Expanding globally
Annual Report 2013
GBST is one of Australia’s leading
technology services companies.
We specialise in providing securities
transaction and wealth administration
software for the financial services industry.
Our software platforms connect capital
markets in Australasia, Asia, Europe and
the United States; and support more than
7,000 investment options on a single
wealth administration platform.
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.
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
33 Auditor’s Independence
Declaration
34 Financial Statements
91 Directors’ Declaration
92 Independent Auditor’s Report
94 Additional Information
96 Corporate Directory
Notice of AGM
GBST Holdings Limited (GBST)
will hold its Annual General
Meeting at 3.30pm (Brisbane
Time) on Thursday the 24th
October 2013 at the office of
McCullough Robertson,
Level 11 Central Plaza Two,
66 Eagle Street, Brisbane.
The Year in Review
Group Total
Revenue
$83.0m
EBITDA
Cash EPS*
$16.5m
16.5 cents
’10 ’11 ’12 ’13
’10 ’11 ’12 ’13
’10 ’11 ’12 ’13
•
•
Record revenue of $83 million, driven by the continued sales growth of
the GBST Composer wealth management platform
GBST Composer now the top provider of direct-to-consumer
technology for the distribution of tax-incentivised products in the UK
•
First direct sale of GBST Syn~ in the United States
• Net profit increased by 86 per cent to $6.0 million
• Adjusted cash NPAT up 19 per cent to $11.0 million
• Dividend payments 6.5 cents for the year, fully franked
*Cash EPS is calculated by dividing the NPAT excluding amortisation
and impairment by the weighted average number of shares. It is a
non-IFRS measure that is used to assess the Group’s ability to
generate cash per security, and has not been tax affected.
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report
1
2013 Performance
Dividend
(cents)
Final
Interim
Group revenue by half
($ millions)
H2
H1
Group revenue
– licence vs services
($ millions)
Services
Licence
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0
90
80
70
60
50
40
30
20
10
0
90
80
70
60
50
40
30
20
10
0
’10
’11
’12
’13
’10
’11
’12
’13
’10
’11
’12
’13
Dividends for FY2013
were 6.5 cents per share,
up from 5.0 cents in
FY2012
High quality, recurring
annuity licence revenue
income continues to
grow as new clients
‘go live’ using GBST’s
products
Service revenue is
increasing, reflecting
new client product
installations which will
lead to future licence
revenue
2
Group revenue
– International vs Australia
($ millions)
Group revenue
– by division
($ millions)
International
Australia
Financial services
Wealth Management
Capital Markets
90
80
70
60
50
40
30
20
10
0
90
80
70
60
50
40
30
20
10
0
’10
’11
’12
’13
’10
’11
’12
’13
International revenue in
FY2013 was nearly 40%
of total revenue, and
international sales were
up 14% compared to the
previous year
GBST’s wealth
administration platform,
GBST Composer, has
increased sales revenue
and market share
significantly
GBST Snapshot
Established
1983
ASX listed
2005
Capital markets and wealth
management specialist
More than
380
employees
Growing
global presence
Record revenue of
$83 million
60%
of revenue from
recurring licence fees
More than
60 clients
and expanding
Business to
business
products
R&D
investment drives
future growth
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report
3
Chairman’s and Managing Director’s Report
GBST continued to grow
despite the challenging
economic environment in
financial markets
Mr John Puttick, Chairman
Dear fellow shareholders,
We are pleased to report that in FY2013 GBST continued
to grow despite the challenging economic environment
in financial markets. The group made good progress with
its strategy of global expansion, supported by its solid
platform in Australia where GBST has been a market-
leading provider of securities processing and wealth
administration software products for nearly 30 years.
Today, GBST has customers on four continents –
Australasia, Asia, Europe and North America. In FY2013 we
secured our first direct US client using our new generation
back- and middle-office platform, GBST Syn~, and opened
offices in New York, Hong Kong and Singapore to support
international sales. The UK market beachhead that we
acquired with the Composer platform in 2007 is now a fast-
expanding wealth management business.
We are a leading software and services provider for the
financial services industry, with more than 60 clients
internationally. Our technology systems are critical to
our clients’ success, and we invest approximately 10%
of revenues annually to ensure our software is reliable,
scalable and competitive.
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
In FY2013 GBST’s net profit after tax increased by 86%
to $6.0 million, compared with $3.3 million in FY2012.
Operating EBITDA was $17.5 million, up 13% from $15.5
million in the previous year.
Revenue for the year increased to a record $83.0 million,
driven by Australian and international growth. This included
record sales of GBST Composer in the UK where the
Financial Services Authority’s Retail Distribution Review
legislation has now been activated. Recurring annuity
licence income was 63% of total revenue and is growing,
reflecting the high quality of the company’s earnings.
International revenue was $31.9 million, up 14% from the
previous year and a record. Offshore sales now represent
nearly 40% of total sales and we anticipate this percentage
will increase. Australian revenue improved by 5%,
demonstrating good performance in a subdued market.
The group reported strong operating cash flow of $15.2
million, up from $7.7 million in FY2012, when cash was
impacted by pre-payments received in FY2011. This
represented a 111% conversion of EBITDA to cash flow,
reflecting the ongoing strength of GBST’s operations and
strong cash flow management.
Amortisation of software systems and customer contracts
as a result of acquisitions was $5 million in FY2013, less
than the $6 million in FY2012. We repaid senior debt of
$4.0 million and entered into a new financing arrangement
which allowed more flexible repayments during the year,
reducing senior debt to $14.0 million at 30 June 2013. Net
debt fell from $21.2 million to $12.4 million at 30 June 2013
consistent with the strong cash flow generated.
4
GBST’s net profit after tax
increased by 86% to $6.0
million... a strong result driven
by positive contributions from
all businesses
Mr Stephen Lake, Managing Director
and Chief Executive Officer
Dividends
The board has declared a final dividend of 3.5 cents per
share, fully franked, which will be paid on 23 October
2013. Total dividends paid for the year were 6.5 cents per
share, fully franked. This represented a payout ratio of 39%
of adjusted cash NPAT, up from 36% in FY2012. This ratio
reflects the strength of the group’s capital position and our
confidence in the future.
GBST Syn~ use expanding
GBST Capital Markets revenue was $35.5 million
for FY2013, down 2% from $36.2 million in FY2012,
reflecting very difficult conditions in international capital
markets. Operating EBITDA was $5.7 million.
Australia
In Australia, new licence sales and increased retail
trading activity led to a 5% rise in revenue to $28.8 million
compared to $27.4 million in FY2012. The highlight of
the year was the joint implementation of our GBST Syn~
and GBST Shares platforms for a client, demonstrating
the strong progress we have made toward providing a
complete Australasian regional end-to-end middle-office
and back-office solution. This live deployment was a
watershed moment for us after many years of research
and development.
Introducing accessibility through mobile devices to our
GBST Front Office software for advisers has assisted
sales, which tripled during the year. GBST Front Office
use is increasing; and we expect to launch new mobility
products and a cash margining product in FY2014.
International expansion
Another significant milestone was our first direct sale of
GBST Syn~ in the United States, providing a middle-office
processing solution to a major broker dealer firm.
International revenue for Syn~, however, was lower at
$6.7 million in FY2013. While our international business
reported an operating EBITDA loss of $3 million in the first
half, cost rationalisation and new contracts contributed
to a reduced operating EBITDA loss in the second half of
$1.6 million. Continued improvement is expected as new
installations are completed and customers “go live” using
GBST Syn~.
In Europe, we launched the first post-trade processing
software to enable capital markets participants to
manage their obligations for the proposed European
Union financial transaction tax. We have a promising
pipeline of sales opportunities among investment banks,
custodians and asset managers, and have already
secured our first customer.
Asia represents an attractive growth opportunity for
us and we have made a significant investment in the
region, strengthening staff and resources. This was
rewarded in early FY2014 when we were delighted to
sign a new contract with a major investment bank. A
key competitive advantage of GBST Syn~ is its flexibility,
as it combines multiple products including equities,
derivatives, fixed income and managed funds on a
single platform.
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report
5
Strong growth of GBST Composer sales
GBST Composer sales continued to grow strongly and
group wealth management revenue was $43.4 million, up
18% from $36.8 million in the previous year. International
sales were $25.2 million, 31% above $19.2 million in
FY2012. Australian revenue rose 4% to $18.2 million.
UK sales grew with new contract wins and the activation of
customer platforms. Services revenue represented 46% of
sales, a high ratio reflecting project implementations which
will lead to future licence revenue. Operating EBITDA was
$11.6 million, up 26% from $9.2 million in FY2012.
GBST in the community
An enduring feature of our culture is the work of our staff
for the community. We match donations to tax-deductible
charities, and encourage them to contribute voluntarily and
through sponsorship to worthy causes.
Some organisations that we have supported include the
Australian Red Cross, Innocents Relief, Multiple Sclerosis
Australia, Women in Technology, World Vision of Australia,
the British Heart Foundation, Compassion UK, Hear
and Say Centre, Xavier Children’s Support Network and
Starlight Foundation.
The strength of our product was recognised not only by
sales, where GBST Composer supports three of the UK’s
top six wrap and platform providers, but also by industry
accolades. GBST won the ‘Best software provider’
award at the 2012 Aberdeen UK platform awards, and a
UK customer won the 2013 PlatForum ‘Best workplace
platform’ and ‘Best innovation’ awards for combining retail
and corporate platforms using GBST Composer.
We would like to thank our staff who contributed to the
community, and acknowledge their efforts. Over half of
our 380 employees have served more than five years
with GBST, and around half of these have been with
us more than 10 years. We have built up considerable
talent pool in capital markets transaction processing,
wealth management and compliance to the benefit of
our customers.
We are continuing to invest in research and development
for Composer and expanding the use of offshore
development resources to build capacity for further growth.
In Australia, GBST helped customers launch new direct-to-
consumer superannuation products and migrate systems
to GBST Composer. The platform already complies
with Future of Financial Advice (FoFA) and SuperStream
legislation. The GBST Quant business launched a new Tax
Analyser product, offering the first patented pre-trade tax
analysis tool in the market.
GBST Financial Services
GBST Financial Services continued to operate profitably,
and revenue increased to $3.5 million in FY2013, up 5%
from the previous year. An important part of software
development has been ensuring that our products are
easy to use and have an attractive look and feel. This has
been championed by Emu Design, which supports the
user interfaces for all GBST products and provides digital
services across the group.
Highlights of the year included roll-out of new e-commerce
platforms for clients, launch of a new online GBST Unison
membership and registry platform for trade unions, and
expansion of Emu Design’s UK operations to support new
sales of GBST Composer.
Outlook
GBST has steadily increased group revenue and
profitability since 2010 and is well positioned for further
growth. While capital markets remain subdued, there are
signs of market improvement and increased customer
engagement. Following a long period of deferred
expenditure, the need for the financial services sector to
invest in technology is growing.
We continue to focus on Asian and North American
markets to increase sales of GBST Syn~, and the
proposed introduction of the financial transaction tax in
Europe provides further growth opportunities worldwide.
Regulatory change in the UK continues to support sales
growth of GBST Composer.
With leading products, experienced and skilled staff, and
increased global resources, we are positioned well to take
advantage of an improvement in the world’s financial markets.
In closing, we would like to extend our thanks to the
management and staff of GBST for their dedication and
commitment. We would also like to thank our shareholders
for their support. We look forward to another positive year
of growth.
6
The GBST Product Suite
TRANSITIONING
PORTFOLIO
ADMINISTRATION
PLATFORM
INTEGRATION
I
E
C
F
F
O
K
C
A
B
I
E
C
F
F
O
T
N
O
R
F
Through its flagship products GBST provides industry-
leading securities transaction and fund administration
software for the financial services sector.
The GBST Shares platform is the most scalable and
widely used middle- and back-office equities system in
Australia. It helps stockbrokers and third-party clearers to
manage and execute transactions with the Australian
Securities Exchange’s market operations and clearing
systems. It facilitates transactions 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.
GBST’s Business Intelligence reporting (BIR) provides
pre-built reports and dashboards for advisers, which can
be scheduled, emailed and exported.
GBST Syn~ is a new-generation technology platform that
enables capital market participants to manage post-trade
processing requirements across multiple asset classes,
entities, markets and operational centres. It offers a
regional middle- and back-office solution in Australia, Asia,
Europe and the United States.
GBST Composer is the leading administration and
registry platform for the wealth management industry,
with the unique capability to support more than 7,000
investment options. 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 by GBST ComposerWeb, which
enables advisers and clients to administer portfolios from
the presale planning stage through to maintaining their
portfolios. GBST SuperStream provides funds with
flexibility and control while supporting industry messaging
standards and Gateway services. GBST Quant provides
data analytics and quantitative services for measuring
portfolio performance and after-tax tools and services.
7
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report
GBST Executive Team
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.
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.
Andrew Ritter Chief Financial Officer
Andrew commenced with GBST in
November 2011 as Chief Financial
Officer, having spent over 14 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.
Isabel Sanchez Chief Technology Officer
Isabel was appointed as Chief
Technology Officer in March 2008.
Isabel has over 19 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.
8
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.
