Technology for Financial Markets
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www.gbst.com
annual report 2008
CORPORATE DIRECTORY
REGISTERED OFFICE
c/- McCullough Robertson, Lawyers
Level 11, Central Plaza Two
66 Eagle Street
Brisbane QLD 4000
SHARE REGISTRY
Link Market Services
Level 12, 300 Queen Street
Brisbane QLD 4000
Ph 02 8280 7454
STOCK EXCHANGE LISTING
GBST Holdings Limited shares are quoted on
the Australian Stock Exchange under the code GBT.
VOLUNTARY RESTRICTIONS
Details of shares that are held in voluntary escrow:
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 789,105 options are on issue to 57 employees under
the GBST Holdings Limited Employee Option Plan.
AUDITORS
Hayes Knight Audit (Qld) Pty Ltd
Level 19, 127 Creek Street
Brisbane QLD 4000
Ph 07 3229 2022
Fax 07 3229 3277
Ph 07 3233 8888
Fax 07 3229 9949
PRINCIPAL PLACE OF BUSINESS
5 Cribb Street
Milton QLD 4064
Ph 07 3331 5555
Fax 07 3367 0181
www.gbst.com
POSTAL ADDRESS
PO Box 1511
Milton QLD 4064
DIRECTORS
John Francis Puttick
Stephen Maurice Linton Lake
Joakim James Sundell
Allan James Brackin
David Campbell Adams
COMPANY SECRETARIES
David Michael Doyle
John Francis Puttick
GBST is a leading provider of securities transaction and fund administration software for
the fi nancial services industry.
GBST builds, owns and manages software products and we provide support for our customers who use
these products. We are focused on earning our revenue from the fi nancial services sector and aim to use
technology applications to earn recurring revenue from areas such as transactions processing, reporting,
account management, books and records, data and content.
GBST Broker Services division is Australia’s leading provider of client accounting and securities transaction
technology. Capital market participants such as banks, clearing houses, custodians, fund managers, margin
lenders and institutional and retail stockbrokers use GBST’s specialist market access and transaction solutions
to process up to $130 billion of ASX trades every month.
GBST doubled in size in August 2007 with the purchase of InfoComp, a specialist provider of wealth
management software.
GBST Wealth Management division is now the leading provider of funds administration and registry
software to the Australian wealth management industry. It offers an integrated system for the administration
of wrap platforms, master trusts, superannuation, pensions, risk and debt. GBST’s wealth management
software administers funds valued at more than $150 billion in Australia and the United Kingdom.
CONTENTS
Highlights
Chairman’s and
Managing Director’s report
Financial report
Corporate governance statement
1
2
7
8
Directors’ report
Financial statements
Independent auditor’s report
Additional information
Corporate directory
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30
86
88
89
NOTICE OF AGM
The Annual General Meeting of
GBST Holdings Limited will be held at:
McCullough Roberston
Level 11, Central Plaza Two
66 Eagle Street, Brisbane
on Thursday 23 October at 12.30pm.
HIGHLIGHTS
CASH EPS (cents)
29.1%
OPERATING REVENUE ($ million)
FY05 FY06 FY07 FY08
121%
FY05 FY06 FY07 FY08
EBITDA ($ million)
60%
FY05 FY06 FY07 FY08
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Progressed growth strategy with the acquisition
Growing annuity licence income accounting
and integration of InfoComp
for 65% of revenue
Group operating revenue, including a full year’s
EBITDA based on 12 months earnings from InfoComp
contribution from InfoComp, up to $64.1 million,
increased 60% to $18.3 million
an increase of 120.5% on the prior year
Exceeded forecast with revenue of $33.3 million
for Wealth Management division for the full
12 months, with Broker Services division revenue
of $30.8 million, up 6%
Fully-franked full year dividend of 9.5 cents
21.9% increase in cash earnings per share
to 23.39 cents
CHAIRMAN’s and
MANAGING DIRECTOR’s
REPORT
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During the 2008 fi nancial year, we made
considerable progress in our objectives
of broadening our business model and
advancing our growth strategy, both
organically and through acquisitions.
After taking this write-down to account, the Directors
have declared a fi nal dividend of 4.0 cents, bringing
the full dividend for the year to 9.5 cents, fully franked.
During the fi nancial year, we were challenged by
issues arising from the knock-on effects in the sub-prime
GBST achieved an operating EBITDA result of
crisis in the United States, which impacted markets
$17.2 million for the year to 30 June 2008 on total
and their participants around the world. We have not
Group revenue of $60.7 million. This result includes
been immune from the global decline of the fi nancial
a 10 month contribution by InfoComp and represents
sector, however, GBST’s underlying performance
EBITDA growth of 50 percent and revenue growth
has remained sound despite the shift in sentiment
of 99 percent.
around equities and credit markets. This uncertainty
has presented a number of strategic diversifi cation
The transformational acquisition of InfoComp during
the period provided a major impetus for these results
opportunities for GBST.
and has reinforced our determination to remain
ACQUISITIONS
focussed on our strategy.
The acquisition of InfoComp in August 2007
GBST has strategically invested in software provider
effectively doubled the size of our business. InfoComp
IT&e Limited. While we continue to see the importance
extended our global reach into Europe and provided
of risk management software in GBST’s existing Broker
the foundations for GBST to become a signifi cant
Services business and offmarket and exchange traded
player in the UK market.
securities, the global decline of listed companies has
contributed to a reduction in the value of the Group’s
16.2 percent shareholding. This has required a
one-off, non-cash write-down of $2.3 million
over the fi nancial year.
InfoComp 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.
GBST’s underlying performance has remained
sound despite the shift in sentiment around
equities and credit markets.
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The purchase of InfoComp follows our successful
BROKER SERVICES
acquisition and subsequent integration of the Palion
broking business in December 2005.
GBST’s share of ASX trade volumes increased from
42 percent at the start of the year to 44 percent
Moving forward, we intend to continue to leverage
in June 2008.
the purchase of InfoComp to focus on building scale
around our key operating divisions.
NEW PRODUCTS
This year, we are investing more than $6 million in
This year, our research and development expenditure
in the broker services sector was invested to strengthen
the way we cater for anticipated increases in
market volumes.
research and development to ensure we leverage
Throughout the Australian and New Zealand markets,
all opportunities within the current market and drive
GBST Shares processed 79 million trades, and
contract wins for GBST in Australia and the
8.8 million confi rmations for the year without any
United Kingdom.
signifi cant system outages.
In 2008 we released signifi cant enhancements
In July 2007 a total of 68 fi nancial institutions,
to GBST Clearview to further enhance our proven
including brokers, fi nancial intermediaries, and trading
CHESSLink application. GBST Clearview provides a
participants, relied on GBST for back offi ce equities
solution for ASX participants that do not currently use
and derivatives processing. This number increased to
GBST products. It is a high performance and feature-
89 fi nancial institutions by June 2008.
rich CHESS gateway and holdings management
system that allows multiple views of client holdings.
Additionally, we are currently enhancing
ComposerWeb to support a fl exible Wrap web
portal capability for the fi nancial advisor and investor.
CHAIRMAN’s and MANAGING
DIRECTOR’s REPORT continued
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Despite a challenging second half of the year, GBST’s
WEALTH MANAGEMENT
Broker Services business continued to provide a sound
platform for our Group’s operations, achieving a six
percent increase in operating revenue to $30.8 million
for the full year. This is a solid result given the subdued
retail broking market.
A major achievement in 2008 was the successful
integration of InfoComp into the GBST operating
framework. InfoComp forms the basis for GBST’s
Wealth Management division. This division’s full year
results exceeded our revenue forecasts by $3.3 million
There are clear trends emerging within our industry,
to deliver revenue of $33.3 million for the full year.
including some divergence between retail and
institutional broking. While retail broking services
remain focussed on the Australian market, institutional
broking is increasingly demanding technology
solutions to match the demands of regional and
global businesses.
The fi rst two stages of the integration of InfoComp have
been completed with the successful amalgamation of
the HR and fi nance functions, and the rationalisation of
operating systems. The third and fi nal stage is underway
and already producing extremely positive results
as we start to extract full benefi ts from the two
With the increasingly diverse income streams of broking
technology areas.
houses, our clients require technology solutions enabling
them to employ tighter client management practices
across a broader range of asset classes. GBST will
invest more research and development expenditure
into this area in the coming year.
Additionally, our institutional clients require technology
solutions to service their increased electronic and
algorithmic trading needs. These trends are providing
GBST with opportunities to continue to invest in the
development of products and services, ensuring we
retain our leadership position within the broker
services sector.
The Chief Executive of InfoComp, Robert De Dominicis,
now leads GBST’s Wealth Management division.
During the year, we achieved one of our key wealth
management objectives – to build upon our presence
in Europe and increase our number of clients.
Our fl agship product Composer successfully went
live in August 2008 with a substantial UK and
European client.
During the year, we achieved one of
our key wealth management objectives
– to build upon our presence in Europe
and increase our number of clients.
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One of the UK’s largest providers of Self Invested
Personal Pensions (SIPP) and Wrap products now uses
Composer to administer its products. This is GBST’s
fi rst live client in the UK and confi rms our readiness for
the European market following four years of market
and product development.
In May 2008, we secured our second UK client
and in July 2008, our third client announced its
This new business unit has been established to
entry into the UK Wrap market and commenced
capitalise on the convergence of the broking and
the implementation of Composer.
wealth management industries.
The size of UK ‘wrappable’ assets are estimated at
Denis Orrock has been appointed the Chief Executive
some £2 trillion (AUD$4.2 trillion). At present, only
of this division. Denis previously ran the fi nancial
a small percentage – between one and fi ve percent
information service company InfoChoice.
– are administered in Wrap Platforms.
GBST has entered the UK market at an early stage
to focus on the distribution and independent display
of the Wrap market development. With three anchor
of fi nancial products and services, and to provide
clients adopting the Composer Platform, we are in an
a critical link between clients’ front and back
excellent position to build market share.
offi ce functions.
Through our fi nancial services division, GBST intends
FINANCIAL SERVICES
OUR PEOPLE AND COMMUNITY
GBST Financial Services has been established to
GBST now employs over 300 people across our
construct and distribute a range of aggregated and
Australian and UK bases and in our development
proprietary data services to fi nancial advisor and
centre in India.
wealth management professionals.
CHAIRMAN’s and MANAGING
DIRECTOR’s REPORT continued
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We strive to employ the best people in the industry.
While global markets remain volatile, our approach
GBST continues to ensure our global network comprises
to the year ahead is one of cautious optimism.
staff with the knowledge, capability and drive to steer
our company and continue to deliver outstanding results
for both customers and investors.
This cautious optimism derives from our commitment
to continue to invest and innovate to maintain strong
overall performance and future, sustainable growth.
During the year, we welcomed David Adams to the
We believe we are well positioned to take advantage
Board as an independent non-executive director,
of market pressures and we are excited about the
bringing considerable expertise in the wealth
opportunities that lie ahead.
management industry. We also thank outgoing director
David Shirley for his dedication in guiding GBST
through its past three years of growth.
GBST’s diversifi cation strategy and the signifi cant
contribution of our wealth management and fi nancial
services operations have the potential to mitigate and
GBST is proud of its established commitment to
capitalise on the impacts of current market conditions.
supporting community organisations and donates up to
one percent of EBITDA in support of our communities.
We will continue to manage our global GBST business
closely against our strategic goals and will keep our
This year, GBST provided fi nancial support to
stakeholders informed.
organisations that provide long-term, socio-economic
improvements for disadvantaged Australians. We
also contributed to programs that support people with
medical needs, or offer advice and comfort for patients
and their families.
This year GBST supported:
• Lifeline Australia
• The Salvation Army
• Australian Red Cross
• Youngcare
• Hear and Say Centre
• Autism Queensland
• Boomerang project.
OUTLOOK
GBST is led by experienced people with a vision for
the Company, who support the Board’s commitment to
working to deliver long-term value. We would like to
thank our staff for their hard work and commitment
and our customers for their continued support.
Dr John Puttick, Chairman
As we move into the 2009 fi nancial year, GBST’s
performance will be linked to the ongoing instability of
Mr Stephen Lake, Managing Director
global markets and the outlook for economic growth,
and Chief Executive Offi cer
which will impact the broking and wealth management
sectors internationally.
INCOME STATEMENT
FINANCIAL REPORT
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CORPORATE GOVERNANCE
STATEMENT
The ASX document, ‘Principles of Good Corporate
(iii) oversee the performance of executive
Governance and Best Practice Recommendations’
management and generally to take and fulfi l
(‘Guidelines’) applying to listed entities was published
an effective leadership role in relation to the
in March 2003 by the ASX Corporate Governance
Company.
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 refl ects our charter, policies and
procedures on 5 September 2008. The Company is
reviewing its governance practices against the second
edition of the Guidelines and will report against the
c) Power and authority in certain areas is specifi cally
reserved to the Board – consistent with its function
as outlined above. These areas include:
(i)
composition of the Board itself including the
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
(iii) appointment and removal of the Chief Executive
Offi cer and the Company Secretary
second edition of the Guidelines in the 2009
(iv) reviewing and overseeing systems of risk
Annual Report.
SCOPE OF RESPONSIBILITY OF BOARD
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.
management and internal compliance and
control, codes of ethics and conduct, and legal
and statutory compliance
(v) monitoring senior management’s performance
and implementation of strategy and
(vi) approving and monitoring fi nancial and other
reporting and the operation of committees.
COMPOSITION OF BOARD
The Board performs its roles and function, consistent
with the above statement of its overall corporate
b) The Board’s broad function is to:
governance responsibility, in accordance with the
(i) chart strategy and set fi nancial targets for
following principles:
the Company
a) the Board should comprise at least fi ve Directors
(ii) monitor the implementation and execution of
b) the Board shall be constituted by members having
strategy and performance against fi nancial
an appropriate range of skills and expertise
targets and
c) at least two Directors will be Non-Executive
Directors independent from management.
BOARD CHARTER AND POLICY
a) The Board has adopted a charter (which will be
AUDIT AND RISK MANAGEMENT
COMMITTEE
kept under review and amended from time to time
a) The purpose of this committee is to advise on the
as the Board may consider appropriate) to give
establishment and maintenance of a framework of
formal recognition to the matters outlined above.
internal control and appropriate ethical standards for
This charter sets out various other matters that
the management of the Group. Its members are:
are important for effective corporate governance
(i) Mr Allan Brackin, Chairman
including the following:
(i) a detailed defi nition of ‘independence’
(ii) a framework for the identifi cation of candidates
for appointment to the Board and their selection
(iii) a framework for individual performance review
and evaluation
(ii) Dr John Puttick
(iii) Mr David Adams
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
(iv) proper training to be made available to
committee is responsible are the following:
Directors both at the time of their appointment
and on an on-going basis
(i)
Board and committee structure to facilitate a
proper review function by the Board
(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
detailed code of ethics and values
(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 the
market.
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.
(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 fi nancial statements and other
fi nancial 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
defi ciency in or breakdown of controls
(ix)
assessing the adequacy of external reporting
for the needs of shareholders and
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CORPORATE GOVERNANCE
STATEMENT continued
(x) monitoring compliance with the Company’s code
The following are a tangible demonstration of the
of ethics.
Company’s corporate governance commitment.
c) Meetings are held at least four times each year. A
a) Independent professional advice
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.
NOMINATIONS AND REMUNERATION
COMMITTEE
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 fulfi l
their duties and responsibilities as Directors. Any costs
incurred are borne by the Company.
a) The purpose of this committee with regard to
b) Code of ethics and values
remuneration is to review and approve the
remuneration of senior executives, the remuneration
policies for the group and the structure of equity
based remuneration programmes.
b) The purpose of this committee with regard to
nominations is to consider the structure and
membership of the Board, to review the performance
of the Board, to set desirable criteria for future
Board members and to assess candidates against
those criteria.
c) Due to the importance of people to the business
of the group each Director is a member of the
committee. Committee meetings are held from
time to time as required by the Board.
BEST PRACTICE COMMITMENT
The Company is committed to achieving and
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 and is
available for review on the Company’s web site.
e) Substantial compliance with ASX corporate
governance guidelines and best practice
maintaining the highest standards of conduct and
recommendations.
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.
GBST BOARD ASSESSMENT AGAINST THE
GUIDELINES
Principle 3 – Promote ethical and responsible
decision making
The Board has adopted a detailed code of ethics and
Principle 1 – Lay solid foundations for management
values and a detailed code of conduct for transactions
and oversight
in securities as referred to above. The purpose of these
The role of the Board and delegation to management
codes is to guide Directors in the performance of their
have been formalised as described above in this
duties and to defi ne the circumstances in which both
section and will continue to be refi ned, in accordance
they and management, and their respective associates,
with the Guidelines, in the light of practical experience
are permitted to deal in securities. The Board will
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
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
experience, skills, qualifi cations and contacts relevant
to the business of the Company. The majority of
the Guidelines.
the current Board is not independent. In particular,
Principle 4 – Safeguard integrity in fi nancial
the Chairman is not independent in terms of the
reporting
Guidelines. There are at least two independent
Directors. GBST believes that the current board of
The Audit and Risk Management Committee has its
own Charter. The Committee comprises three Directors,
fi ve Directors has been appropriate for a company of
the majority of which are independent. All the members
GBST’s size and the current Directors have been the
of the Audit Committee are fi nancially literate.
best people to act in the interests of stakeholders and
for this reason does not presently fully comply with the
Principle 5 – Make timely and balanced disclosure
recommendations. The Board will consider increasing
Policies and procedures for compliance with ASX
its size should suitable candidates be identifi ed. The
Listing Rule disclosure requirements are included in the
number of Independent Directors may be increased as
Company’s corporate governance charter.
a result of the additional appointments. The Board calls
specifi c meetings of the Board as a Nominations and
Remuneration Committee.
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CORPORATE GOVERNANCE
STATEMENT continued
Principle 6 – Respect the rights of shareholders
Principle 8 – Encourage enhanced performance
The Board recognises the importance of this principle
The corporate governance charter adopted by the
and strives to communicate with shareholders both
Board requires individual performance review and
regularly and clearly – both by electronic means
evaluation to be conducted formally on an annual
and using more traditional communication methods.
basis. The Board acknowledges that performance can
Shareholders are encouraged to attend and participate
always be enhanced and will continue to seek and
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at general meetings. It is intended that the Company’s
consider ways of further enhancing performance both
auditors will always attend the annual general meeting
individually and collectively. GBST’s practice complies
and be available to answer shareholders’ questions.
with the Guidelines in this area.
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The Company’s policies comply with the Guidelines in
relation to the rights of shareholders.
Principle 9 – Remunerate fairly and responsibly
Remuneration of Directors and executives will be fully
Principle 7 – Recognise and manage risks
disclosed in the annual report and any changes with
The Board, together with management, has constantly
respect to key executives announced in accordance
sought to identify, monitor and mitigate risk. Internal
with continuous disclosure principles. The Board from
controls are monitored on a continuous basis and,
time to time calls a specifi c meeting of the Board as a
wherever possible improved. The Company uses its
Nominations and Remuneration Committee. Due to the
quality management system and project management
importance of people within GBST’s business all Board
methodologies to identify, assess and manage risk.
members considered they would have a contribution to
The whole issue of risk management is formalised
make to the meeting and as a result the committee is
in the Company’s corporate governance charter
not independent. The Chairman will lead a review of
(which complies with the Guidelines in relation to
the Directors and the Independent Directors will lead a
risk management) and will continue to be kept under
review of the Chairman. No individual will be directly
regular review. Review takes place at both committee
involved in deciding his or her remuneration.
level (Audit and Risk Management Committee), with
meetings at least four times each year, and at Board
Principle 10 – Recognise the legitimate interests of
level. The Board requires the CEO and CFO to sign
stakeholders
all statements required to be provided under the
Guidelines and Corporations Act in relation to the
Company’s Financial Statements and risk management
generally.
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.
