement score relating to employees understanding how they contribute to the organisation
and how they can have an impact
― 94% engagement score relating to employees recommending CTM as a great place to work
― Employees would like the short-term incentive program returned.
Areas of improvement:
― Development opportunities in these difficult times have been challenging
― Communications at the micro level and or across teams needs bolstering
― Salary reviews and incentives have been paused since the start of the pandemic
― FY23 short-term incentive program to be implemented.
3232
Each region formulated and delivered on action
plans based on their local feedback from the
Vibe Survey. We will expand the Vibe Survey in
FY23 to include additional questions relating to
Sustainability and Diversity and Inclusion, which
will assist the ongoing development of our
People Plans.
In FY22, we introduced ‘Have Your Say’ meetings
in two regions where senior leaders conducted
one-on-one feedback sessions with employees.
The purpose of these interviews is to share key
messages and receive direct feedback and ideas
from our team members. In FY23, 'Have Your Say'
will be rolled out to all regions.
Diversity, Equality and Inclusion
We understand the benefits to CTM of having
a workforce with a range of skills, experiences,
backgrounds, thoughts, beliefs and education levels
and we acknowledge the individual strengths of
each employee and the potential they bring.
There has been no material change to our
workforce mix by gender, age or tenure from FY21
to FY22. Through FY23, CTM will continue to push
the boundaries to ensure diversity targets are
continually improved and celebrated.
Our Workforce - as of 30 June 2022
72% of our employees are
and managers are female,
female and 28% male
48% of senior leaders are
67% of our team leaders
female
Knowledge, skills and
training are critical
elements in developing and
supporting a diverse team.
Knowledge, skills and training are critical
elements in developing and supporting a
diverse team. As part of our new Global Learning
Management System, we introduced enhanced
training in FY22 relating to Diversity, Equality
and Inclusion along with Unconscious Bias
and Harassment training.
Equity in relation to salary is important at
CTM, and we have processes and procedures
in place to reduce and eliminate any bias in
salary allocations.
All gender diversity reporting that is required by
authorities was provided in FY22 including under
the Australian Workplace Gender Equality Act
(WGEA) 2012, UK Gender Pay Gap Reporting, US
Equal Employment Opportunity Commission -
Employer Information Report EEO-1, and the
New Zealand Government Employment Survey.
Average age is 45
Average tenure is 6 years
33
CORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Health, safety and wellbeing
Training and development
At CTM, the health, safety and wellbeing of our people is
paramount. During FY22 the number of non-work and
work-related incidents was negligible and CTM had no
fatalities, permanent disabilities or major injuries.
The focus remained on operational, process and
compliance training, which has been critical in the
uncertain travel landscape across FY22. Leadership and
development programs will be relaunched in FY23.
Since the COVID-19 pandemic outbreak, CTM has
continued to support our employees with a variety of
initiatives promoting health and mental wellbeing within
the office and home environments. These include flexible
working arrangements, access to wellness information
via our intranet sites including mental health tips and
techniques, mental health training, health challenges
and programs, support of R U OK Day, domestic and
family violence awareness and training, and access to the
Group’s Employee Assistance Programs (EAPs). In FY22,
we introduced 'Wellness Days' for employees to take
when needed during the year to support their mental
health and wellbeing.
Through CTM’s EAP providers, CTM provides all
employees and their immediate families professional
and experienced counselling sessions where required.
Throughout FY22, globally there were 315 contacts with
our EAP providers.
During the year team members completed compliance
training across 28 topics through a variety of mediums,
such as courses, videos and audio books. All new starters
complete on-boarding training facilitated locally via our
on-demand online learning portal, which also facilitates
ongoing professional development. Throughout FY22,
19,600 learning items were launched. At CTM we
encourage our employees to be continuous learners.
In late FY22, we introduced the CTM Academy which is
designed to attract and train new people to CTM and the
travel industry. It’s an opportunity for non-industry people
to learn the ins and outs of being a Travel Consultant
through a trainer led 3-week program which is specifically
designed to allow successful candidates to enter our
business and hit the ground running as a trained Travel
Consultant. With post-course trainer support, a buddy
system and fully immersive experience, these teams will
be key to supporting future operational growth.
We have also refreshed our High Potential (HiPo) Program
and have a complete program of supported development
mapped out for FY23 to grow our high potential future
senior leaders of CTM. This program also supports females
to grow into senior leadership roles with the goal of having
at least 50% female participation in the program.
Looking towards FY23
In FY23, our goals include developing and implementing
a Diversity, Equality and Inclusion Action Plan and to
ensure targets are embedded and tracked throughout the
business. We will also progress the ongoing and delayed
initiatives summarised in the performance table.
34
Performance against FY22 People Pillar goals
Theme
What
Initiative
Goal
Status
Dignity &
Equality
Gender
equality
Continue to ensure gender
discrimination is not
present in the workplace
Data
Diversity &
Inclusion
Employee
survey
Gather relevant D&I data
from new employees
as they commence
employment with CTM
Ask employees what is
important to them in
relation to diversity
and inclusion
1. Conduct an annual review
of remuneration to ensure
performance, remuneration is
equal for males and females
Ongoing
2. Report to the Remuneration &
Sustainability Committee annually
Ongoing
3. Conduct a review of recruitment
advertising to ensure no bias
Ongoing
Implement initiatives to support
communities or charities that
resonate with our employees in FY23
Ongoing
Conduct a D&I survey with our
employees in FY22
Ongoing
Training
All employees trained in D&I
and EEO topics
100% compliance to training
Health &
Wellbeing
Health
& safety
training
Ensure all employees have
access to health & safety
training to increase awareness
100% completion of global health
and safety training course
Wellbeing
calendar
Each region has a planned
calendar of health and
wellbeing initiatives
Each region conducts a minimum
of one employee wellbeing initiative
per quarter
Talent
pipeline
Initiatives to build
a pipeline of talent
Skills for
the Future
1. Redefine key attributes and
skills needed
2. Graduate Program for operations
in each region
3. Tech Hub Graduate Program in
each region
4. Build marketing of EVP externally
in each region
Continual
improvement
towards goals
Continual
improvement
towards goals
Ongoing
Ongoing
Ongoing
Ongoing
Ongoing
HiPo
Refresh and recalibrate the
HiPo Program Q3 FY22
Refresh and relaunch the HiPo
Program in each region in Q3 FY22
Delayed -
Focused re-
launch in FY23
Employee
referrals
Refresh and relaunch CTM
Referral Program for new
employee referrals and
building positive networks
Refresh and relaunch employee
referral incentive programs in each
region Q3 FY22
Complete
35
CORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Prosperity
At CTM, we believe the core
drivers for longer-term
sustainability from a prosperity
perspective include our
contribution to employment,
wealth generation, investment
in innovation, community
participation and support,
including the payment of taxes.
3636
Despite the impacts of the pandemic, CTM remained well-placed to act on opportunities to grow our footprint, add scale
and acquire talent, evidenced by CTM’s recent acquisitions of Helloworld Travel corporate in March 2022.
Employment
The rapid return to international and domestic travel in three of our four regions has seen the Group recommence hiring
with a 25% increase in staff numbers in FY22, hiring an additional 949 people. During the year 354 people were promoted.
The table below summarises our financial year end work force by region, gender and age group.
Workforce Overview
Age Group
Australia/New
Zealand
Asia
Europe
North America
Totals
18-30
Female
Male
31-50
Female
Male
50+
Female
Male
Totals
101
28
410
162
117
48
866
5
4
128
57
59
41
294
56
29
155
90
62
55
447
36
21
352
141
682
156
1,388
198
82
1045
450
920
300
2,995
CTM focusses on retaining skilled and knowledgeable staff to provide ongoing support to our clients and our business.
Our performance target is to retain our turnover rate below 15%. During the reporting period, CTM observed an average
voluntary turnover rate of 19.67%. The high attrition rate is largely as a direct result of fatigue in the travel industry as travel
management companies continue to work through the COVID-19 related impacts from the past 27 months.
37
CORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 3838
Innovation is at the core of CTM’s purpose, value
proposition and overall sustainability performance.
Innovation of better products and services
Innovation is at the core of CTM’s purpose, value proposition and overall sustainability performance.
The proprietary technology we develop is core to our client value proposition.
As businesses adjust to the industry’s changing macro trends, we have delivered new solutions and
technologies enabling our clients to get back to business travel as quickly and safely as possible. CTM
has continued to support customers’ health, safety and wellbeing through a range of products and
services including CTM’s traveller tracking and communication tools, risk management and traveller
wellbeing reporting.
CTM will continue to invest in technology development as part of its long-term Sustainability Strategy.
$21.7M
FY22 INVESTMENT IN
SOFTWARE ASSETS
FY21
$14.5M
39
CORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Wealth generation
Despite the operational challenges created by the pandemic in FY22, we have maintained a positive cash balance and zero
drawn debt. CTM’s lenders have been highly supportive through the pandemic period, providing covenant waivers when
required and supporting the refinance of the group’s debt facility in April 2022. As of 30 June 2022, CTM holds $142m in
cash and has no drawn debt on an available facility of $100m. CTM will continue to manage its balance sheet prudently
with a focus on sustainable performance.
Further, in March 2022 CTM acquired Helloworld Travel Limited’s corporate and entertainment businesses. These
businesses have increased our business diversification and will benefit stakeholders in the future through increased client
offerings and earnings growth.
CTM has a diversified client base and monitors potential concentration of revenues by client and sector. CTM has benefited
during the pandemic from its over-weight exposure to ‘essential services’ industries who continued to travel despite
movement restrictions.
Core Metrics
Regional Economic
Contribution in FY22 (A$m)
Australia /
New Zealand
North America
Asia
Europe
Total
Economic value generated
Economic value distributed
Economic value retained
$69.8
$84.3
($14.5)
$217.7
$202.4
$15.3
$17.3
$24.2
($6.9)
$83.9
$42.4
$41.5
$388.7
$353.3
$35.4
Tax
CTM is committed to responsibly managing the Group’s compliance with its tax obligations around the world. The Group’s
approach to tax is governed by a Board-approved Tax Governance Framework. The Group has robust internal tax controls
and risk management procedures in place to enable the Group to identify and respond to any emerging tax risks.
Under the Group’s tax risk management strategy, CTM is committed to maintaining a proactive and transparent
relationship with taxation authorities in all tax jurisdictions in which the Group operates.
40
Community and social vitality
As a global business, we empower our employees to develop and deliver values which are relevant to their
specific local communities, while underpinned by our broader purpose, mission, vision and values.
In Australia, we continued our focus on raising employee awareness and understanding of traditional
cultures through our Australian Indigenous Engagement Plan. CTM recognises that by valuing Aboriginal
and Torres Strait Islander peoples’ heritage, culture and knowledge, we facilitate contribution, inclusion
and opportunity within our organisation. At CTM, we are committed to:
― Improving outcomes for Aboriginal and Torres Strait Islander people; and
― Educating and promoting inclusion within our workplaces.
Our Australian Indigenous Engagement Plan includes membership of Supply Nation for the procurement
of goods and services provided by indigenous businesses, promotion and celebration of NAIDOC Week, and
our partnership with North Queensland Cowboys House.
At CTM we have partnered with North Queensland Cowboys House, which is a facility
based in Townsville providing supported accommodation, for Aboriginal and Torres
Strait Islander students from remote communities, while attending local secondary
schools. CTM has invested $30,000 over a three-year agreement (and is in the process
of renewing this arrangement) to be a ‘friend of the house’, contributing to life-
changing education opportunities for young, remote Aboriginals and Torres Strait
Islanders.
In FY22, we grew our relationship with Cowboys House by partnering with one of
our clients, CBRE, to support Cowboys House’s new 'Tidda – Women Empowerment
Program' for First Australian Females. Tidda means ‘Sister’. Through the guidance of
the House and respected community Elders, this program's curriculum encompasses
monthly seminars focused around the following core areas.
― Women in Leadership
― Building Confidence
― Making Positive Change
― Personal Safety
― Respectful Relationships
All CTM offices globally hold fundraising events and provide employees with an annual Volunteer Day to
help support local charities.
Examples of the initiatives CTM offices have supported during FY22 include:
Region
Community Organisation
Identified Benefit
Brisbane Lions AFL Academy
To support the Brisbane Lions Academy in an ongoing
commitment to enhance the training capabilities and career
opportunities for young Queensland athletes and their
communities
Australia / New Zealand
Soldier On – Gold Pledge Partner
Funds granted, Volunteer Day and opportunities for returned
veterans to re-enter the workforce
Flying Gifts – Christmas Crusade
underprivileged indigenous children, to the Aboriginal Shire of
Partnered with Air Charter Services to provide Christmas gifts, to
Kowanyama, Queensland, Australia
41
CORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Community and social vitality (continued)
Region
Community Organisation
Identified Benefit
The Community Chest Skip
To support services for the homeless and people who live in cage
Lunch Day
homes in Hong Kong
Asia
Caring Company Award 2021/22
recognition of our commitment in caring for the community, our
CTM is awarded as one of the Caring Companies in Hong Kong in
employees, and the environment
Feimayi recycle program
To help and support many of the poorest who live in remote rural
areas in China through the donation of used clothes
Europe
Salvation Army Christmas
Present Appeal
CTM’s 9th year running where London staff donate new gifts
to the Salvation Army, which are distributed across London to
vulnerable families at Christmas
North America
Christy's Hope
Raises funds for battered women and children shelters in San
Antonio, Texas and offers domestic violence support.
Habitat for Humanity
affordable housing which strengthens families and creates stable
Helps families build and improve places to call home through
communities
American Heart Association
advance cardiovascular health for all, including identifying and
Helps fund lifesaving research and medical breakthroughs to
removing barriers to health care access and quality
Project Harmony
Focused on ending the cycle of child abuse and neglect in the
Omaha community
Performance against FY22 Prosperity Pillar goals
Theme
What
Initiative
Goal
Indigenous
Engagement Plan
Cultural awareness
Indigenous Engagement Plan
Execute and
initiatives
document plan
Status
Complete
Employment and
Employee turnover
Wealth Generation
and job creation
Employment initiatives to
attract and retain employees
at CTM
Fundraising
Support of charities / causes
Maintain voluntary turnover
at 15% for FY22
Not Achieved
Each region to complete
Delayed due
a minimum 1 fundraiser /
to ongoing
charity initiative per office per
COVID-19
Community
quarter
Volunteer Day
day a year to support a charity
All employees have access to 1
/ cause
50% of employees utilising
their Volunteer Day
Innovation of Better
Products and Services
Responsible innovation
services in a responsible way for
Further enhance technology
our stakeholders
Sustain a technology
development roadmap,
including sustainability
metrics for clients
restrictions
Not Achieved
due to
restrictions
in many
locations
Ongoing
Looking towards FY23
During FY23, CTM looks to maximise its prosperity values, including progressing the delayed initiatives summarised in
the performance table above. Further, CTM will introduce additional community-based programs and partnerships, and
continue our focus on putting best-in-class technology in the hands of our clients.
42
Materiality Index^
Section Title
Material Aspect / Discussion
Disclosure
Message from our Chairman
Defining principles and values
GR1 102-14
Message from our
Managing Director
Financial sustainability, strategy, look
ahead
About CTM
Our purpose
Our sustainability pillars
GR1 102-2, 3, 4
Stakeholders and stakeholder
engagement
Materiality of sustainability topics
GRI 102-40, 42-44
Governance framework
GR1 102-22, 24
Principles of Governance
Risk oversight
Ethics and integrity
Opportunity oversight
GR1 103-2
GR1 102-5, 15
GR1 102-15
Data security and privacy
SASB
Direct impact
GRI 302-1, 4
GHG emissions (Scope 2, 3)
GRI 305-1-3, 5, 7
Looking ahead
GRI 306-1-4
Impact from our value chain
TCFD, CDP-Climate
# and % of demographics
GRI 102-8, 9
# and % of local employment
GRI 401-1
# and % of gender equality
GRI 405-1, 2
# and % of women in workforce
SASB
Planet
People
Page in this
Report
6
8
16
18
19
20 - 21
22 - 23
23
24
25
25
29
29
31
30
33
37
33
33
# and % of indigenous people in
the workforce
GRI 102-2
Not
reported
Health and safety
GRI 403-2-4, SASB
Training, development and
talent management
Employee demographics
and breakdown
Indigenous engagement
Prosperity
Wealth generation
Innovation of better products
and services
Community and social vitality
GRI 404-1-3
SASB HC 101
GRI 405-1, 2
GRI 413-1, SASB
GRI 414-1, 2
GRI 102-2,
GRI 201-1, 2
Innovation
GRI 202-2
GRI 413-1, 2
CTM's GRI General Disclosures Focus
GRI 102-50-52
34
34
37
41
40
39
41
43
^Where a particular GRI Code has not been identified or applicable, the relevant discussion of each Material Aspect has been identified as important aspects
of sustainability performance within the World Economic Forum Principles of Governance, and/or Sustainability Assurance Standards Board (SASB) and the
Australian Stock Exchange (ASX) Corporate Governance Principles and Recommendations.
43
CORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Conclusion
Through the turbulence created by the
pandemic for much of FY22 followed by
a rapid return in demand for business
travel, there has been a delay in
realising the full potential of our FY22
sustainability objectives as identified
within this report.
Our commitment to improving our management of risks to our longer-term
sustainability is underpinned through the appointment of a Global Head of ESG
and Sustainability. The sustainability focus in FY23 will include a review of our
Sustainability Strategy and collection of the data required to measure our progress
in future years. We will also continue to expand our support of our customers’
sustainability ambitions.
Through our ongoing commitment to proactive management of our
environmental footprint, CTM has improved its visibility of Scope 1 and 2 GHG
Emissions in FY22, and in FY23 the goal is to identify the full extent of our material
Scope 3 footprint. CTM plans to further reduce our direct and indirect GHG
emissions for both customers and employees through effective partnerships and
delivery of innovative business and technology initiatives. Our understanding
of our climate risks and opportunities will be undertaken aligned to TCFD
methodology, with our goal to develop a Carbon Positive program.
Our people are at the heart of our value creation for our stakeholders.
We will continue to listen to our people through employee feedback loops to
help strengthen workplace culture, including health and safety and diversity,
equality and inclusiveness. In FY23, we will further invest in our people through
leadership and development programs.
4444
At CTM, our purpose
includes the commitment
to creating and delivering
long-term value for
all our stakeholders
by contributing to
the economic growth
and prosperity of the
communities in
which we operate.
45
CORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Financial
Report
Directors’ Report
Corporate Governance
Remuneration Report
Auditor's Independence Declaration
Consolidated Financial Statements
Consolidated Statement of Profit or
Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated
Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Shareholder Information
Corporate Directory
47
58
59
79
80
81
82
83
84
85
141
142
149
151
46
Directors' Report
The Directors present their report, together with the consolidated financial statements, on the consolidated entity
(referred to hereafter as the 'Group', or 'CTM') consisting of Corporate Travel Management Limited (referred to hereafter as
the 'Company' or the 'parent entity') and the entities it controlled at the end of, or during, the year ended 30 June 2022.
Directors
The following persons were Directors of CTM during the
financial year and up to the date of this Directors' Report,
except as otherwise stated.
― Ewen Crouch AM (Chairman, Independent Non-
executive Director).
― Sophie Mitchell (Independent Non-executive
Director).
― Jon Brett (Independent Non-executive Director).
― Jamie Pherous (Managing Director).
― Laura Ruffles (Executive Director).
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
There were no dividends paid during the current
reporting period. Since 30 June 2022, the Directors have
recommended the payment of an unfranked, final
ordinary dividend of 5.0 cents per fully paid share, 0%
franked, to be paid on 5 October 2022 out of retained
earnings at 30 June 2022.
There were no dividends paid, recommended, or
determined for the previous reporting period.
Review of operations
The Group continued to engage in its principal activity,
the provision of travel services, the outcome of which is
disclosed in the following financial statements.
Corporate Activity
The Group acquired 100% of Helloworld Travel Limited's
(ASX: HLO) corporate and entertainment travel businesses
(‘HLO Corporate’) with effect from 31 March 2022 for
consideration of $188.9 million. HLO Corporate operates
across Australia and New Zealand, specialising in travel
agency services for the corporate market. The acquisition
builds on CTM’s existing core as a global specialist
corporate travel management firm and brings new
capability to the Group, expanding CTM’s reach into
entertainment and conference-related travel.
On 29 April 2022, the Group acquired 100% of the shares
of Universal Advisory Pte Ltd, which owns 96.5% of
Safe2Travel Pte Ltd (together, Safe2Travel), a corporate
travel management company based in Singapore.
The cost of the acquisition was $4.7 million. There is
no earn-out consideration payable.
CTM completed two capital raisings during the year, an
underwritten institutional placement in December 2021
and a share purchase plan in January 2022. These raised a
total of $100 million with 4,761,906 shares issued at $21.00.
These proceeds, in addition to a further 3,571,429 shares
issued directly to Helloworld Group Pty Limited, were used
to fund the acquisition of the HLO Corporate business. The
shares issued directly to Helloworld Group Pty Limited are
subject to escrow until 31 March 2023.
The Group's syndicated debt facility, which was due to
expire in July 2022, was refinanced in April 2022. The new
facility expires in July 2025 and provides the Group access
to up to $100 million of debt funding. The refinance has
reduced the Group's total available bank debt limits by
approximately $10.6 million which was considered
surplus to requirements.
Group financial performance
The Group's statutory profit after tax of attributable to
owners for the financial period amounted to $3,101,000
(FY21 loss: $55,351,000), while underlying EBITDA increased
to $59,805,000 in FY22 from a loss of $7,249,000 in FY21.
The COVID-19 pandemic continued to impact the Group’s
results in the first three quarters of the financial year,
particularly with the emergence of the Delta and Omicron
COVID-19 variants. In the fourth quarter, the virus became
endemic in all of the Group's operating regions except
Asia, resulting in an easing of travel restrictions across the
world. Travel demand and supply increased globally as a
result, enabling a dramatic improvement in the Group’s
financial performance. Strong travel demand increased
ticket prices globally, impacting revenue yields. The
reconciliation of underlying EBITDA to profit/(loss)
before income tax from continuing operations is set
out in note 3 'Segment reporting' in the consolidated
financial statements.
Transformational acquisitions, investment in technology,
and strategic cost management have enabled the
business to recover strongly through enhanced scale,
technology, integrated automation, and an increasingly
attractive value proposition for customers in an ongoing
complex environment.
The Group has remained profitable on a monthly
underlying EBITDA basis throughout FY22.
The Group maintains a strong balance sheet with no debt
and cash of $142,054,000 as at 30 June 2022, including
$15,523,000 of client cash. Outstanding bank guarantees
reduced from $19,595,000 at 30 June 2021 to $17,746,000
as at 30 June 2022.
47
CORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Underlying EBITDA to Statutory Net Income Before tax Reconciliation ($M)
Comprehensive underlying EBITDA
Acquisition costs
Integration costs
COVID-19 Bad and doubtful debts
Statutory EBITDA
Add total EBITDA non-recurring costs
Finance costs
Depreciation and amortisation
+0.6
48.2
59.8
(3.3)
(8.9)
+11.6
(2.3)
(35.2)
Underlying net income before income tax from continuing operations
Less: total EBITDA non-recurring costs
Amortisation - client contracts and relationships
(9.2)
Net income before income tax from continuing operations
1.5
22.3
(11.6)
Regional operations
The key financial results are summarised in the following tables.
Consolidated Group
Reported AUD
TTV
Revenue
Total revenue and other income
Underlying EBITDA
Underlying EBITDA as % of Revenue
Underlying profit/(loss) before income tax/(benefit)
Australia and New Zealand
Reported AUD
TTV
Revenue
Total revenue and other income
Underlying EBITDA
Underlying EBITDA as % of Revenue
Underlying loss before income tax/(benefit)
2022
$'m
2021
$'m
Change
5,070.8
1,609.4
377.4
388.7
59.8
15.8%
22.3
2022
$'m
1,011.9
66.5
68.3
11.9
17.9%
(3.7)
174.0
200.5
(7.2)
(43.6)
2021
$'m
442.8
34.6
42.0
7.7
22.3%
(3.0)
215%
117%
94%
Change
129%
92%
63%
55%
The opening of state borders and the removal of travel restrictions throughout FY22 led to a pickup in ANZ activity
and resulted in a year-on-year increase in total revenue and other income of 63% and underlying EBITDA of 55% to
$11.9 million. Impacts from the Delta and Omicron variants of COVID-19 were significant over the first three quarters of
FY22, with rapid recovery from the middle of March 2022. Despite the volatility, the ANZ region’s results were supported by
its strong domestic business and exposure to essential travel clients.
s
t
s
o
c
g
n
i
r
r
u
c
e
r
-
n
o
n
A
D
T
I
B
E
s
t
s
o
c
g
n
i
r
r
u
c
e
r
-
n
o
n
T
B
P
48
Directors' ReportContinued
As travel restrictions eased, particularly in the second half of FY22, the region witnessed a rapid increase in demand across
its entire client base. This rapid increase in activity has challenged the business, with a corresponding focus on increasing
staff numbers to service clients. The ANZ region is deploying creative and innovative approaches to increasing front-line
staff in order to enable the business to service the customer base cost-effectively.
The acquisition of HLO Corporate positively impacted revenue and underlying EBITDA for the region following completion
on 31 March 2022. The period post-acquisition was challenging as we sought to increase customer experience to levels
consistent with CTM’s business, under demand conditions not seen since 2019. The acquisition builds further scale in the
ANZ region, increasing customer diversification and expanding expertise in the areas of entertainment and conference-
related travel. The HLO Corporate business also provides an opportunity for the Group to further expand its specialist
government servicing capability through the Whole of Australian Government contract.
North America
Reported AUD
TTV
Revenue
Total revenue and other income
Underlying EBITDA
Underlying EBITDA as % of Revenue
Underlying profit/(loss) before income tax (benefit)
2022
$'m
2,301.9
213.3
217.7
27.2
12.8%
4.9
2021
$'m
755.5
92.7
96.0
(10.7)
(29.9)
Change
205%
130%
127%
Total revenue and other income increased by 127% to $217,700,000 in North America, driving the region to positive
underlying EBITDA of $27,200,000 in FY22. The Delta and Omicron variants of COVID-19 impacted the business through
the first three quarters of FY22. Increases in staff numbers in the fourth quarter of FY21 resulted in excess staffing in
the first half as activity was further impacted by COVID-19. To ensure stability and service levels for the recovery, the
decision was made to maintain staff numbers despite the temporary impacts on activity caused by Delta and then
Omicron. This proved the right decision, as travel restrictions were removed in the fourth quarter and travel demand
increased significantly.