Liz Bevan CEO, North America
With over fifteen years’ experience in
financial services, Liz has driven
strategic product development,
product management and marketing
programmes during her tenure at
GBST. Liz has a track record of
delivering on strategy development
and execution, new product development, product
management, strategies for pricing, marketing and
promotion and risk management.
As the company’s first CEO for North America, she is
charged with delivering overall business growth and
targeted demand generation for the company’s North
American operations.
GBST Board of Directors
John Puttick Non-Executive Chairman
Joakim Sundell Non-Executive Director
Dr John Puttick is the founder and
Chairman of GBST. He holds a Doctor
of the University from Queensland
University of Technology and chartered
accounting qualifications from
Auckland University of Technology.
He has over forty years’ experience in
building commercial systems with information technology,
over thirty of which have been in developing financial
services solutions at GBST.
John is deputy chancellor of Queensland University of
Technology and a Member of the Hall of Fame of the Pearcey
Foundation. John is a Member of the Audit and Risk Committee
and the Nominations and Remuneration Committee.
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 Pincock Minarco 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 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
Ltd, a private investment company. He was a Director
of Infochoice Limited (from 13 December 2006 until
5 February 2008).
David Adams Independent Non-Executive Director
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 2013 Annual Report
9
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 in August 2007 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 2013.
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.
b) The Board’s broad function is to:
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 an internally developed survey of board
members on performance.
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:
(a) the Board should comprise at least five Directors;
(b) the Board shall be constituted by members having an
appropriate range of skills and expertise; and
(i) chart strategy and set financial targets for
(c) at least two Directors will be non-executive Directors
the Company;
independent from management.
(ii) monitor the implementation and execution of strategy
and performance against financial targets; and
(iii) oversee the performance of executive
management and generally to take and fulfil an
effective leadership role in relation to the Company.
(c) Power and authority in certain areas is specifically
reserved to the Board – consistent with its function as
outlined above. These areas include:
(i)
composition of the Board itself including
the appointment and removal of Directors
and the making of recommendations to
shareholders concerning the appointment and
removal of Directors;
(ii) oversight of the Company including its control and
accountability system;
(iii) appointment and removal of the Chief Executive
Officer and the Company Secretary;
(iv) reviewing and overseeing systems of risk
management and internal compliance and control,
1010
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 evaluation;
(iv) proper training to be made available to Directors
both at the time of their appointment and on an
on-going basis;
(v) basic procedures for meetings of the Board and
its committees – frequency, agenda, minutes and
Corporate Governancefor the year ended 30 June 2013
private discussion of management issues among
non-executive Directors;
appropriate, in relation to any deficiency in or
breakdown of controls;
(vi) ethical standards and values – formalised in
(ix) assessing the adequacy of external reporting for
a detailed code of ethics and values;
the needs of shareholders; and
(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;
(vii) review of the performance and independence of
the external auditors;
(viii) review of the external audit function to ensure
prompt remedial action by management, where
(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. The committee
has 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 to 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 4 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.
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
1111
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report
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 2013, 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
33%
34%
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 met measurable
objectives for the 2013 year including:
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.
In the 2014 year the Company’s measurable objectives are:
1. the development of female leaders within a leadership
development program that will be continued in 2014 ;
2. continue the practice of requiring the Company to
report twice annually on the statistical performance of
the Company on diversity within GBST; and
3. the formal adoption of a ‘keeping in touch’ program
with employees on parental leave to make sure those
employees are kept up to date on new systems and
corporate developments and aid a smooth transition on
the employee’s return to work.
The Company is required to complete a 2012-2013
public report with the Workplace Gender Equality
Agency and makes this report available at the GBST
website http://gbst.com/about-us/diversity.
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
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
1212
of Choice awards conducted by Women in Technology
in Queensland. GBST continues to support industry
initiatives promoting female participation in the ICT
industry including the support of Women in Technology
and Group X. 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.
Corporate Governancefor the year ended 30 June 2013 continued
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.
1313
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report 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 2013 and the audit report thereon.
Directors
The names of the Directors of the Company in office during
the year and to the date of this report are:
Name
Non-executive
Period of
Directorship
Dr John F Puttick (Chairperson)
January 1984
Mr David C Adams
Mr Allan J Brackin
Mr Joakim J Sundell
Dr Ian Thomas
Executive
April 2008
April 2005
July 2001
December 2011
Mr Stephen M L Lake (Managing
Director and Chief Executive Officer)
September 2001
Principal activities
The principal activities of GBST during the year ended
30 June 2013 were:
• client accounting and securities transaction technology
solutions for the finance, banking and capital markets
industry in Australia, Asia, Europe and North America;
• funds administration and registry software for the
wealth management industry in Australia and the
United Kingdom;
• gateway technology provider to the superannuation
industry; provider of data and quantitative services
offering after tax measurement of portfolio performance
and delivery of other related services for financial
advisers and institutions in Australia; and
• website and mobile platform design and digital agency
services focused on e-commerce and the financial
services industry in Australia and Europe.
No significant changes in the nature of these activities
occurred during the year.
managed funds transactions for global capital markets.
In Australia, GBST also offers the GBST Shares and
derivatives platform which is the country’s most widely
used middle-office and back-office equities and
derivatives system. Other GBST products provide fully
integrated solutions for trading, clearing and settlement
of multi-instruments, currencies and markets.
• GBST Wealth Management, through the GBST
Composer platform provides end to end funds
administration and management software to the
wealth management industry, both in Australia and the
United Kingdom. It offers an integrated system for the
administration of wrap platforms, including individual
savings accounts (ISA’s), pensions, self-invested
personal pension (SIPP) and superannuation; as
well as master trusts, unit trusts, risk and debt; and
other investment assets. Other GBST products
provide technology hub solutions; and data analytics
and quantitative services for the measurement of
portfolio performance.
• GBST Financial Services, incorporating Emu Design,
provides independent financial data and digital agency
services for interactive website design, development,
hosting, e-commerce platforms, and mobile and social
networking solutions.
Key Financial Results
• Total revenue for the Group increased by 8%
to $83.0 million (2012: $77.1 million).
• Operating EBITDA increased by 13% to $17.5 million
(2012: $15.5 million).
• EBITDA increased by 16% to $16.5 million
(2012: $14.2 million).
• Profit before income tax increased by 76% to $7.8 million
(2012: $4.5 million).
• Net profit after income tax (NPAT) increased by 86%
to $6.0 million (2012: $3.3 million).
• Adjusted cash net profit after income tax (Cash NPAT)
increased by 19% to $11.0 million (2012: $9.2 million).
• Senior debt decreased during the year by $4.0 million
to $14.0 million at 30 June 2013 from $18.0 million at
30 June 2012. Net Debt (total borrowings less cash) has
reduced from $21.20 million in 2012 to $12.37 million.
• Dividend payout ratio of 39% on adjusted Cash NPAT
GBST comprised three divisions during the year:
increased by 3% on 2012.
• GBST Capital Markets, through the GBST Syn~
platform, provides new-generation technology to
process equities, derivatives, fixed income and
14
Directors’ Reportfor the year ended 30 June 2013 Dividends
Dividends paid during the year were:
Measures of profitability and basis
of preparation
• Final fully franked ordinary dividend of 2.5 cents per
share for the 2012 financial year paid on 24 October
2012, as recommended in the financial report for the
year ended 30 June 2012.
• Interim fully franked ordinary dividend of 3.0 cents per
share paid on 26 April 2013.
Dividends declared after the end of the year:
The Directors recommend a final dividend of 3.5 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 23 October 2013.
Group results
FuLL YeaR To 30 June
2013
$‘000
2012
$‘000
%
Change
Total revenue and
other income
83,011
77,067
operating eBITDa
17,497
15,498
Unallocated expenses
(971)
(1,256)
eBITDa
16,526
14,242
Net finance costs
(1,495)
(2,058)
8
13
16
27
Depreciation
& Operating
Amortisation
Investment
Amortisation
(2,262)
(1,756)
(29)
(4,944)
(5,972)
Profit before income
tax
7,825
4,456
Income tax expense
(1,794)
(1,205)
Profit after income
tax
adjusted Cash
nPaT
Basic ePS (cents)
Cash ePS (cents)
6,031
3,251
10,975
9.06
16.49
9,223
4.87
13.82
17
76
86
19
86
19
The table includes IFRS and non-IFRS financial information. Non-IFRS financial
information is Operating EBITDA, Operating & Investment Amortisation
and Adjusted Cash NPAT which has not been audited or reviewed by our
auditor, KPMG.
Operating EBITDA, Operating Amortisation,
Investment Amortisation and Adjusted
Cash NPAT
GBST defines Operating EBITDA as profit before net
finance costs, tax, depreciation, amortisation, impairment
(if applicable) and other unallocated expenses. Operating
Amortisation is defined as amortisation relating to
tangible and intangible assets used as part of on-going
operating activities; Investment Amortisation relates to
intangible assets acquired through acquisition. GBST
defines Adjusted Cash NPAT as profit after income tax
plus Investment Amortisation. GBST uses Operating
EBITDA and Adjusted Cash NPAT as internal performance
indicators for the management of its operational business
segments, and overall Group performance to allow for
better evaluation of business segment activities and
comparison over reporting periods.
Unallocated expenses
Unallocated expenses are legal expenses associated with
non-operating Group matters which are not associated
with any business segment and therefore are not
allocated to a segment. This treatment is in accordance
with Management’s internal measurement of segment
performance and the segment disclosures in Note 25
to the financial report. Unallocated expenses are reported
to allow for reconciliation between the Group and
segment reports.
Group performance
Operating EBITDA increased by 13% to $17.5 million
compared to $15.5 million in the prior year. Given the
difficult overall financial environment, this was a very
pleasing performance. While the environment for financial
market participants globally remains challenging, the latter
part of the year showed encouraging signs of improving
conditions. The long term strategy of GBST to use the solid
platform it has in Australia, built over the past 30 years,
to expand internationally is now delivering results; shown
by significant new customer wins, revenue growth and
increased profitability.
Finance costs are steadily reducing as the gross senior
debt owed reduced to $14.0 million from $18.0 million
in 2012. Net Debt (total borrowings less cash) has reduced
from $21.20 million in 2012 to $12.37 million.
1515
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report MaRKeT LeaDInG PRoDuCTS
GBST is first and foremost a business to business
software product Company with a long heritage of
delivering innovative, robust and reliable solutions to the
financial services industry. Consequently GBST invests
heavily in its products to ensure that it continues to offer
unique solutions which provide competitive advantages
to its customers. Investment spend in R&D averages
approximately 10% of turnover. R&D is an important
driver of growth and a key element of the success
of the Company.
The Group’s UK growth is spearheaded by sales
of GBST Composer, which was initially designed to
meet the challenges of the Retail Distribution Review
legislation. Over the past 3 years, GBST Composer has
been a multiple award winner recognised for innovation,
efficiency and flexibility and is unparalleled in its ability
to support more than 7,000 investment options on
a single platform. GBST Composer is the leading direct
to consumer technology for the distribution of tax based
financial products, such as ISA’s, SIPPS and pensions.
GBST Syn~ is a new-generation technology platform
that enables capital markets participants to manage their
post-trade processing requirements across multiple asset
classes, entities, markets and operational centres. The
recent significant customer wins are a further endorsement
of its capability. Investment continues to expand the
technology solutions provided by GBST Syn~. Significant
progress has been made towards the deployment of
a complete, end to end, back and middle office regional
Asian solution that also meets the requirements of the
Institutional market in Australia.
In Australia where GBST Shares and GBST DCA are the
leading middle and back-office equities and derivatives
systems, enhancement has been made to its cash equity
margin calculations and reporting as well as its capital
adequacy reporting capabilities.
GBST is also investing in the mobility enablement of all
of its core products.
Depreciation and operating amortisation costs have
increased by $500 thousand to $2.3 million due primarily
to increased fit out costs after moving into new offices
in multiple locations. Technology infrastructure spend has
also increased with the growth of the business. Investment
amortisation relates to intangible assets acquired
through acquisition or from third parties. The reduction
in this expense will continue as these assets become
fully amortised.
The effective tax rate for 2013 is 23% down from 27%
in 2012. Profit after tax has increased to $6.0 million,
up by 86%. Adjusted Cash NPAT is up to $10.9 million,
an increase from $9.2 million last year. The Board
is pleased to record dividends for 2013 of 6.5 cents
per share, up from 5.0 cents in 2012.
GLoBaL eXPanSIon
Group revenue was a record $83.0 million for the year,
compared to $77.1 million in the previous year. Offshore
sales revenue increased 14% to $31.9 million, also a record
and is now nearly 40% of total sales. Recurring annuity
licence income is 63% of total revenue, and growing.
This is a significant achievement, and 2013 has seen
an increase in the quantity and quality of the Company’s
earnings, as well as the progression of the good reputation
GBST has in Australia into all the markets it operates
in globally.
GBST Composer grows from strength to strength in the
UK with revenue up by over 30% from the prior year. GBST
Composer also performed very well in Australia, achieving
revenue growth in what has been a very subdued market.