DIRECTORS’ REPORT
The directors of GBST Holdings Limited (‘GBST’) submit
PRINCIPAL ACTIVITIES
herewith the consolidated fi nancial report for the year
ended 30 June 2008.
DIRECTORS
On 31 August 2007, GBST acquired InfoComp
Pty Ltd, ICP Holdings Pty Ltd and its subsidiaries for
$36,784,002 in cash and an issue of 4,935,183
GBST shares.
The names of the directors of the Company in offi ce
during the year and to the date of this report are:
The principal activities of GBST in the year, including
Dr John F Puttick
Mr Allan J Brackin
Mr Stephen M L Lake
Mr David C Shirley (resigned 29 April 2008)
Mr Joakim J Sundell
Mr David C Adams (appointed 1 April 2008)
COMPANY SECRETARIES
this acquisition, were the provision of client accounting
and securities transaction technology solutions for the
fi nance, banking and securities industry in Australia
and South East Asia; and funds administration and
registry software for the wealth management industry
in Australia and the United Kingdom.
No other signifi cant change in the nature of these
activities occurred during the year.
The following persons held the position of company
secretary at the end of the fi nancial year:
OPERATING RESULT AND DIVIDEND
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
The consolidated profi t after income tax for the
fi nancial year amounted to $6,131,695 (2007:
$8,021,396).
holds Bachelor degrees in Law and Business
The directors recommend a fi nal dividend of 4.0 cents
(Computing) from Queensland University of Technology.
per share be paid to the holders of fully paid ordinary
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
shares. The dividend will be 100% franked at
30% corporate tax rate and will be paid on
26 September 2008.
on directors.
Dividends paid during the year were as follows:
2007 fully-franked ordinary dividend of 6 cents per
share paid on 28 September 2007, as recommended
in last year’s report $2,999,290.
2008 interim fully-franked ordinary dividend of
5.5 cents per share paid on 26 March 2008
$2,765,515.
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REVIEW OF OPERATIONS
• Decline in the value of the 16.2% shareholding
in IT&e Limited has been taken into account, in
The consolidated group operates in two business
accordance with AASB 139. This one–off non–cash
segments:
write down is $2.3 million.
GBST Broker Services provides client accounting
GBST Broker Services also incurred integration, and
and securities transaction technology. Capital
restructure costs during the year of approximately
market participants such as banks, clearing houses,
$800k. The market place for equities and derivatives
custodians, fund managers, margin lenders and
is going through a period of signifi cant change, with
institutional and retail stockbrokers use GBST’s specialist
new entrants into the Australian marketplace offering
market access and transaction solutions to process
alternative models for settlement and clearing, as
approximately $130 billion of ASX trades every month.
well as prospective changes to the capital liquidity
GBST Wealth Management provides funds
administration and registry software to the Wealth
Management industry, both in Australia and the
United Kingdom. It offers an integrated system for
the administration of wrap platforms, master trusts,
superannuation, pensions, risk and debt. GBST’s
Wealth Management software administers funds
valued at more than $150 billion in Australia and
the United Kingdom.
The highlights for the current fi nancial year are
as follows:
• Group operating revenue up to $60.7 million,
an increase of 99.7% on the prior year;
• Revenue for GBST Broker Services was $31.7
million (2007: $30.4 million), up 4.0%, while GBST
Wealth Management revenue was $29 million;
requirements of all settlement participants in the market.
Technology will play a critical role in this process
and GBST is committed to the continuing investment
in its products to meet the changing needs of our
customers. The additional research & development
(R&D) expenditure in Broker Services was incurred to
increase the scale of the Shares platform, resulting in
an extra $1.5 million in costs in this fi nancial year, over
and above historical R&D expenditure of $3 million pa.
Our policy remains that all R&D is expensed as it is
incurred.
GBST Wealth Management revenue growth was
above management expectations but the performance
of the United Kingdom operation was impacted by
costs of building infrastructure to service the current
project pipeline and by adverse foreign exchange
movements. In May 2008, the business signed its
second client, in the United Kingdom – Novia Financial
Plc. GBST will supply the front and back offi ce systems
• GBST Broker Services Research and Development
to Novia, and demonstrates the growing capabilities
(R&D) costs increased by $1.5 million to
$4.5 million (2007: $3.0 million); and
of the Composer software in the market in the
United Kingdom.
GBST has strong operating cashfl ow and more
than 65% of the Company’s revenue is earned
SIGNIFICANT CHANGES IN STATE
OF AFFAIRS
from annuity licence income. While this is below
the Company’s long term targets, this ratio is likely
During the year the Company issued 5,283,171
to remain while GBST Wealth Management delivers
new shares, 1,205,894 new options and 357,400
its major implementations in Australia and in the
options were exercised.
United Kingdom.
Growth in the future will be achieved through
As previously noted, on 31 August 2007, GBST
Holdings Limited acquired InfoComp Pty Ltd, ICP
geographic expansion and exposure to a wider range
Holdings Pty Ltd and its subsidiaries for a cash payment
of technology products in the fi nancial services industry.
of $36.78 million and the issue of 4,935,183 shares.
The cash component of the consideration was funded
Further information on the operational performance
from existing cash reserves and a term loan facility of
of the Company is included in the Chairman’s and
$20 million, established with Suncorp Metway Ltd
Managing Director’s Report.
FINANCIAL POSITION
The net assets of the consolidated entity increased by
$19.16 million during the year to $39.37 million at
30 June 2008 as a result of the improved operating
performance of the Group. Total assets increased
from $28.35 million at 2007 to $73.4 million
at 30 June 2008.
for the purpose of the acquisition. The term of the
facility is six years. The facility limit will reduce by
$1 million at the end of each quarter,
commencing December 2008.
No other signifi cant changes in the state of affairs of
the Company occurred during the fi nancial year.
FUTURE DEVELOPMENTS, PROSPECTS AND
BUSINESS STRATEGIES
This increase has largely resulted from the following
The Company is actively pursuing opportunities to
factors:
• Proceeds from share issues raising $18.6 million;
and
• Increase in software systems of $13.4 million,
customer contracts $6.8 million and goodwill
$28.2 million arising from the acquisition of
InfoComp. The acquisition correspondingly affected
fi nancial liabilities to the extent borrowings were
required of $20 million after utilising cash reserves
for the acquisition.
expand its sources of revenue from the delivery of
technology to the fi nancial services industry. 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.
These developments, together with the current business
strategies within GBST’s Broker Services and Wealth
Management segments, are expected to assist in the
achievement of GBST’s long term goals.
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DIRECTORS’ REPORT continued
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Disclosure of further information regarding future
He is currently Adjunct Professor, School of Information
developments and fi nancial results is likely to result in
Technology and Electrical Engineering at the University
unreasonable prejudice to the Company. Accordingly,
of Queensland and Chair of Southbank Institute of
this information has not been disclosed in this report.
Technology Business Council.
AFTER BALANCE DATE EVENTS
John is a member of GBST’s Audit and Risk
Since balance date the group has incorporated three
wholly owned subsidiaries in the UK.
Other than for the impact (if any) of the prospects
referred to in the commentary above, no matters or
circumstances have arisen since the end of the fi nancial
year which signifi cantly affected or may signifi cantly
affect the operations of GBST, the results of those
operations, or the state of affairs of GBST in future
fi nancial years.
ENVIRONMENTAL ISSUES
GBST’s operations are not regulated by any
signifi cant environmental regulation under a law of the
Commonwealth or of a State or Territory.
INFORMATION ON DIRECTORS
John Puttick
Non–Executive Chairman
John Puttick is the founder
and Chairman of GBST and
has 40 years’ experience in
the IT industry, over 20 of
which developing fi nancial
services solutions at GBST. John serves as a member of
the QUT Council and on University of Queensland and
Queensland University of Technology Faculty Advisory
Committees.
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.
Stephen Lake
Managing Director and
Chief Executive Offi cer
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 Offi cer 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 (Asia) Ltd. Stephen
is a Member of the Nominations and Remuneration
Committee.
Interest in Shares and Options – 500,000 Options
and 3,651,423 Ordinary Shares of GBST Holdings
Limited held by Mr Lake.
Allan Brackin
Independent
He is Managing Director of Crown Financial Pty Ltd,
a private investment company. He was a director of
Non–Executive Director
Infochoice Limited (13 December 2006 to 5 February
Allan Brackin was appointed
2008). Joakim is a Member of the Nominations and
to the Board in April 2005.
Remuneration Committee.
He has detailed knowledge
of the IT sector having served
as Director and Chief Executive Offi cer of Volante
Group Limited, one of Australia’s largest IT services
companies from November 2000 to October 2004.
Prior to this, Allan founded a number of IT companies
including Applied Micro Systems (Australia) Pty Ltd,
Prion Pty Ltd and Netbridge Pty Ltd, all national
organisations operating under the group company
of AAG Technology Services Pty Ltd. Allan currently
serves on the board of the New South Wales Heart
Foundation and is Chairman of IT software company
Emagine Pty Ltd. He 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 – 231,943 Ordinary
Shares of GBST Holdings Limited held by Mr Brackin’s
associated entities.
Joakim Sundell
Non–Executive Director
Joakim Sundell was
appointed to the board
in 2001. Joakim has
an extensive career in
private equity fi nance,
merchant banking, and management both in
Sydney and London.
Interest in Shares and Options – 15,417,605
Ordinary shares held by Mr Sundell’s
associated entities.
David Adams
Independent
Non–Executive Director
David Adams was
appointed to the board on
1 April 2008. David has an
extensive career in the funds
management industry including the establishment of
Australia’s fi rst cash management trust at Hill Samuel
Australia in 1980 and Group Head of the Funds
Management Group for Macquarie Bank. He was a
director at Macquarie Bank from 1983 until 2001.
David was chairman of the Investment and Financial
Services Association in 2000 and 2001. He was a
Visiting Fellow (Management of Financial Institutions) at
Macquarie University and holds a Bachelor of Science
from the University of Sydney and a Masters in
Business Administration from the University of
New South Wales. David is a member of the
Audit and Risk Committee and the Nominations
and Remuneration Committee.
Interests in Shares and Options – Nil.
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DIRECTORS’ REPORT continued
REMUNERATION REPORT
The performance of executives is considered annually
against agreed performance objectives relating to
The remuneration report is set out under the following
both individual performance goals and contribution
main headings:
• Remuneration policies and practices
• Company performance and remuneration
18
• Service agreements
• Details of remuneration.
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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
fi nancial report and have been audited.
Remuneration policies and practices
The policy for determining the nature and amount of
remuneration of directors and specifi ed executives is as
follows:
Remuneration of non–executive directors is
determined by the Board with reference to market
rates for comparable companies and refl ective 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 refl ect the person’s duties,
responsibilities and performance.
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 benefi ts 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
• The Company will use competitive remuneration
packages to attract, motivate and retain talented
executives.
The current remuneration structure has three
• The employees will be rewarded for sustained and
components: fi xed remuneration, performance–related
sustainable improvement in the performance of the
bonus and equity based remuneration. Executives are
Company.
offered longer term incentives through an Employee
• Directors and senior executives are encouraged
Share Option Plan which seeks to align the executives’
to make investments in the Company but only in
performance with the interests of shareholders.
accordance with the Company’s share trading
guidelines.
• Senior executive agreements will not allow for
Fixed annual remuneration
signifi cant termination payments if an employment
The fi xed remuneration consists of cash salary (‘Base’).
agreement has to be terminated for cause.
• The Company will make full disclosure of director
and executive remuneration.
To ensure that fi xed remuneration arrangements remain
competitive, the fi xed remuneration component of
executive remuneration is reviewed annually based on
The Board recognises the signifi cant role played by
performance and market data.
remuneration in attracting and retaining staff.
Remuneration structure – non–executive directors
Non–executive directors are paid fi xed annual
remuneration as set out in letters of appointment.
Benchmarking of executive remuneration is against
executive remuneration practices for executive roles
having similar scope, accountability and complexity to
those being reviewed. Positions may be benchmarked
Reviews of each individual director and directors as
against:
a whole occur annually. Non–executive directors may
• Other positions within the Company so that internal
make investments in the Company in accordance with
relativities are maintained; and/or
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
benefi ts to directors.
• Roles situated in companies listed on the Australian
Stock Exchange with market capitalisation similar
to that of the Company’s and/or within an industry
sector in which the Company has operations.
Prior to the 2007 AGM, the Board commissioned a
report and as a result the Board remuneration as an
aggregate was increased after which time the Board
implemented new remuneration levels consistent with
the median range recommended by the advisor.
Remuneration structure – senior executives
Three elements make up the Company’s remuneration
structure for senior executives:
• Fixed remuneration of salary and superannuation.
• Bonus payments based upon company performance
and the meeting of corporate objectives
– Short Term Incentive (STI).
• Equity based remuneration – Long Term
Incentive (LTI).
Short Term Incentive remuneration (STI)
The Company operates a short term bonus scheme to
provide competitive performance based remuneration
incentives to both executives and staff.
Its objectives are to:
• Align the interests of the executives and staff with
those of shareholders;
• Provide participants with the opportunity to be
rewarded with at risk remuneration, where superior
performance outcomes are achieved over the
measurement period; and
• Refl ect a strong commitment towards attracting
and retaining high performing executives and
staff who are committed to the ongoing success
of the Company.
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DIRECTORS’ REPORT continued
Performance objectives are established for all
Executive performance is reviewed annually with
executives and structured to refl ect each executive’s
bonuses being awarded based on an assessment of
potential impact on and contribution to the business.
performance against agreed criteria. The payment
The performance objectives comprise elements of total
of performance bonuses is subject to a consideration
Company performance and individual performance
of whether or not the overall performance of the
and contain measures of fi nancial, non–fi nancial
Company warrants the payment of a bonus.
20
and strategic outcomes. Achievement of performance
objectives would entitle an executive to a cash bonus.
Long Term Incentive Remuneration (LTI)
The Company has an employee share ownership plan.
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Generally, bonus arrangements are capped at a
The plan involves the use of options to acquire shares.
maximum of 50% of Base, however when exceptional
The plan is designed to reward executives in a manner
outcomes are delivered, or where warranted by special
which aligns this element of remuneration with the
circumstances, it can exceed this amount.
fi nancial performance of the Company and the interests
All executive bonus amounts are determined based on
of shareholders. Executives are also required to
meet continued service conditions in order to exercise
the recommendation of the Managing Director, having
the options.
regard to actual performance against the performance
objectives. These recommendations are then put to the
The objective of the LTI plan is to reward executives in
Remuneration Committee for approval.
a manner that aligns remuneration with the creation of
Fixed remuneration levels are set with reference
to commercial benchmark information and the
individual’s role, responsibility, experience and
geographic location. The fi xed component of
executive remuneration is reviewed annually. The
shareholders’ wealth. As such, LTI grants are only made
to executives who are able to infl uence the generation
of shareholder wealth and thus have an impact on the
Group’s performance against the relevant long term
performance hurdle.
Company makes superannuation contributions on fi xed
LTI grants to executives are delivered in the form of
remuneration amounts.
Bonus and equity based schemes are designed
to motivate employees for the continuing benefi t
of shareholders. No employee has a continuous
share options under the Employee Share Options Plan.
The share options generally vest over a period of three
years subject to meeting performance hurdles, with no
opportunity to retest. Executives are able to exercise the
share option for up to two years after vesting, before
entitlement to bonus payments. Performance objectives
the options lapse.
for each executive are set on an annual basis and
are refl ective of the areas of responsibility of the
The Company uses Shareholder Return as a
executive and the broader objectives of the Company.
performance hurdle for the LTI plan, measured either
Performance objectives include fi nancial and non–
by reference to growth in earnings before interest, tax
fi nancial goals.
and depreciation, or growth in earnings per share.
Details of the plan are shown in Note 31 of the
Financial Statements.
Company performance and remuneration
The table below shows the fi nancial performance of the Company over the last four years. GBST’s remuneration
practices seek to align executive remuneration with growth in profi tability and shareholder value, amongst
other things.
EBITDA
Growth
Less pre–acquisition earnings InfoComp
EBITDA inclusive InfoComp earnings from 1/9/2007
Less write down of IT&e investment
EBITDA adjusted for IT&e write down
EPS (cents)
Growth
Net operating revenue
Growth
Net profit before tax
Growth
Closing share price
Dividends paid (cents)
*The Company listed on the Australian Stock Exchange on 28 June 2005.
2005
$ 4.0m
9%
–
–
–
–
16.73
–
$22.2m
4%
$ 3.5m
46%
$1.23*
n/a*
2006
$ 9.0m
127%
–
–
–
–
13.96
(16%)
$26.7m
21%
$ 8.6m
144%
$2.37
0
2007
$11.4m
26%
–
–
–
–
18.11
29%
$29.3m
10%
$11.4m
31%
$4.00
9.0
2008
$18.3m
60%
$(1.1m)
$17.2m
$(2.3m)
$14.9m
12.44
(31%)
$59.8m
104%
$ 9.8m
(14%)
$1.89
11.5
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Service agreements
Remuneration and other terms of employment for
Apart from Mr Lake’s service agreements, the
executive directors and executives are formalised
agreements are expressed to be open ended
in service contracts. All agreements with executives
appointments but may generally be terminated by
are subject to an annual review. Each of the
notice by either party or earlier in the event of
agreements provide for base pay, leave entitlements,
certain breaches of terms and conditions.
superannuation and performance–related bonus.
The agreements also contain normal provisions
relating to the protection of confi dential information
and intellectual property rights as well as post
employment restraints.
Mr Lake’s service agreement has a minimum term of
two years ending in August 2009 and is able to be
terminated at that time or after it by either party giving
the other not less than six month’s notice.
DIRECTORS’ REPORT continued
Details of Remuneration
The remuneration for each director and executive offi cers (the key management personnel) of the Company and
the consolidated entity receiving the highest remuneration during the year was as follows:
Benefits
Post Employment Other Long–
Term Benefits
Leave
entitlement
$
Superannuation
$
Share–based
Payment
Equity
options
$
Performance
Related
Total
$
%
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Short–Term
Benefits
Base salary
& fees
$
Bonus
$
Other
$
87,500
15,000
50,000
580,385
50,000
50,000
832,885
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2008
Directors
J Puttick
D Adams (appointed 1/4/08)
A Brackin
S Lake
D Shirley (resigned 29/4/08)
J Sundell
Total Directors
Executives
R De Dominicis (appointed 31/8/07)
P Fowler (resigned 7/2/08)
P Salis (appointed 1/10/07)
I Sanchez (appointed 3/3/08)
K Sprott
K Wallis (resigned 12/10/07)
Total Executives
Group Total
321,688
166,967
179,077
66,667
169,387
83,744
987,530
1,820,415
–
–
40,000
80,000
40,000
–
160,000
160,000
–
6,302
–
–
–
60,000
66,302
66,302
–
–
–
52,235
–
–
52,235
13,014
–
16,118
4,803
15,245
5,850
55,030
107,265
–
–
44,100
–
–
44,100
–
–
–
–
–
–
–
–
–
–
–
–
32,308
32,308
32,308
–
–
–
–
–
–
–
–
–
3,109
–
–
3,109
87,500
15,000
50,000
635,729
50,000
50,000
888,229
334,702
–
175,478
2,209
236,523
1,328
151,470
–
226,474
1,842
181,902
–
5,379
1,306,549
8,488 2,194,778
–
–
–
–
–
–
80,000
40,000
534,100
40,000
40,000
734,100
–
–
–
0.5
–
–
–
–
1.3
17.5
52.8
18.5
–
–
–
–
–
–
–
–
–
7.0
9.0
13.0
6.0
4.0
13.0
–
–
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 21/8/06)
K Wallis
Total Executives
Group Total
80,000
40,000
490,000
40,000
40,000
690,000
–
–
–
–
–
–
–
–
–
–
–
–
134,470
204,231
218,333
186,899
98,237
181,346
1,023,516
1,713,516
–
13,761
–
22,936
8,259
35,000
–
13,761
–
5,000
–
32,110
122,568
8,259
122,568 8,259
13,274
20,445
–
17,257
9,291
19,211
79,478
123,578
28,802
–
–
–
–
–
28,802
28,802
–
–
–
–
–
–
–
–
190,307
247,612
261,592
217,917
112,528
232,667
1,262,623
1,996,723
Summary at 30 June 2008 of options issued as part of remuneration.
