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www.gbst.com
Annual Report 2007
GBST Holdings Limited
ABN 85 010 488 874
+
+ GBST is Australia’s leading provider of client accounting and securities
transaction technology.
Our strategy is to build consistently growing recurring revenues from
financial transactions, by providing robust technology solutions to the
financial services sector.
Providing services to some of the world’s leading institutional
banks and stockbrokers, approximately half of all equities traded
on the Australian Securities Exchange are processed by GBST
network participants.
In August 2007 GBST extended its services to include wealth
management with the acquisition of InfoComp Group, the foremost
provider of funds administration and unit registry software to the
Australian wealth management industry.
Contents
Highlights
Chairman’s report
CEO’s report
GBST in the life of a transaction
GBST’s competitive advantage
GBST in the community
Wealth management services
Board of directors
Executive team
1
2
3
6
8
9
10
11
12
Corporate governance statement
Directors’ report
Auditor’s independence declaration
Directors’ declaration
Financial report
Notes to the financial statements
Independent audit report
Additional information
Corporate directory
15
18
26
27
28
32
57
59
60
Notice of AGM
The Annual General Meeting
of GBST Holdings Limited will
be held at:
McCullough Robertson
Level 11
Central Plaza 2
66 Eagle Street, Brisbane
on Wednesday
21st November at 3.30pm.
4
1
1
T
B
G
R
C
F
y
b
d
e
c
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d
o
r
p
d
n
a
d
e
n
g
i
s
e
D
H i gH l i gH t s 2 0 0 6 / 2 0 0 7
– Growth strategy accelerated through acquisition of InfoComp
– Profit after tax of $8.0 million, a 31% increase on the prior year
– EBITDA increased 26% to $11.4 million
– Fully franked dividends increased to 11 cents per share, with
a 6 cents final dividend
– 29.7% increase in earnings per share (EPS) to 18.1 cents
Operating revenue
eBitD a
prOfit after tax
10%
26%
30
24
$m
18
12
6
0
$m
12
10
8
6
4
2
0
31%
$m
10
8
6
4
2
0
FY ‘04
FY ‘05
FY ‘06
FY ‘07
FY ‘04
FY ‘05
FY ‘06
FY ‘07
FY ‘04
FY ‘05
FY ‘06
FY ‘07
G B S T A n n u A l R e p o R t 2 0 0 7
1
c H a i r m a n ’ s r e p O r t
2006/7 was a successful year for GBST, in
which we strengthened our market-leading
position and rewarded the confidence of
our investors with strong profit growth.
Profit after tax was $8 million, an increase
of 31 per cent on the previous year.
GBSt’s growth has enabled us to increase our fully
franked dividend to 11 cents for the year.
our services play an important role in continuing to
improve financial market efficiency. new systems
contributed spectacular benefits to market participants
through transformed, diversified and more flexible
methods of trading. our innovation has helped to
streamline floats and transaction processing, and bring
new stocks and financial products to market.
In addition, GBSt’s financial services technology has
contributed to record market trading volumes. our
market share by volume increased to 42.5 per cent,
and 48 stockbrokers use GBSt’s Shares platform,
representing 56 per cent of the cash equities market.
In 2006/7, Shares processed 8.3 million contract notes,
a 27 per cent increase on the previous year.
We are excited by the acquisition of InfoComp,
which expands our business to wealth management,
bringing us new, blue-chip customers and a leadership
position as a supplier of funds administration and
registry software to the fast-growing Australian wealth
management industry.
We are particularly pleased to acquire a business with
which we have a natural cultural affinity. Among our
similarities are a business model underpinned by
recurring licence-fee revenues; a proven track record
over nearly two decades; and specialised professional
service capacity with staff recognised as experts in their
respective fields.
this acquisition readies GBSt to capitalise on the
international trends toward investor-managed
accounts and self-managed superannuation, which
are supported by a broader investment mandate for
stockbrokers and the growing private wealth industry.
InfoComp has established a beachhead in the united
Kingdom, where legislative change to the pensions and
superannuation systems is expected to be a catalyst for
long-term financial services industry growth.
the market we serve continues to experience strong
growth. this reflects increased activity from offshore
traders, sophisticated hedge funds, new entrants and
higher volume trade from existing market participants.
We expect further volume growth and increased
cross-border flows as investors are encouraged by the
benefits of exposure to Australian financial markets
which are seen as a sound, safe and profitable market in
which to invest.
We continue to upgrade our own systems, capitalising
on the strong knowledge base of our people.
our outsourcing activity has become more
sophisticated, enabling us to purchase selectively.
While proud of our capacity, we expect to make greater
use of offshore skills to meet customer demand for
product enhancements.
looking ahead, we expect 2007/8 to be a defining year
for GBSt, underpinned by the acquisition of InfoComp,
which is expected to contribute revenue of $30 million,
and to be cash earnings per share accretive in 2007/8.
I would like to commend Stephen lake and his team
for their outstanding efforts this year. to deliver strong
growth it is important to work consistently together,
and I would like to congratulate everyone that has
been involved in making this a highly successful year
for GBSt.
John puttick
Chairman
2
c e O ’ s r e p Or t
2007 was a significant year for GBST not
only in terms of our strong financial results
but also in the momentum we established
in our core business and in meeting our
longer-term objectives.
GBSt builds and owns software applications for the
financial services industry, and provides infrastructure
and support services to maintain these applications.
As part of our ongoing business we continue to look
for opportunities to supply more data, information and
efficiency to our customers.
As detailed at the time of our initial public offering, a
key objective of listing GBSt on the ASX was to allow
us to supplement organic growth with acquisitions, to
develop a broader base of financial services revenues.
the purchase of palion, the leading derivatives
trading and client accounting technology in Australia,
brought us a presence in the derivatives market
and substantially increased our customer base. It
also contributed valuable management, industry
knowledge, and very talented people. palion has been
fully integrated into GBSt and is a core part of our
business. While we did not conclude an acquisition
during the financial year 2007, we laid the foundation
for the acquisition of InfoComp.
infocomp
In August 2007, we doubled the size of GBSt through
the purchase of InfoComp, the leading specialist
provider of wealth management software. InfoComp
extends our business into a new sector of the financial
services market.
our capacity to provide technology services to the
financial services industry has increased substantially.
this is a significant step in GBSt’s strategic evolution,
and we are excited by its growth opportunities.
We now offer combined equities and wealth
management platforms, significantly expanding our
customer community and network. our core wealth
management product “Composer” offers a complete
system for the administration of wrap platforms,
master trusts, retail and wholesale unit trusts and
retirement products such as superannuation plans
and pensions.
In the united Kingdom, InfoComp has secured a
benchmark customer, Abbey Group business division,
James Hay. over the next few years, the James Hay
self-invested personal pension (SIpp) and Abbey wrap
products will be progressively migrated to Composer.
this is expected to provide a strong competitive
advantage in the burgeoning wraps market.
While wraps are established among retail investors in
Australia, these investments are only now beginning
to take off in the uK, and this market represents a
substantial growth opportunity. According to industry
research, an estimated £150 billion is set to flow into
wraps by the end of 2008, driven by legislation change
and simpler administration.
locally, more than $150 billion of assets are
administered currently on Composer, which is used by
some of Australia’s leading financial services businesses.
financial results
our underlying business saw a 26% increase in eBItDA
to $11.42 million and a 31% increase in net profit after
tax, compared to the prior year. this resulted from a
10% increase in revenue to $29.2 million and growth
in our eBItDA margin from 33% to 39%. We continue
to benefit from increased trading volumes and new
product sales.
GBSt’s customer network continued to expand,
with third party clearing clients adding 11 new
financial services providers and palion product sales
including seven new modules. GBSt’s share of ASX
transactions continued to increase and remains a core
focus of the business. Consulting revenue, although
restrained by resources, grew 25% to $2.5 million.
our plan is to continue to grow recurring revenues
from financial markets transactions, client accounting
and administration. We are focused on building a
network of connected financial market participants,
G B S T A n n u A l R e p o R t 2 0 0 7
3
w
ceO’s report continued
and exploiting the efficiencies that this offers. 2007 has
provided us with the solid foundations to diversify and
grow our business and to maintain our focus
with confidence.
upgraded to ensure we employ people who fit our
culture and values. We also provide the opportunity
for employee participation in GBSt equity through our
employee share scheme.
research and development
Significant new products released in 2006/7 include
GBSt Databus which assists our clients to transport data
to internal data repositories and GBSt ClearView,
a highly scalable connection to the ASX’s settlement
and clearing system CHeSS.
In building our systems we work closely with our
customers. this ensures high-quality products tailored
to the Australian market.
the broker services market continues to evolve, driven
by algorithmic trading, the introduction of offshore
market participants, increased cross-border flows and
changes to conventional market operating models.
our strong research and development capability
ensures we can continue to design industry-leading
products that deliver more services to customers,
at a lower cost.
people
GBSt has outstanding people throughout the
business and a united culture based on values
of initiative, teamwork, integrity and professionalism.
We now employ nearly 300 staff across the group
in Australia and the united Kingdom. our increased
diversity and resources provide significant career paths
for all staff.
Although we continue to take steps to strengthen our
team, buoyant finance and technology markets have
created a high demand for skilled people. this shortage
constrained our growth throughout the year although
we have made good progress in recent months.
We are building management expertise through
leadership programs and encourage training and
development. Recruitment processes have been
I am delighted to welcome the staff of InfoComp,
who bring a great deal of talent to GBSt, and in
particular welcome to our executive team InfoComp
founders Robert DeDominicis and Ray tubman,
who will drive the wealth management business.
community
GBSt has a strong commitment to the community,
which is recognised in greater detail on page 9 of this
report. For the past two years, we have donated up to
one per cent of eBItDA to organisations and charities
that contribute to child welfare in Australia and people
in developing countries. I would also like to recognise
the efforts of our directors and staff who support
the community through participation in professional
bodies and many hours of voluntary work for education
and not-for profit organisations.
the future
We enter 2007/8 a significantly larger and stronger
company. Significant growth opportunities exist for
our wealth management business in the uK and for
our broker services business in Australia and Asia.
our core ambition of building recurring revenue from
financial markets transactions remains in place.
the business models of our customers are changing
as is the marketplace in which we operate. We aim
to evolve with the marketplace through ongoing
investment in building and acquiring a broader product
portfolio. this drives our expansion to support new
sectors of the financial services market.
our acquisition strategy continues to be guided by
our strict investment criteria of seeking out companies
with similar business models, and commitment to their
products and their domain.
4
I would like to thank our staff for their hard work and
commitment in what has been a year of significant
change and growth; and our customers for their
continued support.
+ “Our CAPACITy TO PrOvIDE TEChnOlOGy
SErvICES TO ThE FInAnCIAl SErvICES
InDuSTry hAS InCrEASED SuBSTAnTIAlly.
stephen lake
Chief executive officer
and Managing Director
ThIS IS A SIGnIFICAnT STEP In GBST’S
STrATEGIC EvOluTIOn, AnD wE ArE
ExCITED By ITS GrOwTh OPPOrTunITIES.”
G B S T A n n u A l R e p o R t 2 0 0 7
5
g B s t i n t
H e l i f e O f a t r a n s a c t i
O n
1. c lient
2. aD viser
CUSTomer
diSCUSSeS
order wiTh
Broker
order iS
plaCed By
Broker
gBst tOms
UpdaTed
porTfolio
6. BrOker B ack Office
5. aD viser
ConTraCT iS
GeneraTed
gBst shares
gBst clearview
gBst shares
gBst Dca
SeTTlemenT
oCCUrS
Bank
margin lenDer
registry
cmt prOviDer
6
gBst margin lending
3. BrOker f rOnt an D mi DDle Office
gBst tOms
gBst rms
gBst shares
order
GoeS To
aSx To Be
Traded
4. a ustralian securities excHange
Trade
oCCUrS
GBSt’s products and services provide client
accounting and securities transaction solutions
to support stock market trading and settlement.
GBST TOMS
toMS is an information and trading tool used
by advisers, managing the process from the
time the investor makes an investment decision,
through to market execution, trade confirmation
and account allocation.
GBST Shares
one of the world’s most advanced securities
transaction processing systems, Shares
automates trading, clearing, and settlement for
multiple instruments, currencies and markets.
GBST DCA
DCA is a back office solution for clearing and
settling derivatives transactions. Integrating
with the clearing house, DCA eliminates the
need for double entry, thereby minimising
human error and the associated reconciliation
and error correction processes.
GBST rMS
the RMS system enables brokers to better
manage their client risk, providing the ability
to monitor margins across customer and
in-house positions as well as perform
what-if scenarios.
GBST Margin lending
Margin lending is a tool used by margin
lenders, broking firms, financial planners and
fund managers to create and manage profitable
lending services for their clients.
GBST Clearview
Integrating with back office applications,
ClearView provides a guaranteed audit trail
with real time connectivity to CHeSS.
G B S T A n n u A l R e p o R t 2 0 0 7
7
g B s t ’ s c O m p e t i t i v e a D v a n t a g e
GBST’s broker services are tailor-made for Australian and regional markets
in collaboration with our customers. Our products are innovative, scalable
and robust to deliver superior processing capability and efficiency.
market leadership
GBSt Shares is the industry-leading securities transaction platform used by 56% of
the cash equities market. the leading equities option platform, GBSt DCA, is used
by 22 brokers, which equates to around 50% of the options market.
critical systems
Distribution
scalability
clearing service
capability
innovation
trading and clearing systems are critical for stockbrokers. levels of operational risk,
settlement risk, and market risk are directly dependent on system capability, scalability
and durability. GBSt Shares is one of the most advanced securities transaction systems
in the world, providing the mission-critical information technology ‘backbone’
infrastructure essential for trading.
our systems connect an extensive network of stockbrokers, financial institutions and
financial market participants. this is a significant distribution channel for providers
of financial services. As stockbrokers seek to compete by offering more products
and services, GBSt can facilitate electronic connectivity to a wide range of providers,
including funds managers; master trust and wrap providers; cash management
providers; margin lenders; ratings, news and research services; and market data
providers.
our robust clearing and settlement systems underpin the Australian securities market.
GBSt Shares processed 42.5% of ASX market volume transactions in 2007, up from
40% in 2006.
GBSt Shares is the leading third party and agency clearing solution.
We are an established financial technology leader with a track record of innovation
since 1983. Recent releases include front office products to manage equities and
derivatives orders from a single system, and to process floats.
transaction based
business model
An important factor in GBSt’s success has been its commercial engagement model.
GBSt’s revenue is a mix of variable and fixed service fees. the variable fees are linked
to the volume of trading activity. this allows GBSt’s customers to share in the benefits
of a user-pays model.
client engagement &
service differentiation
GBSt’s support for customers is underpinned by the highest standards of service.
We are dedicated to helping our customers achieve business efficiency, technology
intergration and growth.
8
8
g B s t i n t H e c O m m u n i t y
Supporting children and
developing countries
In June 2005, GBSt established a policy to
donate up to one per cent of earnings before
interest, tax, depreciation and amortisation to
charitable organizations.
our community involvement theme and focus for two
years has been ‘children and developing countries’.
In this time, GBSt has donated more than $125,000
to help organisations that make an ongoing socio-
economic improvement for children in Australia and
people in developing countries.
+
“ wOrlD vISIOn SEEkS TO PArTnEr wITh
AuSTrAlIAnS TO AChIEvE ITS GOAl OF
MAkInG POvErTy hISTOry In Our wOrlD.
ThIS PArTnErShIP wAS POwErFully
DEMOnSTrATED By GBST AnD ITS
GEnErOSITy In AllOwInG wOrlD vISIOn
Some organisations and charities that GBSt has helped:
TO uSE ITS SyDnEy OFFICE SPACE.