GBST Syn~ made good progress in the second half of the
year securing client wins in North America and a global
financial services provider. Ongoing regulatory changes
have created opportunities for third-party clearing and
settlement providers, and GBST Syn~ is an effective
solution that allows customers to take advantage of those
opportunities. The recent launch of GBST’s Syn~ Financial
Transactions Tax module has established a solid pipeline
with the first implementation underway.
GBST has increased overall staff numbers to
approximately 380, hiring in all locations and expanding
the use of offshore development resources to increase
capacity in a cost effective manner.
New offices have been opened in New York, Hong Kong
and Singapore and larger premises taken in London,
Sydney and Brisbane.
1616
Directors’ Reportfor the year ended 30 June 2013 continued GBST Capital Markets
FY2013
$000’s
FY2012
$000’s
%
Change
Sales to external
customers – Australia
28,757
27,373
5
Sales to external
customers
– International
Sales to external
customers – Total
Operating EBITDA
– Australia
Operating EBITDA
– International
Operating EBITDA
– Total
Depreciation &
amortisation of
segment assets
Segment result
– Capital Markets
(Australia &
International)
6,709
8,822
(24)
35,466
36,195
10,273
9,248
(2)
11
(4,569)
(3,164)
(44)
5,704
6,084
(4,479)
(4,142)
(6)
(8)
1,225
1,942
(37)
WInS neW CLIenTS In auSTRaLIa
Revenue increased to $28.8 million for the year, up from
$27.4 million in 2012. Revenue growth was driven by new
license sales and increased retail trading volumes in the
second half of the year. Operating EBITDA increased
to $10.3 million, up 11%.
GBST’s first deployment of GBST Syn~ in Australia went
live in September 2012, marking a major milestone for the
Company. It was especially pleasing that this was a joint
implementation of GBST Syn~ and GBST Shares working
side by side to deliver a simple and effective solution to
a complex challenge faced by a customer.
This success was achieved despite a subdued macro
environment with significantly reduced corporate activity.
Adapting to changing regulation has had a direct impact
on Brokers and capital market participants.
During the year, GBST continued its expansion onto Broker
desktops; GBST Front Office deployments grew by more
than 300%. Mobile device support was also developed for
Front Office, opening up a new market for the product.
GBST Syn~’s settlement management functionality brings
the exception management capabilities to the Australian
market as part of a comprehensive regional Asian solution.
International revenue reduced from $8.8 million in 2012
to $6.7 million in 2013 while operating EBITDA fell to
a loss of $4.6 million from a loss of $3.2 million in 2012.
Trading conditions in the first half of the year were
particularly difficult, resulting in a loss of $3.0 million for
that period. Performance in the latter part of the year was
much improved with the start of projects relating to new
contracts and increased activity from existing customers.
This, together with cost rationalisation, led to the division
posting a reduced loss of $1.6 million for the second half.
Internationally GBST has made a significant investment
in product development, infrastructure, and sales and
business development over the past few years. This
is starting to deliver results and GBST Syn~ sales are
increasing with important new customer wins in the
United States, Europe and Asia.
In the United States, GBST’s Syn~ is being implemented
by a major broker-dealer firm to enable them to automate
the trade cycle and provide increased flexibility to
self-manage future business and regulatory change.
This is a significant milestone for the Company; and the
establishment of a valuable entry point into North America.
GBST has also recently entered into a global agreement
with one of the world’s largest banks which will use GBST
Syn~ to provide outsourced middle office processing
to the broker-dealer community. This is another important
achievement; endorsing the strengths of the product and
GBST’s expertise in Third Party Clearing business models.
In Europe, following the introduction of the Financial
Transaction Tax GBST has launched the industry’s first
post-trade processing product to assist capital markets
participants to manage their obligations around this tax.
The GBST Syn~ FTT module provides a rules-based
engine to manage FTT in many countries, and the first
client has commenced implementation.
The continued expansion of GBST’s international presence
demonstrates the commitment to the regions we operate
in and contributes to our ability to meet the needs of
a growing customer base in each local market.
1717
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report GBST Wealth Management
FY2013
$000’s
FY2012
$000’s
%
Change
Sales to external
customers – Australia
18,225
17,548*
Sales to external
customers
– International
Sales to external
customers – Total
25,174
19,221
43,399
36,769
Operating EBITDA
11,624
9,219
Depreciation &
amortisation of
segment assets
(2,595)
(3,515)
Segment result
9,029
5,704*
4
31
18
26
26
58
* The prior corresponding year sales and result have increased by $553 thousand
and $32 thousand respectively as the quantitative data service business was
reallocated from the Financial Services division.
GBST CoMPoSeR SaLeS GRoW SuBSTanTIaLLY
The strong growth of GBST Composer sales continued,
and revenue was $43.4 million, up 18% compared to
$36.8 million in the previous year. This was attributable
to securing new clients in both Australia and the United
Kingdom as well as to increasing project work from existing
customers. Operating EBITDA rose 26% to $11.6 million.
Over the past six years GBST’s focus on penetrating
the UK market has met with growing success with
platform and wrap providers. GBST Composer now
supports three of the top six companies, and market
share continues to grow. More recently the focus has
been on the self-invested personal pension (SIPP) and
Life and Pensions segments where GBST Composer
has won several new customers. GBST Composer offers
a cost-effective solution for companies to migrate and
consolidate their systems onto a comprehensive single
modern and flexible platform.
New clients signed during the year include two providers
who will use GBST Composer to upgrade their SIPP
administration platforms and will launch separate direct
to consumer and adviser based SIPP products, on a single
administration solution and also extend the breadth of
functionality offered by GBST Composer. Composer has
been successfully proven as a platform for both simple
and complex SIPP. New features include the Composer
Pension Illustration module and online equity trading which
were also deployed.
1818
In Australia, GBST Composer was implemented at
a leading bank to launch a new direct to consumer
pension product, and also installed by one of the country’s
top insurance and wealth management groups to enhance
their direct offering to consumers. The platform was
updated to help clients’ voluntary compliance with the
Australian Federal government’s Future of Financial Advice
(FoFA) legislation during 2012. New features in Composer
provide fee transaction information and opt-in charging
data, reporting requirements to maintain registers and the
ability to ensure fees are correctly allocated for specific
products and investments.
GBST Financial Services
FY2013
$000’s
FY2012
$000’s
%
Change
Sales to external
customers
3,542
3,357*
Operating EBITDA
169
195
Depreciation &
amortisation of
segment assets
Segment result
(132)
37
(71)
124*
5
(13)
(86)
(70)
* The prior corresponding year sales and result have decreased by $553 thousand
and $32 thousand respectively as the quantitative data service business was
reallocated to the Wealth Management division.
The financial services division continued to provide strong
support for GBST operations in Australia and the UK, and
Operating EBITDA was stable.
Highlights for the year include the successful roll out of
Emu Design’s new e-commerce platform into both existing
and new clients, and the launch of a new web platform
designed for GBST Unison, which is used to manage data
in membership based organisations. This system has had
a rapid take up by GBST’s Union customers. Emu also
continued to grow its operations in the financial services
sector, providing websites and financial modelling tools to
financial institutions in Australia and UK.
Emu Design continued to consolidate its position as
a whole-service digital provider, growing their e-commerce
division and investing significantly into the development
of their e-commerce product. It has expanded its offering
to include mobile applications which help financial advisors
provide services to their customers. It is also expanding its
UK operations with a focus on new sales for its growing
product base.
Directors’ Reportfor the year ended 30 June 2013 continued
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 Queensland
University of Technology and chartered accounting
qualifications from Auckland University of Technology.
He has over 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. John
recently accepted the appointment as Deputy Chancellor
of the Queensland University of Technology. He is Adjunct
Professor, School of Information Technology and Electrical
Engineering at the University of Queensland. 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 was inaugural Chair of Southbank
Institute of Technology.
John is a member of GBST’s Audit and Risk Management
Committee and Nominations and Remuneration Committee.
Interest in Shares and Options
5,697,461 Ordinary Shares of GBST Holdings Limited were
held by Dr Puttick and associated entities at 30 June 2013.
Financial position
GBST completed the refinancing of its senior debt facility
in December 2012 and entered into a new financing
arrangement with the Commonwealth Bank of Australia
which allows more flexible repayments than the previous
facility. The senior debt facility matures on 27 December
2015. Senior debt as at 30 June 2013 was $14.0 million,
compared to $18.0 million at 30 June 2012. GBST’s net
debt reduced from $21.2 million to $12.37 million over the
same period. 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 new clients are secured.
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 period 1,314,636 performance
rights were issued to selected employees under the GBST
Performance Rights and Option Plan which are subject
to performance criteria.
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.
Future developments, prospects and
business opportunities
Information regarding the Company’s future developments,
prospects and business opportunities is included in the
report above. Overall, GBST will continue to:
• Enhance and develop its products and services;
• Expand services to clients geographically; and
• Focus on increasing revenue and market share in the
markets in which it operates, and enter new markets.
1919
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report 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.
Interest in Shares and Options
5,134,109 Ordinary Shares of GBST Holdings Limited were
held by Mr Lake at 30 June 2013.
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, Netbridge
Pty Ltd and 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 were
held by Mr Brackin’s associated entities at 30 June 2013.
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.
Interest in Shares and Options
9,631,610 Ordinary Shares of GBST Holdings Limited were
held by Mr Sundell’s associated entities at 30 June 2013.
2020
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
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’ Reportfor the year ended 30 June 2013 continued 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:
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
12
12
12
12
12
12
12
10
12
11
11
10
5
5
5
–
–
–
5
5
5
3*
–
–
3
3
3
3
1
–
3
3
3
3
1
–
* 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.
Remuneration report – audited
The information provided in the remuneration report relates
to the Group for the year ended 30 June 2013 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. Services from Remuneration Consultants
e. 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 and Senior Executives are encouraged 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 Securities
Exchange within similar industry sectors.
Remuneration paid to Directors and Executives is valued
at the cost to the Group, except for share based payments
which are valued at fair value.
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
2121
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report 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 annual fees paid in 2013 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.
In conducting the annual review for Non-Executive Director
remuneration for the 2014 year the Company via the
Chair of the Nomination and Remuneration Committee
appointed CRA Plan Managers (‘CRA’) to conduct
a benchmarking review of current Non-Executive
Director remuneration. The benchmarking review was
to consider both the amount of remuneration and the
workload of the various roles performed by Non-Executive
Directors. Adopting the recommendations of CRA the
remuneration levels for the 2014 year are $135,000 for
the Chairman, $90,000 for Chairmen of Committees
of the Board and $80,000 for Non-Executive Directors.
In making this decision the Board recognised that the last
change was made in early 2008 and the Company has
in that time become a truly international Company with
further offshore expansion plans in the next few years.
The Board accepted that the restraint shown in recent
years was appropriate, but it was now important that the
remuneration for Non-Executive Directors moved to levels
consistent with the remuneration paid in the market.
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).
• Equity based remuneration – Long Term Incentive (LTI).
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
2222
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 2013
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
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.
Directors’ Reportfor the year ended 30 June 2013 continued The performance criteria associated with the grant of
share performance rights outstanding under the GBST
Performance Rights and Option Plan is as follows:
1. Cumulative Earnings Per Share (EPS) Target
Vesting of the performance rights granted will be subject
to GBST achieving three year (2013 – 2015 financial years)
cumulative EPS targets of 26 cents, 28 cents, and 32 cents
for 25%, 50% and 100% vesting respectively. There is also
a vesting requirement that a minimum EPS of 5 cents is
achieved in each year; and,
2. Service Condition
Continuous employment with GBST Holdings Limited from
grant date to vesting date.
The Company has previously used options as a feature
of its equity based remuneration, but this practice has
ceased. 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 prior financial year.
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.
The Board assessed the performance hurdles on
a subjective and substantive basis – based on the criteria
determined at the commencement of the financial year.
The STI cash bonuses were determined after that review.
Long Term Incentive Remuneration (LTI)
During the year, the Group established a long term
incentive scheme with the objective of promoting sustained
delivery of long term shareholder value. The scheme was
approved at the Company’s 2012 Annual General Meeting.
Under this scheme selected staff are made individual offers
of specific numbers of share performance rights at the
discretion of the Board. The Board may determine the
number of share performance rights, vesting conditions,
vesting period, exercise price and expiry date. Share
performance rights may be granted at any time, subject
to the Corporations Act and ASX Listing Rules.
The scheme involves the use of performance rights to
acquire shares. The plan is designed to reward Executives
in a manner which aligns this element of remuneration
with the financial performance of the Company and the
interests of shareholders. As such, LTI grants are only made
to Executives who are able to influence the generation of
shareholder wealth and thus have an impact on the Group’s
performance against the relevant long term performance
hurdle. Executives are also required to meet continued
service conditions in order to exercise the options.
The Company uses Shareholder Return as a performance
hurdle for the LTI plan, measured by growth in earnings
per share.
On 8 November 2012, 1,314,636 performance rights
were issued to select Executive employees. There is a nil
exercise price and the share performance rights vest
in thirty-six months after the date of grant or the date
of release of GBST’s financial results for the 2015 financial
year. The share performance rights expire thirty days after
the vesting date.
2323
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report (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.