Granted
number
Options granted
as part of
remuneration
$
–
–
–
–
–
–
500,000
3,109
–
–
–
–
500,000
3,109
–
100,000
100,000
–
100,000
120,000
420,000
920,000
–
2,209
1,328
–
1,842
–
5,379
8,488
Total
remuneration
represented
by Options
%
–
–
–
0.5
–
–
–
–
1.3
0.6
–
0.8
–
–
–
Options
exercised
and sold
$
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Options
lapsed/
forfeited
($)
–
–
–
–
–
–
–
–
(2,209)
–
–
–
–
(2,209)
(2,209)
Total
$
–
–
–
3,109
–
–
3,109
–
–
1,328
–
1,842
–
3,170
6,279
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Directors
J Puttick
D Adams
A Brackin
S Lake
D Shirley
J Sundell
Total Directors
Executives
R De Dominicis
P Fowler (i)
P Salis
I Sanchez
K Sprott
K Wallis (i)
Total Executives
Group Total
(i) These executives resigned during the year and these options were forfeited.
(ii) In addition to the above balances, Mr P Fowler held 100,000 options from a prior year which remain
exercisable.
(iii) In addition to the above balances, Mr K Wallis held 1,332 options from a prior year which were exercised
in the current year.
DIRECTORS’ REPORT continued
Options granted as remuneration to key management personnel in the year ended 30 June 2008.
24
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Directors
J Puttick
D Adams
A Brackin
S Lake
D Shirley
J Sundell
Total Directors
Executives
R De Dominicis
P Fowler (iii)
P Salis
I Sanchez
K Sprott
K Wallis (iii)
Total Executives
Group Total
Vested No.
(i)
Granted No.
(ii)
Grant Date
–
–
–
–
–
–
–
–
50,000
–
–
–
1,332
51,332
51,332
–
–
–
–
–
–
500,000
19.12.07
–
–
–
31.07.07
24.10.07
–
31.07.07
31.07.07
–
–
500,000
–
100,000
100,000
–
100,000
120,000
420,000
920,000
Average
Value per
Option at
Grant Date
$
–
–
–
0.43
–
–
–
1.09
1.05
–
1.09
1.09
Exercise
Price
First
Exercise
Date
Last
Exercise
Date
$
–
–
–
–
–
–
–
–
–
3.85
18.06.09
18.12.09
–
–
–
3.92
3.92
–
3.92
3.92
–
–
–
–
–
–
30.07.08
23.10.08
–
30.07.08
30.07.08
30.07.12
23.10.12
–
30.07.12
30.07.12
Details of the total holdings of options granted as remuneration in previous fi nancial years are set out in
Note 29 in the fi nancial statements. Details of these options are set out in Note 31 in the fi nancial statements.
(i) These are in respect of options granted in prior years which vested in the current year.
(ii) Options granted in current year.
(iii) Options granted and subsequently forfeited in current year.
Shares issued on exercise of compensation options in the year ended 30 June 2008.
Options exercised during the year that were granted as compensation in previous fi nancial years:
No. of ordinary
shares issued
Amounts paid
per share
$
Amounts unpaid
per share
$
Directors
J Puttick
D Adams
A Brackin
S Lake
D Shirley
J Sundell
Total Directors
Executives
R De Dominicis
P Fowler
P Salis
I Sanchez
K Sprott
K Wallis
Total Executives
Group Total
–
–
–
–
–
–
–
–
–
–
–
–
1,332
1,332
1,332
–
–
–
–
–
–
–
–
–
–
–
0.00
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–
–
–
–
–
–
–
–
–
–
–
DIRECTORS’ REPORT continued
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Meetings of Directors
During the fi nancial year, 19 meetings of Directors (including committees of directors) were held. Attendances by
each Director during the year were as follows:
Directors’ Names
Directors’ Meetings
Audit And Risk Committee Remuneration And Nominations
J Puttick
D Adams
A Brackin
S Lake
D Shirley
J Sundell
Number
eligible to
attend
Number
attended
Number
eligible to
attend
Number
attended
Number
eligible to
attend
Number
attended
14
3
14
14
12
14
12
2
14
13
12
9
4
1
4
–
3
–
3
–
4
*
4
3
–
1
–
1
1
1
1
1
–
1
1
1
1
*At the request of the Audit and Risk Committee Mr S Lake (CEO) attends the Audit and Risk Committee meetings even though not a member of the committee.
Indemnifying Directors and Offi cers
Options
During the fi nancial year, the Company paid a
The number of options over ordinary shares outstanding
premium in respect of a contract insuring the directors
at 30 June 2008 are as follows:
of the Company, the company secretaries and all
executive offi cers of the Company against a liability
incurred as such a director, secretary or executive
Grant date
Expiry and
Exercise price
Number
exercise Date
offi cer to the extent permitted by the Corporations Act
09.03.05
08.03.10
2001. The total amount of the premium paid for this
18.07.06
19.07.08
cover was $46,390.
25.07.07
31.07.07
24.10.07
24.10.07
19.12.07
24.07.10
30.07.10
23.10.10
23.10.10
18.12.09
In addition, the Company has entered into a Deed of
Indemnity which ensures that generally the Directors
and Offi cers of the Company will incur no monetary
loss as a result of defending the actions taken against
them as Directors and Offi cers.
The Company has not otherwise, during or since the
fi nancial year, indemnifi ed or agreed to indemnify an
Offi cer or auditor of the Company against a liability
incurred as such an Offi cer or auditor.
$0.00
$1.25
$3.90
$3.92
$3.92
$3.80
$3.85
23,976
100,000
78,202
100,000
100,000
100,000
500,000
1,002,178
The Company established an employee share trust on
Non–audit services
9 March 2005 to hold shares in GBST for subsequent
The Board, in accordance with advice from the Audit
allocation under the GBST Share Employee Option
Committee, is satisfi ed that the provision of non–audit
Plan (ESOP). During the year ended 30 June 2008,
services during the year is compatible with the general
36,844 shares were issued from the trust to meet the
standard of independence for auditors imposed by the
exercise of employee options (grant date 09.03.05
Corporations Act 2001.
and exercise price was $.7505). GBST ESOP Pty Ltd
held nil shares in GBST at reporting date. The Trust is
treated as a special purpose entity and consolidated.
Refer to Note 22 in the fi nancial report for details
of fees for non–audit services paid/payable to the
The Trust’s shareholding in the Company is disclosed as
external auditors during the year.
treasury shares and deducted from equity.
In addition, 210,000 new shares were issued to meet
the exercise of employee options (no amounts are
unpaid on any of the shares).
Grant Date
25.08.05
05.12.05
03.01.06
Number
50,000
70,000
90,000
210,000
Auditor’s Independence Declaration
The lead auditor’s independence declaration for the
year ended 30 June 2008 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.
No further shares or options have been issued since
30 June 2008.
Dr J F Puttick
Chairman
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.
Proceedings on behalf of Company
S M L Lake
No person has applied for leave of court to bring
Managing Director and Chief Executive Offi cer
proceedings on behalf of the Company or intervene
in any proceedings to which the Company is a party
Brisbane
for the purpose of taking responsibility on behalf of the
Dated this 29th day of August 2008
Company for all or any part of those proceedings. The
Company was not a party to any such proceedings
during the year.
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DIRECTORS’ DECLARATION
The Directors of the Company declare that:
1. The fi nancial statements and notes are in accordance with the Corporations Act 2001 and:
a) Comply with Accounting Standards and the Corporations Regulations 2001; and
b) Give a true and fair view of the fi nancial position as at 30 June 2008 and of the performance for
the year ended on that date of the Company and consolidated group.
2. The Chief Executive Offi cer and Chief Financial Offi cer have each declared that:
a) The fi nancial records of the Company for the fi nancial year have been properly maintained in
accordance with section 286 of the Corporations Act 2001;
b) The fi nancial statements and notes for the fi nancial year comply with the Accounting Standards; and
c) The fi nancial statements and notes for the fi nancial 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.
There are reasonable grounds to believe that the Company and its subsidiaries identifi ed in Note 23 will be able
to meet any obligations or liabilities to which they are or may become subject to by virtue of the Deed of Cross
Guarantee between the Company and those group entities pursuant to ASIC Class Order 98/1418.
This declaration is made in accordance with a resolution of the Board of Directors.
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Dr J F Puttick
Chairman
S M L Lake
Managing Director and
Chief Executive Offi cer
Brisbane
Dated this 29th day of August 2008
GBST HOLDINGS LIMITED ABN: 85 010 488 874
GBST HOLDINGS LIMITED ABN: 85 010 488 874
Financial Report for the year enddded 30000030 JJJJuunuuneeeee 202020000200080888
Financial Report for the year ended 30 June 2008
INCOME STATEMENT
GBST Group
Note
30 Jun 2008
$
30 Jun 2007
$
GBST Holdings
30 Jun 2008
$
30 Jun 2007
$
Revenue
Other income
Product delivery and support expenses
Cost of third party product sold
Property and equipment expenses
Corporate and administrative expenses
Finance costs
Profit before income tax
Income tax expense
Profit for the year
Profit attributable to members of the parent company
Basic earnings per share (cents)
Diluted earnings per share (cents)
Dividends per share (cents)
The accompanying notes form part of these financial statements.
2
2
60,739,931
452,981
61,192,912
30,410,971
876,156
31,287,127
31,741,200
3,024,692
34,765,892
30,410,971
944,955
31,355,926
(32,902,128)
(901,192)
(5,291,671)
(10,811,959)
(1,533,216)
(12,139,888)
(1,134,720)
(3,013,076)
(3,641,934)
(19,682)
(14,379,475)
(778,636)
(3,223,657)
(6,979,419)
(2,017,314)
(12,139,888)
(1,134,720)
(3,013,076)
(3,604,248)
(19,682)
9,752,746
(3,621,051)
6,131,695
6,131,695
11,337,827
(3,316,431)
8,021,396
8,021,396
7,387,391
(2,721,443)
4,665,948
4,665,948
11,444,312
(3,316,431)
8,127,881
8,127,881
12.44
12.37
11.50
18.11
17.77
9.00
3
4
32
32
5
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BALANCE SHEET
GBST Group
Note
30 Jun 2008
$
30 Jun 2007
$
GBST Holdings
30 Jun 2008
$
30 Jun 2007
$
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
Trade and other payables
Financial 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
The accompanying notes form part of these financial statements.
31
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6
7
8
12
7
9
10
11
15
12
13
14
15
17
13
14
15
16
17
18
19
20
1,491,521
9,711,532
471,083
711,455
12,385,591
–
1,621,543
2,518,022
53,808,072
2,835,470
230,685
61,013,792
73,399,383
7,033,699
4,485,755
367,556
4,049,311
15,936,321
–
16,259,896
175,732
1,467,339
192,367
18,095,334
34,031,655
39,367,728
25,499,241
–
135,666
13,732,821
39,367,728
15,454,992
3,797,888
–
513,605
19,766,485
16,027
781,937
1,289,967
5,339,012
1,138,404
13,453
8,578,800
28,345,285
2,186,566
–
2,080,532
2,260,754
6,527,852
–
–
174,492
1,128,406
305,611
1,608,509
8,136,361
20,208,924
6,807,508
(31,253)
67,788
13,364,881
20,208,924
228,139
3,835,494
419,145
630,566
5,113,344
60,650,363
1,621,645
1,362,880
4,944,389
1,178,511
230,590
69,988,378
75,101,722
4,248,981
4,422,372
791,395
2,500,673
11,963,421
7,748,021
16,135,545
143,395
1,045,643
192,367
25,264,971
37,228,392
37,873,330
25,499,241
–
79,765
12,294,324
37,873,330
15,454,992
3,849,344
–
513,605
19,817,941
16,027
782,039
1,289,967
5,339,012
1,138,404
13,453
8,578,902
28,396,843
2,178,571
–
2,080,532
2,260,754
6,519,857
–
–
174,492
1,128,406
305,611
1,608,509
8,128,366
20,268,477
6,807,508
–
67,788
13,393,181
20,268,477
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GBST HOLDINGS LIMITED ABN: 85 010 488 874
Financial Report for the year ended 30 June 2008
STATEMENT OF CHANGES IN EQUITY
Treasury
shares (a)
Retained
earnings
$
$
Foreign
currency
translation
$
Equity
remuneration
reserve (b)
$
GBST Group
Balance at 1 July 2006
Profit for the year
Share based payments
Share Issues
Exercise of options
Transfer to/from ordinary capital
Subtotal
Dividends paid
Balance at 30 June 2007
Issued
capital
$
5,722,015
–
–
780,696
–
304,797
6,807,508
–
6,807,508
Balance at 1 July 2007
Profit for the year
Share based payments–exempt shares
Share based payments–options
Share Issues
Exercise of options
Translation of foreign controlled subsidiary
Transfer to/from ordinary capital
Subtotal
Dividends paid (Note 5)
6,807,508
–
107,808
–
18,260,177
272,500
–
51,248
25,499,241
–
(1,778,071)
–
–
–
1,746,818
–
(31,253)
–
(31,253)
(31,253)
–
–
–
–
31,253
–
–
–
–
9,274,432
8,021,396
–
–
–
–
17,295,828
(3,930,947)
13,364,881
13,364,881
6,131,695
–
–
–
–
–
–
19,496,576
(5,763,755)
Balance at 30 June 2008
25,499,241
–
13,732,821
GBST Holdings
Balance at 1 July 2006
Profit for the year
Share based payments
Share Issues
Transfer to ordinary capital
Subtotal
Dividends paid
Balance at 30 June 2007
Balance at 1 July 2007
Profit for the year
Share based payments–exempt shares
Share based payments–options
Share Issues
Exercise of options
Transfer to financial asset reserve
Transfer to ordinary capital
Subtotal
Net Dividends paid (Note 5)
Balance at 30 June 2008
5,722,015
–
–
780,696
304,797
6,807,508
–
6,807,508
6,807,508
–
107,808
–
18,260,177
272,500
–
51,248
25,499,241
–
25,499,241
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
9,274,432
8,127,881
–
–
–
17,402,313
(4,009,132)
13,393,181
13,393,181
4,665,948
–
–
–
–
–
–
18,059,129
(5,764,805)
12,294,324
Total
$
13,517,192
8,021,396
73,769
780,696
1,746,818
–
24,139,871
(3,930,947)
20,208,924
20,208,924
6,131,695
44,033
127,000
18,260,177
303,753
55,901
–
45,131,483
(5,763,755)
298,816
–
73,769
–
–
(304,797)
67,788
–
67,788
67,788
–
(63,775)
127,000
–
–
–
(51,248)
79,765
–
79,765
39,367,728
298,816
–
73,769
–
(304,797)
67,788
–
67,788
67,788
–
(63,775)
127,000
–
–
–
(51,248)
15,295,263
8,127,881
73,769
780,696
–
24,277,609
(4,009,132)
20,268,477
20,268,477
4,665,948
44,033
127,000
18,260,177
272,500
–
–
79,765
43,638,135
–
79,765
(5,764,805)
37,873,330
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
55,901
–
55,901
–
55,901
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(a) During the year ended 30 June 2008, 36,844 (2007: 2,332,336) shares were issued from the Trust to meet the exercise of employee options.
GBST ESOP Pty Ltd held nil shares in GBST at 30 June 2008 (2007: 36,844). 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 equity remuneration 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.
CASH FLOW STATEMENT
GBST Group
Note
30 Jun 2008
$
30 Jun 2007
$
GBST Holdings
30 Jun 2008
$
30 Jun 2007
$
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Interest received
Finance costs
Income tax paid
Net cash provided by/(used in) operating activities
25(a)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of plant & equipment
Purchase of plant & equipment
Purchase of intangibles
Acquisition of business (net of cash acquired)
25(d)
Proceeds\(payments) of 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
Proceeds from borrowings
Dividends paid
Net cash provided by/(used in) financing activities
49,928,924
(37,014,835)
452,981
(1,533,216)
(5,450,585)
6,383,269
32,342,988
(22,068,505)
775,697
(9,874)
(3,409,002)
7,631,304
36,579,315
(23,585,094)
234,680
(1,665,314)
(5,563,287)
6,000,300
32,342,988
(22,058,056)
775,697
(9,874)
(3,409,002)
7,641,753
4,108
(680,151)
(168,434)
(31,234,921)
–
31,801
(625,286)
(82,974)
–
–
21,129
(3,127,499)
(35,185,768)
21,527
(781,937)
(1,436,869)
1,976
(405,779)
(50,339)
31,801
(625,286)
(82,974)
–
–
(32,527,862)
21,129
(3,127,499)
(36,088,374)
1,895,751
21,527
(781,937)
458,882
(63,858)
31,253
272,500
19,000,000
(5,763,755)
13,476,140
(35,276)
1,828,015
780,696
–
(3,930,947)
(1,357,512)
4,836,923
10,618,069
15,454,992
(9,362)
(35,276)
–
272,500
19,000,000
(5,764,805)
13,498,333
(16,589,741)
15,454,992
(1,134,749)
–
780,696
–
(4,009,132)
(3,263,712)
4,836,923
10,618,069
15,454,992
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS
Cash at beginning of the financial year
Cash at end of the financial year
(15,326,359)
15,454,992
128,633
25(b)
The accompanying notes form part of these financial statements.
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GBST HOLDINGS LIMITED ABN: 85 010 488 874
Financial Report for the year ended 30 June 2008
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
GBST Holdings Limited is a public company limited by
Principles of consolidation
shares, incorporated and domiciled in Australia. The
A controlled entity is any entity over which GBST
fi nancial report covers the consolidated entity of GBST
Holdings Limited has the power to control the fi nancial
Holdings Limited and its controlled entities, and GBST
and operating policies, so as to obtain benefi ts from
Holdings Limited as an individual parent entity.
its activities. In assessing the power to govern, the
Basis of preparation
The fi nancial report is a general purpose fi nancial
existence and effect of holdings of actual and potential
voting rights are considered.
report prepared in accordance with the requirements
A list of controlled entities is contained in Note 23 of
of the Corporations Act 2001, Australian Accounting
the fi nancial statements. All controlled entities have a
Standards, including Australian Accounting
June fi nancial year end.
Interpretations and other authoritative pronouncements
of the Australian Accounting Standards Board (AASB).
As at reporting date, the assets and liabilities of all
controlled entities have been incorporated into the
Australian Accounting Standards set out accounting
consolidated fi nancial statements as well as their results
policies that the AASB has concluded would result
for the year then ended. Where controlled entities have
in a fi nancial report containing relevant and reliable
entered (left) the consolidated Group during the year,
information about transactions, events and conditions
their operating results have been included (excluded)
to which they apply. Compliance with Australian
from the date control was obtained (ceased).
Accounting Standards ensures that the fi nancial
statements and notes also comply with International
Financial Reporting Standards. Material accounting
policies adopted in the preparation of this fi nancial
report are presented below. They have been
consistently applied unless otherwise stated.
The fi nancial report has been prepared on an accruals
basis and is based on historical costs, modifi ed,
where applicable, by the measurement at fair value
of selected non–current assets, fi nancial assets and
fi nancial liabilities.
All inter–company balances and transactions between
entities in the consolidated entity, including any
unrealised profi ts or losses, have been eliminated on
consolidation. Accounting policies of subsidiaries have
been changed where necessary to ensure consistency
with those adopted by the parent entity.
Business combinations
Business combinations occur where control over
another business is obtained and results in the
consolidation of its assets and liabilities. All business
combinations, including those involving entities under
common control, are accounted for by applying the
purchase method.
