GBST
Visual Identity
Guidelines
July 2012
Annual Report 2012
Contents
1 The Year in Review
2
Chairman’s and
Managing Director’s Report
7 GBST Product Suite
8
Executive Team
9 Board of Directors
10 Corporate Governance
Statement
14 Directors’ Report
29 Auditor’s Independence
Declaration
30 Financial Statements
84 Directors’ Declaration
85 Independent Auditor’s Report
87 Additional Information
88 Corporate Directory
Notice of AGM
GBST Holdings Limited (GBST) will
hold its Annual General Meeting
at 3.30pm (Brisbane Time) on
Thursday the 25th October
2012 at the office of McCullough
Robertson, Level 11 Central Plaza
Two, 66 Eagle Street, Brisbane.
GBST is one of Australia’s leading
technology services companies.
We specialise in providing securities
transaction and fund administration
software for the financial services industry.
Our software platforms connect capital
markets throughout Europe, Asia and
Australasia, and administer funds valued at
more than $350 billion in Australia and the
United Kingdom.
Through the Syn platform, GBST Capital Markets provides
next-generation technology to process equities, derivatives, fixed
income and managed funds transactions to global capital market
participants.
Through the Composer platform, GBST Wealth Management
provides fund administration and registry software to the wealth
management industry in Australia and the UK.
GBST Financial Services is a wholesale provider of access to
financial products and related data information transactions for
financial advisors and institutions and, through Emu Design, web
design services.
The year in review
Group Total
Revenue
$77m
EBITDA
Cash EPS*
14.9 cents
$14.2m
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’09 ’10
’11
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’09 ’10
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Group revenue increased to a record $77 million, driven by growing
international sales of the GBST Composer wealth management platform
Substantial investment in research and development continued to
consolidate GBST’s technology lead over competitors, leading to an increase
in market share and providing a strong foundation for global growth
GBST completed its first Australian customer installation using the Syn
next-generation back- and middle office platform for capital markets
Net profit increased by 135 per cent to $3.25 million
Dividend payments for the year rose to 4.5 cents for the year,
and a final fully franked dividend of 2.5 cents will be paid on
24 October 2012
*Cash EPS is calculated by dividing the NPAT excluding amortisation
and impairment by the weighted average number of shares. It is a
non-IFRS measure that is used to assess the Group’s ability to
generate cash per security, and has not been tax affected.
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
1
Chairman’s and Managing Director’s Report
Dear fellow shareholders,
The 2012 financial year was characterised by economic
uncertainty and volatility in global financial markets, and was
particularly difficult for our customers in the financial services
sector. Notwithstanding these challenges, it was a milestone
year for GBST as we posted record sales revenue.
This performance was underpinned by strong growth in
the UK operations and GBST’s revenues outside Australia
rose by 37%, demonstrating substantial progress with
our international expansion strategy which began with the
acquisition of the Composer platform in 2007.
GBST is a financial services technology leader, and
through our flagship software platforms Shares and Syn
for capital markets and Composer for wealth management,
we provide securities transaction and fund administration
technology for the financial services sector.
Our software and infrastructure platforms support many
of the world’s largest institutional banks, stockbrokers
and wealth managers. These customers depend on
us for sophisticated services that comply with strict
financial markets regulation and are reliable, scalable, and
technologically strong.
Our business model is based on recurring revenue through
participating in, or exposure to, financial services transaction
processing, asset administration and asset values.
Financial overview
GBST’s net profit after tax increased to $3.3 million in the
2012 financial year compared to $1.4 million in FY2011, an
increase of 135%. Excluding amortisation, net profit after
tax was $9.9 million, up from $7.7 million in the prior year.
Operating EBITDA was $15.5 million, up 4% from $14.9
million in the previous year.
Group revenue increased 13% to a record $77 million,
reflecting strong sales of Composer in the UK. Revenue in
the Australian Broker Services and Global Broker Services
divisions decreased slightly from the previous year, as
difficult market conditions continued. Overall, this was a
solid result in a fragile and constrained environment.
Amortisation of software systems and customer
contracts that resulted from acquisitions was $6.7 million,
compared to $6.3 million in the prior year and $8.0 million
of GBST funded research and development expenditure
was expensed.
The company continued to reduce debt, and senior debt
during the year decreased by $6.0 million to $18.0 million
at 30 June 2012 from $24.0 million at 30 June 2011.
Notwithstanding
challenges, it was
a milestone year
for GBST as we
posted record sales
revenue.
Dr John Puttick, Chairman
2
GBST is well
positioned to
maintain its positive
momentum in the
year ahead.
Mr Stephen Lake, Managing Director
and Chief Executive Officer
Dividends
Directors have declared a final dividend of 2.5 cents per
share, fully franked, which will be paid on 24 October 2012.
Total dividends paid for the year ended 30 June 2012 were
4.5 cents per share, fully franked.
Building software for success
We work closely with our customers, developing and
tailoring software to meet their specific needs. This
approach, which can involve years of development and
testing, has helped establish our products’ competitive
advantage.
During the year we invested $8.0 million in R&D, up from
$7.3 million the year before. Financial services technology
has continued to evolve rapidly, despite the difficult global
economy. Capital markets are required to process greater
volumes of sophisticated information faster, with better
reporting of and control over risk, in an environment where
there is unrelenting pressure to cut costs.
Composer is growing market share in the UK, where the
Financial Services Authority’s Retail Distribution Review is
driving change across the retail investment industry. This
legislation is similar to the Future of Financial Advice (FoFA)
reforms in Australia, where we are seeing similar changes
to increase consumer confidence in the financial system
and financial advice industries.
The Composer wrap platform was developed to provide
the first individual tax wrapper system and a platform
for investors to access a broad range of investment
products. This first-mover advantage has helped us
secure substantial sales of Composer to some of the
world’s leading wealth management and pension
administration companies.
Our experience has shown us that securing such
advantage takes considerable forward planning, as
evidenced by our investment in the Syn technology.
This platform, we believe, positions us in good stead
in the Australian capital markets where we service the
institutional and retail broking sectors. We are now building
Syn into a truly worldwide post-trade processing capital
markets solution.
Australian Broker Services
The Australian Broker Services division provides client
accounting and securities transaction technology to capital
market participants, which were impacted by market
uncertainty and weak trading conditions during the year.
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
3
Chairman’s and Managing Director’s Report (continued)
2005
2006
2007
2008
Founded in 1983, GBST was listed on
the Australian Securities Exchange in
2005 as Australia’s largest provider of
securities transaction processing.
GBST acquires the DCA fully integrated
client accounting system, which is
Australia’s leading derivatives transaction
processing technology.
GBST acquires the Composer wealth
management and registry management
platform, which provides GBST’s
beachhead into the UK market.
GBST acquires the Syn technology to
develop its next-generation technology
platform for capital markets and
the Emu Design web design and
development consultancy.
Division revenue declined to $27.4 million compared to
$28.0 million in the previous year despite an increase in
market share.
Operating EBITDA declined to $9.3 million from
$9.8 million in the prior year, reflecting the economic
environment and the division’s continued contribution to
research and development.
Global Broker Services
GBST acquired the Syn technology in 2008. Since
then, we have invested significantly to create a powerful
technology that offers a single back- and middle-office
platform to process equities, derivatives, fixed income and
managed funds transactions for capital markets customers
in Asia and Europe.
Importantly, Australian Broker Services completed its
first Australian implementation of the Syn platform. This
platform is the key to GBST’s further market share growth
and offers next generation technology to process equities,
derivatives, fixed income and managed fund transactions.
This was a year of substantial progress and were it not
for delays in some major projects, the division would have
reported an improved result. The current focus for this
business is to build our presence in Asia and increase
market awareness of the Syn platform.
During the year, the division renewed customer contracts
and gained two new customers. While customer spending
continued to be constrained, the company’s Front Office
product increased market share and rollout is progressing
to plan.
We anticipate continued growth, as responding to
regulatory reform can prove time-consuming and
expensive for market participants. Recent changes to
direct capital liquidity requirements, for example, have
resulted in the growth of third party clearing in Australia.
GBST has a strong offering for third party clearing and
continues to grow market share.
Capital markets in Europe were among the most affected
by the ongoing sovereign debt crisis. In a difficult year for
our customers, revenue declined 3 per cent to $8.8 million.
Operating EBITDA was consequently lower, reflecting the
depressed economic environment and the costs of our
continued research and development program.
The new Syn 2.0 platform offers highly flexible technology
which can manage multiple financial instruments,
currencies and markets. Its improved modelling capabilities
enable faster tailoring of services to meet changing market,
regulatory and customer service requirements and strict
risk controls. Increasingly, our customers are looking for
post-trade processing for all Asian capital markets, and our
ongoing development is focused on the development of a
‘pan-Asian’ solution.
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2009
2010
2011
2012
GBST launches the ComposerWeb
portal for financial advisers.
GBST begins its program to develop the
company’s next-generation Australian
capital markets platform through
conversion to the Syn technology.
GBST releases the Syn 2.0 platform
for Asian and European capital markets
and, in Australia, launches its GBST
FrontOffice software for advisers.
GBST completes the first installation
of Syn for an Australian client and its
UK wealth management division grows
significantly.
Wealth Management
GBST’s Wealth Management division administers more
than $350 billion of assets under advice in Australia and
the UK for financial institutions and fund managers, earning
revenue through licence fees based both on fixed and
variable fee structures and consulting.
The division continued to add new clients and secured
new contracts during the year, particularly in the UK.
Revenue increased to $36.2 million, up 33% from $27.1
million in the prior year. Operating EBITDA also increased
33% to $9.2 million.
This was a standout achievement attributable to the
competitive advantage provided by our Composer
technology and an outstanding performance by our
team, stimulated by the changes required by the UK
Retail Distribution Review legislation. Composer offers
a fully-integrated platform to administer wraps including
retirement and savings products, managed funds and
structured products. It is highly flexible adapting to
regulatory change and the needs of both large and small
investment fund platforms.
managers. The FoFA reforms are providing opportunities
as fund managers review existing systems to determine
whether they can accommodate the effects of the legislation.
GBST Financial Services
This division provides distribution of financial products and
related data, transactions management, and web design
services through Emu Design for financial institutions,
GBST and other organisations. Operating revenue
increased 16% to $3.9 million.
Operating EBITDA was lower, reflecting less internal work
compared to the prior year when Emu Design contributed
to the modern, user-friendly look and feel of GBST’s front
office products. Emu’s success was the springboard for
the extension of its services into developing large-scale
retail and industrial e-commerce websites and its business
continues to grow.
The quantitative data services business launched new
products during the year, including a tax analyser for
superannuation funds and new after-tax benchmarks.
Appointment of new director
Sales momentum is expected to continue as the UK
pension regulations come into force and further Financial
Services Authority changes need industry responses to be
in place by December 2013.
In Australia, where GBST has many long-standing
customers, new products were launched for a major bank,
and two migration projects were completed for large fund
In December 2011 we were delighted to welcome to the
board Dr Ian Thomas, whose substantial international
leadership experience includes roles with aerospace
giant Boeing in Australia, Europe and the United States.
We anticipate that Dr Thomas’ strategy expertise will
serve us well as the company expands globally and
enters new markets.
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
5
Chairman’s and Managing Director’s Report (continued)
Supporting the community
At GBST we aim to provide a safe and supportive
environment for staff. We match employee donations to
tax-deductible charities and extend the value of our staff’s
voluntary charitable work with financial contributions.
Recent programs have included sponsorship to educate 11
children in Tanzania, Kenya and Sri Lanka through Innocents
Relief, and supporting 13 orphanages, schools, homes and
rehabilitation centres for children in Indonesia, Kenya, Peru,
The Philippines, South Africa, Sri Lanka, Tanzania, Uganda
and Papua New Guinea. We also supported a staff member
who spent a year at an orphanage in Bangladesh through
the donation of computers.
Through these and other programs, we acknowledge
the drive and passion of our staff, whose effort and hard
work contribute so much to GBST’s continued success.
Two thirds of our 360 employees have served more than
5 years with GBST, and over half this number have been
with the company more than 10 years. We have built up
a considerable talent pool in capital markets transaction
processing, wealth management and compliance to the
benefit of our customers.
Restructure
In order to take advantage of the company’s international
growth opportunities, GBST’s chief executive officer,
Stephen Lake, has relocated to Hong Kong to establish a
regional presence and assist sales of Syn in Asian markets.
Recognising the increasing importance of Syn , in August
2012 GBST’s broker services divisions merged to form the
new Capital Markets division. Australian Broker Services
chief executive, Denis Orrock, has been appointed chief
executive, GBST Capital Markets and will move to London
in late 2012. Global Broker Services’ chief executive,
Patrick Salis, has been appointed chief operating officer
and will return to Sydney at the end of 2012.
Outlook
While the economic environment remains uncertain,
GBST is well positioned to maintain its positive momentum
in the year ahead. Our significant investment in research
and development has resulted in stronger, more flexible
technologies with competitive advantages in both global
capital markets and wealth management.
We expect that the group will benefit from regulatory
changes taking place in the financial services sector,
particularly in the UK where the Retail Distribution Review
comes into force at the end of 2012. We are confident
that GBST’s Wealth Management division will continue
its strong growth in the UK where it maintains a strong
pipeline of potential new business.
Although capital markets remain constrained, we anticipate
a developing market for GBST’s Syn platform, with our
first Australian customer having recently ‘gone live’. The
Syn platform provides significant international growth
opportunities, particularly in Asia.
Whilst we expect a relatively flat first half, we believe
the second half will begin to show some good sales
momentum. We are focused on building our business with
regional solutions in Asia and Europe. While our business
remains characterised by long investment, sales and
implementation cycles, we are excited by the opportunities
before us. We believe we are very well positioned in terms
of product, domain expertise and geographic deployment
to benefit from any recoveries in the capital markets and
savings markets.
GBST’s Board of Directors:
Standing: Joakim Sundell, Ian Thomas,
Allan Brackin, Stephen Lake. Seated:
David Adams, John Puttick
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The GBST Product Suite
TRANSITIONING
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Through its flagship products GBST provides leading
securities transaction and fund administration software
for the financial services industry.
The GBST Shares platform is the most scalable and
widely-used middle- and back-office equities system in
Australia. It helps institutional and retail stockbrokers and
third-party clearers to manage and execute transactions
with the Australian Securities Exchange’s market
operations and clearing systems. Through GBST’s
products and extended network, it is possible to transact
in virtually every type of financial instrument including
derivatives, margin lending, foreign equities, term
deposits, bonds, bank bills and other cash products.
GBST’s DCA is a fully integrated client accounting system
for derivatives trading. It is directly connected to the
ASX’s derivatives clearing system and processes most
Australian derivatives transactions.
GBST Front Office is used in the stockbroker’s front
office to provide client advisers with client information
including their portfolio, risk profile and investment
preferences.
Internationally, GBST’s Syn provides next-generation
technology to process equities, derivatives, fixed
income and managed funds transactions. It is used
extensively across Europe and Asia by global capital
market participants and provides a highly scalable
transaction processing system in the middle- and back-
office. GBST is developing the Syn technology for the
Australian market.
GBST Composer is the leading administration and
registry platform for the wealth management industry.
In Australia, Composer supports wraps, corporate and
personal superannuation, pensions, retail and wholesale
unit trusts, life, risk, loans and cash management. In the
United Kingdom, it offers a comprehensive solution for
the management and administration of tax wrappers
for self-invested personal pensions, income drawdown,
individual savings accounts, bonds and Wraps across
multiple investments including retail and wholesale unit
trusts and open ended investment companies.
It is supplemented online by GBST ComposerWeb,
which enables advisers and clients to administer
portfolios from the pre-sale planning stage through to
maintaining their portfolios.
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
7
GBST Executive Team
Stephen Lake Managing Director and Chief Executive Officer
Isabel Sanchez Chief Technology Officer
Mr Stephen Lake joined GBST in
September 2001 after an extensive
career in the capital markets industry
in Australia, the United Kingdom and
Asia. Stephen became a shareholder
of GBST and was appointed Chief
Executive Officer in 2001. Prior to
joining GBST, he was Chief General Manager of Financial
Markets at Adelaide Bank Limited. Stephen was Managing
Director of BZW’s Capital Market’s Division Australia and
also Managing Director of the Fixed Interest Division at
BZW (Asia) Ltd. Stephen is a Member of the Nominations
and Remuneration Committee.
Andrew Ritter Chief Financial Officer
Andrew commenced with GBST in
November 2011 as Chief Financial
Officer, having spent over 13 years in
public practice and the commercial
sector in both Australia and the United
Kingdom. Most recently, he was
Chief Financial Officer and Company
Secretary of IntraPower Limited. Andrew is a Chartered
Accountant, holds a Bachelor of Commerce degree and a
Graduate Diploma of Applied Corporate Governance.
Patrick Salis Chief Operating Officer
Patrick was appointed Group Chief
Operating Officer in August 2012
following previous roles with GBST
as Chief Executive, Global Broker
Services from March 2010 to August
2012 and Chief Financial Officer from
October 2007 to March 2010. Before
joining the company Patrick held senior financial roles
in the financial services industry, most recently as Chief
Financial Officer of Virgin Money Australia Limited. He has
extensive experience working in wealth management,
equities and derivatives broking, superannuation,
mortgages and unsecured lending. Patrick holds a
Bachelor of Accounting and is a member of the Institute of
Chartered Accountants in Australia.
Isabel was appointed as Chief
Technology Officer in March 2008.
Isabel has over 18 years experience
in software development and has
been a member of GBST’s Wealth
Management Division (formerly
InfoComp) for 16 years, where she
acted in a similar capacity since 2000. Isabel holds a
Bachelor of Computing Science from the University
of Wollongong.
Robert De Dominicis Chief Executive,
GBST Wealth Management
Robert is a founding partner of
InfoComp, now GBST’s Wealth
Management Division, with over 25
years experience in the development
of software applications. Robert holds
a Bachelor of Mathematics. Robert
has a business and technical software
background having been part of the Wealth Management
Division’s development and professional services teams.
Denis Orrock Chief Executive, GBST Capital Markets
Denis joined GBST in May 2008
and was appointed Chief Executive
Officer, Capital Markets in August
2012. Previously, he managed the
company’s Australian Broker Services
and Financial Services divisions. Prior
to joining GBST, Denis was General
Manager of Infochoice. Denis has worked within the
Australian financial services industry for over 15 years. He
has a broad understanding of domestic wholesale and
retail markets and has held advisory and trading positions
with UBS, Grange Securities and Taylor Collison.
Scott Hutchinson Chief Executive, Emu Design
Scott founded Emu Design in 1998
and continued to manage the business
after its acquisition by GBST in 2008.
He holds four degrees across creative
and technical disciplines.
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GBST Board of Directors
John Puttick Non-Executive Chairman
Joakim Sundell Non-Executive Director
Dr John Puttick is the founder and
Chairman of GBST and has forty years
experience in the IT industry, over thirty
of which have been in development
of financial services solutions at
GBST. John serves as a member of
the QUT Council and on University of
Mr Joakim Sundell was appointed
to the Board in 2001.
Joakim has an extensive career in
private equity finance, merchant
banking, and management both in
Sydney and London. He is Managing
Director of Crown Financial Pty
Queensland and Queensland University of Technology
Faculty Advisory Committees. He is currently Adjunct
Professor at the School of Information Technology and
Electrical Engineering University of Queensland. John is a
member of GBST’s Audit and Risk Management Committee
and Nominations and Remuneration Committee.
Ltd, a private investment company. He was a Director
of Infochoice Limited (from 13 December 2006
until 5 February 2008). Joakim is a Member of the
Nominations and Remuneration Committee.
David Adams Independent Non-Executive Director
Stephen Lake Managing Director and Chief Executive Officer
Mr Stephen Lake joined GBST in
September 2001 after an extensive
career in the capital markets industry
in Australia, the United Kingdom and
Asia. Stephen became a shareholder
of GBST and was appointed Chief
Executive Officer in 2001. Prior to
joining GBST, he was Chief General Manager of Financial
Markets at Adelaide Bank Limited.
Stephen was Managing Director of BZW’s Capital Market’s
Division Australia and also Managing Director of the Fixed
Interest Division at BZW (Asia) Ltd. Stephen is a Member
of the Nominations and Remuneration Committee.
Allan Brackin Independent Non-Executive Director
Mr Allan Brackin was appointed to the
Board in April 2005. He has detailed
knowledge of the IT sector having
served as Director and Chief Executive
Officer of Volante Group Limited,
one of Australia’s largest IT services
companies from November 2000 to
October 2004. Prior to this, Allan co-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 is Chairman of
ASX listed mining technology company Runge Limited
(since November 2011), currently serving as Chairman of
IT software Company Emagine Pty Ltd and is a member
of the advisory board for Madison Technologies Pty Ltd
and Huon IT Pty Ltd. Allan is Chairman of GBST’s Audit
and Risk Management Committee and is a member of the
Nominations and Remuneration Committee.
Mr 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 first 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 Management Committee and the Chair
of the Nominations and Remuneration Committee.
Ian Thomas Independent Non-Executive Director
Dr Ian Thomas was appointed to the
Board in December 2011. Ian brings
twenty years’ global experience to
GBST. He has held many senior
positions including his current role
as President of Boeing Australia
and South Pacific, previous roles as
President Boeing India, Vice President
Boeing Europe, and director of international policy for
Boeing in the US. Prior to joining Boeing in 2001, Ian
served in a variety of staff and policy roles in the U.S.
Department of Defence. He is currently President of the
American Chamber of Commerce in Australia and a
member of the Prime Minister’s Manufacturing Task Force.
Ian holds a master’s degree in international relations,
a PhD in history from the University of Cambridge, a
graduate degree in social sciences from the University of
Stockholm, and a bachelor’s degree (cum laude) in history
from Amherst College.
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
9
Corporate Governance Statement
Introduction
The ASX document, ‘Principles of Good Corporate
Governance and Best Practice Recommendations with
2010 Amendments’ 2nd Edition (‘Guidelines’) applying
to listed entities was released by the ASX Corporate
Governance Council with the aim of enhancing the
credibility and transparency of Australia’s capital markets.
The Board has made an assessment of the Company
against the Guidelines. The Board has made decisions
in relation to its operations and the operations of the
Company that mean that it does not completely comply
with all of the Guidelines but these are in place to guide
better performance. The Board outlines its assessment
against the Guidelines below. This statement on corporate
governance reflects the Company’s charter, policies and
procedures on 6 September 2012.
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.
(iv) reviewing and overseeing systems of risk
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 financial and other
reporting and the operation of committees.
(d) Senior management roles are given authorities and
responsibilities pursuant to both corporate policies
and through directions issued from time to time. The
CEO’s performance is reviewed by the Chairman
in consultation with the Board and the CEO takes
responsibility for the review of other executives’
performance. Formal reviews are conducted at least
annually. The Board uses a variety of means of review
including during the last twelve months conducting a
360° feedback review conducted with the assistance
of external consultants.