EBITDA
Year on Year Growth
Net profit/(loss) before tax
Year on Year Growth
Net profit/(loss) after tax
Year on Year Growth
EPS (cents)
Year on Year Growth
Closing share price
Dividends paid (cents per share)
2009
2010
2011
2012
2013
$12.7m
$16.4m
$13.7m
$14.2m
(34%)
$2.0m
(80%)
$2.1m
(66%)
3.90
(69%)
$0.67
5.5
29%
(16%)
$(.6)m
$3.3m
(130%)
$(2.4)m
(214%)
(3.68)
(194%)
$0.98
–
666%
$1.4m
158%
2.08
157%
$0.80
4
4%
$4.5m
37%
$3.3m
135%
4.87
134%
$0.81
4.5
$16.5m
16%
$7.8m
76%
$6.0m
86%
9.06
86%
$1.70
5.5
(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 (e) 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
up to six months’ notice. No other termination payments
are applicable.
(d) Services from Remuneration Consultants
The Nomination and Remuneration Committee engaged
CRA Plan Managers (CRA) as remuneration consultant
to the board to review the amount and elements of the
key management personnel remuneration and provide
recommendations in relation thereto.
In addition to the remuneration recommendations, CRA
provided the following other services to the Company
throughout the year:
• Long-term incentive & ESS plan design report
• CEO remuneration benchmark data
• Non-executive Director remuneration benchmark data
• Commentary on the structure of short-term and
long-term components for Executive remuneration
CRA was paid $33,489 for the remuneration
recommendations for the financial year.
The Board is satisfied that the remuneration
recommendations were made by CRA free from undue
influence by members of the Key Management Personnel
about whom the recommendations may relate.
The Board undertook its own inquiries and review of
the processes and procedures followed by CRA during
the course of its assignment and is satisfied that its
remuneration recommendations were made free from
undue influence.
2424
Directors’ Reportfor the year ended 30 June 2013 continued (e) 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–
eMPLoY-
MenT
BeneFITS
oTheR
LonG–
TeRM
BeneFITS
ShaRe–
BaSeD
PaYMenT
Base
Salary
and Fees
$
95,000
55,046
60,000
Bonus
$1
other
$2
Super–
annuation
$
Leave
entitlement
$
equity
options
$
Total
Remu-
neration
$
equity
Based
%
Perfor-
mance
Related
%
–
–
–
–
–
–
–
4,954
–
–
–
–
–
–
–
95,000
60,000
60,000
–
–
–
–
–
–
641,305
135,000
294,142
1,795
14,750
63,880
1,150,872
5.6
17.3
60,000
60,000
–
–
–
–
–
–
–
–
–
–
60,000
60,000
971,351
135,000
294,142
6,749
14,750
63,880 1,485,872
2013
Directors
J Puttick
D Adams
A Brackin
S Lake
J Sundell
I Thomas
ToTaL
DIReCToRS
Executives
R De Dominicis
438,795
125,000
121,205
–
7,373
31,940
724,313
D Orrock
310,235
75,000
118,717
13,207
5,385
31,940
554,484
A Ritter
P Salis
240,000
27,460
–
24,140
4,615
20,442
316,657
291,197
45,767
77,707
74,360
2,844
25,552
517,427
I Sanchez
300,000
82,380
–
34,620
5,769
25,552
448,321
ToTaL
eXeCuTIVeS
GRouP
ToTaL
1,580,227
355,607
317,629
146,327
25,986
135,426 2,561,202
2,551,578
490,607
611,771
153,076
40,736
199,306 4,047,074
–
–
4.4
5.8
6.5
4.9
5.7
–
–
21.7
19.3
15.1
13.8
24.1
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.
2525
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report 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-
eMPLoY-
MenT
BeneFITS
oTheR
LonG-
TeRM
BeneFITS
ShaRe-
BaSeD
PaYMenT
Base Salary
and Fees
$
Bonus
$1
other
$2
Super-
annuation
$
Leave
entitlement
$
equity
options
$
Total
Remunera-
tion $
equity
Based
%
2012
Directors
J Puttick
D Adams
A Brackin
95,000
55,046
60,000
–
–
–
–
–
–
–
4,954
–
–
–
–
S Lake
607,872
190,000
125,929
43,745
13,917
J Sundell
60,000
–
–
–
–
–
–
–
–
33,710
–
–
–
–
–
–
95,000
60,000
60,000
981,463
60,000
33,710
–
–
–
–
–
–
911,628
190,000
125,929
48,699
13,917
– 1,290,173
I Thomas
(appointed
8/12/11)
ToTaL
DIReCToRS
Executives
Perfor-
mance
Related
%
–
–
–
19.4
–
–
R De Dominicis
510,609
160,000
64,417
–
7,373
(14,306)
728,093
(2.0)
20.0
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
GRouP
ToTaL
1,604,092
355,000
282,257
105,273
16,750
(85,834) 2,277,538
2,515,720
545,000
408,186
153,972
30,667
(85,834) 3,567,711
–
(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.
2626
Directors’ Reportfor the year ended 30 June 2013 continued 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)
R De Dominicis
Chief Executive Wealth Management
D Orrock
Chief Executive Capital Markets
A Ritter
P Salis
Chief Financial Officer
Chief Operating Officer
I Sanchez
Chief Technology Officer
2727
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report Performance Right Holdings
Performance rights issued as part of Remuneration for the Year Ended 30 June 2013.
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.
Performance
rights Granted
as Part of
Remuneration
$
Total
Remuneration
Represented by
Performance
rights
%
Granted
number
#
Performance
rights exercised
and Sold
$
Performance
rights Lapsed/
Forfeited
$
Directors
J Puttick
D Adams
A Brackin
S Lake
J Sundell
I Thomas
–
–
–
–
–
–
365,177
63,880
–
–
–
–
ToTaL DIReCToRS
365,177
63,880
Executives
R De Dominicis
D Orrock
A Ritter
P Salis
I Sanchez
ToTaL eXeCuTIVeS
182,588
182,588
116,857
146,071
146,071
774,175
GRouP ToTaL
1,139,352
31,940
31,940
20,442
25,552
25,552
135,426
199,306
–
–
–
5.6
–
–
–
4.4
5.8
6.5
4.9
5.7
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
$
–
–
–
63,880
–
–
63,880
31,940
31,940
20,442
25,552
25,552
135,426
199,306
2828
Directors’ Reportfor the year ended 30 June 2013 continued Performance Right Holdings (continued)
Performance rights granted as remuneration to Key Management Personnel in the Year Ended 30 June 2013.
Vested
number
#
Granted
number
#
Grant Date
average
Value per
Performance
right at Grant
Date
$
exercise Price
$
First exercise
Date
Last
exercise Date
Directors
J Puttick
D Adams
A Brackin
S Lake
J Sundell
I Thomas
ToTaL DIReCToRS
Executives
R De Dominicis
D Orrock
A Ritter
P Salis
I Sanchez
ToTaL eXeCuTIVeS
GRouP ToTaL
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
365,177
08.11.12
0.8151
–
–
365,177
–
–
–
–
182,588
08.11.12
182,588
08.11.12
116,857
08.11.12
146,071
08.11.12
146,071
08.11.12
0.8151
0.8151
0.8151
0.8151
0.8151
774,175
1,139,352
Details of these performance rights are set out in Note 30 in the financial statements.
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
08.11.15
08.12.15
–
–
–
–
08.11.15
08.12.15
08.11.15
08.12.15
08.11.15
08.12.15
08.11.15
08.12.15
08.11.15
08.12.15
2929
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report Performance Right Holdings (continued)
The numbers of performance rights 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
01/07/12
Granted as
Compen-
sation
Perfor-
mance
rights
exercised
or Sold
Perfor-
mance
rights
Cancelled/
Forfeited
other
Total
Vested at
30/06/13
Total
Vested and
exercisable
at 30/06/13
Total
Vested and
unexercis-
able at
30/06/13
Balance
30/06/13
2013
Directors
J Puttick
D Adams
A Brackin
S Lake
J Sundell
I Thomas
ToTaL
DIReCToRS
Executives
R De Dominicis
D Orrock
A Ritter
P Salis
I Sanchez
ToTaL
eXeCuTIVeS
GRouP
ToTaL
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
365,177
–
–
365,177
182,588
182,588
116,857
146,071
146,071
774,175
– 1,139,352
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
365,177
–
–
365,177
182,588
182,588
116,857
146,071
146,071
774,175
– 1,139,352
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
365,177
–
–
365,177
182,588
182,588
116,857
146,071
146,071
774,175
– 1,139,352
Option Holdings
Options granted as part of Remuneration for the Year Ended 30 June 2013
There were no options granted as remuneration to Key Management Personnel in the 30 June 2013 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 2013 financial year that were granted as compensation in previous
financial years as remuneration to Key Management Personnel.
3030
Directors’ Reportfor the year ended 30 June 2013 continued Option Holdings (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
Compensa-
tion
options
exercised
or Sold
options
Cancelled/
Forfeited
other
Balance
30/06/12
Total
Vested at
30/06/12
Total
Vested and
exercisable
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
100,000
A Ritter
P Salis
–
150,000
I Sanchez
250,000
ToTaL
eXeCuTIVeS
GRouP
ToTaL
600,000
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 30).
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
3131
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report Directors’ interests
The number of shares in the Company held (directly,
indirectly or beneficially) as at 30 June 2013 by Directors,
including their related parties, are set out below.
2013
Directors
J Puttick
D Adams
A Brackin
S Lake
J Sundell
I Thomas
ToTaL
Balance at 30/06/13
5,697,461
–
381,943
5,134,109
9,631,610
–
20,845,123
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 21 in the financial report for details of
non-audit service fees.
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.
Lead Auditor’s Independence Declaration
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 2013.
In addition, the Company has entered into a Deed
of Indemnity which ensures the Directors and Officers
of the Group will incur, to the extent permitted by law,
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.
Performance rights
To assist in the attraction, retention and motivation of
employees, the Company operates a GBST Performance
Rights and Option Plan.
The number of performance rights over ordinary shares
outstanding at 30 June 2013 are as follows:
Grant Date
08.11.12
exercise Date exercise Price
number
08.11.15
$0.00
1,314,636
No further employee performance rights have been issued
up to the date of this report.
No person entitled to exercise the performance right
had or has any right by virtue of the performance right to
participate in any share issue of any other body corporate.
3232
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:
Dr J F Puttick
Chairman
Mr S M L Lake
Managing Director and Chief Executive Officer
Dated at Brisbane this 23rd day of August 2013
Directors’ Reportfor the year ended 30 June 2013 continued 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 2013 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.
•
ABCD
Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001
KPMG
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 2013 there have been:
Stephen Board
•
Partner
no contraventions of the auditor independence requirements as set out in the Corporations
Act 2001 in relation to the audit; and
Brisbane
•
23 August 2013
no contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
Stephen Board
Partner
Brisbane
23 August 2013
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
Liability limited by scheme approved under
Professional Standards Legislation.
3333
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
Liability limited by scheme approved under
Professional Standards Legislation.
Auditor’s Independence Declarationfor the year ended 30 June 2013 GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report
30 Jun 2013
$’000
30 Jun 2012
$’000
note
52,200
28,345
1,862
82,407
604
49,196
25,744
1,381
76,321
746
83,011
77,067
(56,564)
(54,500)
4 (d)
4 (e)
5
(9,716)
(7,411)
9,320
(1,529)
34
(1,495)
7,825
(1,794)
6,031
–
–
1,594
–
1,594
1,594
(8,184)
(7,869)
6,514
(2,096)
38
(2,058)
4,456
(1,205)
3,251
1,004
1,004
278
(91)
187
1,191
7,625
4,442
31
31
9.06
9.06
4.87
4.87
Revenue from license and support 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
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
Items that will not be reclassified to profit or loss
Net change in fair value of investment
Total items that will not be reclassified to profit or loss
Items that may be reclassified subsequently to profit or loss
Exchange differences arising on translation of foreign operations
Effect of hedge of net investment in foreign operations
Total items that may be reclassified subsequently to profit or loss
other comprehensive (loss)/income for the year, net of income tax
ToTaL CoMPRehenSIVe InCoMe 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.
3434
Consolidated Statement of Profit or Loss and Other Comprehensive Incomefor the year ended 30 June 2013 CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories and work in progress
Current tax receivable
Other assets
Total Current assets
NON-CURRENT ASSETS
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
Total Current Liabilities
NON-CURRENT LIABILITIES
Trade and other payables
Loans and borrowings
Deferred tax liabilities
Provisions
Total non-Current Liabilities
ToTaL LIaBILITIeS
neT aSSeTS
EQUITY
Issued capital
Reserves
Retained earnings
ToTaL eQuITY
The accompanying notes are an integral part of these consolidated financial statements.