Management in North America was focused on client integration activities throughout the year to achieve the Travel and
Transport acquisition synergies. As at 30 June 2022, the Travel and Transport acquisition integration is materially complete.
The region leads the Group in terms of client wins as increased scale and profile following the acquisition have changed
the business' market relevance. One brand, one technology stack, and one operational system enable improvements in
process simplicity and client serviceability. Ultimately, this will lead to improved scalability for the North America region.
Asia
Reported AUD
TTV
Revenue
Total revenue and other income
Underlying EBITDA
Underlying loss before income tax/(benefit)
2022
$'m
312.3
14.5
17.3
(3.0)
(9.0)
2021
$'m
23.9
8.5
18.9
(5.4)
(9.0)
Change
1,207%
71%
(8%)
Revenue in the Asia region is principally derived from international travel with ongoing cross-border travel restrictions
resulting in subdued trading activity throughout the period. Whilst revenue of $14.5 million was 71% higher than the
previous corresponding period, total revenue and other income fell 8% to $17.3 million as government employment
subsidies were removed. The region continued to maintain a cost focus to limit business losses during this low travel
activity period. Continued lockdowns in China, as that country pursues a COVID-19 eradication strategy, have had flow-on
impacts throughout the region and on travel into the region.
Pleasingly, the removal of travel restrictions in Singapore in the latter part of FY22 has seen a rapid recovery in travel in that
country. Whilst historically Singapore has made a small contribution to Asia’s overall activity, the acquisition of Safe2Travel,
a Singapore-based agent, was completed on 29 April 2022, increasing Singapore's contribution to the Asia region.
49
Directors' ReportContinuedCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Europe
Reported AUD
TTV
Revenue
Total revenue and other income
Underlying EBITDA
Underlying EBITDA as % of Revenue
Underlying profit before income tax (benefit)
2022
$'m
1,444.7
83.0
83.9
37.4
45.1%
34.5
2021
$'m
387.3
38.2
42.0
10.1
26.4%
7.4
Change
273%
117%
100%
270%
366%
Europe’s performance in the early part of FY22 continued to benefit from project work, notably the Group’s contracts
to support the UK government’s initiatives relating to COVID-19. Whilst project-related work continued throughout the
year, the COVID-19 projects were completed and restrictions were eased in the UK late in 1H22, at which time a return to
corporate travel activity commenced, notably in domestic travel. Testing requirements for European travellers into the
United States were removed in June 2022, reducing impediments to recovery on the lucrative Transatlantic route. Sourcing
appropriately qualified employees has been a key concern for the Europe regional team in the second half of FY22 as low
unemployment and a broad-based travel recovery have stretched existing resources.
Group Financial Position
The Group continues to maintain a strong financial position, with net current assets of $62,188,000 and total equity
of $1,081,385,000. At 30 June 2022, the Group had no interest-bearing liabilities (2021: nil), excluding lease liabilities.
Dividends
The Board determined a final dividend of 5.0 cents per share, given the Group's financial performance, the strength
of the financial position, and the Group's confidence in the recovery path.
Earnings per share for profit/(loss) from continuing operations attributable to the ordinary equity
holders of the Company
Jun 2022
Jun 2021
2.2
2.2
(43.0)
(43.0)
- Basic EPS (cents per share)
- Diluted EPS (cents per share)
Strategy and future performance
The Group's operating model is focused on the corporate
travel market and our client value proposition combines
personalised service excellence with market-leading
technology. In FY22, the Group continued to focus on its
key strategic drivers being:
― sustainably expanding our global operations, driving
organic growth through operational excellence and
leveraging our technology platforms;
― retaining current clients and winning new clients
through our client value proposition;
― development and deployment of innovative
technology and digital initiatives with a focus
on delivering an improved customer experience
and internal productivity;
― capitalising on our scale and global network to
develop and optimise supplier performance for
our clients;
― continuing to seek selective opportunities for
mergers and acquisitions where it represents strong
value and aligns with the Group’s strategic goals;
50
― Integrating past acquisitions and leveraging niche
expertise throughout the global business; and
― staff empowerment to make service decisions
that drive high staff engagement and client
satisfaction outcomes.
In the financial year ending 30 June 2022, the Group
executed these strategic drivers. Notwithstanding the
unprecedented conditions and challenges presented by
travel restrictions arising from COVID-19 and the recovery
from the impact of those restrictions, the Group managed
a strong client retention outcome. Further, we used our
technology to drive enhanced servicing to assist and
support travellers.
The Group intends to continue to pursue the opportunity
to sustainably expand our global operations, drive
organic growth, and leverage our technology platforms.
Additionally, the Group continues to seek merger and
acquisition opportunities in niche travel sectors or which
complement our existing business and/or geographic
footprint.
Directors' ReportContinued Material business risks
General economic conditions
The Group’s operating and financial performance is
influenced by a variety of general economic and business
conditions globally. A prolonged deterioration in general
economic conditions (both globally and regionally)
including a decrease in consumer and business demand,
is likely to have a material adverse impact on the Group’s
operating performance through a reduction in corporate
travel, including airline, hotel, and hire car reservations,
and business or trade conferences. This risk is heightened
in the current uncertain economic environment.
At some point in time the markets in which the Group
operates will have economic downturns of differing
severity and duration, which could affect the desire
of people to travel in those markets. This would impact the
operating and financial performance of the Group.
There are also other changes in the macroeconomic
environment that are beyond the control of CTM and may
be exacerbated in an economic recession or downturn.
These include, but are not limited to:
― changes in inflation, interest rates, and foreign
currency exchange rates;
― changes in employment levels and labour costs,
which will affect the cost structure of the Group;
― changes in aggregate investment and economic
output; and
― other changes in economic conditions which may
affect the revenue or costs of the Group.
To mitigate these risks, the Group maintains a resilient
business model with a diverse portfolio of customers
across multiple jurisdictions and industries, which reduces
the reliance on any one specific geography or customer.
The potential material business risks that could adversely
affect the achievement of the Group’s business strategies
and financial prospects in future years are described
below. This section does not purport to list every risk
that may be associated with the Group’s business now
or in the future. There is no guarantee or assurance that
the importance of these risks will not change, or other
risks emerge. While the Group aims to manage risks in
order to minimise adverse impacts on its financial and
reputational standing, some risks are outside the control
of the Group.
Travel industry disruption
The Group’s financial prospects are dependent on the
strength of the travel industry generally. A decline in the
domestic and/or international travel industry, whether as
a result of a particular event (such as war, terrorism, health
epidemic/pandemic or a natural disaster), economic
conditions (such as a decrease in business demand),
geopolitical conditions, or any other factors, will likely
have a material adverse effect on the Group’s business,
financial condition, and operations.
The COVID-19 pandemic has caused unprecedented
disruption to the travel industry as a result of government-
imposed travel restrictions, border closures and
quarantine requirements. This has resulted in a significant
detrimental impact on corporate travel services and as a
result, the Group’s earnings since March 2020.
Whilst the impact of COVID-19 is rapidly subsiding, there
is no certainty that the demand for the Group’s services
will normalise to a level existing prior to the impact of
COVID-19, or how long such a return might take. The
Group is leveraged to domestic travel and is able to
operate a high-performing domestic-only business until
international activity recovers fully.
The diversification of the Group’s businesses across
multiple jurisdictions and a diverse portfolio of customers,
including exposure to essential travel clients, provide the
Group with greater resilience when there are disruptions
to the travel industry. The Group’s ‘capital light model’
allows the Group to rapidly re-size the business and
reduce costs while maintaining a high-quality product
and service offering to customers. The combination of the
Group’s resilient business model and the actions taken
to respond to COVID-19, including strong cost control,
securing debt covenant waivers and preserving liquidity
have helped to mitigate the impact of COVID-19.
51
Directors' ReportContinuedCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Supplier risk
The Group’s business model, financial prospects and
operations are reliant on mutually beneficial contractual
arrangements with a number of third-party suppliers,
including airlines, rail travel providers, and global
distribution system providers. The Group cannot be
certain that contracts with third-party suppliers will be
renewed or the terms on which they may be renewed.
If contracts are not renewed, or are renewed on terms that
are less favourable than current arrangements, there is a
possibility that this would result in the Group being unable
to generate earnings equal to those historically generated
by those contracts.
A variety of credit risks are inherent in the Group’s supply
chains, particularly heightened in the current economic
environment. To the extent suppliers are facing financial
stress, they may seek to change the terms upon which
they engage with the Group or, in some cases, may not
pay their debts as and when they fall due. Receivable
balances are actively monitored on an ongoing basis and
where issues are identified, appropriate actions are taken
to mitigate the Group’s exposure to bad debts.
Persistent global personnel shortages create a risk that
supplier capacity is reduced for an extended period.
Contractual arrangements with suppliers are based on
the volume of transactions. Should supply capacity be
impeded for an extended period, the Group may not
generate earnings equal to those historically generated
under supply contracts for that period.
Client risk
The Group’s operating and financial performance is
dependent upon client satisfaction, loyalty, and the
specific travel markets in which the Group operates.
As a result of unprecedented travel interruptions, the
Group cannot be certain that clients will engage in any
minimum level of travel activity, or that contracts with
clients will be renewed, or the terms on which they may
be renewed. If contracts that account for material travel
activity are not renewed or are renewed on terms that
are less favourable than current arrangements, there is a
possibility that this would result in the Group being unable
to generate earnings equal to those historically generated
by those contracts. This may result in impairment of the
carrying value of those client contracts, if any. Further,
any diminution in client satisfaction, client experience,
or client perception of the travel environment may have
an adverse impact on the financial performance and
position of the Group.
To mitigate this risk, the Group has a diverse mix of quality
clients with exposure to a wide variety of industries. For
example, many of CTM’s essential travel clients, including
government, healthcare, mining, fly-in, fly-out, fisheries,
construction and infrastructure have continued to travel
during the COVID-19 pandemic. Further, CTM’s proprietary
client-facing technology delivers CTM the ability to swiftly
deploy software updates to meet changing client needs
and expectations.
Financing risk
The Group is exposed to risk relating to the cost and
availability of funds to support its operations, including
changes in interest rates and foreign currency exchange
rates, counterparty credit risk, and liquidity risk, all of
which could impact its financing activities.
Refer to note 20 'Financial risk management'.
Foreign exchange risk
The Group operates internationally and is exposed to
foreign exchange risk. The Group uses foreign exchange
spot and forward contracts to manage its net risk position.
At times, the Group also uses its multi-currency debt
facility allowing for borrowings in relevant currencies to
provide an offset to the revaluation of foreign currency
assets or future foreign currency earnings. However,
notwithstanding these measures, the movement of
foreign exchange rates could still have an adverse effect
on the Group’s operating and financial performance.
Refer to note 20 'Financial risk management'.
Taxation risk
Changes in tax law, or changes in the way tax law is
interpreted in the various jurisdictions in which the Group
operates, may impact the tax assets and liabilities of the
Group. There can be no assurance that these tax laws
or their interpretation in relation to the Group will not
change, or that regulators will agree with the tax position
the Group has adopted.
The Group regularly reviews its operating business model
and strategies to take account of changes in tax law and
changes in the way tax law is interpreted, which may
impact the Group.
52
Directors' ReportContinued Information Technology
Competition
The Group relies on both its outsourced technology
platforms and develops its own software internally.
Whilst all third party systems are licensed, any failure or
disruption to the supply or performance of these systems
may have an immediate and a longer term impact on
the Group’s operations, client and supplier satisfaction
and company performance, which may have an adverse
impact on the financial performance of the Group.
The Group manages this risk by having system
redundancy, other back-up measures, security, and
monitoring programs in place. However, there can be
no assurance that the Group’s mitigation arrangements
will be sufficient to prevent the risk of significant
systems failure.
Cybersecurity and data protection
The protection of client, employee, third party, and
company data is critical to the Group’s operations. The
Group has access to a significant amount of client,
employee, and third party information, including in
its database of clients. There is a risk of failure in the
Group’s operations or material financial loss as a result
of cyber-attacks. Any unauthorised access to the Group’s
information technology systems (including as a result
of cyber-attacks, computer viruses, malicious code, or
phishing attacks) could result in the unauthorised release
or misuse of confidential or proprietary information of
the Group, its employees, or clients, which may lead to
reputational damage, regulatory breaches, financial
penalties, litigation, and compromised relationships with
clients. Further, cyber-attacks or disruption in relation
to suppliers may impact the Group’s operations. For
example, a disruption in relation to airline operators could
cause significant disruption to travel schedules which
may result in the Group being unable to provide certain
services during that period or providing an inferior service.
This may have an adverse impact on the operating and/
or financial performance of the Group. The legal and
regulatory environment surrounding information security
and privacy is increasingly complex and demanding.
The Group has monitoring programs and systems in
place to monitor and identify potential threats. It also
utilises third party expertise from technology partners
and maintains support arrangements for cyber incident
response and recovery. The Group also holds a cyber
breach insurance policy.
The Group operates in a competitive market, and the
Group’s business is subject to competition from existing
and new entrants and business models. Technological
innovation is challenging entire business models and
causing disruption to industry structures. Technological
developments have therefore increased, and will continue
to increase competition to the Group’s businesses. Also,
current competitors or new competitors may become
more effective.
If the Group does not adequately respond to competitive
forces, this may have an adverse effect on operational
and/or financial performance. A sustained increase in
competition from new entrants may result in a material
failure to grow, decline in profitability, or a loss of
market share.
The Group aims to continually improve its product
and service offering to attract and retain customers.
Talent
The Group relies on the talent and experience of its
directors, key senior management, and staff generally.
The loss of any key personnel could cause disruption to
the conduct of the Group’s business in the short-term
and may have a material adverse impact on the Group’s
operations and/or financial performance. It may be
difficult to replace key personnel or to do so in a timely
manner or at a comparable expense. The Group regularly
reviews its succession planning to ensure that key
personnel risk is identified and managed. Furthermore,
as the industry recovers from a period of global travel
disruption, it may be difficult to attract and retain staff in
the volumes required to service customers effectively.
Acquisitions and integration
From time to time, the Group examines new acquisition
opportunities in all of the regions in which it operates. Any
future acquisitions would cause a change in the sources
of the Group’s earnings and result in variability of earnings
over time. There is a risk that the integration of new
businesses may result in the Group incurring substantial
costs, delays, or other challenges in implementing
its strategy for any acquired businesses, which could
negatively impact the Group’s operations, profitability,
and/or reputation. Further, the financial performance
of investments and the economic conditions they
operate within may result in impairment of investments
or goodwill should the recoverable amount of the
investment fall below its carrying value.
53
Directors' ReportContinuedCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Impairment risk
The Group assesses whether there is any indication
that an asset may be impaired on an ongoing basis.
Annually, or when an indicator of impairment exists,
the Group makes a formal estimate of the recoverable
amount. When the carrying amount of an asset exceeds
its recoverable amount the asset is considered impaired
and is written down to the recoverable amount. Adverse
outcomes of some of the risk factors listed above, and in
particular if market conditions continue to deteriorate,
as well as new developments which are not currently
apparent, could trigger an impairment and have a
negative impact on the reported financial result of
the Group.
Refer to note 25 'Impairment testing of goodwill'.
Litigation risk
While the Group is not currently engaged in any
material litigation or disputes, it remains exposed to
possible litigation and dispute risks, and this risk may
be heightened having regard to the current volatility in
global economic markets. A member of the Group may
be subject to litigation in the course of its business, in
each of the jurisdictions in which it operates, including
commercial, contractual or client claims, injury
claims, employee claims, indemnity claims and
regulatory disputes.
Even if the Group is ultimately successful in defending
claims against it (or in pursuing claims made by it),
reputational harm may be inflicted and substantial legal
and associated costs may be incurred that may not be
recoverable from other parties, which may have a
material adverse impact on the Group’s financial
position and performance.
Any litigation, disputes or investigations that arise from
time to time are proactively managed by the Group with
a view to protecting CTM’s financial position as well as its
reputation and ongoing business.
Political and social risk
The Group has global operations. The ability of the Group
to conduct business in the countries in which it operates
long-term, is uncertain. Regional, political or social
instability could negatively impact the Group’s revenue
streams and ultimately, its financial performance.
The diversification of the Group’s businesses across
multiple jurisdictions and a diverse portfolio of customers
provides the Group with greater resilience if regional,
political or social instability arises.
Significant changes in the state of affairs
There were no significant changes in the state of
affairs of the Group during the financial year.
Events since the end of the financial year
Refer to note 36 'Events after the reporting period'.
On 1 July 2022, Corporate Travel Management Group
Pty Ltd, a subsidiary of the Company, acquired a 100%
ownership interest in 1000 Mile Travel Group Pty Ltd. 1000
Mile Travel Group is an Australian-based supplier of travel
management solutions. Consideration paid to the vendors
for the acquired shares amounted to $6,787,000 and
constituted cash consideration of $4,784,000 plus 106,336
new fully paid ordinary shares in the Company. The fair
value of the equity consideration was $2,003,000 based on
the closing share price on 1 July 2022 of $18.84.
Purchase price accounting for the acquisition of 1000 Mile
Travel Group will be completed and disclosed during FY23.
Likely developments and expected
results of operations
The Group's global footprint, diverse client pool,
technology assets, and strong cost management has
enabled a strong underlying EBITDA result in FY22.
The Group is well-positioned to grow our business
organically as travel activity continues to recover from
the impact of COVID-19.
Details that could give rise to likely material detriment to
the Group, for example, information that is commercially
sensitive, confidential or could give a third party a
commercial advantage, have not been included in
this report.
Environmental regulations
The Group has determined that no particular or significant
environmental regulations apply to its operations.
The Directors have considered climate-related risks and
have determined there is not an associated material risk
to the Group's operations or any amounts recognised
in the financial statements. The Group continues to
monitor climate-related and other emerging risks and
their potential impact on the financial statements.
Refer to the Group's FY22 Sustainability Report for
additional information.
54
Directors' ReportContinued Information on Directors
Particulars of the skills, experience and special responsibilities of the Directors in office as at the date of this report are set
out below.
Mr Ewen Crouch AM BEc (hons.), LLB, FAICD
Mr Jamie Pherous BCom
Executive Director, Managing Director since May 2008
Experience and expertise:
Jamie Pherous founded Corporate Travel Management
in 1994. He has built the Group from its headquarters
in Brisbane to become one of the world’s largest travel
management companies.
Prior to establishing CTM, Jamie Pherous was employed
by Arthur Andersen, now EY, as a qualified Chartered
Accountant, specialising in business services and financial
consulting notably in Australia, Papua New Guinea, and
the United Arab Emirates.
Other current directorships:
Nil
Former directorships (last 3 years):
Nil
Special responsibilities:
Managing Director
Interests in shares:
17,500,000 Ordinary shares in Corporate Travel
Management Limited
Independent Non-Executive Director – Chairman since
March 2019
Experience and expertise:
Ewen Crouch was a Partner at Allens from 1988 – 2013.
He served as a member of the firm’s board for 11 years,
including four years as Chairman of Partners. His other
roles at Allens included Co-Head Mergers & Acquisitions
and Equity Capital Markets from 2004 – 2010, Executive
Partner – Asian Offices from 1999 – 2004 and Deputy
Managing Partner from 1993 – 1996. He was a director of
Mission Australia from 1995, including as Chairman from
2009, until retiring in November 2016.
Mr Crouch is a Non-executive Director of BlueScope
Steel Limited (since March 2013) and Chairman and
Non-executive Director of AnteoTech Limited (since April
2022). He is a Fellow of the Australian Institute of Company
Directors and a director of Jawun (since September 2015).
He served as a member of the Takeovers Panel from
2010-2015, as a member of the Commonwealth
Remuneration Tribunal from 2015 – 2019, as a director
of Sydney Symphony Orchestra from 2009 – 2020 and
as a Non-executive Director of Westpac Banking
Corporation from 2013 to 2019.
Other current directorships:
BlueScope Steel Limited (since March 2013)
AnteoTech Ltd (since April 2022)
Former directorships (last 3 years):
Westpac Banking Corporation (February 2013 -
December 2019).
Special responsibilities:
Chair of the Board
Chair of Nomination Committee
Audit & Risk Committee member
Remuneration & Sustainability Committee member
Interests in shares:
13,196 Ordinary shares in Corporate Travel
Management Limited
55
Directors' ReportContinuedCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Ms Laura Ruffles MBA, GAICD
Ms Sophia (Sophie) Mitchell B.Econ, GAICD
Executive Director since December 2015
Experience and expertise:
Laura Ruffles is CTM’s Global Chief Operating 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 joined CTM in 2010 and has been a
key contributor to its successful growth.
Other current directorships:
Australian Federation of Travel Agents
Former directorships (last 3 years):
Independent Non-Executive Director
since September 2019
Experience and expertise:
Sophie Mitchell has over 30 years of corporate advisory,
capital markets and equity research experience. She
retired from Morgans in June 2019 after over a decade as
an Executive Director in Morgans Corporate and, prior to
this, she was Morgans' Head of Research.
Sophie is a Non-executive Director of Morgans Holdings
(Australia) Limited and the Morgans Foundation Limited,
a Board member for the Australia Council for the Arts,
Chairman of Australian Super’s Queensland Advisory
Council and was a member of the Takeovers Panel
between 2009 and 2018.
Nil
Other current directorships:
Special responsibilities:
Global Chief Operating Officer
Interests in shares:
50,000 Ordinary shares in Corporate Travel
Management Limited
Interests in rights:
250,000 Share appreciation rights in Corporate Travel
Management Limited
Apollo Tourism and Leisure Ltd (since September 2016)
Former directorships (last 3 years):
Flagship Investments Limited (June 2008 - November
2021)
Silver Chef Limited (September 2011 - December 2019)
Special responsibilities:
Chair Remuneration & Sustainability Committee
Audit & Risk Committee member
Nomination Committee member
Interests in shares:
28,326 Ordinary shares in Corporate Travel
Management Limited
56
Directors' ReportContinued Mr Jon Brett BCom, BAcc, MCom, CA(SA),
Dip Datametrics
Independent Non-Executive Director since
January 2020
Experience and expertise:
Jon Brett was formerly an executive director of Investec
Wentworth Private Equity Limited, and an executive of
Investec Bank (Australia) Limited. He was also the CEO
of Techway Limited which pioneered internet banking
in Australia. Jon brings extensive strategic, board and
management experience to CTM, particularly in the areas
of finance and corporate advisory.
Jon is currently Executive Chairman of Stridecorp Equity
Partners, an AFSL licensed fund manager specialising in
private equity. His former directorships include Godfreys
Group Limited, The Pas Group Limited, deputy president
of the NRMA and Vocus Group Limited since its listing on
the ASX.
Company secretary
Anne Tucker
Anne Tucker resigned as a Company Secretary on
8 October 2021.
Cale Bennett BIntFin, Grad Dip App Fin & Inv, MBA, FCPA
Cale Bennett, Global Chief Financial Officer, was appointed
as a Company Secretary on 8 October 2021. Cale resigned
as Company Secretary on 22 November 2021.
Shelley Sorrenson LLB, BJUS, LLM, MAICD
Shelley Sorrenson was appointed as a Company
Secretary on 22 November 2021.
Meetings of Directors
The number of meetings of CTM's Board of Directors
('the Board') held during the year ended 30 June 2022,
and the number of meetings attended by each Director
were as follows:
Mr Ewen Crouch AM
Ms Sophie Mitchell
Mr Jon Brett
Mr Jamie Pherous
Ms Laura Ruffles
Board
A
Board
B
12
12
12
12
11
12
12
12
12
12
Other current directorships:
Mobilicom Limited (since September 2018)
Former directorships (last 3 years):
Indoor Skydive Australia Limited (September 2018 –
July 2019)
Special responsibilities:
Chair Audit & Risk Committee
Remuneration & Sustainability Committee member
Nomination Committee member
Interests in shares:
1,499 Ordinary shares in Corporate Travel
Management Limited
57
Directors' ReportContinuedCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Audit & Risk
Committee
A
Audit & Risk
Committee
B
Remuneration
& Sustainability
Committee
A
Remuneration
& Sustainability
Committee
B
Nomination
Committee
A
Nomination
Committee
B
Mr Ewen Crouch AM
Ms Sophie Mitchell
Mr Jon Brett
Mr Jamie Pherous
Ms Laura Ruffles
4
4
4
NM
NM
4
4
4
NM
NM
4
4
4
NM
NM
4
4
4
NM
NM
3
3
3
NM
NM
3
3
3
NM
NM
A = Number of meetings attended
B = Number of meetings held during the time the Director held office or was a member of the Committee
NM = Not a member of the relevant Committee
Corporate Governance
The Board of CTM recognises the importance of good corporate governance practices which assist in ensuring the
accountability of the Board and management of the Group. The Group believes that these practices are fundamental to
the long-term performance and sustainability of the Group, the delivery of strategic objectives and contributing to the
preservation of shareholder value.
Information relating to the Group’s corporate governance practices and its Corporate Governance Statement can be found
in the Corporate Governance section on the Group’s website at https://investor.travelctm.com.au/corporate-governance
58
Directors' ReportContinued Remuneration
Report
Introduction
This report sets out the remuneration arrangements of the Company for the year ended 30 June 2022,
and is prepared in accordance with section 300A of the Corporations Act 2001. The information has been
audited as required by section 308(3C) of the Corporations Act 2001.
The report is structured as follows:
Letter from the Chair of the Remuneration & Sustainability Committee
Remuneration Highlights
Persons covered by this report
Remuneration governance framework
Executive KMP remuneration
Contractual arrangements for Executive KMP
Non-executive Director Remuneration
KMP Remuneration
Other information
60
62
63
64
64
72
72
74
76
59
Directors' ReportContinuedCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Remuneration Report Continued
Letter from the Chair of the Remuneration & Sustainability Committee
Dear Shareholder,
On behalf of the Remuneration and Sustainability Committee (the Committee), I am pleased to present you with CTM’s
Remuneration Report for the year ended 30 June 2022.