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The purchase method requires an acquirer of the
Current and deferred income tax expense (income)
business to be identifi ed and for the cost of the
is charged or credited directly to equity instead of
acquisition and fair values of identifi able assets,
the profi t or loss when the tax relates to items that are
liabilities and contingent liabilities to be determined
credited or charged directly to equity.
as at acquisition date, being the date that control is
obtained. Cost is determined as the aggregate of fair
values of assets given, equity issued and liabilities
assumed in exchange for control, together with costs
directly attributable to the business combination. Any
deferred consideration payable is discounted
to present value using the entity’s incremental
borrowing rate.
Deferred tax assets and liabilities are ascertained
based on temporary differences arising between the
tax bases of assets and liabilities and their carrying
amounts in the fi nancial statements. Deferred tax
assets also result where amounts have been fully
expensed but future tax deductions are available. No
deferred income tax will be recognised from the initial
recognition of an asset or liability, excluding a business
Goodwill is recognised initially as the excess of cost
combination, where there is no effect on accounting or
over the acquirer’s interest in the net fair value of the
taxable profi t or loss.
identifi able assets, liabilities and contingent liabilities
recognised. If the fair value of the acquirer’s interest is
greater than cost, the surplus is immediately recognised
in profi t or loss.
Income tax
Deferred tax assets and liabilities are calculated at the
tax rates that are expected to apply to the period when
the asset is realised or the liability is settled, based on
tax rates enacted or substantively enacted at reporting
date. Their measurement also refl ects the manner in
The income tax expense (revenue) for the year
which management expects to recover or settle the
comprises current income tax expense (income) and
carrying amount of the related asset or liability.
deferred tax expense (income).
Current income tax expense charged to the profi t or
and unused tax losses are recognised only to the extent
loss is the tax payable on taxable income calculated
that it is probable that future taxable profi t will be
using applicable income tax rates enacted, or
available against which the benefi ts of the deferred tax
substantially enacted, as at reporting date. Current tax
asset can be utilised.
Deferred tax assets relating to temporary differences
liabilities (assets) are therefore measured at the amounts
expected to be paid to (recovered from) the relevant
taxation authority.
Where temporary differences exist in relation to
investments in subsidiaries, branches, associates,
and joint ventures, deferred tax assets and liabilities are
Deferred income tax expense refl ects movements in
not recognised where the timing of the reversal of the
deferred tax asset and deferred tax liability balances
temporary difference can be controlled and it is
during the year as well unused tax losses.
not probable that the reversal will occur in the
foreseeable future.
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GBST HOLDINGS LIMITED ABN: 85 010 488 874
Financial Report for the year ended 30 June 2008
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income tax (continued)
Any current tax liabilities (or assets) and deferred
Current tax assets and liabilities are offset where a
tax assets arising from unused tax losses assumed
legally enforceable right of set–off exists and it is
by the head entity from the subsidiaries in the tax–
intended that net settlement or simultaneous realisation
consolidated group are recognised in conjunction
36
and settlement of the respective asset and liability will
with any tax funding arrangement amounts (refer
occur. Deferred tax assets and liabilities are offset
below). Any difference between these amounts is
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where a legally enforceable right of set–off exists, the
recognised by the Company as an equity contribution
deferred tax assets and liabilities relate to income taxes
to or distribution from the subsidiary. Distributions fi rstly
levied by the same taxation authority on either the same
reduce the carrying amount of the investment in the
taxable entity or different taxable entities where it is
subsidiary are then recognised as revenue.
intended that net settlement or simultaneous realisation
and settlement of the respective asset and liability will
occur in future periods in which signifi cant amounts
of deferred tax assets or liabilities are expected to be
recovered or settled.
Tax consolidation
The Company recognises deferred tax assets arising
from unused tax losses of the tax–consolidated group
to the extent that it is probable that future taxable profi ts
of the tax–consolidated group will be available against
which the asset can be utilised. Any subsequent period
adjustments to deferred tax assets arising from unused
The Company and its wholly–owned Australian
tax losses assumed from subsidiaries are recognised by
resident entities are part of a tax–consolidated
the head entity only.
group. As a consequence, all members of the tax–
consolidated group are taxed as a single entity. The
head entity within the tax–consolidated group is GBST
Holdings Limited. The implementation date of
the tax–consolidation group was 1 July 2003.
The members of the tax–consolidated group have
entered into a tax funding arrangement which sets
out the funding obligations of members of the tax–
consolidated group in respect of tax amounts. The
tax funding arrangements require payments to/from
The current and deferred tax amounts for the
the head entity equal to the current tax liability (asset)
tax–consolidated group are allocated among the
assumed by the head entity and any tax–loss deferred
entities in the group using a ‘stand–alone taxpayer’
tax asset assumed by the head entity. The members
approach whereby each entity in the tax–consolidated
of the tax–consolidated group have also entered
group measures its current and deferred taxes as if it
into a valid Tax Sharing Agreement under the tax
continued to be a separately taxable entity in its own
consolidation legislation which sets out the allocation
right. Deferred tax assets and deferred tax liabilities are
of income tax liabilities between the entities should
measured by reference to the carrying amounts of the
the head entity default on its tax payment obligations
assets and liabilities in the Company’s balance sheet
and the treatment of entities leaving the tax
and their tax values applying under tax consolidation.
consolidated group.
Cash and cash equivalents
Subsequent costs are included in the asset’s carrying
Cash and cash equivalents includes cash on hand,
amount or recognised as a separate asset, as
deposits held at call with banks, other short term
appropriate, only when it is probable that future
highly liquid investments with original maturities of
economic benefi ts associated with the item will fl ow to
three months or less, and bank overdrafts. Bank
the Group and the cost of the item can be measured
overdrafts are shown within fi nancial liabilities on
reliably. All other repairs and maintenance are charged
the balance sheet.
Inventories
to the income statement during the fi nancial period in
which they are incurred.
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Inventories are measured at the lower of cost and net
The depreciable amount of all fi xed assets including
realisable value.
Work in progress is stated at the aggregate of long
term project development contract costs incurred to
date, plus recognised profi ts, less any recognised
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
losses and progress billings.
improvements.
Contract costs include all costs directly related to
The depreciation rates used for each class of assets
specifi c contracts, costs that are specifi cally chargeable
are:
to the customer under the terms of the contract and an
allocation of overhead expenses incurred in connection
Class of
Depreciation
Basis
with the consolidated entity’s activities in general.
fi xed Asset rate
Plant and equipment
Owned plant,
5–67%
Straight–Line/
Plant and equipment are carried at cost or fair value,
equipment
Diminishing Value
less, where applicable, any accumulated depreciation
and impairment losses. The carrying amount of plant
Leased plant,
10–40%
Straight–Line
and equipment is reviewed annually by directors to
equipment
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 fl ows
that will be received from the asset’s employment and
subsequent disposal. The expected net cash fl ows have
been discounted to their present values in determining
recoverable amounts.
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.
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GBST HOLDINGS LIMITED ABN: 85 010 488 874
Financial Report for the year ended 30 June 2008
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Asset retirement obligations
Intangible assets
The cost of plant and equipment includes an initial
The Group’s major intangible assets are software
estimate of the cost of make good allowances, and a
systems, customer contracts and goodwill.
corresponding provision for these future costs is raised.
The Company has a number of lease agreements
Acquired both separately and from a business
over offi ce premises which include an obligation to
combination
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.
Leases and hire purchase
Leases of fi xed assets where substantially all the risks
and benefi ts incidental to the ownership of the asset,
but not the legal ownership that is transferred to entities
in the consolidated entity, are classifi ed as fi nance
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 benefi ts 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
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, ranging from fi ve to 10 years.
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.
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 benefi ts are
uncertain or the future economic benefi ts cannot be
measured reliably.
Externally acquired
Software systems externally acquired are recognised
at cost of acquisition. Software systems have a fi nite
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-
over the life of the lease term.
line basis.
Goodwill
Trade date accounting is adopted for fi nancial assets
Goodwill is initially recorded at the amount by which
that are delivered within timeframes established by
the purchase price for a business acquisition exceeds
marketplace convention.
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.
Financial instruments are initially measured at fair
value plus transaction costs where the instrument is
not classifi ed as at fair value through profi t or loss.
Transaction costs related to instruments classifi ed as at
Goodwill is tested annually for any indication of
fair value through profi t or loss are expensed to profi t
impairment, or more frequently if events or changes in
or loss immediately. Financial instruments are classifi ed
circumstances indicate that the carrying value may be
and measured as set out below.
impaired. Goodwill is allocated to cash generating
units for the purpose of impairment testing.
Loans and receivables
Impairment of assets
Loans and receivables are non–derivative fi nancial
assets with fi xed or determinable payments that are not
At each reporting date, the Group reviews the
quoted in an active market and are stated at amortised
carrying values of its tangible and intangible assets to
cost using the effective interest rate method.
determine whether there is any indication that those
assets have been impaired. If such an indication exists,
Available–for–sale fi nancial assets
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.
Available–for–sale fi nancial assets (investments)
are refl ected at fair value or cost. They comprise
investments in the equity of other entities where there
is neither a fi xed maturity nor fi xed or determinable
payments. Fair value is determined with reference to
market prices. Unrealised gains and losses arising from
Impairment testing is performed annually for goodwill
changes in fair value are taken directly to equity other
and intangible assets with indefi nite lives. Where it is
than for impairment (see below).
not possible to estimate the recoverable amount of an
individual asset, the Group estimates the recoverable
Financial liabilities
amount of the cash–generating unit to which the asset
belongs.
Non–derivative fi nancial liabilities (excluding fi nancial
guarantees) are subsequently measured at amortised
cost, using the effective interest rate method.
Financial instruments
Recognition and initial measurement
Fair value
Financial instruments, incorporating fi nancial assets
Fair value is determined based on current bid prices for
and fi nancial liabilities, are recognised when the entity
all quoted investments.
becomes a party to the contractual provisions of the
instrument.
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GBST HOLDINGS LIMITED ABN: 85 010 488 874
Financial Report for the year ended 30 June 2008
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Impairment
Those cashfl ows are discounted using market yields on
At each reporting date, the Group assesses whether
national government bonds with terms to maturity that
there is objective evidence that a fi nancial instrument
match the expected timing of cashfl ows. Contributions
has been impaired. In the case of available–for–sale
are made by the Group to employee superannuation
fi nancial instruments, a prolonged decline in the value
funds and are charged as expenses when incurred.
of the instrument is considered to determine whether
an impairment has arisen. Impairment losses are
recognised in the income statement.
Derecognition
Equity–settled compensation
The Group operates equity–settled share–based
payment employee share and option schemes. The fair
value of the equity to which employees become entitled
Financial assets are derecognised where the
is measured at grant date and recognised as an
contractual rights to receipt of cashfl ows expires or the
expense over the vesting period, with a corresponding
asset is transferred to another party whereby the entity
increase to an equity account. The fair value of shares
is no longer has any signifi cant continuing involvement
is ascertained as the market bid price. The fair value
in the risks and benefi ts associated with the asset.
of options is ascertained using a Black–Scholes pricing
Financial liabilities are derecognised where the related
model which incorporates all market vesting conditions.
obligations are either discharged, cancelled or expire.
The number of shares and options expected to vest is
Provisions
Provisions are recognised when the Group has a legal
or constructive obligation, as a result of past events,
reviewed and adjusted at each reporting date such
that the amount recognised for services received, as
consideration for the equity instruments granted, shall
be based on the number of equity instruments that
for which it is probable that an outfl ow of economic
eventually vest.
benefi ts will result and that outfl ow can be reliably
measured.
Employee benefi ts
Provision is made for the Group’s liability for employee
benefi ts arising from services rendered by employees
to balance date. Employee benefi ts 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 benefi ts
payable later than one year have been measured at
the present value of the estimated future cash outfl ows
to be made for those entitlements.
Revenue and other income
Revenue is measured at the fair value of the
consideration received or receivable after taking into
account any trade discounts and volume rebates
allowed. Any consideration deferred is treated as
the provision of fi nance and is discounted at a rate
of interest that is generally accepted in the market
for similar arrangements. The difference between the
amount initially recognised and the amount ultimately
received is interest revenue.
Revenue received in advance for software usage rental
Foreign currency transactions and balances
is recognised over the period of the usage.
Functional and presentation currency
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
The functional currency of each of the Group’s
entities is measured using the currency of the primary
economic environment in which that entity operates.
The consolidated fi nancial statements are presented in
Australian dollars which is the parent entity’s functional
incurred in relation to the development of the project.
and presentation currency.
Revenue from the sale of goods is recognised at the
point of delivery as this corresponds to the transfer of
signifi cant risks and rewards of ownership of the goods
and the cessation of all involvement in those goods.
Interest revenue is recognised using the effective interest
rate method, which, for fl oating rate fi nancial assets,
is the rate inherent in the instrument. Dividend revenue
is recognised when the right to receive a dividend has
been established.
Transaction and balances
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. Non–monetary items measured at
historical cost continue to be carried at the exchange
rate at the date of the transaction. Non–monetary items
measured at fair value are reported at the exchange
rate at the date when fair values were determined.
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
Offi ce. 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.
Cashfl ows are presented in the cashfl ow statement
on a gross basis, except for the GST component of
investing and fi nancing activities, which are disclosed
as operating cashfl ows.
Exchange differences arising on the translation of
monetary items are recognised in the income statement,
except where deferred in equity as a qualifying cash
fl ow or net investment hedge.
Exchange differences arising on the translation of
non–monetary items are recognised directly in equity to
the extent that the gain or loss is directly recognised in
equity, otherwise the exchange difference is recognised
in the income statement.
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GBST HOLDINGS LIMITED ABN: 85 010 488 874
Financial Report for the year ended 30 June 2008
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Foreign currency transactions and balances
Financial guarantees
(continued)
Group companies
Where material, fi nancial guarantees issued, which
require the issuer to make specifi ed payments to
The fi nancial results and position of foreign operations
reimburse the holder for a loss it incurs because a
42
whose functional currency is different from the Group’s
specifi ed debtor fails to make payment when due,
presentation currency are translated as follows:
are recognised as a fi nancial liability at fair value
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– Assets and liabilities are translated at year–end
exchange rates prevailing at that reporting date;
– Income and expenses are translated at average
exchange rates for the period; and
– Retained earnings are translated at the exchange
rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign
operations are transferred directly to the Group’s
foreign currency translation reserve in the balance
sheet. These differences are recognised in the income
statement in the period in which the operation is
disposed.
Critical accounting estimates and judgments
The Directors evaluate estimates and judgments
incorporated into the fi nancial report based on
historical knowledge and best available current
information. Estimates assume a reasonable
on initial recognition. The guarantee is subsequently
measured at the higher of the best estimate of the
obligation and the amount initially recognised
less, when appropriate, cumulative amortisation in
accordance with AASB 118: Revenue. Where the
entity gives guarantees in exchange for a fee, revenue
is recognised under AASB 118.
The fair value of fi nancial guarantee contracts has been
assessed using a probability weighted discounted cash
fl ow approach. The probability has been based on:
– the likelihood of the guaranteed party defaulting in
a year period;
– the proportion of the exposure that is not expected
to be recovered due to the guaranteed party
defaulting; and
– the maximum loss exposed if the guaranteed party
were to default.
expectation of future events and are based on current
Comparative fi gures
trends and economic data, obtained both externally
Where required by Accounting Standards comparative
and within the Group. Actual results may differ from
fi gures have been adjusted to conform to changes in
these estimates. The key estimates and judgements
presentation for the current fi nancial period. Details of
made in this fi nancial report concern the assessment
any such changes are included in the fi nancial report.
of the fair value of assets and liabilities acquired in the
InfoComp acquisition (Note 25 (d)) and carrying value
of the consolidated entity’s intangible assets (Note 11).
NOTE 2: REVENUE
(a) Revenue:
Sales revenue:
Revenue from licence and service sales
Revenue from sale of third party product
(b) Other income:
Interest revenue (c)
Profit on sale of plant & equipment
Other revenue
Management fee income from controlled entity
(c) Interest revenue:
Other entities
Controlled entities
GBST Group
30 Jun 2008
$
30 Jun 2007
$
GBST Holdings
30 Jun 2008
$
30 Jun 2007
$
59,690,794
1,049,137
60,739,931
29,086,199
1,324,772
30,410,971
30,827,555
913,645
31,741,200
29,086,199
1,324,772
30,410,971
364,328
–
88,653
–
452,981
364,328
–
364,328
866,046
9,280
830
–
876,156
1,735,128
709
62,219
1,226,636
3,024,692
866,046
–
866,046
233,635
1,501,493
1,735,128
934,845
9,280
830
–
944,955
866,046
68,799
934,845
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NOTE 3: PROFIT FOR THE YEAR
Profit before income tax expense includes the following items of revenue and expense:
(a) Expenses:
Cost of third party product sold
Impairment charge on investment in listed shares
Loss on sale of plant & equipment
Finance costs (b)
Depreciation & amortisation (c)
Foreign currency translation losses/(gains)
Operating lease rentals
Research & developments costs
Employee benefits expense (d)
901,192
2,287,893
4,492
1,533,216
4,055,438
291,667
1,912,665
8,045,210
24,617,695
1,134,720
–
–
19,682
942,374
–
1,262,612
2,915,214
11,305,179
778,636
2,287,893
–
2,017,314
940,481
384
1,277,276
4,522,040
13,057,298
1,134,720
–
–
19,682
942,374
–
1,262,612
2,915,214
11,305,179
GBST HOLDINGS LIMITED ABN: 85 010 488 874
Financial Report for the year ended 30 June 2008
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS
NOTE 3: PROFIT FOR THE YEAR (CONTINUED)
GBST Group
(b) Finance costs:
Interest paid to other entities
Interest paid to controlled entities
Finance lease charges
Facility fees
(c) Depreciation & amortisation:
Depreciation of plant & equipment
Amortisation of leased assets
Amortisation of intangibles
(d) Employee benefits expense:
Monetary based expense (i)
Share based payments expense (ii)
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30 Jun 2008
$
1,438,048
–
18,100
77,068
1,533,216
932,500
9,538
3,113,400
4,055,438
30 Jun 2007
$
GBST Holdings
30 Jun 2008
$
30 Jun 2007
$
–
–
974
18,708
19,682
442,791
23,530
476,053
942,374
1,408,412
528,639
3,195
77,068
2,017,314
455,104
8,790
476,587
940,481
–
–
974
18,708
19,682
442,791
23,530
476,053
942,374
24,446,662
171,033
24,617,695
11,231,410
73,769
11,305,179
12,886,265
171,033
13,057,298
11,231,410
73,769
11,305,179
(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”.
(e) Significant Items:
The following significant expense items are relevant in explaining the financial performance:
Impairment charge on investment in listed shares
Amortisation of intangibles
2,287,893
3,116,005
5,403,898
–
–
–
2,287,893
479,192
2,767,085
–
–
–
NOTE 4: INCOME TAX EXPENSE
GBST Group
(a) The components of tax expense comprise:
Current Tax
Deferred tax (Note 15)
Under provision in respect of prior years
(b) The prima facie tax on profit from ordinary activities before income
tax is reconciled to income tax as follows:
Operating profit
Prima facie tax payable at 30%
Adjust for tax effect of:
Amortisation of customer contracts
Impairment charge on investment in listed shares
Other non–allowable items (net)
Research & development expenditure claim
Under provision in respect of prior years
Effect of different tax rates of subsidiaries operating in other jurisdictions
Income tax attributable to entity
Weighted average effective tax rates:
30 Jun 2008
$
4,713,161
(1,134,888)
42,778
3,621,051
30 Jun 2007
$
GBST Holdings
30 Jun 2008
$
30 Jun 2007
$
3,441,241
(104,888)
(19,922)
3,316,431
2,778,555
(118,938)
61,826
2,721,443
3,441,241
(104,888)
(19,922)
3,316,431
9,752,746
2,925,824
11,337,827
3,401,348
7,387,391
2,216,217
11,444,312
3,433,294
405,000
686,368
29,079
(488,524)
42,778
20,526
3,621,051
–
–
41,072
(106,067)
(19,922)
–
–
686,368
13,056
(256,024)
61,826
–
–
–
9,126
(106,067)
(19,922)
–
3,316,431
2,721,443
3,316,431
37%
29%
37%
29%
The 8% increase compared to 2007 in the weighted average effective consolidated tax rate has resulted primarily from the non–allowable amortisation
of customer contracts ($1,350,000 : tax effect $405,000) and non–allowable impairment of investment in listed shares ($2,287,893 : tax effect
$686,368 – refer note (i) below).