– World Vision
Canteen
–
Innocents Relief
–
Caritas Australia
–
Variety, the Children’s Charity
–
Australian Red Cross
–
Abused Childs trust
–
–
Salvation Army
– unicef
–
–
Youth off the Streets
Cyclone larry relief appeal
ThIS SuPPOrT EnABlED wOrlD vISIOn
AuSTrAlIA TO ThIS yEAr (07) TOuCh ThE
lIvES OF MOrE ThAn 12 MIllIOn PEOPlE
In AlMOST 60 COunTrIES AnD PrOvIDE
lIFE SAvInG rESPITE FrOM POvErTy
AnD DISEASE.”
tim costello
Ceo World Vision Australia
G B S T A n n u A l R e p o R t 2 0 0 7
9
w e a l t H m a n a g e m e n t s e r v i c e s
gBst’s grOwing
internatiOnal market
gBst Broker services
Offices
Customer locations
Adelaide
Brisbane
Melbourne
Sydney
Australia
hong kong
new Zealand
gBst wealth management
Offices
Customer locations
london
Sydney
wollongong
Australia
England
through the purchase of InfoComp Group, GBSt is a
leading supplier of software solutions to the Australian
and united Kingdom wealth management industries.
our flagship wealth management product, Composer,
provides the technology to perform the complete
administration of wrap platforms.
Wrap platforms provide an administration service
for investment, superannuation and pensions and
offer an open investment architecture incorporating
cash, equities, managed funds and other managed
investments. they provide many benefits to financial
advisers including a single point of contact - rather than
having to deal with many fund managers and brokers
- consolidated portfolio and tax reporting, consolidated
portfolio valuations and automated administration
facilities such as portfolio rebalancing.
Wrap and master trusts today dominate retail
investment, with 70-80 per cent of new wealth
management business written through these platforms.
Composer offers a complete system for the
administration of wrap platforms, master trusts,
retail and wholesale unit trusts, and retirement
products, such as superannuation plans, pensions,
annuities and provident funds. In the united Kingdom,
Composer supports individual savings accounts (ISAs),
personal equity plans (peps), self invested personal
pensions (SIpps) and Group SIpps as well as general
investment platforms.
In Australia, more than $150 billion of assets are
administered using the Composer platform.
the electronic messaging product, Conductor,
is integrated in Composer, and provides a framework
for business-to-business e-commerce in the wealth
management sector. unison provides registry and
membership management services for associations,
unions and clubs. the technology that underpins the
Composer system incorporates a comprehensive and
acclaimed service oriented architecture (Composer
Business Integration Server) and external messaging
framework (Conductor). these technologies facilitate
enterprise integration and e-commerce within the
wealth management sector.
1010
w e a l t H m a n a g e m e n t s e r v i c e s
B O a r D O f D i r e c t O r s
allan Brackin
Independent Non-Executive Director
Allan Brackin was appointed to the Board in April
2005. He has detailed knowledge of the It sector
having served as Director and Chief executive officer
of Volante Group limited, one of Australia’s largest It
infrastructure service companies from november 2000
to october 2004. prior, he founded Queensland laser
and Survey Supplies pty ltd, as well as Applied Micro
Systems (Australia) pty ltd, which grew to become
the national company AAG technology Services pty
ltd. Allan currently serves on the board of Hutchison’s
Child Care Services limited and the new South Wales
Heart Foundation.
Allan is Chairman of GBSt’s Audit and Risk Management
Committee.
David shirley
Independent Non-Executive Director
David joined GBSt in April 2005 as an Independent
non-executive Director. David had a successful career
providing strategic, business planning and governance
advice in executive management positions with
Microsoft Business Solutions and navision. He is also a
non-executive board and audit committee member of
Steel Foundations limited and he was a non-executive
board and audit committee member with Queensland
Capital Corporation limited. David also serves as an
advisory board member for a number of privately owned
companies and was a partner with Gadens lawyers.
David is a member of the GBSt Audit and Risk
Management Committee.
Joakim sundell
Non-Executive Director
Joakim was appointed to the Board in 2001. Joakim has
an extensive career in private equity finance, merchant
banking, and management both in Sydney and
london. He is Managing Director of Crown Financial pty
ltd, a private investment company.
4
5
Board of directors
1
John puttick
2 Stephen lake
3 Allan Brackin
4 David Shirley
5
Joakim Sundell
1
2
3
John puttick
Non-Executive Chairman
John is the founder and Chairman of GBSt, and has 40
years’ experience in the It industry over 20 of which
developing financial services solutions at GBSt. He
is a member of GBSt’s Audit and Risk Management
Committee. John serves on university of Queensland
and Queensland university of technology faculty
advisory committees. He is currently Adjunct professor,
School of Information technology and electrical
engineering at the university of Queensland and Chair
of Southbank tAFe Community Council.
stephen lake
Managing Director and Chief Executive Officer
Stephen lake joined GBSt in September 2001 after
an extensive career in the capital markets industry
in Australia, the united Kingdom and Asia. Mr lake
became a shareholder of GBSt and was appointed Chief
executive officer in 2001. prior to joining GBSt, he was
Chief General Manager of Financial Markets at Adelaide
Bank limited. Mr lake was Managing Director of BZW’s
Capital Market’s Division Australia and also Managing
Director of the Fixed Interest Division at BZW (Asia) ltd.
G B S T A n n u A l R e p o R t 2 0 0 7
11
e x e c u t i v e t e a m
stephen lake
Chief Executive Officer
patrick salis
Chief Financial Officer
patrick has recently joined GBSt, starting in october
2007 as Chief Financial officer. patrick has held similar
roles in the financial services industry, most recently
as Chief Financial officer of Virgin Money Australia
limited, and has extensive experience working in
wealth management, equities and derivatives broking,
superannuation, mortgages and unsecured lending.
patrick holds a Bachelor of Accounting and is a member
of the Institute of Chartered Accountants in Australia.
kylie sprott
Human Resources & Communications
Kylie has extensive experience in managing the HR
component of acquisitions and mergers in the It
sector, in particular overseeing the integration of five
acquisitions and two substantial mergers. Kylie holds
a Bachelor of Arts and a postgraduate Certificate in
Management (Human Resources) and has studied
Strategic Human Resources at Harvard Business School.
peter ferguson
Head of Corporate Development
prior to joining GBSt in February 2005, peter held senior
strategic positions with leading international financial
markets technology company, oMX. Between 2001 and
2004 he was General Manager responsible for oMX’s
Australian operations and substantially grew the
business with prior experience providing international
legal advice to oMX’s in-house counsel in Stockholm as
well as serving as a solicitor in Stockholm and Sydney.
peter holds a Bachelor of law from Sydney university.
Hurrem Basdan
Client Services & Business Development (Broker Services)
Hurrem has re-joined GBSt having previously been
instrumental in defining and implementing GBSt’s
product marketing strategy. Hurrem has over 10 years
industry experience in consultation and management
roles within some of Australia’s leading financial services
providers. She has also gained experience in other
financial markets including the united Kingdom, the
netherlands and Spain. Hurrem holds a Bachelor of
economics (Accounting) from the university of Sydney
and is in the final stages of completing a Master of
Business Administration degree.
6
11
7
12
8
13
9
14
10
15
Executive team
6 patrick Salis
7 Kylie Sprott
8 peter Ferguson
9 Hurrem Basdan
10 peter Fowler
11 Andy Haddon
12 Robert DeDominicis
13 Ray tubman
14 Mark Smith
15 Isabel Sanchez
12
peter fowler
Head of Products (Broker Services)
Joining GBSt after GBSt’s successful acquisition of palion
from oMX in December 2005, peter provides GBSt with
a unique blend of business and It knowledge. peter
has gained his experience working overseas in europe,
America and Asia. His previous industry experience
includes heading the regional operations of ICCH,
which at the time was the international arm of the
london Clearing House (lCH). peter also established
a new central counterparty clearing service in Asia as
well as palion pty limited in Australia.
andy Haddon
Acting Chief Technology Officer (Broker Services)
Andrew joined GBSt in August 2007 with a strong
background in software and technology development
in Australia, Asia and the uK. prior to joining GBSt,
from 2001 he was Country and General Manager for a
software development firm in the banking and financial
sectors. He has held senior management positions
with At&t in Hong Kong, responsible for product
Development in Asia, and establishing a professional
Services business and new online services in Australia.
Andrew was technical Manager for nortec, a uK
telecommunication firm with responsibility for
design and development.
robert DeDominicis
Chief Executive (Wealth Management)
Robert is a founding partner of InfoComp with over
25 years experience in the development of software
applications. Robert holds a Bachelor of Mathematics
degree. Robert has a business and technical software
background having been part of InfoComp’s
development and professional services teams.
Robert has extensive experience in the registry and
wealth management sector both in Australia and the
uK having driven InfoComp’s involvement with this
sector since 1995.
ray tubman
Head of Global Products (Wealth Management )
Ray is a founding partner of InfoComp and Chief
Architect for InfoComp’s wealth management product
suite. Ray has over 20 years experience in the It
industry and has worked in various senior technical
roles on projects. His previous experience includes
work on British Airways pension systems in england,
Westpac and various other financial institutions. Ray
has a Bachelor of Mathematics degree and ASFA
qualifications and is considered a subject matter expert
in the pensions and Investment industry in both the uK
and Australia.
mark smith
Head of Professional Services (Wealth Management)
Mark joined InfoComp in 1998 and since that time
has worked in a number of roles ranging from project
management, software development, professional
services and contracts management. Mark has
managed InfoComp’s projects both in Australia and
the uK. prior to joining InfoComp Mark has held various
senior software development and management roles
both within Australia and the uK. Mark has over 19 years
of industry experience in sectors including finance,
medical, manufacturing and marketing with tertiary
training in business administration.
isabel sanchez
Chief Technology Officer (Wealth Management)
Isabel has over 15 years experience in software
development and has been a member of the
InfoComp team for 13 years. Since 2000, Isabel has
been responsible for the management of development
and support of all InfoComp product. Also responsible
for the oversight of InfoComp’s It&t services and
InfoComp’s off-shore development centre. Isabel holds a
Bachelor of Computing Science from the university
of Wollongong.
G B S T A n n u A l R e p o R t 2 0 0 7
13
f i n a n c i a l r e p O r t
+
14
C o r p o r a t e g o v e r n a n C e s t a t e m e n t
IntroduC tIon
the ASX document, ‘principles of Good Corporate
Governance and Best practice Recommendations’
(‘Guidelines’) applying to listed entities was published
in March 2003 by the ASX Corporate Governance
Council with the aim of enhancing the credibility and
transparency of Australia’s capital markets. the board
has made an assessment of the company against the
Guidelines. the board has made decisions in relation
to its operations and the operations of the company
that mean that it does not fully comply with all of
the Guidelines but are in place to provide better
performance. the Board outlines its assessment against
the Guidelines below. this statement on corporate
governance reflects our charter, policies and procedures
on 5 october 2007.
(v) monitoring senior management’s performance
and implementation of strategy and
(vi) approving and monitoring financial and other
reporting and the operation of committees.
ComposItIon of b oard
the Board performs its roles and function, consistent
with the above statement of its overall corporate
governance responsibility, in accordance with the
following principles:
a) the Board should comprise at least five Directors
b) the Board shall be constituted by members having
an appropriate range of skills and expertise
c) at least two directors will be non-executive Directors
independent from management.
sCope of r esponsIbIlIt y of b oard
board Charter and p olIC y
a) Responsibility for the Company’s proper corporate
governance rests with the Board. the Board’s guiding
principle in meeting this responsibility is to act honestly,
conscientiously and fairly, in accordance with the law,
in the interests of GBSt’s shareholders with a view to
building sustainable value for them and the interests of
employees and other stakeholders.
a) the Board has adopted a charter (which will be
kept under review and amended from time to time
as the Board may consider appropriate) to give
formal recognition to the matters outlined above.
this charter sets out various other matters that
are important for effective corporate governance
including the following:
b) the Board’s broad function is to:
(i) a detailed definition of ‘independence’
(i) chart strategy and set financial targets for the
Company
(ii) a framework for the identification of candidates
for appointment to the Board and their selection
(ii) monitor the implementation and execution
(iii) a framework for individual performance review
of strategy and performance against financial
targets and
(iii) oversee the performance of executive
management and generally to take and fulfil
an effective leadership role in relation to the
Company.
c) power and authority in certain areas is specifically
reserved to the Board – consistent with its function
as outlined above. these areas include:
and evaluation
(iv) proper training to be made available to Directors
both at the time of their appointment and on an
on-going basis
(v) basic procedures for meetings of the Board and
its committees – frequency, agenda, minutes
and private discussion of management issues
among non-executive Directors
(vi) ethical standards and values – formalised in a
(i) composition of the Board itself including the
detailed code of ethics and values
appointment and removal of Directors and the
making of recommendations to shareholders
concerning the appointment and removal of
Directors
(ii) oversight of the Company including its control
and accountability system
(vii) dealings in securities – formalised in a detailed
code for securities transactions designed to
ensure fair and transparent trading by Directors
and senior management and their associates
and
(viii) communications with shareholders and
(iii) appointment and removal of the Chief executive
the market.
officer and the Company Secretary
(iv) reviewing and overseeing systems of risk
management and internal compliance and
control, codes of ethics and conduct, and legal
and statutory compliance
b) these initiatives, together with the other matters
provided for in the Board’s charter, are designed to
‘institutionalise’ good corporate governance and to
build a culture of best practice in GBSt’s own internal
practices and in its dealings with others.
G B S T A n n u A l R e p o R t 2 0 0 7
15
C o r p o r a t e g o v e r n a n C e s t a t e m e n t C o n t I n u e d
audIt and rI sk m anagement CommIt tee
a) the purpose of this committee is to advise on the
establishment and maintenance of a framework of
internal control and appropriate ethical standards for
the management of the Group. Its members are:
(i) Mr Allan Brackin, Chairman
(ii) Mr John puttick
(iii) Mr David Shirley
b) the committee performs a variety of functions
relevant to risk management and internal and
external reporting and reports to the Board following
each meeting. Among other matters for which the
committee is responsible are the following:
(i) Board and committee structure to facilitate a
proper review function by the Board
(ii)
internal control framework including
management information systems
(iii) corporate risk assessment and compliance with
internal controls
(iv) internal audit function and management
processes supporting external reporting
(v) review of financial statements and other financial
information distributed externally
(vi) review of the effectiveness of the audit function
(vii) review of the performance and independence of
the external auditors
(viii) review of the external audit function to ensure
prompt remedial action by management, where
appropriate, in relation to any deficiency in or
breakdown of controls
(ix) assessing the adequacy of external reporting for
the needs of shareholders and
(x) monitoring compliance with the Company’s
code of ethics.
c) Meetings are held at least four times each year. A
broad agenda is laid down for each regular meeting
according to an annual cycle. the committee invites
the external auditors to attend each of its meetings.
best p r aC tICe CommItment
the Company is committed to achieving and
maintaining the highest standards of conduct and
has undertaken various initiatives, as outlined in this
section, which are designed to achieve this objective.
GBSt’s corporate governance charter is intended to
‘institutionalise’ good corporate governance and, to
build a culture of best practice both in the Company’s
own internal practices and in its dealings with others.
the following are a tangible demonstration of the
Company’s corporate governance commitment.