Whilst the recovery is underway, FY22 was another challenging year for the travel industry. CTM’s approach to
remuneration and sustainability continued to focus on those matters which we consider to be material to CTM’s long-term
sustainability and to creating value for our stakeholders.
Throughout the pandemic period, our priority has been to ensure the health and wellbeing of our people and our clients.
We have supported our employees with a variety of initiatives promoting health and mental wellbeing, including flexible
working arrangements, access to wellness information, mental health tips and techniques, as well as the support provided
through our employee assistance program.
FY22 was another year of ongoing human resources challenges with the pandemic creating a balancing act of managing
periods of low activity during the outbreak of the Delta and Omicron variants of COVID-19 with rapid recovery in travel
demand, particularly in the fourth quarter, as travel restrictions eased. The talent retention and remuneration challenges
were similar to the last two pandemic-affected years and we have seen the loss of some experienced people from the
sector during a period of extreme uncertainty. Adding to the retention challenges, the rapid response to easing travel
restrictions has required CTM to quickly bring people into (or back into) the sector at a time when there is near full
employment in our regions. CTM is successfully re-engaging with many CTM alumni, with whom contact was maintained
during the pandemic, and developing programs to attract new talent from outside the sector. The Committee and
executive team are thankful for the ongoing dedication of the entire employee cohort.
CTM’s Sustainability Strategy continued to evolve in FY22 but not at the speed the Committee would have liked, with
CTM needing to prioritise shorter-term issues such as the impact of the Delta and Omicron COVID-19 outbreaks in the
first and third quarters, and managing the human resource challenges discussed above. In May 2022, CTM appointed an
experienced ESG executive to review and oversee the execution of our global Sustainability Strategy. The Committee looks
forward to seeing our Sustainability programme maturing under more focused leadership in the coming years. Please
refer to our FY22 Sustainability Report for more information.
FY22 Outcomes
In FY22 we were required to remain flexible in our approach to remuneration following the measures implemented in
FY21 to manage the impact of COVID-19 on the Group. The impact of Delta and Omicron variant-related travel restrictions
necessitated ongoing reduced working hours and pay for many CTM employees for much of the first eight months of
FY22. This was replaced by a significant rebound in travel demand once borders started to re-open in March. Managing
people was challenging at CTM throughout FY22.
A key goal in our FY22 remuneration plan was to return all our people to full pay and working hours. This was achieved by
the fourth quarter in all regions except Asia, where travel restrictions are still in place. We are actively rebuilding our staff
base outside Asia, welcoming many new employees, and pleasingly, former CTM employees back into the team. Despite
a dynamic and challenging working environment, our people remain engaged in their work, as can be observed in the
outcomes of FY22 employee surveys included in the Sustainability Report on page 14.
The FY22 remuneration plan included a short-term incentive pool based on the Group achieving positive underlying
EBITDA for FY22 and achieving individual KPIs reflecting regional priorities. The FY22 STI opportunity was made available
to a wider group of CTM employees than in previous years. The original intention was to return to an annual STI payment,
however the Board endorsed management’s recommendation for a half-year, part-payment to non-KMP STI plan
recipients in regions where underlying EBITDA was positive to assist with retention and reward high performance. This
was similar to the structure of the FY21 STI plan, noting very limited STIs were paid in FY21 with the earnings gateways not
met. In North America, 30% of the full-year STI payment was paid in February 2022 and in the Europe region, 50% was paid.
Nil was paid in Asia and ANZ. The balance of FY22 STI payments was paid post-year-end, including to eligible KMPs.
A total of $7.85 million was paid in STIs (FY21: $0.2 million) including a total of $2.65 million in short-term retention
payments to Travel and Transport executives, agreed to in September 2020 to ensure key staff were retained during the
integration period. The KMP STI and North American short-term retention payments represented $4.38 million of total STI
payments from the FY22 year (FY21: nil).
The FY22 equity incentive plan reflected the ongoing uncertainty in the travel sector and comprised of SARs set at a strike
price of $21.19 (five-day VWAP to 30 June 2021) capable of vesting over two and three-year performance periods, with the
temporary split period structure bearing some similarity to the FY21 plan which focused on retention of our leaders. The
temporary changes to CTM’s equity incentive structure have delivered the desired outcomes for shareholders during the
prolonged period of uncertainty, caused by the pandemic including high retention rates of senior leaders, strong cost
control, cash management and client retention, and the successful integration of Travel & Transport and Tramada.
60
Directors' ReportContinued Remuneration Report Continued
The vesting outcomes from SARs tranches that could potentially vest at the end of FY22 were as follows:
― The FY20 SARs did not meet the EPS hurdle set and therefore lapsed;
― The FY21 SARs issued to Travel & Transport senior leaders at the time of acquisition meeting the required service
conditions, vested in full; and
― The FY21 two-year SARs tranche was fully vested to plan participants despite not meeting the EPS hurdle set.
The Board, for the first time, exercised its discretion to reward senior executives for their achievements over the last
two years. Their achievements reflected in the Group’s FY22 underlying EBITDA result of $59.8 million and despite
the challenges created by the pandemic and managing the rapid recovery in demand in more recent months.
The Board required that half of the shares issued due to this vesting decision be subject to a six-month sale
restriction from the release of the FY22 annual results.
FY23 Approach
Our FY23 remuneration strategy reflects our expectations that the travel sector will continue to recover across the year
and recognises that there will be regional differences in the speed of recovery. Our remuneration strategy remains focused
on driving performance and providing competitive total rewards that attract, retain, and motivate employees. This is
particularly important in the current environment with record low unemployment rates in three of our
four regions.
As we recover, the Board is keen to see CTM’s incentive structure return to pre-pandemic principles of earnings growth
gates, annual STI opportunities with financial and non-financial KPIs for individual leaders, and three-year equity incentive
plans.
Given the Board used its discretion for the first time this year to approve the vesting of the FY21 two-year SARs, the
Committee commissioned an external review of the SARs plan to challenge whether it was fit for purpose. The feedback
from the advisor was that the majority of plan participants did not understand the SARs vesting structure, including the
EPS growth hurdle. Investors and their advisors have provided feedback that they would prefer an incentive structure that
provides clearer alignment with shareholders. Taking on board the feedback and advice, the SARs incentive structure will
be replaced in FY23 with a three-year performance right structure, vesting if share prices increase and three-year EBITDA
targets are met to reflect that underlying EBITDA is the key performance metric used by CTM internally and externally.
Specifically, the FY23 remuneration and people plan includes:
― A continued increase in headcount as demand increases to ensure we maintain service levels for our clients and
manage the workload of our people, noting that efficiency gains primarily through increased automation should
mean employment levels do not return to pre-pandemic levels relative to activity or revenue;
― After an extended period of flat or reduced fixed remuneration, increases will be applied across the Group to reflect
the competitive employment environment and rising living costs;
― A potential short-term incentive pool based on the financial performance of the Group, payable in proportion to the
achievement of regional financial and non-financial KPIs related to the sustainable recovery of the business; and
― A new equity incentive plan comprised of Performance Rights with a share price hurdle of $18.81 (five-day VWAP
to 30 June 2022) capable of vesting after a three-year performance period, with vesting conditional on achieving
an increase in share price based on a 20-day VWAP period to 30 June 2025, service and conduct conditions, and an
underlying EBITDA growth target (100% vesting with underlying EBITDA Compound Annual Growth Rate of 20%).
The Committee believes the remuneration structure is simple and clear and will continue to serve CTM’s shareholders and
employees in future years.
On behalf of the Committee, I thank you for your ongoing support of CTM.
Sincerely,
Sophie Mitchell
Remuneration & Sustainability Committee Chair
17 August 2022
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Remuneration Highlights
FY20 Long-term performance incentives
Many of the plans which were actioned in FY20 to manage
costs against the reduced corporate travel activity
experienced as a result of COVID-19, which continued
in FY21, have been progressively removed in FY22.
As travel activity has returned through FY22 we have
commensurately increased staff numbers in all regions
except Asia, where travel restrictions remain in Hong Kong
and China. The stop-start nature of the recovery in the first
three-quarters of FY22 made for a challenging environment
to manage staff, which was solved by the Group employing
to match activity and then holding onto those staff where
activity fell away. In the fourth quarter, this was replaced
by solid demand for staff in all regions, with the exception
of Asia, as the Omicron variant of COVID-19 retreated and
travel demand increased dramatically.
Group remuneration
Increases to fixed annual remuneration (FAR) for
employees across the Group were given in special
circumstances as the employment market tightened,
particularly for professional staff with transferrable skills
(FY21: nil). Except for Asia, all staff have returned to their
contracted FAR and hours as the recovery continues.
There were no increases in contracted FAR for Executive
KMP, except small increases to take account of changes
in minimum superannuation contributions in Australia
(FY21: FAR reduction for the period 1 July to 1 August 2020).
Executive KMPs returned to their contracted FAR for the
full FY22 (FY21: reduction of 25% to 1 August 2020).
Managing Director and CEO remuneration
Total FY22 remuneration for the Managing Director and
CEO (Managing Director) was $1,006,483 (FY21: $492,904).
The Managing Director was awarded 80% of his
short-term incentive opportunity in FY22, totalling
$400,000 (FY21: nil).
Short-term performance incentives
Recognising the business’ recovery and the performance
of the management team in difficult circumstances,
short-term incentives were awarded to KMP whose
regions made a profit in FY22 (FY21: nil). The amounts
payable are detailed in the Executive KMP remuneration
section on page 64.
In FY22 we awarded total short-term incentives across the
Group, excluding KMP, of $6.38 million (FY21: $220,000).
These short-term incentives were paid to a broader pool
of employees than historically, to recognise the effort
expended to continue to provide high levels of service in a
complex environment caused by the Delta and Omicron
variants, and the challenges of a rapidly recovering market
from March 2022, and to retain staff.
Following the end of the three-year performance period
ended 30 June 2022, share appreciation rights (SARs)
awarded to employees in FY20 were tested to determine
whether the performance hurdles had been met. Vesting
of these SARs was conditional on achieving:
― service conditions - continued employment and
behaviour in line with our values; and
― performance conditions - EPS growth, with target
performance being set at 10% average EPS growth,
with a minimum hurdle of 6%.
As the business is continuing to recover from
COVID-19, the EPS performance condition was not met.
Consequently, all FY20 SARs lapsed unvested.
FY21 retention and performance equity incentives
In FY21 we made some temporary adjustments to
our equity incentive program to balance the impact
of COVID-19 on earnings and preserve incentive
remuneration arrangements aligned with shareholders
while maintaining our ability to attract, retain, and
motivate staff during a period of heightened uncertainty.
The temporary adjustments to our FY21 equity incentive
program were aimed directly at the retention of our
leaders and to incentivise actions and behaviours
consistent with the immediate priorities of the Group
which the Committee judged would drive future
shareholder returns. The outcome has been strong cost
control, effective cash management, client retention,
and the successful acquisitions of Travel & Transport and
Tramada. Despite significant ongoing turmoil within the
travel industry and very strong employment markets,
retention of senior leaders has been very high.
As disclosed in the FY21 Remuneration Report, the
FY21 Retention SARs vested in early FY22, with a total
of 431,786 CTM shares issued from 809,750 SARs
granted to 48 participants.
Following the end of the two-year performance period
on 30 June 2022, the FY21 Performance SARs granted to
employees in FY21 were assessed. Vesting of these SARs
was conditional on achieving:
― service conditions - continued employment and
behaviour in line with our values; and
― performance conditions - EPS growth, with target
performance being set at 20% average EPS growth
with a minimum hurdle of 16%.
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Directors' ReportContinued Remuneration Report Continued
With the continued impact of COVID-19 on earnings, the EPS performance condition was not met. The Board, for the first
time, exercised its discretion to reward senior executives for their achievements over the last two years. The outcome is
reflected in the Group’s FY22 underlying EBITDA result of $59.8 million despite the challenges created by the pandemic
and managing the rapid recovery in demand in more recent months. The Board required that half the shares issued as a
result of this vesting be subject to a six-month sale restriction from the release of the FY22 annual results.
Having achieved share price growth over the strike price of $9.89 (five-day VWAP to 30 June 2020), the FY21 Performance
SARs vesting will result in a total of 720,551 CTM shares to be issued from 1,664,500 SARs granted to 51 participants.
Travel & Transport Retention Remuneration
To retain select Travel & Transport executives following the Travel & Transport acquisition, cash retention payments
and SARs were awarded. During the year a total of USD 1.9 million ($2.7 million) in cash was paid to these executives as
retention payments, as approved by the Board. The vesting of the Travel & Transport Retention SARs was conditional on
achieving conduct and service conditions up to 30 June 2022.
As a result of share price growth over the strike price of $12.35, the Travel & Transport Retention SARs vesting will result in a
total of 308,222 CTM shares to be issued from 930,000 SARs granted to 23 participants.
Non-executive Director fees
There were no increases to Non-executive Director fees in FY22 (FY21: nil increase, reduction of 33% for the period to
1 August 2020).
Persons covered by this report
Key management personnel (KMP) include Non-executive Directors, Executive Directors and those senior executives with
authority and responsibility for the planning, controlling, and directing of the activities of the Company and the Group,
which includes those executives who lead business units.
For the purposes of this report, Executive KMP means the Executive Directors (Managing Director and Global COO), the
Global CFO, the CEO - North America, CEO – Europe, CEO – Asia, and the CEO – Australia and New Zealand.
Details of the KMP are provided in the table below.
Name
Position
Ewen Crouch AM
Chairman, Non-executive Director
Non-executive Directors
Jon Brett
Non-executive Director
Executive Directors
Sophie Mitchell
Jamie Pherous
Laura Ruffles
Cale Bennett
Non-executive Director
Managing Director
Global COO
Global CFO
Kevin O'Malley
CEO - North America
Other Key Management
Personnel
Larry Lo
KMP who ceased to
be KMP in FY21
Debbie Carling
Greg McCarthy
Neale O'Connell
Maureen Brady
CEO - Asia
CEO - Europe
CEO - Australia and New Zealand
Global CFO (ceased as KMP 26 February 2021)
CEO - North America (ceased as KMP 30 October 2020)
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Remuneration governance framework
Remuneration and Sustainability Committee
The Remuneration and Sustainability Committee
(Committee) consists of all of the Non-executive Directors,
with one performing the role of Chair. The Managing
Director and Global COO are invited to attend but are not
present when their remuneration is discussed.
The Committee has an advisory role and assists the Board
in the following areas:
― people and remuneration strategy and policies;
― setting executive remuneration and incentives for
Executive KMP;
― talent development and succession planning;
― Non-executive Director remuneration; and
― sustainability, social, environmental, and governance
issues relevant to the Group.
Under the terms of the Remuneration and Sustainability
Committee Charter, the majority of Committee
members must be independent directors and the Chair
of the Committee must be an independent director.
All members of the Remuneration and Sustainability
Committee are independent Non-executive Directors.
Details about members of the Committee and their
backgrounds are included in the Directors’ Report which
can be found on pages 55 to 57.
To ensure the Committee is fully informed when
making remuneration decisions, it may seek external
remuneration advice. During the reporting period, the
Committee engaged independent consultants to provide
advice in relation to the long-term incentive structure.
Executive KMP remuneration
Remuneration Framework
The objective of the Group’s remuneration framework,
summarised below, is to:
― attract and retain high calibre team members;
― incentivise and reward team members for the
achievement of strategic objectives designed to deliver
sustained growth in shareholder wealth, ensuring
reward for performance is competitive and appropriate
for the results delivered; and
― align remuneration with shareholder interests.
Key elements of remuneration
The Group’s remuneration framework has
three components:
― Fixed annual remuneration (FAR);
― Short-term performance incentives (STI); and
― Long-term (equity) incentives (LTI).
CTM’s remuneration framework provides for a mix of
short and long-term incentives. As team members gain
seniority within the Group, the balance of this mix shifts
to a higher proportion of ‘at risk’ rewards, commensurate
to each individual’s role and responsibilities.
The proportion of short and long-term incentives (relative
to fixed pay) for Executive KMP is set at the start of the
financial year, together with Key Performance Indicators
(KPIs). Incentive awards are subject to adherence to CTM’s
values and behavioural standards – failure to meet these
values and standards will result in disqualification from
incentive awards.
Fixed Annual Remuneration
Fixed annual remuneration (FAR) comprises base pay,
superannuation, and pensions. Team members are
offered a competitive FAR that targets the desired skills
and experience for our roles. FAR is reviewed annually,
to ensure that it remains competitive with the market.
Team member FAR is also reviewed upon promotion.
There are no guaranteed pay increases in any senior
executive contracts of employment and in FY22 increases
to fixed annual remuneration were specifically targeted
where markets had moved.
Variable Remuneration - Short-term
performance incentives (STI)
Participation in the Group’s short-term incentive scheme
is broad, with team members across all regions eligible
to participate. An individual’s target STI opportunity is set
depending on the accountabilities and impact of the role
on the organisation or business unit performance. Short-
term incentives are paid in cash following the release of
annual results.
The scheme is designed to reward and recognise
outstanding employee performance and the execution
of CTM’s business plans provided the Group can also
demonstrate it has created value for shareholders.
Each year, the Remuneration and Sustainability
Committee considers the appropriate targets and KPIs,
including setting any maximum payment potential under
the STI plan and minimum levels of performance
required to trigger payment of short-term incentives.
STI performance targets are underpinned by the Group’s
strategic priorities and are aligned with CTM’s values and
risk appetite. All targets and KPIs are defined
and measurable.
Ordinarily, the short-term incentive pool is based on the
following key elements:
1.
the financial performance of the relevant region in the
year and the financial performance of the Group in the
year; and
2. each individual’s performance against their KPIs.
The Board retains the discretion to adjust short-term
incentives, considering unexpected, unintended, or
individual circumstances.
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Directors' ReportContinued Remuneration Report Continued
Considering the uncertain environment for our employees and the travel industry more generally, adjustments were
made to the FY21 STI program, to split the FY21 STI into two opportunities across the first and second halves. Despite
initially deciding to revert the FY22 STI back to an annual opportunity, the Committee agreed to maintain the half-year
opportunity prior to calendar year-end for non-KMP participants in the STI program, given the ongoing uncertainty being
caused by the pandemic and emergence of the Omicron variant in late 2022. Short-term incentives were awarded more
broadly across the Group than usual in FY22 to recognise the efforts of operational staff through the uncertainty caused by
the pandemic, the recovery period experienced from March 2022, and to encourage retention.
1. Financial Performance
In FY22, the incentive pool for each half was only formed if the Group achieved predetermined financial targets set by the
Committee. The criteria for FY22 required positive EBITDA, adjusted for one-off items including significant non-recurring
items, currency movements, and items that are considered by their nature and size as unusual or not in the ordinary
course of business, such as mergers and acquisition activity (underlying EBITDA).
If the global and regional underlying EBITDA results meet expectations, the full STI pool will form. Conversely, if results
are below expectations, only a fraction of the pool, or possibly none of the short-term incentive pool will form. The use
of financial targets ensures variable reward is only available when value has been created for shareholders and when
earnings are consistent with the Group’s approved targets.
If an incentive pool does not form due to the regional and/or Group financial performance not achieving the
predetermined financial targets set by the Remuneration and Sustainability Committee, the Board may exercise discretion
to determine incentives for specific regions that individually perform strongly against their KPIs. The Committee did this in
FY21 to recognise the extraordinary achievements of certain members of the team in the United Kingdom.
2.
Individual Performance
Each individual’s incentive opportunity is determined by reference to the individual’s own KPIs. KPI targets for Executive
KMP include a mix of financial and non-financial targets. In FY22, these targets were focused on the following core metrics
which were set by the Board at the beginning of the financial period: cost containment, productivity, client retention,
people, and leadership.
Individual performance impacts the amount of incentive payment for any individual. Executive KMP performance reviews
are conducted by the Managing Director and provided to the Remuneration and Sustainability Committee and Board
annually. The Managing Director’s performance review is conducted by the Chairman and provided to the Remuneration
and Sustainability Committee and Board annually.
The weighting of the financial and non-financial KPIs for current Executive KMP is outlined in the following table.
Executive KMP
Jamie Pherous
Laura Ruffles
Cale Bennett
Kevin O’Malley
Larry Lo
Debbie Carling
Greg McCarthy
Title / Region
MD / Global
COO / Global
CFO / Global
CEO / North America
CEO / Asia
CEO / Europe
CEO / Australia & New Zealand
Financial KPIs
Non-financial KPIs
EBITDA
Cost containment
Cash management
Client retention
People and
leadership
70%
70%
80%
70%
70%
70%
70%
30%
30%
20%
30%
30%
30%
30%
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Remuneration Report Continued
FY22 Reward Outcomes under STI
As the world responded to the impact of the COVID-19 pandemic, CTM continued to face challenging operating conditions
in FY22. Government-mandated shutdowns, border closures, quarantine arrangements and travel restrictions all featured
throughout the world for parts of the financial year. Travel restrictions started to be lifted in March 2022 resulting in a surge
in travel demand creating a set of different challenges for the leadership teams.
Following the assessment of Executive KMP against their KPIs, no short term incentives were awarded to KMPs as
summarised in the table below:
Name
Jamie Pherous
Laura Ruffles
Cale Bennett
Kevin O’Malley1
Larry Lo1
Debbie Carling1
Greg McCarthy
Neale O'Connell2
Maureen Brady1,2
Maximum
STI Potential
(FY22)1
$500,000
$1,050,000
$200,000
$689,180
$264,919
$366,636
$50,000
FY22
FY21
Awarded %
Forfeited %
Maximum STI
Potential (FY21)1
Awarded %
Forfeited %
80%
55%
75%
30%
0%
100%
50%
20%
45%
25%
70%
100%
0%
50%
$125,000
$550,000
N/A
$250,000
$129,402
$112,702
$25,000
$115,000
$66,916
0%
0%
N/A
0%
0%
0%
0%
0%
0%
100%
100%
N/A
100%
100%
100%
100%
100%
100%
1 Maximum STI potential is determined in local currency and converted at average exchange rates.
2 Ceased to be a KMP in FY21.
The STIs awarded reflect a combination of financial and non-financial outcomes versus targets for individual KMPs,
and meeting service and behaviour expectations. Kevin O’Malley‘s reported STI outcome does not include the retention
payment of $551,344 agreed to during the acquisition of Travel and Transport in 2020 as continued service was
the only requirement.
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Directors' ReportContinued Remuneration Report Continued
Variable Remuneration - long-term (equity-based)
incentives (LTI)
Senior leaders who have a greater potential impact on
share price and long-term value creation participate
in CTM’s equity-based incentive program.
CTM’s equity-based incentive scheme is designed to:
(a) assist in the reward, retention and motivation of
eligible employees;
(b) link the reward of eligible employees to shareholder
value creation; and
(c) align the interests of eligible employees with
shareholders by providing an opportunity for eligible
employees to receive an equity interest in the Group.
Grants of Share Appreciation Rights (SARs) have been
made annually according to the role and influence on
long-term performance. A SAR is a right to receive an
award that may be satisfied by the issue of shares, cash
payment, or a combination of both (at the Board’s sole
discretion), subject to the achievement of performance
conditions which can include service conditions, conduct
expectations, and EPS growth.
If the performance conditions are achieved, the number of
shares awarded is calculated by reference to an increase in
the CTM share price from a strike price set at the volume-
weighted average price (VWAP) of the five trading days
prior to 30 June immediately preceding the grant of SARs
against the five-day VWAP immediately preceding the
time that the Board determines the performance hurdles
are satisfied. The use of a five-day VWAP to set both the
strike price and the subsequent share price at the time of
vesting provides a very clear and publicly verifiable pricing
structure for equity-based remuneration. Awards are of
no value to participants if the subsequent share price at
the time of vesting is below the strike price, aligning the
interests of participants with shareholders.
Participation in LTI program
In FY22, 83 senior employees were invited by the Board
to participate in the equity incentive scheme (FY21: 74).
All Executive KMP, other than the Managing Director,
participated in the FY22 equity incentive scheme.
Performance hurdles and performance period
Temporary adjustments to the SARs performance period
in FY21 created a gap in the vesting schedule, with no
SARs due for vesting at the end of FY23. Consequently,
in FY22 SARs were issued in two equal tranches with
performance to be tested over periods of two years
and three years.
Talent retention and motivation are critical to CTM’s
business performance and to creating wealth for
shareholders. In our experience, employees in the travel
industry with transferable skills who are experiencing
uncertain prospects have been targeted by other
industries during the period of pandemic-induced
uncertainty. The temporary adjustments to our FY21 and
FY22 equity incentive programs were specifically modified
to deal with these challenges and were designed to retain
our key staff during this period of heightened uncertainty.
The FY23 equity incentive program will revert to a three-
year period.
The FY22 equity offer was comprised of two tranches
of SARs:
― Tranche 1: FY22 SARs were granted with vesting
conditional on achieving service and conduct
conditions and EPS growth over a two-year period
ending 30 June 2023; and
― Tranche 2: FY22 SARs were granted with vesting
conditional on achieving service and conduct
conditions and EPS growth over a three-year period
ending 30 June 2024.
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The FY22 SARs will vest on a scaled basis as follows:
Minimum EPS growth from 1 July 2021 – 30 June 2023 or 30 June 2024 as relevant
80% achievement of target growth rate (i.e. 16.0% EPS growth)
90% achievement of target growth rate (i.e. 18.0% EPS growth)
100% achievement of target growth rate (i.e. 20.0% EPS growth)
Portion of SARs that become
performance qualified
50% of SARs
75% of SARs
100% of SARs
SARs will become performance qualified on a straight-line basis where average EPS growth over the three-year testing
period falls between 16 and 20%.
While temporary adjustments were made in FY21 and FY22 to performance periods and vesting conditions, the
overarching philosophy for equity incentive remuneration remains unchanged: to reward, retain and motivate senior
leaders; link the reward to shareholder value creation to align senior leaders with shareholders; provide an opportunity
for eligible employees to build an equity interest in CTM, and support our expectations of employee conduct.
The Board may exercise its discretion with respect to adjustments to thresholds and targets at the time of testing.
The Board retains the discretion to adjust equity incentives (including vesting conditions, performance hurdles and
the forfeiture of unvested LTIs) considering unexpected, unintended or individual circumstances. The Group will provide
a clear explanation if any adjustments are made to thresholds and targets.