Composition of Board
The Board performs its roles and function, consistent with
the above statement of its overall corporate governance
responsibility, in accordance with the following principles:
(b) The Board’s broad function is to:
(a) the Board should comprise at least five Directors;
(i)
chart strategy and set financial targets for the
Company;
(b) the Board shall be constituted by members having an
appropriate range of skills and expertise; and
(ii) monitor the implementation and execution of
(c) at least two Directors will be non-executive Directors
strategy and performance against financial targets;
and
(iii) oversee the performance of executive
management and generally to take and fulfil an
effective leadership role in relation to the Company.
(c) Power and authority in certain areas is specifically
reserved to the Board – consistent with its function as
outlined above. These areas include:
(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;
independent from management.
Board Charter and Policy
(a) The Board has adopted a charter (which is kept under
review and amended from time to time as the Board
considers appropriate) to give formal recognition to the
matters outlined above. This charter sets out various
other matters that are important for effective corporate
governance including the following:
(i) a detailed definition of ‘independence’;
(ii) a framework for the identification of candidates
for appointment to the Board and their selection;
(iii) a framework for individual performance review and
(ii) oversight of the Company including its control and
evaluation;
accountability system;
(iii) appointment and removal of the Chief Executive
Officer and the Company Secretary;
(iv) proper training to be made available to Directors
both at the time of their appointment and on an
on-going basis;
10
(v) basic procedures for meetings of the Board and
(vii) review of the performance and independence of
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. The Board’s
charter is included within the Company’s corporate
governance charter, which is available from the
Company’s web site.
Audit and Risk Management Committee
(a) The purpose of this committee is to advise on the
establishment and maintenance of a framework of
internal control and appropriate ethical standards for
the management of the Group. Its members are:
(i) Mr Allan Brackin, Chairman;
(ii) Mr John Puttick; and
(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 committee is
responsible are the following:
(i)
Board and committee structure to facilitate a
proper review function by the Board;
(ii) internal control framework including management
information systems;
(iii) corporate risk assessment and compliance with
internal controls;
(iv) internal audit function and management processes
supporting external reporting;
(v) review of financial statements and other financial
information distributed externally;
(vi) review of the effectiveness of the audit function;
the external auditors;
(viii) review of the external audit function to ensure
prompt remedial action by management, where
appropriate, in relation to any deficiency in or
breakdown of controls;
(ix) assessing the adequacy of external reporting for
the needs of shareholders; and
(x) monitoring compliance with the Company’s code
of ethics.
(c) Meetings are held at least four times each year. A broad
agenda is laid down for each regular meeting according
to an annual cycle. The committee invites the external
auditors to attend each of its meetings. During the year
the committee decided to add to its meeting schedule
a further committee meeting to provide further time
for review of accounting matters connected with the
Company’s financial statements and is likely to adopt this
change within the Board’s annual program.
Nominations and Remuneration
Committee
(a) The purpose of this committee with regard
to 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, the committee comprises 5 directors.
Committee meetings are held from time to time as
required by the Board. Meetings are held at least
twice each year. David Adams, a non-executive and
independent Director is the chair of the committee.
Relevant discussions on nominations and remuneration
have been considered by the Board at various Board
meetings as specific items of business and in general
business. The Board conducted a review of its own
performance with the board surveyed on a variety
of matters related to their own and their collective
performance. The results of that survey were then
tabled with the board and they will be used to assist
decision making on changes to board processes.
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
11
Corporate Governance Statement (continued)
Diversity
The Board has adopted a diversity policy that documents
the Company’s commitment to diversity to further embed
within the Company’s culture the importance of a diverse
work force and an environment that embraces the benefits
of diversity. The Company takes a broad view on diversity
and its policy encourages diversity in the workplace in
relation to gender, sexual orientation, age, race, ethnic
origin, religious beliefs, impairment and nationality. The
diversity policy also recognises a commitment to merit
based appointments.
As at 30 June 2012, the proportion of female employees
in the whole organisation, in senior positions and on the
Board was:
Proportion of Women at GBST
Proportion of Women in senior roles at GBST
Proportion of Women on the Board
31%
42%
0%
The Nomination and Remuneration Committee within
its charter is given a specific role to implement and
monitor the Company’s diversity policy. The Nomination
and Remuneration Committee set, and the Company met,
measurable objectives for the 2012 year including:
1. offering senior female employees opportunities
to undertake a Board readiness program and
encouraging them to do so;
2. the development of female leaders within an
executive development program that is being formally
established for the Company;
3. requiring the Company to report twice annually on
the statistical performance of the Company in areas
including diversity within the GBST work force,
recruitment results based on gender and pay equity; and
4. the Company early adopting reporting on diversity in
its Annual Report.
In the 2013 year the Company’s measurable objectives are:
1. the development of female leaders within an executive
development program that will be continued in 2013 ; and
2. requiring the Company to report twice annually on
the statistical performance of the Company in areas
including diversity within the GBST work force,
recruitment results based on gender and pay equity.
The Company’s adoption of a diversity policy was a
formalisation of the Company’s values. The Company
has previously developed its own paid maternity leave
12
program and has tried to provide a work environment
that recognises the need for a work life balance. The
Company is proud to have been awarded the Employer
of Choice awards conducted by Women in Information
Technology in Queensland. The Company has also
committed itself to providing positions as a part of
the Australian Employment Covenant (http://www.
fiftythousandjobs.org.au). During the year the Company
received a number of job applications and enquiries in
its graduate recruitment programme that commented
on GBST’s award and policies reflecting the tangible
benefits that can be obtained from the Company’s public
commitment to diversity.
Best Practice Commitment
The Company is committed to achieving and maintaining
the highest standards of conduct and has undertaken
various initiatives, as outlined in this section, which are
designed to achieve this objective. GBST’s corporate
governance charter is intended to ‘institutionalise’ good
corporate governance and, to build a culture of best
practice both in the Company’s own internal practices and
in its dealings with others.
The following are a tangible demonstration of the
Company’s corporate governance commitment.
(a) Independent professional advice
With the prior approval of the Chairman, each Director
has the right to seek independent legal and other
professional advice concerning any aspect of the
Company’s operations or undertakings in order to fulfil
their duties and responsibilities as Directors. Any costs
incurred are borne by the Company.
(b) Code of ethics and values
The Company has developed and adopted a detailed
code of ethics and values to guide Directors in the
performance of their duties.
(c) Code of conduct for transactions in securities
The Company has developed and adopted a formal
code to regulate dealings in securities by Directors
and senior management and their associates. This
is designed to ensure fair and transparent trading in
accordance with both the law and best practice.
(d) Charter
The code of ethics and values and the code of
conduct for transactions in securities (referred to
above) both form part of the Company’s corporate
governance charter which has been formally adopted
and is available for review on the Company’s web site.
GBST Board Assessment against the
Guidelines
Principle 1 – Lay solid foundations for management
and oversight
The role of the Board and delegation to management have
been formalised as described above in this section and will
continue to be refined, in accordance with the Guidelines,
in the light of practical experience. GBST complies with the
Guidelines in this area.
Principle 2 – Structure the Board to add value
Together the Directors have a broad range of experience,
skills, qualifications and contacts relevant to the business
of the Company. The majority of the current Board
is not independent. In particular, the Chairman is not
independent in terms of the Guidelines. There are three
independent Directors, namely Mr Allan Brackin, Mr David
Adams and Dr Ian Thomas. GBST believes that the current
Board of Directors is appropriate for a Company of GBST’s
size and the current Directors have been the best people
to act in the interests of stakeholders and for this reason
does not presently fully comply with the recommendations.
The Board will consider increasing its size should suitable
candidates be identified. The number of independent
Directors may be increased as a result of the additional
appointments. The Board calls specific meetings of the
Board as a Nominations and Remuneration Committee.
Principle 3 – Promote ethical and responsible decision
making
The Board has adopted a detailed code of ethics and
values and a detailed code of conduct for transactions
in securities as referred to above. The purpose of these
codes is to guide Directors in the performance of their
duties and to define the circumstances in which both they
and management, and their respective associates, are
permitted to deal in securities. The Board will ensure that
restrictions on dealings in securities are strictly enforced.
Both codes have been designed with a view to ensuring
the highest ethical and professional standards, as
well as compliance with legal obligations, and therefore
compliance with the Guidelines.
Principle 4 – Safeguard integrity in financial reporting
The Audit and Risk Committee has its own Charter. The
Committee comprises three Directors, the majority of
which are independent. All the members of the Audit
Committee are financially literate.
Principle 5 – Make timely and balanced disclosure
Policies and procedures for compliance with ASX
Listing Rule disclosure requirements are included in the
Company’s corporate governance charter.
Principle 6 – Respect the rights of shareholders
The Board recognises the importance of this principle
and strives to communicate with shareholders both
regularly and clearly – both by electronic means and
using more traditional communication methods.
Shareholders are encouraged to attend and participate
at general meetings. It is intended that the Company’s
auditors will always attend the annual general meeting
and be available to answer shareholders’ questions.
The Company’s policies comply with the Guidelines in
relation to the rights of shareholders.
Principle 7 – Recognise and manage risks
The Board, together with management, has constantly
sought to identify, monitor and mitigate risk. Internal
controls are monitored on a continuous basis and,
wherever possible improved. The Company uses its
quality management system and project management
methodologies to identify, assess and manage risk. With
the acquisition of new subsidiaries the Company initiated
a program of integration which involved an assessment
of the adequacies of risk management in the subsidiaries
to ensure they were of a sufficient standard in light of the
Board’s requirements in this area. The whole issue of risk
management is formalised in the Company’s corporate
governance charter (which complies with the Guidelines
in relation to risk management) and will continue to be
kept under regular review. Review takes place at both
committee level (Audit and Risk Management Committee),
with meetings at least four times each year, and at Board
level. The Board requires the CEO and CFO to sign all
statements required to be provided under the Guidelines
and Corporations Act in relation to the Company’s financial
statements and risk management generally.
Principle 8 – Remunerate fairly and responsibly
Remuneration of Directors and executives will be fully
disclosed in the annual report and any changes with
respect to key executives announced in accordance
with continuous disclosure principles. The Board from
time to time calls a specific meeting of the Board as a
Nominations and Remuneration Committee. Due to the
importance of human capital within GBST’s business the
committee’s composition and the contribution that each
member can make has been considered appropriate and
as a result the committee is not independent. The Board
has structured the committee to have an independent
Director as Chairman. The Chairman will lead a review
of the Directors and the independent Directors will lead
a review of the Chairman. No individual will be directly
involved in deciding his or her remuneration.
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
13
Directors’ Report
for the year ended 30 June 2012
The Directors of GBST Holdings Limited (‘GBST’ or
the ‘Company’) submit their report together with the
consolidated financial report of the Group, comprising
the Company and its controlled entities for the year ended
30 June 2012 and the audit report thereon.
• GBST Global Broker Services through the Syn
platform, provides next-generation technology to
process equities, derivatives, fixed income and
managed funds transactions in global capital markets
in Asia, Europe and North America.
September 2001
Operating EBITDA increased by 4 per cent to
$15.50 million (2011: $14.94 million).
Directors
The names of the Directors of the Company in office during
the year and to the date of this report are:
Name
Period of Directorship
Non-executive
Dr John F Puttick
(Chairperson)
Mr David C Adams
Mr Allan J Brackin
Mr Joakim J Sundell
Dr Ian Thomas
Executive
Mr Stephen M L Lake
(Chief Executive Officer)
Principal activities
January 1984
April 2008
April 2005
July 2001
December 2011
The principal activities of GBST during the year, were
provision of:
• client accounting and securities transaction technology
solutions for the finance, banking and securities industry
in Australia, Asia, Europe and North America;
• funds administration and registry software for the wealth
management industry in Australia and Europe;
• independent financial product data and related services
to financial advisers and institutions in Australia; and
• website design and web services with a growing focus
on the financial services industry.
No significant changes in the nature of these activities
occurred during the year ended 30 June 2012.
GBST comprised of four operating
segments during the year:
• GBST Australia Broker Services provides client
accounting and securities transaction technology to
capital market participants such as banks, custodians,
fund managers, margin lenders, and institutional and
retail stockbrokers.
14
• GBST Wealth Management through the Composer
platform, 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,
with customers.
• GBST Financial Services provides wholesale access
to financial products and related data information
transactions for financial advisers and institutions.
It also provides web design, development and usability
services through Emu Design.
Review of operations
Total revenue for the Group increased by 13 per cent
to $77.07 million (2011: $68.44 million).
EBITDA increased by 4 per cent to $14.24 million
(2011: $13.69 million).
Profit before income tax increased by 37 per cent to
$4.46 million (2011: $3.26 million).
Profit after income tax (NPAT) for the Group increased
by 135 per cent to $3.25 million (2011: $1.38 million).
Senior debt during the year decreased by $5.97 million
to $18.03 million at 30 June 2012 from $24.00 million at
30 June 2011.
DIVIDENDS
Dividends paid during the year were as follows:
• 2011 final fully franked ordinary dividend of 2.0 cents
per share for the FY2011 financial year paid on 26
October 2011, as recommended in the financial report
for the year ended 30 June 2011.
• 2012 interim fully franked ordinary dividend of 2.5 cents
per share paid on 27 April 2012.
Dividends declared after end of year:
The Directors recommend a final dividend of 2.5 cents per
share to be paid to the holders of fully paid ordinary shares.
The dividend will be 100% franked and will be paid on
24 October 2012.
Group results
Group performance
FuLL YeAR To
30 JuNe
2012
$‘000
2011
$‘000
%
Change
77,067
68,435
13
Total revenue and
other income
Research and development
expenses
(7,974)
(7,272)
(10)
operating eBITDA
15,498
14,943
Unallocated expenses
(1,256)
(1,250)
eBITDA
14,242
13,693
Net finance costs
(2,058)
(3,164)
Depreciation
Amortisation
(1,069)
(941)
(6,659)
(6,327)
Profit before income tax
4,456
3,261
Income tax expense
(1,205)
(1,877)
Profit after income tax
3,251
1,384
Basic ePS (cents)
Diluted ePS (cents)
4.87
4.87
2.08
2.08
4
–
4
35
(14)
(5)
37
–
135
134
134
The table includes IFRS and non-IFRS financial information. Non-IFRS financial
information comprises of Operating EBITDA which has not been audited or
reviewed by our auditor, KPMG.
Measures of profitability and basis
of preparation
Operating EBITDA
GBST defines Operating EBITDA as profit before net
finance costs, tax, depreciation, amortisation, impairment
(if applicable) and other unallocated expenses. GBST uses
Operating EBITDA as an internal performance indicator
for the management of its operational business segments,
and to allow for better evaluation of business segment
activities and comparison over reporting periods.
Unallocated expenses
Unallocated expenses are legal expenses associated
with a prior acquisition which have not been allocated
to any business segment. This treatment is in accordance
with Management’s internal measurement of segment
performance and the segment disclosures in Note 27
to the financial report.
Operating EBITDA increased 4 per cent to $15.50 million,
compared to $14.94 million in the prior year, representing
solid performance in a difficult environment. FY2012 was
the most difficult year for GBST’s clients since the global
financial crisis, with the repercussions from economic
problems in Europe having an effect worldwide. GBST’s
performance, particularly in its broker services divisions,
was impacted by substantial Research & Development
(R&D) and product spend, delays in major client projects
and weak retail equities trading volumes.
ouTSTANDING GBST WeALTH MANAGeMeNT
PeRFoRMANCe
Against this backdrop, Group revenue was up 13 per cent
to a record $77.07 million, compared to $68.44 million in
the previous year. This was attributable to outstanding
sales of Composer which were driven by new regulations
introduced to protect consumers by the UK Financial
Services Authority’s Retail Distribution Review (RDR).
This growth confirms the benefits anticipated by GBST
when the division was founded with the acquisition of the
Composer platform. GBST continued to secure new clients
for Composer during the year and has a strong pipeline of
potential new business. Further changes to the RDR are
anticipated which the wealth management industry will
be compelled to address by December 2013, and sales
momentum is expected to continue.
FIRST AuSTRALIAN SYN CLIeNT INSTALLATIoN
CoMPLeTeD – Go LIVe Q1 FY13
While GBST’s broker services businesses also secured
new business, income from existing clients fell and overall
revenue was slightly reduced compared to the prior year.
The Australian Broker Services business increased market
share, reflecting the robust performance and scalability
of GBST Shares which differentiates this platform from its
competitors. The division also completed the first Australian
client installation of its next generation Syn platform, which
represents a significant milestone for GBST.
While the Global Broker Services division was particularly
exposed to weak global financial markets and the resulting
clampdown on spending by investment banks, the most
important factor was delays to major projects without
which this business would have experienced a turnaround.
The division successfully implemented work in Asia
and completed several projects despite project issues
relating to a contract with a technology partner which led
to cancellation of work pursuant to statements of work.
Litigation against the previous shareholders of the Coexis
business is continuing and GBST is confident of its position.
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
15
Directors’ Report
for the year ended 30 June 2012 continued
SuBSTANTIAL ReTuRN FRoM R&D
During FY2012, GBST invested $7.97 million in R&D
compared to $7.27 million in the prior year. The positive
outcomes of this continued focus are demonstrated by
market share growth. In FY2012, GBST’s offshore revenue
increased by approximately 37 per cent.
This investment has substantially improved GBST’s
technology and the company’s competitive advantage
which is increasingly recognised by clients. Products
introduced during the year included Australian Broker
Services’ Front Office solution, Business Intelligence
Reporting for client advisers and Syn Position Keeping
for institutional brokers.
The development of Syn 2.0 for Asian, European and
North American capital markets provides GBST with a
strong platform for international growth. Increasingly,
GBST’s development is targeted to providing regional
and global solutions.
The Wealth Management division strengthened the
Composer platform with further development of the
ComposerWeb solution, and offers fully-integrated
technology to support wrap platforms and individual
tax-wrapper administration in the UK.
GBST Australian Broker Services
Institutional trading volume rose as a proportion of divisional
income and two new clients began using GBST Shares
to process trades. A further new client has committed to
replace its existing back office with GBST Shares and this is
expected to begin in the first quarter of FY2013.
During the year, the division completed contract renewals
with major customers for a further three to five years,
and some clients also subscribed to GBST’s hosted
services offering.
GBST’s Front Office client management system will replace
up to five clients’ existing GBST software resulting in an
improved experience for the client and a more robust
distribution platform for GBST products and services
in the future.
AuSTRALIAN CLIeNT To ‘Go LIVe’ oN GBST SYN
In FY2012, GBST secured its first Australian contract for
Syn and the implementation has now been completed.
This is another key milestone for GBST, which invested
heavily in research and development to bring the new
product to market.
This technology offers GBST important opportunities to
extend its services to clients in Australia and complements
GBST solutions currently being offered in Asia and other
international markets.
FY2012
$000’s
FY2011
$000’s
%
Change
GBST Global Broker Services
Sales to external customers
27,373
27,950
Operating EBITDA
9,248
9,805
Depreciation & amortisation
of segment assets
Segment result
(1,587)
(1,104)
7,661
8,701
(2)
(6)
(44)
(12)
Divisional revenue declined slightly, with positive growth
from new clients offset by reduced income from existing
clients in weak trading conditions. Trading volumes
experienced high volatility during the year and some broker
volumes were down by as much as 40 per cent compared
to the prior year.
Operating EBITDA fell, reflecting significant R&D spend
to develop the Australian Syn technology platform.
In a difficult market GBST increased market share,
demonstrating the strength and value of its software
and technology infrastructure.
FY2012
$000’s
FY2011
$000’s
%
Change
Sales to external customers
8,822
9,060
Operating EBITDA
(3,164)
(2,131)
Depreciation & amortisation
of segment assets
Segment result
(2,555)
(2,614)
(5,719)
(4,745)
(3)
(48)
2
(21)
During the year the division completed several new
implementations of Syn including a substantial project
to enable the regional processing for a global investment
bank which is now using Syn in Singapore and Japan.
The bank plans to move all Asian market operations to the
Syn platform, and migration of its Hong Kong business
to Syn is expected to be completed in November 2012.
These deployments followed the successful implementation
of Syn in Australia for the firm’s middle office processing
requirements. Another investment bank also commenced
operations using Syn in Asia in the second half.
1616
During the year an Australian investment bank commenced
use of GBST Global Broker Services’ new Syn Position
Keeping product for corporate actions, which allows
institutional brokers to track clients’ equity holdings and
process entitlements.
Project issues relating to a contract with a technology
partner led to cancellation of work pursuant to statements
of work in the second half, along with a $200 thousand
provision being made for possible non-recovery of trade
receivables in FY2012. Normalised operating expenses
were below budget and consistent with FY2011 levels.
Operating EBITDA continued to be impacted by R&D
investment to further the development of Syn for
international markets.
GBST Wealth Management
FY2012
$000’s
FY2011
$000’s
%
Change
Sales to external customers
36,216
27,133
Operating EBITDA
9,187
6,916
Depreciation & amortisation
of segment assets
Segment result
(3,515)
(3,518)
5,672
3,398
33
33
–
67
GBST CoMPoSeR SALeS INCReASe BY 33%
FY2012 was a watershed year for GBST’s growth in the
UK. The division’s improved performance has confirmed
the potential of the Composer platform to provide an
integrated funds administration and registry system for
the wealth management industry. Division revenue was
$36.22 million, up 33 per cent in a difficult environment.
Impressively, Operating EBITDA was $9.19 million, also
up 33 per cent and incorporates a reallocation of costs of
$530 thousand from the GBST Australian Broker Services
Division relating to the first half of FY2012.
In the UK GBST successfully supported an international
provider of pensions, investments and protection solutions,
to launch its ‘Adviser focused’ platform for independent
financial advisers and ‘Employer sponsored’ platforms.
The business has successfully completed implementations
of Composer for an increasing list of UK wealth
management companies all on time and within budget.
In Australia, the division completed several projects
successfully including a direct to consumer wrap
offering, which was integrated into the bank’s traditional
banking channels. A large financial group’s staff
superannuation fund was also migrated onto Composer
and another consolidated two external systems onto the
Composer platform.
GBST continues to see a strong sales pipeline in Australia.
The federal government’s Future of Financial Advice (FoFA)
reform and GBST’s involvement in the government’s
SuperStream initiative are also providing opportunities
for GBST.
GBST Financial Services
FY2012
$000’s
FY2011
$000’s
%
Change
Sales to external customers
3,910
3,363
Operating EBITDA
227
353
16
(36)
Depreciation & amortisation
of segment assets
Segment result
(71)
156
(32)
(122)
321
(51)
GBST FINANCIAL SeRVICeS ReVeNue uP 16%
Division revenue reflects a solid performance by the
Emu Design business and excludes inter-company work.
Operating EBITDA was lower as inter-company work
declined in comparison to FY2011.
Emu Design benefited from increased sponsored and
consulting work, and capitalised successfully on its
e-commerce, mobile application and financial services
sector web design expertise. This business has made a
substantial contribution to the consistent user interface
of GBST’s Syn , Front Office and Composer products,
and strengthened its capacity to provide high-quality
web solutions for large projects. The business has a
strong pipeline of approved work extending into the
new financial year.
FY2012 revenue includes six months’ contribution of
the quantitative data services business from 1 July 2011 to
31 December 2011, after which the business was re-aligned
to report within the GBST Wealth Management division.