The 8% increase compared to 2007 in the weighted average effective company rate has resulted primarily from the non–allowable impairment of
investment in listed shares ($2,287,893 : tax effect $686,368 – refer note (i) below).
(i) The consolidated group and the company have not brought to account a deferred tax asset relating to the tax benefit on the impairment of the
investment in listed shares due to the uncertainty of realisation of this capital loss.
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GBST HOLDINGS LIMITED ABN: 85 010 488 874
Financial Report for the year ended 30 June 2008
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS
NOTE 5: DIVIDENDS
GBST Group
30 Jun 2008
$
30 Jun 2007
$
GBST Holdings
30 Jun 2008
$
30 Jun 2007
$
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Provision for dividend on ordinary shares
Dividend paid in the period:
Interim fully franked ordinary dividend of 5.5 cents
(2007: 5 cents) per share
2007 final fully franked ordinary dividend of 6 cents
(2006: 4 cents) per share paid in 2008
Total dividends paid
Dividend received on Treasury Shares
Net Dividend paid
Franking credit balance:
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 (see Note 33)
Franking credits available for future reporting periods
NOTE 6: CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Short term bank deposits (a)
–
–
–
–
2,765,515
2,250,412
2,765,515
2,250,412
2,999,290
5,764,805
(1,050)
5,763,755
1,758,720
4,009,132
(78,185)
3,930,947
2,999,290
5,764,805
–
5,764,805
1,758,720
4,009,132
–
4,009,132
6,643,839
2,033,928
6,643,839
2,033,928
367,556
2,080,532
367,556
2,080,532
(862,230)
6,149,165
(1,285,000)
2,829,460
(862,230)
6,149,165
(1,285,000)
2,829,460
1,491,521
–
1,491,521
854,992
14,600,000
15,454,992
228,139
–
228,139
854,992
14,600,000
15,454,992
(a) The effective interest rate on short–term bank deposits was 6.3% in 2007; these deposits had an average maturity of 30 days.
NOTE 7: TRADE AND OTHER RECEIVABLES
GBST Group
30 Jun 2008
$
30 Jun 2007
$
GBST Holdings
30 Jun 2008
$
30 Jun 2007
$
Current
Trade receivables (a)
Controlled entities (c)
Other amounts receivable
9,206,473
–
505,059
9,711,532
3,439,457
–
358,431
3,797,888
3,231,051
210,191
394,252
3,835,494
3,439,457
42,960
366,927
3,849,344
NOTE 7: TRADE AND OTHER RECEIVABLES (CONTINUED)
GBST Group
30 Jun 2008
$
30 Jun 2007
$
GBST Holdings
30 Jun 2008
$
30 Jun 2007
$
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Non–Current receivables
Controlled entities (d)
Other amounts receivable
–
–
–
–
16,027
16,027
60,650,363
–
60,650,363
–
16,027
16,027
(a) Trade debtor terms range between 14 to 30 days. Included in the Group’s trade receivable balance are debtors with a carrying amount of $1,980,797 (2007:
$89,075) which are past due at the reporting date for which the Group has not provided as there has not been a significant change in the credit quality and
the Group believes that the amounts are still considered recoverable. The average age of these receivables is 86 days (2007: 39 days).
Included in the Company’s trade receivable balance are debtors with a carrying amount of $200,164 (2007: $89,075) which are past due at the reporting
date for which the Company has not provided as there has not been a significant change in the credit quality and the Group believes that the amounts are still
considered recoverable. The average age of these receivables is 42 days (2007: 39 days).
(b) There are no balances within trade and other receivables that are impaired. A provision for impairment is recognised when there is an objective evidence
that an individual trade or term receivable is impaired.
(c) The current year amount represents the net balance arising from the tax consolidation.
(d) Intercompany balances are long term and interest bearing using the average overdraft rate of 8.94% p.a. (2007: Nil) except for one short term balance which
is non–interest bearing and repayable on demand.
NOTE 8: INVENTORIES
Current – at cost
Inventory on hand
Work in progress
NOTE 9: FINANCIAL ASSETS
Non–Current
Available for sale financial assets:
Investment in controlled entities at cost (a) (Note 23)
Investment in listed shares at fair value (b)
24,665
446,418
471,083
–
–
–
24,665
394,480
419,145
–
–
–
–
–
1,621,543
1,621,543
781,937
781,937
102
1,621,543
1,621,645
102
781,937
782,039
(a) The fair value of these investments is estimated to be at least $56 million.
(b) During the year the Company increased its shareholding in IT&e to approximately 16%. At 30 June fair valuing this investment resulted in an impairment
charge of $2,287,893 to the profit and loss.
GBST HOLDINGS LIMITED ABN: 85 010 488 874
Financial Report for the year ended 30 June 2008
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS
NOTE 10: PLANT AND EQUIPMENT
GBST Group
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Owned plant and equipment at cost
Provision for depreciation
Leased plant and equipment at cost
Provision for amortisation
Total plant and equipment
(a) Movement in plant and equipment
Consolidated
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
Carrying amount at the end of the year
Year ended 30 June 2008
Balance at the beginning of the year
Additions
Additions through the acquisition of controlled entities
Disposals
Depreciation expense
Carrying amount at the end of the year
Parent Company
Year ended 30 June 2007
Balance at the beginning of the year
Additions
Disposals
Depreciation expense
Reclassification to owned assets – cost
30 Jun 2008
$
7,643,952
(5,287,263)
2,356,689
168,266
(6,933)
161,333
2,518,022
30 Jun 2007
$
GBST Holdings
30 Jun 2008
$
30 Jun 2007
$
3,097,181
(1,807,214)
1,289,967
–
–
–
1,289,967
3,441,156
(2,220,524)
1,220,632
148,433
(6,185)
142,248
1,362,880
3,097,181
(1,807,214)
1,289,967
–
–
–
1,289,967
Owned
$
Leased
$
Total
$
1,133,513
641,765
(42,520)
23,530
1,157,043
–
–
641,765
(42,520)
(442,791)
(23,530)
(466,321)
120,963
(120,963)
(120,963)
1,289,967
1,289,967
849,315
1,192,595
(42,688)
(932,500)
2,356,689
Owned
$
1,133,513
641,765
(42,520)
–
–
120,963
–
1,289,967
–
1,289,967
168,266
–
–
(6,933)
161,333
Leased
$
23,530
–
–
1,017,581
1,192,595
(42,688)
(939,433)
2,518,022
Total
$
1,157,043
641,765
(42,520)
Reclassification to owned assets – accumulated depreciation
Carrying amount at the end of the year
(120,963)
1,289,967
(442,791)
(23,530)
(466,321)
120,963
(120,963)
120,963
–
–
–
1,289,967
NOTE 10: PLANT AND EQUIPMENT (CONTINUED)
Parent Company
Year ended 30 June 2008
Balance at the beginning of the year
Additions
Disposals
Depreciation expense
Carrying amount at the end of the year
Owned
$
Leased
$
Total
$
1,289,967
419,246
(33,477)
(455,104)
1,220,632
–
1,289,967
148,433
–
(6,185)
142,248
567,679
(33,477)
(461,289)
1,362,880
NOTE 11: INTANGIBLE ASSETS
GBST Group
30 Jun 2008
$
30 Jun 2007
$
GBST Holdings
30 Jun 2008
$
30 Jun 2007
$
At Cost
Software systems
Accumulated amortisation
Net carrying value
Leased software
Provision for amortisation
Customer contracts
Accumulated amortisation
Net carrying value
Goodwill
Net carrying value
Total intangibles
18,190,201
(2,756,823)
15,433,378
2,985,455
(996,504)
1,988,951
3,026,381
(1,468,521)
1,557,860
2,985,455
(996,504)
1,988,951
39,073
(2,605)
36,468
8,100,000
(1,350,000)
6,750,000
31,588,226
31,588,226
53,808,072
–
–
–
–
–
–
39,073
(2,605)
36,468
–
–
–
–
–
–
–
–
–
3,350,061
3,350,061
5,339,012
3,350,061
3,350,061
4,944,389
3,350,061
3,350,061
5,339,012
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GBST HOLDINGS LIMITED ABN: 85 010 488 874
Financial Report for the year ended 30 June 2008
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS
NOTE 11: INTANGIBLE ASSETS (CONTINUED)
(a) Movement in intangibles
Consolidated
Year ended 30 June 2007
Balance at the beginning of the year
Additions
Disposals
Amortisation charge
Carrying amount at the end of the year
Year ended 30 June 2008
Balance at the beginning of the year
Additions
Additions through the acquisition of controlled entities
Disposals
Amortisation charge
Carrying amount at the end of the year
Parent Company
Year ended 30 June 2007
Balance at the beginning of the year
Additions
Disposals
Amortisation charge
Carrying amount at the end of the year
Year ended 30 June 2008
Balance at the beginning of the year
Additions
Disposals
Amortisation charge
Carrying amount at the end of the year
Software
Systems
$
Leased
Software
$
Computer
Contracts
$
Goodwill
$
Total
$
2,382,318
82,974
(288)
(476,053)
1,988,951
–
–
–
–
–
1,988,951
–
168,434
39,073
15,044,227
(4,834)
(1,763,400)
15,433,378
–
–
(2,605)
36,468
2,382,318
82,974
(288)
(476,053)
1,988,951
–
–
–
–
–
1,988,951
–
50,339
39,073
(4,843)
(476,587)
1,557,860
–
(2,605)
36,468
–
–
–
–
–
–
–
3,350,061
5,732,379
–
–
–
82,974
(288)
(476,053)
3,350,061
5,339,012
3,350,061
5,339,012
–
207,507
8,100,000
28,238,165
51,382,392
–
(1,350,000)
–
–
(4,834)
(3,116,005)
6,750,000
31,588,226
53,808,072
–
–
–
–
–
–
–
–
–
–
3,350,061
5,732,379
–
–
–
82,974
(288)
(476,053)
3,350,061
5,339,012
3,350,061
5,339,012
–
–
–
89,412
(4,843)
(479,192)
3,350,061
4,944,389
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.
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NOTE 11: INTANGIBLE ASSETS (CONTINUED)
Impairment disclosures
Goodwill is allocated to cash–generating (CGU) units which are based on the Group’s reporting segments.
Broker segment
Wealth Management segment
Total
30 Jun 2008
$
3,350,061
28,238,165
31,588,226
30 Jun 2007
$
3,350,061
–
3,350,061
Broker Services segment goodwill relates to the 2005
the CGU is dedicated, the size of the business,
Palion acquisition which has been fully integrated
geographic location, past performance and other
within the Broker segment.
The Wealth Management segment goodwill relates to
the InfoComp acquisition – see Note 25 (d).
The recoverable amount of goodwill has been
assessed using value in use calculations for each CGU.
Key assumptions used for value–in–use calculations
Value–in–use
The cash–generating unit impairment tests are based
on value in use calculations, using discounted cash
fl ow projections based on actual operating results,
the budgets and fi ve–year strategic plans, approved
by the Board and updated where appropriate and
cash forecasts extrapolated for a further fi ve years.
For the fi nancial year ending 2009, management
has used the 2009 fi nancial budget approved by the
Board. For future fi nancial years, forecast projections
or the current business strategic plan have been used.
The assumptions are generally consistent with past
performance or are based upon the Group’s view of
future market activity.
Growth and discount rates
Growth rates used were generally determined by
factors such as industry sector, the market to which
industry factors. In particular for the emerging UK
market for Wealth Management segment’s existing
products, successful penetration into the market
is assumed. The long term growth rate used to
extrapolate the cash forecasts beyond the fi ve year
period range from 5% to 8%. Discount rates are pre–
tax and are adjusted to incorporate the risks associated
with the industries and countries the business operates
in. A pre–tax discount rate of 15% has been used.
Impact of possible changes to assumptions
With regard to the assessment of the value–in–use
of the CGUs, management has conducted sensitivity
analysis on the effect of a change in the respective key
assumptions on the carrying value of each CGU.
For all the CGUs, the Management believe that as the
excess of the recoverable amount over the carrying
amount of the goodwill is signifi cant, any reasonable
possible change in the assumptions would not have a
material impact on the recoverable amount of
the goodwill.
Impairment
There is no impairment loss to any of the cash
generating units containing goodwill in the 2008
fi nancial year.
GBST HOLDINGS LIMITED ABN: 85 010 488 874
Financial Report for the year ended 30 June 2008
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS
NOTE 12: OTHER ASSETS
GBST Group
30 Jun 2008
$
30 Jun 2007
$
GBST Holdings
30 Jun 2008
$
30 Jun 2007
$
52
8
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
D
E
T
I
M
I
L
I
S
G
N
D
L
O
H
T
S
B
G
Current
Prepaid expenditure
Non–Current
Prepaid expenditure
NOTE 13: TRADE AND OTHER PAYABLES
Current (unsecured)
Trade payables & accruals
Controlled entities
Amount owing to vendors in respect of InfoComp acquisition
Non–Current (unsecured)
Controlled entities
NOTE 14: FINANCIAL LIABILITIES
Current
Bank overdraft (secured)
Bank loan facility (secured)
Finance lease liability (Note 21)
Non–Current
Bank loan facility (secured)
Finance lease liability (Note 21)
Total secured liabilities
711,455
513,605
630,566
513,605
230,685
230,685
13,453
13,453
230,590
230,590
13,453
13,453
6,283,699
–
750,000
7,033,699
2,186,566
–
–
2,186,566
2,268,043
1,980,938
–
4,248,981
2,178,571
–
–
2,178,571
–
–
–
–
7,748,021
7,748,021
1,362,888
3,000,000
122,867
4,485,755
16,000,000
259,896
16,259,896
20,362,888
–
–
–
–
–
–
–
–
1,362,888
3,000,000
59,484
4,422,372
16,000,000
135,545
16,135,545
20,362,888
–
–
–
–
–
–
–
–
–
–
The bank facilities are secured by a registered charge
tax is 6 to 1 in the fi rst twelve months of the facility and
over the assets of the Group. The facility has a six year
not less than two to one going forward. In respect
term, with the fi rst principal repayment due on
of the bank facilities, totalling $20,362,888 at 30
31 December 2008. Interest rates under the facility
June 2008, the company failed to meet the Dividend
are variable. The facility has a number of other
Payout Ratio for the period ended 30 June 2008 and
commercial terms and conditions.
therefore has a breach of the covenant. The bank has
The covenants within the bank borrowings require
that the debt to earnings before interest and tax is not
indicated no action will be taken at this time other than
to adjust the borrowing rate in the facilities.
greater than 2 to 1, dividend payout is 70% or less
The carrying amount of group non current assets
and debt service cost to earnings before interest and
secured is $61,013,792.
NOTE 15: TAX
(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:
Unused tax losses
Provisions and prepaid income
Other items
Transaction costs on equity issue
(c) Reconciliations
(i) Gross movement
The overall movement in the deferred tax account is as follows:
Opening balance
Additions through the acquisition of controlled entities
(Charge)/credit to income statement
Charge to equity
Closing balance
(ii) Deferred tax liability
(a) 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
GBST Group
30 Jun 2008
$
30 Jun 2007
$
GBST Holdings
30 Jun 2008
$
30 Jun 2007
$
53
8
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
D
E
T
I
M
I
L
I
S
G
N
D
L
O
H
T
S
B
G
367,556
2,080,532
791,395
2,080,532
175,732
175,732
174,492
174,492
143,395
143,395
174,492
174,492
588,146
2,139,678
59,913
47,733
2,835,470
–
–
902,584
140,353
95,467
1,138,404
1,070,865
59,913
47,733
1,178,511
–
902,584
140,353
95,467
1,138,404
963,912
608,672
1,134,888
(47,734)
2,659,738
906,758
–
104,888
(47,734)
963,912
963,912
–
118,938
(47,734)
1,035,116
906,758
–
104,888
(47,734)
963,912
174,492
1,240
175,732
144,765
29,727
174,492
174,492
(31,097)
143,395
144,765
29,727
174,492
GBST HOLDINGS LIMITED ABN: 85 010 488 874
Financial Report for the year ended 30 June 2008
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS
NOTE 15: TAX (CONTINUED)
GBST Group
30 Jun 2007
$
GBST Holdings
30 Jun 2008
$
30 Jun 2007
$
54
8
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
D
E
T
I
M
I
L
I
S
G
N
D
L
O
H
T
S
B
G
(c) Reconciliations (continued)
(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
Additions through the acquisition of controlled entities
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
Unused tax losses
Opening balance
Additions through the acquisition of controlled entities
Credited/(charged) to income statement
Closing balance
30 Jun 2008
$
902,584
307,894
929,200
2,139,678
140,353
(80,440)
59,913
95,467
(47,734)
47,733
–
300,778
287,368
588,146
(a) Deferred tax assets not brought to account, the benefits of which will only
be realised if the conditions for deductibility set out in Note 1: Income Tax occur:
– tax losses : operating losses
– tax losses : capital losses
– temporary differences
–
1,029,157
–
853,259
–
49,325
902,584
902,584
–
168,281
1,070,865
55,063
85,290
140,353
143,201
(47,734)
95,467
–
–
–
–
–
–
–
140,353
(80,440)
59,913
95,467
(47,734)
47,733
–
–
–
–
–
686,368
–
853,259
–
49,325
902,584
55,063
85,290
140,353
143,201
(47,734)
95,467
–
–
–
–
–
–
–
NOTE 16: PROVISIONS
Long–Term
Employee benefits (a)
Asset retirement provision (b)
Consolidated
Balance at the beginning of the year
Additional provisions
Amounts used
Unused amounts reversed
Balance at 30 June 2008
Parent Company
Balance at the beginning of the year
Additional provisions
Amounts used
Unused amounts reversed
Balance at 30 June 2008
GBST Group
30 Jun 2008
$
30 Jun 2007
$
GBST Holdings
30 Jun 2008
$
30 Jun 2007
$
1,000,173
467,166
1,467,339
770,414
357,992
1,128,406
737,184
308,459
1,045,643
770,414
357,992
1,128,406
Long–term
Employee benefits
$
Asset Retirement
$
770,414
379,639
(149,880)
–
357,992
172,174
(37,046)
(25,954)
Total
$
1,128,406
551,813
(186,926)
(25,954)
1,000,173
467,166
1,467,339
770,414
35,782
(69,012)
–
357,992
13,467
(37,046)
(25,954)
1,128,406
49,249
(106,058)
(25,954)
737,184
308,459
1,045,643
55
8
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
D
E
T
I
M
I
L
I
S
G
N
D
L
O
H
T
S
B
G
(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 17: 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
4,049,311
4,049,311
2,260,754
2,260,754
2,500,673
2,500,673
2,260,754
2,260,754
192,367
192,367
305,611
305,611
192,367
192,367
305,611
305,611
GBST HOLDINGS LIMITED ABN: 85 010 488 874
Financial Report for the year ended 30 June 2008
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS
NOTE 18: ISSUED CAPITAL
GBST Group
50,296,733 (June 2007: 45,013,562) fully paid ordinary shares
30 Jun 2008
$
25,499,241
25,499,241
30 Jun 2007
$
GBST Holdings
30 Jun 2008
$
30 Jun 2007
$
6,807,508
6,807,508
25,499,241
25,499,241
6,807,508
6,807,508
56
8
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
D
E
T
I
M
I
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I
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G
N
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O
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B
G
Movements in issued capital:
Opening balance
Transfer from options reserve (Note 20)
Share issues during the year:
31 July 2007 Employee exempt share scheme
31 August 2007 Acquisition of InfoComp
*Various dates Employee deferred options scheme
*Various dates Employee exempt options scheme
Ordinary Shares
Opening balance
Share issues during the year:
31 July 2007 Employee exempt share scheme
31 August 2007 Acquisition of InfoComp
*Various dates Employee deferred options scheme
*Various dates Employee exempt options scheme
6,807,508
51,248
5,722,015
304,797
6,807,508
51,248
5,722,015
304,797
107,808
18,260,177
272,500
–
–
–
780,696
–
107,808
18,260,177
272,500
–
–
–
780,696
–
25,499,241
6,807,508
25,499,241
6,807,508
No.