Future Period LTI Program Changes
In FY22 we have undertaken a review of the Long-Term Incentive program, with the assistance of an independent
executive remuneration advisor. Following this review, the Board has made changes to the program to ensure its
continued appropriateness for all stakeholders. From FY23 onwards, eligible executives will be offered Performance
Rights, summarised as follows.
Feature
Description
Opportunity
Vehicle
The value of the performance rights issued each year to an eligible executive will typically be set between
5% and 75% of FAR. The opportunity for each eligible executive is determined at the beginning of each
financial year.
Each Performance Right entitles the eligible executive to the right to one share of Corporate Travel
Management Limited for nil consideration.
Performance Period
Performance will be measured over three years.
Performance measures
The performance measures include a share price gateway, determined at the outset of the performance
period, and an underlying EBITDA target vesting schedule to be determined each year at the time of
granting. Should the share price measurement finish below the gateway, no performance rights will vest.
Allocation methodology
The number of rights awarded is calculated by dividing the Opportunity by the fair value of the
Performance Right, with no discount for the likelihood of non-market linked performance conditions
being met.
Fair value methodology
The fair value of Performance Rights is calculated using the monte carlo method, in accordance with
AASB2 Share-based payment.
Settlement
Vesting Performance Rights will be settled in equity.
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Directors' ReportContinued Remuneration Report Continued
Cessation of employment, change of control
and clawback
All unvested SARs and Performance Rights lapse
immediately upon cessation of employment with the
Group. However, the Board has discretion in exceptional
circumstances to determine that SARs and Performance
Rights be retained and the terms applicable following
cessation of employment. Special circumstances include
events such as retirement, redundancy, death, and
permanent disability. Should a Change of Control Event
occur, or the Board determines in its absolute discretion
that a Change of Control Event may occur, the Board
has absolute discretion to determine the appropriate
treatment regarding any awards.
Unvested SARs and Performance Rights may be clawed
back where there has been a material misrepresentation
of the financial outcomes on which the award was
assessed and/or the participant’s actions have been found
to be fraudulent, dishonest, in breach of his or her duties,
contrary to CTM’s values and behavioural standards or
would bring CTM into disrepute.
Dividend entitlements
Recipients of SARs or Performance Rights are not
entitled to dividends until shares are allocated (based on
vesting and meeting the relevant performance hurdles,
employment condition, and conduct expectations and
being exercised by recipients).
Dilution
Shares issued under the Group’s Omnibus Incentive Plan
are subject to a cap of 5% of equity. This is inclusive of
shares that may be issued in respect of each outstanding
offer of shares, options or rights if accepted or exercised
under other equity plans.
Hedging
Executive KMP are not permitted to hedge LTI awards.
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FY22 Reward Outcomes under equity incentive plan
FY22 SARS
Temporary adjustments to the SARs performance period
in FY21 created a gap in the vesting schedule. Therefore,
in FY22 SARs were issued in two equal tranches with
performance to be tested over periods of two years
and three years. In FY22, a total of 2,400,500 SARs
were awarded to 83 participants (FY21: 3,354,250 to 74
participants) as follows:
― Tranche 1: 1,200,250 SARs were granted with vesting
conditional on achieving service and conduct
conditions and EPS growth over a two-year period
ending 30 June 2023; and
― Tranche 2: 1,200,250 SARs were granted with vesting
conditional on achieving service and conduct
conditions and EPS growth over a three-year period
ending 30 June 2024.
FY21 SARS
With the continued impact of COVID-19 on earnings,
the EPS performance condition was not met. Following
FY22 year-end, given the exceptional performance of the
business despite the challenges created by the pandemic
and managing the rapid recovery in demand in more
recent months, the Committee resolved to exercise its
discretion to vest 100% of the FY21 Performance SARs. This
is the first time since the Group was listed on the ASX that
the Board has exercised its discretion in this way.
Having achieved share price growth over the strike
price of $9.89 (five-day VWAP to 30 June 2020), the FY21
Performance SARs vesting resulted in a total of 720,551
CTM shares granted from 1,664,500 SARs awarded to 51
participants. A six-month disposal restriction has been
placed on half of the shares issued through the vesting
of the FY21 Performance SARs.
FY20 SARs
The three-year performance period for the FY20 SARs
ended on 30 June 2022. Vesting was conditional on the
Group achieving earnings per share (EPS) growth per
annum over the three-year testing period, with target
performance being set at 10% average EPS growth and
participants continuing to be employed by the Group at
the end of the performance period.
Following the end of the financial year, the FY20 SARs
were tested. As the minimum EPS growth condition
was not met, 100% of the FY20 SARs lapsed.
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Directors' ReportContinued Remuneration Report Continued
The following table sets out details of the SARs granted to persons in their capacity as Executive KMP that have not
yet vested or been cancelled as at 30 June 2022. Additionally, movements during the period are noted.
Value per
right at
grant date
No. of rights
vested
during
the year
Vested
%
Forfeited /
Lapsed
%
Max value
yet to vest
$
1 July 2021
62,500
$7.21
62,500
100%
2020
30 June 2022
Name
Financial
year of grant
Vesting
Date
No. of rights
granted
2022
2022
1 July 2024
1 July 2025
62,500
62,500
Laura Ruffles
2021
Performance1
2021
Retention
Cale Bennett
2019
2022
2022
2021
2022
2022
Larry Lo
2021
Performance1
2021
Retention
1 July 2022
125,000
1 July 2021
1 July 2023
1 July 2024
100,000
150,000
50,000
50,000
1 July 2024
100,000
1 July 2024
1 July 2025
37,500
37,500
1 July 2022
75,000
$5.33
$6.05
$7.18
-
-
-
-
-
-
$1.67
$4.80
$3.66
$4.39
$6.00
$3.66
$4.39
$2.67
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1 July 2021
37,500
$2.29
37,500
100%
2020
30 June 2022
2019
2022
2022
1 July 2021
1 July 2024
1 July 2025
75,000
75,000
37,500
37,500
1 July 2022
75,000
$1.67
$4.80
$3.66
$4.39
$2.67
-
-
-
-
-
-
-
-
-
-
1 July 2021
37,500
$2.29
37,500
100%
2020
30 June 2022
2019
2022
2022
1 July 2021
1 July 2024
1 July 2025
75,000
75,000
37,500
37,500
1 July 2022
75,000
$1.67
$4.80
$3.66
$4.39
$2.67
-
-
-
-
-
-
-
-
-
-
1 July 2021
37,500
$2.29
37,500
100%
Debbie Carling
2021
Performance1
2021
Retention
Greg McCarthy
2021
Performance1
2021
Retention
2020
30 June 2022
75,000
2019
2022
2022
2021
2021
Performance1
2021
Retention
1 July 2021
100,000
1 July 2023
1 July 2024
62,500
62,500
1 July 2022
187,500
1 July 2022
100,000
1 July 2021
50,000
2020
30 June 2022
100,000
2021
Performance1
2021
Retention
1 July 2022
75,000
1 July 2021
37,500
2020
30 June 2022
50,000
Kevin O’Malley
Neale
O'Connell2
Maureen
Brady2
1 2021 Performance Shares vested on 1 July 2022.
2 Ceased to be KMP in FY21.
$1.67
$4.80
$3.66
$4.39
$3.50
$2.67
$2.29
$1.67
$2.67
$2.29
$1.67
-
-
-
-
-
-
-
-
187,500
100%
50,000
100%
-
-
100%
-
-
-
-
-
-
50%
-
100%
-
-
-
-
100%
100%
-
-
-
-
-
-
-
100%
100%
-
-
-
-
100%
100%
-
-
-
-
100%
100%
-
-
-
-
100%
-
-
166,685
252,383
-
-
-
-
91,698
146,377
379,033
109,783
68,774
-
-
-
-
109,783
68,774
-
-
-
-
109,783
68,774
-
-
-
-
182,971
114,623
-
-
-
-
-
-
-
71
Directors' ReportContinuedCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Remuneration Report Continued
Correlation between variable remuneration and financial results
In considering the Group’s performance in the context of appropriate remuneration levels and structures, the
Remuneration & Sustainability Committee considers a variety of measures including financial results, share price growth
and the delivery of a return on investment to shareholders. Over the past three financial years, COVID-19 has created
substantial volatility in these measures. This is highlighted in the table below which outlines the performance of the Group
and shareholder returns over the last five financial years.
FY 2022
FY 2021
FY 2020
FY 2019
FY 2018
Net profit/(loss) attributable to members ($’000)
3,101
(55,351)
Basic earnings per share (cents)
Dividends paid ($’000)
Dividend payout ratio (%)1
Increase/(decrease) in share price (%)
Total Executive KMP STI
as percentage of net profit/(loss) (%)
2.2
-
234.1
(13.4)
55.7
(43.0)
-
N/A
111.5
0.0
(8,185)
(7.5)
23,953
N/A
(56.9)
0.0
86,235
79.6
76,712
72.4
42,263
34,964
49.0
(17.6)
1.6
45.6
19.0
1.9
1 Based on dividends to be paid in respect of the financial year.
Contractual arrangements for Executive KMP
Each Executive KMP, including the Managing Director, has a formal contract, known as a service agreement. There were
no changes to the service agreements for Executive KMP in FY22.
Executive KMP
Contract duration
Notice period
by KMP
Notice period
by Group
Termination payment
Jamie Pherous
No fixed duration
6 months
6 months
Laura Ruffles
No fixed duration
24 weeks
24 weeks
Cale Bennett
No fixed duration
12 weeks
12 weeks
Kevin O’Malley
30 June 2023
3 months
Nil
Larry Lo
No fixed duration
6 months
6 months
Debbie Carling
No fixed duration
3 months
3 months
Greg McCarthy
No fixed duration
12 weeks
12 weeks
Combination of notice and payment
in lieu totaling no less than 6 months
Combination of notice and payment
in lieu totaling no less than 24 weeks
Combination of notice and payment
in lieu totaling no less than 12 weeks
Combination of notice and payment
in lieu totaling no less than 12 months
Combination of notice and payment
in lieu totaling no less than 6 months
Combination of notice and payment
in lieu totaling no less than 3 months
Combination of notice and payment
in lieu totaling no less than 12 weeks
Termination payments are assessed on a case-by-case basis and are capped at law. As is the case for all employees,
the employment of Executive KMP may be terminated immediately in the case of serious misconduct.
Non-executive Director Remuneration
Non-executive Directors receive a base fee and, where applicable, an additional fee in recognition of the higher workload
and extra responsibilities resulting from chairing Board Committees. The Chairman receives an all-inclusive fee as
Chairman of the Board and as a member of all Board Committees (including as Chairman of the Nomination Committee).
Board fees are not paid to Executive Directors and Executive KMP do not receive fees for directorships of any subsidiaries.
Fee Structure
As approved by shareholders at the 2019 Annual General Meeting, the maximum aggregate Non-executive Directors’
fee pool is $950,000 per annum, of which the Group utilised $532,500 in FY22 (FY21: $515,593). Fees paid to Non-executive
Directors in FY22 are set out in the table below and are inclusive of superannuation. Fees are reviewed annually by
the Board.
72
Directors' ReportContinued Remuneration Report Continued
Chair
Member
Board
Audit & Risk
Committee
Remuneration &
Sustainability
Committee
Nomination
Committee
$242,500
$22,500
$22,500
$122,500
-
-
-
-
There were no increases to Board or Committee fees in FY22 (FY21: nil increase, a decrease of 33% to 1 August 2020).
Non-executive Directors do not receive incentive payments, nor are they entitled to participate in any Group employee
equity plans. They receive no non-monetary benefits and do not participate in any retirement benefits scheme, other than
statutory superannuation contributions, where applicable. Non-executive Directors are reimbursed for expenses properly
incurred in performing their duties as a Director of the Group. This policy is consistent with Non-executive Directors being
responsible for objective and independent oversight of the Group.
73
Directors' ReportContinuedCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Remuneration Report Continued
KMP Remuneration
Fixed Remuneration
Variable Remuneration
Name
Year
$
$
Cash
salary and
fees
Non-cash
benefits
Short
term
incentive
Equity
incentive3
$
$
Perfor-
mance
Related
%
Total
$
Leave
$
-
-
-
-
-
-
-
-
Superan-
nuation
$
-
4,834
13,182
12,181
13,182
12,181
26,364
29,196
-
-
-
-
-
-
-
-
FY22
242,500
FY21
229,961
FY22
131,818
FY21
128,218
FY22
131,818
FY21
128,218
FY22
506,136
FY21
486,397
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
242,500
234,795
145,000
140,399
145,000
140,399
532,500
515,593
906,482
44%
492,904
-
64%
53%
FY22
472,308
8,790
FY21
460,955
8,342
1,816
1,913
23,568
400,000
21,694
-
FY22
699,396
9,426
18,827
23,568
577,500
741,092
2,069,809
FY21
682,498
9,426
41,045
21,694
-
866,592
1,621,255
FY22
1,171,704
18,216
20,643
47,136
977,500
741,092
2,976,291
FY21
1,143,453
17,768
42,958
43,388
-
866,592
2,114,159
Non-executive
Directors
Ewen Crouch AM
Sophie Mitchell
Jon Brett
Sub-Total
Non-executive
Directors
Executive
Directors
Jamie Pherous
Laura Ruffles
Sub-Total
Executive
Directors
74
Directors' ReportContinued Remuneration Report Continued
Fixed Remuneration
Variable Remuneration
Cash
salary and
fees
Non-cash
benefits
Name
Year
$
$
Other Key Management Personnel (Group)
Superan-
nuation
Short
term
incentive
Equity
incentive3
$
$
$
Perfor-
mance
Related
%
Total
$
Cale Bennett4
Larry Lo5
Debbie Carling5
Greg McCarthy
Kevin O’Malley4,5, 6
Neale O'Connell7
Maureen Brady5,7
Sub-Total
Other Key
Management
Personnel
Total
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY21
FY21
378,306
128,067
575,228
548,960
350,893
343,213
374,551
385,761
1,256,280
384,661
297,879
103,204
7,500
2,500
-
-
-
-
-
-
25,166
17,803
23,568
150,000
364,640
935,656
7,093
3,179
3,106
-
-
-
127,050
223,625
178,913
270,616
814,016
747,229
10,904
366,636
223,625
964,639
10,503
-
178,913
547,756
16,396
23,688
25,000
223,625
663,260
21,694
-
178,913
596,290
6,901
206,754
533,865
2,042,882
-
6,012
(5,424)
17,071
-
13,660
-
-
-
-
260,909
676,885
164,698
480,236
-
116,864
FY22
2,935,258
32,666
66,519
68,240
748,390
1,569,380
5,420,453
FY21
2,191,745
26,315
68,953
59,467
-
1,089,396
3,435,876
FY22
4,613,098
50,882
87,162
141,740
1,725,890
2,310,472
8,929,244
FY21
3,821,595
44,083
111,911
132,051
-
1,955,988
6,065,628
55%
47%
27%
24%
61%
33%
37%
30%
36%
38%
34%
0%
Leave
$
11,642
5,906
11,984
16,250
12,581
15,127
9,922
13,916
13,512
1 Non-cash benefits represent the cost to the Group of providing parking, health, and communications benefits.
2 Leave represents the movement in the annual leave and long service leave provision balances. The accounting value may be negative, for example, where
a KMP leave balance decreases as a result of taking more leave than the leave entitlement accrued during the year.
3 For accounting purposes, equity incentives are calculated at fair value on grant date and expensed over the period, in accordance with AASB 2 Share Based
Payments. The accounting value may be negative where SARs are forfeited, resulting in amounts expensed in prior years being reversed. There can also be
a reversal of amounts expensed where there is a reduction in the probability of performance conditions being met.
4 Commenced as KMP during FY21. Cale Bennett commenced as a KMP on 1 March 2021. Kevin O’Malley commenced as a KMP on 1 November 2020.
5 Payments made in local currency and converted at average exchange rates.
6 Kevin O'Malley was paid a $551,344 (US$400,000) retention bonus, agreed during the Travel & Transport acquisition in 2020. The bonus was paid based
on the continuance of service.
7 Ceased to be KMP in FY21.
The table above is prepared in accordance with the Corporations Act 2001 requirements. The amounts that appear under
the heading ‘Equity incentive’ represent the amounts expensed by the Group in accordance with the required Accounting
Standards in respect of current and past incentive allocations of share appreciation rights. These amounts are therefore
not amounts received by Executive KMP during the year. Whether Executive KMP receives any value from the allocation
of equity incentives in the future will depend on whether applicable performance conditions are met.
75
Directors' ReportContinuedCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Remuneration Report Continued
Other information
Minimum Shareholding Guidelines for Non-executive Directors
To align the Non-executive Directors’ interests with the interests of shareholders, the Board has established guidelines to
encourage Non-executive Directors to progressively acquire and hold shares within three years of their appointment with
a value equal to 100% of base fees. Direct and indirect holdings count towards the minimum shareholding target.
Minimum Shareholding Guidelines for Executive KMP
Executive KMPs are encouraged to progressively, through participation in the Group’s equity incentive program, acquire
and hold shares over a reasonable period from the date of their appointment. They are expected to hold a minimum
number of shares commensurate to their role and responsibilities. Direct and indirect holdings together with unvested
equity will count towards the minimum shareholding target.
Equity instruments held by Key Management Personnel
The tables below show the number of shares and share appreciation rights held by Non-executive Directors and Executive
KMP respectively at the beginning and end of the financial year.
Common equity
Non-executive Directors
Ewen Crouch AM
Jon Brett
Sophie Mitchell
Executive Directors
Jamie Pherous
Laura Ruffles
Other Key Management Personnel
Cale Bennett
Kevin O’Malley
Larry Lo
Debbie Carling
Greg McCarthy
Share Appreciation Rights
Executive Directors
Laura Ruffles
Cale Bennett
Larry Lo
Debbie Carling
Greg McCarthy
Kevin O'Malley
76
Balance as at
30 June 2021
Purchased
Disposed
Received on
vesting of
rights
Other
changes
during the
year
Balance
at 30 June
2022
12,482
1,249
27,612
19,240,000
50,000
-
102,429
121,632
33,578
89,699
714
250
714
-
-
-
-
-
-
-
-
-
-
-
-
(1,740,000)
-
-
-
-
-
(33,329)
33,329
-
10,665
(52,000)
(20,000)
(3,000)
(25,000)
-
19,997
19,997
19,997
-
-
-
-
-
-
-
-
-
-
13,196
1,499
28,326
-
17,500,000
50,000
10,665
50,429
121,629
50,575
84,696
Balance as at
30 June 2021
Awarded
during
the year
Vested
during
the year
Lapsed /
Forfeited
Other
changes
during
the year
Balance
at 30 June
2022
437,500
125,000
(62,500)
(250,000)
185,000
100,000
(20,000)
(25,000)
262,500
262,500
287,500
75,000
75,000
75,000
(37,500)
(150,000)
(37,500)
(150,000)
(37,500)
(175,000)
187,500
125,000
-
-
-
-
-
-
-
-
250,000
240,000
150,000
150,000
150,000
312,500
Directors' ReportContinued Securities Trading Policy
The Group’s Securities Trading Policy prohibits employees
from dealing in CTM securities while in possession of
material non-public information relevant to CTM. It also
prohibits entry into transactions in associated products
that limit the economic risk of participating in unvested
entitlements under equity-based remuneration schemes.
Shares under options
There are currently no unissued ordinary shares of CTM
under options. No share options were granted as equity
compensation benefits during the financial year (FY21: nil).
Loans to KMP
There have been no loans granted to Non-executive
Directors and Executive KMP of the Company or their
related entities (FY21: nil).
Other transactions and balances with key
management personnel
Contingent consideration of $700,000 in relation to
the acquisition of SCT Travel Group Pty Ltd was earned
during the financial year and will be paid to Greg
McCarthy in FY23.
In the normal course of business, the Group may enter
into transactions with various entities that have Directors
in common with CTM. Transactions with these entities are
made on commercial arm’s length terms and conditions.
The relevant Directors do not participate in any decisions
regarding these transactions.
Non-executive Directors and Executive KMP can acquire
travel and event management services from the Group.
All transactions are made on normal commercial terms
and conditions and at market rates. There are no amounts
outstanding in relation to these transactions at
30 June 2022.
Insurance of officers and indemnities
The Company has entered into directors’ and officers’
insurance policies and paid an insurance premium in
respect of the insurance policies, to the extent permitted
by the Corporations Act 2001 (Cth). The insurance policies
cover former Directors of the Company along with the
current Directors of the Company. Executive officers
and employees of the Company and its related bodies
corporate are also covered.
In accordance with Rule 24 of its Constitution, the
Company, to the maximum extent permitted by law, must
indemnify any current or former Director or Company
Secretary and current or former executive officers of the
Company or any of its related bodies corporate, against all
liabilities incurred in those capacities. For the year ended
30 June 2022, no amounts have been paid pursuant to
indemnities (FY21: nil).
A Deed of Indemnity, Access and Insurance is in place
between the Company and Directors, the Company
Secretary and some other current and former executives.
The deed indemnifies those persons, to the extent
permitted by law, against liabilities, including costs and
expenses, incurred as a result of acting in their capacity
as officers of the Company or its related bodies corporate.
The Company’s Constitution also allows the Company
to pay insurance premiums for contracts insuring the
officers of the Company in relation to any such liabilities
and legal costs. The Directors have not included details
of the nature of the liabilities covered or the amount of
the premium paid in respect of the directors’ and officers’
liability insurance contract, as, in accordance with normal
commercial practice, such disclosure is prohibited under
the terms of the contract.
Indemnification of auditors
To the extent permitted by law, the Company has agreed
to indemnify its auditors, PwC, as part of the terms of its
audit engagement agreement against claims by third
parties arising from the audit. No payment has been
made to PwC during or since the end of the financial year
in respect of this indemnification (FY21: nil).
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of
the Corporations Act for leave to bring proceedings on
behalf of the Company, or to intervene in any proceedings
to which the Company is a party, for the purpose of taking
responsibility on behalf of the Company for all or part of
those proceedings.
No proceedings have been brought or intervened in on
behalf of the Company with the lease of the Court under
section 237 of the Corporations Act.
Non-Audit Services
PwC provided $209,400 of non-audit services during
the year ended 30 June 2022, comprising:
― Tax compliance services - $84,803
― Tax advisory services - $79,227
― Other advisory services - $45,370
The Directors are satisfied that the provision of these
non-audit services is compatible with the general
standard of independence for auditors in accordance
with the Corporations Act 2001 (Cth). The nature, value
and scope of each type of non-audit service provided is
considered by the Directors not to have compromised
auditor independence.
77
Directors' ReportContinuedCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Auditor’s Independence Declaration
The Auditor’s Independence Declaration for the year ended 30 June 2022 has been received from PwC. This is set out on
page 79 of the Directors’ Report.
Rounding of amounts
Amounts in the Directors’ Report are presented in Australian dollars (unless otherwise indicated) with values rounded
to the nearest thousand dollars, or in certain cases, the nearest dollar, in accordance with the Australian Securities and
Investments Commission Corporations (Rounding in Financial/Directors’ Reports) instrument 2016/191.
This Report is made in accordance with a resolution of the Directors and is signed for and on behalf of the Board.
Mr Ewen Crouch AM
Chairman
Mr Jamie Pherous
Managing Director
17 August 2022
Brisbane
78
Directors' ReportContinued Auditor’s Independence Declaration
As lead auditor for the audit of Corporate Travel Management Limited for the year ended
30 June 2022, I declare that to the best of my knowledge and belief, there have been:
(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Corporate Travel Management Limited and the entities it controlled
during the period.
Michael Crowe
Partner
PricewaterhouseCoopers
Brisbane
17 August 2022
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.
79
Directors' ReportContinuedCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022
Consolidated
Financial
Statements
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Shareholder Information
81
82
83
84
85
141
142
149
General information
Corporate Travel Management Limited is a public company limited by shares, listed on the ASX,
incorporated and domiciled in Australia. Its registered office and principal place of business is:
Level 24,
307 Queen Street
Brisbane
Queensland 4000
80
Consolidated Statement of Profit or
Loss and Other Comprehensive Income
For the year ended 30 June 2022
Revenue
Other Income
Total revenue and other income
Operating Expenses
Employee benefits
Information technology and telecommunications
Occupancy
Travel and entertainment
Cost of goods sold
Administrative and general
Depreciation and amortisation
Impairment
Total operating expenses
Operating profit/(loss)
Finance costs
Profit/(loss) before income tax benefit from continuing operations
Income tax (expense)/benefit
Profit/(loss) after income tax (expense)/benefit from continuing operations
Loss after income tax benefit from discontinued operations
Profit/(loss after income tax (expense)/benefit for the year
Other comprehensive income/(loss)
Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign operations
Other comprehensive income/(loss) for the year, net of tax
Total comprehensive income/(loss) for the year
Profit/(loss) for the year is attributable to:
Non-controlling interest
Ordinary Equity Holders of Corporate Travel Management Limited
Total comprehensive income/(loss) for the year is attributable to:
Continuing operations
Discontinued operations
Non-controlling interest
Continuing operations
Discontinued operations
Ordinary Equity Holders of Corporate Travel Management Limited
Note
4
5
2022
$'000
377,360
11,322
2021
$'000
174,046
26,406
388,682
200,452
10,16,27
10,16
18
8
30
24
(256,534)
(41,502)
(5,094)
(1,990)
(9,539)
(25,762)
(44,425)
-
(164,855)
(29,220)
(3,820)
(501)
(8,176)
(24,098)
(40,857)
(1,261)
(384,846)
(272,788)
3,836
(2,303)
1,533
(771)
762
-
762
(72,336)
(3,267)
(75,603)
19,018
(56,585)
(1,176)
(57,761)
35,576
(28,400)
35,576
36,338
(28,400)
(86,161)
(2,339)
3,101
762
(1,959)
-
(1,959)
38,297
-
38,297
36,338
(2,410)
(55,351)
(57,761)
(3,856)
-
(3,856)
(81,129)
(1,176)
(82,305)
(86,161)
Earnings per share for profit/(loss) attributable to the ordinary equity holders
of Corporate Travel Management Limited
Basic earnings per share
Diluted earnings per share
Cents
Cents
6
6
2.2
2.2
(43.0)
(43.0)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.
