ANNUAL
REPORT
2015
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.
1 The Year in Review
3
Chairman’s and
Managing Director’s Report
7 GBST Product Suite
8 GBST Executive Team
9 GBST Board of Directors
10 Directors’ Report
27 Auditor’s Independence Declaration
28 Financial Statements
71 Directors’ Declaration
72
74 Additional Information
76 Corporate Directory
Independent Auditor’s Report
ii
GBST Holdings Limited (GBST) will hold its Annual
General Meeting at 3.30pm (Brisbane Time) on
Thursday 15 October 2015 at McCullough Robertson,
Level 11 Central Plaza Two, 66 Eagle Street, Brisbane.
THE YEAR
IN REVIEW
Continued
STRONG
international growth
Revenue up 16% to
$114.3 million
NPAT up
52% to $15.3 million
Cash EPS up
35%
International sales now
55% of total
Group Total Revenue
2015 $114.3m
2014 $98.5m
2013 $83.0m
2012 $77.0m
2011 $67.5m
EBITDA
2015 $24.5m
2014 $20.5m
2013 $16.5m
2012 $14.2m
2011 $13.7m
Cash EPS
2015 28.9c
2014 21.5c
2013 16.5c
2012 13.8c
2011 11.6c
Dividends
2015 10.5c
2014 8.5c
2013 6.5c
2012 5.0c
2011 4.0c
1
GBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORT GBST
SNAPSHOT
Established
1983
ASX listed
2005
About
600 employees
More than
60 clients worldwide
Flagship products:
GBST Syn~, GBST Shares
Focus:
Client accounting and securities
transaction processing
Flagship product:
GBST Composer
Focus:
Wealth administration
and registry
Customers in:
Australia, Asia, Europe,
North America
CLIENTS
• Australian market leader
• Growing international market
share; more than 10 international
customers including major
broker-dealers
• Using GBST Syn~, cornerstone
US client increased automation
from 30% to 98%
Customers in:
Australia, Asia, New Zealand,
United Kingdom
CLIENTS
• Expanding market share
• GBST Composer supports three of
the top six UK wraps and platforms
and five of the leading pensions providers
• Established Australian provider
to major banks and wealth management
companies
MARKETS
• GBST Shares and GBST Syn~
support more than 60 ASX
participants
• GBST Syn~ new generation
platform now operational
internationally including Asia,
Europe and the US, the
world’s largest capital
market
STRONG
GLOBAL
GROWTH
MARKETS
• UK wraps and platforms
market expected to quadruple
in size by 2020
• More than £770 billion is held
on retail UK mutual funds
• $2.6 trillion Australian total
managed funds
BUSINESS
OPPORTUNITY
• Financial markets are evolving and
need to optimise performance
• Banks and broker-dealers face
significant operational, technological
and business model challenges
• US opportunity driven by need
for firms to replace older
technology to increase
automation and lower
costs
BUSINESS
OPPORTUNITY
• UK Retail Distribution Review is
the main driver of change
• Facilitates online, low cost delivery
models for customers
• Supports sales of GBST Composer
digital platform which can
support 7,000 investment
options
2
CHAIRMAN’S
& MANAGING
DIRECTOR’S
REPORT
“ WE ARE PLEASED TO REPORT ANOTHER YEAR OF STRONG
PERFORMANCE. THIS REFLECTS THE RETURN OF MANY YEARS
OF INVESTMENT IN OUR BUSINESS WHICH HAS ENABLED GBST
TO EXPAND ITS OPERATIONS AROUND THE WORLD.”
John Puttick
Chairman
Stephen Lake
Managing Director and
Chief Executive Officer
D
ear fellow shareholders,
We are pleased to report another
year of strong performance. This
reflects the return of many years of
investment in our business which
has enabled GBST to expand its
operations around the world. FY2015
was the first year that international
sales exceeded Australian sales, demonstrating the
continued success of our global growth strategy.
GBST is a financial services technology leader. Through
our flagship software products GBST Composer for wealth
management and GBST Shares and GBST Syn~ for capital
markets, we enable some of the world’s leading institutional
banks, stockbrokers and wealth managers to complete
financial transactions and administer investments and registries
– actions which are fundamental to the global financial system.