QuANT BuSINeSS FoCuSeS oN AFTeR-TAX
oPPoRTuNITY
The quantitative data services business strengthened its
offering during the year with new after-tax benchmarks
and services, including development of the Tax Analyser
product for superannuation funds. Significant new
clients were added. As fund managers are required to
demonstrate after-tax performance to superannuation
funds, demand for the Quant business’ after-tax products
is expected to increase.
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
17
Directors’ Report
for the year ended 30 June 2012 continued
Financial position
The Group has a net current asset deficiency at 30 June
2012 of $12.28 million (30 June 2011: $12.17 million).
Of this, $9.11 million (30 June 2011: $9.26 million)
represents payments received in advance and invoices
issued in advance to clients and, as such, do not represent
future cash outflows other than salary and wage related
costs in line with the budgeted expenditure.
The senior debt facility provided by National Australia Bank
matures on 30 June 2014. Senior debt as at 30 June 2012
was $18.03 million, compared to $24.00 million at 30 June
2011. At reporting date, all banking covenants have been
met. Based on the Group’s current forecast and business
plan, the Group anticipates that it will continue to meet
its covenants.
The Directors are of the opinion that there will be
sufficient cash flows to support the Group. The Group’s
earnings outlook continues to improve as all divisions
have secured new clients. The Directors are therefore
confident the Group will be able to meet its debts as they
fall due and, accordingly, believe that the use of the going
concern assumption is appropriate in preparing these
financial statements.
Significant changes in state of affairs
As at the reporting date, GBST has on issue 66,561,725
ordinary shares.
During the year 600,513 employee options lapsed and the
Company issued 165,796 shares as settlement in relation
to an acquisition.
There has been a change in circumstance relating to
the investment in the Company Razor Risk Technologies
Limited (ASX: RZR). The investment was sold for
$1.53 million during the financial year based on a share
price of $0.0349 per share. The sale had no profit and
loss impact.
No other significant changes in the state of affairs of the
Group occurred during the financial year, other than those
disclosed in this report.
Subsequent events
No matters or circumstances have arisen since the end
of the financial year which significantly affected or may
significantly affect operations of GBST, the results of
those operations, or the state of affairs of GBST in future
financial years.
1818
Future developments, prospects and
business opportunities
ReSTRuCTuRe
GBST is actively pursuing new business opportunities
in Asia, Japan and North America where there is strong
interest in Syn ; and potential opportunities for GBST
Wealth Management’s Composer product exist in Europe,
North America and Asia.
To exploit these opportunities, a realignment of the
business is taking place, with significant changes including:
• The Australian Broker Services and Global Broker
Services divisions will merge. The CEO of Australian
Broker Services, Denis Orrock, has been appointed
Group CEO Broker Services based in London, UK.
His focus is building the Company’s business in
new markets;
• The CEO of the Global Broker Services division,
Patrick Salis, has been appointed to the newly
created role of Group Chief Operating Officer, based
in Sydney, Australia;
• The Company’s sales team will be refocused to enable
a global, multi-product approach to sales, recognising
the increased interest of GBST’s clients in both GBST’s
broking and wealth management products;
• Development of a new retail strategy known as
‘GBST Hub’ which will focus on combining GBST’s
adviser-oriented technologies - GBST Front Office,
ComposerWeb, Market Access and mobile applications
- for financial services clients.
Environmental issues
There are no significant environmental regulations applying
to the Group.
Information on Directors
John Puttick Non-Executive Chairman
Dr John Puttick is the founder and Chairman of
GBST. He holds a Doctor of the University from QUT
and chartered accounting qualifications from Auckland
University of Technology. He has forty years’ experience in
building commercial systems with information technology
over thirty of which have been in developing financial
services solutions at GBST. John has provided the vision
for GBST’s development over these years.
Dr Puttick has numerous external appointments. He is
Adjunct Professor, School of Information Technology
and Electrical Engineering at the University of
Queensland and member of Council of Queensland
University of Technology. John was inaugural Chair of
Southbank Institute of Technology. He has participated in
various Ministerial appointments and overseas missions.
He has also had extensive involvement in the community
as Past President of the Rotary Club of Brisbane; founding
Chair of Vision Queensland; and founding member of
Software Queensland. John’s contribution to the Australian
technology industry has been acknowledged by his
peers naming him as a Member of the Hall of Fame of
the Pearcey Foundation and as a Fellow of the Australian
Computer Society.
John is a member of GBST’s Audit and Risk
Management Committee and Nominations and
Remuneration Committee.
Interest in Shares and Options
6,173,398 Ordinary Shares of GBST Holdings Limited are
held by Dr Puttick and associated entities.
Stephen Lake Managing Director and
Chief Executive Officer
Mr Stephen Lake joined GBST in September 2001 after
an extensive career in the capital markets industry in
Australia, the United Kingdom and Asia. Stephen became
a shareholder of GBST and was appointed Chief Executive
Officer in 2001. Prior to joining GBST, he was Chief General
Manager of Financial Markets at Adelaide Bank Limited.
Stephen was Managing Director of BZW’s Capital Market’s
Division Australia and also Managing Director of the Fixed
Interest Division at BZW (Asia) Ltd, and was a member of
the global management committee. Prior to BZW Stephen
commenced work in a treasury role and later became a
partner of a stockbroking firm. Stephen is a Member of
the Nominations and Remuneration Committee.
Interest in Shares and Options
4,470,108 Ordinary Shares of GBST Holdings Limited are
held by Mr Lake.
Allan Brackin Independent Director
Mr Allan Brackin was appointed to the Board in April 2005.
He has detailed knowledge of the IT sector having served
as Director and Chief Executive Officer of Volante Group
Limited, one of Australia’s largest IT services companies
from November 2000 to October 2004. Prior to this,
Allan co-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 is Chairman of ASX listed mining technology
company Runge Limited (since November 2011),
currently serving as Chairman of IT software Company
Emagine Pty Ltd and is a member of the advisory board
for Madison Technologies Pty Ltd and Huon IT Pty Ltd.
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
381,943 Ordinary Shares of GBST Holdings Limited are
held by Mr Brackin’s associated entities.
Joakim Sundell Non-Executive Director
Mr Joakim Sundell was appointed to the Board in 2001.
Joakim has had an extensive career in private equity
finance, merchant banking, and management both in
Sydney and London. He is Managing Director of Crown
Financial Pty Ltd, a private investment company. He was a
Director of Infochoice Limited from 13 December 2006 until
5 February 2008. Joakim is a Member of the Nominations
and Remuneration Committee.
Interest in Shares and Options
9,631,610 Ordinary Shares of GBST Holdings Limited are
held by Mr Sundell’s associated entities.
David Adams Independent Director
Mr David Adams was appointed to the Board in April
2008. David has had an extensive career in the funds
management industry including the establishment of
Australia’s first cash management trust at Hill Samuel
Australia in 1980 and as 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
Management Committee and the Chair of Nominations
and Remuneration Committee.
Interests in Shares and Options
Nil
Ian Thomas Independent Director
Dr Ian Thomas was appointed to the Board in December
2011. Ian brings twenty years global experience and
has held many senior positions including vice president
for Boeing’s European operations, leading Boeing’s
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
19
Directors’ Report
for the year ended 30 June 2012 continued
defence activities in the United Kingdom, and director of
international policy for Boeing’s military aircraft and missile
systems division in the U.S. Prior to joining Boeing in 2001,
Ian served in a variety of staff and policy roles in the U.S.
Department of Defence and is an authority on U.S.-allied
security relations in NATO-Europe and on the security
policies and programs of the United States, Europe and
Asia. He is currently President of the American Chamber
of Commerce in Australia and a member of the Prime
Minister’s Manufacturing Task Force.
Ian holds a master’s degree in international relations and
a Ph.D. in history from the University of Cambridge, a
graduate degree in social sciences from the University of
Stockholm, and a bachelor’s degree (cum laude) in history
from Amherst College.
Interests in Shares and Options
Nil
Company Secretary
Mr David M Doyle joined GBST in 1997 as an in house
legal advisor and was appointed to the position of
Company Secretary on 18 April 2005. Mr Doyle holds
Bachelor degrees in Law and Business (Computing)
from Queensland University of Technology.
Directors’ meetings
The number of Directors’ meetings (including meetings
of committees of Directors) and number of meetings
attended by each of the Directors of the Company during
the financial year are:
Remuneration report – audited
The information provided in the remuneration report
relates to the Group for the year ended 30 June 2012 and
has been audited as required by section 308(3C) of the
Corporations Act (2001).
The remuneration report is set out under the following
main headings:
a. Remuneration Policies and Practices
b. Group Performance and Remuneration
c. Service Agreements
d. Details of Remuneration
(a) Remuneration Policies and Practices
Remuneration Principles
Key Management Personnel comprise the Directors and
Senior Executives who have authority and responsibility
for planning, directing and controlling the activities of
the Group.
The principles for determining the nature and amount
of remuneration of Directors and specified Executives
are as follows:
• The Group will use competitive remuneration
packages to attract, motivate and retain talented
Executives as determined by the Nomination and
Remuneration Committee.
• The employees will be rewarded for sustained
and sustainable improvement in the performance
of the Group.
Directors
J Puttick
D Adams
A Brackin
S Lake
J Sundell
I Thomas
DIReCToRS’
MeeTINGS
AuDIT AND RISk
CoMMITTee
NoMINATIoN AND
ReMuNeRATIoN
CoMMITTee
eligible to
attend
Attended
eligible to
attend
Attended
eligible to
attend
Attended
11
11
11
11
11
6
11
11
11
11
7
5
5
5
5
–
–
–
5
5
5
5*
–
–
2
2
2
2
2
–
2
2
2
2
–
–
*At the request of the Audit and Risk Committee Mr S Lake (CEO) attends the Audit and Risk Committee meetings even though he is not a member of the committee.
2020
• Directors and Senior Executives are encouraged to
• Long Term Incentive (LTI) – the Group intends to
make investments in the Group in accordance with the
Group’s share trading guidelines.
• Senior Executive agreements will not allow for significant
termination payments if an employment agreement has
to be terminated for cause.
• The Group will make full disclosure of Director and
Executive remuneration.
• The Group’s practices will be legal, ethical and
consistent with being a good corporate citizen. It will
comply with remuneration disclosures required by law
and will seek to maintain the highest standards of clarity
and transparency in communications with shareholders.
The Board recognises the significant role played by
remuneration in attracting and retaining staff with the aim
to benchmark against other similar roles situated in other
similar companies listed on the Australian Stock exchange
within similar industry sectors.
Remuneration paid to Directors and Executives is valued
at the cost to the Group.
Remuneration Structure – Non-executive Directors
Remuneration of non-executive Directors is determined by
the Board with reference to market rates for comparable
companies and reflective of the responsibilities and
commitment required of the Director. The remuneration
of Directors is voted on annually at the Company’s Annual
General Meeting. The current shareholder approved limit
is $500 thousand.
Non-executive Directors are paid fixed annual
remuneration as set out in letters of appointment. Reviews
of each individual Director and Directors as a whole occur
annually. The current annual fees are $95 thousand for the
Chairman and $60 thousand for non-executive Directors.
There are currently no additional fees paid for membership
of Board committees. Non-executive Directors may
make investments in the Company in accordance with
the Company’s share trading guidelines but they did not
participate in the existing Employee Share Ownership Plan.
GBST does not operate a scheme for retirement benefits
to Directors.
Remuneration Structure – Senior executives
The Group’s remuneration structure for Senior Executives
has three components.
• Fixed remuneration of salary and superannuation.
• Bonus payments based upon Group performance
and the meeting of corporate objectives - Short Term
Incentive (STI).
implement a LTI in FY2013.
A combination of these comprises the Executive’s
remuneration.
Executive remuneration packages are aligned with
the market and properly reflect the person’s duties,
responsibilities and performance. Executive remuneration
packages are reviewed annually by reference to the
Group’s economic performance, Executive performance
and comparative information from industry sectors. The
performance of Executives is considered annually against
agreed performance objectives relating to both individual
performance goals and contribution to the achievement of
broader Group objectives.
Fixed Annual Remuneration
The fixed remuneration consists of cash salary (base) and
superannuation contributions. The fixed remuneration
is reviewed annually based on individual performance,
salary survey data and comparisons with data from
companies operating in a similar industry. The Executives
responsibilities, changes in responsibility, experience and
the geographic location for the performance of the work
are taken into account during the review process.
Short Term Incentive Remuneration (STI)
The Group operates a short term bonus scheme to provide
competitive performance based remuneration incentives to
both Executives and staff. Its objectives are to:
• Promote continuous improvement in annual
performance outcomes;
• 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;
• Reflect a strong commitment towards attracting and
retaining high performing Executives and staff who are
committed to the ongoing success of the Group; and
• Develop a culture where achievement of financial
objectives is seen as a key measure of success.
Key Performance Indicators (KPI’s) for Executives were
agreed with each Executive at the beginning of the 2012
financial year. Each Executive had specific agreed goals
for determination of Short Term Performance Incentives.
The KPI’s include measures of Group performance and
individual performance against financial, non-financial and
strategic goals. Achievement of performance objectives
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
21
Directors’ Report
for the year ended 30 June 2012 continued
may entitle an Executive to a cash bonus. The Board,
through its Nomination and Remuneration Committee,
supervises all calculations of performance against the
KPI’s to ensure fairness for the Executives and the Group.
The arrangements align the KPI’s for Executives with the
Group’s strategic plan. The Board, where appropriate,
also exercised its discretion to award an additional
bonus in recognition of exceptional contribution to
the Group’s strategy.
Generally, bonus arrangements are capped at a maximum
of 50% of base remuneration, however when exceptional
outcomes are delivered, or where warranted by special
circumstances, a bonus may exceed this amount.
The payment of a performance bonus is subject to a
consideration of whether or not the overall performance
of the Group warrants the payment of a bonus.
Long Term Incentive Remuneration (LTI)
The Company has previously used options as a feature
of its equity based remuneration, but this practice has
ceased and alternative remuneration arrangements are
under development. The vesting of options was conditional
upon the Company meeting certain financial performance
measures. Such financial performance hurdles were not
met and therefore 600,000 options having a $Nil value
lapsed during the year.
The Group intends to establish a long term incentive
scheme with the objective of promoting sustained delivery
of long term shareholder value in FY2013.
(b) Group Performance and Remuneration
The table below shows the financial performance of
the Group over the last five years. GBST’s remuneration
practices seek to align Executive remuneration with growth
in profitability and shareholder value, amongst other things.
(c) Service Agreements
Remuneration and other terms of employment for Executive
Directors and Executives are formalised in service
contracts. All agreements with Executives are subject to
an annual review. Each of the agreements provide for base
pay, leave entitlements, superannuation, performance-
related bonus and any other benefits. The Group is
an international organisation and when Executives are
seconded to other countries their packages are reviewed
in line with normal employment expectations for those
countries. This may involve adjustments for cost of living
and the provision of benefits customary in the country of
employment. The amounts of the benefits are set out in
the table in section (d) below as Short- Term Benefits Other.
The agreements also contain normal provisions relating to
the protection of confidential information and intellectual
property rights as well as post-employment restraints.
Service agreements with executives are currently open
ended. Mr Lake’s service agreement has a minimum term
of three years ending in February 2015 and is able to be
terminated by either party giving not less than six months’
notice. Other Executive’s agreements require not less
than six months’ notice. No other termination payments
are applicable.
2008
2009
2010
2011
2012
$18.3m
$12.7m
$16.4m
$13.7m
$14.2m
60%
$9.8m
(14%)
$6.1m
(24%)
$1.89
11.5
(34%)
$2.0m
(80%)
29%
$(.6)m
(70%)
$2.1m
$(2.4)m
(66%)
$0.67
5.5
(214%)
$0.98
–
(16)%
$3.3m
666%
$1.4m
158%
$0.80
4
4%
$4.5m
37%
$3.3m
135%
$0.81
4.5
EBITDA
Year on Year Growth
Net profit/(loss) before tax
Year on Year Growth
Net profit/(loss) after tax
Year on Year Growth
Closing share price
Dividends paid (cents per share)
2222
(d) Details of Remuneration
The remuneration for each Director and Executive Officer
(Key Management Personnel) of the Group accrued for the
financial year was as follows:
SHoRT-TeRM BeNeFITS
PoST-
eMPLoYMeNT
BeNeFITS
oTHeR
LoNG-
TeRM
BeNeFITS
SHARe-
BASeD
PAYMeNT
Base
salary
and fees
$
95,000
55,046
60,000
2012
Directors
J Puttick
D Adams
A Brackin
S Lake
J Sundell
I Thomas
(appointed
8/12/11)
ToTAL
DIReCToRS
Executives
Bonus
2012
$1
other
$ 2
Super-
annuation
$
Leave
entitle-
ment
$
equity
options
$
Total
Remu-
neration
$
options
based
%
Perfor-
mance
related
%
–
–
–
–
–
–
–
4,954
–
–
–
–
607,872
190,000
125,929
43,745
9,379
60,000
33,710
–
–
–
–
–
–
–
–
–
–
–
–
–
–
95,000
60,000
60,000
976,925
60,000
33,710
–
–
–
–
–
–
–
–
–
19.4
–
–
911,628
190,000
125,929
48,699
9,379
– 1,285,635
R De Dominicis
510,609
160,000
64,417
–
–
(14,306)
720,720
(2.0)
20.2
C Mallios
(resigned
28/10/11)
96,923
–
97,959
15,508
(4,484)
–
205,906
D Orrock
280,000
40,000
13,298
31,201
5,281
(14,306)
355,474
A Ritter (appointed
14/11/11)
147,692
25,000
–
15,542
2,794
–
191,028
P Salis
268,868
40,000
104,987
–
–
(21,458)
392,397
I Sanchez
300,000
90,000
1,596
43,022
5,786
(35,764)
404,640
ToTAL
eXeCuTIVeS
1,604,092
355,000
282,257
105,273
9,377
(85,834) 2,270,165
GRouP ToTAL
2,515,720
545,000
408,186
153,972
18,756
(85,834) 3,555,800
–
(4.0)
–
(5.5)
(8.8)
–
7.2
13.1
4.7
13.4
1 Bonus amounts for the financial year represent the amount that vested in the financial year against specific performance criteria. No amounts vest in future
financial years in respect of bonus schemes for the current financial year.
2 Other amounts are short-term benefits that do not constitute base salary, fees and bonus and include cost of living adjustments for Executives on secondment
and fringe benefits tax.
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
23
Directors’ Report
for the year ended 30 June 2012 continued
The remuneration for each Director and Executive Officer
(Key Management Personnel) of the Group paid and
accrued for the financial year was as follows:
SHoRT-TeRM BeNeFITS
PoST-
eMPLoYMeNT
BeNeFITS
oTHeR
LoNG-
TeRM
BeNeFITS
SHARe-
BASeD
PAYMeNT
SHoRT-TeRM BeNeFITS
Bonus
2010
$
other
$
Super-
annuation
$
Leave
entitle-
ment
$
equity
options
$
Total
remun-
ertion
paid
$
options
based
%2
Bonus
$
Perfor-
mance
related
%2
Base
salary
and fees
$
95,000
55,046
60,000
2011
Directors
J Puttick
D Adams
A Brackin
S Lake
590,000 150,0001
J Sundell
60,000
–
ToTAL
DIReCToRS
Executives
860,046 150,000
C Mallios
(appointed
30/08/10)
231,538
D Orrock
280,000
P Salis
284,512
I Sanchez
280,000
ToTAL
eXeCuTIVeS 1,483,447
–
–
–
–
–
–
–
–
–
–
4,954
–
–
–
–
66,600
14,952
–
–
–
–
–
–
–
95,000
60,000
60,000
821,552
60,000
71,554
14,952
– 1,096,552
–
–
–
–
–
–
–
–
–
–
–
–
75,0002
10.0
–
75,000
–
–
R De Dominicis 407,397
–
189,705
–
–
12,262 609,364
1.9
20,000
5.1
–
–
–
–
977
20,838
4,485
–
257,838
7,162
25,200
3,411
12,262 328,035
78,389
3,635
664
14,905
382,105
1,592
25,200
5,385
30,655 342,832
–
3.5
3.9
7.3
–
20,000
–
–
9.3
3.9
75,000
25.3
–
–
– 277,825
74,873
13,945
70,084 1,920,174
– 115,000
GRouP
ToTAL
2,343,493 150,000 277,825 146,427
28,897
70,084 3,016,726
– 190,000
1 The bonus of $150,000 for Stephen Lake, the CEO, was attributable to FY’2010 and paid in FY’2011. The Group had a practice previously where the short term
incentives for all Executives were determined after the audited financials were lodged. The bonus of $75,000 for the CEO was attributable to the FY’2011 year and
was paid in FY’2012.
2 The 2011 bonus and options as a percentage of total remuneration for 2011 are calculated using the 2011 remuneration, including the 2011 bonus and excluding the
2010 related bonus.
2424
Option Holdings
options granted as part of Remuneration for the Year
ended 30 June 2012
There were no options granted as remuneration to Key
Management Personnel in the 30 June 2012 financial year.
The cost of equity options is reported in accordance with
accounting standard AASB 2 Share-based Payments,
which has the effect of reporting the cost of the options
over the period between the grant date and vesting date.
Shares issued on exercise of compensation options
There were no options exercised during the 30 June
2012 financial year that were granted as compensation
in previous financial years as remuneration to Key
Management Personnel.
Group and Company Key Management
Personnel
Names and positions held of Group and Company Key
Management Personnel in office at any time during the
financial year were:
key Management
Personnel
Position
J Puttick
D Adams
A Brackin
S Lake
J Sundell
I Thomas
Director (Non-executive Chairman)
Director (Independent)
Director (Independent)
Director (Managing Director and
Chief Executive Officer)
Director (Non-executive)
Director (Independent)
(appointed 8 December 2011)
R De Dominicis
Chief Executive Wealth Management
C Mallios
D Orrock
A Ritter
P Salis
Chief Financial Officer
(resigned 28 October 2011)
Chief Executive Broker Services
Chief Financial Officer
(appointed 14 November 2011)
Chief Executive Global
Broker Services
I Sanchez
Chief Technology Officer
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
25
Directors’ Report
for the year ended 30 June 2012 continued
The numbers of options in the Company held (directly, indirectly or beneficially) during the financial year by Key
Management Personnel, including their related parties, are set out below.
Balance
01/07/11
Granted as
compen-
sation
options
exercised
or sold
options
cancelled/
forfeited
other
Balance
30/06/12
Total
vested at
30/06/12
Total
vested and
exercis-
able at
30/06/12
Total
vested and
unexercis-
able at
30/06/12
2012
Directors
J Puttick
D Adams
A Brackin
S Lake
J Sundell
I Thomas
ToTAL
DIReCToRS
Executives
–
–
–
–
–
–
–
R De Dominicis
100,000
C Mallios
D Orrock
A Ritter
P Salis
I Sanchez
ToTAL
eXeCuTIVeS
–
100,000
–
150,000
250,000
600,000
GRouP ToTAL
600,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(100,000)
–
(100,000)
–
(150,000)
– (250,000)
– (600,000)
– (600,000)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Financial performance hurdles were not met for the executive options which were subsequently cancelled. No options
vested in the year (Note 32).