81
CORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022
Consolidated Statement
of Financial Position
As at 30 June 2022
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Income tax receivable
Other assets
Non-current assets classified as held for sale
Total current assets
Non-current assets
Trade and other receivables
Investments accounted for using the equity method
Financial assets at fair value through profit or loss
Property, plant and equipment
Right-of-use assets
Intangible assets
Deferred tax assets
Other assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Borrowings
Lease liabilities
Provisions
Total current liabilities
Non-current liabilities
Trade and other payables
Borrowings
Lease liabilities
Deferred tax liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Reserves
Retained earnings
Equity attributable to the equity holders of Corporate Travel Management Limited
Non-controlling interests - equity
Total equity
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
82
Note
11
12
13
2022
$'000
2021
$'000
142,054
281,062
1,422
3,890
9,832
99,018
175,428
884
9,541
5,803
438,260
290,674
26
3,311
-
441,571
290,674
12
14
15
27
16
10
8
17
18
19
21
17
18
19
8
21
22
23
24
30
-
577
6,998
11,592
42,422
968,621
34,916
469
398
2,849
4,423
11,155
40,526
756,918
28,805
-
1,065,595
845,074
1,507,166
1,135,748
341,467
204,745
-
10,751
27,165
-
9,193
18,155
379,383
232,093
2,171
-
37,601
3,206
3,420
46,398
9,998
-
37,188
1,400
3,612
52,198
425,781
284,291
1,081,385
851,457
927,397
49,454
91,095
1,067,946
13,439
1,081,385
744,581
3,484
87,994
836,059
15,398
851,457
Consolidated Statement
of Changes in Equity
For the year ended 30 June 2022
Balance at 1 July 2020
Loss after income tax expense for the year
Other comprehensive loss for the year, net of tax
Total comprehensive loss for the year
Transactions with ordinary equity holders in their
capacity as ordinary equity holders:
Balance at 1 July 2021
Loss after income tax expense for the year
Other comprehensive loss for the year, net of tax
Total comprehensive loss for the year
Transactions with ordinary equity holders in their
capacity as ordinary equity holders:
-
-
-
-
-
-
Contributed
equity
$'000
375,314
Reserves
$'000
20,174
Retained
earnings
$'000
143,345
-
(55,351)
(26,954)
-
Non-
controlling
interests
$'000
19,254
(2,410)
(1,446)
Total equity
$'000
558,087
(57,761)
(28,400)
(26,954)
(55,351)
(3,856)
(86,161)
Contributed
equity
$'000
744,581
Reserves
$'000
3,484
Retained
earnings
$'000
87,994
-
35,196
3,101
-
Non-
controlling
interests
$'000
15,398
(2,339)
380
Total equity
$'000
851,457
762
36,338
35,196
3,101
(1,959)
36,338
Contributions of equity, net of transaction costs (note 22)
369,267
-
Share-based payments (note 29)
-
10,264
-
-
-
-
369,267
10,264
Balance at 30 June 2021
744,581
3,484
87,994
15,398
851,457
Contributions of equity, net of transaction costs (note 22)
182,816
-
Share-based payments (note 29)
-
10,774
-
-
-
-
182,816
10,774
Balance at 30 June 2022
927,397
49,454
91,095
13,439
1,081,385
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes
83
CORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Consolidated Statement
of Cash Flows
For the year ended 30 June 2022
Cash flows from operating activities
Receipts from customers (inclusive of consumption tax)
Payments to suppliers and employees (inclusive of consumption tax)
Transaction costs relating to acquisitions
Interest received
Finance costs
Income taxes (paid)/received
Net cash used in operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Payments for intangibles
Proceeds from sale of property, plant and equipment
Purchase of controlled entities, deferred consideration
Payments relating to purchase of controlled entities, net of cash acquired
Proceeds from sale of subsidiary
Change in financial assets
Net cash (used) in investing activities
Cash flows from financing activities
Proceeds from issue of new shares
Share issue transaction costs
Secured deposits release / (payment)
Principal elements of lease payments
Net cash from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
Note
2022
$'000
2021
$'000
11
27
10
9
9
22
22
417,313
114,285
(333,898)
(170,294)
(4,403)
102
(2,929)
(2,270)
(7,153)
82
(3,258)
5,982
73,915
(60,356)
(4,278)
(21,686)
9
(700)
(802)
(14,545)
125
-
(88,171)
(276,147)
113
-
2,867
(886)
(114,713)
(289,388)
100,000
379,830
(2,108)
331
(9,302)
(11,115)
(317)
(9,315)
88,921
359,083
48,123
99,018
(5,087)
9,339
92,843
(3,164)
Cash and cash equivalents at the end of the financial year
142,054
99,018
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes
84
Note 1. Basis of preparation
Note 2. Critical accounting judgements, estimates and assumptions
Note 3. Segment reporting
Note 4. Revenue
Note 5. Other income
Note 6. Earnings per share
Note 7. Dividends paid and proposed
Note 8.
Income tax
Note 9. Business combinations
Note 10. Intangible assets
Note 11. Cash and cash equivalents
Note 12. Trade and other receivables
Note 13. Inventories
Note 14. Investments accounted for using the equity method
Note 15. Financial assets at fair value through profit or loss
Note 16. Right-of-use assets
Note 17. Trade and other payables
Note 18. Borrowings
Note 19. Lease liabilities
Note 20. Financial risk management
Note 21. Provisions
Note 22. Contributed equity
Note 23. Reserves
Note 24. Retained earnings
Note 25. Impairment testing of goodwill
Note 26. Non-current assets classified as held for sale
Note 27. Property, plant and equipment
Note 28. Fair value measurement
Note 29. Share-based payments
Note 30. Interest in other entities
Note 31. Related party transactions
Note 32. Parent entity information
Note 33. Deed of cross guarantee
Note 34. Auditors’ remuneration
Note 35. Summary of significant accounting policies
Note 36. Events after the reporting period
86
87
88
90
92
93
94
95
99
102
104
105
106
107
108
109
110
111
112
113
117
119
120
121
122
124
125
126
127
129
133
134
136
138
139
140
85
Notes to the Consolidated Financial StatementsCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Note 1. Basis of preparation
(a) Basis of consolidation
(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 Profit or Loss and
Other 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, deregistered,
or liquidated, 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 Profit or Loss and Other
Comprehensive Income as part of the gain or loss on sale.
Goodwill and fair value adjustments arising from the
acquisition of foreign operations are treated as the foreign
operations’ assets and liabilities and translated at the
closing rate.
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. For subsidiaries acquired
within the current financial year, financial statements will
be prepared from the date control is transferred to the
Group through to the end of the current reporting period.
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 Profit or Loss and Other
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 Profit or Loss and Other
Comprehensive Income as part of the fair value gain
or loss.
86
Notes to the Consolidated Financial Statements Note 2. Critical accounting judgements, estimates and assumptions
Judgements and estimates as a result of the
Coronavirus (COVID-19) pandemic
Certain key judgements require an assessment of
forecast performance of the Group and its businesses.
Whilst recovery from the COVID-19 pandemic is
underway, at the time of this report some uncertainty
remains around the recovery path in the Asia region and
therefore those assessments have inherent uncertainty.
These judgements have been made based on the best
information available to date regarding the circumstances
existing at 30 June 2022 including key judgements as
set out above. The assumptions made should not be
taken to indicate the outcome of future Group decisions.
Should actual performance differ significantly from the
assumptions outlined, there may be material changes
to the carrying value of assets and liabilities in future
reporting periods.
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 involve 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 the notes in this report, as follows:
― Value of intangible assets relating to acquisitions:
― Note 9 'Business combinations'.
― Note 10 'Intangible assets'.
― Software developed or acquired not as part of a
business combination:
― Note 10 'Intangible assets'.
― Impairment testing of goodwill:
― Note 25 'Impairment testing of goodwill'.
― Expected credit losses:
― Note 20 'Financial risk management'.
― Provisions:
― Note 21 'Provisions'.
― Share based payments:
― Note 29 'Share-based payments'.
― Value of investments:
― Note 14 'Investments accounted for using the
equity method'.
― Note 15 'Financial assets at fair value through
profit or loss'.
― Note 26 'Non-current assets classified as held
for sale'.
― The recognition and recoverability of a net deferred tax
asset relating to income tax losses:
― Note 8 'Income tax'.
87
Notes to the Consolidated Financial StatementsCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Note 3. Segment reporting
(a) Description of segments
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 (“CODMs”) are the Managing Director, Jamie Pherous (MD), Global Chief Financial
Officer, Cale Bennett (CFO), and Global Chief Operating Officer, Laura Ruffles (COO).
The CODMs consider, organise and manage the business from a geographic perspective. The CODMs have identified
four operating Travel and related service segments being Australia and New Zealand, North America, Asia, and Europe.
There are currently no non-reportable segments.
(b) Segment information provided to the Chief Operating Decision Makers
The CODMs assess the performance of the operating segments based on a measure of underlying EBITDA.
This measurement basis excludes the effects of the costs of acquisitions, acquisition related adjustments, and
other non-recurring items during the year.
The segment information provided to the CODMs for the reportable segments for the year ended 30 June 2022
is as follows:
June 2022
Total revenue from external parties
Other income
Total revenue and other income
Underlying EBITDA
Total segment assets
Total segment liabilities
June 2021
Total revenue from external parties
Other income
Total revenue and other income
Underlying EBITDA
Total segment assets
Total segment liabilities
Australia and
New Zealand
$’000
North
America
$’000
66,514
1,835
68,349
11,864
374,521
105,599
213,270
4,433
217,703
27,178
576,945
73,342
Australia and
New Zealand
$’000
North
America
$’000
34,619
7,399
42,018
7,745
122,027
44,308
92,691
3,331
96,022
(10,724)
536,324
76,234
Asia
$’000
14,536
2,772
17,308
(3,012)
165,658
57,893
Asia
$’000
8,506
10,380
18,886
(5,355)
147,721
38,428
Europe
$’000
Other*
$’000
Total
$’000
83,040
871
83,911
37,416
355,269
185,316
-
1,411
1,411
(13,641)
34,773
3,631
377,360
11,322
388,682
59,805
1,507,166
425,781
Europe
$’000
Other*
$’000
Total
$’000
38,230
3,767
41,997
10,119
307,345
123,000
-
1,529
1,529
(9,034)
22,331
2,321
174,046
26,406
200,452
(7,249)
1,135,748
284,291
* The other segment represents the Group’s support service, created to support the operating segments and growth of the global business.
88
Notes to the Consolidated Financial Statements Note 3. Segment reporting continued
(c) Other segment information
Underlying EBITDA
The reconciliation of underlying Statutory EBITDA to underlying and statutory loss before income tax is provided as follows:
Underlying EBITDA from Continuing Operations
Discontinued operations
Underlying EBITDA
Underlying EBITDA
Interest revenue
Finance costs
Interest on lease liabilities
Depreciation - Plant and equipment
Depreciation - Right-of-use assets
Amortisation - Intangibles
Impairment - Intangibles
2022
$'000
59,805
-
2021
$'000
(7,249)
(755)
59,805
(8,004)
59,805
102
(903)
(1,400)
(5,240)
(9,513)
(20,517)
-
(7,249)
82
(1,728)
(1,539)
(4,720)
(9,384)
(18,711)
(358)
Underlying profit / (loss) before income tax (benefit) from continuing operations
22,334
(43,607)
Non-recurring items
Acquisition costs
Integration costs
Right-of-use assets - impairment (integration costs)
Gain on sale of DVI
Other
COVID-19 impacts
Bad and doubtful debts
Redundancy costs
Amortisation - client contracts and relationships
Profit/(loss) before income tax benefit from continuing operations
Accounting policy
(3,293)
(8,925)
-
-
-
570
-
(11,648)
(9,153)
1,533
(7,153)
(11,471)
(903)
970
(2,876)
(1,199)
(1,322)
(23,954)
(8,042)
(75,603)
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 CODMs have been identified as a group of executives, which is the committee that
makes strategic decisions.
Goodwill is allocated by management to groups of cash-generating units on a segment level.
89
Notes to the Consolidated Financial StatementsCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Note 4. Revenue
(a) Disaggregation of revenue from contracts with customers
2022
Transactional revenue
Volume based incentive revenue
Revenue from sale of inventory
Licensing revenue
Other revenue
Australia and
New Zealand
North America
$’000
$’000
61,796
778
-
3,162
778
175,153
20,551
12,470
4,857
239
Asia
$’000
13,987
528
-
-
21
Europe
$’000
78,459
2,594
-
992
995
Total
$’000
329,395
24,451
12,470
9,011
2,033
Total revenue from external parties
66,514
213,270
14,536
83,040
377,360
2021
Transactional revenue
Volume based incentive revenue
Revenue from sale of inventory
Licensing revenue
Other revenue
Australia and
New Zealand
North America
$’000
$’000
31,033
617
-
2,474
495
72,006
5,992
10,339
4,326
28
Asia
$’000
8,269
207
-
-
30
Europe
$’000
Total
$’000
36,452
147,760
608
-
1,169
1
7,424
10,339
7,969
554
Total revenue from external parties
34,619
92,691
8,506
38,230
174,046
(b) Assets related to contracts with customers
The Group has contract assets related to contracts with suppliers:
Contract assets
2022
$'000
2021
$'000
11,877
3,674
Contract assets represent only current balances for amounts outstanding from suppliers for volume based incentive revenue.
90
Notes to the Consolidated Financial Statements Note 4. Revenue continued
Accounting policy
Transactional revenue
Transactional revenue is revenue derived from clients and
suppliers generated from the provision of travel services
to clients. The performance obligation is the facilitation of
travel related services on behalf of clients. Transactional
revenue is the fixed amount per client transaction and
is recognised at either the ticketed date of the travel
booking or on the date of travel, depending on the terms
of the contract, or as earned per the contract.
Volume based incentive revenue
Volume based incentive revenue is revenue derived
from contracts with suppliers. The revenue is variable
and is dependent upon the achievement of contractual
performance criteria specific to each supplier. Revenue is
recognised over time and is measured as the amount that
is deemed highly probable to be received, which has been
determined using the most likely amount method and
the Group’s experience with the contracts.
Revenue from sale of inventory
Revenue from sale of inventory is revenue derived from
the sale of gift cards for loyalty programs within the US
market. This revenue is recognised at the time the order
is dispatched to the customer.
Licensing Revenue
Licensing revenue is revenue derived from the right to use
CTM’s software and travel supply network. This revenue
is recognised over time in-line with the satisfaction of the
performance obligation, being the provision of access to
software and the travel supply network.
Other revenue
Other revenue is recognised when the transfer of the
promised goods or service to the customer has been
completed. Other revenue includes interest revenue,
rental income, and other minor operating revenue.
91
Notes to the Consolidated Financial StatementsCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Note 5. Other income
This note provides a breakdown of the items included in other income.
Net foreign exchange gain
Net fair value gain on investments
Government grants
Other
Other income
2022
$'000
2,450
2,148
3,942
2,782
2021
$'000
2,169
-
18,401
5,836
11,322
26,406
Income from Government grants as a result of the COVID-19 pandemic has been recognised in other income. In FY21
and FY22, the Group received government assistance for operations in Australia, New Zealand, Hong Kong and the
United Kingdom.
There are no unfulfilled conditions or other contingencies attached to these grants. The Group did not benefit directly
from any other forms of government assistance. Government grant income offsets the cost of retaining additional staff.
In the Asia and Europe regions, access to the grants was made possible by retaining staff.
Accounting Policy
Government grants are recognised when there is reasonable assurance that the grant will be received and all
attaching conditions will be complied with. If conditions are attached to the grant which must be satisfied before the
Group is eligible to receive the contribution, the recognition of the grant as revenue will be deferred until those
conditions are satisfied.
92
Notes to the Consolidated Financial Statements Note 6. Earnings per share
The following information reflects the income and share data used in the basic and diluted earnings per share computations:
Earnings per share for profit/(loss) from continuing operations
Profit/(loss) after income tax
Non-controlling interest
Profit/(loss) after income tax attributable to the ordinary equity holders
of Corporate Travel Management Limited
Weighted average number of ordinary shares used as a denominator
in calculating basic earnings per share
2022
$'000
762
2,339
2021
$'000
(57,761)
2,410
3,101
(55,351)
Number
Number
140,059,733
128,645,231
Adjustments for calculation of diluted earnings per share
3,558
-
Weighted average number of ordinary shares used as a denominator
in calculating diluted earnings per share
140,063,291
128,645,231
Accounting policy
Basic earnings per share
Basic earnings per share is calculated as net profit/(loss) attributable to owners of the Group, adjusted to exclude any
costs of servicing equity (other than dividends) divided by the weighted average number of ordinary shares, adjusted
for any bonus element.
Diluted earnings per share
Diluted earnings per share is calculated as net profit/(loss) 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.
93
Notes to the Consolidated Financial StatementsCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Note 7. Dividends paid and proposed
Ordinary shares
Current period
There were no dividends paid or recommended during the current reporting period. The dividends approved by the Board
of Directors in August 2022 for the current reporting period to be paid in FY23 are shown below.
Approved by the Board of Directors in August but not recognised as a liability as at 30 June
2022
$'000
7,260
2021
$'000
-
Previous period
There were no dividends paid, recommended or determined during, or for, the previous reporting period.
Franking credit balance
Franking credits available for subsequent reporting periods based on a tax rate of 30% (2021: 30%)
2022
$'000
-
2021
$'000
-
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.
94
Notes to the Consolidated Financial Statements
Note 8. Income tax
Current income tax
Current tax on profits for the year
Adjustments for current tax of prior periods
Deferred income tax
(Increase) in deferred tax assets
Increase in deferred tax liabilities
Income tax expense/(benefit)
Income tax expense/(benefit) is attributable to:
Profit/(loss) from continuing operations
Loss from discontinued operations
Income tax expense/(benefit)
Numerical reconciliation of income tax expense/(benefit) to prima facie tax payable/(receivable)
Profit/(loss) before income tax (expense)/benefit from continuing operations
Loss before income tax benefit from discontinued operations
Tax at the statutory tax rate of 30%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Non-deductible amounts
Other amounts
Adjustments for current tax of prior periods
Recognition of temporary differences previously not brought to account
Difference in overseas tax rates
Research and development tax credit
Utilisation of previously unrecognised tax losses
2022
$'000
7,835
1,407
2021
$'000
(345)
531
(13,660)
(24,680)
5,189
771
5,444
(19,050)
771
-
771
(19,018)
(32)
(19,050)
1,533
(75,603)
-
1,533
(1,208)
(76,811)
460
(23,043)
2,172
(426)
729
234
2,206
(22,080)
1,407
(299)
(1,257)
(401)
(885)
531
(921)
4,092
(669)
(3)
Income tax expense/(benefit)
771
(19,050)
95
Notes to the Consolidated Financial StatementsCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022
Note 8. Income tax continued
Deferred income tax
Deferred tax assets
The balance comprises temporary differences attributable to:
Provisions
Employee benefits (SARs)
Lease liabilities
Tax losses
2022
$'000
2021
$'000
12,715
6,232
11,285
45,934
76,166
7,115
5,620
10,825
30,495
54,055
Set-off of deferred tax liabilities pursuant to set-off provisions
(41,250)
(25,250)
Net deferred tax assets
Deferred tax liabilities
The balance comprises temporary differences attributable to:
Depreciation and amortisation
Accrued income
Right-of-use assets
Other
34,916
28,805
2022
$'000
2021
$'000
34,328
(101)
10,044
185
17,345
281
9,122
(98)
44,456
26,650
Set-off of deferred tax assets pursuant to set-off provisions
(41,250)
(25,250)
Net deferred tax liabilities
3,206
1,400
96
Notes to the Consolidated Financial Statements Note 8. Income tax continued
Deferred income tax
Deferred tax assets
2022
Provisions
Employee benefits
(SARs)
Lease liabilities
Tax losses
Other
2021
Provisions
Employee benefits
(SARs)
Lease liabilities
Tax losses
Other
Deferred tax
liabilities
2022
Depreciation and
amortisation
Accrued income
Right-of-use assets
Other
2021
Depreciation and
amortisation
Accrued income
Right-of-use assets
Other
(Charged)/
credited in
year via P&L
(Charged)/
credited
in year via
equity
Acquisition of
subsidiaries
Disposal of
subsidiaries
Change in FX
rates
$'000
$'000
$'000
$'000
$'000
At 30 June
$'000
At 1 July
$'000
7,115
5,620
10,825
30,495
-
3,907
(1,888)
(1,674)
13,315
-
103
2,500
-
-
-
1,095
-
1,706
-
-
54,055
13,660
2,603
2,801
6,042
-
11,540
7,347
30
650
791
(214)
23,483
(30)
553
4,829
-
-
-
90
-
-
-
-
24,959
24,680
5,382
90
-
-
-
-
-
-
(1)
-
(12)
(117)
-
(130)
495
-
428
2,124
-
3,047
(219)
-
(489)
(218)
-
(926)
12,715
6,232
11,285
45,934
-
76,166
7,115
5,620
10,825
30,495
-
54,055
(Charged)/
credited in
year via P&L
(Charged)/
credited
in year via
equity
Acquisition of
subsidiaries
Disposal of
subsidiaries
Change in FX
rates
$'000
$'000
$'000
$'000
$'000
At 30 June
$'000
5,963
184
(1,169)
211
5,189
1,889
(887)
(511)
4,953
5,444
-
-
-
72
72
-
-
-
(8,534)
(8,534)
9,291
(591)
1,706
-
10,406
945
(136)
-
-
809
-
-
-
-
-
24
-
(5)
-
19
1,729
34,328
25
385
-
(101)
10,044
185
2,139
44,456
(1,313)
17,345
(79)
(432)
-
281
9,122
(98)
(1,824)
26,650
At 1 July
$'000
17,345
281
9,122
(98)
26,650
15,800
1,383
10,070
3,483
30,736
The Group has tax losses that arose in foreign subsidiaries of $40,719,000 (2021: 14,754,000) that are available for offsetting
against future taxable profits of the companies in which the losses arose. In most cases, the unused tax losses have no
expiry date. Deferred tax assets have not been recognised in respect of these losses as they may not be used to offset
taxable profits elsewhere in the Group and there is insufficient evidence to support recoverability in the near future.
If the Group were able to recognise all unrecognised deferred tax assets, the profit would increase by $7,510,000 (2021:
$3,210,000).
97
Notes to the Consolidated Financial StatementsCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Note 8. Income tax continued
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’
intercompany accounts with the tax consolidated group
head company, Corporate Travel Management Limited.
The income tax expense (or benefit) 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. It includes adjustments for tax expected
to be payable or recoverable in respect of previous periods.
Where the amount of tax payable or recoverable is
uncertain, management establishes provisions based on
either: the Group’s judgment of the most likely amount
of the liability or recovery or; where there is a range
of possible non-binary outcomes, the expected value
calculated under a probability weighted approach.
Deferred income tax is provided for in full, using the
liability method, on temporary differences arising between
the tax bases of assets and liabilities and their carrying
amounts in the consolidated financial statements.
However, the deferred income tax is not accounted for if
it arises from initial recognition of an asset or liability in
a transaction other than a business combination that, at
the time of the transaction, affects neither accounting nor
taxable profit or loss.
98
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 Note 9. Business combinations
HLO Corporate
On 31 March 2022, the Group acquired 100% of Helloworld Travel Limited's (ASX: HLO) corporate and entertainment
travel businesses ('HLO Corporate'). The cost of the acquisition was $188,899,000, with $104,078,000 paid in cash and the
remaining $84,821,000 paid via the issuance of 3,571,429 CTM shares to Helloworld Group Pty Limited at an issue price of
$23.75. These shares are subject to escrow until 31 March 2023. There is no earn-out consideration payable.
Acquisition-related costs of $2,934,000 are included in administrative and general expenses in the Consolidated Statement
of Profit or Loss and Other Comprehensive Income.
Trade and other receivables approximate the gross contractual amounts receivable, adjusted for any balances expected to
be uncollectible.
The acquired business contributed revenues of $13,504,000 and a net profit after tax of $1,687,000 to the Group for the
period 1 April 2022 to 30 June 2022. If the acquisition had occurred on 1 July 2021, the Group's consolidated revenue and net
profit after tax for the year ended 30 June 2022 would change from $377,360,000 to $431,523,000 and from $762,000 to
$7,528,000 respectively based on the extrapolation of the contribution since acquisition.
Safe2Travel Pte. Limited
On 29 April 2022, the Group acquired 100% of the shares of Universal Advisory Pte Ltd, which owns 96.5% of Safe2Travel Pte
Ltd (together, Safe2Travel), a corporate travel management company based in Singapore. The cost of the acquisition was
$4,690,000. There is no earn-out consideration payable.
Acquisition-related costs of $270,000 are included in administrative and general expenses in the Consolidated Statement
of Profit or Loss and Other Comprehensive Income.
Trade and other receivables approximate the gross contractual amounts receivable, adjusted for any balances expected to
be uncollectible.
The acquired business contributed revenues of $603,000 and a net profit/(loss) after tax of ($36,000) to the Group for the
period 30 April 2022 to 30 June 2022. If the acquisition had occurred on 1 July 2021, the Group's consolidated revenue and
profit after tax for the year ended 30 June 2022 would change from $377,360,000 to $380,908,000 and from $762,000 to
$533,000 respectively based on the extrapolation of the contribution since acquisition.
Fair value acquisition consideration and reconciliation to cash flow
Initial consideration - cash
Initial consideration - equity
Working capital adjustment
HLO
Corporate
Safe2Travel
$’000
100,000
84,821
4,078
$’000
4,690
-
-
Total acquisition date fair value consideration
188,899
4,690
Cash paid
less: cash balances acquired
Total outflow of cash - investing activities
104,078
(20,034)
84,044
4,690
(642)
4,048
99
Notes to the Consolidated Financial StatementsCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Note 9. Business combinations continued
The provisional fair values of the assets and liabilities of the acquired businesses, as at the date of acquisition, are as follows:
Current assets
Cash and cash equivalents
Trade and other receivables
Other assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Deferred tax asset
Current liabilities
Trade and other payables
Lease liabilities
Income tax payable
Provisions
Non-current liabilities
Lease liabilities
Provisions
Deferred tax liability
Net identifiable assets acquired
Goodwill on acquisition
Intangible assets - client contracts and relationships
Intangible assets - brands
Deferred tax liability
Net assets acquired
Additional acquisitions
HLO
Corporate
Safe2Travel
$’000
$’000
20,034
19,613
1,430
366
5,685
1,959
1,686
(22,928)
(1,237)
-
(2,711)
(4,449)
(80)
-
19,368
148,038
30,300
250
(9,057)
642
2,835
1,214
68
1,426
-
-
(3,628)
(479)
(8)
(527)
(949)
(104)
(8)
482
2,304
1,529
635
(260)
188,899
4,690
On 31 May 2022 the Group acquired 100% of the shares in Global Travel Support Service Co. domiciled in Japan. The
acquisition consideration was $85,000 and the cash acquired through the acquisition was $6,000. The acquisition does not
have a material impact on the Group's financial results.