30 Jun 2013
$’000
30 Jun 2012
$’000
note
7
8
9
15
12
10
11
15
12
13
14
15
16
17
13
14
15
16
18
19
3,505
14,651
1,107
4
1,278
20,545
5,223
59,788
5,166
15
70,192
90,737
7,170
4,473
1,526
4,673
10,182
28,024
1,361
11,299
2,851
1,603
17,114
45,138
45,599
37,664
(4,999)
12,934
45,599
2,156
14,578
991
156
669
18,550
3,380
64,334
4,164
6
71,884
90,434
7,566
10,289
23
3,837
9,115
30,830
–
13,062
3,584
1,553
18,199
49,029
41,405
37,664
(6,823)
10,564
41,405
3535
Consolidated Statement of Financial Positionfor the year ended 30 June 2013 GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report
Balance at 1 July 2011
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 loss
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- options
Share Issues (net of costs, for
non-cash consideration)
Transfer financial asset reserve to
retained earnings
Total contributions by owners
Total transactions with owners
Issued
Capital
$’000
Retained
earnings
$’000
Foreign
Currency
Translation
Reserve(a)
$’000
Financial
asset
Reserve(b)
$’000
equity
Remuneration
Reserve(c)
$’000
Total
$’000
37,516
9,873
(7,010)
(570)
88
39,897
–
–
–
–
–
–
–
–
148
–
148
148
3,251
–
–
–
–
–
278
(91)
–
187
–
–
–
1,004
1,004
3,251
187
1,004
(2,994)
–
–
434
(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.
In the prior comparative period, 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 was 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 is used to record items recognised as expenses on valuation of employee share/options/performance rights granted. When
options/performance rights are exercised, cancelled or forfeited the amount in the reserve relating to those options/performance rights is transferred to
issued capital.
The accompanying notes are an integral part of these consolidated financial statements.
3636
Consolidated Statement of Changes in Equityfor the year ended 30 June 2013
Consolidated Statement of Changes in Equity
(continued)
for the year ended 30 June 2013
Issued
Capital
$’000
Retained
earnings
$’000
Foreign
Currency
Translation
Reserve(a)
$’000
Financial
asset
Reserve(b)
$’000
equity
Remuneration
Reserve(c)
$’000
Balance at 1 July 2012
37,664
10,564
(6,823)
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-
performance rights
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
–
–
–
–
–
–
–
–
–
–
–
–
6,031
–
–
–
–
–
1,594
–
–
1,594
6,031
1,594
(3,661)
–
–
–
(3,661)
(3,661)
–
–
–
–
–
–
BaLanCe aT 30 June 2013
37,664
12,934
(5,229)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
$’000
41,405
6,031
1,594
–
–
1,594
7,625
–
–
–
–
–
–
–
–
(3,661)
230
230
–
–
230
230
230
–
–
(3,431)
(3,431)
45,599
(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.
In the prior comparative period, 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 was 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 is used to record items recognised as expenses on valuation of employee share/options/performance rights granted. When
options/performance rights are exercised, cancelled or forfeited the amount in the reserve relating to those options/performance rights is transferred to
issued capital.
The accompanying notes are an integral part of these consolidated financial statements.
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report
3737
net cash provided by operating activities
24 (a)
15,237
note
30-Jun-13
$’000
30-Jun-12
$’000
92,547
79,894
(74,755)
(68,162)
34
604
(1,336)
(1,857)
4
–
24 (c)
(1,633)
(276)
437
(1,468)
(873)
16,530
38
746
(2,038)
(2,731)
7,747
8
1,530
(880)
(621)
(117)
(80)
(515)
–
6
(20,605)
(6,556)
(118)
(3,661)
(8,727)
5,042
(206)
(1,331)
3,505
–
(2,994)
(10,065)
(2,398)
87
980
(1,331)
Cash Flows from Operating Activities
Receipts from customers
Payments to suppliers and employees
Interest income
Sundry income
Finance costs paid
Income tax paid
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 received/(payment for acquisitions)
net cash used in investing activities
Cash Flows from Financing Activities
Repayment of finance leases
Proceeds from borrowings
Repayment of borrowings
Payment of transaction costs related to loans and 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
Cash and cash equivalents at end of financial year
24 (b)
The accompanying notes are all an integral part of these consolidated financial statements.
3838
Consolidated Statement of Cash Flowsfor the year ended 30 June 2013 Note 1: Reporting Entity
GBST Holdings Limited (“GBST” or the “Company”)
is the Group’s parent Company. The Company is a public
for profit 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 2013
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 23 August 2013.
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.
Use of estimates and judgments
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 Note 3:
• recognition of revenue;
• 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:
• recognition of revenue (Note 3);
• impairment testing of the consolidated entity’s
cash-generating units containing goodwill (Note 11);
• utilisation of tax losses (Note 15).
Changes in accounting policies
(i) Presentation of transactions recognised in other
comprehensive income
From 1 July 2012 the Group applied amendments to
AASB 101 Presentation of Financial Statements outlined
in AASB 2011-9 Amendments to Australian Accounting
Standards – Presentation of Items of Other Comprehensive
Income. The changes have been applied retrospectively
and require the Group to separately present those items
of other comprehensive income that may be reclassified
to profit or loss in the future from those that will never
be reclassified to profit or loss. These changes are
included in the Statement of Profit or Loss and Other
Comprehensive Income.
3939
Notes to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2013 GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report Note 3: Significant 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, except for the changes
in accounting policies explained in Note 2.
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 22 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.
Business Combinations
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.
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 a 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
4040
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.
Subsequent changes to the fair value of contingent
consideration will be recognised as a charge to the cost
of the acquisition.
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.
Income Tax
The income tax expense/(benefit) for the year comprises
current income tax expense/(benefit) and deferred tax
expense/(benefit).
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.
Notes to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2013 continued 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.
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.
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GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report Note 3: Significant Accounting Policies (continued)
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
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.
4242
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
Owned software
Leased software
amortisation
Rate
Basis
25%
25%
Straight-Line
Straight-Line
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.
Notes to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2013 continued 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.
Goodwill
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.
(ii) Non-derivative financial assets
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.
4343
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report 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.
4444
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.
An impairment loss is recognised if the carrying amount
of an asset exceeds its recoverable amount. Impairment
losses are recognised in profit or loss.
Notes to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2013 continued 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 employee share,
performance rights and option plan. 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 the share performance
rights is determined using the Binomial Approximation
Option Valuation Model. 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, performance rights 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.
4545
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report 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 Profit
or Loss and Other 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 Profit and
Loss and Other 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.
4646
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 31).
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.
Notes to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2013 continued 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 2013, but have not
been applied preparing this financial report:
• 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 adoption of AASB10 is not expected to impact
on the Group’s financial statements.
4747
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report Note 3: Significant Accounting Policies (continued)
• 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 adoption of AASB 13 is not expected
to impact on the Group’s financial statements.
• 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
for the Group’s 30 June 2014 financial statements with
retrospective application required.
• 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 2015 financial statements. The adoption
of IAS 32 is not expected to impact on the Group’s
financial statements.
4848
Notes to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2013 continued 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 and services sold
Operating lease rentals
Research & developments costs
(b) Depreciation & amortisation:
Depreciation of plant & equipment
Amortisation of tangible & intangible leased assets
Amortisation of acquired intangibles (excluding leased assets)
(c) Employee benefits expense:
Monetary based expense (includes contributions to defined contribution plans $3.23 million
(2012: $2.96 million))
Share based payments
(d) Finance costs:
Foreign currency losses
Interest paid to external 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 2013
$’000
30 Jun 2012
$’000
3,367
2,767
9,396
1,258
856
5,092
7,206
2,428
2,572
7,974
1,069
446
6,213
7,728
43,792
41,077
230
(88)
44,022
40,989
173
740
70
546
58
1,327
45
666
1,529
2,096
34
34
159
159
38
38
212
212
4949
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report Note 5: Income Tax Expense
(a) The components of tax expense comprise:
Current tax
Deferred tax (Note 15 (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
Recoupment of temporary differences not previously taken up
Under/(Over) provision in respect of prior years
Recognition of previously unrecognised tax losses
Current year losses for which no deferred tax asset was recognised (i)
Other non-allowable items (net)
Reduction in tax rate – opening balances
Reduction in tax rate – current year
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 2013
$’000
30 Jun 2012
$’000
3,782
(1,700)
(367)
79
1,794
7,825
2,348
78
(1,917)
(68)
94
(367)
1,168
441
52
4
(40)
1,794
23%
2,507
(778)
–
(524)
1,205
4,456
1,337
465
(2,072)
(150)
(478)
–
1,576
537
104
(13)
(101)
1,205
27%
The weighted average effective consolidated tax rate for the year ended 30 June 2013 is 23% (2012: 27%) primarily due
to current year losses for which no deferred tax asset is being recognised and other non-allowable items:
(i) For GBST Ltd (Coexis) deferred tax assets of $1.17 million 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 2012– 30 Jun 2013: 225%; 1 Jul 2011 – 31 Mar 2012: 200%).
(ii) Reduction in United Kingdom (UK) tax rate to 23% from 1 April 2013 (2012: 24%).
(iii) There is no tax recognised in other comprehensive income within the current year or prior year.
5050
Notes to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2013 continued Note 6: Divdends
Dividend paid in the period:
Interim fully franked (at 30%) dividend paid of 3.0 cents per share (2012: 2.5)
2012 final fully franked (at 30%) dividend paid of 2.5 cents per share (2011: 2.0)
net Dividend paid
GBST GRouP
30 Jun 2013
$’000
30 Jun 2012
$’000
1,997
1,664
3,661
1,664
1,330
2,994
After the reporting date the Directors recommended a final dividend of 3.5 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 23 October 2013. 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 2013
$’000
30 Jun 2012
$’000
13,184
13,212
13,713
12,349
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 14)
Cash and cash equivalents in the Statement of Cash flows
GBST GRouP
30 Jun 2013
$’000
30 Jun 2012
$’000
3,505
-
3,505
2,156
(3,487)
(1,331)
5151
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report Note 8: Trade and Other Receivables
Current
Trade receivables
Accrued revenue
Other amounts receivable
GBST GRouP
30 Jun 2012
$’000
30 Jun 2011
$’000
12,804
13,355
344
1,503
856
367
14,651
14,578
(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 $215 thousand (2012: $208 thousand), amounts written off $2 thousand (2012: $71 thousand).
Note 9: Inventories and Work in Progress
GBST GRouP
30 Jun 2013
$’000
30 Jun 2012
$’000
–
1,107
1,107
710
281
991
Current – at cost
Inventory on hand
Work in progress
5252
Notes to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2013 continued Note 10: Plant and Equipment
Owned plant and equipment at cost
Accumulated depreciation
Net carrying value
Leased plant and equipment at cost
Accumulated amortisation
Net carrying value
Total plant and equipment
(a) Movement in Plant and Equipment
GBST Group
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
Year ended 30 June 2013
Balance at 1 July 2012
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 2013
GBST GRouP
30 Jun 2013
$’000
30 Jun 2012
$’000
14,284
11,604
(9,624)
4,660
1,151
(588)
563
5,223
(8,749)
2,855
826
(301)
525
3,380
owned
$’000
Leased
$’000
Total
$’000
3,014
891
(31)
(1,069)
165
(134)
19
2,855
2,855
3,031
(88)
650
123
-
(218)
(165)
134
1
525
525
316
-
3,664
1,014
(31)
(1,287)
-
-
20
3,380
3,380
3,347
(88)
(1,258)
(283)
(1,541)
-
-
120
4,660
-
-
5
563
-
-
125
5,223
5353
Plant and equipment was impairment tested in conjunction with intangible assets, refer Note 11.
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report Note 11: 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 2012
Balance at 1 July 2011
Additions
Additions through internal development
Disposals
Amortisation charge
Software
Systems
$’000
Customer
Contracts
$’000
Goodwill
$’000
Leased
Software
$’000
23,535
3,835
40,708
621
211
–
–
–
–
(3,818)
(2,395)
–
–
–
–
Effect of movements in exchange rates
179
33
137
Balance at 30 June 2012
20,728
1,473
40,845
1,288
64,334
5454
GBST GRouP
30 Jun 2013
$’000
30 Jun 2012
$’000
39,308
(21,605)
17,703
37,738
(17,010)
20,728
12,423
12,070
(12,022)
(10,597)
401
1,473
45,445
(4,872)
40,573
1,916
(805)
1,111
45,649
(4,804)
40,845
1,520
(232)
1,288
59,788
64,334
Total
$’000
68,129
2,086
211
–
(6,441)
349
51
1,465
–
–
(228)
–
Notes to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2013 continued GBST Group
Year ended 30 June 2013
Balance at 1 July 2012
Additions
Additions through internal development
Adjustment to controlled entity acquisition
consideration
Disposals
Amortisation charge
Software
Systems
$’000
Customer
Contracts
$’000
Goodwill
$’000
Leased
Software
$’000
20,728
1,473
40,845
277
36
–
(1)
–
–
–
–
(3,993)
(1,099)
–
–
(973)
–
–
1,288
396
–
–
–
Total
$’000
64,334
673
36
(973)
(1)
(573)
(5,665)
–
1,111
1,384
59,788
Effect of movements in exchange rates
Balance at 30 June 2013
656
17,703
27
401
701
40,573
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 Profit or Loss and Other
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 Cash Generating Unit CGU based on the Group’s reporting segments presented below:
Capital Markets Australia segment (Palion)
Wealth Management segment (InfoComp)
Capital Markets International segment (Coexis)
Financial Services segment (Emu)
Total Goodwill
30 Jun 2013
$’000
30 Jun 2012
$’000
3,350
28,238
8,099
886
3,350
28,238
8,371
886
40,573
40,845
The recoverable amount of goodwill for each CGU has been assessed using discounted cash flow projections over five
years and a terminal value. The first year cash flow projections are based on 2014 Board approved budgets, while cash
flows projections for years two to five are based on Management assumptions set out below. Terminal growth rates
have been determined by Management based on their assessment of long term annual growth expected to be achieved
in the countries in which each CGU operates. Discount rates are based on a weighted average cost of capital calculation
for the relevant markets and in the same currency as the cash flows, and adjusted for a risk premium to reflect both the
increase in risk of investing in equities and the risk specific to the CGU. Where fair value less cost to sell is used to assess
recoverable amount, the discount rate is reviewed by Management to assess whether the risk reflects a market return.