2626
Balance
01/07/10
Granted as
compen-
sation
options
exercised
or sold
options
cancelled/
forfeited
Balance
30/06/11
Total
vested at
30/06/11
other
Total
vested and
exercis-
able at
30/06/11
Total
vested and
unexercis-
able at
30/06/11
2011
Directors
J Puttick
D Adams
A Brackin
S Lake
–
–
–
–
J Sundell
10,526,316
ToTAL
DIReCToRS
Executives
10,526,316
R De Dominicis
100,000
C Mallios
D Orrock
P Salis
I Sanchez
ToTAL
eXeCuTIVeS
–
100,000
250,000
250,000
700,000
GRouP ToTAL
11,226,316
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
– (10,526,316)
– (10,526,316)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
100,000
–
100,000
(100,000)
150,000
–
250,000
(100,000)
600,000
– (10,626,316)
600,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
100,000
–
100,000
150,000
250,000
600,000
600,000
A loan held previously with Crown Financial Pty Ltd,
of which Mr Sundell is a Director was extinguished
30 June 2011. The Crown Financial debt was connected
to 10,526,316 options granted by the Company in
favour of Crown Financial. The repayment of the Crown
Financial debt has the simultaneous effect of extinguishing
the options.
Financial performance hurdles were not met for 100,000
(40%) of the executive options for P Salis which were
subsequently cancelled. No options vested in the year.
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
27
Directors’ Report
for the year ended 30 June 2012 continued
Directors’ interests
Lead Auditor’s Independence Declaration
The number of shares in the Company held (directly,
indirectly or beneficially) as at 30 June 2012 by Directors,
including their related parties, are set out below.
The lead Auditor’s independence declaration can be found
on the page following this Directors’ report and forms part
of the Directors’ report for the year ended 30 June 2012.
2012
Directors
J Puttick
D Adams
A Brackin
S Lake
J Sundell
I Thomas
ToTAL
Balance at
30/06/12
Rounding
The Company is of a kind referred to in ASIC Class Order
98/100 dated 10 July 1998 and in accordance with that
Class Order, amounts in the financial report and Directors’
report have been rounded off to the nearest thousand
dollars, unless otherwise stated.
Signed in accordance with a resolution of the Directors:
6,173,398
–
381,943
4,470,108
9,631,610
–
20,657,059
Indemnifying Directors and Officers
During the financial year, the Group paid a premium to
insure the Directors and Officers of the Group. The terms
of the insurance contract prevent additional disclosure.
Dr J F Puttick
Chairman
Mr S M L Lake
Managing Director and Chief Executive Officer
Dated at Brisbane this 24th day of August 2012
In addition, the Company has entered into a Deed of
Indemnity which ensures the Directors and Officers of the
Group will incur no monetary loss as a result of defending
the actions taken against them as Directors and Officers.
The Group is not aware of any liability that has arisen under
these indemnities at the date of the report.
Proceedings on behalf of Company
No person has applied for leave of Court to bring
proceedings on behalf of the Company or intervene in
any proceedings to which the Company is a party for the
purpose of taking responsibility on behalf of the Company
for all or any part of those proceedings. The Company was
not a party to any such proceedings during the year.
Non-audit services
The Board of Directors, in accordance with advice from the
Audit and Risk Committee, is satisfied that the provision of
non-audit services during the year is compatible with the
general standard of independence for Auditors imposed by
the Corporations Act (2001).
Refer to Note 23 in the financial report for details of non-
audit service fees.
2828
Auditor’s Independence Declaration
for the year ended 30 June 2012
ABCD
Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001
To: the directors of GBST Holdings Limited
I declare that, to the best of my knowledge and belief, in relation to the audit for the financial
year ended 30 June 2012 there have been:
•
•
no contraventions of the auditor independence requirements as set out in the Corporations
Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
Stephen Board
Partner
Brisbane
24 August 2012
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
29
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
Liability limited by a scheme approved under
International Cooperative (“KPMG International”), a Swiss entity.
Professional Standards Legislation.
Consolidated Statement of Comprehensive Income
for the year ended 30 June 2012
Revenue from license and service sales
Revenue from sponsored work
Revenue from sale of third party product
Total revenue
Other income
Total revenue and other income
Product delivery and support expenses
Property and equipment expenses
Corporate and administrative expenses
Research and development expenses
ReSuLTS FRoM oPeRATING ACTIVITIeS
Finance costs
Finance income
Net finance costs
PROFIT BEFORE INCOME TAX
Income tax expense
PRoFIT ATTRIBuTABLe To MeMBeRS oF THe PAReNT eNTITY
Other comprehensive income
Exchange differences arising on translation of foreign operations
Effect of hedge of net investment in foreign operations
Net change in fair value of investment
other comprehensive income/(loss) for the year, net of income tax
ToTAL CoMPReHeNSIVe INCoMe/(LoSS) FoR THe YeAR
ATTRIBuTABLe To MeMBeRS oF THe PAReNT eNTITY
Earnings per share
Basic earnings per share (cents)
Diluted earnings per share (cents)
The accompanying notes are an integral part of these consolidated financial statements.
Note
30 Jun 2012
$'000
30 Jun 2011
$'000
46,710
25,744
3,867
76,321
746
45,331
20,018
2,157
67,506
929
77,067
68,435
(46,526)
(39,350)
4 (d)
4 (e)
5
(8,184)
(7,869)
(7,974)
6,514
(2,096)
38
(2,058)
4,456
(1,205)
3,251
278
(91)
1,004
1,191
(6,942)
(8,446)
(7,272)
6,425
(3,165)
1
(3,164)
3,261
(1,877)
1,384
(3,818)
969
(570)
(3,419)
4,442
(2,035)
33
33
4.87
4.87
2.08
2.08
30
Consolidated Statement of Financial Position
for the year ended 30 June 2012
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Current tax receivable
Other assets
Total current assets
NON-CURRENT ASSETS
Investment
Plant and equipment
Intangible assets
Deferred tax assets
Other assets
Total non-current assets
ToTAL ASSeTS
CURRENT LIABILITIES
Trade and other payables
Loans and borrowings
Current tax liabilities
Provisions
Unearned income
Liabilities on business acquisition
Total current liabilities
NON-CURRENT LIABILITIES
Loans and borrowings
Deferred tax liabilities
Provisions
Total non-current liabilities
ToTAL LIABILITIeS
NeT ASSeTS
EQUITY
Issued capital
Reserves
Retained earnings
ToTAL eQuITY
Note
30 Jun 2012
$'000
30 Jun 2011
$'000
7
8
9
16
13
10
11
12
16
13
14
15
16
17
18
19
15
16
17
20
21
2,156
14,578
991
156
669
5,116
11,122
227
–
989
18,550
17,454
–
3,380
64,334
4,164
6
71,884
90,434
7,557
10,289
23
3,837
9,115
9
526
3,664
68,129
3,542
8
75,869
93,323
5,504
10,842
435
3,404
9,262
176
30,830
29,623
13,062
18,550
3,584
1,553
18,199
49,029
41,405
37,664
(6,823)
10,564
41,405
3,878
1,375
23,803
53,426
39,897
37,516
(7,492)
9,873
39,897
The accompanying notes are an integral part of these consolidated financial statements.
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
31
Consolidated Statement of Changes in Equity
for the year ended 30 June 2012
Issued
capital
$'000
Retained
earnings
$'000
Foreign
currency
translation
reserve (a)
$'000
Financial
asset
reserve (b)
$'000
equity re-
muneration
reserve (c)
$'000
Loan
conversion
reserve (d)
$'000
Total
$'000
Balance at 1 July 2010
37,102
10,577
(4,161)
Total comprehensive income
for the year
Profit for the year
–
1,384
–
Other comprehensive income
Exchange differences arising on
translation of foreign operations
Effect of hedge of net investment
in foreign operation
Net change in fair value
of investment
Total other comprehensive loss
ToTAL CoMPReHeNSIVe LoSS
FoR THe YeAR
Transactions with owners,
recorded directly in equity
Contributions by and
distributions to owners
Dividends paid (Note 6)
Share based payments –
exempt shares
Share based payments – options
Share Issues (net of costs)
Fair value conversion option
Transfer to/(from) ordinary capital
Total contributions by owners
Total transactions with owners
–
–
–
–
–
–
–
–
304
–
110
414
414
–
–
–
–
(570)
(570)
–
–
–
–
(3,818)
969
–
(2,849)
1,384
(2,849)
(570)
(2,649)
–
–
–
561
–
(2,088)
(2,088)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
128
561
44,207
–
–
–
–
–
–
–
2
68
–
–
(110)
(40)
(40)
88
–
1,384
–
–
–
–
–
–
–
–
–
(561)
–
(561)
(561)
(3,818)
969
(570)
(3,419)
(2,035)
(2,649)
2
68
304
–
–
(2,275)
(2,275)
–
39,897
BALANCe AT 30 JuNe 2011
37,516
9,873
(7,010)
(570)
(a) The foreign currency translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations as well
as from the translation of liabilities that hedge the Company’s net investment in a foreign subsidiary.
The hedge instrument was GBP denominated debt drawn under the Company’s bank debt facility. The objective of drawing GBP debt under the Company’s bank
debt facility is to use it as a ‘natural hedge’ to offset changes to the fair value of the net tangible assets (NTA) of this foreign subsidiary due to fluctuations in the AUD/
GBP spot rate.
(b) The financial assets reserve records the revaluation of financial assets, classified as fair value through other comprehensive income.
(c) The equity remuneration reserve was used to record items recognised as expenses on valuation of employee share/options granted. When options are exercised,
cancelled or forfeited the amount in the reserve relating to those options is transferred to issued capital.
(d) The loan conversion reserve contains the equity impacts from the issue of options that were not equity remuneration. The balance of the reserve was transferred
to retained earnings during the prior year as the options were extinguished.
The accompanying notes are an integral part of these consolidated financial statements.
32
Consolidated Statement of Changes in Equity
for the year ended 30 June 2012
Issued
capital
$'000
Retained
earnings
$'000
Foreign
currency
translation
reserve (a)
$'000
Financial
asset
reserve (b)
$'000
equity re-
muneration
reserve (c)
$'000
Loan
conversion
reserve (d)
$'000
Total
$'000
Balance at 1 July 2011
37,516
9,873
(7,010)
(570)
88
–
39,897
Total comprehensive income
for the year
Profit for the year
Other comprehensive income
Exchange differences arising on
translation of foreign operations
Effect of hedge of net investment
in foreign operation
Net change in fair value of investment
Total other comprehensive income
ToTAL CoMPReHeNSIVe
INCoMe FoR THe YeAR
Transactions with owners,
recorded directly in equity
Contributions by and
distributions to owners
Dividends paid (Note 6)
Share based payments –
exempt shares
Share based payments – options
Share Issues (net of costs,
for non-cash consideration)
Transfer financial asset reserve
to retained earnings
Total contributions by and
distributions to owners
Total transactions with owners
–
–
–
–
–
–
–
–
–
148
3,251
–
–
–
–
–
278
(91)
–
187
–
–
–
1,004
1,004
3,251
187
1,004
(2,994)
–
–
–
–
434
148
148
(2,560)
(2,560)
–
–
–
–
–
–
–
–
–
–
–
(434)
(434)
(434)
–
–
–
–
–
–
–
–
–
(88)
–
–
(88)
(88)
–
–
3,251
–
–
–
–
–
–
–
–
–
–
–
–
–
278
(91)
1,004
1,191
4,442
(2,994)
–
(88)
148
–
(2,934)
(2,934)
41,405
BALANCe AT 30 JuNe 2012
37,664
10,564
(6,823)
(a) The foreign currency translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations as well
as from the translation of liabilities that hedge the Company’s net investment in a foreign subsidiary.
The hedge instrument was GBP denominated debt drawn under the Company’s bank debt facility. The objective of drawing GBP debt under the Company’s bank
debt facility is to use it as a ‘natural hedge’ to offset changes to the fair value of the net tangible assets (NTA) of this foreign subsidiary due to fluctuations in the AUD/
GBP spot rate.
(b) The financial assets reserve records the revaluation of financial assets, classified as fair value through other comprehensive income.
(c) The equity remuneration reserve was used to record items recognised as expenses on valuation of employee share/options granted. When options are exercised,
cancelled or forfeited the amount in the reserve relating to those options is transferred to issued capital.
(d) The loan conversion reserve contains the equity impacts from the issue of options that were not equity remuneration. The balance of the reserve was transferred
to retained earnings during the prior year as the options were extinguished.
The accompanying notes are an integral part of these consolidated financial statements.
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
33
Consolidated Statement of Cash Flows
for the year ended 30 June 2012
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest income
Sundry income
Finance costs paid
Income tax paid
Net cash provided by operating activities
Cash flows from investing activities
Proceeds from sale of plant and equipment
Proceeds from sale of investments
Purchase of plant and equipment
Purchase of software intangibles
Deferred consideration payment for acquisitions
Net cash used in investing activities
Cash flows from financing activities
Repayment of finance leases
Proceeds from borrowings
Repayment of borrowings
Dividends paid
Net cash used in financing activities
Net (decrease)/increase in cash and cash equivalents
Effect of exchange rate fluctuations on cash held
Cash and cash equivalents at 1 July
Note
30-Jun-12
$'000
30-Jun-11
$'000
79,894
82,201
(67,527)
(62,269)
26 (a)
26 (c)
26 (c)
6
38
746
(2,038)
(3,366)
7,747
8
1,530
(880)
(621)
(117)
(80)
(515)
–
(6,556)
(2,994)
(10,065)
(2,398)
87
980
1
929
(2,572)
(3,892)
14,398
3
–
(1,513)
(1,407)
–
(2,917)
(273)
10,476
(16,378)
(2,649)
(8,824)
2,657
(501)
(1,176)
980
Cash and cash equivalents at end of financial year
26 (b)
(1,331)
The accompanying notes are an integral part of these consolidated financial statements.
34
Notes to and forming part of the Consolidated Financial Statements
for the year ended 30 June 2012
Note 1: Reporting Entity
Use of estimates and judgments
GBST Holdings Limited (“GBST” or the “Company”) is
the Group’s parent Company. The Company is a public
Company limited by shares, incorporated and domiciled in
Australia. The consolidated financial report of the Company
as at and for the year ended 30 June 2012 comprises the
Company and its controlled entities (together referred to
as the “Group” and individually as the “Group entities”).
Note 2: Basis of Preparation
Statement of compliance
The consolidated financial statements are general
purpose financial statements which have been prepared in
accordance with Australian Accounting Standards (AASBs)
adopted by the Australian Accounting Standards Board
(AASB) and the Corporations Act (2001). The consolidated
financial statements comply with International Financial
Reporting Standards (IFRSs) adopted by the International
Accounting Standards Board (IASB).
This consolidated financial report was authorised for
issue in accordance with a resolution of Directors on
24 August 2012.
Basis of measurement
The consolidated financial report has been prepared
on an accruals basis and is based on historical costs,
modified, where applicable, by the measurement at fair
value of selected non-current assets, financial assets and
financial liabilities.
Functional and presentation currency
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 financial statements are presented in
Australian dollars which is the parent entity’s functional
and presentation currency.
The Company is of a kind referred to in ASIC Class Order
98/100 dated 10 July 1998 and in accordance with that
Class Order, amounts in the financial report and Directors’
report have been rounded off to the nearest thousand
dollars, unless otherwise stated.
Comparative figures
Where required by Accounting Standards comparative
figures have been adjusted to conform to changes in
presentation for the current financial period. Details of
any such changes are included in the financial report.
The preparation of the consolidated financial statements
in conformity with IFRSs requires Management to make
judgments, estimates and assumptions that effect the
application of accounting policies and the reported
amounts of assets, liabilities, income and expenses. Actual
results may differ from these estimates. Estimates and
underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the
period in which the estimates are revised and in any future
periods affected.
Information about critical judgments in applying accounting
policies that have the most significant effect on the
amounts recognised in the financial statements is included
in the following note:
• treatment of software development costs and whether
these are to be capitalised;
Information about assumptions and estimation
uncertainties that have a significant risk of resulting in
a material adjustment within the next financial year are
included in the following notes:
• impairment testing of the consolidated entity’s
cash-generating units containing goodwill (Note 12);
• utilisation of tax losses (Note 16).
Financial Position
The Group has a net current asset deficiency at 30 June
2012 of $12.28 million (30 June 2011: $12.17 million). Of
this, $9.11 million (30 June 2011: $9.26 million) represents
payments received in advance and invoices issued in
advance to clients and, as such, do not represent future
cash outflows other than salary and wage related costs in
line with the budgeted expenditure.
The senior debt facility provided by National Australia Bank
matures on 30 June 2014. Senior debt as at 30 June 2012
was $18.03 million, compared to $24.00 million at 30 June
2011. At reporting date, all banking covenants have been
met. Based on the Group’s current forecast and business
plan, the Group anticipates that it will continue to meet
its covenants.
The Directors are of the opinion that there will be
sufficient cash flows to support the Group. The Group’s
earnings outlook continues to improve as all divisions
have secured new clients. The Directors are therefore
confident the Group will be able to meet its debts as they
fall due and, accordingly, believe that the use of the going
concern assumption is appropriate in preparing these
financial statements.
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
35
Notes to and forming part of the Consolidated Financial Statements
for the year ended 30 June 2012 continued
Note 2: Basis of Preparation (continued)
Changes in accounting policies
The accounting policies set out in Note 3 below have
been applied consistently to all periods presented in these
consolidated financial statements and have been applied
consistently by the Group entities.
Note 3: Significant Accounting Policies
Basis of Consolidation
A controlled entity is any entity over which the Group has
the power to control the financial and operating policies,
so as to obtain benefits from its activities. In assessing the
power to govern, the existence and effect of holdings of
actual and potential voting rights are considered.
A list of controlled entities is contained in Note 24 of the
financial statements. All controlled entities have a 30 June
financial year end.
As at reporting date, the assets and liabilities of all
controlled entities have been incorporated into the
consolidated financial statements as well as their results for
the year ended on that date. Where controlled entities have
entered/(left) the consolidated Group during the year, their
operating results have been included/(excluded) from the
date control was obtained/(ceased).
All inter-company balances and transactions between
entities in the Group, including any unrealised profits or
losses, have been eliminated on consolidation. Accounting
policies of subsidiaries are consistent with those adopted
by the parent entity.
contractual terms, economic conditions, the Group’s
operating or accounting policies and other pertinent
conditions as at the acquisition date.
Any contingent consideration to be transferred by the
acquirer will be recognised at fair value at the acquisition
date. Subsequent changes to the fair value of the
contingent consideration will be recognised in profit or
loss unless it is classified as equity. If the contingent
consideration is classified as equity, it shall not be
remeasured and settlement is accounted for within equity.
Group measures goodwill at the acquisition date as:
• the fair value of the consideration transferred; plus
• the recognised amount of any non-controlling interests
in the acquiree; plus if the business combination is
achieved in stages, the fair value of the existing equity
interest in the acquiree; less
• the net recognised amount (generally fair value) of the
identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain
is recognised immediately in profit or loss.
Acquisitions before 1 July 2009
Goodwill represents the excess of the cost of the
acquisition over the Group’s interest in the recognised
amount (generally fair value) of the identifiable assets,
liabilities and contingent liabilities of the acquiree.
Transaction costs, other than those associated with the
issue of debt or equity securities, that the Group incurred
in connection with business combinations were capitalised
as part of the cost of the acquisition.
Business Combinations
Income Tax
Business combinations are accounted for using the
acquisition method as at the acquisition date, which
is the date on which control is transferred to the Group.
The income tax expense/(benefit) for the year comprises
current income tax expense/(benefit) and deferred tax
expense/(benefit).
Acquisitions on or after 1 July 2009
The consideration transferred in a business combination
is measured at fair value, which is calculated as the sum of
the acquisition date fair values of the assets transferred by
the acquirer, the liabilities incurred by the acquirer to former
owners of the acquire and equity issued by the acquirer.
Acquisition-related costs are expensed as incurred unless
associated with issue of debt or equity securities incurred
in connection with business combination.
When the Group acquires a business, it assesses the
financial assets and liabilities assumed for appropriate
classification and designation in accordance with the
3636
Current income tax expense charged to the profit or loss
is the tax payable on taxable income calculated using
applicable income tax rates enacted, or substantially
enacted, as at reporting date. Current tax liabilities (assets)
are therefore measured at the amounts expected to be
paid to/ (recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in
deferred tax asset and deferred tax liability balances
during the year as well unused tax losses.
Current and deferred income tax expense/(benefit) is
charged or credited directly to equity instead of the profit
or loss when the tax relates to items that are credited or
charged directly to equity.
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 financial statements. Deferred tax assets also arise
from unused tax losses. No deferred income tax will
be recognised from the initial recognition of an asset or
liability, excluding a business combination, where there
is no effect on accounting or taxable profit or loss.
Deferred tax 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 as at reporting
date. Their measurement also reflects the manner in which
Management expects to recover or settle the carrying
amount of the related asset or liability.
Deferred tax assets relating to temporary differences and
unused tax losses are recognised only to the extent that
it is probable that future taxable profit will be available
against which the benefits of the deferred tax asset can
be utilised.
Where temporary differences exist in relation to
investments in subsidiaries, deferred tax assets and
liabilities are not recognised where the timing of the
reversal of the temporary difference can be controlled
and it is not probable that the reversal will occur in the
foreseeable future.
Current tax assets and liabilities are offset where a legally
enforceable right of set-off exists and it is intended that
net settlement or simultaneous realisation and settlement
of the respective asset and liability will occur. Deferred
tax assets and liabilities are offset if there is a legally
enforceable right to offset current tax liabilities and assets,
and they relate to income taxes levied by the same tax
authority on the same taxable entity, or on different tax
entities, but they intend to settle current tax liabilities and
assets on a net basis or their tax assets and liabilities will
be realised simultaneously.
Tax consolidation
The Company and its wholly-owned Australian resident
entities are part of a tax-consolidated 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.
Inventories
Inventories are measured at the lower of cost and net
realisable value. The cost of inventories is based on first-in
first-out principle and includes expenditure incurred in
acquiring the inventories and other costs incurred in
bringing them to their existing location and condition.
Work in progress is stated at the aggregate of project
development contract costs incurred to date plus
recognised profits less any recognised losses and
progress billings.
Contract costs include all costs directly related to specific
contracts, costs that are specifically chargeable to the
customer under the terms of the contract and an allocation
of overhead expenses incurred in connection with the
Group’s activities in general.
Plant and Equipment
Plant and equipment are carried at cost, less any
accumulated depreciation and where applicable,
impairment losses.
Cost includes expenditure that is directly attributable to
the acquisition of the asset.
Subsequent costs are included in the asset’s carrying
amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits
associated with the item will flow to the Group and the cost
of the item can be measured reliably. All other repairs and
maintenance are charged to the income statement during
the financial period in which they are incurred.
The depreciable amounts of all fixed assets including
capitalised lease assets, are depreciated over their
useful lives to the entity commencing from the time the
asset is held ready for use. Leasehold improvements
are depreciated over the shorter of either the unexpired
period of the lease or the estimated useful lives of
the improvements.