Prior period business combinations
During the year ended 30 June 2022, $700,000 of contingent consideration relating to the achievement of performance
conditions in FY21 was paid for prior year business combinations. The payment is associated with the acquisition of SCT
Travel Group Pty Ltd ("Platinum Travel").
100
Notes to the Consolidated Financial Statements Note 9. Business combinations continued
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. Acquisition-related costs are expensed in the
period in which the costs are incurred.
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 for 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
Consolidated Statement of Profit or Loss and Other 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 as a financial liability at acquisition. 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 Consolidated Statement of Profit
or Loss and Other Comprehensive Income. Any subsequent adjustment to the final contingent consideration, based
on actual results as at 30 June 2022, has been reflected in the Consolidated Statement of Profit or Loss and Other
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 noncontrolling 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 Profit or Loss and Other 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, software and other
intangibles. Client contracts and relationships were valued using the multi-period excess earnings method. These
calculations require the use of assumptions including future customer retention rates and cash flows.
Acquired software has been valued using the cost to re-create method. These calculations require the use of assumptions
including the period of time it would take to rebuild the software, the number of people it would take to rebuild the
software and the cost per person to rebuild the software.
Acquired other intangible assets were valued using the relief from royalty method. These calculations require the use
of assumptions including the projection of financial performance and the estimation of a suitable royalty rate, useful life
and discount rate.
Value of financial assets held at fair value through profit or loss and investments accounted for
under the equity method
The Group has allocated portions of the cost of acquisitions to financial assets held at fair value through profit or loss.
As these minority interests are unlisted securities, significant inputs used to calculate the fair value of these interests
are unable to be based upon observable market data and assumptions must be used. The Group relies upon financial
information provided by the controlling interest for measurement purposes.
The Group has allocated portions of the cost of acquisitions to investments accounted for under the equity method.
Whilst the Group has significant influence over the investee, it does not have a controlling interest and relies upon
financial information provided by the investee to calculate the value of these investments.
101
Notes to the Consolidated Financial StatementsCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Note 10. Intangible assets
Goodwill - at cost
Less: Accumulated amortisation & impairment
Customer contracts - at cost
Less: Accumulated amortisation
Software - at cost
Less: Accumulated amortisation & impairment
Other intangible assets - at cost
Less: Accumulated amortisation
2022
$'000
882,108
(22,915)
859,193
133,659
(71,368)
62,291
108,867
(65,393)
43,474
5,765
(2,102)
3,663
2021
$'000
699,677
(21,424)
678,253
96,928
(59,873)
37,055
93,211
(54,864)
38,347
4,608
(1,345)
3,263
968,621
756,918
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set
out below:
Balance at 1 July 2020
Additions
Additions through business combinations (note 9)
Disposals
Impairment expense
Amortisation expense - continuing operations
Amortisation expense - discontinued operations
Exchange differences
Balance at 30 June 2021
Additions
Additions through business combinations (note 9)
Disposals
Impairment expense
Amortisation expense - continuing operations
Exchange differences
Client
contracts and
relationships
Software
Goodwill
Other
intangible
assets
$'000
$'000
$'000
$'000
15,122
-
33,188
-
-
(8,042)
-
(3,213)
37,055
-
31,829
-
-
(9,153)
2,560
30,865
14,522
14,668
(1,895)
(358)
(17,614)
(323)
(1,518)
38,347
21,686
1,959
-
-
(19,903)
1,385
478,211
-
232,212
-
-
-
-
(32,170)
678,253
-
150,342
-
-
-
30,598
260
23
4,358
-
-
(1,097)
-
(281)
3,263
-
885
-
-
(614)
129
Total
$'000
524,458
14,545
284,426
(1,895)
(358)
(26,753)
(323)
(37,182)
756,918
21,686
185,015
-
-
(29,670)
34,672
Balance at 30 June 2022
62,291
43,474
859,193
3,663
968,621
102
Notes to the Consolidated Financial Statements Note 10. Intangible assets continued
Accounting policy
Client contracts and relationships
The client contracts were acquired as part of a business combination (refer note 9 'Business combinations' for details). They
are recognised at their fair value at the date of acquisition and amortised based on a straight line basis.
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 as software and
systems assets.
Software acquired as part of a business combination
Identifiable intangible software acquired through a business combination, which is expected to contribute future period
financial benefits through revenue generation and/or cost reduction is capitalised as software and system assets.
Other
Other intangible assets, such as brand names are recognised at fair value and are amortised over their useful life. Other
intangible assets with an indefinite useful life are tested annually for impairment, or more frequently if events or changes
in circumstances indicate that the intangible asset may be impaired.
Amortisation expense
The useful lives of the below intangible assets are assessed to be finite.
A summary of the amortisation policies applied to the Group's intangible assets is as follows:
Item
Client contracts and relationships
Software developed and acquired
Other intangible assets
Years
3 – 6
1 – 7
2 – 10
Method
Straight line
Straight line
Straight line
Acquired/Internally generated
Acquired
Acquired/Internally generated
Acquired
Where amortisation is charged on assets with finite lives, this expense is recognised in the Consolidated Statement of
Profit and Loss and Other Comprehensive Income in the expense category 'depreciation and amortisation'.
Impairment expense
Goodwill and indefinite life intangibles are tested for impairment annually, or whenever facts and circumstances indicate
possible impairment. An impairment loss is recognised when the carrying amount exceeds recoverable amount.
The recoverable amount is the higher of fair value less costs of disposal or value-in-use.
Goodwill
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 25 'Impairment testing of goodwill').
Critical estimates, assumptions and judgements
Client contracts and relationships
The Group recognises customer contracts and relationships arising from business combinations. Estimates and
judgements are used in determining the fair value of future benefits of contracts and relationships acquired.
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 useful life for amortisation. There is also
judgement involved in assessing how the assets will deliver probable future economic benefit to the Group.
Goodwill
Refer note 25 'Impairment testing of goodwill'.
103
Notes to the Consolidated Financial StatementsCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Software acquired as part of a business combination
Refer to note 9 'Business combinations'
Note 11. Cash and cash equivalents
Cash at bank and on hand
Client cash
2022
$'000
126,531
15,523
2021
$'000
92,824
6,194
Total cash and cash equivalents
142,054
99,018
Cash at bank and on hand and client cash earns interest at floating rates. The range of deposit rates as at 30 June 2022
was: -0.50% to 2.20% (2021: -0.50% to 0.08%).
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 contributed by clients that the Group is required by regulation or contracted to hold
separately before release.
For the purpose of the Consolidated Statement of Cash Flows, cash and cash equivalents consists of cash and cash
equivalents as defined, net of outstanding bank overdrafts.
Reconciliation of loss after income tax to net cash inflow/(outflow) from operating activities
Profit/Loss for the year
Adjustments for:
Depreciation and amortisation
Impairment of intangible assets
Net exchange differences
Non-cash interest
Non-cash employee benefits expense - share-based payments
Net gain on disposal of subsidiary
Net gain/(loss) on disposal of non-current assets
Unrealised Gain from Fair value of investments
2022
$'000
2021
$'000
762
(57,761)
44,425
41,306
-
(1,827)
111
8,386
-
23
(2,150)
1,261
107
60
5,548
(970)
439
-
(Increase)/decrease in trade and other receivables
(73,002)
(99,803)
(Increase)/decrease in prepayments
Increase/(decrease) in deferred tax balances
Increase/(decrease) in income tax payable
Increase/(decrease) in payables and provisions
(Increase)/decrease in inventory
Net cash flow from operating activities
(1,854)
(8,539)
7,039
100,997
(456)
3,148
(18,968)
1,914
63,195
168
73,915
(60,356)
104
Notes to the Consolidated Financial Statements
Note 12. Trade and other receivables
Current assets
Trade receivables 1
Client receivables 1
Contract assets
Deposits 2
Other receivables
2022
$'000
2021
$'000
33,143
219,378
11,090
263,611
6,926
10,525
17,451
20,378
145,766
3,416
169,560
5,248
620
5,868
Total current trade and other receivables
281,062
175,428
Non-current assets
Long-term receivables
Total trade and other receivables
-
398
281,062
175,826
1 Trade and client receivables are non-interest bearing and are generally on terms ranging from 7 to 30 days.
2 Deposit balance represents advanced deposits to suppliers and deposits made on behalf of clients for travel which will occur at a future date.
Accounting policy
Trade and client receivables are recognised initially at fair value and, subsequently, measured at amortised cost using
the effective interest method, less a provision for impairment in accordance with the simplified approach permitted by
AASB 9 Financial Instruments (AASB 9).
The Group applies the simplified approach to providing for expected credit losses prescribed by AASB 9, which permits
the use of the lifetime expected credit loss provision for all trade and client receivables and contract assets (refer note 20
'Financial risk management').
105
Notes to the Consolidated Financial StatementsCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Note 13. Inventories
A reconciliation of the values of inventory at the beginning and end of the current and previous financial year is
set out below:
Current assets
Inventory
Amounts recognised in profit or loss
2022
$'000
2021
$'000
1,422
884
Inventories recognised as an expense during the year ended 30 June 2022 amounted to $9,539,000 (2021: $8,176,000).
These were included in cost of goods sold in the Consolidated Statement of Profit or Loss and Other
Comprehensive Income.
Accounting policy
Inventory is valued at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the
ordinary course of business, less estimated costs necessary to make the sale.
Inventory represents gift cards for a loyalty program in the North American market.
Revenue from the sale of inventory is recognised at the time the order is fulfilled and sent to the customer. Cost of goods
sold is recognised as an expense of the value of inventory sold.
106
Notes to the Consolidated Financial Statements
Note 14. Investments accounted for using the equity method
Associates are all entities over which the Group has significant influence but not control or joint control. This is generally
the case where the Group holds between 20% and 50% of the voting rights. Investments in associates are accounted for
using the equity method of accounting.
The following table presents the Group's investments accounted for using the equity method at 30 June 2022:
Name of company
Principal Activity
Ownership
Interest
2022
%
Ownership
Interest
2021
Investment
in associates
2022
Investment
in associates
2021
%
$'000
$'000
2120 Tower LLC (North America)
Commercial real estate
MFG Reisen (Europe)
Travel services
37.78%
40.00%
37.78%
40.00%
-
577
2,849
-
The owner collective of 2120 Tower LLC are currently undertaking to sell the building to which this investment relates,
resulting in this asset being classified as an asset held for sale at 30 June 2022. Refer to note 26 'Non-current assets
classified as held for sale' for more information.
Accounting policy
Associates
Associates are entities over which the Group has significant influence but not control or joint control. Investments in
associates are accounted for using the equity method. Under the equity method, the share of the profits or losses of the
associate is recognised in profit or loss and the share of the movements in equity is recognised in other comprehensive
income. Investments in associates are carried in the Consolidated Statement of Financial Position at cost plus post-
acquisition changes in the Group's share of net assets of the associate. Goodwill relating to the associate is included in
the carrying amount of the investment and is neither amortised nor individually tested for impairment. Dividends
received or receivable from associates reduce the carrying amount of the investment.
When the Group's share of losses in an associate equals or exceeds its interest in the associate, including any unsecured
long-term receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments
on behalf of the associate.
The Group discontinues the use of the equity method upon the loss of significant influence over the associate and
recognises any retained investment at its fair value. Any difference between the associate's carrying amount, fair value
of the retained investment and proceeds from disposal is recognised in profit or loss.
107
Notes to the Consolidated Financial StatementsCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Note 15. Financial assets at fair value through profit or loss
Minority interest investments are investments in entities over which the Group does not have significant influence or joint
control. This is generally the case where the Group holds less than 20% share capital. These investments are accounted for
at fair value through profit or loss.
The following table presents the Group's financial assets measured and recognised at fair value at 30 June 2022:
Minority interest investments
Refer to note 28 'Fair value measurement' for further information on fair value measurement.
2022
$'000
6,998
2021
$'000
4,423
108
Notes to the Consolidated Financial Statements Note 16. Right-of-use assets
Buildings - right-of-use
Accumulated depreciation
Accumulated impairment
Total right-of-use assets (buildings)
Motor vehicles - right-of-use
Less: Accumulated depreciation
Total right-of-use assets (motor vehicles)
2022
$'000
65,375
(22,341)
(868)
42,166
399
(143)
256
2021
$'000
56,778
(15,344)
(908)
40,526
-
-
-
Total right-of-use assets
42,422
40,526
Opening net book value
Additions
Additions through the acquisition of businesses (refer Note 9)
Disposals
Depreciation - continuing operations
Depreciation - discontinued operations
Impairment of assets
Exchange difference
Closing net book value
Expense relating to short-term leases (operating expenses)
Expense relating to leases of low-value assets that are not shown above as short term leases
(included in operating expenses)
Expense relating to variable lease payments not included in lease liabilities
(included in operating expenses)
2022
$'000
40,526
3,607
7,111
(445)
(9,513)
-
-
2021
$'000
46,828
1,340
15,079
(9,701)
(9,384)
(90)
(903)
1,136
(2,643)
42,422
40,526
2022
$'000
-
422
966
2021
$'000
4
426
563
Accounting policy
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which
comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the
commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in
the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset,
and restoring the site or asset.
Extension and termination options are included in a number of building leases across the Group. These are used to
maximise operational flexibility in terms of managing the assets used in the Group's operations. The majority of the
extension and termination options held are exercisable only by the Group and not by the respective lessors. Where
appropriate extension options have been included in the lease liabilities. Extension options are only included in the lease
term if the lease is reasonably certain to be extended. The assessment of reasonable certainty is only revised if a significant
event or a significant change in circumstances occurs.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful
life of the asset, whichever is the shorter.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with
terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or
loss as incurred.
109
Notes to the Consolidated Financial StatementsCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Note 17. Trade and other payables
Current liabilities
Trade payables1
Client payables1
Other payables and accruals
Acquisition payable
Total current trade and other payables
Non-current liabilities
Other payables and accruals
Total trade and other payables
2022
$'000
2021
$'000
32,816
244,898
63,053
700
41,079
119,048
43,918
700
341,467
204,745
2,171
9,998
343,638
214,743
1 Trade payables and client payables are non-interest bearing and are normally settled on terms ranging from 7 to 30 days.
Accounting policy
Client payables result from the provision of travel services and products to clients. Trade payables result from other
activities required to provide those travel services, such as corporate services.
Other payables and accruals represent liabilities for goods and services received, amounts recognised as redundancy
payments, and amounts owed to clients for refunds. 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. Other payables and accruals also include amounts received from third
parties that are recognised as revenue in line with the performance obligations attached to the relevant contract.
Acquisition payables are recognised where contingent consideration hurdles have been satisfied and the amount is to be
settled from previously acquired entities.
110
Notes to the Consolidated Financial Statements Note 18. Borrowings
Borrowings
The carrying amounts of the Group's borrowings were as follows at 30 June:
Total current borrowings
2022
$'000
-
2021
$'000
-
In April 2022, the Group established a new, unsecured syndicated bank loan facility, replacing the previous secured
£60,000,000 ($110,644,000) facility. The new facility is a revolving line of credit with a total available limit of $100,000,000
and an availability period until 1 July 2025.
The refinancing has reduced the Group's total available bank debt limits by $10,664,000 compared to 30 June 2021.
This amount was considered surplus to requirements. The reduction was made to reduce costs associated with carrying
the surplus capacity. As the facility is unsecured, it provides the Group with a more flexible source of funding and a lower
total carrying cost.
Capitalised establishment costs relating to the new debt facility have been recognised in Other Assets and the balance
will be amortised over the life of the facility. As at 30 June 2022, the establishment costs paid which are recognised as
current and non-current assets are $237,000 and $469,000 respectively.
The Group has remained in compliance with requirements under its bank facilities throughout the period.
A covenant waiver agreed with lenders under the previous debt facility expired in December 2021. No further waiver
of covenants was required due to the Group returning to profitability sufficient to satisfy covenant thresholds.
Bank guarantees/letters of credit
The Group provides bank guarantees and letters of credit primarily for the benefit of suppliers in accordance with
state travel agency licensing and International Air Transport Association (IATA) regulations. The table below shows
the outstanding balance of guarantees issued by the Group at 30 June 2022:
Bank guarantees
Finance costs
Bank loans (including commitment fees)
Interest expense - leases
Other finance costs
Total finance costs
Accounting policy
Borrowings
2022
$'000
17,746
2022
$'000
820
1,400
83
2021
$'000
19,595
2021
$'000
1,544
1,539
184
2,303
3,267
Borrowings are initially recognised at fair value and are then subsequently measured at amortised cost using the effective
interest rate method. Establishment costs are capitalised and are amortised over the life of the related borrowing unless
there are no borrowings noted in which case capitalised establishment costs are recognised as Other Assets.
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.
Finance costs
This expense is recognised as interest accrues, using the effective interest method for bank loans and an incremental
borrowing rate for lease liabilities. These methods calculate the amortised cost of a financial liability and allocate 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.
111
Notes to the Consolidated Financial StatementsCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Note 19. Lease liabilities
Current liabilities
Lease liabilities - buildings
Lease liability - vehicles
Non-current liabilities
Lease liabilities - buildings
Lease liability - vehicles
Total lease liability
Reconciliation of lease liabilities at 30 June 2022 was as follows:
Opening net book value
Additions
Additions through business combinations (note 9)
Disposals
Repayment of principal element of lease liabilities
Exchange difference
2022
$'000
10,716
35
10,751
2021
$'000
9,193
-
9,193
37,509
37,188
92
37,601
-
37,188
48,352
46,381
2022
$'000
2021
$'000
46,381
53,095
2,818
7,114
(511)
(9,302)
1,852
1,477
15,391
(11,330)
(9,315)
(2,937)
48,352
46,381
Accounting policy
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present
value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the
lease or, if that rate cannot be readily determined, the Group's incremental borrowing rate. Lease payments comprise of
fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts
expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is
reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend on
an index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured
if there is a change in the following: future lease payments arising from a change in an index or a rate used; residual
guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an
adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use
asset is fully written down.
112
Notes to the Consolidated Financial Statements Note 20. Financial Risk Management
The Group is exposed to market risk (interest rate risk and foreign exchange risk), credit risk, and liquidity risk in the normal
course of business. The Group’s financial risk management is controlled by a central treasury department under policies
approved by the Board. Group Treasury identifies, evaluates, and hedges financial risks in co-operation with the Group’s
operating units and in accordance with the Board-approved Treasury Policy. The Treasury Policy provides written principles
for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit
risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.
(a) Market risk
Interest rate risk
The Group’s income and financial cash flows are impacted by changes in market interest rates, as the Group holds both
interest bearing assets and liabilities.
The Group’s main interest rate exposure during the period arose from interest receivable on cash deposited with banks.
As at 30 June 2022, the Group had no outstanding variable rate borrowings (refer note 18 'Borrowings').
Interest rate risk is managed using natural hedges, borrowing terms available under facility documents or using interest
rate derivatives. As at the balance date, the Group had no interest rate derivatives outstanding. The Group has considered
its exposure to interest rate movements and notes that significant changes in interest rates would not result in a material
impact to finance costs.
Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk. Foreign exchange risk arises from future
transactions and recognised assets and liabilities denominated in a currency that is not the functional currency of the
relevant Group entity.
When managing its net risk position, the Group uses foreign exchange spot and forward contracts. The Group's multi-currency
debt facility also allows for borrowings in relevant currencies to provide an offset to revaluation of foreign currency assets
where funding is also required.
The Group’s exposure to foreign currency risk at the end of the reporting period, expressed in Australian dollars, was as follows.
2022
EUR
HKD
NZD
USD
CHF
SEK
Other
Cash
and cash
equivalents
Trade
and other
receivables
Related
party loans
$'000
1,872
-
3
483
143
204
412
$'000
3,006
1
18
227
525
18
297
$'000
1,063
932
746
43
216
125
(142)
Trade
and other
payables
$'000
(2,070)
-
-
(270)
(448)
(73)
(394)
Total foreign exchange risk
3,117
4,092
2,983
(3,255)
Borrowings
$'000
-
-
-
-
-
-
-
-
Total
$'000
3,871
933
767
483
436
274
173
6,937
Based on the 30 June 2022 balances, a 10% stronger and 10% weaker Australian dollar against the currencies held, would
result in a loss of $631,000 and a gain of $771,000 respectively.
113
Notes to the Consolidated Financial StatementsCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Note 20. Financial risk management continued
2021
USD
EUR
HKD
GBP
SGD
NZD
Other
Cash
and cash
equivalents
Trade
and other
receivables
$'000
$'000
754
134
78
2,031
1,530
6
302
152
8
1
-
-
-
173
Related
party loans
$'000
2,598
(2,273)
(2,116)
3
-
1,046
415
Trade
and other
payables
$'000
(99)
14
(3)
(19)
(22)
(1)
(82)
Total foreign exchange risk
4,835
334
(327)
(212)
Borrowings
$'000
-
-
-
-
-
-
-
-
Total
$'000
3,405
(2,117)
(2,040)
2,015
1,508
1,051
808
4,630
Based on the 30 June 2021 balances, a 10% stronger and 10% weaker Australian dollar against the currencies held, would
have resulted in a loss of $514,000 and a gain of $421,000 respectively.
The following table summarises the foreign exchange rates for the key currencies used in the preparation of the
Annual Report.
2022
Spot rate
Average rate
2021
Spot rate
Average rate
(b) Credit risk
AUD/USD
0.6903
0.7255
0.7498
0.7472
AUD/GBP
0.5669
0.5455
0.5422
0.5546
AUD/HKD
5.4178
5.6621
5.8225
5.7959
Credit risk arises from cash and cash equivalents placed on deposit with counterparties and balances owing from clients
and suppliers.
The Group’s exposure to credit risk relating to cash and cash equivalents arises from the ability of the counterparty to
repay funds placed on deposit. The Group’s cash and cash equivalent investments are held on deposit with counterparties
holding an investment grade credit rating.
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 actively
monitored on an ongoing basis, with the result that the Group’s exposure to bad debts has been
historically negligible.
Trade and other receivables are subject to the expected credit loss model. The Group has applied the AASB 9 Financial
Instruments simplified approach to measuring the expected credit loss, which uses a lifetime expected loss allowance for
all receivables and contract assets.
Contract assets represent balances earned which are not yet unconditional and have the same characteristics as trade
receivables. The Group has, therefore, concluded that the expected loss rates for trade receivables are a reasonable
approximation of the loss rates for contract assets.
To measure the expected credit losses, receivables and contract assets have been grouped based on shared credit risk
characteristics (by client industry or supplier type) and the days past due. Based on the grouping of clients, an expected
loss rate has been applied. Any individual receivable or contract asset which had significantly increased credit risk, were
individually assessed and allowed for. Historic loss events and forward-looking assumptions have been factored into the
expected loss allowance calculation for these assets as at 30 June 2022.
114
Notes to the Consolidated Financial Statements Note 20. Financial risk management continued
On this basis, the loss allowance as at 30 June 2022 and 30 June 2021 was determined as follows:
2022
Expected loss rate (%)
Carrying amount – client receivables ($'000)
Carrying amount – trade receivables ($'000)
Carrying amount – contract assets ($'000)
Loss allowance ($'000)
2021
Expected loss rate (%)
Carrying amount – client receivables ($'000)
Carrying amount – trade receivables ($'000)
Carrying amount – contract assets ($'000)
Loss allowance ($'000)
Current
2
183,761
32,345
11,877
4,156
Current
1
140,967
20,561
3,674
1,811
18,433
225,080
More than
30 days
past due
More than
60 days
past due
More than
90 days
past due
3
12,823
726
-
340
9
10,063
2,377
-
1,107
21
886
-
4,077
More than
30 days
past due
More than
60 days
past due
More than
90 days
past due
7
2,575
169
-
181
10
1,527
30
-
163
62
4,914
925
-
3,627
Client
Receivables
Trade
Receivables
Total
4
36,334
11,877
9,680
Total
3
149,983
21,685
3,674
5,782
Contract
Assets
$'000
258
529
-
-
The loss allowances for receivables and contract assets as at 30 June reconcile to the opening loss allowances as follows:
Opening loss allowance as at 1 July 2021
Increase/(decrease) in loss allowances recognised in the Consolidated Statement
of Profit or Loss and Other Comprehensive Income
Receivables written off during the year as uncollectible
Additions through acquisitions
Closing loss allowance as at 30 June 2022
$'000
4,218
818
(179)
846
5,703
$'000
1,306
1,884
-
-
3,190
787
Opening loss allowance as at 1 July 2020
Increase in loss allowances recognised in the Consolidated Statement of Profit or Loss
and Other Comprehensive Income
Receivables written off during the year as uncollectible
Additions through acquisitions
Closing loss allowance as at 30 June 2021
Client
Receivables
Trade
Receivables
Contract
Assets
$'000
3,874
33
(1,791)
2,102
4,218
$'000
1,437
(135)
-
4
1,306
$'000
760
(281)
(221)
-
258
Receivables and contract assets are written-off where there is no reasonable expectation of recovery. Indicators that
there is no reasonable expectation of recovery include, amongst others, the failure of a client or supplier to engage in a
repayment plan.
Losses on client and trade receivables and contract assets are presented as bad and doubtful debts for client receivables
and transactional overrides or a write-back of revenue for volume-based overrides. Subsequent recoveries will be
recognised against the same line items.
(c) Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulties in meeting the obligations associated with its financial
liabilities. The Group’s approach to managing liquidity is to ensure sufficient cash and credit facilities are available to meet
its liabilities when due, under both normal and stressed conditions.
In addition to the cash position outlined in note 11 'Cash and cash equivalents', the Group has the following credit facilities
available at 30 June 2022. The bank loan amounts in FY22 include the Group’s new $100,000,000 multi-currency revolving
loan facility which matures in July 2025. The new facility has fully refinanced and replaced the previous facility which was
in place in FY21, resulting in a reduction in available credit lines of approximately $10,664,000. This reduction amount was
surplus to potential requirements and the limit reduced to avoid unnecessary carrying costs.