5555
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report Note 11: Intangible Assets (continued)
For the InfoComp, Palion and Emu CGUs, the key assumptions used for value-in-use calculations consider growth and
discount rates and are generally consistent with past performance or are based upon the Group’s view of future market
activity. 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. 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 Coexis CGU, the recoverable amount of goodwill has been assessed using a fair value less costs
to sell calculation, which is based on the Board approved 2014 budget and uses growth rates in line with historical
performance along with an assessment of costs if the CGU was operating on a stand-alone basis. The forecasts have
been based on expectations as to existing contracts and new contracts to be entered into over the forecast period. In the
event that these forecasts are not achieved the Coexis CGU may need to be impaired in future periods – refer below for
sensitivity analysis.
A summary of key assumptions for Coexis and other CGU’s is presented below:
2013
Calculation Method
Revenue growth rates
Cost growth rates
Long term growth rates
Post-tax discount rate
2012
Calculation Method
Revenue growth rates
Cost growth rates
Long term growth rates
Post-tax discount rate
Coexis
Fair value less
cost to sell
InfoComp
Value-in-use
Palion
Value-in-use
eMu
Value-in-use
3-6%
3-5%
3%
7.5%
3-5%
3%
5%
3-5%
3%
7.5%
3-5%
3%
14.90% 10.85-14.90%
10.85%
10.85%
Coexis
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%
7.5%
3-5%
3%
14.32% 10.50-14.32%
10.50%
10.50%
Future anticipated cash flows for all CGU’s indicate that the carrying value of the intangible assets were not required
to be impaired in 2013.
The sensitivity 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 Coexis CGU:
Decrease of annual revenue against forecast by
9.6% (June 2012: 5.7%)
Increase of annual costs above forecast by
13.44% (June 2012: 7.4%)
Increase of post-tax discount rate by
781 bps (June 2012: 390 bps)
5656
Notes to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2013 continued Note 12: Other Assets
Current
Prepaid expenditure
Non-Current
Prepaid expenditure
Note 13: Trade and other Payables
Current (unsecured)
Trade payables & accruals
Leasehold liability
Non-Current (unsecured)
Trade payables & accruals
Leasehold liability
GBST GRouP
30 Jun 2013
$’000
30 Jun 2012
$’000
1,278
1,278
15
15
669
669
6
6
GBST GRouP
30 Jun 2013
$’000
30 Jun 2012
$’000
7,039
131
7,170
253
1,108
1,361
7,566
7,566
–
–
5757
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report Note 14: Loans and Borrowings
Current
Bank overdraft (secured)(a)
Senior bank facility (secured)(a)
Commercial loan facility (secured)(a)
Finance lease liability (Note 20)
Non-Current
Senior bank facility (secured)(a)
Finance lease liability (Note 20)
GBST GRouP
30 Jun 2013
$’000
30 Jun 2012
$’000
–
3,461
–
1,012
4,473
10,471
828
11,299
3,487
6,000
79
723
10,289
12,026
1,036
13,062
The secured bank loans are secured over the Group’s assets of $90.74 million (2012: $90.43 million).
(a) On 28 December 2012 GBST extinguished its debt facilities with the National Australia Bank (NAB), and refinanced the bank overdraft
and senior bank facility with the Commonwealth Bank of Australia on that same date. The equipment financing facility for assets already
purchased will remain with the NAB until the repayments are completed.
The facilities are secured by fixed and floating charges over the operating companies within the Group. The senior bank facility represents
a $14.03 million loan at 30 June 2013 maturing on 27 December 2015. Offsetting this loan are capitalised establishment costs of $98k.
Additional payments may be made against facilities without incurring penalties. The Interest rate under the facility is variable and linked to
BBSY. At 30 June 2013 the interest rate for the senior bank facility was 6.26% p.a.
The covenants within the Commonwealth Bank of Australia borrowings require that at 30 June 2013 the debt to EBITDA ratio is below 1.5 to 1,
interest cover is above 3 to 1 and net worth ratio is above 45%. 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 $14.03 million at 30 June 2013, the Group met all
covenant requirements.
5858
Notes to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2013 continued
Note 15: 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
GBST GRouP
30 Jun 2013
$’000
30 Jun 2012
$’000
1,526
23
148
2,703
2,851
399
3,185
3,584
4
156
3,812
3,185
45
20
1,289
5,166
580
270
(57)
1,700
(158)
(20)
2,315
7
40
932
4,164
(336)
302
(104)
778
(40)
(20)
580
5959
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report Note 15: Tax (continued)
GBST GRouP
30 Jun 2013
$’000
30 Jun 2012
$’000
(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
6060
3,584
3,878
(32)
–
(946)
245
(30)
(3)
(322)
61
2,851
3,584
3,185
2,609
29
(5)
596
7
(208)
(2)
780
6
3,812
3,185
7
(10)
(1)
47
2
45
40
(20)
20
29
-
(2)
(21)
1
7
60
(20)
40
Notes to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2013 continued 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
(b) Total deferred tax assets not brought to account as at reporting period end:
– tax losses : operating losses
– tax losses : capital losses
GBST GRouP
30 Jun 2013
$’000
30 Jun 2012
$’000
932
219
(51)
111
78
1,289
6,156
2,812
844
480
(103)
(303)
14
932
3,781
2,812
For deferred tax assets that have not been recognised in relation to operating losses, refer Note 5 (i).
6161
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report Note 16: 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 2013
GBST GRouP
30 Jun 2013
$’000
30 Jun 2012
$’000
4,443
230
4,673
1,093
510
1,603
employee
benefits
$’000
Make Good
$’000
4,706
3,116
(2,204)
(82)
5,536
683
80
(23)
–
740
3,804
33
3,837
902
651
1,553
Total
$’000
5,389
3,196
(2,227)
(82)
6,276
(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 2014 to 2023.
6262
Notes to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2013 continued Note 17: Unearned Income
Current
Revenue received in advance for software usage and support services
Note 18: Issued Capital
66,561,725 (2012: 66,561,725) fully paid ordinary shares
Movements in issued capital:
Opening balance
Share issues during the year:
25 August 2011
Settlement in relation to acquisition
7 February 2012 Deferred consideration – Coexis
Ordinary Shares
Opening balance
Share issues during the year:
25 August 2011
Settlement in relation to acquisition
7 February 2012 Deferred consideration – Coexis
GBST GRouP
30 Jun 2013
$’000
30 Jun 2012
$’000
10,182
10,182
9,115
9,115
GBST GRouP
30 Jun 2013
$’000
30 Jun 2012
$’000
37,664
37,664
37,664
37,664
37,664
37,516
–
–
98
50
37,664
37,664
no.
no.
66,561,725
66,395,929
–
–
110,000
55,796
66,561,725
66,561,725
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 and Performance Rights
For details on employee and placement options and performance rights over ordinary shares, see Note 30.
6363
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report Note 19: Reserves
Equity remuneration reserve
Foreign currency translation reserve
Note 20: 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 14)
Non-current (Note 14)
GBST GRouP
30 Jun 2013
$’000
30 Jun 2012
$’000
230
(5,229)
(4,999)
–
(6,823)
(6,823)
GBST GRouP
30 Jun 2013
$’000
30 Jun 2012
$’000
1,084
866
1,950
(110)
1,840
1,012
828
1,840
757
1,059
1,816
(57)
1,759
723
1,036
1,759
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
3,209
9,404
10,663
23,276
2,718
5,573
4,903
13,194
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.
6464
Notes to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2013 continued (c) Capital and Other Expenditure Commitments
Contracted for:
Capital purchases
Other operating purchases
Payable
Not later than one year
Note 21: Auditors’ Remuneration
Audit Services
KPMG Australia
GBST GRouP
30 Jun 2013
$’000
30 Jun 2012
$’000
298
263
561
561
561
343
73
416
416
416
GBST GRouP
30 Jun 2013
$
30 Jun 2012
$
Audit & review of financial reports
207,500
200,200
Overseas KPMG firms
Audit & review of financial reports
Other Services
KPMG Australia
Taxation services
Overseas KPMG firms
Taxation services
88,960
78,000
296,460
278,200
1,600
221,344
105,058
119,809
106,658
341,153
6565
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report Note 22: 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 2012: 100%)
100% (June 2012: 100%)
100% (June 2012: 100%)
United Kingdom
100% (June 2012: 100%)
Australia
100% (June 2012: 100%)
United States of America
100% (June 2012: 100%)
GBST Singapore Pte Limited
Singapore
100% (June 2012: 100%)
Subsidiaries of GBST Australia Pty Ltd:
GBST Hong Kong Limited
Hong Kong
100% (June 2012: 100%)
GBST Registry Solutions Pty Ltd*
GBST Wealth Management Pty Ltd*
Australia
Australia
100% (June 2012: 100%)
100% (June 2012: 100%)
Subsidiaries of GBST Wealth Management Pty Ltd:
GBST UK Holdings Limited
United Kingdom
100% (June 2012: 100%)
Subsidiaries of GBST UK Holdings Ltd:
GBST Hosting Limited
United Kingdom
100% (June 2012: 100%)
GBST Wealth Management Limited
United Kingdom
100% (June 2012: 100%)
(b) Deed of Cross Guarantee
* 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.
6666
Notes to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2013 continued A consolidated statement of profit or loss and other 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 2013 is set out as follows:
Financial information in relation to:
i. Summarised Statement of Profit or Loss and Other 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 Income
Items that will not be reclassified to profit or loss
Net change in fair value of investment
Total items that will not be reclassified to profit or loss
Total Comprehensive Income for the Year
ii. Retained Earnings
Retained profits at the beginning of the year
Transfer financial asset reserve to retained earnings
Profit after income tax
Dividends provided for or paid
Retained earnings at end of the Year
CLoSeD GRouP anD
PaRTIeS To DeeD oF CRoSS
GuaRanTee
30 Jun 2013
$’000
30 Jun 2012
$’000
46,095
19,327
1,185
124
42,956
15,568
1,201
166
9,904
5,840
(1,505)
(2,048)
32
(1,473)
8,431
(1,929)
6,502
6,502
–
–
6,502
11,759
–
6,502
(3,661)
14,600
28
(2,020)
3,820
(885)
2,935
2,935
1,004
1,004
3,939
11,387
430
2,936
(2,994)
11,759
6767
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report Note 22: Other Group Entities (continued)
(b) Deed of Cross Guarantee (continued)
iii. Statement of Financial Position
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Tax Receivable
Other assets
Total Current assets
non-Current assets
Trade and other receivables
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
6868
CLoSeD GRouP anD
PaRTIeS To DeeD oF CRoSS
GuaRanTee
30 Jun 2013
$’000
30 Jun 2012
$’000
2,165
11,208
1,011
–
708
492
9,779
295
150
406
15,092
11,122
10,449
3,632
42,634
17,108
3,688
15
77,525
92,618
3,991
4,447
1,526
4,640
8,631
–
11,996
2,266
45,269
18,990
3,100
6
81,627
92,749
3,628
10,256
–
3,804
7,629
9
23,235
25,326
Notes to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2013 continued non-Current Liabilities
Trade and other payables
Financial liabilities
Deferred tax liabilities
Provisions
Total Non-Current Liabilities
ToTaL LIaBILITIeS
neT aSSeTS
equity
Issued capital
Reserves
Retained earnings
ToTaL eQuITY
Note 23: Financing Arrangements
Financing facilities(a)
Amount utilised
unused credit facility
CLoSeD GRouP anD
PaRTIeS To DeeD oF CRoSS
GuaRanTee
30 Jun 2013
$’000
30 Jun 2012
$’000
1,361
11,281
2,850
1,399
16,891
40,126
52,492
–
13,040
3,529
1,431
18,000
43,326
49,423
37,664
37,664
228
14,600
52,492
–
11,759
49,423
GBST GRouP
30 Jun 2013
$’000
30 Jun 2012
$’000
28,060
27,606
(18,499)
(25,043)
9,561
2,563
(a) This amount comprises a working facility, bank guarantees, finance lease facility and senior bill facility with the Commonwealth Bank of Australia (CBA).
The senior facility expires on 27 December 2015 and additional payments may be made against the facility without incurring penalties. The Interest rate under
the facility is variable and linked to BBSY. At 30 June 2013 the interest rate for the senior bank facility was 6.26% p.a. The facilities are secured by fixed and
floating charges over the operating companies within the Group. The equipment financing facility for assets already purchased will remain with the NAB until the
repayments are completed.