The depreciation rates used for each class of assets are:
Class of
fixed asset
Depreciation
rate
Basis
Owned plant, equipment
5-40%
Straight-line
Owned plant, equipment
13.3-67% Diminishing value
Leased plant, equipment
25%-33%
Straight-line
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
37
37
Notes to and forming part of the Consolidated Financial Statements
for the year ended 30 June 2012 continued
Acquired in a business combination and or separately
Software systems and customer contracts acquired
outside a business combination are recognised at cost.
Intangible assets acquired in 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 one to ten 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 (research and development)
Development costs are capitalised only if development
costs can be measured reliably, the product or process
is technically and commercially feasible, future economic
benefits are probable and the Group intends to and has
sufficient resources to complete development and to
use or sell the asset. The cost capitalised includes the
cost of materials, direct labour and overhead costs that
are directly attributable to preparing the asset for its
intended use. Once development is completed, capitalised
development costs are amortised over their useful life
as determined by Management on a straight-line basis.
Capitalised development expenditure is measured at
cost less accumulated amortisation and accumulated
impairment losses.
Expenditure during the research phase of a project is
recognised as an expense when incurred. Development
costs are expensed in the year in which they are incurred
when future economic benefits are uncertain or the future
economic benefits cannot be measured reliably.
Subsequent expenditure
Subsequent expenditure is capitalised only when it
increases the future economic benefits embodied in the
specific asset to which it relates. All other expenditure,
including expenditure on internally generated goodwill
and brands, is recognised in profit or loss as incurred.
Note 3: Significant Accounting Policies
(continued)
Gains and losses on disposals are determined by
comparing proceeds with the carrying amount. These
gains and losses are included in profit or loss.
Asset Retirement Obligations
The cost of plant and equipment includes an initial estimate
of the cost of make good allowances, and a corresponding
provision for these future costs is raised. The Group has a
number of lease agreements over office premises which
include an obligation to make good the premises at the
conclusion of the lease term. The Group 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 lease.
Leases
Leases where the Group assumes substantially all
the risks and rewards incidental of the ownership are
classified as finance leases. All other leases are operating
leases and are not recognised on the Group’s statement
of financial position.
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 are charged as
expenses in the periods in which they are incurred.
Lease incentives under operating leases are recognised as
a liability and amortised on a straight-line basis over the life
of the lease term.
Intangible Assets
The Group’s major intangible assets are software systems,
customer contracts and goodwill.
The amortisation rates used for each class of assets
acquired outside a business combination are:
Class of fixed asset
Amortisation rate
Basis
Owned software
Leased software
25%
25%
Straight-Line
Straight-Line
3838
Goodwill
(ii) Non-derivative financial assets
Goodwill is initially recorded at the amount by which
the purchase consideration for a business combination
exceeds the fair value attributed to its net assets at date
of acquisition. Following initial recognition, goodwill is
measured at cost less any accumulated impairment
losses. Goodwill is not amortised.
Goodwill is tested annually for impairment, or more
frequently if events or changes in circumstances indicate
that the carrying value may be impaired. Goodwill is
allocated to cash generating units for the purpose of
impairment testing.
Borrowing Costs
Borrowing costs directly attributable to the acquisition
or production of a qualifying asset (i.e. an asset that
necessarily takes a substantial period of time to get ready
for its intended use or sale) are capitalised as part of the
cost of the asset. All other borrowing costs are expensed
in the period they occur. Borrowing costs consist of
interest and other costs that the entity incurs in connection
with the borrowing of funds.
Financial Instruments
(i) Non-derivative financial liabilities
Financial liabilities are recognised initially on the trade date
at which the Group becomes a party to the contractual
provisions of the instrument. The Group derecognises
a financial liability when its contractual obligations are
discharged or cancelled or expire. Financial liabilities and
assets are offset and the net amount presented in the
statement of financial position when, and only when, the
Group has a legal right to offset the amounts and intends
either to settle on a net basis or to realise the asset and
settle the liability simultaneously.
The Group classified non-derivative financial liabilities
into the other financial liabilities category. Such financial
liabilities are recognised initially at fair value plus any
directly attributable transaction costs.
Subsequent to initial recognition, these financial liabilities
are measured at amortised cost using the effective interest
rate method.
Other financial liabilities comprise loans and borrowings,
bank overdrafts and trade and other payables.
The early adoption of AASB 9 (2009) did not impact the
Group’s accounting policy for financial liabilities.
Changes in accounting policies during the year
ended 30 June 2011
As disclosed in the consolidated financial report for the
year ended 30 June 2011, the Group early adopted
AASB 9 Financial Instruments (2010) and AASB 2009-11
Amendments to Australian Standards arising from AASB 9
in the year then ended. As allowed by the transitional
provisions of AASB 9, the Group chose the date of initial
application of AASB 9 (the date on which the Group
assessed its existing financial assets) as 1 July 2010.
The early adoption of AASB 9 did not impact the Group’s
accounting policy for financial liabilities.
AASB 9 requires that an entity classifies its financial assets
as subsequently measured at either amortised cost or
fair value depending on the entity’s business model for
managing the financial assets and the contractual cash
flow characteristics of the financial assets. In addition, for
certain investments in equity instruments, an entity may
irrevocably elect to recognise all changes in fair value
directly through other comprehensive income; dividend
income on such equity investments is recognised in profit
or loss.
Accounting policy
The Group initially recognises financial assets on the
trade date at which the Group becomes a party to the
contractual provisions of the instrument.
Financial assets are initially measured at fair value.
If the financial asset is not subsequently measured at
fair value through profit or loss, the initial measurement
includes transaction costs that are directly attributable
to the asset’s acquisition or origination. The Group
subsequently measures financial assets at either fair
value or amortised cost.
Financial assets measured at amortised cost
A financial asset is subsequently measured at amortised
cost using the effective interest method and net of any
impairment loss, if: the asset is held within a business
model with an objective to hold assets in order to collect
contractual cash flows; and the contractual terms of the
financial asset give rise, on specified dates, to cash flows
that are solely payments of principal and interest.
Financial assets measured at fair value
Financial assets other than those subsequently measured
at amortised cost are subsequently measured at fair value
with all changes in fair value recognised in profit or loss.
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
39
39
Notes to and forming part of the Consolidated Financial Statements
for the year ended 30 June 2012 continued
Note 3: Significant Accounting Policies
(continued)
However, for investments in equity instruments not held
for trading, the Group may elect at initial recognition
to recognise gains and losses in other comprehensive
income. For instruments measured at fair value through
other comprehensive income, gains and losses are
never reclassified to profit or loss and no impairments are
recognised in profit or loss. Dividends earned from such
investments are recognised in profit or loss unless the
dividends clearly represent a recovery of part of the cost
of investment.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and
call deposits with original maturities of three months or
less. Bank overdrafts that are repayable on demand and
form an integral part of the Group’s cash management are
included as a component of cash and cash equivalent for
the purposes of statement of cash flows.
Impairment of Assets
Financial assets
Financial assets at amortised cost
A financial asset at amortised cost is assessed at each
reporting date to determine whether there is objective
evidence that it is impaired. A financial asset at amortised
cost is impaired if objective evidence indicates that a
loss event has occurred after the initial recognition of the
asset and that the loss event had a negative effect on
the estimated future cash flows of that asset that can be
estimated reliably. Objective evidence that these financial
assets are impaired can include default or delinquency
by a debtor, restructuring of an amount due to the Group
on terms that the Group would not consider otherwise or
indications that a debtor or issuer will enter bankruptcy.
The Group considers evidence of impairment for
receivables at both a specific asset and collective level.
All individually significant receivables are assessed for
specific impairment. All individually significant receivables
found not to be specifically impaired are then collectively
assessed for any impairment that has been incurred but
not yet identified. Receivables that are not individually
significant are collectively assessed for impairment
by grouping together receivables with similar risk
characteristics. In assessing collective impairment the
Group uses historical trends of the probability of default,
timing of recoveries and the amount of loss incurred,
adjusted for management’s judgment as to whether
current economic and credit conditions are such that the
actual losses are likely to be greater or less than suggested
by historical trends.
An impairment loss in respect of a financial asset
measured at amortised cost is calculated as the difference
between its carrying amount and the present value of
the estimated future cash flows discounted at the asset’s
original effective interest rate. Losses are recognised in
profit or loss and reflected in an allowance account against
receivables. Interest on the impaired asset continues to be
recognised through the unwinding of the discount. When
a subsequent event causes the amount of impairment loss
to decrease, the decrease in impairment loss is reversed
through profit or loss.
The early adoption of AASB 9 did not impact the Group’s
accounting policy for impairment in relation to financial
assets measured at amortised cost.
Accounting policy in respect of equity securities at
fair value
Impairment assessment is not required to be carried out
for equity securities at fair value when the requirements
of AASB 9 are applied as all changes in fair value are
recognised in other comprehensive income.
Non-financial assets
The carrying amounts of the Group’s non-financial assets,
other than deferred tax assets, are reviewed at each
reporting date to determine whether there is any indication
of impairment. If any such indication exists then the
asset’s recoverable amount is estimated. For goodwill and
intangible assets that have indefinite lives or that are not yet
available for use, the recoverable amount is estimated each
year at the same time.
The recoverable amount of an asset is the greater of its
value in use and its fair value less costs of disposal. In
assessing value in use, the estimated future cash flows
are discounted to their present value using a post-tax
discount rate that reflects current market assessments
of the time value of money and the risks specific to the
asset. For the purpose of impairment testing, assets
are grouped together into the smallest group of assets
that generate cash inflows from continuing use that are
largely independent of the cash inflows of other assets or
groups of assets (the “cash-generating unit”). The goodwill
acquired in a business combination, for the purpose
of impairment testing, is allocated to cash-generating
units that are expected to benefit from the synergies of
the combination.
4040
An impairment loss is recognised if the carrying amount
of an asset exceeds its recoverable amount. Impairment
losses are recognised in profit or loss.
An impairment loss in respect of goodwill is not reversed.
In respect of other assets, impairment losses recognised
in prior periods are assessed at each reporting date for
any indications that the loss has decreased or no longer
exists. An impairment loss is reversed if there has been a
change in the estimates used to determine the recoverable
amount. An impairment loss is reversed only to the extent
that the asset’s carrying amount does not exceed the
carrying amount that would have been determined, net
of depreciation or amortisation, if no impairment loss had
been recognised.
Provisions
Provisions are recognised when the Group has a legal
or constructive obligation, as a result of past events, for
which it is probable that an outflow of economic benefits
will result and that outflow can be reliably measured.
Provisions are determined by discounting the expected
future cash flows at a pre-tax rate that reflects current
market assessments of the time value of money and the
risks specific to the liability. The unwinding of the discount
is recognised as a finance cost.
Employee Benefits
Provision is made for the Group’s liability for employee
benefits arising from services rendered by employees
to reporting period end. Employee benefits expected to
be settled within one year have been measured at the
amounts expected to be paid when the liability is settled,
plus related oncosts. Other employee benefits payable
later than one year have been measured at the present
value of the estimated future cash outflows to be made
for those entitlements. Those cash flows are discounted
using market yields on national government bonds with
terms to maturity that match the expected timing of cash
flows. Contributions are made by the Group to defined
contribution superannuation funds and are charged as
expenses when incurred.
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 is
measured at grant date and recognised as an expense
over the vesting period, with a corresponding increase to
an equity account. The fair value of shares is ascertained
as the market bid price. The fair value of options is
ascertained using a Black–Scholes option pricing
model or a Trinomial Lattice option pricing model which
incorporate all market vesting conditions. The number
of shares and options expected to vest is 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 eventually vest.
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 finance 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. The major business
activities recognised revenue as follows:
Software license fee revenue
A software licensing arrangement is considered to be a
sale if the following conditions are satisfied:
• The rights to the software license are assigned to the
licensee in return for a fixed fee or a non-refundable
guarantee;
• The contract is non-cancellable;
• The licensee if able to exploit its rights to the license
freely; and
• The consolidated entity has no remaining obligations
to perform.
For such arrangements, software license fee revenue
is recognised on the transfer of the rights to the licensee.
In other arrangements, revenue is recognised over the
license term on a straight line basis.
Maintenance/support service revenue for
licensed software
Unearned income is recognised upon receipt of payment
for maintenance/support contracts. Revenue is brought
to account over time as it is earned.
However, to the extent that GBST has fulfilled all its
obligations under the contract, the income is recognised
as being earned at the time when all GBST’s obligations
under the contract have been fulfilled.
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
41
41
Notes to and forming part of the Consolidated Financial Statements
for the year ended 30 June 2012 continued
Note 3: Significant Accounting Policies
(continued)
Sponsored implementation and consulting revenue
Revenue from a contract to provide implementation and
consulting services is recognised by reference to the
percentage of completion of the contract. The percentage
of completion of the contract is determined by reference to
the proportion of work performed (costs incurred to date)
to estimated total work performed (total contract costs).
When the percentage of completion cannot be estimated
reliably, contract revenue is recognised only to the extent of
the contract costs incurred that are likely to be recovered.
An expected loss on a contract is recognised immediately
in the Statement of Comprehensive Income at inception.
Sponsored project revenue
Revenue received in advance for long-term project
development contracts is deferred. This revenue is
recognised over the period in which expenditure is incurred
in relation to the development of the project. When the
outcome of a long-term service contract can be estimated
reliably, contract revenue and expenses are recognised
in the profit and loss account by reference to the stage
of completion of the contract activity at the reporting
date. The stage of completion is assessed by reference
to the completion of a physical proportion of the contract
work to date for each contract. When the outcome of a
long-term service contract cannot be estimated reliably,
revenue is recognised only to the extent of contract
costs incurred that are probable to be recoverable and
contract costs are recognised as an expense in the
period in which they are incurred. An expected loss on
a contract is recognised immediately in the Statement
of Comprehensive Income at inception.
Sale of third party product
Revenue from the sale of goods is recognised at the point
of delivery as this corresponds to the transfer of significant
risks and rewards of ownership of the goods and the
cessation of all involvement in those goods.
All revenue is stated net of the amount of goods and
services tax (GST).
Interest revenue
Interest revenue is recognised using the effective interest
rate method, which, for floating rate financial assets, is
the rate inherent in the instrument.
Dividend revenue
Dividend revenue is recognised when the right to receive
a dividend has been established.
4242
Grants
Government grants are recognised initially as deferred
income at fair value when there is reasonable assurance
that they will be received and that the Group will comply
with the conditions associated with the grant. Grants
that compensate the Group for expenses incurred
are recognised in profit or loss as other income on
a systematic basis in the same periods in which the
expenses are recognised. Grants that compensate the
Group for the cost of an asset are recognised in profit or
loss on a systematic basis over the useful life of the asset.
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of
the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Tax Office.
In these circumstances the GST is recognised as part of
the cost of acquisition of the asset or as part of an item of
the expense. Receivables and payables in the Statement
of Financial Position are shown inclusive of GST.
Cash flows are presented in the Statement of Cash
flows on a gross basis, except for the GST component
of investing and financing activities, which are disclosed
as operating cash flows.
Earnings Per Share
The Group presents basic and diluted earnings per
share (EPS) data for its ordinary shares. Basic EPS is
calculated by dividing the profit or loss attributable to
ordinary shareholders of the Group by the weighted
average number of ordinary shares outstanding during
the period. Diluted EPS is determined by adjusting the
profit or loss attributable to ordinary shareholders and the
weighted average number of ordinary shares outstanding
for the effects of all dilutive potential ordinary shares,
which comprise share options granted to employees,
Directors and related parties (refer to Note 33).
Segment Reporting
An operating segment is a component of the Group that
engages in business activities from which it may earn
revenues and incur expenses, including revenues and
expenses that relate to transactions with any of the Group’s
other components. All operating segments’ operating
results are regularly reviewed by the Group’s CEO to make
decisions about resources to be allocated to the segment
and assess its performance, and for which discrete
financial information is available.
Inter-segment pricing is determined on an arm’s
length basis.
Segment results, assets and liabilities that are reported to
the CEO include items directly attributable to a segment as
well as those that can be allocated on a reasonable basis.
Foreign Currency Transactions and Balances
Transactions and balances
Foreign currency transactions are translated into a Group
entities’ 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.
Exchange differences arising on the translation of
monetary items are recognised in profit or loss, except
where deferred in equity as a qualifying cash flow 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 profit
or loss.
Group companies
The financial results and position of foreign operations
whose functional currency is different from the Group’s
presentation currency are translated as follows:
a. Assets and liabilities are translated at year-end
exchange rates prevailing at that reporting date;
b. Income and expenses are translated at average
exchange rates for the period; and
c. Retained earnings are translated at the exchange rates
prevailing at the date of the transaction.
Exchange differences arising on translation of foreign
operations are recognised in other comprehensive income
and presented in the Group’s foreign currency translation
reserve in equity. These differences are recognised in profit
or loss in the period in which the operation is disposed.
When the settlement of a monetary item receivable from
or payable to a foreign operation is neither planned nor
likely in the foreseeable future, foreign exchange gains and
losses arising from such a monetary item are considered
to form part of a net investment in a foreign operation and
are recognised in other comprehensive income, and are
presented in the translation reserve in equity.
Hedge of Net Investment in Foreign Operation
Foreign currency differences arising on the retranslation
of a financial liability designated as a hedge of a net
investment in a foreign operation are recognised in other
comprehensive income and presented in equity, in the
foreign currency translation reserve, to the extent that
the hedge is effective. To the extent that the hedge is
ineffective, such differences are recognised in the profit
or loss. When the hedged part of a net investment is
disposed of, the associated cumulative amount in equity
is transferred to profit or loss as an adjustment to the profit
or loss on disposal.
Share capital
ordinary shares
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of ordinary shares and
share options are recognised as a deduction from equity,
net of any tax effects.
New Standards and Interpretations not
yet adopted
The following standards, amendments to standards and
interpretations have been identified as those which may
impact the entity in the period of initial application. They are
available for early adoption at 30 June 2012, but have not
been applied preparing this financial report:
• AASB 9 Financial Instruments (December 2010) was
added to AASB 9 Financial Instruments in 2010 and
relates to the classification and measurement of financial
liabilities. The requirements that were added are
generally consistent with the equivalent requirements
of AASB 139 Financial Instruments: Recognition and
Measurement except in respect of the fair value option
and certain derivatives linked to unquoted equity
instruments. The requirements of AASB 139 in relation
to the derecognition of financial assets and financial
liabilities to AASB 9 were also added. AASB 9 (2010)
will become mandatory for the Group’s 30 June 2016
financial statements. Early adoption is permitted and
entities may elect whether to apply AASB 9 (December
2010) or AASB 9 (December 2009). GBST has elected
to early adopt AASB 9 (December 2009) for its 2011
financial statements and has elected that the prior
periods are not to be restated. GBST does not intend
early adopting AASB 9 (2010).
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
43
43
Notes to and forming part of the Consolidated Financial Statements
for the year ended 30 June 2012 continued
for the Group’s 30 June 2014 financial statements with
retrospective application required. The Group has not
yet determined the potential effect of the amendment.
• AASB 2011-9 Amendments to Australian Accounting
Standards – Presentation of Items of Other
Comprehensive Income makes a number of changes
to the presentation of Other Comprehensive Income
including presenting separately those items that would
be reclassified to profit or loss in the future and those
that would never be reclassified to profit or loss and
the impact of tax on those items. The amendments
will become mandatory for the Group’s 30 June 2013
financial statements with retrospective application
required. The Group has not yet determined the
potential effect of the amendment.
• AASB 2011-4 Amendments to Australian Accountings
Standards to Remove Individual Key Management
Personnel Disclosure Requirements removes specific
individual key management personnel disclosures
required by disclosing entities from AASB 124 as
this information is already required in the Remuneration
Report of disclosing entities under s300A of the
Corporations Act 2001. The amendments will become
mandatory for the Group’s 30 June 2013 financial
statements. Early adoption of this standard is not
permitted. The Group has not yet determined the
potential effect of the amendment.
• Amendments to IFRS 7 Offsetting Financial Assets
and Financial Liabilities The amendments increase
the disclosures about offset positions, including the
gross position and the nature of the arrangements. The
amendments will become mandatory for the Group’s
30 June 2013 financial statements. The Group has not
yet determined the potential effect of the amendment.
• Amendments to IAS 32 Offsetting Financial Assets
and Financial Liabilities The amendments clarify when
an entity has a legally enforceable right to set-off
financial assets and financial liabilities permitting entities
to present balances net on the balance sheet. The
amendments will become mandatory for the Group’s
30 June 2014 financial statements. The Group has not
yet determined the potential effect of the amendment.
Note 3: Significant Accounting Policies
(continued)
• AASB 10 Consolidated Financial Statements introduces
a new approach to determining which investees should
be consolidated. An investor controls an investee
when the investor is exposed, or has rights, to variable
returns from its involvement with the investee and has
the ability to affect those returns through its power
over the investee. AASB 10 will become mandatory
for the Group’s 30 June 2014 financial statements.
Retrospective application is required when there is a
change in the control conclusion. Early application is
only available if AASB 11, AASB 12, AASB 127 (2011)
and AASB 121 (2011) are applied at the same time.
The Group has not yet determined the potential impact
of the standard.
• AASB 127 Separate Financial Statements (2011)
carries forward the existing accounting and disclosure
requirements for separate financial statements with
some minor clarifications. Retrospective application is
generally applicable. Early application is only available
if AASB 10, AASB 11, AASB 12 and AASB 128 (2011)
are applied at the same time. The Group has not yet
determined the potential impact of the standard.
• AASB 12 Disclosures of Interests in Other Entities
contains the disclosure requirements for entities that
have interest in subsidiaries, joint arrangements,
associated and/or unconsolidated structured entities.
AASB 12 will become mandatory for the Group’s
30 June 2014 financial statements. Early application
is available only if AASB 10 and AASB 11 are applied
at the same time. The Group has not yet determined
the potential impact of the standard.
• AASB 13 Fair Value Measurement explains how to
measure fair value when required to by other IFRSs.
It does not introduce new fair value measurements,
nor does it eliminate the practicability exceptions to fair
value that currently exist in certain standards. AASB
13 becomes mandatory for the Group’s 30 June 2014
financial statements with prospective application
required. The Group has not yet determined the
potential effect of the standard.