Another year of record sales and profit
GBST reported record sales and profit. The group’s net profit
increased 52% to $15.3 million, up from $10 million in the
previous year. Adjusted cash net profit after income tax rose
35% to $19.2 million, compared to $14.3 million. EBITDA
grew 20% to $24.5 million, up from $20.5 million.
Strong sales of GBST Composer in the United Kingdom
helped drive a 16% increase in revenue to $114.3 million,
compared to $98.5 million. International sales were $63.0
million, 55% of the total, and Australian sales were $51.3
million. The value of our investment in software platforms
and sales infrastructure globally is shown by our progress.
Our business model is focused on building and developing
long-term recurring revenue streams. This enables strong
cash generation. In FY2015 cash flow from operations
(excluding interest and taxes) was $25.5 million, representing
104% conversion of EBITDA to cash. GBST repaid
senior debt in November 2014, and at 30 June 2015
held $7.5 million cash. The company maintains a strong
balance sheet.
We continued to invest in our products and sales teams.
Employees increased to about 600 in June 2015 from 470
in June 2014. We spend approximately 10% of revenue
on product development every year to ensure high
quality products and services for clients. Research and
development related tax concessions reduced GBST’s tax
rate to 12%, down from 16% in the prior year.
Dividends
Directors have declared a final dividend of 5.5 cents per
share, fully franked, which will be paid on 14 October 2015.
This brings dividends for the year to 10.5 cents per share
fully franked, up from 8.5 cents per share in the previous
year. This represented a payout ratio of 36% of adjusted
cash NPAT.
Investment in R&D supports growth
Product leadership is the cornerstone of our success.
In FY2015 we transformed our wealth management
platform’s capability to serve customers internationally
through support of deployment onto multiple databases
including Microsoft SQL. The update maintained a single line
of code. Two UK clients are already using its capability, with
five clients expected to be ‘live’ by the end of 2015.
We also integrated GBST Syn~’s straight-through processing
capability with GBST Front Office, a new order management
system for derivatives and more comprehensive business
intelligence reporting and risk management. This enables
us to offer a holistic software suite for retail and institutional
stockbrokers, third-party clearers and custodians.
Strong wealth management performance
GBST Composer is the market-leading wealth management
and registry platform in Australia and the top direct to
GBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORT
3
COMMUNITY
PROUDLY SUPPORTING
CHARITIES
During FY2015 GBST staff contributed $128,000
to charities, including $20,000 to the Sir David
Martin Foundation, a non-profit organisation which
helps young people in crisis; and approximately
$10,500 to Friends for Street Children, which assists
disadvantaged and street children in and around
Ho Chi Minh City, Vietnam. This contribution has
been matched by GBST.
consumer software platform for the distribution of tax
incentivised products in the UK. It provides a comprehensive
platform for wraps and platforms, self invested personal
pensions (SIPPs), individual savings accounts (ISAs), bonds,
retail and wholesale unit trusts and open ended investment
companies (OEICS).
Wealth management EBITDA increased 39% to $18.8
million from $13.5 million in the previous year. An impressive
performance from our UK operations contributed EBITDA
of $11.4 million, up 74%, reflecting increased work from new
and existing clients and scale benefits.
Sales grew 28% to $69.1 million including international sales
of $50.1 million, up 41%; and Australian sales were $19.0
million, up 4%. During software implementation we receive
services revenue, and after the platform ‘goes live’ an
annuity-based licence fee takes effect. UK licence fees were
35% of international sales, a proportion which is expected to
grow over time; in Australia, where GBST Composer is well
established, licence fees represented 80% of sales.
Regulation is a significant driver of our growth. In FY2015 the
UK Pensions Freedoms legislation allowed people aged over
55 to draw from their defined contributions benefit schemes.
GBST Composer’s early compliance helped to secure new
clients including a leading retirement products provider, a
top three UK SIPP provider and an investment and financial
services firm.
The total value of assets managed in the UK is estimated at
£6 trillion, including £770 billion held in retail mutual funds,
and £260 billion in wraps and platforms. The wraps and
platforms market alone is expected to quadruple in size by
2020. Today, GBST Composer serves three of the top six UK
wrap platforms and five of the UK’s top pensions providers.
GBST Composer has become the first platform to support
flexible annuities, and we introduced support for guaranteed
pensions and improved foreign exchange and global custody
capability. We have allied with Xchanging to leverage its
business process optimisation expertise, allowing our
participation in broader projects for the UK finance industry.