115
Notes to the Consolidated Financial StatementsCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Note 20. Financial risk management continued
Bank loans
Used
Unused
Total bank loans available
Credit cards
Used
Unused
Total credit cards limit
Overdraft facilities
Used
Unused
Total overdraft facilities available
2022
$'000
-
100,000
100,000
45,851
66,529
112,380
-
9,065
9,065
2021
$'000
-
110,664
110,664
15,990
60,672
76,662
-
8,841
8,841
The Group's credit card facilities are primarily used for client bookings via virtual credit cards.
The following table summarises the contractual timing of undiscounted cashflows of financial liabilities, expressed in AUD
as at 30 June 2022. No derivative financial instruments were held as at the reporting date. Cash flows for financial liabilities
without fixed amount or timing are based on the conditions existing at 30 June 2022.
Contractual
maturities of
financial liabilities
June 2022
Trade and other payables
Lease liabilities
Total non-derivative
financial liabilities
June 2021
Trade and other payables
Lease liabilities
Total non-derivative
financial liabilities
Less than
6 months
6 - 12
months
Between
1 and 2 years
$'000
$'000
$'000
Between
2 and 5
years
$'000
Over
5 years
$'000
Total
contractual
cash flows
$'000
Carrying
amount
(assets)/
liabilities
$'000
331,211
6,306
10,256
5,857
2,171
10,500
-
-
343,638
343,638
22,399
7,561
52,623
48,352
337,517
16,113
12,671
22,399
7,561
396,261
391,990
197,078
5,423
7,630
5,090
2,931
9,043
7,104
19,054
-
12,352
214,743
50,962
214,743
46,381
202,501
12,720
11,974
26,158
12,352
265,705
261,124
116
Notes to the Consolidated Financial Statements Note 21. Provisions
Movements in provisions
At 1 July 2021
Acquisition of subsidiary
Arising during the year
Utilised
Write back of provision
Transfer to acquisition payable
Exchange differences
At 30 June 2022
At 1 July 2020
Acquisition of subsidiary
Disposal of subsidiary
Arising during the year
Utilised
Write back of provision
Transfer to acquisition payable
Exchange differences
At 30 June 2021
2022
Current
Non-current
2021
Current
Non-current
Accounting policy
Employee
entitlements
Provisions
for other
liabilities and
charges
$’000
7,304
2,745
13,007
(12,323)
(910)
-
323
$’000
14,463
677
55,550
(45,986)
(4,499)
(700)
934
Total
$’000
21,767
3,422
68,557
(58,309)
(5,409)
(700)
1,257
10,146
20,439
30,585
5,825
1,285
(24)
6,020
(4,741)
(837)
-
(224)
7,304
33,394
1,497
(35)
76,960
(92,221)
(2,690)
(700)
(1,742)
14,463
39,219
2,782
(59)
82,980
(96,962)
(3,527)
(700)
(1,966)
21,767
9,219
927
17,946
2,493
27,165
3,420
10,146
20,439
30,585
6,517
787
7,304
11,638
2,825
14,463
18,155
3,612
21,767
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. At the end of the reporting period, provisions are measured at the
present value of management's best estimate of the expenditure required to settle the present obligation. 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 an 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 Consolidated Statement of Profit or Loss and Other Comprehensive Income,
net of any reimbursement.
Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
117
Notes to the Consolidated Financial StatementsCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Note 21. Provisions continued
Employee benefits
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 are available.
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.
Provision for other liabilities and charges
Provision for unclaimed charges
The Group recognises a provision for unclaimed charges,
arising from the sale of travel services. Based on historical
data and past experience, management considers the
possibility of claims and, if appropriate, it is written back
to the Consolidated Statement of Profit or Loss and Other
Comprehensive Income.
Short term employee benefits
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.
Other long-term employee benefits
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
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 Consolidated 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.
118
Notes to the Consolidated Financial Statements
Note 22. Contributed equity
Ordinary shares - fully paid
2022
$'000
2021
$'000
927,397
744,581
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.
Movements in ordinary share capital
Details
Balance
Capital raising used primarily for the acquisition of T&T
Date
1 July 2020
October 2020
Number
of shares
109,000,950
27,055,823
T&T management share issue
6 November 2020
368,743
Issue price
$13.85
$13.85
Less: transaction costs arising on share issue
Deferred tax credit recognised directly in equity
Balance
30 June 2021
136,425,516
Share appreciation rights vested
20 August 2021
431,786
Institutional share placement - proceeds used for the
acquisition of HLO Corporate
Share purchase plan - proceeds used for the acquisition of
HLO Corporate
Shares issued as part of HLO Corporate acquisition
consideration
Less: transaction costs arising on share issue
Deferred tax credit recognised directly in equity
23 December 2021
3,571,429
$21.00
28 January 2022
1,190,477
$21.00
31 March 2022
3,571,429
$23.75
Balance
30 June 2022
145,190,637
$'000
375,314
374,723
5,107
(11,115)
552
744,581
-
75,000
25,000
84,821
(2,108)
103
927,397
Accounting policy
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.
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 optimal capital structure includes a mix of debt (refer note 18 'Borrowings'), cash (refer note 11 'Cash and cash
equivalents') 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.
119
Notes to the Consolidated Financial StatementsCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Note 23. Reserves
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 2020
Currency translation difference
Deferred tax
Other comprehensive income
Share-based payments:
Expense for the year
Effect of tax
At 30 June 2021
Currency translation differences
Deferred tax
Other comprehensive income
Share-based payments:
Expense for the year
Effect of tax
At 30 June 2022
Nature and purpose of reserves
Foreign currency translation
Foreign
currency
translation
$’000
47,963
(28,765)
1,811
(26,954)
Share-based
payments
$’000
(27,789)
-
-
-
-
-
5,548
4,716
21,009
(17,525)
35,429
(233)
35,196
-
-
(112)
-
(112)
8,386
2,500
Total
$’000
20,174
(28,765)
1,811
(26,954)
5,548
4,716
3,484
35,317
(233)
35,084
8,386
2,500
56,205
(6,751)
49,454
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 Profit or Loss and Other Comprehensive Income when the net investment is sold.
Share-based payments
The share-based payments reserve is used to recognise an expense for the grant date fair value of deferred shares granted
to employees but not yet vested over the vesting period, as well as deferred tax associated with future tax deductions.
120
Notes to the Consolidated Financial Statements Note 24. Retained earnings
Retained earnings at the beginning of the financial year
Profit/(loss) after income tax (expense)/benefit for the year
2022
$'000
87,994
3,101
2021
$'000
143,345
(55,351)
Retained earnings at the end of the financial year
91,095
87,994
121
Notes to the Consolidated Financial StatementsCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Note 25. Impairment testing of goodwill
For goodwill impairment testing, a cash-generating unit (CGU) for the Group has been defined as the lowest level of travel
services operations where individual cash flows can be identified.
The carrying amount of goodwill to the cash generating unit:
Travel services - Australia and New Zealand
Travel services - North America
Travel services - Asia
Travel services - Europe
Total goodwill
2022
$'000
2021
$'000
203,664
56,081
437,377
402,668
55,801
162,351
49,744
169,760
859,193
678,253
The recoverable amount of each cash-generating unit (CGU) has been determined based on forecast cash flow scenarios,
with the value-in-use (VIU) basis being used for all valuations. Forecasts were determined by management using both
internal and external data. The forecasts assume the return of activity to pre-COVID-19 pro-forma levels by FY24 in ANZ,
Europe, and North America and FY25 in Asia. Cash flows post FY24-25 are extrapolated using the annual growth rates in
the table below up to year 5, and the long term growth rates in the table below beyond year 5.
The following table sets out the remaining key assumptions for those cash-generating units that have goodwill allocated
to them.
2022
Pre-tax nominal discount rate applied to the cash flow projection
13.94%
12.11%
13.27%
12.18%
ANZ
NA
Asia
Europe
Cash flows beyond FY24 (FY25 in Asia), up to year 5, are extrapolated
using an average nominal growth rate of:
Revenue
Operating expenses
Long-term growth rate
2021
3.50%
3.50%
2.00%
3.50%
3.50%
2.00%
3.50%
3.50%
2.00%
3.50%
3.50%
2.00%
Pre-tax nominal discount rate applied to the cash flow projection
13.07%
11.69%
10.63%
11.22%
Cash flows beyond FY24, up to year 5, are extrapolated using an average
nominal growth rate of:
Revenue
Operating expenses
Long-term growth rate
3.50%
3.00%
2.00%
3.50%
3.00%
2.00%
3.50%
3.00%
2.00%
3.50%
3.00%
2.00%
122
Notes to the Consolidated Financial Statements Note 25. Impairment testing of goodwill continued
The following key assumptions were used in the modelling:
― Recovery path projections through to FY24 (FY25 for Asia).
― Pre-tax discount rates - reflect specific risks and conditions relating to the relevant cash-generating units and the
countries in which they operate.
― Revenue - the basis used to determine the amount assigned to sales volume is based on historical experience,
expected client retentions and wins, and adjusted for growth and other known circumstances. This information was
overlaid to create three revenue scenarios based on the economic recovery paths.
― Operating expenses - the basis used to determine the amount assigned to the forecast costs are based on
historical margins and patterns of revenue, adjusted for growth and other known circumstances.
― Long term growth rates - the growth rate used to extrapolate cash flows beyond the current period is based on
historical experience and future expectations for growth in the context of inflation expectations in the countries
in which the cash-generating units operate.
Sensitivity to changes in key assumptions
Management recognises that there are various reasons the estimates used in these assumptions may vary. Management
does not believe that there are reasonably possible changes in any one key assumption that would result in an impairment
charge in any of the CGUs.
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.
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 its value in use. To assess
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 have suffered an impairment are reviewed for possible reversal of the impairment at the end of
each reporting period.
In assessing value in use, 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.
123
Notes to the Consolidated Financial StatementsCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Note 26. Non-current assets classified as held for sale
Through a wholly owned subsidiary (TTRE Inc), CTM holds a 37.78% interest in 2120 Tower LLC. 2120 Tower LLC is a limited
liability company that owns an equity interest in the building of CTM’s North America headquarters. The investment
in 2120 Tower LLC has been accounted for based on the equity method of accounting from its inception (refer note 14
'Investments accounted for using the equity method'). The asset is periodically compared to commercial real estate market
rates equivalents to support the underlying value of the investment to assess the recoverable amount of the investment.
During the period, 2120 Tower LLC initiated the process to market and sell the building by engaging with a real estate
agent experienced in such matters.
Current assets
Non-current assets classified as held for sale
Accounting policy
2022
$'000
3,311
2021
$'000
-
Non-current assets and assets of disposal groups are classified as held for sale if their carrying amount will be recovered
principally through a sale transaction rather than through continued use. They are measured at the lower of their carrying
amount and fair value less costs of disposal. For non-current assets or assets of disposal groups to be classified as held for
sale, they must be available for immediate sale in their present condition and their sale must be highly probable.
An impairment loss is recognised for any initial or subsequent write-down of the non-current assets and assets of
disposal groups to fair value less costs of disposal. A gain is recognised for any subsequent increases in fair value less
costs of disposal of non-current assets and assets of disposal groups, but not in excess of any cumulative impairment loss
previously recognised.
Non-current assets are not depreciated or amortised while they are classified as held for sale. Interest and other expenses
attributable to the liabilities of assets held for sale continue to be recognised.
124
Notes to the Consolidated Financial Statements Note 27. Property, plant and equipment
Year ended 30 June 2022
Cost
Accumulated depreciation
Opening net book amount
Additions
Additions through business combinations
(note 9 'Business combinations')
Disposals
Depreciation charge
Exchange differences
Closing net book amount
Year ended 30 June 2021
Cost
Accumulated depreciation
Opening net book amount
Additions
Additions through the acquisition of entities
Disposals
Depreciation charge - continuing operations
Depreciation charge - discontinued operations
Exchange differences
Closing net book amount
Accounting policy
Furniture,
fixtures and
equipment
Computer
equipment
Leasehold
improve-
ments
$’000
$’000
$’000
8,911
(6,822)
2,089
1,707
646
434
(18)
(591)
(89)
2,089
6,790
(5,083)
1,707
2,250
84
343
(267)
(774)
(30)
101
1,707
18,182
(12,868)
5,314
4,261
3,431
-
(5)
(2,793)
420
5,314
18,684
(14,423)
4,261
3,353
209
3,934
(59)
(2,365)
(6)
(805)
4,261
11,780
(8,177)
3,603
4,479
200
-
(10)
(1,472)
406
3,603
9,244
(4,765)
4,479
5,514
472
1,325
(1,095)
(1,389)
-
(348)
4,479
Other
$’000
1,648
(1,062)
586
708
226
-
(80)
(384)
116
586
1,165
(457)
708
974
-
-
(74)
(192)
-
-
708
Total
$’000
40,521
(28,929)
11,592
11,155
4,503
434
(113)
(5,240)
853
11,592
35,883
(24,728)
11,155
12,091
765
5,602
(1,495)
(4,720)
(36)
(1,052)
11,155
Property, 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 Profit or Loss and Other
Comprehensive Income during the reporting period in which they are incurred.
Derecognition
An item of property, 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 Consolidated Statement of Profit or Loss and Other Comprehensive
Income in the year the asset is derecognised.
Depreciation expense
Depreciation is calculated on property, plant and equipment using the following estimated useful lives and methods:
Item
Leasehold improvements
Computer equipment
Furniture, fixtures and equipment
Years Method
3-15 Straight line
3-5 Straight line
4-10 Straight line
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each
financial year end.
125
Notes to the Consolidated Financial StatementsCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Note 28. Fair value measurement
Fair value hierarchy
The following table presents the Group's financial assets and financial liabilities measured and recognised at fair value at
30 June 2022 on a recurring basis. The level 3 balances relate to minority interests in unlisted equity investments held in
the North America region. The change in fair value relates to an increase in CTM's proportional share of the net assets of
the investments.
At 30 June 2022
Financial assets at fair value through profit or loss
At 30 June 2021
Financial assets at fair value through profit or loss
Level 1
$,000
-
Level 1
$,000
-
Level 2
$,000
-
Level 2
$,000
-
Level 3
$,000
6,998
Level 3
$,000
4,423
Total
$,000
6,998
Total
$,000
4,423
Level 1: The fair value of financial instruments traded in active markets (such as publicly traded derivatives and equity
securities) is based on quoted market prices at the end of the reporting period. The quoted marked price used for financial
assets and liabilities held by the Group is the closing bid or ask price as appropriate. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, over–the–counter
derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little
as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the
instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in
level 3. This is the case for unlisted equity securities.
Accounting policy for fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the
fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date; and assumes that the transaction will take place either: in the
principal market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based on its
highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and
transfers between levels are determined based on a reassessment of the lowest level of input that is significant to the
fair value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either
not available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge
and reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an
analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison,
where applicable, with external sources of data.
126
Notes to the Consolidated Financial Statements The SARs only vest if certain criteria are met, the employee
remains in service, and upon the achievement of earnings
per share growth targets over the performance period.
There is no consideration payable by the participant
upon exercising vested SARs. The number of shares to
be issued upon vesting of SARs is calculated by reference
to an increase in the price of CTM’s shares from a base
price determined by the Board and the five-day volume
weighted average price of CTM’s shares immediately
preceding the date that the Board determines that the
vesting conditions are satisfied or waived.
Further details can be found in the Remuneration Report
beginning page 59.
Note 29. Share-based payments
Share appreciation rights
In FY20 CTM introduced a new Omnibus Incentive Plan
(Incentive Plan). The Incentive Plan replaced CTM’s
Share Appreciation Rights Plan (SARs Plan) and Exempt
Employee Share Plan. The Incentive Plan enables CTM
to offer a range of different awards, including share
appreciation rights (SARs), options, performance rights
and tax exempt shares. The grant of awards under
the Incentive Plan forms an integral part of effectively
rewarding executive management, and serves a number
of positive purposes, including acting as a retention
tool for key employees as well as linking the award of
management incentives to shareholder value creation
and aligning the interests of senior executives with those
of shareholders to encourage the long-term sustainable
growth of CTM.
SARs under the current framework
In FY22, SARs were awarded under the Incentive Plan.
Participation in the Incentive 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. SARs granted under the Incentive
Plan carry no dividend or voting rights.
The following table summarises the movement in SARs granted under the plan:
Grant date
As at 1 July
Granted during the year
Vested during the year
Forfeited or lapsed during the year
As at 30 June
Vested and exercisable at 30 June
2022
2021
Number of SARs
Number of SARs
5,814,750
2,400,500
(809,750)
(2,593,000)
4,812,500
-
3,489,000
3,504,250
-
(1,178,500)
5,814,750
-
During FY22, 105,000 SARs granted were subsequently forfeited in the year.
SARs outstanding at the end of the year have the following performance period and share price hurdles.
Grant date
Performance period
Vesting date
Base price
22 August 2018
1 July 2018 - 30 June 2021
9 September 2019
1 July 2019 - 30 June 2022
18 August 2020
18 August 2020
1 July 2020 - 30 June 2021
1 July 2020 - 30 June 2022
1 November 2020
1 November 2020 - 30 June 2022
21 May 2021
1 July 2021
1 July 2021
28 October 2021
28 October 2021
17 February 2021 - 30 June 2024
1 July 2021 - 30 June 2023
1 July 2021 - 30 June 2024
1 July 2021 - 30 June 2023
1 July 2021 - 30 June 2024
30 June 2021
30 June 2022
1 July 2021
1 July 2022
1 July 2022
1 July 2024
1 July 2023
1 July 2024
1 July 2023
1 July 2024
$29.00
$22.84
$9.89
$9.89
$12.35
$13.85
$21.19
$21.19
$21.19
$21.19
2022
Number of
SARs
2021
Number of
SARs
-
-
-
1,101,500
1,311,500
809,750
1,519,500
1,574,500
897,500
100,000
1,085,250
1,085,250
62,500
62,500
917,500
100,000
-
-
-
-
4,812,500
5,814,750
809,750 SARs granted on 18 August 2020, with a performance period ending 30 June 2021 vested on 1 July 2021 resulting in
the issuance of 431,786 shares. 1,519,500 SARs granted on 18 August 2020, with a performance period ending 30 June 2022
vested on 1 July 2022, which will result in the issuance of 720,551 shares.
127
Notes to the Consolidated Financial StatementsCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Note 29. Share-based payments continued
Fair value of SARs granted
The assessed weighted average fair value at grant date of the SARs granted during the year ended 30 June 2022 was
$4.11 per SAR (2021: $3.15). The fair value at grant date was determined using the 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 2022 included:
Base price Grant date
Vesting date
Expected
price
volatility
of CTM's
shares
Share
price at
grant date
Expected
dividend
yield
Risk-free
interest
rate
$
$
%
%
%
21.19
1 July 2021
1 July 2023
21.32
32.00%
1.00%
0.25%
21.19
1 July 2021
1 July 2024
21.32
32.00%
1.00%
0.25%
21.19
28 October 2021
1 July 2023
24.00
32.00%
1.00%
0.25%
21.19
28 October 2021
1 July 2024
24.00
32.00%
1.00%
0.25%
SARs are granted for no
consideration and vest
based on the Group's
Earnings per Share
growth over a 2 year
vesting period
SARs are granted for no
consideration and vest
based on the Group's
Earnings per Share
growth over a 3 year
vesting period
SARs are granted for no
consideration and vest
based on the Group's
Earnings per Share
growth over a 2 year
vesting period
SARs are granted for no
consideration and vest
based on the Group's
Earnings per Share
growth over a 3 year
vesting period
The expected volatility is based on the historic share price volatility aligned with the remaining life of the SARs, adjusted
for any expected changes to future volatility due to publicly available information.
Expenses arising from SARs
An expense for the year of $8,386,000 has been recognised in the consolidated statement of profit or loss and other
comprehensive income with a corresponding amount recognised in the share based payment reserve (refer to note
23 'Reserves'). The expense recognised is based on the number of unvested SARs on issue that are expected to vest.
Accounting policy
Share-based compensation benefits are provided to employees by way of a Share Appreciation Right (SAR). 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 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.
128
Notes to the Consolidated Financial Statements Note 30. Interest in other entities
(a) Subsidiary entities
The Group’s subsidiary entities at 30 June 2022 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.
Company
Region
Corporate Travel Management Group Pty Ltd1
Floron Nominees Pty Ltd
WA Travel Management Pty Ltd
Sainten Pty Ltd
ETM Travel Pty Ltd
Travelcorp Holdings Pty Ltd
Travelogic Pty. Limited
Andrew Jones Travel Pty Ltd
SCT Travel Group Pty Ltd
Travelcorp (Aust) Pty Ltd
Tramada Holdings Pty Ltd
Tramada International Pty Ltd
Tramada Systems Pty Ltd
Corporate Travel Management (New Zealand) Limited
Tramada Systems (UK) Limited5
Tramada Systems (USA) Inc
CTM Finance Pty Ltd2
QBT PTY Ltd1,3
TravelEdge Pty Ltd3
Inspire Travel Management Pty Ltd3
Quay Services Pty Ltd3
Show Group Pty Ltd3
STA Travel Academic Pty Ltd3
Nexus Point Travel Pty Ltd3
Granted Worldwide Pty Ltd3
GSS Travel NZ Pty Ltd3
Communico Services Pty Ltd3
CTMNZ Holdings Ltd2
Atlantic & Pacific Business Travel Ltd3
Atlas Ltd3
Show Group (NZ) Ltd3
CTMNA Holdings Limited1
ANZ
ANZ
ANZ
ANZ
ANZ
ANZ
ANZ
ANZ
ANZ
ANZ
ANZ
ANZ
ANZ
ANZ
ANZ
ANZ
ANZ
ANZ
ANZ
ANZ
ANZ
ANZ
ANZ
ANZ
ANZ
ANZ
ANZ
ANZ
ANZ
ANZ
ANZ
Country
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Ownership
2022
%
Ownership
2021
%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
New Zealand
100.00%
100.00%
United Kingdom
-
100.00%
United States of America
100.00%
100.00%
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
New Zealand
New Zealand
New Zealand
New Zealand
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
North America
United States of America
100.00%
100.00%
129
Notes to the Consolidated Financial StatementsCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Note 30. Interest in other entities continued
Company
Region
Country
Corporate Travel Management North America Inc1,4
North America
United States of America
Corporate Travel Planners, Inc4
North America
United States of America
Ownership
2022
%
Ownership
2021
%
-
-
100.00%
100.00%
Travel & Transport, Inc4
Travefy Incorporated
TTRE Inc
TTINV Inc
WTT Inc4
North America
United States of America
100.00%
100.00%
North America
United States of America
10.00%
10.00%
North America
United States of America
100.00%
100.00%
North America
United States of America
100.00%
100.00%
North America
United States of America
-
100.00%
2120 Tower LLC
North America
United States of America
37.78%
37.78%
Corporate Travel Management (CAN) Limited
North America
Canada
100.00%
100.00%
QBT USA Inc3
North America
United States of America
100.00%
-
Corporate Travel Management (UK) Limited
USD Treasury Coy (UK) Limited
Corporate Travel Management (Europe) Limited
Corporate Travel Management (North) Limited
Portall Travel Limited
Arizonaco Limited5
AIT Travel Limited5
Alpha-Omega (Travel) Limited5
Europe
Europe
Europe
Europe
Europe
Europe
Europe
Europe
United Kingdom
100.00%
100.00%
United Kingdom
100.00%
100.00%
United Kingdom
100.00%
100.00%
United Kingdom
100.00%
100.00%
United Kingdom
100.00%
100.00%
United Kingdom
United Kingdom
United Kingdom
-
-
-
100.00%
100.00%
100.00%
Corporate Travel Management (United Kingdom) Ltd
Europe
United Kingdom
100.00%
100.00%
Radius Travel WTT Limited
Travel and Transport UK Limited
Statesman Travel Group Limited5
Statesman Travel Management Limited5
Statesman TMC Limited5
Statesman Travel Limited
Statesman Travel (Leisure) Limited5
Statesman Travel Services Limited
Statesman Travel Logistics Limited5
Corporate Travel Management (France) SAS
Corporate Travel Management (Germany) GmbH
Corporate Travel Management (Netherlands) BV
Corporate Travel Management (Switzerland) GmbH
Corporate Travel Management (Sweden) AB
Corporate Travel Management s.r.o (Czech Republic)
Corporate Travel Management (Norway) AS
Corporate Travel Management (Denmark) Aps
Europe
Europe
Europe
Europe
Europe
Europe
Europe
Europe
Europe
Europe
Europe
Europe
Europe
Europe
Europe
Europe
Europe
United Kingdom
100.00%
100.00%
United Kingdom
100.00%
100.00%
United Kingdom
United Kingdom
United Kingdom
-
-
-
100.00%
100.00%
100.00%
United Kingdom
100.00%
100.00%
United Kingdom
-
100.00%
United Kingdom
100.00%
100.00%
United Kingdom
-
100.00%
France
Germany
Netherlands
Switzerland
Sweden
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
Czech Republic
100.00%
100.00%
Norway
Denmark
100.00%
100.00%
100.00%
100.00%
130
Notes to the Consolidated Financial Statements Note 30. Interest in other entities continued
Company
Corporate Travel Management (Hungary) Kft
Corporate Travel Management (Poland) SP. z.o.o
MFG Riesen
Travellinspector GmbH Schweiz
Statesman Travel Services Private Limited
Wealthy Aim Investments Limited
Westminster Travel Limited
Westminster Travel (China) Limited5
Jecking Tours & Travel Limited6
Far Extent Investments Limited
Profit Shine Holdings Limited
Bees.Travel Limited
Corporate Travel Management Limited
CTM Overseas Education Centre Limited
Lotus Travel Group Limited
Lotus Tours Limited
Memory Holidays Limited
Westminster Travel Limited (Taiwan)
Westminster Travel Consultancy (Guangzhou) Limited
Guangzhou Anlv Travel Service Co Ltd
Global Travel Support Service Co., Ltd (Japan)3
Corporate Travel Management (S) Pte. Ltd
Universal Advisory Pte Ltd3
Safe2travel Pte Ltd3
Yesrooms Pte Ltd3
Holiday House Pte Ltd3
Region
Europe
Europe
Europe
Europe
Europe
Asia
Asia
Asia
Asia
Asia
Asia
Asia
Asia
Asia
Asia
Asia
Asia
Asia
Asia
Asia
Asia
Asia
Asia
Asia
Asia
Asia
Country
Hungary
Poland
Germany
Ownership
2022
%
Ownership
2021
%
100.00%
100.00%
100.00%
100.00%
40.00%
40.00%
Switzerland
40.00%
40.00%
India
99.99%
99.99%
British Virgin Islands
75.10%
75.10%
Hong Kong
Hong Kong
Hong Kong
Hong Kong
75.10%
75.10%
-
-
75.10%
75.10%
75.10%
75.10%
British Virgin Islands
75.10%
75.10%
Hong Kong
Hong Kong
Hong Kong
75.10%
75.10%
75.10%
75.10%
75.10%
75.10%
British Virgin Islands
75.10%
75.10%
Hong Kong
Hong Kong
Taiwan
75.10%
75.10%
75.10%
75.10%
75.10%
75.10%
People's Republic of China
75.10%
75.10%
People's Republic of China
75.10%
75.10%
Japan
Singapore
Singapore
Singapore
Singapore
Singapore
75.10%
-
75.10%
75.10%
75.10%
72.47%
72.47%
72.47%
-
-
-
-
1 These subsidiary entities have 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 note 33 'Deed of cross guarantee'.