• AASB 2011-10 Amendments to Australian Accounting
Standards arising from AASB 119 Employee Benefits
(September 2011) focuses mainly on, but are not
limited to, the accounting for defined benefit plans. In
addition, it changes the definition of short-term and
other long-term employee benefits and some disclosure
requirements. The amendments will become mandatory
4444
Note 4: Profit for the Year
Profit before income tax expense includes the following items of revenue and expense:
(a) Other expenses:
Cost of third party product sold
Operating lease rentals
(b) Depreciation & amortisation:
Depreciation of owned plant & equipment
Amortisation of tangible & intangible leased assets
Amortisation of intangibles (excluding leased assets)
(c) Employee benefits expense:
Monetary based expense (includes contributions to defined contribution
plans $2.96 million (2011: $2.65 million))
Share based payments
(d) Finance costs:
Foreign currency losses
Interest paid to external entities
Interest paid to director related entities
Finance lease charges
Facility fees
(e) Finance income
Bank interest
(f) Significant items:
The following significant expense items are relevant in
explaining the financial performance:
Termination payments to employees
GBST GRouP
30 Jun 2012
$'000
30 Jun 2011
$'000
2,428
2,572
1,069
446
6,213
7,728
1,483
2,136
941
174
6,153
7,268
41,077
35,888
(88)
70
40,989
35,958
58
1,327
–
45
666
2,096
38
38
212
212
221
1,385
1,000
36
523
3,165
1
1
203
203
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
45
45
Notes to and forming part of the Consolidated Financial Statements
for the year ended 30 June 2012 continued
Note 5: Income Tax Expense
(a) The components of tax expense comprise:
Current tax
Deferred tax (Note 16 (c) (i))
Recognition of previously unrecognised tax losses
(Over)/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:
Profit before tax
Prima facie tax payable/(receivable) at 30%
Adjust for tax effect of:
Amortisation of customer contracts
Research & development expenditure claim (i)
Recoupment of temporary differences not previously taken up
Over provision in respect of prior years
Recognition of previously unrecognised tax losses (ii)
Tax losses carried back
Current year losses for which no deferred tax asset was recognised (iii)
Other non-allowable items (net)
Reduction in tax rate - opening balances
Reduction in tax rate - current year
UK share based payment treatment
Effect of different tax rates of subsidiaries operating in other jurisdictions
Income tax expense attributable to entity
Weighted average effective tax rates:
GBST GRouP
30 Jun 2012
$'000
30 Jun 2011
$'000
2,507
(778)
–
(524)
1,205
4,456
1,337
465
(2,072)
(150)
(478)
–
–
1,576
537
104
(13)
–
(101)
1,205
27%
2,712
(426)
(599)
190
1,878
3,261
978
465
(1,110)
210
(51)
(599)
(12)
1,383
584
31
(10)
7
1
1,877
58%
The weighted average effective consolidated tax rate at 30 June 2012 is 27% (2011: 58%). Key transactions affecting the tax
rate are:
(i) UK R&D corporation tax relief now incorporated in addition to the Australian R&D relief.
(ii) In the prior financial year due to an improved business outlook of probable future profits for the GBST Wealth Management
(UK) business, the Group elected to recognise previously unrecognised tax losses of $599 thousand.
(iii) For GBST Ltd (Coexis) deferred tax assets have not been recognised in relation to operating losses for tax purposes,
as it is not considered probable that they will be utilised within the foreseeable future given the level of research and
development costs incurred by the Company for which the Company has allowable Research and Development tax
concession deductions (rate - 1 Apr – 30 Jun 2012: 225%; 1 Jul – 31 Mar 2012: 200%).
(iv) There is no tax recognised in other comprehensive income within the current year or prior year.
4646
Note 6: Dividends
Dividends on ordinary shares
Dividend paid in the period:
Interim fully franked (at 30%) dividend paid of 2.5 cents per share (2011: 2.0)
2011 final fully franked (at 30%) dividend paid of 2.0 cents per share (2010: 2.0)
Net Dividend paid
GBST GRouP
30 Jun 2012
$'000
30 Jun 2011
$'000
–
–
1,664
1,330
2,994
1,328
1,321
2,649
After the reporting date the Directors recommended a final dividend of 2.5 cents per share to be paid to the holders of fully
paid ordinary shares. The dividend will be 100% franked and will be paid on 24 October 2012. The dividend has not been
provided and there are no income tax consequences.
Dividend franking account:
Balance of franking account at year-end
30% franking credits available to shareholders of GBST Holdings Limited
for subsequent financial years post final dividend payment.
GBST GRouP
30 Jun 2012
$'000
30 Jun 2011
$'000
13,212
12,007
12,349
11,857
The above available amounts are based on the balance of the dividend franking account at year-end adjusted for:
(a) franking credits that will arise from the payment of the current tax liabilities;
(b) franking debits that will arise from the payment of dividends recognised as a liability at the year-end;
(c) franking credits that will arise from the receipt of dividends recognised as receivables by the tax consolidated Group at the
year-end; and
(d) franking credits that the entity may be prevented from distributing in subsequent years.
Note 7: Cash and Cash Equivalents
Cash at bank and on hand
Bank overdraft used for cash management purposes (Note 15)
Cash and cash equivalents in the Statement of Cash flows
GBST GRouP
30 Jun 2012
$'000
30 Jun 2011
$'000
2,156
(3,487)
(1,331)
5,116
(4,136)
980
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
47
47
Notes to and forming part of the Consolidated Financial Statements
for the year ended 30 June 2012 continued
Note 8: Trade and Other Receivables
Current
Trade receivables
Accrued revenue
Other amounts receivable
GBST GRouP
30 Jun 2012
$'000
30 Jun 2011
$'000
13,355
10,305
856
367
662
155
14,578
11,122
(a) An allowance for impairment is recognised when there is objective evidence that an individual trade or term receivable
is impaired. The movement in allowance for impairment during the year was impairment loss recognised $208 thousand
(2011: $76 thousand), amounts written off $71 thousand (2011: $46 thousand).
Note 9: Inventories
Current – at cost
Inventory on hand
Work in progress
Note 10: Investment
Non-Current
Investment in listed shares at fair value (a)
GBST GRouP
30 Jun 2012
$'000
30 Jun 2011
$'000
710
281
991
61
166
227
GBST GRouP
30 Jun 2012
$'000
30 Jun 2011
$'000
–
–
526
526
(a) There has been a change in circumstance relating to the investment in the Company Razor Risk Technologies Limited
(ASX: RZR). The investment was sold for $1.53 million based on a share price of $0.0349 per share.
4848
Note 11: Plant and Equipment
Owned plant and equipment at cost
Provision for depreciation
Net carrying value
Leased plant and equipment at cost
Provision for amortisation
Net carrying value
Total plant and equipment
(a) Movement in Plant and Equipment
GBST Group
Year ended 30 June 2011
Balance at 1 July 2010
Additions
Disposals
Depreciation expense
Reclassification to owned assets – cost
Reclassification to owned assets – accumulated depreciation
Effect of movements in exchange rates
Balance at 30 June 2011
Year ended 30 June 2012
Balance at 1 July 2011
Additions
Disposals
Depreciation expense
Reclassification to owned assets - cost
Reclassification to owned assets - accumulated depreciation
Effect of movements in exchange rates
Balance at 30 June 2012
GBST GRouP
30 Jun 2012
$'000
30 Jun 2011
$'000
11,604
(8,749)
2,855
826
(301)
525
10,792
(7,778)
3,014
867
(217)
650
3,380
3,664
owned
$'000
Leased
$'000
Total
$'000
2,600
1,628
(175)
(941)
148
(111)
(135)
3,014
3,014
891
(31)
(1,069)
165
(134)
19
2,855
349
506
–
(165)
(148)
111
(3)
650
650
123
–
(218)
(165)
134
1
525
2,949
2,134
(175)
(1,106)
–
–
(138)
3,664
3,664
1,014
(31)
(1,287)
–
–
20
3,380
Plant and equipment was impairment tested in conjunction with intangible assets, refer Note 12.
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
49
49
Notes to and forming part of the Consolidated Financial Statements
for the year ended 30 June 2012 continued
GBST GRouP
30 Jun 2012
$'000
30 Jun 2011
$'000
37,738
(17,010)
20,728
12,070
(10,597)
1,473
45,649
(4,804)
40,845
1,520
(232)
1,288
36,668
(13,133)
23,535
12,001
(8,166)
3,835
45,433
(4,725)
40,708
55
(4)
51
64,334
68,129
Software
systems
$'000
Customer
contracts
$'000
Goodwill
$'000
Leased
software
$'000
27,443
313
1,548
(130)
(3,716)
39
(39)
(1,923)
23,535
6,684
42,937
–
–
–
(2,437)
–
–
–
–
–
–
–
–
(412)
3,835
(2,229)
40,708
5
55
–
–
(9)
(39)
39
–
51
Total
$'000
77,069
368
1,548
(130)
(6,162)
–
–
(4,564)
68,129
Note 12: Intangible Assets
At Cost
Software systems
Accumulated amortisation
Net carrying value
Customer contracts
Accumulated amortisation
Net carrying value
Goodwill
Accumulated impairment losses
Net carrying value
Leased software at cost
Accumulated amortisation
Net carrying value
Total intangibles
(a) Movement in Intangibles
GBST Group
Year ended 30 June 2011
Balance at 1 July 2010
Additions
Additions through internal development
Disposals
Amortisation charge
Reclassification to owned assets – cost
Reclassification to owned assets –
accumulated amortisation
Effect of movements in exchange rates
Balance at 30 June 2011
5050
GBST Group
Year ended 30 June 2012
Balance at 1 July 2011
Additions
Additions through internal development
Disposals
Amortisation charge
Reclassification to owned assets – cost
Reclassification to owned assets –
accumulated amortisation
Effect of movements in exchange rates
Balance at 30 June 2012
Software
systems
$'000
Customer
contracts
$'000
Goodwill
$'000
Leased
software
$'000
23,535
3,835
40,708
621
211
–
–
–
–
(3,818)
(2,395)
–
–
–
–
–
–
–
–
–
–
179
20,728
33
1,473
137
40,845
Total
$'000
68,129
2,086
211
–
51
1,465
–
–
(228)
(6,441)
–
–
–
–
–
349
1,288
64,334
Intangible assets, other than goodwill, have finite useful lives. The current amortisation charges for intangible assets are
included within the Product Delivery and Support expense line in the Statement of Comprehensive Income. Goodwill has
an infinite life.
The effect of movements in exchange rates represent the period to period foreign currency translation of assets denominated
in Great British Pounds.
Impairment Disclosures
Intangible assets are reviewed for impairment where there are indicators that the carrying amount may not be recoverable.
Goodwill is allocated to each CGU based on the Group’s reporting segments presented below:
Australian Broker Services segment (Palion)
Wealth Management segment (InfoComp)
Global Broker Services segment (GBS) (Coexis)
Financial Services segment (Emu)
Total Goodwill
30 Jun 2012
$'000
30 Jun 2011
$'000
3,350
28,238
8,371
886
40,845
3,350
28,238
8,234
886
40,708
The recoverable amount of goodwill has been assessed using value-in-use calculations for each CGU using discounted cash
flow projections based on business unit budgets and strategic plans provided by the respective CEO of the CGU and updated
where appropriate.
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
51
51
Notes to and forming part of the Consolidated Financial Statements
for the year ended 30 June 2012 continued
Note 12: Intangible Assets (continued)
For the financial year ended 2012, Management has used the 2013 financial budget approved by the Board. Growth
estimates have been used for a further four financial years. The assumptions are generally consistent with past performance
or are based upon the Group’s view of future market activity. The key assumptions used for value-in-use calculations
consider growth and discount rates. Growth rates used are determined by considering factors such as industry and sector
expectations, the markets in which the CGU operates, the size of the business, and past performance. A summary of key
assumptions is presented below:
2012
Calculation Method
Revenue growth rates
Cost growth rates
Long term growth rates
Post-tax discount rate
Pre-tax discount rate
2011
Calculation Method
Revenue growth rates
Cost growth rates
Long term growth rates
Post-tax discount rate
Pre-tax discount rate
GBS
Value-in-use
InfoComp
Value-in-use
Palion
Value-in-use
eMu
Value-in-use
2-17%
3-5%
3%
7.5%
3-5%
3%
–
3-5%
3%
14.32% 10.50-14.32%
10.50%
16.46% 12.71-16.66%
13.86%
7.5%
3-5%
3%
10.50%
13.26%
GBS
Value-in-use
InfoComp
Value-in-use
Palion
Value-in-use
eMu
Value-in-use
9-29%
(3)-5%
3%
14.43%
17.40%
8-18%
7-19%
3%
14.43%
20.61%
5%
5%
3%
10.66%
14.23%
7.5%
5%
3%
10.66%
14.84%
Future anticipated cash flows for all CGU's indicate that the carrying value of the intangible assets were not required to be
impaired in 2012.
Based on sensitivity analysis, management believe that any reasonable change in the respective key assumptions would not
have a material impact on the recoverable amounts of the InfoComp, Palion and EMU CGUs. In relation to the GBS CGU, the
value in use calculation is based on the board approved 2013 financial budget and management’s best estimate of forecast
growth. These forecasts have been based on expectations as to existing contracts and new contracts to be entered into over
the forecast period, and in the event that these forecasts are not achieved the GBS CGU may need to be impaired in future
periods. The table below shows the amount that these key assumptions are required to change individually, in order for the
estimated recoverable amount to be equal to the carrying amount for the GBS CGU:
Decrease of annual revenue against forecast by
Increase of annual costs above forecast by
Increase of post-tax discount rate by
5.7%
7.4%
3.90%
5252
Note 13: Other Assets
Current
Prepaid expenditure
Non-Current
Prepaid expenditure
Note 14: Trade and other Payables
Current (unsecured)
Trade payables & accruals
Note 15: Loans and Borrowings
Current
Bank overdraft (secured) (a)
Senior bank facility (secured) (a)
Senior bank facility GBP (secured) (a)
Commercial loan facility (secured) (a)
Finance lease liability (Note 22)
Non-Current
Senior bank facility (secured) (a)
Commercial loan facility (secured) (a)
Finance lease liability (Note 22)
Total secured liabilities
GBST GRouP
30 Jun 2012
$'000
30 Jun 2011
$'000
669
669
6
6
989
989
8
8
GBST GRouP
30 Jun 2012
$'000
30 Jun 2011
$'000
7,557
7,557
5,504
5,504
GBST GRouP
30 Jun 2012
$'000
30 Jun 2011
$'000
3,487
6,000
–
79
723
4,136
2,654
3,346
495
211
10,289
10,842
12,026
17,996
–
1,036
13,062
21,592
79
475
18,550
28,706
(a) The bank overdraft, senior bank facility and commercial loan facility are provided by National Australia Bank Limited. The
facilities are secured by fixed and floating charges over the operating companies within the Group. The senior bank facility
expires on 30 June 2014, with quarterly principal repayments of $1.5 million. Additional payments may be made against
facility without incurring penalties. The interest rate under the facility is variable. At 30 June 2012 the interest rate for the
senior bank facility was 5.86% p.a.
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
53
53
Notes to and forming part of the Consolidated Financial Statements
for the year ended 30 June 2012 continued
Note 15: Loans and Borrowings (continued)
The covenants within the National Australia Bank borrowings require that at 30 June 2012 the total operating leverage
is below 1.5 to 1, interest cover is above 3 to 1 and equity ratio is above 55%. Based on the Group’s current forecast
and business plan, the Group anticipates that it will continue to meet its covenants. In respect of the senior bank facility,
totalling $18.03 million at 30 June 2012, the Group met all covenant requirements.
The carrying amount of the Group’s assets secured is $90.43 million.
Note 16: Tax
(a) Liabilities
Current
Income tax
Non-current
Deferred tax liability comprises:
Tax allowances relating to plant and equipment
Tax allowances relating to intangibles
(b) Assets
Current
Tax receivable
Non-current
Deferred tax assets comprise:
Provisions
Other items
Transaction costs on equity issue
Unused tax losses
(c) Reconciliations
(i) Net Movement
The overall movement in the net deferred tax account is as follows:
Opening balance
Recoupment of temporary differences not previously taken up
Tax rate change
Charged to income statement
Foreign currency translation
Charge to equity
Closing balance
5454
GBST GRouP
30 Jun 2012
$'000
30 Jun 2011
$'000
23
435
399
3,185
3,584
65
3,813
3,878
156
–
3,185
2,609
7
40
932
4,164
(336)
302
(104)
778
(40)
(20)
580
29
60
844
3,542
(1,558)
285
(60)
426
591
(20)
(336)
(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 plant and equipment and intangibles
Opening balance
Recoupment of temporary differences not previously taken up
Tax rate change
Charged to income statement
Foreign currency translation
Closing balance
(iii) Deferred Tax Assets
(a) The movement in deferred tax asset for each temporary difference
during the year is as follows:
Provisions
Opening balance
Recoupment of temporary differences not previously taken up
Tax rate change
Charged to income statement
Foreign currency translation
Closing balance
Other Items
Opening balance
Recoupment of temporary differences not previously taken up
Tax rate change
Charged to income statement
Foreign currency translation
Closing balance
Transaction costs on equity issue
Opening balance
Charged directly to equity
Closing balance
Unused tax losses
Opening balance
Recoupment of temporary differences not previously taken up
Tax rate change
Charged to income statement
Foreign currency translation
Closing balance
GBST GRouP
30 Jun 2012
$'000
30 Jun 2011
$'000
3,878
5,267
(30)
(3)
(322)
61
3,584
82
(2)
(730)
(739)
3,878
2,609
3,001
(208)
(2)
780
6
(166)
(24)
(140)
(62)
3,185
2,609
29
–
(2)
(21)
1
7
60
(20)
40
844
480
(103)
(303)
14
932
124
3
(7)
(76)
(15)
29
80
(20)
60
504
530
(31)
(88)
(71)
844
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
55
55
Notes to and forming part of the Consolidated Financial Statements
for the year ended 30 June 2012 continued
Note 16: Tax (continued)
(b) Total deferred tax assets not brought to account as at reporting period end:
– tax losses : operating losses
– tax losses : capital losses
Deferred tax assets have not been recognised in relation to operating losses, refer Note 5(iii).
Note 17: Provisions
Current
Employee benefits
Make Good (a)
Non-Current
Employee benefits
Make Good (a)
GBST Group
Balance at the beginning of the year
Additional provisions
Amounts used
Unused amounts reversed
Balance at 30 June 2012
employee
benefits
$'000
4,169
3,281
(2,743)
(1)
4,706
GBST GRouP
30 Jun 2012
$'000
30 Jun 2011
$'000
3,781
2,812
2,299
2,942
GBST GRouP
30 Jun 2012
$'000
30 Jun 2011
$'000
3,804
33
3,837
902
651
1,553
Make
good
$'000
610
207
(80)
(54)
683
3,338
66
3,404
831
544
1,375
Total
$'000
4,779
3,488
(2,823)
(55)
5,389
(a) In accordance with rental premises lease agreements across the Group, GBST must restore the leased premises to its
original condition at the end of the lease terms. Expiration dates range from 2013 to 2021.
Note 18: Unearned Income
Current
Revenue received in advance for software usage and support services
5656
GBST GRouP
30 Jun 2012
$'000
30 Jun 2011
$'000
9,115
9,115
9,262
9,262
Note 19: Liabilities on Business Acquisition
Current
Amount owing to vendors in respect of acquisition
Note 20: Issued Capital
66,561,725 (2011: 66,395,929) fully paid ordinary shares
Movements in issued capital:
Opening balance
Transfer from options reserve
GBST GRouP
30 Jun 2012
$'000
30 Jun 2011
$'000
9
9
176
176
GBST GRouP
30 Jun 2012
$'000
30 Jun 2011
$'000
37,664
37,664
37,516
37,516
37,516
37,102
*Various dates
Employee zero exercise options scheme
–
110
Share issues during the year:
25 August 2011
7 February 2012
ordinary Shares
Opening balance
Share issues during the year:
9 December 2010
*Various dates
25 August 2011
7 February 2012
Settlement in relation to acquisition
Deferred consideration - Coexis
98
50
–
304
37,664
37,516
No.
No.
66,395,929 66,032,789
Deferred consideration - Coexis
Employee zero exercise options scheme
–
–
334,936
28,204
Settlement in relation to acquisition
Deferred consideration - Coexis
110,000
55,796
–
–
66,561,725 66,395,929
* There were numerous share issues during the prior year as employees exercised their respective options during the year.
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 or par value in respect of its issued shares.
Options
For details on employee and placement options over ordinary shares, see Note 32.
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
57
57
Notes to and forming part of the Consolidated Financial Statements
for the year ended 30 June 2012 continued
Note 21: Reserves
Equity remuneration reserve
Foreign currency translation reserve
Financial asset reserve
Note 22: 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 Statement of Financial Position as:
Current (Note 15)
Non-current (Note 15)
Finance leases relate to items of plant and equipment and
have options to acquire the items on termination.
(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
GBST GRouP
30 Jun 2012
$'000
30 Jun 2011
$'000
–
(6,823)
–
(6,823)
88
(7,010)
(570)
(7,492)
GBST GRouP
30 Jun 2012
$'000
30 Jun 2011
$'000
757
1,059
1,816
(57)
1,759
723
1,036
1,759
259
530
789
(103)
686
211
475
686
2,734
5,718
3,952
12,404
2,027
4,190
818
7,035
Non-cancellable leases include rental premises with original lease terms up to ten 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 purchases
Other operating purchases
Payable
Not later than one year
5858
343
73
416
416
416
90
6
96
96
96
Note 23: Auditors’ Remuneration
Audit Services
KPMG Australia
Audit & review of financial reports
Overseas KPMG firms
Audit & review of financial reports
Other Auditors
Audit & review of financial reports
Other Services
KPMG Australia
Other assurance services
Taxation services
Overseas KPMG firms
Taxation services
Other Auditors
Other assurance services
Taxation services
GBST GRouP
30 Jun 2012
$
30 Jun 2011
$
200,200
253,162
78,000
41,432
–
278,200
36,825
331,419
–
24,972
221,344
130,992
119,809
134,777
–
–
56,411
14,970
341,153
362,122
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
59
59
Notes to and forming part of the Consolidated Financial Statements
for the year ended 30 June 2012 continued
Note 24: Other Group Entities
(a) Controlled Entities Consolidated
Group entity
GBST Pty Ltd*
Emu Design (Qld) Pty Ltd*
GBST ESOP Pty Ltd*
GBST Ltd
GBST Australia Pty Ltd*
Subsidiaries of GBST Ltd:
GBST Inc
Country of Incorporation
Percentage owned
Australia
Australia
Australia
100% (June 2011: 100%)
100% (June 2011: 100%)
100% (June 2011: 100%)
United Kingdom
100% (June 2011: 100%)
Australia
100% (June 2011: 100%)
United States of America
100% (June 2011: 100%)
GBST Singapore Pte Limited
Singapore
100% (June 2011: Nil)
Subsidiaries of GBST Australia Pty Ltd:
GBST Hong Kong Limited
GBST Registry Solutions Pty Ltd*
GBST Wealth Management Pty Ltd*
Subsidiaries of GBST Wealth Management Pty Ltd:
Hong Kong
Australia
Australia
100% (June 2011: 100%)
100% (June 2011: 100%)
100% (June 2011: 100%)
GBST UK Holdings Limited
United Kingdom
100% (June 2011: 100%)
Subsidiaries of GBST UK Holdings Ltd:
GBST Hosting Limited
GBST Wealth Management Limited
(b) Deed of Cross Guarantee
United Kingdom
United Kingdom
100% (June 2011: 100%)
100% (June 2011: 100%)
* Pursuant to ASIC Class Order 98/1418 these wholly-owned controlled entities 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.