Independent professional advice
a)
With the prior approval of the Chairman, each Director
has the right to seek independent legal and other
professional advice concerning any aspect of the
Company’s operations or undertakings in order to fulfil
their duties and responsibilities as Directors. Any costs
incurred are borne by the Company.
b) Code of ethics and values
the Company has developed and adopted a detailed
code of ethics and values to guide Directors in the
performance of their duties.
c) Code of conduct for transactions in securities
the Company has developed and adopted a formal
code to regulate dealings in securities by Directors
and senior management and their associates. this
is designed to ensure fair and transparent trading in
accordance with both the law and best practice.
d) Charter
the code of ethics and values and the code of conduct
for transactions in securities (referred to above) both
form part of the Company’s corporate governance
charter which has been formally adopted.
e)
Substantial compliance with ASX corporate
governance guidelines and best practice
recommendations.
gbst board assessment agaInst the
guIdel Ines
principle 1 – lay solid foundations for management
and oversight
the role of the Board and delegation to management
have been formalised as described above in this section
and will continue to be refined, in accordance with the
Guidelines, in the light of practical experience gained in
operating as a listed company. GBSt complies with the
Guidelines in this area.
principle 2 – structure the board to add value
together the Directors have a broad range of
experience, skills, qualifications and contacts relevant to
the business of the Company. the majority of the current
Board is not independent. In particular, the Chairman is
not independent in terms of the Guidelines. there are
at least two independent Directors. GBSt believes that
the current board of five directors has been appropriate
for a company of GBSt’s size and the current directors
have been the best people to act in the interests of
stakeholders and for this reason does not presently fully
comply with the recommendations. With the Company’s
16
C o r p o r a t e g o v e r n a n C e s t a t e m e n t C o n t I n u e d
both committee level (Audit and Risk Management
Committee), with meetings at least four times each year,
and at Board level.
principle 8 – encourage enhanced performance
the corporate governance charter adopted by the Board
requires individual performance review and evaluation
to be conducted formally on an annual basis. the
Board acknowledges that performance can always be
enhanced and will continue to seek and consider ways
of further enhancing performance both individually and
collectively. GBSt’s practice complies with the Guidelines
in this area.
principle 9 – remunerate fairly and responsibly
Remuneration of Directors and executives will be fully
disclosed in the annual report and any changes with
respect to key executives announced in accordance
with continuous disclosure principles. the Board from
time to time calls a specific meeting of the board as a
nominations and Remuneration Committee. Due to the
importance of people within GBSt’s business all board
members considered they would have a contribution
to make to the meeting and as a result the committee
is not independent. the Chairman will lead a review of
the Directors and the independent Directors will lead
a review of the Chairman. no individual will be directly
involved in deciding his or her remuneration.
principle 10 – recognise the legitimate interests of
stakeholders
the Board recognises the importance of this principle
(which it believes represents not only sound ethics but
also good business sense and commercial practice) and
continues to develop and implement procedures to
ensure compliance with legal and other obligations to
legitimate stakeholders. the Company and its policies
and practices comply with the Guidelines in this area.
increased size and the expansion into new areas of
the financial services industry the board believes its
performance could be enhanced by the introduction of
additional board members. the number of independent
directors may be increased as a result of the additional
appointments. the Board calls specific meetings of the
board as a nominations and Remuneration Committee.
principle 3 – promote ethical and responsible
decision making
the Board has adopted a detailed code of ethics and
values and a detailed code of conduct for transactions
in securities as referred to above. the purpose of these
codes is to guide Directors in the performance of their
duties and to define the circumstances in which both
they and management, and their respective associates,
are permitted to deal in securities. the Board will ensure
that restrictions on dealings in securities are strictly
enforced. Both codes have been designed with a view to
ensuring the highest ethical and professional standards,
as well as compliance with legal obligations, and
therefore compliance with the Guidelines.
principle 4 – safeguard integrity in financial
reporting
the Audit and Risk Committee has its own Charter. the
Committee comprises three Directors, the majority of
which are independent. All the members of the Audit
Committee are financially literate.
principle 5 – make timely and balanced disclosure
policies and procedures for compliance with ASX
listing Rule disclosure requirements are included in the
Company’s corporate governance charter.
principle 6 – respect the rights of shareholders
the Board recognises the importance of this principle
and strives to communicate with shareholders both
regularly and clearly – both by electronic means and
using more traditional communication methods.
Shareholders are encouraged to attend and participate
at general meetings. It is intended that the Company’s
auditors will always attend the annual general meeting
and be available to answer shareholders’ questions.
the Company’s policies comply with the Guidelines in
relation to the rights of shareholders.
principle 7 – recognise and manage risks
the Board, together with management, has constantly
sought to identify, monitor and mitigate risk. Internal
controls are monitored on a continuous basis and,
wherever possible improved. the whole issue of risk
management is formalised in the Company’s corporate
governance charter (which complies with the Guidelines
in relation to risk management) and will continue to
be kept under regular review. Review takes place at
G B S T A n n u A l R e p o R t 2 0 0 7
17
d I r e C t o r s ’ r e p o r t
the directors of GBSt Holdings limited (‘GBSt’) submit
herewith the consolidated financial report for the year
ended 30 June 2007.
dIreC tors
the names of the directors of the company in office
during the year and to the date of this report are:
–
–
–
–
–
Dr John F puttick
Mr Allan J Brackin
Mr Stephen M l lake
Mr David C Shirley
Mr Joakim J Sundell
Company s eC retary
the following persons held the position of company
secretary at the end of the financial year:
David M Doyle – Mr Doyle joined GBSt in 1997 as an
in house legal advisor and was appointed Company
Secretary on 18 April 2005. Mr Doyle holds Bachelor
degrees in law and Business (Computing) from
Queensland university of technology.
John F puttick – Dr puttick was appointed Company
Secretary in 1984. Information on Dr puttick is set out in
the section of this report dealing with information on
directors.
prInCIpal aC tIvItIes
the principal activities of GBSt in the year were the
provision of advanced electronic business solutions for
the finance, banking and securities industry in Australia
and South east Asia. no significant change in the nature
of these activities occurred during the year.
oper atIng r esult and dI vIdend
the consolidated profit after income tax for the financial
year amounted to $8,021,396 (2006: $6,135,982).
the directors recommend a final dividend of 6.0 cents
per share to be paid to the holders of fully paid
ordinary shares. the dividend will be 100% franked
at 30% corporate tax rate and will be paid on
28 September 2007.
Dividends paid during the year were as follows:
–
–
2006 fully franked ordinary dividend of 4 cents per
share paid on 29 September 2006, as recommended
in last year’s report $1,758,720.
2007 interim fully franked ordinary dividend of
5 cents per share paid on 29 March 2007 $2,250,412.
revIew of o per atIons
the growth in profit is attributable to the maintenance
of operating costs in line with the prior comparative
period whilst growing revenue from operations by 7%
to $30.411 million (2006: $28.241 million). profit before
tax grew by 31% to $11.338 million (2006: $8.628 million).
profit after tax increased by 30% to $8.021 million (2006:
$6.136 million).
Significant factors impacting on profitability were;
–
–
–
–
Revenue includes a full year of trading from the
palion suite of products. license revenue of
$2.701 million (2006: $1.312) was recognised in
the year. the palion business was acquired in
mid-December 2005.
Increased usage fees from GBSt’s licensed products
resulting from equity market trading conditions.
Additional recurring revenue from new client and
product licence sales made over the last year.
An increase in revenue from consulting and
software development services to $2.5 million
(2006: $2 million).
the net assets of the consolidated entity increased
by $6.69 million during the year to $20.209 million at
30 June 2007 as a result of the improved operating
performance of the group. the consolidated entity
generated cash flows from operations of $7.63 million
(2006: $9.96 million) after the payment of income taxes
of $3.409m (2006: $343k). total assets increased from
$22.134 million at 2006 to $28.345 million at 30 June
2007. total assets include cash reserves of $15.455 million
at 30 June 2007.
the directors believe the group is in a strong and stable
position to grow its current operations.
In the prior comparative period, on 15 December 2005,
the company acquired the palion business from oMX
technology Australia pty limited for a total acquisition
cost of $5.348 million. palion is the leading supplier of
derivatives clearing and client accounting technology
in Australia. the purchase price included net assets of
$1.998 million and goodwill of $3.35 million. the staff
and products acquired with the palion business have
been integrated into GBSt.
Further information on the operational performance of
the company is included in the Chairman and Managing
Director’s Report.
18
d I r e C t o r s ’ r e p o r t C o n t I n u e d
sIgnIfICant Changes I n s tate of a ffaIrs
envIronmental Issues
During the year the company issued 1,045,562 new
shares, and 2,332,336 options (over existing shares) were
exercised. no other significant changes in the state of
affairs of the company occurred during the financial year.
GBSt’s operations are not regulated by any significant
environmental regulation under a law of the
Commonwealth or of a State or territory.
future developments, prospeC ts and
busIness str ategIes
the company is actively pursuing opportunities to
expand its sources of revenue from the delivery of
technology to the financial services industry and is
currently in discussions with a number of acquisition
prospects. the company will continue to invest in the
internal research and development of software products
and the acquisition of businesses that expand its client
base and range of software products and services.
the current results of the consolidated entity remain
materially affected by the level of domestic equity
trading volume.
Disclosure of further information regarding future
developments and financial results is likely to result in
unreasonable prejudice to the company. Accordingly,
this information has not been disclosed in this report.
after b al anCe d ate e vents
on 2 August 2007, GBSt Holdings limited entered into
agreements to acquire Infocomp pty ltd, ICp Holdings
pty ltd and its subsidiaries for a cash payment of
$36.4 million and the issue of approximately 4.95 million
shares. the cash component of the consideration is
to be funded from existing cash reserves and a term
loan facility of $20 million, established with Suncorp
Metway ltd for the purpose of the acquistion. the term
of the facility is six years. the facility limit will reduce by
$1 million at the end of each quarter, commencing in the
second year of the facility.
the acquisition is expected to complete on or around
31 August 2007, the assets and liabilities arising from
the acquisition will be valued at that time however it is
expected that GBSt will acquire approximately $3 million
in net tangible assets and approximately $53 million in
identifiable intangible assets and goodwill. Identifiable
intangible assets will comprise software systems and
customer contracts and relationships.
other than for the acquisition of the Infocomp group
and the impact (if any) of prospects referred to in
the commentary above, no matters or circumstances
have arisen since the end of the financial year which
significantly affected or may significantly affect the
operations of GBSt, the results of those operations,
or the state of affairs of GBSt in future financial years.
InformatIon on dIreC tors
John puttick non-executive Chairman
John is the founder and Chairman of GBSt and has
40 years’ experience in the It industry over 20 of which
developing financial services solutions at GBSt. John
serves on university of Queensland and Queensland
university of technology faculty advisory Committees.
He is currently Adjunct professor, School of Information
technology and electrical engineering at the university
of Queensland and Chair of Southbank tAFe Community
Council. John is Member of GBSt’s Audit and Risk
Management Committee and is Chairman of the
nominations and Remuneration Committee.
Interest in Shares and Options - 7,667,760 ordinary Shares
of GBSt Holdings limited held by Dr puttick and
associated entities.
allan brackin Independent non-executive Director
Allan Brackin was appointed to the Board in April 2005.
He has detailed knowledge of the It sector having
served as Director and Chief executive officer of Volante
Group limited, one of Australia’s largest It infrastructure
service companies from november 2000 to 31 october
2004. prior to this Allan founded Queensland laser
and Survey Supplies pty ltd, as well as Applied Micro
Systems (Australia) pty ltd, which grew to become the
national company AAG technology Services pty ltd.
Allan currently serves on the board of the new South
Wales Heart Foundation and is a former Director of
Hutchisons Child Care Services limited (november 2005
to September 2006). Allan is Chairman of GBSt’s Audit
and Risk Management Committee and is a member of
the nominations and Remuneration Committee.
Interest in Shares and Options - 169,241 ordinary Shares of
GBSt Holdings limited held by Mr Brackin’s associated
entities.
Stephen Lake Managing Director and
Chief executive officer
Stephen lake joined GBSt in September 2001 after
an extensive career in the capital markets industry
in Australia, the united Kingdom and Asia. Stephen
became a shareholder of GBSt and was appointed
Chief executive officer in 2001. prior to joining GBSt,
he was Chief General Manager of Financial Markets at
Adelaide Bank limited. Stephen was Managing Director
of BZW’s Capital Market’s Division Australia and also
Managing Director of the Fixed Interest Division at BZW
G B S T A n n u A l R e p o R t 2 0 0 7
19
d I r e C t o r s ’ r e p o r t C o n t I n u e d
(Asia) ltd. Stephen is a Member of the nominations and
Remuneration Committee.
Interest in Shares and Options - 3,867,428 ordinary Shares
of GBSt Holdings limited held by Mr lake.
David Shirley Independent non-executive Director
David joined GBSt in April 2005 as an Independent
non-executive Director. David had a successful career
providing strategic, business planning and governance
advice in executive management positions with
Microsoft Business Solutions and navision. He is a
non-executive board and audit committee member
of occupational & Medical Innovations limited (since
23 november 2006) and became non-executive
chairman in January 2007, is a non-executive board and
audit committee member of Steel Foundations limited
and was non-executive board and audit committee
member with Queensland Capital Corporation limited.
David also serves as an advisory board member for
a number of privately owned companies and was a
partner with Gadens lawyers. David is a Member of
the GBSt Audit and Risk Management Committee and
is a member of the nominations and Remuneration
Committee.
Interest in Shares and Options - nil
Joakim Sundell non-executive Director
Joakim was appointed to the board in 2001. Joakim has
an extensive career in private equity finance, merchant
banking, and management both in Sydney and london.
He is Managing Director of Crown Financial pty ltd,
a private investment company. He is a director of
Infochoice limited (since 13 December 2006). Joakim
is a Member of the nominations and Remuneration
Committee.
Interest in Shares and Options - 14,336,053 ordinary shares
held by Mr Sundell’s associated entities.
remuner atIon report
the remuneration report is set out under the following
main headings:
–
–
–
–
Remuneration policies and practices
Company performance and remuneration
Service agreements
Details of remuneration
the information provided in the remuneration report
includes remuneration disclosures that are required
under Accounting Standard AASB 124 Related Party
Disclosures. these disclosures have transferred from the
financial report and have been audited.
remuneration policies and practices (audited)
the policy for determining the nature and amount of
remuneration of directors and specified executives is as
follows:
Remuneration of non-executive directors is
determined by the Board with reference to market
rates for comparable companies and reflective of the
responsibilities and commitment required of the director.
the remuneration of directors is voted on annually at the
company’s annual general meeting.
executive remuneration packages are aligned with
the market and properly reflect the person’s duties,
responsibilities and performance. the current
remuneration structure has three components: fixed
remuneration, performance-related bonus and equity
based remuneration. executives are offered longer term
incentives through an employee share option plan
which seeks to align the executives’ performance with
the interests of shareholders.
the performance of executives is considered annually
against agreed performance objectives relating to
both individual performance goals and contribution
to the achievement of broader company objectives.
executive remuneration packages are reviewed annually
by reference to the company’s economic performance,
executive performance and comparative information
from industry sectors.
Remuneration paid to directors and executives is valued
at the cost to the company and expensed. the company
operates an employee option scheme, comprising of
two sub-schemes, being an exempt options Scheme
for staff generally and a Deferred options Scheme for
select staff and eligible directors. options are valued
using a binomial model which includes variables such as
time, volatility, risk and return. the value of equity based
remuneration under the Deferred option Scheme is
recognised as an employee benefits expense.
the board recognises that a key driver for shareholder
value is the quality of the people employed by and
attracted to the company. In order to meet corporate
objectives GBSt must attract, motivate and retain highly
skilled executives and talented employees.
Remuneration principles
1. the company will use competitive remuneration
packages to attract, motivate and retain talented
executives.
2. the employees will be rewarded for sustained and
sustainable improvement in the performance of the
company.
20
d I r e C t o r s ’ r e p o r t C o n t I n u e d
3. Directors and senior executives are encouraged
to make investments in the company but only
in accordance with the company’s share trading
guidelines.
4. Senior executive agreements will not allow for
significant termination payments if an employment
agreement has to be terminated for cause.
5. the company will make full disclosure of director and
executive remuneration.
the company has an employee share ownership plan.
the plan involves the use of options to acquire shares.
the plan is designed to reward executives in a manner
which aligns this element of remuneration with the
financial performance of the company and the interests
of shareholders. executives are also required to meet
continued service conditions in order to exercise the
options. Details of executive options are shown in
note 28 in the financial statements.
the board recognises the significant role played by
remuneration in attracting and retaining staff.
Company performanCe and
remuner atIon
the table below shows the financial performance of
the company over the last four years as measured
by net operating revenue and net profit before tax.