2 These subsidiary entities were new entities registered during the period.
3 These entities were acquired during the period.
4 These entities were merged during the period with the surviving, merged entity being Corporate Travel Management North America, Inc.
5 These entities were deregistered during the period.
6 These entities were sold during the period. Note that the disposal of these entities was not material to the business.
131
Notes to the Consolidated Financial StatementsCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Note 30. Interest in other entities continued
(b) Non-controlling interests (NCI)
The following table summarises the financial information for entities which have a non-controlling interest which is
material to the Group.
The amounts disclosed are before intercompany 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 of the subsidiary
Summarised Statement of Profit or Loss and Other Comprehensive Income
Revenue and other income
Loss for the year
Other comprehensive income for the year
Total other comprehensive loss for the year
Loss for the year allocated to NCI
Summarised Statement of Cash Flows
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
2022
$'000
2021
$'000
79,050
71,549
(44,976)
(25,763)
34,074
45,786
76,741
(12,045)
64,696
66,687
(11,706)
54,981
98,770
100,767
13,439
15,398
16,892
18,238
(9,169)
6,604
(9,581)
(9,840)
(2,565)
(19,421)
(2,339)
(2,410)
(22,086)
(29,097)
(1,455)
(2,418)
(1,704)
56,359
Net increase/(decrease) in cash and cash equivalents
(25,959)
25,558
132
Notes to the Consolidated Financial Statements Note 31. Related party transactions
(a) Parent entities
The ultimate parent entity within the Group is Corporate Travel Management Limited.
(b) Subsidiary entities
Interests in subsidiary entities are set out in note 30 'Interest in other entities'.
(c) Key management personnel compensation
Short term
Post-employment
Long-term benefits
Share-based payments
2022
$'000
5,884
115
87
2,310
2021
$'000
3,866
132
112
1,956
Total KMP compensation
8,396
6,066
Detailed remuneration disclosures are provided in the Remuneration Report.
(d) Transactions with related parties
During FY22, a deferred acquisition consideration amount of $700,000 was paid to Greg McCarthy (CEO of Australia and
New Zealand) in relation to the acquisition of SCT Travel Group Pty Ltd, trading as Platinum Travel Corporation.
(e) Outstanding balances with related parties
The following balances are outstanding at the end of the reporting period in relation to transactions with related parties:
Contingent consideration
Key management personnel1
2022
$'000
2021
$'000
646
1,293
1 The balance represents the present value of the contingent consideration to Greg McCarthy, as a part of the acquisition of SCT Travel Group Pty Ltd, trading as
Platinum Travel Corporation – refer note 21 'Provisions'.
(f) Terms and conditions
Directors of the Group hold other directorships as detailed in the Directors’ Report. Where any of these related entities
are clients of the Group, the arrangements are on normal commercial terms and conditions and at market rates.
Directors and executives can acquire travel and event management services on normal terms and conditions and
at market rates. There are no amounts outstanding in relation to these transactions at 30 June 2022.
133
Notes to the Consolidated Financial StatementsCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Note 32. Parent entity information
(a) Summary financial information
The individual financial statements of the parent entity show the following aggregate amounts:
Statement of profit or loss and other comprehensive income
Profit/(loss) after income tax
Total comprehensive income/(loss)
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Net assets
Equity
Contributed equity
General Reserve
Share-based payments reserve
Retained earnings
Total equity
2022
$'000
27,252
27,252
2022
$'000
14,684
Parent
2021
$'000
(26,264)
(26,264)
Parent
2021
$'000
2,359
1,009,201
774,239
3,876
2,095
32,250
17,121
976,951
757,118
947,801
764,984
(6,712)
(16,477)
-
35,862
-
8,611
976,951
757,118
(b) Guarantees entered into by the parent entity
The parent entity is party to, and acts as guarantor under the Group's overall financing arrangements as detailed in
note 18 'Borrowings'.
(c) Contingent liabilities of the parent entity
The parent entity did not have any contingent liabilities as at 30 June 2022 or 30 June 2021.
(d) Contractual commitments
The parent did not have any contractual commitments at 30 June 2022 or 30 June 2021.
134
Notes to the Consolidated Financial Statements
Note 32. Parent entity information continued
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 installments.
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.
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:
(i) Investments in subsidiaries
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.
These 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.
135
Notes to the Consolidated Financial StatementsCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Note 33. Deed of cross guarantee
Corporate Travel Management Limited, Corporate Travel Management Group Pty Ltd, QBT Pty Ltd, Corporate Travel
Management (New Zealand), CTMNA Holdings Limited, and Corporate Travel Management North America, 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’.
During the period, QBT Pty Ltd was added to the deed of cross guarantee. Floron Nominees Pty Ltd, Sainten Pty Ltd,
Travelogic Pty Limited, WA Travel Management Pty Ltd, Travelcorp Holdings Pty Ltd, Travelcorp (Aust) Pty Ltd, and ETM
Travel Pty Ltd were removed from the deed of cross guarantee.
During the period, three 100% owned subsidiaries of the Company were merged, Corporate Travel Management North
America Inc., Corporate Travel Planners, Inc., and Travel and Transport, Inc.. The surviving merged entity, Corporate Travel
Management North America Inc. is party to the deed of cross guarantee.
The following table presents a Consolidated Statement of Profit or Loss and Other Comprehensive income, Summary of
movements in consolidated retained earnings and Consolidated Statement of Financial Position for the year ended
30 June 2022 of the closed group.
Statement of profit or loss and other comprehensive income
Revenue
Other income
Cost of goods sold
Employee benefits
Depreciation and amortisation
Information technology and telecommunications
Travel and entertainment
Occupancy
Administrative and general
Operating profit/(loss)
Finance costs
Proft/(Loss) before income tax benefit
Income tax benefit
Profit/(Loss) after income tax benefit
Other comprehensive loss
Exchange differences on translation of foreign operations
Other comprehensive loss for the year, net of tax
Total comprehensive loss for the year
Summary of movements in retained earnings
Retained earnings at the beginning of the financial year
Profit/(Loss) after income tax benefit
Retained earnings at the end of the financial year
136
2022
$'000
263,809
43,191
(9,539)
(202,247)
(31,602)
(34,613)
(1,565)
(2,211)
(19,904)
5,319
(2,538)
2,781
5,444
8,225
2021
$'000
68,115
39,001
-
(67,872)
(19,710)
(14,780)
(237)
(1,077)
(12,187)
(8,747)
(1,929)
(10,676)
7,888
(2,788)
(18,471)
(18,471)
(10,246)
(25,790)
(25,790)
(28,578)
94,301
8,225
102,526
127,329
(2,788)
124,541
Notes to the Consolidated Financial Statements
Note 33. Deed of cross guarantee continued
Statement of financial position
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Income tax receivable
Other assets
Total current assets
Non-current assets
Financial assets at fair value through profit or loss
Investments
Property, plant and equipment
Right-of-use assets
Intangible assets
Deferred tax assets
Related party receivables
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Lease liabilities
Related party
Provisions
Total current liabilities
Non-current liabilities
Trade and other payables
Lease liabilities
Related party
Deferred tax liability
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Retained earnings
Total equity
2022
$'000
34,527
109,265
1,422
4,715
6,262
2021
$'000
12,835
45,719
-
6,647
1,034
156,191
66,235
1,014
317,896
7,861
28,759
683,394
36,331
(252)
-
596,921
3,693
11,958
261,104
17,231
12,960
1,075,003
903,867
1,231,194
970,102
119,158
6,863
9,410
10,099
49,955
2,650
9,296
2,757
145,530
64,658
2,818
25,258
26,724
6,920
871
62,591
-
11,752
34,341
-
730
46,823
208,121
111,481
1,023,073
858,621
932,958
(12,411)
102,526
744,581
(10,501)
124,541
1,023,073
858,621
137
Notes to the Consolidated Financial StatementsCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Note 34. Auditors’ remuneration
The auditor of the Group is PricewaterhouseCoopers.
Audit services - PricewaterhouseCoopers
Audit or review of the financial statements
Other services - PricewaterhouseCoopers
Assurance services
Tax compliance services
Tax advisory services
Other advisory services
2022
$
2021
$
385,668
403,951
-
45,350
62,475
-
5,000
110,795
177,160
14,500
Total remuneration of other services
107,825
307,455
Total remuneration of PricewaterhouseCoopers Australia
493,493
711,406
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 reports
Other assurance services
Tax compliance services
Tax advisory services
1,206,731
1,136,575
45,370
39,453
16,752
43,750
6,623
50,242
Total remuneration of PricewaterhouseCoopers network firms
1,308,306
1,237,190
Non PricewaterhouseCoopers firms:
Services in relation to the entity and any other entity in the consolidated group:
Audit and review of the financial report
Total remuneration of Non-PricewaterhouseCoopers firms
14,786
14,786
46,307
46,307
138
Notes to the Consolidated Financial Statements Note 35. Summary of significant accounting policies
(a) Basis of preparation
These general purpose financial statements have been
prepared in accordance with Australian Accounting
Standards and Interpretations issued by the Australian
Accounting Standards Board and the Corporations Act
2001. Corporate Travel Management Limited is a for-profit
entity for the purpose of preparing the consolidated
financial statements.
The consolidated financial statements have been
prepared on a going concern basis.
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).
These consolidated financial statements have been
prepared under the historical cost convention, as modified
by the revaluation of financial assets and liabilities, fair
value through Consolidated Statement of Profit or Loss
and Other Comprehensive Income.
(b) Rounding of amounts
Amounts in the Consolidated Financial Statements are
presented in Australian Dollars with values rounded to the
nearest thousand dollars, or in certain circumstances, the
nearest dollar, in accordance with the Australian Securities
and Investments Commission Corporations (Rounding in
Financial/Directors' Report) instrument 2016/191.
Critical accounting estimates
The preparation of the financial statements requires the
use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process
of applying the Group's accounting policies. The areas
involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to
the financial statements, are disclosed in note 2 'Critical
accounting judgements, estimates and assumptions'.
Financial assets at fair value through
other comprehensive income
Financial assets at fair value through other comprehensive
income include equity investments which the Group
intends to hold for the foreseeable future and has
irrevocably elected to classify them as such upon initial
recognition.
Impairment of financial assets
The Group recognises a loss allowance for expected credit
losses on financial assets which are either measured at
amortised cost or fair value through other comprehensive
income. The measurement of the loss allowance depends
upon the Group's assessment at the end of each reporting
period as to whether the financial instrument's credit
risk has increased significantly since initial recognition,
based on reasonable and supportable information that is
available, without undue cost or effort to obtain.
Where there has not been a significant increase in
exposure to credit risk since initial recognition, a 12-month
expected credit loss allowance is estimated. This
represents a portion of the asset's lifetime expected credit
losses that is attributable to a default event that is possible
within the next 12 months. Where a financial asset has
become credit impaired or where it is determined that
credit risk has increased significantly, the loss allowance
is based on the asset's lifetime expected credit losses. The
amount of expected credit loss recognised is measured
on the basis of the probability weighted present value of
anticipated cash shortfalls over the life of the instrument
discounted at the original effective interest rate.
For financial assets mandatorily measured at fair value
through other comprehensive income, the loss allowance
is recognised in other comprehensive income with a
corresponding expense through profit or loss. In all other
cases, the loss allowance reduces the asset's carrying value
with a corresponding expense through profit or loss.
139
Notes to the Consolidated Financial StatementsCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Note 36. Events after the reporting period
On 1 July 2022, Corporate Travel Management Group Pty Ltd, a subsidiary of the Company, acquired a 100% ownership
interest in 1000 Mile Travel Group Pty Ltd. 1000 Mile Travel Group is an Australian-based supplier of travel management
solutions. Consideration paid to the vendors for the acquired shares amounted to $6,787,000 and constituted cash
consideration of $4,784,000 plus 106,336 new fully paid ordinary shares in the CTM. The fair value of the equity
consideration was $2,003,000 based on the closing share price on 1 July 2022 of $18.84.
Purchase price accounting for the acquisition of 1000 Mile Travel Group will be completed and disclosed during FY23.
140
Notes to the Consolidated Financial Statements Directors'
Declaration
30 June 2022
In the Directors' opinion:
― the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards,
the Corporations Regulations 2001 and other mandatory professional reporting requirements;
― the attached financial statements and notes comply with International Financial Reporting Standards as issued
by the International Accounting Standards Board as described in note 35 'Summary of significant accounting
policies' to the financial statements;
― the attached financial statements and notes give a true and fair view of the Group's financial position as at 30 June
2022 and of its performance for the financial year ended on that date;
― there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due
and payable; and
― at the date of this declaration, there are reasonable grounds to believe that the members of the extended closed
group 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 33 'Deed of cross guarantee' to the financial statements.
The Directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of Directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the Directors
Mr Ewen Crouch AM
Chairman
Mr Jamie Pherous
Managing Director
17 August 2022
Brisbane
141
CORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022
Independent auditor’s report
To 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 2022 and of its
financial performance for the year then ended
(b) 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 2022
the consolidated statement of changes in equity for the year then ended
the consolidated statement of cash flows for the year then ended
the consolidated statement of profit or loss and other comprehensive income for the year then
ended
the notes to the consolidated financial statements, which include significant accounting policies
and other explanatory information
the directors’ declaration.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Independence
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
PricewaterhouseCoopers, ABN 52 780 433 757
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.
142
Independent Auditor's ReportTo the members of Corporate Travel Management Limited Continued 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 the
consolidation is performed.
Materiality
● For the purpose of our audit we used overall Group materiality of $3.8 million, which represents
approximately 1% of the Group’s revenue.
● 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 revenue because, in our view, it is reflective of the Group's operating activities during the
year and provides a level of materiality which, in our view, is appropriate for the audit having regard to the
users of the Group financial report.
● We utilised a 1% threshold based on our professional judgement, noting it is within the range of commonly
acceptable thresholds.
Audit Scope
● Our audit focused on where the Group made subjective judgements; for example, significant accounting
estimates involving assumptions and inherently uncertain future events.
● 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 the USA, Hong
Kong and the UK operating under our instruction. We structured our audit as follows:
− We 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.
143
Independent Auditor's ReportTo the members of Corporate Travel Management Limited ContinuedCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 −
Component auditors in the USA, Hong Kong and the UK performed audit procedures over the North
America, Asia and Europe regions respectively.
● For the work performed by component auditors in the USA, 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 meetings with local management.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report for the current period. The key audit matters were addressed in the
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. Further, any commentary on the outcomes of a
particular audit procedure is made in that context. We communicated the key audit matters to the
Audit and Risk Committee.
Key audit matter
How our audit addressed the key audit matter
Impairment assessment of the Group’s goodwill
(Refer to note 25)
Our procedures in relation to the impairment
assessment of goodwill included, amongst others:
At 30 June 2022, the Group recorded $968.6m of
intangible assets, of which $859.2m related to
goodwill.
The goodwill is allocated to four cash generating units
(“CGUs”), being Australia & New Zealand (“ANZ”),
North America, Europe and Asia.
As required by Australian Accounting Standards, at
30 June 2022 the Group performed an impairment
assessment over the goodwill balances by calculating
the recoverable amount for each CGU, using
discounted cash flow models prepared on a ‘value in
use’ basis. The models assume the return of activity
to pre-COVID-19 pro-forma levels by FY24 in ANZ,
North America and Europe, and by FY25 in Asia.
Given the degree of judgement involved in estimating
the key assumptions in the valuation models,
including forecast performance, growth rates and
discount rates, and the financial significance of the
goodwill recognised on the Group’s consolidated
statement of financial position, we determined that
this was a key audit matter.
●
Assessing the appropriateness of the
Group’s determination of its CGUs
● Developing an understanding of the process
undertaken by the Group in the preparation
of the discounted cash flow models used to
assess the recoverable amount of the
Group’s CGUs (the “impairment models”)
●
●
●
Assessing the arithmetical accuracy of the
impairment models
Assessing whether the allocation of assets,
including goodwill, to CGUs, was consistent
with our knowledge of the Group’s
operations and internal Group reporting
Evaluating the Group’s forecast recovery
path projections through to FY24/FY25, by
comparison to external economic and
industry forecasts
● Comparing FY22 actual performance to the
forecast FY22 performance per the prior
year models
● Comparing the cash flow forecasts for FY23
used in the models to approved budgets for
FY23
144
Independent Auditor's ReportTo the members of Corporate Travel Management Limited Continued Key audit matter
How our audit addressed the key audit matter
●
●
●
●
Assessing that the discount rates applied in
the impairment models reflect the risks of the
CGU, with the assistance of PwC valuation
experts
Assessing the long-term growth rates, by
comparing to economic forecasts, with the
assistance of PwC valuation experts
Assessing the Group’s consideration of the
sensitivity to a change in key assumptions
that either individually or collectively would
be required for assets to be impaired and
considered the likelihood of such a
movement in those key assumptions arising
Evaluating the adequacy of the disclosures
made in Note 25, including those regarding
the key assumptions and sensitivities to
changes in such assumptions, in light of the
requirements of Australian Accounting
Standards
● Comparing the Group’s net assets as at
30 June 2022 of $1,081.4m to its market
capitalisation of $2,688.9m at 30 June 2022,
noting the $1,607.5m of implied headroom in
the comparison.
Accounting for the Helloworld Corporate
business combination
(Refer to note 9)
Our procedures in relation to the accounting for the
Helloworld Corporate business combination
included, amongst others:
The Group completed the acquisition of Helloworld
Corporate on 31 March 2022.
We determined that the accounting for the Helloworld
Corporate business combination was a key audit
matter due to the financial significance of the value of
the transaction, net assets acquired and the resulting
goodwill arising on the acquisition, as well as the level
of judgement involved in the Purchase Price
Allocation (“PPA”) calculation.
The key area of judgement related to the fair value of
the acquired assets and liabilities recognised at
acquisition date, including client contracts and
relationships intangible assets.
●
Testing of the cash consideration paid and
shares issued by obtaining supporting
documentation including bank statements,
share issuance documents, and the
purchase agreement
● Obtaining the purchase agreement to
determine whether any consideration is
contingent on future events
●
●
Testing a sample of acquired working capital
balances to post acquisition date payments
and receipts
Assessing the Group’s methodology applied
in valuing client contracts and relationship
intangible assets, with the assistance of
PwC valuation experts
145
Independent Auditor's ReportTo the members of Corporate Travel Management Limited ContinuedCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Key audit matter
How our audit addressed the key audit matter
●
Assessing the mathematical accuracy of the
Group’s calculation of the resulting goodwill
arising on the PPA calculation
● Considering the completeness of the
recognition of intangible assets by reference
to the purchase agreement and intangible
assets recognised in previous acquisitions
by the Group
●
Assessing the accuracy and completeness
of business combination disclosures in the
financial statements in light of the
requirements of Australian Accounting
Standards
Recognition and presentation of the Group’s
revenue
(Refer to note 4)
Our procedures in relation to the recognition and
presentation of the Group’s revenue included,
amongst others:
The Group’s provision of travel services to clients
drives several different revenue streams.
● Developing an understanding of the Group’s
revenue recognition processes
The recognition of revenue from each of these
streams is dependent upon the terms of the
underlying contracts with customers and suppliers.
Judgement is involved in the recognition of “Volume
based incentive revenue”, as revenue is accrued over
the contract period based on the expected
achievement of contractual performance criteria
specific to each supplier.
We considered the recognition and presentation of
revenue to be a key audit matter due to the financial
significance of the Group’s revenue, the judgemental
nature of “Volume based incentive revenue”, and the
disclosure considerations per the requirements of
Australian Accounting Standards.
●
Agreeing a sample of revenue transactions
for the “Transactional revenue”, “Sale of
Inventory” and “Licencing revenue” streams
to supporting documents, including customer
agreements, invoices, remittances and bank
statements
● Comparing on a sample basis, “Volume
based incentive revenue” amounts to
supporting documents, including
performance summaries and bank
statements
● Utilising data analytic techniques to identify
revenue transactions for our testing of
journal entries
●
Assessing the completeness and accuracy
of the Group’s revenue disclosures per the
requirements of Australian Accounting
Standards
146
Independent Auditor's ReportTo the members of Corporate Travel Management Limited Continued 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 2022, but does not include the
financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of
this auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing
and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our
auditor's report.
147
Independent Auditor's ReportTo the members of Corporate Travel Management Limited ContinuedCORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 59 to 77 of the directors’ report for the
year ended 30 June 2022.
In our opinion, the remuneration report of Corporate Travel Management Limited for the year ended
30 June 2022 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 Crowe
Partner
Brisbane
17 August 2022
148
Independent Auditor's ReportTo the members of Corporate Travel Management Limited Continued Shareholder
Information
The shareholder information set out below was applicable as at 27 July 2022
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Total
Number of
holders of
ordinary shares
10,999
4,381
585
352
40
Securities
3,824,280
9,663,671
4,015,040
8,047,930
119,746,052
16,357
145,296,973
% of Total
Securities
2.63
6.65
2.76
5.54
82.42
100.00
Holding less than a marketable parcel
538
5,872
-
Based on the Company’s closing share price on 27 July 2022 ($18.13), there were 538 holders of less than a marketable
parcel of ordinary shares and together they hold 5,872 shares.
Equity security holders
The names of the twenty largest registered shareholders are listed below:
1. Citicorp Nominees Pty Limited
2. HSBC Custody Nominees (Australia) Limited
3.
J P Morgan Nominees Australia Pty Limited
4. Pherous Holdings Group Pty Ltd
5. National Nominees Limited
6. BNP Paribas Noms Pty Ltd Drp
7. Helloworld Group Pty Ltd
8. BNP Paribas Nominees Pty Ltd (Agency Lending Drp A/C)
9. HSBC Custody Nominees (Australia) Limited (Nt-Comnwlth Super Corp A/C)
10. Matimo Pty Ltd (Matimo A/C)
11. Ms Helen Logas
12.
LJP2 Pty Ltd
13. Citicorp Nominees Pty Limited (Colonial First State Inv A/C)
14. HSBC Custody Nominees (Australia) Limited - A/C 2
15. Mirrabooka Investments Limited
16. Shamiz Pty Ltd (Sami Superfund A/C)
17. BNP Paribas Nominees Pty Ltd HUB24 Custodial Serv Ltd (Drp A/C)
18. BNP Paribas Noms (Nz) Ltd (Drp)
19. Amalfi Trading Pty Ltd (Michael Pherous Family A/C)
20. Ms Karen Ann Shaw
Top 20 Holders
Remaining Holders balance
Grand Total
Ordinary
shares % of
total shares
issued
Number Held
30,514,659
21,471,279
18,246,615
16,500,000
8,702,170
5,243,281
3,571,429
2,966,218
1,795,461
1,476,807
1,038,497
1,000,000
651,730
626,968
597,000
567,107
525,161
460,652
355,334
278,514
21.00
14.78
12.56
11.36
5.99
3.61
2.46
2.04
1.24
1.02
0.71
0.69
0.45
0.43
0.41
0.39
0.36
0.32
0.24
0.19
116,588,882
80.25
28,708,091
145,296,973
19.75
100.00
149
CORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Shareholder
Information
Equity security holders (continued)
Unquoted equity securities
Share Appreciation Rights
Substantial holders
Number on
issue
Number of
holders
4,812,500
88
As at 13 July 2022, the Company has been notified of the following substantial holders (including associate holdings):
Bennelong Funds Management Group Pty Ltd
Pherous Holdings Group
Voting rights
Number Held
18,684,475
17,500,000
Ordinary shares
% of total
shares issued
12.86
12.04
The voting rights attaching to each class of equity securities are set out below:
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.
Securities purchased on-market
During FY22, a total of 3,003 ordinary shares were acquired on market for the purposes of the Company’s employee equity
plans and the average price per share purchased was $21.30.
150
Corporate
Directory
Directors
Secretary
Annual General Meeting
Registered office in Australia
Share registrar
Auditor
Ewen Crouch AM
Jamie Pherous
Jon Brett
Laura Ruffles
Sophie Mitchell
Shelley Sorrenson
The Annual General Meeting of Corporate Travel Management Limited
is scheduled to be held on 27 October 2022 at 11:00am (AEST)
Level 24, 307 Queen Street
Brisbane QLD 4000
Telephone: +61 7 3211 2400
Computershare Investor Services Pty Limited
Level 1, 200 Mary Street
Brisbane, QLD 4000
Telephone: 1300 787 272
Outside Australia: +61 3 9415 4000
PricewaterhouseCoopers Australia
480 Queen Street
Brisbane QLD 4000
Stock exchange listing
Corporate Travel Management shares are quoted on the Australian Securities
Exchange (ASX).
Website address
travelctm.com
ABN
ABN 17 131 207 611
151
CORPORATE TRAVEL MANAGEMENT | ANNUAL REPORT 2022 Registered Offi ce:
Corporate Travel Management Limited
Level 24, 307 Queen Street, Brisbane QLD 4000
travelctm.com.au
THE FUTURE OF
BUSINESS TRAVEL
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