6060
A consolidated statement of comprehensive income and consolidated statement of financial position, comprising the
Company and controlled entities which are party to the Deed, after eliminating all transactions between parties to the Deed
of Cross Guarantee at 30 June 2012 is set out as follows:
Financial information in relation to:
i. Summarised Statement of Comprehensive Income
Revenue from license and service sales
Revenue from sponsored work
Revenue from sale of third party product
Other income
Results from operating Activities
Finance costs
Finance income
Net finance costs
Profit before income tax
Income tax expense
Profit after income tax
Profit Attributable to Members of the Parent entity
Other comprehensive loss
Total Comprehensive Profit for the Year
ii. Retained Earnings
Retained profits at the beginning of the year
Transfer financial asset reserve to retained earnings
Transfer loan conversion reserve to retained earnings
Profit after income tax
Dividends provided for or paid
Retained earnings at end of the Year
iii. Statement of Financial Position
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Tax Receivable
Other assets
Total Current Assets
CLoSeD GRouP AND
PARTIeS To DeeD oF CRoSS
GuARANTee
30 Jun 2012
$'000
30 Jun 2011
$'000
42,956
15,568
1,201
166
5,840
41,099
11,981
1,132
49
8,174
(2,048)
(3,087)
28
(2,020)
3,820
(885)
2,935
2,935
1,004
3,939
1
(3,086)
5,087
(2,111)
2,976
2,976
(571)
2,405
11,387
10,499
430
–
2,935
(2,994)
11,758
492
9,779
295
150
406
11,122
–
561
2,976
(2,649)
11,387
64
7,737
222
–
703
8,726
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
61
61
Notes to and forming part of the Consolidated Financial Statements
for the year ended 30 June 2012 continued
Note 24: Other Group Entities (continued)
CLoSeD GRouP AND
PARTIeS To DeeD oF CRoSS
GuARANTee
30 Jun 2012
$'000
30 Jun 2011
$'000
11,996
15,339
–
2,266
45,269
18,990
3,100
6
81,627
92,749
3,628
10,256
–
3,804
7,629
9
526
2,506
46,704
21,274
2,269
8
88,626
97,352
2,987
10,825
418
3,301
7,683
176
25,326
25,390
13,040
3,529
1,431
18,000
43,326
49,423
37,664
–
11,759
49,423
18,524
3,793
1,226
23,543
48,933
48,419
37,516
(484)
11,387
48,419
Non-Current Assets
Trade and other receivables
Financial assets
Property, plant and equipment
Intangible assets
Investment
Deferred tax assets
Other assets
Total Non-Current Assets
ToTAL ASSeTS
Current Liabilities
Trade and other payables
Financial liabilities
Current tax liabilities
Provisions
Unearned income
Liabilities on business acquisition
Total Current Liabilities
Non-Current Liabilities
Financial liabilities
Deferred tax liabilities
Provisions
Total Non-Current Liabilities
ToTAL LIABILITIeS
NeT ASSeTS
equity
Issued capital
Reserves
Retained earnings
ToTAL eQuITY
6262
Note 25: Financing Arrangements
Financing facilities (a)
Amount utilised
unused credit facility
GBST GRouP
30 Jun 2012
$'000
30 Jun 2011
$'000
27,606
30,646
(25,043)
(29,952)
2,563
694
(a) This amount comprises bank loans and a multi-option facility. The bank loans and multi-option facility are secured by
a registered charge over the assets of the Group and interest rates under the facility are variable. Additional payments
may be made against facilities without incurring penalties. The bank loans comprise of a senior bank facility and senior
bank facility Great British Pounds (GBP) with quarterly principal repayments of $1.50 million and commercial loan facility
which has monthly principal repayments. The multi-option facility includes an overdraft, bill facility, letter of credit, bank
guarantees and purchasing card and revolving lease limit. The multi-option facility is subject to annual review and has a
number of other commercial terms and conditions. The revolving lease limit is a "revolving asset finance facility" to enable
equipment financing, required for business operations. Each draw on the lease facility creates a rental agreement for a
36 to 48 month period. There are no conditions/covenants in place and drawdown is subject to the bank's acceptance
of assets proposed for financing under the facility.
A finance lease provided by Microsoft Financing is debt funding for the purchase of Microsoft licences which expire
December 2014.
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
63
63
Notes to and forming part of the Consolidated Financial Statements
for the year ended 30 June 2012 continued
Note 26: Cash Flow Information
(a) Reconciliation of Net Cash provided by Operating Activities
to Profit after Income Tax
Profit after income tax
Non-cash flows in operating profit:
Depreciation and amortisation
Loss on sale of plant & equipment
Share based payments
Impact of foreign currency movements on foreign operations
Changes in assets and liabilities:
Change in receivables
Change in other assets
Change in intangibles (internal costs)
Change in unearned income
Change in inventories
Change in deferred tax balances
Change in tax provision
Change in trade and other payables
Change 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 Statement of Financial Position as follows:
Cash at bank (Note 7)
Bank overdraft (Note 15)
(c) Non-cash Financing Activities
During the 2012 financial year the Group acquired plant and equipment and software with
an aggregate value of $1.588 million (2011: $573 thousand) by means of finance leases; $Nil
(2011: $129 thousand) by means of equipment loans.
During the year the following ordinary shares were issued as non-cash consideration:
– Settlement in relation to acquisition
– Settlement in relation to acquisition
These items are not reflected in the Statement of Cash Flows.
6464
GBST GRouP
30 Jun 2012
$'000
30 Jun 2011
$'000
3,251
1,384
7,728
15
(88)
–
(3,372)
322
(211)
(147)
(764)
(915)
(568)
1,886
610
7,747
7,268
111
70
1,674
2,197
(83)
(324)
3,859
486
(1,222)
(1,386)
25
339
14,398
2,156
(3,487)
(1,331)
5,116
(4,136)
980
Number
Issue price
110,000
55,796
$0.8900
$0.9000
Note 27: Operating Segments
The Group has four reportable segments, as described below, which are the Group’s strategic business units. The
strategic business units offer different products and services, and are managed separately because they require different
technology and marketing strategies. For each of the strategic business units, the CEO reviews internal management
reports on a monthly basis. The following summary describes the operations in each of the Group’s reportable segments:
Australian Broker Services 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.
Wealth Management 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. Wealth
Management also provides a Union membership management system for use in Australia and New Zealand.
Financial Services is a wholesale provider of independent, market-leading financial product data and related services
to financial advisors and institutions. It also provides web design, development and usability services through the Emu
Design business.
Global Broker Services through the Syn platform, provides next-generation technology to process equities, derivatives,
fixed income and managed funds transactions to global capital markets in Asia, Europe, Middle East and North America.
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
65
65
Notes to and forming part of the Consolidated Financial Statements
for the year ended 30 June 2012 continued
Note 27: Operating Segments (continued)
Reportable segments
AuSTRALIAN
BRokeR
SeRVICeS
WeALTH
MANAGeMeNT
FINANCIAL
SeRVICeS
GLoBAL
BRokeR
SeRVICeS
eLIMINATIoNS
GBST GRouP
30 Jun
2012
$'000
30 Jun
2011
$'000
30 Jun
2012
$'000
30 Jun
2011
$'000
30 Jun
2012
$'000
30 Jun
2011
$'000
30 Jun
2012
$'000
30 Jun
2011
$'000
30 Jun
2012
$'000
30 Jun
2011
$'000
30 Jun
2012
$'000
30 Jun
2011
$'000
Revenue
Sales to external
customers
Other income from
external customers
Inter-segment
revenues*
Total segment
revenue
27,373 27,950 36,216 27,133
3,910
3,363
8,822
9,060
57
7
163
267
109
2
417
653
–
–
– 76,321 67,506
–
746
929
–
16
–
–
297
954
342
786
(639)
(1,756)
–
–
27,429 27,973 36,379 27,400
4,317
4,319
9,582 10,499
(639)
(1,756) 77,067 68,435
Operating EBITDA 9,248
9,805
9,187
6,916
227
353 (3,164)
(2,131)
15,498 14,943
Depreciation and
amortisation of
segment assets
(1,587)
(1,104)
(3,515)
(3,518)
Segment result
7,661
8,701
5,672
3,398
(71)
156
(32)
(2,555)
(2,614)
321 (5,719)
(4,745)
–
–
–
–
(7,728)
(7,268)
7,770
7,675
Unallocated
expenses
Net finance costs
Profit before income
tax
Income tax expense
Profit after income
tax
Capital
expenditure
Segment total
assets
Segment total
liabilities
(1,256)
(1,250)
(2,058)
(3,164)
4,456
3,261
(1,205)
(1,877)
3,251
1,384
2,799
2,845
334
200
14
158
153
752
16,863 16,182 50,260 51,885
519
166 22,792 25,090
13,935 12,544 12,920 15,317
773
608 21,401 24,957
–
–
–
– 3,300
3,955
– 90,434 93,323
– 49,029 53,426
*Inter-segment revenue received by Global Broker Services from Australian Broker Services of $1.60 million for use of
intangible assets is not included to align with reporting to CEO. Inter-segment revenue with an associated direct external
cost (typically direct labour costs) are included.
6666
Geographical Location:
Australia
Europe and Middle East
Asia
SeGMeNT ReVeNueS
FRoM eXTeRNAL
CuSToMeRS
CARRYING AMouNT
oF SeGMeNT
NoN-CuRReNT ASSeTS
30 Jun 2012
$'000
30 Jun 2011
$'000
30 Jun 2012
$'000
30 Jun 2011
$'000
48,271
22,181
5,869
76,321
47,059
15,747
4,700
67,506
48,093
20,202
–
49,532
22,268
–
68,295
71,800
Information about Geographical Areas
The consolidated Group’s operating segments are managed
in Australia. Australia Broker Services and Financial Services
have operations and customers in Australia, Wealth
Management has operations and customers in Australia
and Europe, and Global Broker Services has operations
and customers in Europe, Middle East and Asia. Australian
Broker Services also has a customer in New Zealand and
customers in Asia from sales to Australian entities.
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 Group at an arm’s length.
These transfers are eliminated on consolidation.
There have been no changes to the basis of segmentation
or the measurement basis for the segment profit or loss
since the prior reporting period.
Major Customer
Revenues from one customer of the Group represents
$14.87 million (2011: $7.40 million) of the Group’s
total revenues.
Reconciliation of Capital Expenditure
The $11 thousand (2011: $95 thousand) difference between
the segment capital expenditure disclosure and the
acquisitions recorded in plant and equipment (Note 11) and
intangibles (Note 12) relates to the make good increase and
minor adjustments.
Accounting Policies
Segment revenues and expenses are those directly
attributable to the segments and include any joint revenue
and expenses where a reasonable basis of allocation exists.
Segment assets include all assets used by a segment
and consist principally of cash, receivables, inventories,
intangibles and property, plant 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 benefits, accrued
expenses, provisions and borrowings. Segment assets and
liabilities do include deferred income taxes.
Note 28: Financial Risk Management
(a) Financial Risk Management Policies
The Group’s principal financial instruments comprise of
accounts receivable and payable, bank accounts, loans and
overdrafts, investments and finance leases.
The main purpose of these financial instruments is to provide
operating finance to the Group.
It is, and has been throughout the period under review,
the Group’s policy that financial instruments held are not
intended for trading purposes.
The Group has exposure to the following risks from their use
of financial instruments – credit risk, liquidity risk and market
risk. This note presents information about the exposure to
each of the above risks. Further quantitative disclosures are
included throughout these consolidated financial statements.
The Board of Directors has overall responsibility for the
establishment and oversight of the Group’s risk management
framework. Management is responsible for developing and
monitoring the risk management policies, and reports to
the Board.
The risk management policies are established to identify
and analyse the risks faced, to set appropriate risk limits
and controls, and to monitor risks and adherence to limits.
The Board of Directors meet on a regular basis to analyse
financial risk exposure and to evaluate treasury management
strategies in the context of current economic conditions
and forecasts.
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
67
67
Notes to and forming part of the Consolidated Financial Statements
for the year ended 30 June 2012 continued
Note 28: Financial Risk Management
(continued)
The Executive Management Team’s overall risk
management strategy seeks to assist the consolidated
Group in meeting its financial targets, whilst minimising
potential adverse effects on financial performance.
Risk management policies are approved and reviewed by
the Board on a regular basis.
(b) Market Risk
Market risk is the risk that changes in market prices, such
as foreign exchange rates, share prices and interest rates
will affect income or the value of holdings of financial
instruments. The objective of market risk management
is to manage and control market risk exposures within
acceptable parameters, while optimising the return.
Interest Rate Risk
The exposure to market risk for the changes in interest
rates relates primarily to borrowing obligations,
underpinned by variable interest rates as agreed in the
Restructure of Banking Facilities in June 2011. Falling
interest rates over the past year have validated the current
variable debt rate strategy employed by the Group.
Australian variable interest rate risk
At reporting period, the Group had the following mix of
financial assets and liabilities exposed to Australian variable
interest rate risk.
Financial assets
Cash
Financial liabilities
Bank overdraft
Bank loan
GBST GRouP
2012
$’000
2011
$’000
482
482
3,487
18,105
21,592
29
29
4,136
21,224
25,360
Lease liabilities have fixed rates, all other items are variable
rate. The exposure to market interest rates relates primarily
to long and short term debt obligations.
Great British Pound variable interest rate risk
At reporting period, the Group had the following mix of
financial assets and liabilities exposed to Great British Pound
variable interest rate risk.
Financial assets
Cash
Financial liabilities
Bank loan
GBST GRouP
2012
$’000
2011
$’000
1,578
1,578
–
–
4,979
4,979
3,346
3,346
united States Dollar Variable Interest Rate Risk
At reporting period, the Group had cash of $97 thousand
which is exposed to United States Dollar variable interest
rate risk (2011: $108 thousand).
euro Variable Interest Rate Risk
At reporting period, the Group had no financial assets
or liabilities exposed to Euro variable interest rate risk
(2011: $Nil).
Foreign Currency Risk
The Group is exposed to fluctuations in foreign
currencies arising from the sale and purchase of goods
and services in currencies other than the Group’s
measurement currency.
The Group constantly monitors its foreign currency
exposure, and seeks to utilise existing currency reserves
and minimise foreign currency purchases where
possible. During the year, the Group repaid in full the
outstanding Great British Pound Senior Debt facility from
existing Great British Pound holdings.
At balance sheet date the Group had exposure to
movements in the exchange rate for Great British Pounds
in cash and receivables of $5.83 million (2011: $7.14
million) and payables and loans of $777 thousand
(2011: $4.47 million).
At balance sheet date the Group had exposure to
movements in the exchange rate for United States of
America Dollars in cash and receivables of $96 thousand
(2011: $1.01 million) and payables of $Nil (2011: $Nil).
6868
At balance sheet date the Group had no exposure to
movements in the exchange rate for Euros as the balance
for cash and receivables was $Nil (2011: $387 thousand)
and payables was $Nil (2011: $Nil).
Share Price Risk
The Group had an investment in an ASX listed Company,
Razor Risk Technologies Limited (formerly IT&e Limited),
(see Note 10). This was a long term shareholding, however
exposure existed to movements in the market price. The
investment was sold during the year.
(c) Liquidity Risk
Liquidity risk is the risk that the Group will not be able to
meet its financial obligations as they fall due. The approach
to managing liquidity is to ensure, as far as possible, that
there will always be sufficient liquidity to meet liabilities
when due, under both normal and stressed conditions,
without incurring unacceptable losses or risking damage
to the Group’s reputation.
The Group’s objective is to maintain a balance between
continuity of funding and flexibility through the use of
overdrafts, loans and finance leases. Liquidity risk is
managed by monitoring forecasted business performance
including cash flows, the collection of trade receivables,
payment of trade payables and maintaining adequate
borrowing facilities. In addition, the Group forecasts
bank covenant compliance and completes a compliance
certificate to the National Australia Bank on a quarterly
basis.
(d) Credit Risk
The maximum exposure of credit risk at balance date,
excluding the value of any collateral or other security, to
recognised financial assets is the carrying amount, net of
any allowance for impairment of those assets, as disclosed
in the balance sheet and notes to the financial statements.
The 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 its trade and other receivables.
In addition, receivables balances are monitored on an
ongoing basis with the result that apart from the risks
noted below, there are no other material credit risks to
the Group.
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 24 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 financial
instruments entered into. Approximately 36% (2011: 32%)
of the Group’s revenue is derived from five customers
providing financial services. All Australian clients satisfy
the minimum core capital requirements of the ASX.
Trade debtor terms range between fourteen to thirty
days. Included in the Group’s trade receivable balance
are debtors with a carrying amount of $1.86 million (2011:
$853 thousand) 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 weighted average age of these
receivables is 16 days (2011: 18 days).
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
69
69
Notes to and forming part of the Consolidated Financial Statements
for the year ended 30 June 2012 continued
Note 28: Financial Risk Management (continued)
The aging of the Group’s receivables at the reporting date was:
Not past due
Past due 0-30 days
Past due 30-120 days
Past due more than 121 days
2012
2011
Gross
$’000
Impairment
$’000
11,485
1,398
579
97
–
66
47
92
Gross
$’000
9,452
374
424
131
13,559
205
10,381
Impairment
$’000
–
–
–
76
76
The carrying amount of the financial assets represents the maximum credit exposure.
The maximum exposure to credit risk at the reporting date was:
Cash and cash equivalents
Trade and other receivables
Investment
GBST GRouP
CARRYING AMouNT
2012
$’000
2,156
14,578
–
16,734
2011
$’000
5,116
11,122
526
16,764
The maximum exposure to credit risk for trade and other receivables at reporting date by geographic region was:
GBST GRouP
CARRYING AMouNT
2012
$’000
7,926
5,387
1,227
38
2011
$’000
6,983
3,120
964
55
14,578
11,122
Australia
Europe
Asia
United States of America
7070
(e) Financial Instruments
(i) Liquidity Risk:
The following table reflects the undiscounted contractual settlement terms for financial liabilities including interest payments:
0-1 YeARS
1-2 YeARS
2-5 YeARS
oVeR 5 YeARS
ToTAL
CARRYING
AMouNTS
2012
$’000
2011
$’000
2012
$’000
2011
$’000
2012
$’000
2011
$’000
2012
$’000
2011
$’000
2012
$’000
2011
$’000
2012
$’000
2011
$’000
10,560
12,718
6,415
7,695
6,187 13,789
752
260
723
232
341
297
9
176
7,557
5,504
–
–
–
–
–
–
–
–
–
–
–
–
– 23,162 34,202 21,592 28,706
–
1,816
789
1,759
686
–
9
176
9
176
–
7,557
5,504
7,557
5,504
18,878 18,658
7,138
7,927
6,528 14,086
–
– 32,544 40,671 30,917 35,072
GBST Group
Financial
Liabilities
Bank loan and
overdraft(i)
Lease
facilities(ii)
Liabilities on
acquisition
Trade & other
payables
ToTAL
FINANCIAL
LIABILITIeS
(i) These items have variable interest rates.
(ii) These items have fixed interest rates. All other items are non-interest bearing.
(ii) Net Fair Values
The fair value of investments traded on active liquid markets are determined with reference to quoted market prices.
Term receivables and other loans and amounts due are determined by discounting the cash flows, at market interest rates
of similar items, to their present value. Other financial assets and financial liabilities net of fair value approximates their carrying
value. Loans payable are determined by discounting the cash flow at market interest rates of similar items, to their present
value. No financial assets or financial liabilities are readily traded on organised markets in standardised form other than
listed investments.
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
71
71
Notes to and forming part of the Consolidated Financial Statements
for the year ended 30 June 2012 continued
Note 28: Financial Risk Management (continued)
Financial assets where the carrying amount exceeds net fair values have not been written down as the Group intends to hold
these assets to maturity.
Aggregate net fair values and carrying amounts of Group financial assets and financial liabilities at balance date:
Financial Assets
Cash and cash equivalents
Trade and other receivables
Investment
Financial Liabilities
Trade and other payables
Bank loans and overdrafts
Lease facilities
Liabilities on business acquisition
2012
2011
Carrying
amount
$’000
Net fair
value
$’000
Carrying
amount
$’000
Net fair
value
$’000
2,156
14,578
-
2,156
14,578
-
5,116
11,122
526
5,116
11,122
526
16,734
16,734
16,764
16,764
7,557
7,557
21,592
21,592
1,759
1,759
9
9
5,504
28,706
686
176
5,504
28,706
686
176
30,917
30,917
35,072
35,072
Fair values are materially in line with carrying values. An average discount rate of 5.86% (2011: 6.11%) has been applied
to all non-current borrowings to determine fair value.
Fair Value Hierarchy
The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been
defined as follows:
• Level 1: quotes prices (unadjusted) in active markets for identical assets or liabilities
• Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (i.e., as prices) or indirectly (i.e., derived from prices)
• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
2012
Investment
2011
Investment
(iii) Sensitivity Analysis
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
–
526
–
–
–
–
–
526
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.
7272
Interest Rate Sensitivity Analysis
At 30 June 2012, 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:
Increase/(Decrease) in Profit and Equity
Increase in interest rate by 1%
Decrease in interest rate by 1%
Foreign Currency Risk Sensitivity Analysis
GBST GRouP
2012
$’000
2011
$’000
(215)
215
(281)
281
At 30 June 2012, the effect on profit and equity as a result of changes in the value of the Australian Dollar (AUD) to the Great
British Pound (GBP), with all other variables remaining constant is as follows:
Increase/(Decrease) 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%
GBST GRouP
2012
$’000
2011
$’000
5
(5)
781
(781)
8
(8)
520
(520)
At 30 June 2012, the effect on profit and equity as a result of changes in the value of the Australian Dollar (AUD) to the United
States of America Dollar (USD), with all other variables remaining constant is as follows:
Increase/(Decrease) in Profit
Improvement in AUD to USD by 10%
Decline in AUD to USD by 10%
Change in Equity
Improvement in AUD to USD by 10%
Decline in AUD to USD by 10%
GBST GRouP
2012
$’000
2011
$’000
23
(19)
23
(19)
117
(95)
117
(95)
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
73
73
Notes to and forming part of the Consolidated Financial Statements
for the year ended 30 June 2012 continued
Note 28: Financial Risk Management (continued)
At 30 June 2012, the effect on profit and equity as a result of changes in the value of the Australian Dollar to the Euro, with all
other variables remaining constant is as follows:
Increase/(Decrease) in Profit
Improvement in AUD to EUR by 10%
Decline in AUD to EUR by 10%
Change in Equity
Improvement in AUD to EUR by 10%
Decline in AUD to EUR by 10%
Price Risk
GBST GRouP
2012
$’000
2011
$’000
–
–
–
–
43
(35)
43
(35)
At 30 June 2012 there no investments in listed shares. The investment in the Company Razor Risk Technologies Limited
(ASX: RZR) was sold for $1.53 million based on a share price of $0.0349 per share.
Reclassification of Financial Assets at the Date of Initial Application of AASB 9
The following table shows the classification of the Group’s financial assets on 1 July 2010 (the date the Group first applied
AASB 9) as they were previously classified under AASB 139 and as they appear on initial application of AASB 9.
In thousands of AuD
Note
original classification under AASB 139 New classification under AASB 9
Cash and cash equivalents
Loans and receivables
Trade and other receivables
Loans and receivables
Amortised cost
Amortised cost
Investments in listed shares
(a)
Available for sale
Fair value through other comprehensive income
The original carrying amount under AASB 139 and the new carrying amount under AASB 9 was the same for all of the
aforementioned financial assets.