GBSt’s remuneration practices seek to align executive
remuneration with growth in profitability and
shareholder value, amongst other things.
the company listed on the Australian Stock exchange on
28 June 2005. over the past year GBSt’s share price has
increased by 69%.
net operating
revenue
Growth
net profit
before tax
Growth
Closing
Share price
2004
2005
2006
2007
$21.3m $22.17m $26.72m $29.28m
11%
4%
21%
10%
$2.42m $3.54m $8.63m $11.4m
100%
46%
144%
31%
n/a
$1.23
$2.37
$4.00
service agreements (audited)
Remuneration and other terms of employment for
executive directors and executives are formalised in
service contracts. All agreements with executives are
subject to an annual review. each of the agreements
provide for base pay, leave entitlements, superannuation
and performance–related bonus. the agreements
are expressed to cover periods specific to individual
appointments but may generally be terminated by
notice by either party or earlier in the event of certain
breaches of terms and conditions. Mr lake’s service
agreement has a rolling term subject to six months
notice from either party.
Remuneration Structure – non-executive directors
non-executive directors are paid fixed annual
remuneration as set out in letters of appointment.
Reviews of each individual director and directors as a
whole occur annually. non-executive directors may
make investments in the company in accordance with
the company’s share trading guidelines but they do not
participate in the employee share ownership plan. GBSt
does not operate a scheme for retirement benefits to
directors.
Remuneration Structure – senior executives
three elements make up the company’s remuneration
structure for senior executives.
1. Fixed remuneration of salary and superannuation.
2. Bonus payments based upon company performance
and the meeting of corporate objectives.
3. equity based remuneration.
Fixed remuneration levels are set with reference to
commercial benchmark information and the individual’s
role, responsibility, experience and geographic location.
the fixed component of executive remuneration is
reviewed annually. the company makes superannuation
contributions on fixed remuneration amounts.
Bonus and equity based schemes are designed to
motivate employees for the continuing benefit of
shareholders. no employee has a continuous entitlement
to bonus payments. performance objectives for each
executive are set on an annual basis and are reflective
of the areas of responsibility of the executive and
the broader objectives of the company. performance
objectives include financial and non-financial goals.
executive performance is reviewed annually with
bonuses being awarded based on an assessment of
performance against agreed criteria. the payment of
performance bonuses is subject to a consideration of
whether or not the overall performance of the company
warrants the payment of a bonus.
G B S T A n n u A l R e p o R t 2 0 0 7
21
d I r e C t o r s ’ r e p o r t C o n t I n u e d
details of remuneration (audited)
the remuneration for each director and executive officers (the key management personnel) receiving the highest remuneration
during the year was as follows:
short-term benefits
post
employment
benefits
other long-
term benefits
share-based
payment
performance
related
total
bonus
other
super-
annuation
leave
entitlement
equity
options
$
%
$
–
–
–
–
–
–
–
–
–
80,000
40,000
534,100
40,000
40,000
734,100
190,307
247,612
261,592
–
217,917
–
–
112,528
232,667
– 1,262,623
– 1,996,723
–
–
–
–
–
7
9
13
6
4
13
base salary
& fees
$
80,000
40,000
490,000
40,000
40,000
690,000
134,470
204,231
218,333
$
–
–
–
–
–
–
13,761
22,936
$
–
–
–
–
–
–
–
–
35,000
8,259
186,899
13,761
98,237
181,346
5,000
32,110
–
–
–
$
–
–
44,100
–
–
44,100
13,274
20,445
–
17,257
9,291
19,211
$
–
–
–
–
–
–
28,802
–
–
–
–
–
2007
directors
J puttick
A Brackin
S lake
D Shirley
J Sundell
total
directors
executives
C Apps
(resigned
16/3/07)
p Ferguson
p Fowler
S Hayhoe
(resigned
8/6/07)
K Sprott
(appointed
21/08/06)
K Wallis
total executives
1,023,516
122,568
8,259
79,478
28,802
group total
1,713,516
122,568
8,259
123,578
28,802
22
d I r e C t o r s ’ r e p o r t C o n t I n u e d
short-term benefits
post
employment
benefits
other long-
term benefits
share-based
payment
performance
related
total
bonus
other
super-
annuation
leave
entitlement
equity
options
$
%
base salary
& fees
$
100,730
40,000
490,000
40,000
40,000
2006
directors
J puttick
A Brackin
S lake
D Shirley
J Sundell
Total Directors
710,730
$
–
–
–
–
–
–
Executives
C Apps
p Ferguson
p Fowler
(appointed
15/12/05)
S Hayhoe
e lloyd (i)
K Wallis
176,212
189,154
32,110
32,110
113,750
165,385
118,587
155,346
–
32,110
32,110
32,110
Total Executives
918,434
160,550
$
–
–
–
–
–
–
–
–
–
–
–
–
–
$
$
952
–
44,269
–
–
103,393
–
–
–
–
$
–
–
205,075
40,000
23,798
558,067
–
–
40,000
40,000
45,221
103,393
23,798
883,142
18,749
19,914
–
17,774
13,563
16,871
86,871
–
–
–
–
–
–
–
6,415
233,486
9,520
250,698
11,544
125,294
7,723
222,992
6,415
6,415
170,675
210,742
48,032 1,213,887
–
–
4
–
–
16
17
9
18
23
18
Group Total
1,629,164
160,550
–
132,092
103,393
71,830 2,097,029
(i) e lloyd entered maternity leave on 2 December 2005 and resigned in the current year.
Options issued as part of Remuneration for the Year Ended 30 June 2007
there were no options issued as remuneration to key management personnel in the 30 June 2007 financial year.
the cost of equity options is reported in accordance with accounting standard AASB 2 Share-based payments, which has the
effect of reporting the cost of the options over the period between the grant date and exercise date.
Options granted as remuneration to key management personnel
there were no options granted as remuneration to key management personnel in the 30 June 2007 financial year.
Details of the total holdings of options granted as remuneration in previous financial years are set out in note 28 in the financial
statements. Details of these options are set out in note 30 in the financial statements.
G B S T A n n u A l R e p o R t 2 0 0 7
23
d I r e C t o r s ’ r e p o r t C o n t I n u e d
Shares issued on exercise of compensation options
options exercised during the year that were granted as compensation in previous financial years:
directors
J puttick
A Brackin
S lake
D Shirley
J Sundell
total directors
executives
C Apps
C Apps
p Ferguson
p Fowler
S Hayhoe
S Hayhoe
K Sprott
K Wallis
total executives
group total
meetIngs of dIreC tors
amounts paid
per share
amounts unpaid
per share
$
–
–
0.7505
–
–
0.7505
0.00
1.09
–
0.7505
1.45
–
0.7505
$
–
–
–
–
–
–
–
–
–
–
–
–
–
no. of ordinary
shares issued
–
–
999,332
–
–
999,332
265,156
1,332
30,656
–
123,560
25,000
–
230,156
675,680
1,675,192
During the financial year, 20 meetings of directors (including committees of directors) were held. Attendances by
each director during the year were as follows:
directors’ names
J puttick
A Brackin
S lake
D Shirley
J Sundell
directors’ meetings
audit and risk committee remuneration and nominations
number
eligible to
attend
number
attended
number
eligible to
attend
number
attended
number
eligible to
attend
number
attended
15
15
15
15
15
14
15
15
15
14
4
4
4
4
–
4
4
4
4
–
1
1
1
1
1
1
1
1
1
1
Indemnifying directors and officers
During the financial year, the company paid a premium in respect of a contract insuring the directors of the company,
the company secretaries and all executive officers of the company against a liability incurred as such a director,
secretary or executive officer to the extent permitted by the Corporations Act 2001.
In addition, the company has entered into a Deed of Indemnity which ensures that generally the Directors and
officers of the company will incur no monetary loss as a result of defending the actions taken against them as
Directors and officers.
the company has not otherwise, during or since the financial year, indemnified or agreed to indemnify an officer or
auditor of the company against a liability incurred as such an officer or auditor.
24
D i r e c t o r s ’ r e p o r t c o n t i n u e D
options
the number of options over ordinary shares outstanding at 30 June 2007 are as follows:
Grant date
09.03.05
25.08.05
05.12.05
03.01.06
expiry and
exercise date
08.03.10
31.01.08
04.12.07
02.01.08
exercise price
$0.00
$1.09
$1.25
$1.45
number
134,532
69,344
187,500
90,000
481,376
the company established an employee share trust on 9 March 2005 to hold shares in GBSt for subsequent allocation
under the GBSt employee option plan. During the year ended 30 June 2007, 2,332,336 shares were issued from
the trust and 1,045,562 new shares were issued to meet the exercise of employee options (grant date 09.03.05 and
exercise price was $.7505). GBSt eSop pty ltd held 36,844 shares in GBSt at reporting date. the trust is treated as a
special purpose entity and consolidated. the trust’s shareholding in the company is disclosed as treasury shares and
deducted from equity.
no person entitled to exercise the option had or has any right by virtue of the option to participate in any share issue
of any other body corporate. Since the end of the financial year the company has issued 85,894 zero exercise price
options to non-executive staff. the zero exercise price options are divided into three tranches.
the first tranche, of 20%, vest and may be exercised after 12 months and lapse if unexercised in 36 months.
the second tranche, of 30%, vest and may be exercised after 24 months and lapse if unexercised in 48 months.
the third tranche, of 50%, vest and may be exercised after 36 months and lapse if unexercised after 60 months. on
cessation of employment all unvested zero exercise price options lapse. the company has also issued 11,988 shares
since the end of the financial year following the exercise of options under the GBSt exempt option plan.
proceeDinGs on Behalf of c ompany
no person has applied for leave of Court to bring proceedings on behalf of the company or 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 any part of those proceedings. the company was not a party to any such proceedings during the year.
non -au Dit services
the board of directors, in accordance with advice from the audit committee, is satisfied that the provision of non-
audit services during the year is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001.
Refer to note 21 in the financial report for details of fees for non-audit services paid/payable to the external auditors
during the year.
auDitor ’s inDepenDence Decl ar ation
the lead auditor’s independence declaration for the year ended 30 June 2007 has been received and can be found
on the page following this directors’ report.
Signed in accordance with a resolution of the Board of Directors:
J f puttick
Chairman
Brisbane
16 August 2007
s m l lake
Managing Director and Chief executive officer
G B S T A n n u A l R e p o R t 2 0 0 7
25
a u d I t o r ’ s I n d e p e n d e n C e d e C l a r a t Io n
26
d I r e C t o r s ’ d e C l a r a t Io n
the Directors of the company declare that:
1. the financial statements and notes, and the additional disclosures included in the directors’ report designated as
audited, are in accordance with the Corporations Act 2001:
a) comply with Accounting Standards and the Corporations Regulations 2001; and
b) give a true and fair view of the financial position as at 30 June 2007 and of the performance for the year
ended on that date of the company and consolidated entity.
2.
the Chief executive officer and Chief Financial officer have each declared that:
a)
the financial records of the company for the financial year have been properly maintained in accordance with
section 286 of the Corporations Act 2001;
b) the financial statements and notes for the financial year comply with the Accounting Standards;
and
c)
the financial statements and notes for financial year give a true and fair view.
3.
In the directors’ opinion there are reasonable grounds to believe that the company will be able to pay its debts as
and when they become due and payable.
this declaration is made in accordance with a resolution of the board of directors.
J f puttick
Chairman
Brisbane
16 August 2007
s m l lake
Managing Director and Chief executive officer
G B S T A n n u A l R e p o R t 2 0 0 7
27
I n C o m e s t a t e m e n t f o r t h e y e a r e n d e d 3 0 J u n e 2 0 0 7
Revenue
other income
total Revenue
Consolidated
Company
note
2007
$
2006
$
2007
$
2006
$
30,410,971
28,241,374
30,410,971
28,241,374
876,156
441,188
944,955
441,188
31,287,127
28,682,562
31,355,926
28,682,562
product delivery and support expenses
(12,139,888)
(11,566,680)
(12,139,888)
(11,566,680)
Cost of third party product sold
(1,134,720)
(1,532,529)
(1,134,720)
(1,532,529)
property and equipment expenses
(3,013,076)
(2,774,417)
(3,013,076)
(2,774,417)
Corporate and administrative expenses
(3,641,934)
(4,154,546)
(3,604,248)
(4,154,546)
Finance costs
profit before income tax
Income tax expense
profit from continuing operations
profit attributable to members of the
parent company
Basic earnings per share (cents)
Diluted earnings per share (cents)
2
3
31
31
(19,682)
(26,214)
(19,682)
(26,214)
11,337,827
8,628,176
11,444,312
8,628,176
(3,316,431)
(2,492,194)
(3,316,431)
(2,492,194)
8,021,396
6,135,982
8,127,881
6,135,982
8,021,396
6,135,982
8,127,881
6,135,982
18.11
17.77
13.96
13.77
the accompanying notes form part of these financial statements.
28
b a l a n C e s h e e t a s a t 3 0 J u n e 2 0 0 7
Current assets
Cash and cash equivalents
trade and other receivables
Inventories
other assets
total current assets
non-Current assets
trade and other receivables
Financial assets
property, plant and equipment
Intangible assets
Deferred tax assets
other assets
totAl non-CuRRent ASSetS
total assets
Current lIabIlItIes
trade and other payables
Financial liabilities
Current tax liabilities
other liabilities
totAl CuRRent lIABIlItIeS
non-Current lIabIlItIes
Deferred tax liabilities
long-term provisions
other liabilities
totAl non-CuRRent lIABIlItIeS
total lIabIlItIes
net assets
eQuIty
Issued capital
treasury shares
Reserves
Retained earnings
total eQuIty
Consolidated
Company
note
2007
$
2006
$
2007
$
2006
$
5
6
7
11
6
8
9
10
14
11
12
13
14
16
14
15
16
17
18
19
15,454,992
10,618,069
15,454,992
10,618,069
3,797,888
3,224,393
3,849,344
5,002,362
–
513,605
2,572
280,102
–
513,605
2,572
280,102
19,766,485
14,125,136
19,817,941
15,903,105
16,027
781,937
36,792
–
16,027
782,039
1,289,967
1,157,043
1,289,967
5,339,012
5,732,379
5,339,012
1,138,404
1,051,523
1,138,404
13,453
31,200
13,453
36,792
102
1,157,043
5,732,379
1,051,523
31,200
8,578,800
8,008,937
8,578,902
8,009,039
28,345,285
22,134,073
28,396,843
23,912,144
2,186,566
2,030,457
2,178,571
2,030,457
–
35,276
–
2,080,532
2,115,948
2,080,532
2,260,754
3,027,989
2,260,754
6,527,852
7,209,670
6,519,857
174,492
144,765
174,492
1,128,406
1,197,841
1,128,406
305,611
64,605
305,611
35,276
2,115,948
3,027,989
7,209,670
144,765
1,197,841
64,605
1,608,509
1,407,211
1,608,509
1,407,211
8,136,361
8,616,881
8,128,366
8,616,881
20,208,924
13,517,192
20,268,477
15,295,263
6,807,508
5,722,015
6,807,508
5,722,015
(31,253)
(1,778,071)
–
–
67,788
298,816
67,788
298,816
13,364,881
9,274,432
13,393,181
9,274,432
20,208,924
13,517,192
20,268,477
15,295,263
G B S T A n n u A l R e p o R t 2 0 0 7
29
s tat e m e n t o f C h a n g e s I n e Q u I t y f o r t h e y e a r e n d e d 3 0 J
u n e 2 0 0 7
Issued
capital
$
treasury
shares (a)
$
retained
earnings
$
option
reserve (b)
$
total
$
ConsolIdated
balance at 1 July 2005
5,722,015
(2,203,076)
3,138,450
175,000
6,832,389
profit for the year
Share based payments
exercise of options
–
–
–
–
–
425,005
6,135,982
–
6,135,982
–
–
123,816
–
123,816
425,005
balance at 30 June 2006
5,722,015
(1,778,071)
9,274,432
298,816
13,517,192
balance at 1 July 2006
5,722,015
(1,778,071)
9,274,432
298,816
13,517,192
profit for the year
Share based payments
Share Issues
exercise of options
–
–
780,696
–
–
–
–
1,746,818
transfer to ordinary capital
304,797
–
8,021,396
–
8,021,396
–
–
–
–
73,769
–
–
73,769
780,696
1,746,818
(304,797)
–
subtotal
6,807,508
(31,253)
17,295,828
67,788
24,139,871
net Dividends paid (note 4)
–
–
(3,930,947)
–
(3,930,947)
balance at 30 June 2007
6,807,508
(31,253)
13,364,881
67,788
20,208,924
parent Company
balance at 1 July 2005
5,722,015
profit for the year
Share based payments
balance at 30 June 2006
balance at 1 July 2006
profit for the year
Share based payments
Share Issues
transfer to ordinary capital
subtotal
net Dividends paid (note 4)
–
–
5,722,015
5,722,015
–
–
780,696
304,797
6,807,508
–
balance at 30 June 2007
6,807,508
–
–
–
–
–
–
–
–
–
–
–
–
3,138,450
175,000
9,035,465
6,135,982
–
6,135,982
–
123,816
123,816
9,274,432
298,816
15,295,263
9,274,432
298,816
15,295,263
8,127,881
–
8,127,881
–
–
–
73,769
73,769
–
780,696
(304,797)
–
17,402,313
67,788
24,277,609
(4,009,132)
–
(4,009,132)
13,393,181
67,788
20,268,477
(a) GBSt eSop pty ltd, in its capacity as trustee of the GBSt employee Share trust, holds shares in GBSt for
subsequent allocation under the GBSt employee option plan. During the year ended 30 June 2007, 2,332,336
(2006: 384,820) shares were issued from the trust to meet the exercise of employee options. GBSt eSop pty ltd
held 36,844 shares in GBSt at 30 June 2007 (2006: 2,369,180 ). the trust is treated as a special purpose entity and
consolidated. the trust’s shareholding in the company is disclosed as treasury shares and deducted from equity.