A finance lease provided by Microsoft Financing is debt funding for the purchase of Microsoft licences which expire December 2014. Finance leases provided by BOQ
is debt funding for the purchase of Dell hardware which expire November 2015.
6969
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report
Note 24: Cash Flow Information
(a) Reconciliation of Net Cash provided by Operating Activities to Profit after Income Tax
GBST GRouP
30 Jun 2013
$’000
30 Jun 2012
$’000
Profit after income tax
Non-cash flows in operating profit:
Depreciation and amortisation
Loss on sale of plant & equipment
Share based payments
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 14)
6,031
3,251
7,206
7,728
60
230
835
(618)
(36)
1,068
(117)
(1,735)
1,656
(230)
887
15,237
15
(88)
(3,372)
322
(211)
(147)
(764)
(915)
(568)
1,886
610
7,747
3,505
–
3,505
2,156
(3,487)
(1,331)
(c) Non-cash Financing Activities
During the 2013 financial year the Group acquired plant and equipment and software with an aggregate value
of $954 thousand (2012: 1.588 million) by means of finance leases.
7070
Notes to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2013 continued Note 25: Operating Segment
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:
Capital Markets Australia offers the GBST Shares and derivatives platform which is the country’s most widely used
middle-office and back-office equities and derivatives system.
Capital Markets International through the GBST Syn~ platform, provides new-generation technology to process equities,
derivatives, fixed income and managed funds transactions for global capital markets.
Wealth Management through the GBST Composer platform, provides end to end funds administration and management
software to the wealth management industry, both in Australia and the United Kingdom. It offers an integrated
system for the administration of wrap platforms, including individual savings accounts (ISA’s), pensions, self-invested
personal pension (SIPP) and superannuation; as well as master trusts, unit trusts, risk and debt; and other investment
assets. Other GBST products provide technology hub solutions; and data analytics and quantitative services for the
measurement of portfolio performance.
Financial Services incorporating Emu Design, provides independent financial data and digital agency services for
interactive website design, development, hosting, e-commerce platforms, and mobile and social networking solutions.
7171
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report Note 25: Operating Segment (continued)
CaPITaL
MaRKeTS
auSTRaLIa
CaPITaL
MaRKeTS
InTeRnaTIonaL
WeaLTh
ManaGeMenT
FInanCIaL
SeRVICeS
eLIMInaTIonS
GBST GRouP
30 Jun
2013
$’000
30 Jun
2012
$’000
30 Jun
2013
$’000
30 Jun
2012
$’000
30 Jun
2013
$’000
30 Jun
2012
$’000
30 Jun
2013
$’000
30 Jun
2012
$’000
30 Jun
2013
$’000
30 Jun
2012
$’000
30 Jun
2013
$’000
30 Jun
2012
$’000
11
4
28,757 27,373
6,709
8,822 43,399 36,769
3,542
3,357
57
228
417
363
163
2
109
–
–
– 82,407 76,321
–
604
746
–
12
342
–
–
600
297
(616)
(639)
–
–
28,772 27,430
6,949
9,581 43,762 36,932
4,144
3,763
(616)
(639) 83,011 77,067
10,273
9,248 (4,569)
(3,164) 11,624
9,219
169
195
17,497 15,498
(1,779)
(1,587)
(2,700)
(2,555)
(2,595)
(3,515)
(132)
Segment result
8,494
7,661 (7,269)
(5,719) 9,029
5,704
37
(71)
124
–
–
–
(7,206)
(7,728)
– 10,291
7,770
(971)
(1,256)
(1,495)
(2,058)
7,825
4,456
(1,794)
(1,205)
6,031
3,251
Revenue
Sales to external
customers
Other income from
external customers
Inter-segment
revenues*
Total segment
revenue
Operating
EBITDA
Depreciation and
amortisation of
segment assets
Unallocated
expenses
Net finance costs
Profit before
income tax
Income tax
expense
Profit after
income tax
Capital
expenditure
Segment total
assets
Segment total
liabilities
2,669
2,799
264
153
974
334
67
14
20,945 16,863 21,281 22,792 48,041 50,260
470
519
14,044 13,935 19,987 21,401 10,412 12,920
695
773
–
–
–
–
3,974
3,300
– 90,737 90,434
– 45,138 49,029
* Inter-segment revenue received by Capital Markets International from Capital Markets Australia of $1.6 million for use of intangible assets is not included to align
with reporting to CEO. Charges for work received by Capital Markets International from Capital Markets Australia of $1.9 million for software development work
is not included to align with reporting to CEO. Inter-segment revenue with an associated direct external cost (typically direct labour costs) are included.
7272
Notes to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2013 continued Geographical Location:
Australia
Europe, North America and Middle East
Asia
Information about Geographical Areas
The consolidated Group’s operating segments are
managed in Australia. Capital Markets Australia and
Financial Services have operations and customers
in Australia, Wealth Management has operations and
customers in Australia and Europe, and Capital Markets
International has operations and customers in Europe,
North America, Middle East and Asia. Capital Markets
Australia also has a customer in New Zealand and
customers in Asia from sales to Australian entities.
Major Customer
Revenues from one customer of the Group represents
$16.62 million (2012: $14.87 million) of the Group’s
total revenues.
Reconciliation of Capital Expenditure
The $82 thousand (2012: $11 thousand) difference
between the segment capital expenditure disclosure and
the acquisitions recorded in plant and equipment (Note 10)
and intangibles (Note 11) relates to the make good increase
SeGMenT ReVenueS
FRoM eXTeRnaL
CuSToMeRS
CaRRYInG aMounT
of SEGMENT
non-CuRRenT aSSeTS
30 Jun 2013
$’000
30 Jun 2012
$’000
30 Jun 2013
$’000
30 Jun 2012
$’000
50,524
28,529
3,354
82,407
48,278
22,174
5,869
76,321
46,282
18,558
186
48,093
20,202
–
65,026
68,295
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.
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.
7373
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report Note 26: Financial Risk Management
Interest Rate Risk
(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.
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 December 2012. Falling interest rates
over the past year have validated the current variable debt
rate strategy employed by the Group.
Australian variable interest rate risk
It is, and has been throughout the period under review,
the Group’s policy that financial instruments held are not
intended for trading purposes.
At reporting period, the Group had the following mix of
financial assets and liabilities exposed to Australian variable
interest rate risk.
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.
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.
7474
Financial assets
Cash
Financial liabilities
Bank overdraft
Bank loan
GBST GRouP
2013
$’000
2012
$’000
1,712
1,712
–
14,030
14,030
482
482
3,487
18,105
21,592
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
GBST GRouP
2013
$’000
2012
$’000
1,000
1,000
1,578
1,578
United States Dollar Variable Interest Rate Risk
At reporting period, the Group had cash of $623 thousand
which is exposed to United States Dollar variable interest
rate risk (2012: $97 thousand).
Notes to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2013 continued Euro Variable Interest Rate Risk
At reporting period, the Group had had cash of
$114 thousand which is to Euro variable interest rate risk
(2012: $Nil).
Hong Kong Dollar Variable Interest Rate Risk
At reporting period, the Group had had cash of
$55 thousand which is to Hong Kong Dollar variable
interest rate risk (2012: $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 naturally hedge foreign currency purchase
where possible.
At balance sheet date the Group had exposure
to movements in the exchange rate for Great British
Pounds in cash and receivables of $5.76 million
(2012: $5.83 million) and payables of $961 thousand
(2012: $777 thousand).
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
$796 thousand (2012: $96 thousand) and payables
of $Nil (2012: $Nil).
At balance sheet date the Group had exposure to
movements in the exchange rate for Euros as the balance
for cash and receivables was $114 thousand (2012: $ Nil)
and payables was $Nil (2012: $Nil).
At balance sheet date the Group had exposure to
movements in the exchange rate for Hong Kong Dollar
as the balance for cash and receivables was $55 thousand
(2012: $ Nil) and payables was $Nil (2012: $Nil).
(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 Commonwealth Bank
of Australia 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, receivable 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 22 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 39% (2012: 36%)
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
(where applicable).
Trade debtor terms range between fourteen to thirty
days. Included in the Group’s trade receivable balance
are debtors with a carrying amount of $2 million
(2012: $1.86 million) 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 28 days (2012: 16 days).
7575
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report Note 26: 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
2013
2012
Gross $’000
Impairment $’000
Gross $’000
Impairment $’000
11,248
631
814
552
13,245
–
–
–
440
440
11,485
1,398
579
97
13,559
–
66
47
92
205
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
2013
$’000
3,505
14,651
–
2012
$’000
2,156
14,578
–
18,156
16,734
The maximum exposure to credit risk for trade and other receivables at reporting date by geographic region was:
GBST GRouP
CaRRYInG aMounT
2013
$’000
9,560
3,668
1,233
190
2012
$’000
7,926
5,387
1,227
38
14,651
14,578
Australia
Europe
Asia
United States of America
7676
Notes to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2013 continued (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
GBST Group
2013
$’000
2012
$’000
2013
$’000
2012
$’000
2013
$’000
2012
$’000
2013
$’000
2012
$’000
2013
$’000
2012
$’000
2013
$’000
2012
$’000
Financial Liabilities
Bank
loan and
overdraft1
Lease
facilities2
Trade
& other
payables
4,349 10,560
5,099
6,415
6,193
6,187
1,084
752
786
723
80
341
–
–
– 15,641
23,162 13,932
21,592
–
1,950
1,816
1,840
1,759
7,170
7,566
263
–
263
–
835
–
8,531
7,566
8,531
7,566
ToTaL
FInanCIaL
LIaBILITIeS 12,603
18,878
6,148
7,138
6,536
6,528
835
–
26,122 32,544 24,303
30,917
1. These items have variable interest rates.
2. 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.
7777
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report Note 26: 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
Financial Liabilities
Trade and other payables
Bank loans and overdrafts
Lease facilities
2013
2012
Carrying
amount
$’000
net Fair Value
$’000
Carrying
amount
$’000
net Fair Value
$’000
3,505
14,651
18,156
8,531
13,932
1,840
24,303
3,505
14,651
18,156
8,531
14,030
1,840
24,401
2,156
14,578
16,734
7,566
21,592
1,759
30,917
2,156
14,578
16,734
7,566
21,592
1,759
30,917
Fair values are materially in line with carrying values. An average discount rate of 6.26% (2012: 5.86%) has been applied
to all non-current borrowings to determine fair value.
(iii) Sensitivity analysis
Interest Rate Risk, Foreign Currency Risk and Price Risk
The Group has performed sensitivity analysis relating to its exposure to interest rate risk, foreign currency risk and price
risk at balance date. This sensitivity analysis demonstrates the effect on the current year results and equity which could
result from a change in these risks.
Interest Rate Sensitivity Analysis
At 30 June 2013, the net effect on full year profit and equity as a result of changes in the interest rate on variable rate
financial instruments, with all other variables remaining constant would be as follows:
GBST GRouP
2013
$’000
2012
$’000
(140)
140
(215)
215
Increase/(Decrease) in Profit and Equity
Increase in interest rate by 1%
Decrease in interest rate by 1%
7878
Notes to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2013 continued Foreign Currency Risk Sensitivity Analysis
At 30 June 2013, 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
2013
$’000
2012
$’000
2
(2)
530
(530)
5
(5)
781
(781)
Financial Instruments Sensitivity Analysis Foreign Currency Risk Sensitivity Analysis (continued)
At 30 June 2013, 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
2013
$’000
2012
$’000
14
(11)
14
(11)
23
(19)
23
(19)
At 30 June 2013, 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%
GBST GRouP
2013
$’000
2012
$’000
13
(10)
13
(10)
–
–
–
–
7979
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report Note 26: Financial Risk Management (continued)
At 30 June 2013, the effect on profit and equity as a result of changes in the value of the Australian Dollar to the
Hong Kong Dollar, with all other variables remaining constant is as follows:
Increase/(Decrease) in Profit
Improvement in AUD to HKD by 10%
Decline in AUD to HKD by 10%
Change in Equity
Improvement in AUD to HKD by 10%
Decline in AUD to HKD by 10%
Price Risk
At 30 June 2013 there no investments in listed shares.
GBST GRouP
2013
$’000
2012
$’000
5
(6)
5
(6)
–
–
–
–
Note 27: Contingent Liabilities
As at 30 June 2013, 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.
8080
Notes to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2013 continued Note 28: 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)
R De Dominicis
Chief Executive Wealth Management
D Orrock
A Ritter
P Salis
I Sanchez
Chief Executive Capital Markets
Chief Financial Officer
Chief Operating Officer
Chief Technology Officer
(b) Key Management Personnel Compensation
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Share-based payments
GBST GRouP
2013
$
2012
$
3,653,956
3,468,906
153,076
153,972
40,736
18,756
199,306
(85,834)
4,047,074
3,555,800
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 performance rights and options provided as compensation and shares issued on the
exercise of such performance rights and options, together with terms and conditions of the options, can be found in the
remuneration report section of the Directors’ report.
8181
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report Note 28: 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.