(a) The Group believes that classification as fair value through other comprehensive income is the most appropriate
classification under AASB 9 for these shares.
Impact of early Adoption of AASB 9
As AASB 9 had been early adopted in the prior financial year, the change in fair value of the listed shares was recognised
in other comprehensive income. The subsequent gain on sale was also recognised in other comprehensive income.
Note 29: Contingent Liabilities
As at 30 June 2012, GBST has with its clients a variety of software supply agreements, each of which contain service and
performance warranties and indemnities. These warranties and indemnities are of the standard type used in the industry
and the likelihood of liabilities arising are considered remote.
The Group is also involved in litigious matters arising in the course of business, one of which involves legal action brought
by the Company against the vendors of a business previously acquired.
It is impractical to estimate the maximum contingent asset or liability in relation to these matters, and in the opinion of the
Directors’ disclosure of any further information would be prejudicial to the interests of the Group.
7474
Note 30: Key Management Personnel Disclosures
(a) Names and positions held of Group Key Management Personnel in office at any time during
the financial year were:
key Management Personnel
Position
J Puttick
D Adams
A Brackin
S Lake
J Sundell
I Thomas
Director (Non-executive Chairman)
Director (Independent)
Director (Independent)
Director (Managing Director and Chief Executive Officer)
Director (Non-executive)
Director (Independent) (appointed 8 December 2011)
R De Dominicis
Chief Executive Wealth Management
C Mallios
D Orrock
A Ritter
P Salis
I Sanchez
Chief Financial Officer (resigned 28 October 2011)
Chief Executive Broker Services
Chief Financial Officer (appointed 14 November 2011)
Chief Executive Global Broker Services
Chief Technology Officer
(b) Key Management Personnel Compensation
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Share-based payments
GBST GRouP
2012
$
2011
$
3,468,906
2,961,318
153,972
146,427
18,756
(85,834)
28,897
70,084
3,555,800
3,206,726
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 the pre-existing 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.
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
75
75
Notes to and forming part of the Consolidated Financial Statements
for the year ended 30 June 2012 continued
Note 30: Key Management Personnel Disclosures (continued)
(d) Shareholdings
The numbers of shares in the Company held (directly, indirectly or beneficially) during the financial year by Key Management
Personnel, including their related parties, are set out below.
2012
Directors
J Puttick
D Adams
A Brackin
S Lake
J Sundell
I Thomas
ToTAL DIReCToRS
Executives
R De Dominicis
C Mallios
D Orrock
A Ritter
P Salis
I Sanchez
ToTAL eXeCuTIVeS
GRouP ToTAL
2011
Directors
J Puttick
D Adams
A Brackin
S Lake
J Sundell
ToTAL DIReCToRS
Executives
R De Dominicis
C Mallios
D Orrock
P Salis
I Sanchez
ToTAL eXeCuTIVeS
GRouP ToTAL
Balance at
01/07/11
Received as
compensation
options
exercised
Net change
other(i)
Balance at
30/06/12
6,401,175
–
311,943
4,370,544
12,631,610
–
23,715,272
2,001,765
–
–
–
16,135
–
2,017,900
25,733,172
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(227,777)
6,173,398
–
–
70,000
381,943
99,564
4,470,108
(3,000,000)
9,631,610
–
–
(3,058,213)
20,657,059
52,894
2,054,659
–
–
–
–
–
–
–
–
16,135
–
52,894
2,070,794
(3,005,319)
22,727,853
Balance at
01/07/10
Received as
compensation
options
exercised
Net change
other (i)
Balance at
30/06/11
7,057,760
–
311,943
4,309,116
17,306,610
28,985,429
2,001,765
–
–
16,135
–
2,017,900
31,003,329
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(656,585)
6,401,175
–
–
–
311,943
61,428
4,370,544
(4,675,000)
12,631,610
(5,270,157)
23,715,272
–
–
–
–
–
–
2,001,765
–
–
16,135
–
2,017,900
(5,270,157)
25,733,172
(i) Shares purchased or sold, consideration for shareholdings purchased by Group, or excluded from disclosure due to resignation.
7676
(e) Option Holdings
The numbers of options in the Company held (directly, indirectly or beneficially) during the financial year by Key Management
Personnel, including their related parties, are set out below.
Balance
01/07/11
Granted as
compen-
sation
options
exercised
or Sold
options
cancelled/
forfeited
other
Balance
30/06/12
Total
vested at
30/06/12
Total
vested and
exercis-
able at
30/06/12
Total
vested and
unexercis-
able at
30/06/12
2012
Directors
J Puttick
D Adams
A Brackin
S Lake
J Sundell
I Thomas
ToTAL DIReCToRS
Executives
–
–
–
–
–
–
–
R De Dominicis
100,000
C Mallios
D Orrock
A Ritter
P Salis
I Sanchez
–
100,000
–
150,000
250,000
ToTAL eXeCuTIVeS
600,000
GRouP ToTAL
600,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
– (100,000)
–
–
– (100,000)
–
–
– (150,000)
– (250,000)
– (600,000)
– (600,000)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Financial performance hurdles were not met for the executive options which were subsequently cancelled. No options vested
in the year.
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
77
77
Notes to and forming part of the Consolidated Financial Statements
for the year ended 30 June 2012 continued
Note 30: Key Management Personnel Disclosures (continued)
The numbers of options in the Company held (directly, indirectly or beneficially) during the financial year by Key Management
Personnel, including their related parties, are set out below.
Balance
01/07/10
Granted as
compen-
sation
options
exercised
or sold
options
cancelled/
forfeited
Balance
30/06/11
Total
vested at
30/06/11
other
Total
vested and
exercis-
able at
30/06/11
Total
vested and
unexercis-
able at
30/06/11
2011
Directors
J Puttick
D Adams
A Brackin
S Lake
J Sundell
–
–
–
–
10,526,316
ToTAL DIReCToRS 10,526,316
Executives
R De Dominicis
100,000
C Mallios
D Orrock
P Salis
I Sanchez
ToTAL
eXeCuTIVeS
–
100,000
250,000
250,000
700,000
GRouP ToTAL
11,226,316
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
– (10,526,316)
– (10,526,316)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
100,000
–
100,000
(100,000)
150,000
–
250,000
(100,000)
600,000
– (10,626,316)
600,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
100,000
–
100,000
150,000
250,000
600,000
600,000
A loan held previously with Crown Financial Pty Ltd, of which Mr Sundell is a Director was extinguished 30 June 2011.
The Crown Financial debt was connected to 10,526,316 options granted by the Company in favour of Crown Financial.
The repayment of the Crown Financial debt has the simultaneous effect of extinguishing the options.
Financial performance hurdles were not met for 100,000 of the executive options which were subsequently cancelled.
7878
Note 31: 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
Compensation and equity interests are set out in Note 30 and the Remuneration Report.
Consultancy fees paid to Mr J Puttick.
Occupancy fees paid to entities of which Mr R De Dominicis has a beneficial interest.
Interest paid on a loan to an entity of which Mr J Sundell is a Director.
GBST GRouP
2012
$
14,000
45,702
2011
$
7,000
293,562
-
1,000,000
(b) A loan held previously with Crown Financial Pty Ltd, of which Mr Sundell is a Director
was extinguished 30 June 2011.
GBST had increased its lending facility with its current senior lender NAB whereby it borrowed a further $10 million that has
been used to repay its loan to its subordinated lender Crown Financial Pty Ltd (“Crown Financial”). The Crown Financial debt
was initially due to be repaid in February 2012.
The Crown Financial debt was connected to 10,526,316 options granted by the Company in favour of Crown Financial.
The repayment of the Crown Financial debt has the simultaneous effect of extinguishing the options.
Note 32: Share Based Payments
The Company has previously used options as a feature of its equity based remuneration, but this practice has ceased and
alternative remuneration arrangements are being investigated to assist in the attraction, retention and motivation of employees
in line with shareholder interests.
The following share based payment plans in operation during the year or comparative year are:
• Zero Exercise Price Option Scheme
• Deferred Option Scheme
Zero Exercise Price Option Scheme
Under this scheme select staff were made individual offers of specific 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 tests have been passed.
85,894 Zero exercise price options (ZEPOs) were granted on 20 July 2007. At the beginning of the year there were a total of
513 options outstanding. The ZEPOs are divided into three tranches. The first tranche of 20% vest and may be exercised after
twelve months and lapse if unexercised in thirty-six months. The second tranche of 30% vest and may be exercised after
twenty-four months and lapse if unexercised in forty-eight months. The third tranche of 50% vest and may be exercised after
thirty-six months and lapse if unexercised after sixty months. During the year 513 options expired and $Nil options remain
outstanding at balance date.
At the Company’s 2007 Annual General Meeting the issue of these ZEPOs was ratified and the Zero Exercise Price Option
Scheme was approved by shareholders.
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
79
79
Notes to and forming part of the Consolidated Financial Statements
for the year ended 30 June 2012 continued
Note 32: Share Based Payments (continued)
Deferred Option Scheme
Under this Scheme select staff were made individual offers of specific numbers of share options at the discretion of the Board.
The Board may determine the number of share options, issue price, vesting conditions, vesting period, exercise price and
expiry date. Share options may be granted at any time, subject to the Corporations Act and ASX Listing Rules.
On 17 May 2010, 600,000 options were issued to select Executive employees. The exercise price for each option was $1.05.
The options vest in nineteen months after the date of grant. The options have a term of forty-three months from the date of
grant. On cessation of employment all unvested options lapse. In addition to continuity of employment, the vesting of options
is conditional upon the Company meeting certain financial performance measures. Such financial performance hurdles were
not met and therefore 600,000 options expired and $Nil options remain outstanding at balance date.
Performance Criteria for Deferred Options Scheme
The performance criteria associated with the grant of share options outstanding made under the Deferred Options Scheme is
summarised below:
Grant Date
Continued employment until
Financial Performance hurdle
17 May 2010
15 December 2011
If Group EBITDA for FY11 is:
• 50% above Group EBITDA on FY 09 adjusted for the number of shares
on issue
The fair value of the options granted on the 17 May 2010 date has been determined by the Board and based on the external
valuation advice. The valuation has been made using a Trinomial Lattice option pricing model using standard option pricing
inputs such as the share price $0.90, the exercise price of $1.05, expected volatility of 80 percent, expected dividends of
5.55 percent, a term of nineteen months and a risk-free interest rate of 5.05 percent.
Movement in Share Options
The following table illustrates the number, weighted average exercise price (WAEP) and movement in share options under
these schemes during the period.
Outstanding at the beginning of the period
600,513
$1.05
729,358
$1.40
Jun 2012
Number
Jun 2012
WAeP
Jun 2011
Number
Jun 2011
WAeP
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
–
–
–
–
–
100,641
28,204
600,513
$1.05
–
–
–
–
–
600,513
513
–
$3.90
$0.00
–
$1.05
$0.00
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.
8080
Note 33: Earnings Per Share
Basic earnings per share (cents)
Diluted earnings per share (cents) (i)
(a) Reconciliation of earnings to net profit
Net Profit
Earnings used in the calculation of basic EPS
Add interest expense net of tax and transactions costs
Earnings used in the calculation of dilutive EPS (i)
(b) Weighted average number of ordinary shares
Weighted average number of ordinary shares outstanding
during the year used in calculation of basic EPS
GBST GRouP
2012
4.87
4.87
2011
2.08
2.08
$’000
$’000
3,251
3,251
–
1,384
1,384
–
3,251
1,384
66,723,380
66,663,437
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
66,723,380
66,663,437
(i) At 30 June 2012, the weighted average number of Nil options (2011: 10,529,296) and their corresponding effect on earnings were excluded from the calculation of
dilutive earnings per share as the effect of share options would not have been dilutive to basic earnings per share.
The average market value of the Company’s shares for purposes of calculating the dilutive effect of share options was based on quoted market prices for the period
during which the options were outstanding.
Note 34: Subsequent Events
The financial report was authorised for issue on 24 August 2012 by the Board of Directors.
No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly
affect operations of GBST, the results of those operations, or the state of affairs of GBST in future financial years.
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
81
81
Notes to and forming part of the Consolidated Financial Statements
for the year ended 30 June 2012 continued
Note 35: Parent Entity Disclosures
As at, and throughout the financial year ending 30 June 2012 the parent company of the Group was GBST Holdings Limited.
Results of the Parent Entity
Profit for the Year
Other comprehensive (loss)/income
Total Comprehensive Income for the Year
Financial Position of the Parent Entity at Year End
Current Assets
Total Assets
Current Liabilities
Total Liabilities
Total Equity of the Parent Entity Comprising of:
Issued capital
Equity remuneration reserve
Financial asset reserve
Retained earnings
Total equity
GBST HoLDINGS
30 Jun 2012
$'000
30 Jun 2011
$'000
4,659
136
4,795
8,851
(570)
8,281
4,809
5,364
163,365
142,705
17,392
114,136
17,192
96,205
37,664
37,516
–
–
11,565
49,229
88
(570)
9,466
46,500
Parent Entity Contingencies
The Directors are of the opinion that no provisions are required in respect of parent entity contingencies.
Contingent Liabilities not Considered Remote
The parent entity has guaranteed, to an unrelated party, the performance of a subsidiary in relation to a contract for the
supply of software and services.
GBST HoLDINGS
30 Jun 2012
$'000
30 Jun 2011
$'000
387
387
–
–
387
96
96
–
–
96
Parent Entity Capital and Other Expenditure Commitments
Contracted for:
Capital and other operating purchases
Payable
Not later than one year
Later than one year but not later than five years
Later than five years
8282
Guarantees
Property Leases
In accordance with property lease requirements, the
Company has provided bank guarantees to the lessors.
Lending Facilities
The Groups’ lending facilities are supported by guarantees
from its subsidiaries.
Performance Guarantees
The parent entity provides certain guarantees in relation to
subsidiary performance of contract.
Parent Entity Guarantees in Respect of Debts
of its Subsidiaries
The parent entity has entered into a Deed of Cross
Guarantee with the effect that the Company guarantees
debts in respect of its subsidiaries.
Further details of the Deed of Cross Guarantee and the
subsidiaries subject to the deed, are disclosed in Note 24.
Financial Position of the Parent Entity
The Company has a net current asset deficiency at 30 June
2012 of $12.58 million (30 June 2011: $11.83 million). The
deficiency will be financed by future operating cash flows.
The earnings outlook of the business is strong and continues
to improve. Accordingly, the Directors believe that the
Company is in a position to pay its debts as and when they
become payable.
Note 36: Company Details
The registered office of the Company is:
GBST Holdings Limited
c/- McCullough Robertson
Level 11, Central Plaza Two
66 Eagle Street
BRISBANE QLD 4000
The Group’s principal places of business are:
5 Cribb Street
MILTON QLD 4064
Level 24
259 George Street
SYDNEY NSW 2000
Level 2
63 Market Street
WOLLONGONG NSW 2530
Building 5
Croxley Green Business Park
Hatters Lane, Watford
HERTFORDSHIRE WD18 8YE
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
83
83
Directors’ Declaration
for the year ended 30 June 2012
1. In the opinion of the Directors of GBST Holdings Limited (‘the Company’):
a. the consolidated financial statements and Notes 1 to 36 and the Remuneration report in the Directors’ report,
set out on pages 15 to 23, are in accordance with the Corporations Act (2001), including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2012 and of its performance for the financial
year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the
Corporations Regulations (2001); and
b. there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
2. There are reasonable grounds to believe that the Company and the Group entities identified in Note 24 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.
3. The Directors have been given the declarations required by Section 295A of the Corporations Act (2001) from the
Chief Executive Officer and Chief Financial Officer for the financial year ended 30 June 2012.
4. The Directors draw attention to Note 2 to the consolidated financial statements, which includes a statement of compliance
with International Financial Reporting Standards.
Signed in accordance with a resolution of the Directors:
Dr J F Puttick
Chairman
Mr S M L Lake
Managing Director and Chief Executive Officer
Dated at Brisbane this 24th day of August 2012
8484
Independent Auditor’s Report
to the members of GBST Holdings Limited
ABCD
Independent auditor’s report to the members of GBST Holdings Limited
Report on the financial report
We have audited the accompanying financial report of GBST Holdings Limited (the company),
which comprises the consolidated statement of financial position as at 30 June 2012, and
consolidated statement of comprehensive income, consolidated statement of changes in equity
and consolidated statement of cash flows for the year ended on that date, notes 1 to 36
comprising a summary of significant accounting policies and other explanatory information and
the directors’ declaration of the Group comprising the company and the entities it controlled at
the year’s end or from time to time during the financial year.
Directors’ responsibility for the financial report
The directors of the company are responsible for the preparation of the financial report that gives
a true and fair view in accordance with Australian Accounting Standards and the Corporations
Act 2001 and for such internal control as the directors determine is necessary to enable the
preparation of the financial report that is free from material misstatement whether due to fraud
or error. In note 2, the directors also state, in accordance with Australian Accounting Standard
AASB 101 Presentation of Financial Statements, that the financial statements of the Group
comply with International Financial Reporting Standards.
Auditor’s responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We
conducted our audit in accordance with Australian Auditing Standards. These Auditing
Standards require that we comply with relevant ethical requirements relating to audit
engagements and plan and perform the audit to obtain reasonable assurance whether the
financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial report. The procedures selected depend on the auditor’s judgement,
including the assessment of the risks of material misstatement of the financial report, whether
due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the entity’s preparation of the financial report that gives a true and fair view in order
to design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by the directors, as well as evaluating the overall presentation of the financial
report.
We performed the procedures to assess whether in all material respects the financial report
presents fairly, in accordance with the Corporations Act 2001 and Australian Accounting
Standards, a true and fair view which is consistent with our understanding of the Group’s
financial position and of its performance.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
85
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International, a Swiss cooperative.
Liability limited by a scheme approved under
Professional Standards Legislation.
Independent Auditor’s Report
to the members of GBST Holdings Limited
ABCD
ABCD
Independence
Independence
In conducting our audit, we have com plied with the i ndependence requirements of the
In conducting our audit, we have complied with the independence requirements of the
Corporations Act 2001.
Corporations Act 2001.
Auditor’s opinion
Auditor’s opinion
In our opinion:
In our opinion:
(a)
(a)
the financial report of the Group is i n accordance with the Corporations Act 2001,
the financial report of the Group is in accordance with the Corporations Act 2001,
including:
including:
(i)
(i)
(ii)
(ii)
giving a true and fair view of the Gr oup’s financial position as at 30 June 2012 and
giving a true and fair view of the Group’s financial position as at 30 June 2012 and
of its performance for the year ended on that date; and
of its performance for the year ended on that date; and
dards
complying with Australian Accounting Stan
complying with Australian Accounting Standards
Regulations 2001.
Regulations 2001.
and t
and
he Corporations
the Corporations
(b)
(b)
the financial report also complies with International Financial Reporting Standards as
the financial report also complies with International Financial Reporting Standards as
disclosed in note 2.
disclosed in note 2.
Report on the remuneration report
Report on the remuneration report
We have audited the Remuneration Report included in pages 20 to 28 of the directors’ report for
We have audited the Remuneration Report included in pages 15 to 23 of the directors’ report for
the year ended 30 June 20 12. The directors of the company are responsible for the preparation
the year ended 30 June 2012. The directors of the company are responsible for the preparation
the
and presentation of the rem uneration report in accordance with Section 300A of
and presentation of the remuneration report in accordance with Section 300A of the
Corporations Act 2001. Our responsibility is to expr ess an opinion on the remuneration report,
Corporations Act 2001. Our responsibility is to express an opinion on the remuneration report,
based on our audit conducted in accordance with auditing standards.
based on our audit conducted in accordance with auditing standards.
Auditor’s opinion
Auditor’s opinion
In our opinion, the remuneration report of GBST Ho ldings Limited for the year ended 30 June
In our opinion, the remuneration report of GBST Holdings Limited for the year ended 30 June
2012, complies with Section 300A of the Corporations Act 2001.
2012, complies with Section 300A of the Corporations Act 2001.
KPMG
KPMG
Stephen Board
Stephen Board
Partner
Partner
Brisbane
Brisbane
24 August 2012
24 August 2012
8686
Additional Information
Shareholding Information as at 6 September 2012
a. Distribution of Shareholders
Category (size of holding)
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,0000
100,001 and over
Total
b. The number of shareholdings in less than marketable parcels is 186
c. The names of the substantial shareholders listed in the company’s register are:
Shareholder
Perpetual Limited
Crown Financial Pty Ltd
John Francis Puttick
National Nominees Ltd ACF Australian Ethical Smaller Companies Trust
Stephen Lake
Renaissance Smaller Companies Pty Ltd
Number ordinary
221
235
132
159
48
795
Number ordinary
10,129,064
10,127,610
7,056,760
8,411,885
4,350,544
4,348,237
d. Voting rights
The company only has ordinary shares on issue. There are 66,561,725 ordinary shares on issue.
Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting or by
proxy has one vote on a show of hands. No shares are the subject of voluntary escrow.
e. 20 Largest Shareholders – ordinary Shares
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Name
NATIONAL NOMINEES LIMITED
RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LIMITED
CROWN FINANCIAL PTY LTD
STEPHEN MAURICE LINTON LAKE
MR JOHN FRANCIS PUTTICK
DEKACROFT PTY LTD
CITICORP NOMINEES PTY LIMITED
MR JOAKIM SUNDELL & MRS SHARA SUNDELL
BRAZIL FARMING PTY LTD
J P MORGAN NOMINEES AUSTRALIA LIMITED
BNP PARIBAS NOMS PTY LTD
BERISLAV BECAREVIC & IVANKA BECAREVIC
BARRY BECAREVIC
RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LIMITED
ROBERT DEDOMINICIS
RAYMOND TUBMAN
WANGARUKA HOLDINGS PTY LTD
TIMENOW PTY LTD
RJAE PTY LTD
BOND STREET CUSTODIANS LIMITED
Total Units
13,277,351
8,178,588
7,618,148
4,152,851
3,710,161
2,463,237
2,386,509
2,013,462
2,000,000
1,078,381
1,066,820
751,553
722,408
708,164
707,839
707,839
703,594
703,594
590,332
590,332
% IC
19.95%
12.29%
11.45%
6.24%
5.57%
3.70%
3.59%
3.02%
3.00%
1.62%
1.60%
1.13%
1.09%
1.06%
1.06%
1.06%
1.06%
1.06%
0.89%
0.89%
GBST Holdings Limited ABN 85 010 488 874 2012 Annual Report
87
Share Registry
Link Market Services
Level 19, 324 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.
Unquoted Securities
The company has no unquoted securities on issue.
Auditors
kPMG
Level 16, 71 Eagle Street
Brisbane QLD 4000
Ph 07 3233 3111
Fax 07 3233 3100
Corporate Directory
Registered Office
c/- McCullough Robertson, Lawyers
Level 11, Central Plaza Two
66 Eagle Street
BRISBANE QLD 4000
Ph 07 3233 8888
Fax 07 3229 9949
Principal 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
Ian Thomas
Company Secretary
David Michael Doyle
8888
GBST
Visual Identity
Guidelines
July 2012
www.gbst.com