(b) the option reserve records items recognised as expenses on valuation of employee share options granted.
When options are exercised, the amount in the reserve relating to those options is transferred to issued capital.
the accompanying notes form part of these financial statements.
30
C a s h f l o w s t a t e m e n t f o r t h e y e a r e n d e d 3 0 J
u n e 2 0 0 7
Consolidated
Company
note
2007
$
2006
$
2007
$
2006
$
Cash flows from
operatIng aCtIvItIes
Receipts from customers
32,342,988
32,447,791
32,342,988
32,447,791
payments to suppliers and employees
(22,068,505)
(22,503,435)
(22,058,056)
(22,520,141)
Interest & sundry income
Interest and other costs of finance paid
Income tax paid
net cash provided by/(used in)
operating activities
Cash flows from InvestIng
aCtIvItIes
775,697
(9,874)
379,230
(16,405)
775,697
(9,874)
(3,409,002)
(343,126)
(3,409,002)
379,230
(16,405)
(343,126)
25(a)
7,631,304
9,964,055
7,641,753
9,947,349
proceeds from sale of plant & equipment
31,801
11,324
31,801
purchase of plant & equipment
(625,286)
(561,932)
(625,286)
11,324
(561,932)
(599,527)
purchase of intangibles
Acquisition of business
proceeds from related entity receivables
proceeds from other entity receivables
purchase of investments
net cash provided by/(used in) investing
activities
Cash flows from fInanCIng
aCtIvItIes
Repayment of finance leases
exercise of options/sale of treasury shares
proceeds from issue of ordinary shares
Dividends paid
net cash provided by/(used in)
financing activities
net InCrease/(deCrease) In Cash
and Cash eQuIvalents
(82,974)
(599,527)
(82,974)
25(c)
–
–
21,527
(781,937)
(5,348,482)
–
(5,348,482)
–
1,895,751
30,182
21,527
–
(781,937)
293,517
30,182
–
(1,436,869)
(6,468,435)
458,882
(6,174,918)
(35,276)
(37,397)
(35,276)
1,828,015
780,696
(3,930,947)
(37,397)
276,811
–
–
–
780,696
(4,009,132)
–
–
–
(1,357,512)
239,414
(3,263,712)
(37,397)
Cash at beginning of the financial year
10,618,069
6,883,035
10,618,069
4,836,923
3,735,034
4,836,923
3,735,034
6,883,035
Cash at end of the financial year
25(b)
15,454,992
10,618,069
15,454,992
10,618,069
the accompanying notes form part of these financial statements.
G B S T A n n u A l R e p o R t 2 0 0 7
31
n o t e s t o a n d f o r mI
n g p a r t o f t h e f
I n a n C I a l s t a t e m e n t s
f o r t h e y e a r e n d e d 3 0 J
u n e 2 0 0 7
NOTE 1: STATEMENT OF SIGNIFICANT
ACCOUNTING POLICIES
GBSt Holdings limited is a public company limited by
shares, incorporated and domiciled in Australia.
the financial report covers the consolidated entity of
GBSt Holdings limited and its controlled entities, and
GBSt Holdings limited as an individual parent entity.
the financial report is a general purpose financial report
prepared in accordance with the requirements of the
Corporations Act 2001, Australian Accounting Standards,
including Australian Accounting Interpretations and
other authoritative pronouncements of the Australian
Accounting Standards Board.
the financial report complies with all International
Financial Reporting Standards (IFRS) in their entirety.
basis of preparation
the following is a summary of the material accounting
policies adopted by the consolidated group in the
preparation of the financial report. the accounting
policies have been consistently applied, unless
otherwise stated.
the financial report has been prepared on an accruals
basis and is based on historical costs modified by the
revaluation of selected non-current assets, and financial
assets and financial liabilities for which the fair value
basis of accounting has been applied.
principles of consolidation
A controlled entity is any entity over which GBSt
Holdings limited has the power to control the financial
and operating policies, so as to obtain benefits from
its activities.
A list of controlled entities is contained in note 22 of the
financial statements. All controlled entities have a June
financial year end.
All inter-company balances and transactions between
entities in the consolidated entity, including any
unrealised profits or losses, have been eliminated
on consolidation.
Where controlled entities have entered or left the
consolidated entity during the year, their operating
results have been included/excluded from the date
control was obtained or until the date control ceased.
revenue
Revenue received in advance for software usage rental is
recognised over the period of the usage.
Revenue received in advance for long term project
development contracts (depending on the terms
of individual contracts) is deferred. this revenue is
recognised over the period in which expenditure is
incurred in relation to the development of the project.
Revenue from the sale of goods, rendering of other
services or the disposal of other assets is recognised
upon the delivery to customers.
Interest revenue is recognised on a proportional basis
taking into account the interest rates applicable to the
financial assets.
All revenue is stated net of the amount of goods and
services tax (GSt).
goods and services tax (gst)
Revenues, expenses and assets are recognised net of
the amount of GSt, except where the amount of GSt
incurred is not recoverable from the Australian tax office.
In these circumstances the GSt is recognised as part of
the cost of acquisition of the asset or as part of an item
of the expense. Receivables and payables in the Balance
Sheet are shown inclusive of GSt.
Cash flows are presented in the cash flow statement on
a gross basis, except for the GSt component of investing
and financing activities, which are disclosed as operating
cash flows.
Income tax
the charge for current income tax expense is based on
the profit for the year adjusted for any non-assessable
or disallowed items. It is calculated using tax rates that
have been enacted or are substantially enacted by the
balance sheet date.
Deferred tax is accounted for using the balance sheet
liability method in respect of temporary differences
arising between the tax bases of assets and liabilities
and their carrying amounts in the financial statements.
no deferred income tax will be recognised from the
initial recognition of an asset or liability, excluding a
business combination, where there is no effect on
accounting or taxable profit or loss.
Deferred tax is calculated at the tax rates that are
expected to apply to the period when the asset is
realised or liability is settled. Deferred tax is credited in
the income statement except where it relates to items
that may be credited directly to equity, in which case the
deferred tax is adjusted directly against equity.
32
n o t e s t o a n d f o r mI
n g p a r t o f t h e f
I n a n C I a l s t a t e m e n t s
f o r t h e y e a r e n d e d 3 0 J
u n e 2 0 0 7
Deferred income tax assets are recognised to the
extent that is probable that future profits will be
available against which deductible temporary
difference can be utilised.
the amount of benefits brought to account or which
may be realised in the future is based on the assumption
that no adverse change will occur in income taxation
legislation and the anticipation that the consolidated
entity will derive sufficient future assessable income to
enable the benefit to be realised and comply with the
conditions of deductibility imposed by the law.
the company and its wholly-owned Australian
subsidiaries have formed an income tax consolidated
group under the tax Consolidation Regime. each entity
in the group recognises its own current and deferred
tax liabilities, except for any deferred tax liabilities
resulting from unused tax losses and tax credits, which
are immediately assumed by the parent entity. the tax
consolidated group has entered a tax sharing agreement
whereby each company in the group contributes to the
income tax payable in proportion to their contribution to
the net profit before tax of the tax consolidated group.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand,
deposits held at call with banks, other short term highly
liquid investments with original maturities of three
months or less, and bank overdrafts.
Inventories
Inventories are measured at the lower of cost and net
realisable value.
plant and equipment
plant and equipment are carried at cost or fair value,
less, where applicable, any accumulated depreciation
and impairment losses. the carrying amount of plant
and equipment is reviewed annually by directors to
ensure it is not in excess of the recoverable amount
from those assets. the recoverable amount of an asset
is assessed on the basis of the expected net cash flows
that will be received from the asset’s employment and
subsequent disposal. the expected net cash flows have
been discounted to their present values in determining
recoverable amounts.
Subsequent costs are included in the asset’s carrying
amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits
associated with the item will flow to the group and
the cost of the item can be measured reliably. All other
repairs and maintenance are charged to the income
statement during the financial period in which they
are incurred.
the depreciable amount of all fixed assets including
capitalised lease assets, is depreciated over their useful
lives to the entity commencing from the time the asset
is held ready for use. leasehold improvements are
depreciated over the shorter of either the unexpired
period of the lease or the estimated useful lives of the
improvements.
the depreciation rates used for each class of assets are:
Class of
fixed asset
owned plant,
equipment
depreciation
rate
basis
7.5%-40%
Straight-line /
Diminishing
Value
Straight-line
leased plant,
equipment
33.3%
the assets’ residual values and useful lives are reviewed,
and adjusted if appropriate, at each balance sheet date.
An asset’s carrying amount is written down immediately
to its recoverable amount if the asset’s carrying amount
is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by
comparing proceeds with the carrying amount. these
gains and losses are included in the income statement.
asset retirement obligations
the cost of plant and equipment includes an initial
estimate of the cost of make good allowances, and a
corresponding provision for these future costs is raised.
the company has a number of lease agreements over
office premises which include an obligation to make
good the premises at the conclusion of the lease term.
the company recognises a liability and an asset for the
estimated cost of making good at the time of entering
a lease agreement. the resulting asset is amortised over
the term of the premises lease.
G B S T A n n u A l R e p o R t 2 0 0 7
33
n o t e s t o a n d f o r mI
n g p a r t o f t h e f
I n a n C I a l s t a t e m e n t s
f o r t h e y e a r e n d e d 3 0 J
u n e 2 0 0 7
NOTE 1: STATEMENT OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)
leases and hire purchase
leases of fixed assets where substantially all the risks and
benefits incidental to the ownership of the asset, but not
the legal ownership that is transferred to entities in the
consolidated entity, are classified as finance leases.
Finance leases are capitalised by recording an asset and
a liability at the lower of the amounts equal to the fair
value of the leased property or the present value of the
minimum lease payments, including any guaranteed
residual values. lease payments are allocated between
the reduction of the lease liability and the lease interest
expense for the period. leased assets are depreciated on
a straight-line basis over the shorter of their estimated
useful lives or the lease term.
lease payments for operating leases, where substantially
all the risks and benefits remain with the lessor, are
charged as expenses in the periods in which they
are incurred.
lease incentives under operating leases are recognised
as a liability and amortised on a straight-line basis over
the life of the lease term.
research and development expenditure
(software systems)
Software systems are the core asset of the company.
Intangible assets are tested for impairment where an
indicator of impairment exists. useful lives are also
examined on an annual basis and adjustments, where
applicable, are made on a prospective basis.
goodwill
Goodwill is initially recorded at the amount by which the
purchase price for a business acquisition exceeds the fair
value attributed to its net assets at date of acquisition.
Following initial recognition, goodwill is measured at
cost less any accumulated impairment losses. Goodwill is
not amortised
Goodwill is tested annually for any indication of
impairment, or more frequently if events or changes in
circumstances indicate that the carrying value may be
impaired. Goodwill is allocated to cash generating units
for the purpose of impairment testing.
Impairment of assets
At each reporting date, the group reviews the carrying
values of its tangible and intangible assets to determine
whether there is any indication that those assets
have been impaired. If such an indication exists, the
recoverable amount of the asset, being the higher of
the asset’s fair value less costs to sell and value in use,
is compared to the asset’s carrying value. Any excess of
the asset’s carrying value over its recoverable amount is
expensed to the income statement.
Internally developed
expenditure during the research phase of a project is
recognised as an expense when incurred. Development
costs are expensed in the year in which they are incurred
when future economic benefits are uncertain or the
future economic benefits cannot be measured reliably.
Impairment testing is performed annually for goodwill
and intangible assets with indefinite lives. Where it is
not possible to estimate the recoverable amount of
an individual asset, the group estimates the recoverable
amount of the cash-generating unit to which the
asset belongs.
Externally acquired
Software systems externally acquired are recognised at
cost of acquisition. Software systems have a finite life and
are carried at cost less any accumulated amortisation and
any impairment losses. Software systems are amortised
over their useful life on a straight line basis.
Identifiable intangible assets
Acquired both separately and from
a business combination
Intangible assets acquired are capitalised at cost.
Intangible assets acquired from a business combination
are recognised separately from goodwill and capitalised
at fair value as at the date of acquisition. Following initial
recognition, the cost model is applied to the class of
intangible assets.
the useful lives of these intangible assets are assessed
and the asset is amortised over its useful life on a straight
line basis.
provisions
provisions are recognised when the group has a legal
or constructive obligation, as a result of past events,
for which it is probable that an outflow of economic
benefits will result and that outflow can be reliably
measured.
employee benefits
provision is made for the group’s liability for employee
benefits arising from services rendered by employees to
balance date. employee benefits expected to be settled
within one year have been measured at the amounts
expected to be paid when the liability is settled, plus
related oncosts. other employee benefits payable later
than one year have been measured at the present value
of the estimated future cash outflows to be made for
those entitlements. Contributions are made by the group
to employee superannuation funds and are charged as
expenses when incurred.
34
financial instruments
Recognition
Financial instruments are initially measured at cost on
trade date, which includes transaction costs, when
the related contractual rights or obligations exist.
Subsequent to initial recognition these instruments are
measured as set out below.
Loans and receivables
loans and receivables are non-derivative financial assets
with fixed or determinable payments that are not quoted
in an active market and are stated at amortised cost
using the effective interest rate method.
Available-for-sale financial assets
Available-for-sale financial assets (investments) are
reflected at fair value or cost. Fair value is determined
with reference to market prices. unrealised gains and
losses arising from changes in fair value are taken directly
to equity.
Financial liabilities
non-derivative financial liabilities are recognised at
amortised cost, comprising original debt less principal
payments and amortisation.
Impairment
At each reporting date, the group assesses whether
there is objective evidence that a financial instrument
has been impaired. In the case of available-for-sale
financial instruments, a prolonged decline in the value
of the instrument is considered to determine whether an
impairment has arisen. Impairment losses are recognised
in the income statement.