2013
Directors
J Puttick
D Adams
A Brackin
S Lake
J Sundell
I Thomas
ToTaL DIReCToRS
Executives
R De Dominicis
D Orrock
A Ritter
P Salis
I Sanchez
ToTaL eXeCuTIVeS
GRouP ToTaL
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
Balance at
01/07/12
Received as
Compensa-
tion
Performance
Rights &
options
exercised
net Change
other1
Balance at
30/06/13
6,173,398
–
381,943
4,470,108
9,631,610
–
20,657,059
2,054,659
–
–
16,135
–
2,070,794
22,727,853
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(475,937)
5,697,461
–
–
–
381,943
664,001
5,134,109
–
–
9,631,610
–
188,064
20,845,123
670,000
2,724,659
–
–
–
–
–
–
16,135
–
670,000
2,740,794
858,064
23,585,917
Balance at
01/07/11
Received as
Compensa-
tion
Performance
Rights &
options
exercised
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
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
net Change
other1
Balance at
30/06/12
(227,777)
6,173,398
–
70,000
99,564
–
381,943
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
1. Shares purchased or sold, consideration for shareholdings purchased by Group, or excluded from disclosure due to resignation.
8282
Notes to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2013 continued (e) Performance Right Holdings
The numbers of performance rights 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
01/07/12
Granted as
Compensa-
tion
Perfor-
mance
rights exer-
cised
or Sold
Perfor-
mance
rights
Cancelled/
Forfeited
other
2013
Directors
J Puttick
D Adams
A Brackin
S Lake
J Sundell
I Thomas
ToTaL
DIReCToRS
Executives
R De Dominicis
D Orrock
A Ritter
P Salis
I Sanchez
ToTaL
eXeCuTIVeS
GRouP
ToTaL
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
365,177
–
–
365,177
182,588
182,588
116,857
146,071
146,071
774,175
– 1,139,352
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Balance
30/06/13
–
–
–
365,177
–
–
365,177
182,588
182,588
116,857
146,071
146,071
774,175
–
–
–
–
–
–
–
–
–
–
–
–
–
– 1,139,352
Total
Vested at
30/06/13
Total
Vested and
exercisable
at 30/06/13
Total
Vested and
unexercis-
able at
30/06/13
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
365,177
–
–
365,177
182,588
182,588
116,857
146,071
146,071
774,175
– 1,139,352
8383
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report Note 28: Key Management Personnel Disclosures (continued)
(f) Option Holdings
Options granted as part of Remuneration for the Year Ended 30 June 2013
There were no options granted as remuneration to Key Management Personnel in the 30 June 2013 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 2013 financial year that were granted as compensation in previous
financial years as remuneration to Key Management Personnel.
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
Compensa-
tion
options
exercised
or Sold
options
Cancelled/
Forfeited
other
Balance
30/06/12
Total
Vested at
30/06/12
Total
Vested and
exercisable
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
GRouP
ToTaL
–
100,000
–
150,000
250,000
600,000
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.
8484
Notes to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2013 continued Note 29: 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 28 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.
GBST GRouP
2013
$
4,000
–
2012
$
14,000
45,702
Note 30: Share Based Payments
To assist in the attraction, retention and motivation of employees, the Company operates a GBST Performance Rights and
Option Plan.
Share based payments entered into in the year are detailed below.
Share Performance Rights
Under this Scheme select staff are made individual offers of specific numbers of share performance rights at the
discretion of the Board. The Board may determine the number of share performance rights, vesting conditions, vesting
period, exercise price and expiry date. Share performance rights may be granted at any time, subject to the Corporations
Act and ASX Listing Rules.
On 8 November 2012, 1,314,636 performance rights were issued to select Executive employees. There is a nil exercise
price and the share performance rights vest in thirty-six months after the date of grant or the date of release of GBST’s
financial results for the 2015 financial year. The share performance rights expire thirty days after the vesting date.
The share performance rights are conditional on the employees meeting continuous service conditions and the group
meeting certain financial performance measures.
As at reporting date, the expense for these share performance rights for the period ending 30 June 2013 was
$230 thousand included in share based payment expense.
At the Company’s 2012 annual general meeting the issue of these performance rights and the GBST Performance Plan
was approved by shareholders.
The performance criteria associated with the grant of share performance rights outstanding under the GBST Performance
Rights and Option Plan is as follows:
1. Cumulative earnings Per Share (ePS) Target
Vesting of the performance rights granted will be subject to GBST achieving three year (2013 – 2015 financial years)
cumulative EPS targets of 26 cents, 28 cents, and 32 cents for 25%, 50% and 100% vesting respectively. There is also
a vesting requirement that a minimum EPS of 5 cents is achieved in each year; and,
2. Service Condition
Continuous employment with GBST Holdings Limited from grant date to vesting date.
8585
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report Note 30: Share Based Payments (continued)
Valuation
The fair value of the share performance rights at the 8 November 2012 of $0.8151 each was determined using the
Binomial Approximation Option Valuation Model. The model inputs were: the share price at date of grant $0.96,
expected volatility of 46.8 percent, expected dividends of 5.42 percent, a term of three years and a risk-free interest rate
of 2.61 percent. The exercise price for the share performance rights is nil.
The share performance rights outstanding at 30 June 2013 had a weighted remaining contractual life of twenty-eight months.
Movement in Share Performance Rights
The following table illustrates the number, weighted average exercise price (WAEP) and movement in share performance
rights under the Share Performance Rights Scheme issued during the period.
Outstanding at the beginning of the period
Granted during the period
Forfeited during the period
Exercised during the period
Expired during the period
Outstanding at the end of the period
Exercisable at the end of the period
Jun 2013
number
Jun 2012
number
–
1,314,636
–
–
–
1,314,636
–
–
–
–
–
–
–
–
Movement in Share Options
The following table illustrates the comparative position for share options. The options expired during the prior comparative
period and none have been subsequently issued.
Outstanding at the beginning of the period
Granted during the period
Forfeited during the period
Exercised during the period
Expired during the period
Outstanding at the end of the period
Exercisable at the end of the period
Jun 2013
number
Jun 2013
WaeP
Jun 2012
number
Jun 2012
WaeP
–
–
–
–
–
–
–
–
–
–
–
–
–
–
600,513
$1.05
–
–
–
–
–
–
600,513
$1.05
–
–
–
–
No person entitled to exercise any performance right or option had or has any right by virtue of the performance right
or option to participate in any share issue of any other body corporate.
8686
Notes to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2013 continued Note 31: Earnings Per Share
Basic earnings per share (cents)
Diluted earnings per share (cents)
(a) Reconciliation of earnings to net profit
Net Profit
Earnings used in the calculation of basic EPS
Earnings used in the calculation of dilutive EPS
GBST GRouP
2013
9.06
9.06
$’000
6,031
6,031
6,031
2012
4.87
4.87
$’000
3,251
3,251
3,251
(b) Weighted average number of ordinary shares
Weighted average number of ordinary shares outstanding during the year used in calculation
of basic EPS
66,561,725
66,723,380
Weighted average number of ordinary shares outstanding during the year used in calculation
of dilutive EPS
66,561,725
66,723,380
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 32: Subsequent Events
The financial report was authorised for issue on 23 August 2013 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.
8787
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report Note 33: Parent Entity Disclosures
As at, and throughout the financial year ending 30 June 2013 the parent company of the Group was GBST Holdings Limited.
GBST hoLDInGS
30 Jun 2013
$’000
30 Jun 2012
$’000
Results of the Parent Entity
PRoFIT aTTRIBuTaBLe To MeMBeRS oF The PaRenT enTITY
2,114
4,659
oTheR CoMPRehenSIVe InCoMe
Items that will not be reclassified to profit or loss
Net change in fair value of investment
Total items that will not be reclassified to profit or loss
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
Retained earnings
Total equity
–
–
2,114
1,004
1,004
5,663
8,692
4,809
194,139
163,365
14,610
146,227
17,392
114,136
37,664
37,664
230
10,018
47,912
–
11,565
49,229
Parent Entity Contingencies
The Directors are of the opinion that no provisions are required in respect of parent entity contingencies.
8888
Notes to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2013 continued 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.
Parent Entity Capital and Other Expenditure Commitments
Contracted for:
Capital and other operating purchases
Payable
Not later than one year
Guarantees
Property Leases
GBST
hoLDInGS
30 Jun 2013
$’000
30 Jun 2012
$’000
246
246
246
387
387
387
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 22.
8989
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report Note 34: 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 places of business are:
Level 4
410 Ann Street
BRISBANE QLD 4000
Level 24
259 George Street
SYDNEY NSW 2000
Level 2
63 Market Street
WOLLONGONG NSW 2530
Level 8
34 Queen Street
MELBOURNE Vic 3000
8th Floor Linen court
10 East Road
LONDON NI 6AD
Building 5
Croxley Green Business Park
Hatters Lane, Watford
HERTFORDSHIRE WD 18 8Y
19th Floor
222 Broadway
NEW YORK NY 10007
Unit 2904, 29F
Universal Trade Centre
3-5A Arbuthnot Road
HONG KONG
Level 10
55 Market St
SINGAPORE 048941
9090
Notes to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2013 continued Directors’ Declaration
1. In the opinion of the Directors of GBST Holdings Limited (‘the Company’):
a) the consolidated financial statements and Notes 1 to 34 and the Remuneration report in the Directors’ report, set
out on pages 21 to 31, 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 2013 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 22 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 2013.
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 23rd day of August 2013
9191
Directors’ Declarationfor the year ended 30 June 2013 GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report Independent Auditor’s Report
for the year ended 30 June 2013 continued
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 2013, and
consolidated statement of profit or loss and other comprehensive income, consolidated statement
of changes in equity and consolidated statement of cash flows for the year ended on that date,
notes 1 to 34 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.
9292
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
Liability limited by a scheme approved under
Professional Standards Legislation.
ABCD
Independence
In conducting our audit, we have complied with the independence requirements of the
Corporations Act 2001.
Auditor’s opinion
In our opinion:
(a)
the financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i)
(ii)
giving a true and fair view of the Group’s financial position as at 30 June 2013 and
of its performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations
2001.
(b)
the financial report also complies with International Financial Reporting Standards as
disclosed in note 2.
Report on the remuneration report
We have audited the Remuneration Report included in pages 21 to 31 of the directors’ report
for the year ended 30 June 2013. The directors of the company are responsible for the
preparation and presentation of the remuneration report in accordance with Section 300A of the
Corporations Act 2001. Our responsibility is to express an opinion on the remuneration report,
based on our audit conducted in accordance with auditing standards.
Auditor’s opinion
In our opinion, the remuneration report of GBST Holdings Limited for the year ended 30 June
2013, complies with Section 300A of the Corporations Act 2001.
KPMG
Stephen Board
Partner
Brisbane
23 August 2013
9393
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report Additional Information
for the year ended 30 June 2013
Shareholding Information as at 6 September 2013
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 96
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
291
369
156
158
49
1023
Number ordinary
5,934,769
6,627,610
7,056,760
6,339,087
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.
9494
e. 20 Largest Shareholders – ordinary Shares
Rank
Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
NATIONAL NOMINEES LIMITED
RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LIMITED
CROWN FINANCIAL PTY LTD
STEPHEN MAURICE LINTON LAKE
J P MORGAN NOMINEES AUSTRALIA LIMITED
MR JOHN FRANCIS PUTTICK
CITICORP NOMINEES PTY LIMITED
DEKACROFT PTY LTD
MR JOAKIM SUNDELL & MRS SHARA SUNDELL
BRAZIL FARMING PTY LTD
RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LIMITED
MRS AMBER ROBYN LAKE
BNP PARIBAS NOMS PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BOND STREET CUSTODIANS LIMITED
BOND STREET CUSTODIANS LIMITED
BERISLAV BECAREVIC & IVANKA BECAREVIC
BARRY BECAREVIC
ROBERT DEDOMINICIS
RAYMOND TUBMAN
Total Units
13,914,851
% IC
20.91%
4,323,117
4,118,148
3,073,219
3,003,351
2,900,000
2,764,491
2,290,000
2,013,462
2,000,000
1,785,750
1,691,000
1,202,658
1,175,550
1,040,332
1,012,500
751,553
722,408
707,839
707,839
6.49%
6.19%
4.62%
4.51%
4.36%
4.15%
3.44%
3.02%
3.00%
2.68%
2.54%
1.81%
1.77%
1.56%
1.52%
1.13%
1.09%
1.06%
1.06%
9595
GBST Holdings Limited ABN 85 010 488 874 2013 Annual Report Share Registry
Link Market Services
Level 19, 324 Queen Street
Brisbane QLD 4000
Ph 1300 554 474
Stock Exchange Listing
GBST Holdings Limited shares are quoted on the Australian
Stock Exchange under the code GBT.
Unquoted Securities
The company has 1,314,636 Performance Rights on issue.
Auditors
KPMG
Level 16, 71 Eagle Street
Brisbane QLD 4000
Ph 07 3233 3111
Fax 07 3233 3100
Corporate Directory
for the year ended 30 June 2013 continued
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
Level 4, 410 Ann Street
Brisbane QLD 4000
Ph 07 3331 5555
Fax 07 3839 7783
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
9696
www.gbst.com