45,013,562
No.
43,968,000
No.
45,013,562
No.
43,968,000
27,432
4,935,183
210,000
110,556
50,296,733
–
–
1,045,562
–
45,013,562
27,432
4,935,183
210,000
110,556
50,296,733
–
–
1,045,562
–
45,013,562
* There were numerous share issues during the year as employees exercised options.
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.
The company does not have an amount of authorised capital.
Options
Management effectively manages the Group’s
For details on options over ordinary shares,
capital by assessing the Group’s fi nancial risks and
see Note 31.
Capital Management
The Board and Management controls the capital of the
group in order to ensure that the Group can fund its
operations and continue as a going concern as well
as provide the shareholders with optimal returns. The
Group also aims to maintain a capital structure that
adjusting its capital structure in response to changes
in these risks and in the market. These responses
include the management of debt levels, distributions
to shareholders and share issues. During the 2008,
the Group paid dividends of $5,763,755 (2007:
$3,930,947). The entity currently has as a target a
dividend payout ratio of 60–70%. This is subject to
regular review depending on the current circumstances
ensures the lowest cost of capital available to the entity.
of the entity.
The Board’s policy is to build and maintain a strong
capital base so as to maintain investor, creditor and
The Company took on debt in the current year to
market confi dence and to sustain future development
fi nance it’s acquisition activity and the current gearing
of the business. The Board monitors the capital mix,
ratio (net debt / total debt and equity) of 33% is within
share price, as well as the return on capital.
the target range of between 30% and 50%. The
The Group’s capital includes ordinary share capital,
reserves and retained earnings, bank facilities, other
fi nancial liabilities; supported by fi nancial assets.
gearing ratio’s for the year ended 30 June 2008 and
30 June 2007 are as follows:
GBST Holdings
Total borrowings
Less cash and cash equivalents
Net debt
Total equity
Total debt and equity
Gearing ratio
GBST Group
30 Jun 2008
$
30 Jun 2007
$
30 Jun 2008
$
30 Jun 2007
$
20,745,651
1,491,521
19,254,130
39,367,728
58,621,858
–
15,454,992
(15,454,992)
20,208,924
4,753,932
20,557,917
228,139
20,329,778
37,873,330
58,203,108
–
15,454,992
(15,454,992)
20,268,477
4,813,485
33%
In funds
35%
In funds
The Group is not subject to any externally imposed capital requirements, other than the facility covenants set out in Note 14.
57
8
0
0
2
t
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a
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A
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B
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GBST HOLDINGS LIMITED ABN: 85 010 488 874
Financial Report for the year ended 30 June 2008
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS
NOTE 19: TREASURY SHARES
GBST Group
30 Jun 2008
$
30 Jun 2007
$
GBST Holdings
30 Jun 2008
$
30 Jun 2007
$
58
8
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
D
E
T
I
M
I
L
I
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G
N
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B
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Treasury Shares (Note 31)
NOTE 20: RESERVES
Equity Remuneration Reserve
Foreign Currency Translation Reserve
–
–
31,253
31,253
–
–
–
–
79,765
55,901
135,666
67,788
–
67,788
79,765
–
79,765
67,788
–
67,788
(a) 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.
(b) The share remuneration reserve records total cost of share issues less amortisation expense, based on a
vesting period of three years and employee employment status. The actual shares were issued at grant date.
(c) The foreign currency translation reserve records exchange differences arising on translation of a foreign
controlled subsidiary.
NOTE 21: CAPITAL, LEASING AND OTHER COMMITMENTS
(a) Finance leasing 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 14)
Non–current (Note 14)
150,167
280,892
431,059
(48,296)
382,763
122,867
259,896
382,763
–
–
–
–
–
–
–
–
75,341
148,345
223,686
(28,657)
195,029
59,484
135,545
195,029
–
–
–
–
–
–
–
–
Finance leases relate to items of plant and equipment and have options to acquire the items on termination.
NOTE 21: CAPITAL, LEASING AND OTHER COMMITMENTS (CONTINUED)
GBST Group
30 Jun 2008
$
30 Jun 2007
$
GBST Holdings
30 Jun 2008
$
30 Jun 2007
$
(b) Non–cancellable operating leases
Lease amounts are payable:
Not later than one year
Later than one year but not later than five years
Later than five years
1,758,991
5,293,464
1,007,907
8,060,362
1,252,771
4,800,307
2,262,742
8,315,820
1,268,223
4,865,081
1,007,907
7,141,211
1,252,771
4,800,307
2,262,742
8,315,820
Non–cancellable leases include rental premises with lease terms up to eight years. The lease agreements require that the minimum lease payments shall be
increased by incremental contingent rentals based on market or CPI. 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
Payable
Not later than one year
NOTE 22: AUDITORS’ REMUNERATION
Remuneration of the auditor of the company for:
Auditing or reviewing the financial report
Other taxation and statutory compliance assistance
Remuneration of other auditors of subsidiaries for:
Auditing the financial report
Other taxation and statutory compliance assistance
495,008
29,680
495,008
29,680
495,008
495,008
29,680
29,680
495,008
495,008
29,680
29,680
149,616
7,320
156,936
23,217
2,039
60,350
4,250
64,600
5,985
2,721
73,183
6,120
79,303
–
–
60,350
4,250
64,600
–
–
59
8
0
0
2
t
r
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a
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GBST HOLDINGS LIMITED ABN: 85 010 488 874
Financial Report for the year ended 30 June 2008
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS
NOTE 23: OTHER GROUP ENTITIES
(a) Controlled entities consolidated
Group entity: GBST Pty Ltd
Country of Incorporation: Australia
Percentage owned: 100% (June 2007: 100%)
Group entity: GBST ESOP Pty Ltd
Country of Incorporation: Australia
Percentage owned: 100% (June 2007: 100%)
Group entity: GBST Australia Pty Ltd
Country of Incorporation: Australia
Percentage owned: 100% (June 2007: 100%)
Subsidiaries of GBST Australia Pty Ltd:
Group entity: GBST Hong Kong Limited
Country of Incorporation: Hong Kong
Percentage owned: 100% (June 2007: 100%)
Group entity: InfoComp Pty Ltd
Country of Incorporation: Australia
Percentage owned: 100% (June 2007: nil)
Group entity: ICP Holdings Pty Ltd
Country of Incorporation: Australia
Percentage owned: 100% (June 2007: nil)
Subsidiaries of ICP Holdings Pty Ltd:
Group entity: InfoComp UK Limited
Country of Incorporation: Australia
Percentage owned: 95.9% (June 2007: nil)
(b) Acquisition of controlled entities
60
8
0
0
2
t
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R
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a
u
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A
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I
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On 31 August 2007 GBST Australia Pty Ltd acquired 100% of ‘InfoComp Pty Ltd and ICP Holdings Pty Ltd’, with GBST Australia Pty Ltd entitled to all profits
earned from purchase date, for a purchase consideration of $55,794,179. As at 30 June 2008 a 4.1% interest in ICP UK still remained to be settled. That
settlement is to be recovered from the deferred consideration payable to the vendors (Note 13). Consequently no minority interest has been accounted for in
the consolidated accounts.
(c) Disposal of controlled entities
One of the subsidiaries of InfoComp which was a dormant entity was liquidated on 27 November 2007.
(d) Deed of cross guarantee
Pursuant to ASIC Class Order 98/1418 (as amended), a number of wholly–owned controlled entities as listed below are relieved from the
Corporations Act 2001 requirements for preparation, audit and lodgement of financial reports and Directors’ Report.
It is a condition of the class order that the Company and each of the controlled entities enter into a Deed of Cross Guarantee (“Deed”). The effect of the Deed
is that the Company guarantees to each creditor payment in full of any debt in the event of winding up any of the controlled entities under certain provisions of
the Corporations Act 2001. If a winding up occurs under other provisions of the Corporations Act 2001, the Company will only be liable in the event that after
six months any creditor has not been paid in full. The controlled entities have also given similar guarantees in the event that the Company is wound up.
The controlled entities subject to the Deed are:
GBST Pty Ltd
GBST ESOP Pty Ltd
GBST Australia Pty Ltd
ICP Holdings Pty Ltd
InfoComp Pty Ltd
NOTE 23: OTHER GROUP ENTITIES (CONTINUED)
Financial information in relation to:
i. Income Statement
Profit before income tax
Income tax expense
Profit after income tax
Profit attributable to members of the parent entity
ii. Retained Earnings
Retained profits at the beginning of the year
Retained profits of subsidiaries acquired
Profit after income tax
Dividends provided for or paid
Retained earnings at the end of the year
iii. Balance Sheet
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Other assets
TOTAL CURRENT ASSETS
NON–CURRENT ASSETS
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
Closed Group
30 Jun 2008
$
6,860,385
(4,111,094)
2,749,291
2,749,291
13,364,881
1,745,767
2,749,291
(5,763,755)
12,096,184
1,045,096
8,828,767
419,145
673,646
10,966,654
1,644,830
2,512,896
53,603,575
2,247,324
230,685
60,239,310
71,205,964
6,389,945
4,485,755
367,556
4,049,311
15,292,567
Parties to deed of
cross guarantee
30 Jun 2008
$
6,860,385
(4,111,094)
2,749,291
2,749,291
13,364,881
1,745,767
2,749,291
(5,763,755)
12,096,184
1,045,096
8,828,767
419,145
673,646
10,966,654
1,644,830
2,512,896
53,603,575
2,247,324
230,685
60,239,310
71,205,964
6,389,945
4,485,755
367,556
4,049,311
15,292,567
61
8
0
0
2
t
r
o
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R
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a
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GBST HOLDINGS LIMITED ABN: 85 010 488 874
Financial Report for the year ended 30 June 2008
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS
NOTE 23: OTHER GROUP ENTITIES (CONTINUED)
NON–CURRENT LIABILITIES
Financial liabilities
Deferred tax liabilities
Long–term provisions
Other liabilities
TOTAL NON–CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Retained earnings
Closed Group
30 Jun 2008
$
16,259,896
175,732
1,467,339
192,367
18,095,334
33,387,901
37,818,063
25,499,241
222,638
12,096,184
37,818,063
Parties to Deed of
Cross Guarantee
30 Jun 2008
$
16,259,896
175,732
1,467,339
192,367
18,095,334
33,387,901
37,818,063
25,499,241
222,638
12,096,184
37,818,063
NOTE 24: FINANCING ARRANGEMENTS
GBST Group
30 Jun 2008
$
30 Jun 2007
$
GBST Holdings
30 Jun 2008
$
30 Jun 2007
$
Other financing facilities (a)
Amount utilised
Unused credit facilities
23,668,799
(21,048,518)
2,620,281
2,625,000
(319,709)
2,305,291
23,467,198
(20,846,916)
2,620,282
2,625,000
(319,709)
2,305,291
(a) This amount comprises bank facilities and lease facilities. The bank overdraft and loan facility are secured by a registered charge over the assets of the Group.
The facility has a six year term, with the fi rst principal repayment due on 31 December 2008 and the end of each quarter after that. Interest rates under the
facility are variable. The facility has a number of other commercial terms and conditions. The lease facility is a “revolving asset fi nance facility” to enable
equipment fi nancing, 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 fi nancing under the
facility.
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NOTE 25: CASH FLOW INFORMATION
GBST Group
(a) Reconciliation of net cash provided by operating activities
30 Jun 2008
$
30 Jun 2007
$
GBST Holdings
30 Jun 2008
$
30 Jun 2007
$
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to profit after income tax
Profit after income tax
Non–cash flows in operating profit:
Depreciation and amortisation
Write down on investments
(Profit)/loss on sale of plant & equipment
Share based payments expensed
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
Cash flow from operations
(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 6)
Short term deposit (Note 6)
Bank overdraft (Note 14)
(c) Non cash financing activities
6,131,695
8,021,396
4,665,948
8,127,881
4,055,438
2,287,893
4,492
171,033
(2,994,900)
(111,809)
(2,560,120)
439,859
763,219
(2,609,019)
737,525
67,963
6,383,269
942,374
–
(9,280)
73,769
(647,460)
(215,756)
(526,228)
2,572
(57,154)
(35,416)
148,114
(65,627)
7,631,304
940,481
2,287,893
(709)
171,033
(84,146)
(334,098)
126,675
(419,145)
(71,204)
(1,289,137)
89,472
(82,763)
6,000,300
942,374
–
(9,280)
73,769
(743,496)
(215,756)
(526,228)
2,572
(57,154)
(35,416)
148,114
(65,627)
7,641,753
1,491,521
–
854,992
14,600,000
228,139
–
854,992
14,600,000
(1,362,888)
128,633
–
15,454,992
(1,362,888)
(1,134,749)
–
15,454,992
During the 2008 financial year the group acquired plant and equipment with an
aggregate value of $207,339 (2007: $nil) by means of finance leases and the
company acquired plant and equipment with an aggregate value of
$187,506 (2007: $nil) by means of finance leases.
During the year the following ordinary shares were issued as non cash consideration:
– InfoComp acquisition
– Employee exempt share plan
– Employee exempt options scheme
These items are not reflected in the Statement of Cash Flows.
Number
4,935,183
27,432
110,556
Issue Price
$3.7000
$3.9300
$0.7505
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GBST HOLDINGS LIMITED ABN: 85 010 488 874
Financial Report for the year ended 30 June 2008
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS
NOTE 25: CASH FLOW INFORMATION (CONTINUED)
GBST Group
30 Jun 2008
$
(d) Acquisition of business
The Group acquired ‘InfoComp Pty Ltd, ICP Holdings Pty Ltd and its subsidiaries’,
a software developer of highly regarded and advanced funds administration and
registry software for the wealth management industry, and the dominant
provider to Australian wrap and master trusts, on 31 August 2007.
30 Jun 2007
$
GBST Holdings
30 Jun 2008
$
30 Jun 2007
$
The purchase was allocated as follows:
Purchase consideration
Transaction costs
Total purchase consideration
This was funded by:
4,935,183 ordinary shares (a)
Cash consideration
Consideration paid at 31 August 2007
Amounts yet to be paid
(a) Market price at purchase date $3.70
Assets and liabilities acquired at acquisition date:
Intellectual Property – Software Systems
Intellectual Property – Customer Contracts
Cash
Future Income Tax Benefit
Other Assets
Payables and Provisions
Borrowings
Goodwill
Total
54,848,640
945,539
55,794,179
18,260,177
36,784,002
55,044,179
750,000
55,794,179
15,000,000
8,100,000
5,549,081
608,672
6,642,914
(8,131,201)
(213,452)
27,556,014
28,238,165
55,794,179
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
The goodwill is attributable to the high profi tability of the acquired business and signifi cant synergies expected to arise after the acquisition of software systems.
The assets and liabilities arising from the acquisition are recognised at fair value which is equal to their carrying value.
Profi t before tax amounting to $2,333,966 is included in the consolidated income statement for the year. Had the results of InfoComp been consolidated for
the full year, consolidated revenue would have been $65,682,152 and consolidated profi t $9,794,444.
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NOTE 26: SEGMENT REPORTING
The Broker Services division supports and provides software solutions to stockbrokers and banks in connection
with share trading, margin lending and option trading in Australia, Hong Kong and New Zealand.
The Wealth Management division supports and provides software solutions to fund managers, superannuation
providers and wrap account providers in connection with client and investment management in Australia and the
United Kingdom. The Wealth Management division also provides a Union membership management system for
use in Australia and New Zealand.
Primary reporting – business segments
Broker Services
Wealth Management
Eliminations
GBST Group
30 Jun 2008
$
7,421,975
REVENUE
Sales to external customers 31,741,200
Inter-segment revenues
–
31,741,200
Total segment revenue
RESULT
Segment result
Unallocated expenses net
of unallocated revenue
Finance costs
Profit before income tax
Income tax expense
Profit after income tax
ASSETS
Segment assets
Unallocated assets
Total Assets
LIABILITIES
Segment liabilities
Unallocated liabilities
Total Liabilities
OTHER
Investments accounted for
using the equity method
Acquisitions of non–current
segment assets
Depreciation and amortisation
of segment assets
Other non–cash
segment expenses
14,506,534
8,921,640
2,458,926
759,113
940,481
–
30 Jun 2007 30 Jun 2008 30 Jun 2007 30 Jun 2008 30 Jun 2007 30 Jun 2008 30 Jun 2007
$
$
$
$
$
$
$
30,410,971 28,998,731
42,169
30,410,971 29,040,900
–
11,357,509
3,863,987
–
–
–
–
–
(42,169)
(42,169)
– 60,739,931 30,410,971
–
–
–
– 60,739,931 30,410,971
–
– 11,285,962 11,357,509
–
(1,533,216)
–
(19,682)
9,752,746 11,337,827
(3,316,431)
8,021,396
(3,621,051)
6,131,695
28,345,285 58,892,849
–
–
– 73,399,383 28,345,285
–
–
73,399,383 28,345,285
8,136,361 25,110,015
–
–
– 34,031,655
–
34,031,655
8,136,361
–
8,136,361
–
–
724,739 51,675,879
942,374
3,114,957
73,769
–
–
–
–
–
–
–
–
–
–
–
–
– 52,434,992
724,739
– 4,055,438
942,374
– 2,458,926
73,769
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GBST HOLDINGS LIMITED ABN: 85 010 488 874
Financial Report for the year ended 30 June 2008
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS
NOTE 26: SEGMENT REPORTING (CONSOLIDATED)
Secondary reporting – geographical segments
Segment revenues from
external customers
Carrying amount of
segment assets
Acquisitions of
non-current segment assets
30 Jun 2008
$
30 Jun 2007
$
30 Jun 2008
$
30 Jun 2007
$
30 Jun 2008
$
30 Jun 2007
$
Geographical Location:
Australia
United Kingdom
49,145,990
30,410,971
70,547,557
28,345,285
11,593,941
–
2,851,826
–
60,739,931
30,410,971
73,399,383
28,345,285
51,002,103
1,432,889
52,434,992
724,739
–
724,739
Accounting policies
Broker Services division provides client accounting
Segment revenues and expenses are those directly
and securities transaction technology solutions for the
attributable to the segments and include any joint
fi nance, banking and securities industry in Australia
revenue and expenses where a reasonable basis of
and South East Asia. Major product lines of the
allocation exists. Segment assets include all assets
division include: Shares, Palion, Margin Lending,
used by a segment and consist principally of cash,
Business Continuity Service, Business Interface
receivables, inventories, intangibles and property, plant
and CMT.
and equipment, net of allowances and accumulated
depreciation and amortisation. While most such assets
can be directly attributed to individual segments, the
carrying amount of certain assets used jointly by two
or more segments is allocated to the segments on a
reasonable basis. Segment liabilities consist principally
of payables, employee benefi ts, accrued expenses,
provisions and borrowings. Segment assets and
liabilities do include deferred income taxes.
Intersegment transfers
Segment revenues, expenses and results include
transfers between segments. The prices charged
on intersegment transactions are the same as those
charged for similar goods to parties outside of the
consolidated group at an arm’s length. These transfers
are eliminated on consolidation.
Business and geographical segments
The consolidated Group has the following two
business segments:
Wealth Management division provides funds
administration and registry software for the wealth
management industry in Australia and the United
Kingdom. Major product lines of the division include:
Composer, Unison and ASP Access. A controlled entity
within the division, which is a dormant entity was
liquidated during the year.