Comparative figures
Where required by Accounting Standards comparative
figures have been adjusted to conform to changes in
presentation for the current financial period. Details of
any such changes are included in the financial report.
the group operates an employee option scheme,
comprising of two sub-schemes, being an exempt
options Scheme for staff generally and a Deferred
options Scheme for select staff and eligible Directors.
the company determines the fair value of options (and
other equity-based incentives) issued to employees as
remuneration and recognises an expense in the Income
Statement. options are valued using a binomial model
which includes variables such as time, volatility, risk
and return.
treasury shares
the GBSt employee Share trust is treated as a special
purpose entity and consolidated. this results in the
trust’s shareholding in the company being disclosed
as treasury shares and deducted from equity.
this consolidation treatment arises on the basis that,
although the consolidated entity has no proprietary
interest in the shares, the GBSt employee Share trust
has been established to maintain and hold securities
in accordance with the remuneration policies and
objectives of the group. It is deemed that the trust is
controlled by the group.
Where the employee share options are exercised and the
employees acquire the shares from the eSop trust, the
treasury shares will be removed from the balance sheet
as cash is received from the employees.
Critical accounting estimates and judgments
the directors evaluate estimates and judgments
incorporated into the financial report based on historical
knowledge and best available current information.
estimates assume a reasonable expectation of future
events and are based on current trends and economic
data, obtained both externally and within the group.
Actual results may differ from these estimates. the key
estimates and judgements made in this financial report
concern the assessment of the carrying value of the
consolidated entity’s intangible assets.
foreign currency transactions and balances
the consolidated financial statements are presented in
Australian dollars which is the parent entity’s functional
and presentation currency.
Foreign currency transactions are translated into
functional currency using the exchange rates prevailing
at the date of the transaction.
Foreign currency monetary items are translated at the
year end exchange rate. exchange differences arising on
the translation of monetary items are recognised in the
income statement.
G B S T A n n u A l R e p o R t 2 0 0 7
35
n o t e s t o a n d f o r mI
n g p a r t o f t h e f
I n a n C I a l s t a t e m e n t s
f o r t h e y e a r e n d e d 3 0 J
u n e 2 0 0 7
Consolidated
Company
2007
$
2006
$
2007
$
2006
$
NOTE 2: PROFIT FOR THE YEAR
(a)
Revenue:
Sales revenue:
Revenue from license and service sales
29,086,199
26,408,429
29,086,199
26,408,429
Revenue from sale of third party product
1,324,772
1,832,945
1,324,772
1,832,945
30,410,971
28,241,374
30,410,971
28,241,374
other income:
Interest revenue (c)
profit on sale of plant & equipment (d)
other revenue
total Revenue
(b)
expenses:
866,046
430,357
934,845
430,357
9,280
830
876,156
–
10,831
441,188
9,280
830
944,955
–
10,831
441,188
31,287,127
28,682,562
31,355,926
28,682,562
loss on sale of plant & equipment (d)
Finance costs (e)
Depreciation & amortisation (f)
–
19,682
942,374
90,281
26,214
–
19,682
822,519
942,374
Foreign currency translation losses/(gains)
–
1,218
–
operating lease rentals
1,262,612
936,533
1,262,612
90,281
26,214
822,519
1,218
936,533
Research & developments costs
2,915,214
3,328,571
2,915,214
3,328,571
employee benefits expense (g)
11,285,343
11,908,162
11,305,179
11,908,162
(c)
Interest revenue:
other entities
Controlled entity
(d)
Sale of assets:
proceeds on sale of plant and equipment
(e)
Finance costs:
Finance lease charges
Facility fees
866,046
430,357
866,046
430,357
–
–
68,799
–
866,046
430,357
934,845
430,357
31,801
31,801
974
18,708
19,682
11,324
11,324
4,035
22,179
26,214
31,801
31,801
974
18,708
19,682
11,324
11,324
4,035
22,179
26,214
36
NOTE 2: PROFIT FOR THE YEAR (CONTINUED)
(f)
Depreciation & amortisation:
Depreciation of plant & equipment
Amortisation of leased assets
Amortisation of intangibles
(g)
employee benefits expense:
Consolidated
Company
2007
$
2006
$
2007
$
2006
$
442,791
23,530
476,053
942,374
478,712
40,317
303,490
822,519
442,791
23,530
476,053
942,374
478,712
40,317
303,490
822,519
Monetary based expense (i)
11,231,410
11,636,152
11,231,410
11,636,152
Share based payments expense (ii)
73,769
272,010
73,769
272,010
11,305,179
11,908,162
11,305,179
11,908,162
(i) Monetary based expense includes salary and fees, bonus payments, superannuation and other benefits.
(ii) Share based payments expense is calculated in accordance with AASB 2 “Share–based payments”.
Consolidated
Company
2007
$
2006
$
2007
$
2006
$
3,441,241
2,502,489
3,441,241
2,502,489
(104,888)
(19,922)
44,907
(55,202)
(104,888)
(19,922)
44,907
(55,202)
3,316,431
2,492,194
3,316,431
2,492,194
NOTE 3: INCOME TA X EXPENSE
(a)
the components of tax expense comprise:
Current tax
Deferred tax (note 14)
over provision in respect of prior years
the prima facie tax on profit from ordinary
activities before income tax is reconciled
to income tax as follows:
operating profit
11,337,827
8,628,176
11,444,312
8,628,176
prima facie tax payable at 30%
3,401,348
2,588,453
3,433,294
2,588,453
Adjust for tax effect of:
other non–allowable items (net)
Research & development expenditure claim
over provision for income tax in prior year
41,072
(106,067)
(19,922)
48,943
(90,000)
(55,202)
9,126
(106,067)
(19,922)
48,943
(90,000)
(55,202)
Income tax attributable to entity
3,316,431
2,492,194
3,316,431
2,492,194
Average effective tax rates:
29%
29%
29%
29%
G B S T A n n u A l R e p o R t 2 0 0 7
37
n o t e s t o a n d f o r mI
n g p a r t o f t h e f
I n a n C I a l s t a t e m e n t s
f o r t h e y e a r e n d e d 3 0 J
u n e 2 0 0 7
NOTE 4: DIVIDENDS
provision for dividend on ordinary shares
Dividend paid in the period:
Interim fully franked ordinary dividend of 5 cents
(2006: nil) per share
2006 proposed final fully franked ordinary dividend
of 4 cents per share paid in 2007
total dividends paid
Dividend received on treasury shares
net dividend paid
Franking credit balance:
Consolidated
Company
2007
$
–
2,250,412
1,758,720
4,009,132
(78,185)
3,930,947
2006
$
–
–
–
–
–
–
2007
$
–
2,250,412
1,758,720
4,009,132
–
4,009,132
2006
$
–
–
–
–
–
–
Balance of franking account at year end
Franking credits arising from payment of provision
for income tax as at the end of the financial year
Impact of estimated final dividend not recognised
during the period
2,033,928
2,080,532
343,126
2,033,928
343,126
2,115,948
2,080,532
2,115,948
(1,285,000)
(753,737)
(1,285,000)
(753,737)
Franking credits available for future reporting periods
2,829,460
1,705,337
2,829,460
1,705,337
NOTE 5: CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Short term deposits (i)
854,992
1,618,069
854,992
1,618,069
14,600,000
9,000,000
14,600,000
9,000,000
15,454,992
10,618,069
15,454,992
10,618,069
(i)
the effective interest rate on short-term bank deposits was 6.3% (2006: 5.8%); these deposits have an average
maturity of 30 days.
NOTE 6: TR ADE AND OTHER RECEIVABLES
Current
trade debtors
other related entities (a)
other amounts receivable
non-Current receivables
other entities
Consolidated
Company
2007
$
2006
$
2007
$
2006
$
3,439,457
2,793,353
3,439,457
–
–
42,960
2,793,353
1,778,071
358,431
431,040
366,927
430,938
3,797,888
3,224,393
3,849,344
5,002,362
16,027
16,027
36,792
36,792
16,027
16,027
36,792
36,792
(a)
Amount advanced to GBSt eSop as trustee for the eSop trust (refer note 30). the loan will be recovered at the
time the employee share options are exercised and the employees acquire the shares from the eSop trust.
the recoverability of the loan is dependant on the value of GBSt’s shares. the GBSt group has no proprietary
interest in the share options or the shares.
38
NOTE 7: INVENTORIES
Inventory on hand at cost
NOTE 8: FINANCIAL ASSE TS
non-Current
Available for sale financial assets:
Investment in controlled entities at cost (note 22)
Investment in shares at fair value
Consolidated
Company
2007
$
–
–
–
781,937
781,937
2006
$
2,572
2,572
2007
$
–
–
–
–
–
102
781,937
782,039
2006
$
2,572
2,572
102
–
102
NOTE 9: PL ANT AND EQUIPMENT
owned plant and equipment at cost
3,097,181
4,298,355
3,097,181
4,298,355
provision for depreciation
(1,807,214)
(3,164,842)
(1,807,214)
(3,164,842)
leased plant and equipment at cost
provision for amortisation
1,289,967
1,133,513
1,289,967
1,133,513
–
–
–
120,963
(97,433)
23,530
–
–
–
120,963
(97,433)
23,530
total plant and equipment
1,289,967
1,157,043
1,289,967
1,157,043
(a) movement in plant and equipment
Consolidated and parent Company
year ended 30 June 2006
Balance at the beginning of the year
Additions
Disposals
Depreciation expense
Carrying amount at the end of the year
year ended 30 June 2007
Balance at the beginning of the year
Additions
Disposals
Depreciation expense
Reclassification to owned assets - cost
Reclassification to owned assets - accumulated depreciation
owned
$
leased
$
total
$
1,047,364
63,847
1,111,211
681,245
(116,384)
(478,712)
1,133,513
–
–
(40,317)
23,530
681,245
(116,384)
(519,029)
1,157,043
1,133,513
23,530
1,157,043
641,765
(42,520)
(442,791)
120,963
(120,963)
–
–
(23,530)
(120,963)
120,963
641,765
(42,520)
(466,321)
–
–
Carrying amount at the end of the year
1,289,967
–
1,289,967
G B S T A n n u A l R e p o R t 2 0 0 7
39
n o t e s t o a n d f o r mI
n g p a r t o f t h e f
I n a n C I a l s t a t e m e n t s
f o r t h e y e a r e n d e d 3 0 J
u n e 2 0 0 7
NOTE 10: INTANGIBLE ASSE TS
Software Systems
Accumulated amortisation
net carrying value
Goodwill
net carrying value
total intangibles
(a) movement in intangibles
Consolidated and parent company
year ended 30 June 2006
Balance at the beginning of the year
Additions
Amortisation charge
Carrying amount at the end of the year
year ended 30 June 2007
Balance at the beginning of the year
Additions
Disposals
Amortisation charge
Consolidated
Company
2007
$
2006
$
2007
$
2006
$
2,985,455
3,096,288
2,985,455
3,096,288
(996,504)
(713,970)
(996,504)
(713,970)
1,988,951
2,382,318
1,988,951
2,382,318
3,350,061
3,350,061
3,350,061
3,350,061
3,350,061
3,350,061
5,339,012
5,732,379
5,339,012
3,350,061
3,350,061
5,732,379
software systems
$
goodwill
$
total
$
86,281
–
86,281
2,599,527
3,350,061
5,949,588
(303,490)
–
(303,490)
2,382,318
3,350,061
5,732,379
2,382,318
3,350,061
5,732,379
82,974
(288)
(476,053)
–
–
–
82,974
(288)
(476,053)
Carrying amount at the end of the year
1,988,951
3,350,061
5,339,012
Intangible assets, other than goodwill, have finite useful lives. the current amortisation charges for intangible assets
are included under depreciation and amortisation expense per the income statement. Goodwill has an infinite life.
Impairment disclosures
Goodwill relates to the acquisition of the palion business in December 2005. the palion business is fully integrated
within the operations of GBSt and is not a separable cash generating unit.
the recoverable amount of goodwill has been determined based on a value in use calculation. the following
assumptions were used in the value-in-use calculations: Value in use has been calculated from the present value of
cash flows included in management approved operating budgets for the year ended 30 June 2008. these budgets
use historical performance to project revenue and expenses. no impairment loss was charged for goodwill in the
2007 financial year.
40
NOTE 11: OTHER ASSE TS
Current
prepaid expenditure
non-current
prepaid expenditure
Consolidated
Company
2007
$
2006
$
2007
$
2006
$
513,605
280,102
513,605
280,102
13,453
13,453
31,200
31,200
13,453
13,453
31,200
31,200
NOTE 12: TR ADE AND OTHER PAYABLES
Current
trade creditors & accruals (unsecured)
2,186,566
2,030,457
2,178,571
2,186,566
2,030,457
2,178,571
2,030,457
2,030,457
NOTE 13: FINANCIAL LIABILITIES
Current
Finance lease liability (note 20)
NOTE 14: TA X
(a)
liabilities
Current
Income tax
non-current
Deferred tax liability comprises:
tax allowances relating to property, plant
and equipment
(b) assets
Deferred tax assets comprise:
provisions and prepaid income
other items
transaction costs on equity issue
–
–
35,276
35,276
–
–
35,276
35,276
2,080,532
2,115,948
2,080,532
2,115,948
174,492
144,765
174,492
144,765
174,492
144,765
174,492
144,765
902,584
140,353
95,467
853,259
55,063
143,201
902,584
140,353
95,467
853,259
55,063
143,201
1,138,404
1,051,523
1,138,404
1,051,523
G B S T A n n u A l R e p o R t 2 0 0 7
41
n o t e s t o a n d f o r mI
n g p a r t o f t h e f
I n a n C I a l s t a t e m e n t s
f o r t h e y e a r e n d e d 3 0 J
u n e 2 0 0 7
Consolidated
Company
2007
$
2006
$
2007
$
2006
$
NOTE 14: TA X (CONTINUED)
(c)
reconciliations
(i)
gross movement
the overall movement in the deferred tax
account is as follows:
opening balance
(Charge)/credit to income statement
Charge to equity
Closing balance
(ii) deferred tax liability
the movement in deferred tax liability for
each temporary difference during the year
is as follows:
tax allowances relating to property, plant
and equipment
opening balance
Charged to income statement
Closing balance
(iii) deferred tax assets
the movement in deferred tax liability for
each temporary difference during the year
is as follows:
provisions and prepaid income
opening balance
Credited to income statement
Closing balance
other Items
opening balance
Credited/(charged) to income statement
Closing balance
transaction costs on equity issue
opening balance
Charged directly to equity
Closing balance
906,758
104,888
(47,734)
963,912
999,399
(44,907)
(47,734)
906,758
906,758
104,888
(47,734)
963,912
999,399
(44,907)
(47,734)
906,758
144,765
29,727
174,492
2,512
142,253
144,765
144,765
29,727
174,492
2,512
142,253
144,765
853,259
49,325
902,584
55,063
85,290
140,353
143,201
(47,734)
95,467
736,429
116,830
853,259
74,547
(19,484)
55,063
190,935
(47,734)
143,201
853,259
49,325
902,584
55,063
85,290
140,353
143,201
(47,734)
95,467
736,429
116,830
853,259
74,547
(19,484)
55,063
190,935
(47,734)
143,201
42
NOTE 15: PROVISIONS
long-term
employee benefits (a)
Asset retirement provision (b)
Consolidated and parent company
Balance at the beginning of the year
Additional provisions
Amounts used
unused amounts reversed
Balance at 30 June 2007
Consolidated
Company
2007
$
2006
$
2007
$
2006
$
770,414
357,992
836,041
361,800
770,414
357,992
836,041
361,800
1,128,406
1,197,841
1,128,406
1,197,841
long-term
employee benefits
$
asset
retirement
$
total
$
836,041
61,132
(42,366)
(84,393)
361,800
16,192
–
1,197,841
77,324
(42,366)
(20,000)
(104,393)
770,414
357,992
1,128,406
(a)
the measurement and recognition criteria relating to employee benefits has been included in note 1 to
this report.
(b)
An asset retirement provision has been recognised for expected future refurbishment costs of office premises.
NOTE 16: OTHER LIABILITIES
Current
Revenue received in advance for software usage
and support services
non-current
Revenue received in advance for software usage
and support services
NOTE 17: ISSUED CAPITAL
45,013,562 (June 2006: 43,968,000) fully paid
ordinary shares
Consolidated
Company
2007
$
2006
$
2007
$
2006
$
2,260,754
3,027,989
2,260,754
2,260,754
3,027,989
2,260,754
3,027,989
3,027,989
305,611
305,611
64,605
64,605
305,611
305,611
64,605
64,605
6,807,508
5,722,015
6,807,508
6,807,508
5,722,015
6,807,508
5,722,015
5,722,015
G B S T A n n u A l R e p o R t 2 0 0 7
43
n o t e s t o a n d f o r mI
n g p a r t o f t h e f
I n a n C I a l s t a t e m e n t s
f o r t h e y e a r e n d e d 3 0 J
u n e 2 0 0 7
Consolidated
Company
2007
$
2006
$
2007
$
2006
$
NOTE 17: ISSUED CAPITAL (CONTINUED)
Movements in issued capital:
opening balance
5,722,015
5,722,015
5,722,015
5,722,015
transfer from options reserve (note 19)
Share issue
ordinary shares
opening balance
Share issue
304,797
780,696
–
–
304,797
780,696
–
–
6,807,508
5,722,015
6,807,508
5,722,015
no.
no.
no.
no.
43,968,000
43,968,000
43,968,000
43,968,000
1,045,562
–
1,045,562
–
45,013,562
43,968,000
45,013,562
43,968,000
For details on options over ordinary shares, see note 30.
ordinary shares participate in dividends and the proceeds of winding up of the parent entity in proportion to the
number of shares held. At shareholders’ meetings each ordinary share is entitled to one vote.
NOTE 18: TREASURY SHARES
treasury Shares (note 30)
NOTE 19: RESERVES
option Reserve
Consolidated
Company
2007
$
2006
$
2007
$
2006
$
31,253
31,253
1,778,071
1,778,071
–
–
–
–
67,788
67,788
298,816
298,816
67,788
67,788
298,816
298,816
the option reserve records the amount recognised as an expense on valuation of employee share options granted.
When options are exercised, the amount in the reserve relating to those options is transferred to issued capital.
44
Consolidated
Company
2007
$
2006
$
2007
$
2006
$
NOTE 20: CAPITAL, LEASING AND OTHER COMMITMENTS
(a)
finance leasing and hire purchase commitments
payable on leases:
not later than one year
later than one year but not later than five years
less future finance charges
total liability
lease liabilities are included in the Balance Sheet as:
Current (note 13)
non-current (note 13)
–
–
–
–
–
–
–
–
36,264
–
36,264
(988)
35,276
35,276
–
35,276
–
–
–
–
–
–
–
–
36,264
–
36,264
(988)
35,276
35,276
–
35,276
(b) non-cancellable operating leases
lease amounts are payable:
not later than one year
1,252,771
1,250,822
1,252,771
1,250,822
later than one year but not later than five years
4,800,307
later than five years
2,262,742
8,315,820
4,512,823
3,469,314
9,232,959
4,800,307
2,262,742
8,315,820
4,512,823
3,469,314
9,232,959
non-cancellable leases include rental premises with
lease terms between five and eight years. the lease
agreements require that the minimum lease payments
shall be increased by 4% per annum. Certain leases
contain options to renew at the end of their term.
(c)
Capital and other expenditure commitments
Contracted for:
Capital and other operating purchases
29,680
536,858
29,680
536,858
payable
not later than one year
NOTE 21: AUDITORS’ REMUNER ATION
Remuneration of the auditor of the company for:
Auditing or reviewing the financial report
other taxation and statutory compliance assistance
29,680
29,680
536,858
536,858
29,680
29,680
536,858
536,858
60,350
4,250
64,600
53,000
4,175
57,175
60,350
4,250
64,600
53,000
4,175
57,175
Remuneration of other auditors
of subsidiary for auditing that financial report
5,378
4,700
–
–
G B S T A n n u A l R e p o R t 2 0 0 7
45
n o t e s t o a n d f o r mI
n g p a r t o f t h e f
I n a n C I a l s t a t e m e n t s
f o r t h e y e a r e n d e d 3 0 J
u n e 2 0 0 7
NOTE 22: OTHER GROUP ENTITIES
Group entity:
Country of Incorporation:
percentage owned:
Group entity:
Country of Incorporation:
percentage owned:
Group entity:
Country of Incorporation:
percentage owned:
GBSt pty ltd
Australia
100% (June 2006: 100%)
GBSt eSop pty ltd
Australia
100% (June 2006: 100%)
GBSt Australia pty ltd
Australia
100% (June 2006: 100%)
these companies are dormant and have nominal shareholders’ equity. GBSt eSop pty ltd, acts solely as trustee for
the eSop Share trust (see note 30).
Group entity:
Country of Incorporation:
percentage owned:
Date of incorporation:
GBSt Hong Kong limited
Hong Kong
100% (June 2006: 100%)
14 August 2002
During the year GBSt Hong Kong limited performed services on behalf of GBSt Holdings limited to the value of
$nIl (2006: $149,348).
NOTE 23: SEGMENT REPORTING
the company operates in the finance, banking and securities industry where it provides advanced electronic business
solutions, predominately in Australia, and also Hong Kong and new Zealand.
Consolidated
Company
2007
$
2006
$
2007
$
2006
$
NOTE 24: FINANCING ARR ANGEMENTS
other Financing facilities (a)
2,625,000
2,250,000
2,625,000
2,250,000
Amount utilised
unused credit facilities
(319,709)
–
(319,709)
–
2,305,291
2,250,000
2,305,291
2,250,000
(a)
this amount comprises bank facilities and lease facilities. the bank facility is secured over the assets and
undertakings of the consolidated entity. Interest rates under the facility are variable. the facility has a number
of other commercial terms and conditions and is subject to review within 12 months. the lease facility is a
“revolving asset finance facility” to enable equipment financing, required for business operations. each draw on
the lease facility creates a rental agreement for a 36 month period. the facility is subject to annual review. there
are no conditions/covenants in place and drawdown is subject to the bank’s acceptance of assets proposed for
financing under the facility.
46
Consolidated
Company
2007
$
2006
$
2007
$
2006
$
NOTE 25: CASHFLOW INFORMATION
(a)
reconciliation of net cash provided
by operating activities to profit after income
tax
profit after income tax
8,021,396
6,135,982
8,127,881
6,135,982
non-cash flows in operating profit:
Depreciation and amortisation
942,374
822,519
942,374
(profit)/loss on sale of plant & equipment
Share based payments expensed
(9,280)
73,769
90,281
272,010
(9,280)
73,769
822,519
90,281
272,010
Changes in assets and liabilities :
(Increase)/decrease in receivables
(Increase)/decrease in other assets
Increase/(decrease) in other liabilities
(Increase)/decrease in inventories
(Increase)/decrease in deferred tax balances
Increase/(decrease) in tax provision
Increase/(decrease) in trade and other payables
Increase/(decrease) in provisions
(647,460)
(215,756)
(526,228)
2,572
(57,154)
(35,416)
148,114
(65,627)
(861,252)
(743,496)
(54,916)
(215,756)
(877,958)
(54,916)
2,061,738
(526,228)
2,061,738
59,738
92,641
2,027,858
(813,311)
130,767
2,572
(57,154)
(35,416)
148,114
(65,627)
59,738
92,641
2,027,858
(813,311)
130,767
Cash flow from operations
7,631,304
9,964,055
7,641,753
9,947,349
(b) reconciliation of cash
Cash at the end of the financial year as shown
in the Statement of Cash Flows is reconciled to
items in the Balance Sheet as follows:
Cash at bank (note 5)
854,992
1,618,069
854,992
1,618,069
Short term deposit (note 5)
14,600,000
9,000,000
14,600,000
9,000,000
15,454,992
10,618,069
15,454,992
10,618,069
(c) acquisition of business
on 15 December 2005, the company acquired
the palion business from oMX technology
Australia pty limited.
the purchase was allocated as follows:
purchase consideration
transaction costs
total purchase consideration
total cash consideration paid
–
–
–
–
5,033,337
315,145
5,348,482
5,348,482
–
–
–
–
5,033,337
315,145
5,348,482
5,348,482
G B S T A n n u A l R e p o R t 2 0 0 7
47
n o t e s t o a n d f o r mI
n g p a r t o f t h e f
I n a n C I a l s t a t e m e n t s
f o r t h e y e a r e n d e d 3 0 J
u n e 2 0 0 7
NOTE 25: CASHFLOW INFORMATION (CONTINUED)
Assets and liabilities acquired at acquisition date:
Intellectual property – software systems
plant and equipment
Future income tax benefit
employee entitlements
Goodwill
total
Consolidated
Company
2007
$
2006
$
2007
$
2006
$
–
–
–
–
–
–
–
2,000,000
65,084
28,569
(95,232)
1,998,421
3,350,061
5,348,482
–
–
–
–
–
–
–
2,000,000
65,084
28,569
(95,232)
1,998,421
3,350,061
5,348,482
NOTE 26: FINANCIAL INSTRUMENTS
(a) financial risk management
the group’s principal financial instruments comprise of cash and short-term deposits with banks and fund managers.
the main purpose of these financial instruments is to provide operating finance to group. the group has various
other financial assets and liabilities such as trade receivables and trade payables, which arise directly from its
operations. the main risks arising from these financial instruments are interest rate risk and credit risk. the group
manages liquidity risk by monitoring forecast cash flows and ensuring that adequate unutilised borrowing facilities
are maintained.
Interest rate risk
(i)
the group’s exposure to the risk of changes in market interest rates relates primarily to the cash and short term
deposits. the debt facilities were undrawn at balance date. For further details on interest rate risk refer to
note 26 (b) (i).
(ii) Credit risk
the maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to
recognised financial assets is the carrying amount, net of any provisions for impairment of those assets, as disclosed
in the balance sheet and notes to the financial statements.
except for the following concentrations of credit risks, the group does not have any material credit risk exposure to
any single debtor or group of debtors under financial instruments entered into. Approximately 50% (2006: 50%) of the
company’s revenue is derived from five customers.
Funds on deposit with banks and fund managers adhere to an internal policy approved by the board.
48
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G B S T A n n u A l R e p o R t 2 0 0 7
49
n o t e s t o a n d f o r mI
n g p a r t o f t h e f
I n a n C I a l s t a t e m e n t s
f o r t h e y e a r e n d e d 3 0 J
u n e 2 0 0 7
NOTE 27: CONTINGENT LIABILITIES
GBSt has with its clients a variety of software supply agreements, each of which contain service and performance
warranties and indemnities. these warranties and indemnities are of the standard type used in the industry.
NOTE 28: KEY MANAGEMENT PERSONNEL DISCLOSURES
(a)
names and positions held of group and company key management personnel in office at any time
during the financial year are:
key management person
position
J puttick
A Brackin
S lake
D Shirley
J Sundell
C Apps
Director (non-executive Chairman)
Director (Independent)
Director (Managing Director and Chief executive officer)
Director (Independent)
Director (non-executive)
General Manager, Clearing, Settlements & Custody Solutions (resigned 16 March 2007)
p Ferguson
Head of Corporate Development
p Fowler
S Hayhoe
K Sprott
K Wallis
Head of product and Client Services
Chief technology officer (resigned 8 June 2007)
Human Resource executive (appointed 21 August 2006)
Chief Financial officer
Consolidated
Company
2007
$
2006
$
2007
$
2006
$
(b) key management personnel
compensation
Short-term employee benefits
1,844,343
1,789,714
1,844,343
1,789,714
post-employment benefits
other long-term benefits
Share-based payments
123,578
28,802
–
132,092
103,393
71,830
123,578
28,802
–
132,092
103,393
71,830
1,966,723
2,097,029
1,966,723
2,097,029
the company has taken advantage of the option under Regulation 2M.06.04 of Schedule 5B Corporations
Regulations 2001 to transfer the detailed remuneration disclosures to the directors’ report.
(c) equity instrument disclosures relating to key management personnel
Details of options provided as compensation and shares issued on the exercise of such options, together with terms
and conditions of the options, can be found in the remuneration report section of the directors’ report.
(d) shareholdings
the numbers of shares in the company held (directly, indirectly or beneficially) during the financial year by key
management personnel, including their related parties, are set out on the following page
50
.
directors
J puttick
A Brackin
S lake
D Shirley
J Sundell
GBSt eSop pty ltd as trustee (ii)
total directors
executives
C Apps
p Ferguson
p Fowler
S Hayhoe
K Sprott
K Wallis
total executives
group total
balance at
1/7/06
received as
compensation
options
exercised
net change
other (i)
balance at
30/06/07
9,167,760
169,241
3,568,096
–
18,450,122
2,369,180
33,724,399
–
–
–
–
–
–
–
33,724,399
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(1,500,000)
–
7,667,760
169,241
999,332
(700,000)
3,867,428
–
–
–
–
(4,114,069)
14,336,053
(2,332,336)
–
36,844
(1,333,004)
(6,314,069)
26,077,326
266,488
30,656
–
(266,488)
(30,656)
–
148,560
(148,560)
–
230,156
675,860
–
(96,246)
(541,950)
–
–
–
–
–
133,910
133,910
(657,144)
(6,856,019)
26,211,236
(i) Shares purchased or sold, or excluded from disclosure due to resignation.
(ii) Shares held as trustee for the eSop trust (refer note 30).
(e) options holdings
the numbers of options in the company held (directly, indirectly or beneficially) during the financial year by key
management personnel, including their related parties, are set out below.
balance
01.07.06
granted as
compensation
options
exercised
or sold
options
cancelled
balance
30.06.07
total
vested
30.06.07
total
exercisable
30.06.07
total
unexercisable
30.06.07
directors
J puttick
A Brackin
S lake
D Shirley
J Sundell
–
–
999,332
–
–
total directors
999,332
executives
C Apps
p Ferguson
p Fowler
S Hayhoe
K Sprott
K Wallis
266,488
100,000
100,000
174,892
–
231,488
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(999,332)
–
–
(999,332)
(266,488)
(30,656)
–
–
–
–
–
–
–
–
–
–
(148,560)
(25,000)
–
(230,156)
–
–
–
–
–
–
–
–
–
–
–
100,000
1,332
–
1,332
total executives
872,868
– (675,860)
(25,000)
172,008
group total
1,872,200
– (1,675,192)
(25,000)
172,008
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
19,344
50,000
1,332
–
1,332
72,008
72,008
19,344
50,000
1,332
–
–
50,000
50,000
–
–
1,332
70,676
101,332
70,676
101,332
G B S T A n n u A l R e p o R t 2 0 0 7
51
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I n a n C I a l s t a t e m e n t s
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NOTE 29: REL ATED PART Y TR ANSAC TIONS
transactions between related parties are on normal commercial terms and conditions no more favourable than those
available to other parties unless otherwise stated.
(a) transactions with directors and key management personnel
Compensation and equity interests are set out in note 28.
(b) transactions with controlled entities
Details of transactions with controlled entities are set out in notes 6 & 22.
NOTE 30: SHARE BASED PAYMENTS
on 9 March 2005, GBSt established the GBSt employee option plan. the plan comprised two sub-schemes, being an
exempt options Scheme for staff generally and a Deferred options Scheme for select staff and eligible Directors. A
total of 481,376 (2006: 3,911,932) share options remain outstanding at 30 June 2007.