Geographical segments
The consolidated Group’s business segments are
located in Australia with the Wealth Management
division also having operations in the United Kingdom.
The Broker Services division has a customer base in
South East Asia from sales to Australian entities.
Impairment losses
An impairment loss amounting to $2,287,893 relating
to Investment in listed shares within the broker services
segment was recognised as an expense for the year
ended 30 June 2008.
NOTE 27: FINANCIAL RISK MANAGEMENT
(a) Financial risk management policies
The risk management policies are established to
The Group’s principal fi nancial instruments comprise
identify and analyse the risks faced, to set appropriate
of accounts receivable and payable, bank accounts,
risk limits and controls, and to monitor risks and
loans and overdrafts, investments and fi nance leases.
adherence to limits.
The Company’s principal fi nancial instruments include
these items and intercompany receivables/payables.
A fi nance committee consisting of senior executives of
the Group meet on a regular basis to analyse fi nancial
The main purpose of these fi nancial instruments is to
risk exposure and to evaluate treasury management
provide operating fi nance to the Group.
strategies in the context of the most recent economic
conditions and forecasts.
It is, and has been throughout the period under
review, the Group’s policy that no trading in fi nancial
The Executive Management Team’s overall risk
instruments shall be undertaken.
The Company and the Group have exposure to the
following risks from their use of fi nancial instruments
management strategy seeks to assist the consolidated
Group in meeting its fi nancial targets, whilst minimising
potential adverse effects on fi nancial performance.
– credit risk, liquidity risk and market risk. This note
Risk management policies are approved and reviewed
presents information about the exposure to each of
by the Board on a regular basis.
the above risks. Further quantitative disclosures are
included throughout these consolidated fi nancial
(b) Market risk
statements.
Market risk is the risk that changes in market prices,
such as foreign exchange rates, share prices and
The Board of Directors has overall responsibility for the
interest rates will affect income or the value of holdings
establishment and oversight of the Company and the
of fi nancial instruments. The objective of market
Group’s risk management framework. Management
risk management is to manage and control market
is responsible for developing and monitoring the risk
risk exposures within acceptable parameters, while
management policies, and reports to the Board.
optimising the return.
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GBST HOLDINGS LIMITED ABN: 85 010 488 874
Financial Report for the year ended 30 June 2008
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS
NOTE 27: FINANCIAL RISK MANAGEMENT (CONTINUED)
Interest rate risk
The exposure to market risk for the changes in interest rates relates primarily to borrowing obligations. The policy
at the present is to manage interest cost using fi xed and variable rate debt.
At balance date, the Group had the following mix of fi nancial assets and liabilities exposed to Australian variable
interest rate risk.
Financial Assets
Cash
Loans Other Entities
Loans Controlled Entities
Financial Liabilities
Bank Overdraft
Bank Loan
Loans Controlled Entities
GBST Group
GBST Holdings
2008
$
2007
$
2008
$
2007
$
1,491,521
16,074
–
1,507,595
1,362,888
19,000,000
–
20,362,888
15,454,992
33,828
–
15,488,820
–
–
–
–
228,139
16,074
60,650,363
60,894,576
1,362,888
19,000,000
9,728,959
30,091,847
15,454,992
33,828
–
15,488,820
–
–
–
–
Lease liabilities have fi xed rates, all other items
The Company’s only exposure is for intercompany
are variable rate. The exposure to market interest
payables of $1,980,938 (2007: $nil).
rates relates primarily to long and short term debt
obligations.
Foreign currency risk
Share price risk
The Company and Group have an investment in an
ASX listed company, IT&e Limited (see Note 9). This is
The Group is exposed to fl uctuations in foreign
a long term shareholding, however exposure exists to
currencies arising from the sale and purchase of goods
movements in the market price.
and services in currencies other than the Group’s
measurement currency.
(c) Liquidity risk
The Group constantly monitors it’s foreign currency
Group will not be able to meet its fi nancial obligations
exposure, and consideration is given to alternative
as they fall due. The approach to managing liquidity
Liquidity risk is the risk that the Company and the
hedging positions.
At balance sheet date the Group had exposure to
movements in the exchange rate for Great Britain
Pounds in cash and receivables of $2,505,571
(2007: $nil) and payables of $643,755 (2007: $nil).
is to ensure, as far as possible, that there will always
be suffi cient liquidity to meet liabilities when due,
under both normal and stressed conditions, without
incurring unacceptable losses or risking damage to the
Company and the Group’s reputation.
NOTE 27: FINANCIAL RISK MANAGEMENT (CONTINUED)
The Group’s objective is to maintain a balance
receivables. In addition, receivables balances are
between continuity of funding and fl exibility through
monitored on an ongoing basis with the result that the
the use of overdrafts, loans and fi nance leases. The
Group’s exposure to bad debts is not signifi cant.
liquidity risk is managed by monitoring forecast cash
fl ows, the collection of trade receivables and payment
of trade payables, use of borrowing facilities and
ensuring that adequate unutilised borrowing facilities
are maintained.
(d) Credit risk
The maximum exposure to credit risk, excluding the
value of any collateral or other security, at balance
date to recognised fi nancial assets is the carrying
amount, net of any provisions for impairment of those
assets, as disclosed in the balance sheet and notes to
the fi nancial statements. The Company’s and Group’s
exposure to credit risk arises from potential default of
the counter party, with a maximum exposure equal
to the carrying amount of these instruments. Credit
risk arises primarily from exposures to customers. The
Group trades only with recognised, creditworthy third
parties, and as such collateral is not requested nor is
it the Group’s policy to securitise it’s trade and other
In respect of the parent entity, credit risk also
incorporates the exposure of GBST Holdings Limited to
the liabilities of all members of the closed Group under
the deed of cross–guarantee. Refer to Note 23 for
further information.
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 fi nancial instruments entered into.
Approximately 46% (2007: 50%) of the Group’s
revenue is derived from fi ve customers. Approximately
57% (2007: 50%) of the company’s revenue is derived
from fi ve customers.
The carrying amount of the fi nancial assets represents
the maximum credit exposure.
The maximum exposure to credit risk at the reporting
date was:
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GBST Group GBST Holdings
carrying amount
carrying amount
2008
2008
$
$
2007
$
2007
$
Cash and cash equivalents
Trade and other receivables
Other financial assets
1,491,521
9,711,532
1,621,543
12,824,596
15,454,992
3,813,915
781,937
20,050,844
The maximum exposure to credit risk for trade and other receivables at reporting date by geographic region was:
Australia
UK
7,856,394
1,855,138
9,711,532
3,813,915
–
3,813,915
228,139
64,485,857
1,621,645
66,335,641
66,335,641
–
66,335,641
15,454,992
3,865,371
782,039
20,102,402
3,865,371
–
3,865,371
GBST HOLDINGS LIMITED ABN: 85 010 488 874
Financial Report for the year ended 30 June 2008
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS
NOTE 27: FINANCIAL RISK MANAGEMENT (CONTINUED)
(e) Financial Instruments
(i) Financial instrument composition and maturity analysis:
The table below refl ects the undiscounted contractual settlement terms for Group fi nancial instruments of a fi xed
period of maturity, as well as management’s expectations of the settlement period for all other fi nancial instruments.
As such, the amounts may not reconcile to the balance sheet.
GBST Group 0–1 Years
1–2 Years
2–5 Years Over 5 Years Total
08
$
07
$
08
$
07
$
08
$
07
$
08
$
07
$
08
$
07
$
FINANCIAL
ASSETS
Cash (i)
Trade and other
receivables
Available for sale
financial assets
TOTAL FINANCIAL
ASSETS
FINANCIAL LIABILITIES
Bank loan
and overdraft (i)
Lease facilities (ii)
1,491,521 15,454,992
–
–
9,711,532 3,797,888
–
16,027
1,621,543
781,937
–
–
12,824,596 20,034,817
–
16,027
–
–
–
–
–
–
–
–
–
–
–
–
–
1,491,521 15,454,992
–
9,711,532 3,813,915
–
1,621,543
781,937
– 12,824,596 20,050,844
4,362,888
150,167
– 4,000,000
–
150,167
Trade & other payables 7,033,699 2,186,566
–
– 12,000,000 –
–
– 20,362,888 –
–
–
130,725
–
–
–
431,059
–
–
–
–
–
7,033,699 2,186,566
TOTAL FINANCIAL
LIABILITIES
11,546,754
2,186,566 4,150,167
– 12,130,725
–
–
– 27,827,646
2,186,566
(i) These items have variable interest rates.
(ii) These items have fixed interest rates. All other items are non–interest bearing.
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NOTE 27: FINANCIAL RISK MANAGEMENT (CONTINUED)
The table below refl ects the undiscounted contractual settlement terms for Parent Entity fi nancial instruments of
a fi xed period of maturity, as well as management’s expectations of the settlement period for all other fi nancial
instruments. As such, the amounts may not reconcile to the balance sheet.
GBST Holdings 0–1 Years
1–2 Years
2–5 Years Over 5 Years Total
08
$
07
$
08
$
228,139 15,454,992
3,625,303
3,806,384
210,191
42,960
1,621,645
782,039
5,685,278 20,086,375
–
–
–
–
–
07
$
–
16,027
–
–
16,027
FINANCIAL
ASSETS
Cash (i)
Trade and Other
Receivables
Amounts Receivable
Related Parties
Available for Sale
Financial Assets
TOTAL FINANCIAL
ASSETS
08
$
07
$
08
$
07
$
08
$
07
$
–
–
–
–
–
–
–
–
–
–
228,139 15,454,992
–
3,625,303 3,822,411
– 60,650,363
– 60,860,554
42,960
–
–
–
1,621,645
782,039
– 60,650,363
–
66,335,641 20,102,402
FINANCIAL LIABILITIES
Bank Loan and
overdraft (i)
4,362,888
Lease Facilities (ii)
75,341
– 4,000,000
–
75,341
Trade & Other Payables 2,268,043
2,178,571
Amounts Payable
Controlled Entities
TOTAL FINANCIAL
LIABILITIES
1,980,938
–
(i) These items have variable interest rates.
(ii) These items have fixed interest rates. All other items are non–interest bearing.
– 12,000,000
–
–
–
73,004
–
–
–
–
–
–
–
–
– 20,362,888
223,686
–
–
2,268,043 2,178,571
–
–
–
7,748,021
–
9,728,959
–
–
–
8,687,210
2,178,571 4,075,341
– 12,073,004
–
7,748,021
–
32,583,576
2,178,571
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GBST HOLDINGS LIMITED ABN: 85 010 488 874
Financial Report for the year ended 30 June 2008
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS
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NOTE 27: FINANCIAL RISK MANAGEMENT (CONTINUED)
(ii) Net fair values
at market interest rates of similar items, to their present
The fair value of investments traded on active liquid
value. No fi nancial assets and fi nancial liabilities are
markets is determined with reference to quoted
readily traded on organised markets in standardised
market prices.
form other than listed investments.
Term receivables and other loans and amounts due
Financial assets where the carrying amount exceeds
are determined by discounting the cash fl ows, at
net fair values have not been written down as the
market interest rates of similar items, to their present
Group intends to hold these assets to maturity.
value. Other fi nancial assets and fi nancial liabilities
net fair value approximates their carrying value. Loans
payable are determined by discounting the cashfl ow
Aggregate net fair values and carrying amounts of
fi nancial assets and fi nancial liabilities at balance date.
Financial Assets
Cash and cash equivalents
Trade and other receivables
Available–for–sale Financial Assets at fair value
Financial liabilities
Trade and payables
Bank loans and overdrafts
Lease facilities
2008
2007
Carrying
amount
$
Net fair
value
$
Carrying
amount
$
Net fair
value
$
1,491,521
9,711,532
1,621,543
12,824,596
7,033,699
20,362,888
382,763
27,779,350
1,491,521
9,711,532
1,621,543
12,824,596
7,033,699
20,362,888
382,763
27,779,350
15,454,992
15,454,992
3,813,915
781,937
3,813,915
781,937
20,050,844
20,050,844
2,186,566
2,186,566
–
–
–
–
2,186,566
2,186,566
Fair values are materially in line with carrying values. A discount rate of 8.66% (2007: nil%) has been applied to all non–current borrowings to determine
fair value.
NOTE 27: FINANCIAL RISK MANAGEMENT (CONTINuEd)
(iii) Sensitivity analysis
Interest Rate Risk, Foreign Currency Risk and Price Risk
The Group has performed sensitivity analysis relating to its exposure to interest rate risk, foreign currency risk and
price risk at balance date. This sensitivity analysis demonstrates the effect on the current year results and equity
which could result from a change in these risks.
Interest rate sensitivity analysis
At 30 June 2008, the net effect on full year profit and equity as a result of changes in the interest rate on variable
rate financial instruments, with all other variables remaining constant would be as follows:
GBST Group
2008
$
2007
$
GBST Holdings
2008
$
2007
$
Change in profit
Increase in interest rate by 1%
Decrease in interest rate by 1%
Change in Equity
Increase in interest rate by 1%
Decrease in interest rate by 1%
(203,629)
146,000
(203,629)
146,000
203,629
(146,000)
203,629
(146,000)
(203,629)
203,629
146,000
(146,000)
(203,629)
203,629
146,000
(146,000)
Foreign currency risk sensitivity analysis
At 30 June 2008, the effect on profit and equity as a result of changes in the value of the Australian Dollar
to the Great British Pound, with all other variables remaining constant is as follows:
GBST Group
2008
$
2007
$
GBST Holdings
2008
$
2007
$
Change in profit
Improvement in AUD to GBP by 10%
Decline in AUD to GBP by 10%
Change in Equity
Improvement in AUD to GBP by 10%
Decline in AUD to GBP by 10%
Price risk
191,375
(191,375)
191,375
(191,375)
–
–
–
–
198,094 –
(198,094) –
198,094 –
(198,094) –
At 30 June 2008 the net effect on profit and equity of a 1 cent change in the Group’s and the company’s listed
investment, with all other variables remaining constant is $438,255 up\down (2007: $55,656 up\down).
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GBST HOLDINGS LIMITED ABN: 85 010 488 874
Financial Report for the year ended 30 June 2008
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS
NOTE 28: CONTINGENT LIABILITIES
GBST has with its clients a variety of software supply
Under the terms of a Deed of Cross Guarantee
agreements, each of which contain service and
described in Note 23, the Company has guaranteed
performance warranties and indemnities. These
the repayment of all current and future creditors in the
warranties and indemnities are of the standard type
event of any of the entities party to the Deed being
used in the industry.
wound up. No defi ciency in net assets exists in these
companies at reporting date.
Contingent liabilities considered remote: Guarantees
During the year the company entered into a Deed of
Cross Guarantee under which the company and its
subsidiaries guarantee the debts of each other.
NOTE 29: KEY MANAGEMENT PERSONNEL DISCLOSURES
(a) Names and positions held of Group and company key management personnel in offi ce at any time
during the fi nancial year are:
Key Management Person
Position
J Puttick
D Adams
A Brackin
S Lake
D Shirley
J Sundell
Director (Non–executive Chairman)
Director (Independent) (appointed 1 April 2008)
Director (Independent)
Director (Managing Director and Chief Executive Offi cer)
Director (Independent) (resigned 29 April 2008)
Director (Non–executive)
R De Dominicis
Chief Executive Wealth Management (appointed 31 August 2007)
P Fowler
P Salis
I Sanchez
K Sprott
K Wallis
Head of Product and Client Services (resigned 7 February 2008)
Chief Financial Offi cer (appointed 1 October 2007)
Chief Technology Offi cer (appointed 3 March 2008)
Human Resource Executive
Chief Financial Offi cer (resigned 12 October 2007)
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NOTE 29: KEY MANAGEMENT PERSONNEL DISCLOSURES CONTINUED
(b) Key management personnel compensation
GBST Group
2008
$
2007
$
GBST Holdings
2008
$
2007
$
Short–term employee benefits
Post–employment benefits
Other long–term benefits
Share–based payments
2,046,717
107,265
32,308
8,488
2,194,778
1,844,343
123,578
28,802
–
1,966,723
979,149
47,126
32,308
5,349
1,063,932
1,844,343
123,578
28,802
–
1,966,723
Detailed disclosures on compensation for key management personnel are set out in the Remuneration Report
included in 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 benefi cially) during the fi nancial year by key
management personnel, including their related parties, are set out below.
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Directors
J Puttick
D Adams
A Brackin
S Lake
D Shirley
J Sundell
GBST ESOP Pty Ltd as trustee (ii)
Total Directors
Executives
R De Dominicis
P Fowler
P Salis
I Sanchez
K Sprott
K Wallis
Total Executives
Group Total
Balance at
1/7/07
Received as
compensation
Options
exercised
Net change
other (i)
Balance at
30/06/08
7,667,760
–
169,241
3,867,428
–
14,336,053
36,844
26,077,326
–
–
–
–
–
132,578
132,578
26,209,904
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,332
1,332
1,332
–
–
62,702
(216,005)
–
1,081,552
(36,844)
7,667,760
–
231,943
3,651,423
–
15,417,605
–
891,405
26,968,731
1,780,996
–
–
–
–
(133,910)
1,647,086
2,538,491
1,780,996
–
–
–
–
–
1,780,996
28,749,727
(i) Shares purchased or sold, consideration for shareholdings purchased by Group, or excluded from disclosure due to resignation.
(ii) Shares held as trustee for the ESOP Trust (refer Note 31).
GBST HOLDINGS LIMITED ABN: 85 010 488 874
Financial Report for the year ended 30 June 2008
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS
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NOTE 29: KEY MANAGEMENT PERSONNEL DISCLOSURES (CONTINUED)
(e) Option holdings
The numbers of options in the Company held (directly, indirectly or benefi cially) during the fi nancial year by key
management personnel, including their related parties, are set out below.
Balance
01.07.07
Granted as
compensation
Options
exercised
or sold
Options
cancelled/
forfeited
Balance
30.06.08
Total Vested
30.06.08
Total
exercisable
30.06.08
Total
unexercisable
30.06.08
Directors
J Puttick
D Adams
A Brackin
S Lake
D Shirley
J Sundell
Total Directors
Executives
R De Dominicis
P Fowler
P Salis
I Sanchez
K Sprott
K Wallis
Total Executives
Group Total
–
–
–
–
–
–
–
–
100,000
–
–
–
1,332
101,332
101,332
–
–
–
500,000
–
–
500,000
–
100,000
100,000
–
100,000
120,000
420,000
920,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(100,000)
–
–
–
(1,332)
(120,000)
(1,332)
(1,332)
(220,000)
(220,000)
–
–
–
500,000
–
–
500,000
–
100,000
100,000
–
100,000
–
300,000
800,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
100,000
100,000
–
–
–
–
–
–
–
–
100,000
100,000
100,000
100,000
–
–
–
500,000
–
–
500,000
–
–
100,000
–
100,000
–
200,000
700,000
NOTE 30: RELATED PARTY TRANSACTIONS
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
GBST Group
2008
$
2007
$
GBST Holdings
2008
$
2007
$
Compensation and equity interests are set out in Note 29.
Occupancy fees paid to entities of which Mr R De Dominicis
has a beneficial interest.
Maximum deferred consideration payable on InfoComp
acquisition to Mr R De Dominicis and associates.
(b) Transactions with controlled entities
299,554
250,000
–
–
–
–
–
–
Details of transactions & balances with controlled entities are set out in Notes 2, 3, 7, 13 & 23.
NOTE 31: SHARE BASED PAYMENTS
On 9 March 2005, GBST established the GBST
The Trust is treated as a special purpose entity and
Employee Option Plan. The plan comprised two sub–
consolidated. The trust’s shareholding in the company
schemes, being an Exempt Options Scheme for staff
has been disclosed as treasury shares and deducted
generally and a Deferred Options Scheme for select
from equity (refer Note 19).
staff and eligible Directors. During the year two further
schemes were established, an Exempt Shares Plan
and a Zero Exercise Price Option Scheme. A total of
1,002,178 (2007: 481,376) share options remain
outstanding at 30 June 2008 under these schemes.
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 satisfi ed before employees had the benefi t from
GBST ESOP Pty Ltd, in its capacity as trustee of the
holding the share options. Divestiture of the shares is
GBST Employee Share Trust, holds shares in GBST
restricted for a period of 3 years, subject to cessation
for subsequent allocation under the GBST Employee
of employment. No share options were granted during
Option Plan. During the year ended 30 June 2008,
the year under this scheme (2007: nil), and 23,976
36,844 (2007: 2,332,336) shares were issued from
share options (2007: 134,532) remain outstanding at
the trust to meet the exercise of employee options.
30 June 2008. The options lapse on 8 March 2010.
GBST ESOP Pty Ltd held nil shares in GBST at 30 June
2008 (2007: 36,844).
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GBST HOLDINGS LIMITED ABN: 85 010 488 874
Financial Report for the year ended 30 June 2008
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS
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NOTE 31: SHARE BASED PAYMENTS (CONTINUED)
Deferred Options Scheme
During the year the board exercised its discretion to
Under this Scheme select staff are made individual
issue additional options under the company’s deferred
offers of specifi c numbers of share options at the
option scheme. The following further grants were
discretion of the Board. The Board may determine
made under this scheme.
the number of share options, issue price, vesting
conditions, vesting period, exercise price and expiry
date. Share options may be granted at any time,
On 31 July 2007, 420,000 options were issued to
select executive employees. The exercise price for
subject to the Corporations Act and ASX Listing Rules.
each option is $3.92.
At the beginning of the year there were three separate
issues of options outstanding under this scheme, and
On 24 October 2007, 100,000 options were issued
to select executive employees. The exercise price for
a total of 346,844 options were outstanding. During
each option is $3.92.
the year in respect two of those issues, 159,344
options were exercised and no further options were
outstanding. The status of the third issue under this
scheme at 30 June 2008 is as follows:
On 5 December 2005, 240,000 options were
granted to staff in connection with the acquisition of
the Palion business unit. The 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 fi nancial hurdles as summarised below. During the
year 87,500 options were exercised and 100,000
options remain outstanding at balance date. The
options lapsed on 19 July 2008.
On 24 October 2007, 100,000 options were issued
to select executive employees. The exercise price for
each option is $3.80.
These deferred options are divided into three tranches.
The fi rst 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
options lapse.
In addition to continuity of employment, the vesting of
options is conditional upon the company’s fi nancial
growth rate exceeding certain thresholds.
NOTE 31: SHARE BASED PAYMENTS (CONTINUED)
Executive options
Employee share option plan zero exercise price
The shareholders of the company at the 2007 annual
option scheme
general meeting approved the issue of 500,000
options to the company’s Chief Executive Offi cer and
this occurred on 19 December 2007. The exercise
price for each option is $3.85. The options vest 18
months after the date of grant. The options have a term
of 24 months from the date of grant. On cessation of
Under this scheme select staff are made individual
offers of specifi c numbers of share options at the
discretion of the Board. There is no price to be paid to
exercise the options and convert the options into shares
but the options cannot be exercised until continuity of
employment all unvested options lapse.
employment tests have been passed.
The executive options are subject to fi nancial
performance measures being met.
Exempt shares plan
85,894 Zero exercise price options (ZEPOs) were
granted on 20 July 2007. The ZEPOs are divided
into three tranches. The fi rst tranche of 20% vest
and may be exercised after 12 months and lapse if
Under this plan employees were offered $1,000
unexercised in 36 months. The second tranche of
worth of ordinary shares. There was no payment or
30% vest and may be exercised after 24 months and
performance criteria that was required to be met prior
lapse if unexercised in 48 months. The third tranche of
to receiving the shares. Divestiture of the shares is
50% vest and may be exercised after 36 months and
restricted to the earlier of 3 years from the date of issue
lapse if unexercised after 60 months. On cessation of
of the shares and cessation of employment. 27,432
employment all unvested options lapse.
shares were issued under the exempt scheme. At the
company’s 2007 annual general meeting the issue of
these shares was ratifi ed and the exempt employee
share plan was approved by shareholders.
At the company’s 2007 annual general meeting the
issue of these ZEPOs was ratifi ed and the Employee
Share Option Plan Zero Exercise Price Option Scheme
was approved by shareholders.
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GBST HOLDINGS LIMITED ABN: 85 010 488 874
Financial Report for the year ended 30 June 2008
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS
NOTE 31: SHARE BASED PAYMENTS (CONTINUED)
The performance criteria associated with each grant of share options made under the Deferred Options Scheme
Continued employment until
Performance criteria
financial performance hurdle
80
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is summarised below:
Grant date
5 December 2005
Tranche 1
31 October 2007
Tranche 2
31 October 2008
31 July 2007
Tranche 1 (20%)*
31 July 2008
Tranche 2 (30%)*
31 July 2009
Tranche 3 (50%)*
31 July 2010
24 October 2007
Tranche 1 (20%)*
24 October 2008
Targeted growth of 15% or greater in GBST’s normalised earnings per
share for the year ended 30 June 2007. The target growth percentage
is moderated against relative increases or decreases in ASX trading volumes.
Either;
• The annual percentage growth in earnings before interest, tax, depreciation and
amortisation (EBITDA) for the year ended 30 June 2008 meets or exceeds 25%, or
• The annual percentage growth in earnings per share for the year ended 30 June 2008
meets or exceeds 15%.
If normalised EPS CAGR for 2008 compared to 2007 is:
• Less than 10%: no options vest
• Equal to 10%: 33.33% of options vest
• Greater than 10% but less than 20%: pro rated vesting between
33.33% and 100%
• Equal to or greater than 20%: 100% vesting.
If normalised EPS CAGR for the combined 2008 and 2009,
compared to 2007 is:
• Less than 10%: no options vest
• Equal to 10%: 33.33% of options vest
• Greater than 10% but less than 20%: pro rated vesting between
33.33% and 100%
• Equal to or greater than 20%: 100% vesting.
If normalised EPS CAGR for the combined 2008, 2009 and 2010, compared to 2007 is:
• Less than 10%: no options vest
• Equal to 10%: 33.33% of options vest
• Greater than 10% but less than 20%: pro rated vesting between
33.33% and 100%
• Equal to or greater than 20%: 100% vesting.
If normalised EPS CAGR for 2008 compared to 2007 is:
• Less than 10%: no options vest
• Equal to 10%: 33.33% of options vest
• Greater than 10% but less than 20%: pro rated vesting between
33.33% and 100%
• Equal to or greater than 20%: 100% vesting.
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NOTE 31: SHARE BASED PAYMENTS (CONTINUED)
Grant date
Continued employment until
24 October 2007 continued
Tranche 2 (30%)*
24 October 2009
Tranche 3 (50%)*
24 October 2010
24 October 2007
Tranche 1 (20%)*
24 October 2008
Tranche 2 (30%)*
24 October 2009
Tranche 3 (50%)*
24 October 2010
19 December 2007
19 June 2009
Performance criteria
financial performance hurdle
If normalised EPS CAGR for the combined 2008 and 2009,
compared to 2007 is:
• Less than 10%: no options vest
• Equal to 10%: 33.33% of options vest
• Greater than 10% but less than 20%: pro rated vesting between
33.33% and 100%
• Equal to or greater than 20%: 100% vesting.
If normalised EPS CAGR for the combined 2008, 2009 and 2010, compared to 2007 is:
• Less than 10%: no options vest
• Equal to 10%: 33.33% of options vest
• Greater than 10% but less than 20%: pro rated vesting between
33.33% and 100%
• Equal to or greater than 20%: 100% vesting.
If normalised EPS CAGR for 2008 compared to 2007 is:
• Less than 10%: no options vest
• Equal to 10%: 33.33% of options vest
• Greater than 10% but less than 20%: pro rated vesting between
33.33% and 100%
• Equal to or greater than 20%: 100% vesting.
If normalised EPS CAGR for the combined 2008 and 2009,
compared to 2007 is:
• Less than 10%: no options vest
• Equal to 10%: 33.33% of options vest
• Greater than 10% but less than 20%: pro rated vesting between
33.33% and 100%
• Equal to or greater than 20%: 100% vesting.
If normalised EPS CAGR for the combined 2008, 2009 and 2010, compared to 2007 is:
• Less than 10%: no options vest
• Equal to 10%: 33.33% of options vest
• Greater than 10% but less than 20%: pro rated vesting between
33.33% and 100%
• Equal to or greater than 20%: 100% vesting.
The Company’s financial performance in the financial year ending 30 June 2008 is when
measured at the Earnings per Share level 20% greater in the financial year ending 30
June 2008 when compared to the financial year ending 30 June 2007.
* If the performance condition for Tranche 1 is not met at the first exercise date, then 50% of those options lapse and 50% are rolled into Tranche 2.
If the performance condition for Tranche 2 is not met at the first exercise date for Tranche 2, then 50% of those options lapse and 50% are rolled into Tranche 3.
If the performance condition for Tranche 3 is not met at the first exercise date for Tranche 3, then all remaining options will lapse.
EPS – Earnings per share
CAGR – Compound average growth rate
GBST HOLDINGS LIMITED ABN: 85 010 488 874
Financial Report for the year ended 30 June 2008
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS
NOTE 31: SHARE BASED PAYMENTS (CONTINUED)
The following table illustrates the number (No.), weighted average exercise price (WAEP) and movement in share
options under these schemes issued during the period.
Outstanding at the beginning of the period
Granted during the period
Forfeited during the period
Exercised during the period
Expired during the period
Outstanding at the end of the period
Exercisable at the end of the period
Jun 2008 No.
Jun 2008 WAEP
Jun 2007 No.
Jun 2007 WAEP
481,376
1,205,894
327,692
357,400
–
1,002,178
123,976
$0.92
$3.60
$3.83
$0.88
–
$3.21
$1.01
3,911,932
–
52,658
3,377,898
–
481,376
111,844
$0.80
–
$1.28
$0.77
–
$0.92
$1.27
The options outstanding at 30 June 2008 had a weighted average exercise price of $3.21 and a weighted
average remaining contractual life of 19 months. The exercise price for share options outstanding under the
Exempt and Zero Exercise Price Options Schemes is nil, the exercise prices for share options outstanding under the
Deferred Options Scheme and Executive Scheme range from $1.25 to $3.92 in respect of options outstanding at
30 June 2008.
The expense recognised in the income statement in relation to share–based payments is disclosed in Note 3.
No person entitled to exercise any option had or has any right by virtue of the option to participate in any share
issue of any other body corporate.
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NOTE 32: 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
(b) Weighted average number of ordinary shares
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
GBST Group
2008
GBST Group
2007
12.44
12.37
$
6,131,695
6,131,695
6,131,695
18.11
17.77
$
8,021,396
8,021,396
8,021,396
49,308,236
44,302,441
268,810
846,643
49,577,046
45,149,084
(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 31).
NOTE 33: SUBSEQUENT EVENTS
The directors recommend a fi nal dividend of
The fi nancial report was authorised for issue on
4.0 cents per share to be paid to the holders of fully
29 August 2008 by the board of directors.
paid ordinary shares on 26 September 2008. The
total amount of the dividend will approximate
$2.0 million. The dividend has not been provided for
in the fi nancial statements.
As outlined in the Future Developments section of the
Directors’ Report, the company is actively pursuing
opportunities to expand. Other than for the impact
(if any) of these prospects, no matters or circumstances
Since balance date the group has incorporated three
have arisen since the end of the fi nancial year which
wholly owned subsidiaries in the UK.
signifi cantly affected or may signifi cantly affect the
operations of GBST, the results of those operations,
or the state of affairs of GBST in future fi nancial years.
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GBST HOLDINGS LIMITED ABN: 85 010 488 874
Financial Report for the year ended 30 June 2008
NOTES TO AND FORMING PART
OF THE FINANCIAL STATEMENTS
NOTE 34: CHANGE IN ACCOUNTING POLICY
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 fi nancial statements at
reporting date.
AASB Amendment
AASB Standard affected
Nature of change in accounting policy
and impact
Application date
of the Standard
Application date
for the Group
1.1.2009
1.7.2009
The disclosure requirements of AASB
114: Segment Reporting have been
replaced due to the issuing of AASB
8: Operating Segments in February
2007. These amendments will involve
changes to segment reporting disclosures
within the financial report. However, it is
anticipated there will be no direct impact
on recognition and measurement criteria
amounts included in the financial report.
AASB 2007–3 Amendments to
Australian Accounting Standards
AASB 5: Non–current Assets
Held for Sale and Discontinued
Operations
AASB 6: Exploration for and
Evaluation of Mineral Resources
AASB 102: Inventories
AASB 107: Cash Flow
Statements
AASB 119: Employee Benefits
AASB 127: Consolidated and
Separate Financial Statements
AASB 134: Interim Financial
Reporting
AASB 136: Impairment of Assets
1.1.2009
1.1.2009
1.7.2009
1.7.2009
AASB 8 Operating segments
AASB 114: Segment Reporting
As above
AASB 2007–6 Amendments to
Australian Accounting Standards
AASB 1: First time adoption
of AIFRS
AASB 101: Presentation of
Financial Statements
AASB 107: Cash Flow
Statements
AASB 116: Property, Plant and
Equipment
AASB 138: Intangible Assets
The revised AASB 123: Borrowing Costs
issued in June 2007 has removed
the option to expense all borrowing
costs. This amendment will require the
capitalisation of all borrowing costs directly
attributable to the acquisition, construction
or production of a qualifying asset.
However, there will be no direct impact
to the amounts included in the financial
Group as they already capitalise borrowing
costs related to qualifying assets.
AASB 123 Borrowing costs
AASB 123 Borrowing Costs
As above
AASB 2007–8 Amendments to
Australian Accounting Standards
AASB 101: Presentation of
Financial Statements
The revised AASB 101: Presentation of
Financial Statements issued in September
2007 requires the presentation of a
statement of comprehensive income
and makes changes to the statement of
changes in equity.
1.1.2009
1.1.2009
1.7.2009
1.7.2009
AASB 101
AASB 101: Presentation of
Financial Statements
As above
1.1.2009
1.7.2009
NOTE 35: COMPANY DETAILS
The registered offi ce of the company is:
GBST Holdings Limited
c/- McCullough Robertson
Level 11, Central Plaza Two
66 Eagle Street
Brisbane QLD 4000
The Group’s principal places of business are:
5 Cribb Street
Milton QLD 4064
Suite 1, Level 26
259 George Street
Sydney NSW 2000
Level 2
63 Market Street
Wollongong NSW 2530
Suite 102
150 Minories
London
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ADDITIONAL INFORMATION
Shareholding Information as at 5 September 2008
(e) 20 Largest Shareholders – Ordinary Shares
(a) Distribution of Shareholders
Name
Category (size of holding)
Number ordinary
No of
ordinary shares
% Held of
Issued
Ordinary
Capital
1
CROWN FINANCIAL PTY LTD
14,571,605
28.96%
2 MR JOHN FRANCIS PUTTICK
5,010,440
9.96%
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1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
179
403
169
175
34
(b) The number of shareholdings in less than
marketable parcels is 116
(c) The names of the substantial shareholders listed in
the company’s register are:
Shareholder
Number ordinary
Crown Financial Pty Ltd
15,400,605
John Francis Puttick
Perpetual Limited
7,667,760
7,480,506
Stephen Maurice Linton Lake
3,567,428
(d) Voting rights
The company only has ordinary shares on issue.
There are 50,308,524 ordinary shares on issue.
3
4
5
6
7
8
9
RBC DEXIA INVESTOR SERVICES
AUSTRALIA NOMINEES PTY LIMITED
STEPHEN MAURICE LINTON LAKE
RBC DEXIA INVESTOR SERVICES
AUSTRALIA NOMINEES PTY LIMITED
GERALDINE ANN MAUNDER
& JOHN FRANCIS PUTTICK
NATIONAL NOMINEES LIMITED
ROBERT DE DOMINICIS
RAYMOND TUBMAN
10 BARRY BECAREVIC
11 COGENT NOMINEES PTY LIMITED
12 WANGARUKA HOLDINGS PTY LTD
13
TIMENOW PTY LTD
14
MR JOHN FRANCIS PUTTICK &
MS GERALDINE ANN MAUNDER
15 BERISLAV BECAREVIC & IVANKA BECAREVIC
520,783
16
J P MORGAN NOMINEES AUSTRALIA LIMITED
480,809
17
MERRILL LYNCH (AUSTRALIA) NOMINEES
PTY LIMITED
4,643,781
3,567,428
9.23%
7.09%
2,249,240
4.47%
2,000,000
1,467,865
1,061,758
1,061,758
872,408
807,213
709,238
709,238
657,320
343,285
300,000
248,000
3.98%
2.92%
2.11%
2.11%
1.73%
1.60%
1.41%
1.41%
1.31%
1.04%
0.96%
0.68%
0.60%
0.49%
248,000
0.49%
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.
18
TPIC PTY LIMITED
19 BOGASI PTY LTD
20 BOGASI PTY LTD
CORPORATE DIRECTORY
REGISTERED OFFICE
c/- McCullough Robertson, Lawyers
Level 11, Central Plaza Two
66 Eagle Street
Brisbane QLD 4000
SHARE REGISTRY
Link Market Services
Level 12, 300 Queen Street
Brisbane QLD 4000
Ph 02 8280 7454
STOCK EXCHANGE LISTING
GBST Holdings Limited shares are quoted on
the Australian Stock Exchange under the code GBT.
VOLUNTARY RESTRICTIONS
Details of shares that are held in voluntary escrow:
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 789,105 options are on issue to 57 employees under
the GBST Holdings Limited Employee Option Plan.
AUDITORS
Hayes Knight Audit (Qld) Pty Ltd
Level 19, 127 Creek Street
Brisbane QLD 4000
Ph 07 3229 2022
Fax 07 3229 3277
Ph 07 3233 8888
Fax 07 3229 9949
PRINCIPAL PLACE OF BUSINESS
5 Cribb Street
Milton QLD 4064
Ph 07 3331 5555
Fax 07 3367 0181
www.gbst.com
POSTAL ADDRESS
PO Box 1511
Milton QLD 4064
DIRECTORS
John Francis Puttick
Stephen Maurice Linton Lake
Joakim James Sundell
Allan James Brackin
David Campbell Adams
COMPANY SECRETARIES
David Michael Doyle
John Francis Puttick
GBST is a leading provider of securities transaction and fund administration software for
the fi nancial services industry.
GBST builds, owns and manages software products and we provide support for our customers who use
these products. We are focused on earning our revenue from the fi nancial services sector and aim to use
technology applications to earn recurring revenue from areas such as transactions processing, reporting,
account management, books and records, data and content.
GBST Broker Services division is Australia’s leading provider of client accounting and securities transaction
technology. Capital market participants such as banks, clearing houses, custodians, fund managers, margin
lenders and institutional and retail stockbrokers use GBST’s specialist market access and transaction solutions
to process up to $130 billion of ASX trades every month.
GBST doubled in size in August 2007 with the purchase of InfoComp, a specialist provider of wealth
management software.
GBST Wealth Management division is now the leading provider of funds administration and registry
software to the Australian wealth management industry. It offers an integrated system for the administration
of wrap platforms, master trusts, superannuation, pensions, risk and debt. GBST’s wealth management
software administers funds valued at more than $150 billion in Australia and the United Kingdom.
CONTENTS
Highlights
Chairman’s and
Managing Director’s report
Financial report
Corporate governance statement
1
2
7
8
Directors’ report
Financial statements
Independent auditor’s report
Additional information
Corporate directory
13
30
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89
NOTICE OF AGM
The Annual General Meeting of
GBST Holdings Limited will be held at:
McCullough Roberston
Level 11, Central Plaza Two
66 Eagle Street, Brisbane
on Thursday 23 October at 12.30pm.
Technology for Financial Markets
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annual report 2008