GBSt eSop pty ltd, in its capacity as trustee of the GBSt employee Share trust, holds shares in GBSt for subsequent
allocation under the GBSt employee option plan. During the year ended 30 June 2007, 2,332,336 (2006: 384,820)
shares were issued from the trust to meet the exercise of employee options. GBSt eSop pty ltd held 36,844 shares in
GBSt at 30 June 2007 (2006: 2,369,180). the trust is treated as a special purpose entity and consolidated. the trust’s
shareholding in the company is disclosed as treasury shares and deducted from equity (refer note 18).
exempt options scheme
under this Scheme employees were offered the right to acquire $1,000 worth of shares in GBSt. there was no
performance or vesting criteria which needed to be satisfied before employees had the benefit from holding the
share options. Divestiture of the shares is restricted for a period of 3 years, subject to cessation of employment. no
share options were granted during the year under this scheme (2006: nil), and 134,532 share options (2006: 159,840)
remain outstanding at 30 June 2007. the options lapse on 8 March 2010.
deferred options scheme
under this Scheme select staff are made individual offers of specific numbers of share options at the discretion of
the Board. the Board may determine the number of share options, issue price, vesting conditions, vesting period,
exercise price and expiry date. Share options may be granted at any time, subject to the Corporations Act and ASX
listing Rules.
the following share based payment arrangements existed at 30 June 2007 under the Deferred options Scheme:
on 25 August 2005, 100,000 share options were granted to an executive employee of GBSt at an exercise price of
$1.09. the share options were granted in two equal tranches. each tranche includes performance criteria relating
to continued employment with GBSt and financial hurdles as summarised below. 69,344 share options remain
outstanding at balance date. the share options lapse in August 2007.
on 5 December 2005, 240,000 share options were granted to staff in connection with the acquisition of the palion
business unit. the share options have an exercise price of $1.25. the share options were granted in two equal
tranches. each tranche includes performance criteria relating to continued employment with GBSt and financial
hurdles as summarised below. 187,500 share options remain outstanding at balance date. the share options lapse in
December 2007.
on 3 January 2006, 210,000 options were granted to select staff to accept ordinary shares in GBSt at an exercise price
of $1.45. the share options were granted in two equal tranches. each tranche includes performance criteria relating
to continued employment with GBSt and financial hurdles as summarised below. 90,000 share options remain
outstanding at reporting date. the share options lapse in January 2008.
52
the performance criteria associated with each grant of share options made under the Deferred options Scheme is
summarised below:
grant date
Continued employment until
financial performance hurdle
performance criteria
25 august 2005
tranche 1
31 october 2006
targeted growth of 15% or greater in GBSt’s normalised
earnings per share for the year ended 30 June 2006. the
target growth percentage is moderated against relative
increases or decreases in ASX trading volumes.
tranche 2
31 october 2007
either;
5 december 2005
tranche 1
31 october 2006
–
–
the annual percentage growth in earnings before inter-
est, tax, depreciation and amortisation (eBItDA) for the
year ended 30 June 2007 meets or exceeds 25%, or
the annual percentage growth in earnings per share for
the year ended 30 June 2007 meets or exceeds 15%.
targeted growth of 15% or greater in GBSt’s normalised
earnings per share for the year ended 30 June 2006. the
target growth percentage is moderated against relative
increases or decreases in ASX trading volumes.
tranche 2
31 october 2007
either;
3 January 2006
tranche 1
31 october 2006
–
–
the annual percentage growth in earnings before inter-
est, tax, depreciation and amortisation (eBItDA) for the
year ended 30 June 2007 meets or exceeds 25%, or
the annual percentage growth in earnings per share for
the year ended 30 June 2007 meets or exceeds 15%.
targeted growth of 15% or greater in GBSt’s normalised
earnings per share for the year ended 30 June 2006. the
target growth percentage is moderated against relative
increases or decreases in ASX trading volumes.
tranche 2
31 october 2007
either;
–
–
the annual percentage growth in earnings before inter-
est, tax, depreciation and amortisation (eBItDA) for the
year ended 30 June 2007 meets or exceeds 25%, or
the annual percentage growth in earnings per share for
the year ended 30 June 2007 meets or exceeds 15%.
G B S T A n n u A l R e p o R t 2 0 0 7
53
n o t e s t o a n d f o r mI
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I n a n C I a l s t a t e m e n t s
f o r t h e y e a r e n d e d 3 0 J
u n e 2 0 0 7
NOTE 30: SHARE BASED PAYMENTS (CONTINUED)
the following table illustrates the number (no.), weighted average exercise price (WAep) and movement in share
options issued during the year.
2007
no.
2007
waep
2006
no.
outstanding at the beginning of the year
3,911,932
$0.80
4,097,184
Granted during the year
Forfeited during the year
exercised during the year
expired during the year
outstanding at the end of the year
exercisable at the end of the year
–
52,658
3,377,898
–
481,376
111,844
–
$1.28
$0.77
–
$0.92
$1.27
550,000
350,432
384,820
–
3,911,932
1,513,230
2006
waep
$0.72
$1.30
$0.75
$0.72
–
$0.80
$0.75
there were 3,377,898 share options exercised during the year ended 30 June 2007. these options had a weighted
average share price of $3.41 at exercise date.
the options outstanding at 30 June 2007 had a weighted average exercise price of $0.92 and a weighted average
remaining contractual life of 12 months. the exercise price for share options outstanding under the exempt options
Scheme is nil, the exercise prices for share options outstanding under the Deferred options Scheme range from $1.09
to $1.45 in respect of options outstanding at 30 June 2007.
there were no share options granted during the year (2006: 550,000 with a weighted average fair value of $0.21).
the expense recognised in the income statement in relation to share-based payments is disclosed in note 2.
no person entitled to exercise the option had or has any right by virtue of the option to participate in any share issue
of any other body corporate. Since the end of the financial year the company has issued 85,894 zero exercise price
options to non-executive staff. the zero exercise price options are divided into three tranches.
the first tranche, of 20%, vest and may be exercised after 12 months and lapse if unexercised in 36 months.
the second tranche, of 30%, vest and may be exercised after 24 months and lapse if unexercised in 48 months.
the third tranche, of 50%, vest and may be exercised after 36 months and lapse if unexercised after 60 months. on
cessation of employment all unvested zero exercise price options lapse. the company has also issued 11,988 shares
since the end of the financial year following the exercise of options under the GBSt exempt option plan.
NOTE 31: EARNINGS PER SHARE
Basic earnings per share (cents)
Diluted earnings per share (cents)
(a) reconciliation of earnings to net profit or loss
net profit
earnings used in the calculation of basic epS
earnings used in the calculation of dilutive epS
Consolidated
2007
Consolidated
2006
18.11
17.77
8,021,396
8,021,396
8,021,396
13.96
13.77
6,135,982
6,135,982
6,135,982
54
NOTE 31: EARNINGS PER SHARE (CONTINUED)
(b) weighted average number of ordinary shares
Weighted average number of ordinary shares
outstanding during the year used in calculation
of adjusted basic epS (i)
Weighted average number of ordinary shares
outstanding during the year used in calculation
of basic epS
Weighted average number of options outstanding
or exercised during the year (i)
Weighted average number of ordinary shares
outstanding during the year used in calculation
of dilutive epS
Consolidated
2007
$
Consolidated
2006
$
44,302,441
43,968,000
44,302,441
43,968,000
846,643
580,780
45,149,084
44,548,780
(i)
options issued under the GBSt employee option plan are not included in the basic or dilutive epS to the extent
that the issue of shares is contingent upon future events and, as at reporting date, conditions which would result
in the issue of shares had not been obtained (refer to note 30).
NOTE 32: SUBSEQUENT EVENTS
on 2 August 2007, GBSt Holdings limited entered into agreements to acquire Infocomp pty ltd, ICp Holdings pty ltd
and its subsidiaries for a cash payment of $36.4 million and the issue of approximately 4.95 million shares. the cash
component of the consideration is to be funded from existing cash reserves and a term loan facility of $20 million,
established with Suncorp for the purpose of the acquistion. the term of the facility is six years. the facility limit will
reduce by $1 million at the end of each quarter, commencing in the second year of the facility.
the acquisition is expected to complete on or around 31 August 2007, the assets and liabilities arising from the
acquisition will be valued at that time however it is expected that GBSt will acquire approximately $3 million in net
tangible assets and approximately $53 million in identifiable intangible assets and goodwill. Identifiable intangible
assets will comprise computer systems and software and customer contracts and relationships.
As outlined in the Future Developments section of the Directors’ Report, the company is actively pursuing
opportunities to expand. other than for the acquisition of the Infocomp group and the impact (if any) of prospects,
no matters or circumstances have arisen since the end of the financial year which significantly affected or may
significantly affect the operations of GBSt, the results of those operations, or the state of affairs of GBSt in future
financial years.
the financial report was authorised for issue on 16 August 2007 by the board of directors.
the directors recommend a final dividend of 6.0 cents per share to be paid to the holders of fully paid ordinary
shares on 28 September 2007. the total amount of the dividend, after including the estimate of shares to be issued in
relation to the Infocomp acquisition (see above), will approximate $3.0 million. the dividend has not been provided
for in the financial statements.
G B S T A n n u A l R e p o R t 2 0 0 7
55
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I n a n C I a l s t a t e m e n t s
f o r t h e y e a r e n d e d 3 0 J
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NOTE 33: CHANGE IN ACCOUNTING POLIC Y
the following Australian Accounting Standards have been issued or amended and are applicable to the parent
and group but are not yet effective. they have not been adopted in preparation of the financial statements at
reporting date.
application
date of the
standard
application
date for the
group
1 January 2007 1 July 2007
aasb
amendment
AASB 2005–10
Amendments
to Australian
Accounting
Standards
aasb standard affected
AASB 1: First-time Adoption
of AIFRS
AASB 101: presentation of
Financial Statements
AASB 114: Segment Reporting
AASB 117: leases
AASB 133: earnings per share
AASB 139: Financial Instruments:
Recognition and Measurement
nature of change
in accounting policy
and impact
the disclosure requirements
of AASB 132: Financial
Instruments: Disclosure and
presentation have been
replaced due to the issuing of
AASB 7: Financial Instruments:
Disclosures in August 2005.
these amendments will
involve changes to financial
instrument disclosures within
the financial report. However,
there will be no direct impact
on amounts included in
the financial report as it is a
disclosure standard.
AASB 7 Financial
Instruments:
Disclosures
Amendment to
AASB 123
AASB 132: Financial Instruments:
Disclosure and presentation
As above
1 January 2007 1 July 2007
AASB 123: Borrowing Costs
1 January 2009 1 July 2009
under the amendments
to AASB 123 only the
capitalisation treatment
is permitted in relation
to borrowing costs
directly attributable to the
acquisition, construction or
production of a qualifying
asset. the amendment will
have no effect on the group.
NOTE 34: COMPANY DE TAILS
the registered office of the company is:
GBSt Holdings limited
C/– McCullough Robertson
level 11, Central plaza two
66 eagle Street
BRISBAne QlD 4000
the principal place of business of the company is:
GBSt Holdings limited
5 Cribb Street
MIlton QlD 4064
56
I n d e p e n d e n t a u dI t r e p o r t
t o t h e m e m b e r s o f g b s t ho l d I n g s l I mI t e d
G B S T A n n u A l R e p o R t 2 0 0 7
57
I n d e p e n d e n t a u d I t r e p o r t C o n t I n u e d
58
a d d I t Io n a l I n f o r m a t Io n
SHAREHOLDING
(a) Distribution of Shareholders
Category (size of holding)
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,0000
100,001 and over
number ordinary
206
395
201
196
35
1033
(b) the number of shareholdings in less than marketable parcels is 2
(c)
the names of the substantial shareholders and their controlled shareholdings listed in the company’s register
as at 5 october 2007 are:
Shareholder
Crown Financial pty ltd
John Francis puttick
perpetual limited
Stephen lake
pengana Holdings pty ltd
number ordinary
14,386,053
7,667,760
5,864,177
3,867,428
2,203,213
(d) Voting rights
the company only has ordinary shares on issue.
each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting or by proxy
has one vote on a show of hands.
(e) 20 largest Shareholders – ordinary Shares
name
1. Crown Financial pty ltd
2. Mr John Francis puttick
3. Stephen lake
4. RBC Dexia Investor Services Australia nominees pty limited
5. Cogent nominees pty limited
6. RBC Dexia Investor Services Australia nominees pty limited
7. Geraldine Ann Maunder and John Francis puttick
8. Robert DeDominicis
9. Raymond tubman
10. Barry Becarevic
11. timenow pty ltd
12. Wangaruka Holdings pty ltd
13. Mr John Francis puttick and Ms Geraldine Ann Maunder
14. Berislav Becarevic and Ivanka Becarevic
15. Bydand Capital pty ltd
16. Merrill lynch (Australia) nominees pty limited
17. Jp Morgan nominees Australia limited
18. tpIC pty limited
19. Sayers Investments (ACt) pty limited
20. Bogasi pty ltd
number of
ordinary shares
% held of Issued
ordinary Capital
13,740,053
5,116,260
3,867,428
3,534,614
2,207,213
2,000,943
2,000,000
1,061,758
1,061,758
872,408
709,238
709,238
551,500
520,783
392,596
343,285
328,216
300,000
284,000
248,000
27.49
10.23
7.73
7.07
4.42
4.00
4.00
2.12
2.12
1.75
1.42
1.42
1.10
1.04
0.79
0.69
0.66
0.60
0.57
0.50
G B S T A n n u A l R e p o R t 2 0 0 7
59
C o r p o r a t e d I r e C t o r y
REGISTERED OFFICE
c/- McCullough Robertson, lawyers
level 11, Central plaza two
66 eagle Street
BRISBAne QlD 4000
ph 07 3233 8888
Fax 07 3229 9949
PRINCIPAL P L ACE OF B USINESS
5 Cribb Street
Milton QlD 4064
ph 07 3331 5555
Fax 07 3367 0181
www.gbst.com
POSTAL A DDRESS
po Box 1511
Milton QlD 4064
DIREC TORS
John Francis puttick
Stephen Maurice linton lake
Joakim James Sundell
David Cameron Shirley
Allan James Brackin
COMPANY S ECRE TARIES
David Michael Doyle
John Francis puttick
SHARE R EGISTRY
link Market Services
level 12, 300 Queen Street
Brisbane QlD 4000
ph 02 8280 7454
STOCK E XCHANGE LISTING
GBSt Holdings limited shares are quoted on the Australian
Stock exchange under the code GBt.
VOLUNTARY RESTRIC TIONS
Details of shares that are held in voluntary escrow:
ordinary fully paid shares escrowed until 31 August 2008
1,645,061
ordinary fully paid shares escrowed until 31 August 2009
1,645,061
ordinary fully paid shares escrowed until 31 August 2010
1,645,061
UNQUOTED SECURITIES
A total of 1,102,158 options are on issue to 98 employees
under the GBSt Holdings limited employee option plan.
AUDITORS
Robertsons Audit and Assurance pty ltd
level 4, 127 Creek Street
Brisbane QlD 4000
ph 07 3229 2022
Fax 07 3229 3277
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+ GBST is Australia’s leading provider of client accounting and securities
transaction technology.
Our strategy is to build consistently growing recurring revenues from
financial transactions, by providing robust technology solutions to the
financial services sector.
Providing services to some of the world’s leading institutional
banks and stockbrokers, approximately half of all equities traded
on the Australian Securities Exchange are processed by GBST
network participants.
In August 2007 GBST extended its services to include wealth
management with the acquisition of InfoComp Group, the foremost
provider of funds administration and unit registry software to the
Australian wealth management industry.
Contents
Highlights
Chairman’s report
CEO’s report
GBST in the life of a transaction
GBST’s competitive advantage
GBST in the community
Wealth management services
Board of directors
Executive team
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2
3
6
8
9
10
11
12
Corporate governance statement
Directors’ report
Auditor’s independence declaration
Directors’ declaration
Financial report
Notes to the financial statements
Independent audit report
Additional information
Corporate directory
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18
26
27
28
32
57
59
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Notice of AGM
The Annual General Meeting
of GBST Holdings Limited will
be held at:
McCullough Robertson
Level 11
Central Plaza 2
66 Eagle Street, Brisbane
on Wednesday
21st November at 3.30pm.
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www.gbst.com
Annual Report 2007
GBST Holdings Limited
ABN 85 010 488 874
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