We began work with an existing client to service Asia
through GBST Composer. As Asian markets mature there
is a significant opportunity to reach mass retail customers
through digital distribution channels.
Australian revenue was $19.0 million, up 4%, as major
banks and financial services firms migrated older systems
onto GBST Composer. We enhanced its processes for
Superstream rollovers, contributions and insurance.
Capital markets
GBST Capital Markets revenue was $44.7 million, up 1%
compared to the prior year. This included revenue from
the previous financial services division which has been
integrated into the GBST Capital Markets. EBITDA was
$5.7 million. Results were impacted by the provision for a
bad debt of $640,000 related to a client being placed in
administration.
Australian capital markets revenue was steady at
$32.3 million as GBST Shares and GBST Syn~ projects
continued for existing clients. Approximately 80% of
Australian sales come from recurring licence fees. Our initial
project to transition a global institutional bank’s back- and
4
MILESTONES
2015: GBST Composer begins
supporting multiple databases
including Microsoft SQL
RESULTS
BOOSTING
EFFICIENCY
Using GBST Syn~, our cornerstone US client
increased trade consignment automation from
30% to 98%
• Automation prior to GBST Syn~
30%
• Automation using GBST Syn~
98%
middle-offices from GBST Shares to GBST Syn~ is ongoing.
Margins were consistent with the previous year, a sound
performance in a highly competitive market.
International capital markets sales were $12.4 million, up 6%,
despite delays to Asian projects. While international expenses
exceeded sales due to ongoing commitment to product
investment, these markets offer significant scope for growth.
In Asia, deployment of GBST Syn~ for a major banking and
financial services company continued, extending settlement
through the Hong Kong, Singapore and Indonesia Stock
Exchanges. Another client used GBST Syn~ to provide
back- and middle-office and custody services, increasing its
efficiency. We will soon provide full integration and settlement
with the Singapore Exchange for three clients.
Increased support for multiple asset classes led to new
sales. An Asian customer began an exchange traded
derivatives implementation and selected GBST Syn~ to
process fixed income in Japan. We have a strong pipeline
of potential new work, and growing opportunities, including
potential to use the platform‘s Omgeo CTM connectivity
to provide services in China; and fixed income and cash
equities services in Japan.
GBST builds US team
Our GBST Syn~ platform recently transformed the middle-
office services of a cornerstone US client, providing a
strong return on investment. This broker-dealer serves
approximately 6,300 financial advisors, managing about
$496 billion in assets and 2.6 million client accounts from
nearly 2600 locations in the US, Canada and other countries.
We are currently scoping work for the next phase of activity,
and have strengthened our US team to build on this success
including appointment of an experienced US CEO.
The US is the world’s largest securities processing market, and
represents a significant growth opportunity. Regulators are
demanding greater transparency, such as consolidated audit
trails for market reconstruction and surveillance. The market is
considering regulation to shorten equity settlement from three
days (T+3) to two (T+2). This would be a strong catalyst for
change as many broker dealers will need new technology to
meet these requirements, and GBST Syn~ has already proven
its ability to meet T+2 regulation in Europe and Australia.
In Europe, we partnered with SAP HANA to roll out our
GBST Syn~ Financial Transaction Tax (FTT) product.
In the community
We have a long-standing commitment to assist local
communities through matching staff donations to charities
and supporting our employees’ voluntary charitable work
with financial contributions. During FY2015 GBST staff
contributed $128,000 to charities, including $20,000 to the
Sir David Martin Foundation, a non-profit organisation which
helps young people in crisis; and approximately $10,500 to
Friends for Street Children, which assists disadvantaged and
street children in and around Ho Chi Minh City, Vietnam. This
contribution has been matched by GBST.
Board appointment
Christine Bartlett was appointed to GBST’s Board in June
2015. She brings a wide range of senior executive skills
and international expertise to the Board. She is a non-
executive director of the Mirvac Group and The Smith Family.
Previously she was executive general manager of National
Australia Bank’s Asset Servicing business, and before
that led NAB’s NextGen business process and technology
transformation program. Her experience includes roles as
CEO of commercial property services provider Jones Lang
LaSalle Australia and as COO for IBM’s Business Consulting
Services, Asia Pacific.
Outlook
We remain well positioned to continue our strategy of global
expansion. We are pursuing new opportunities in all regions
in both wealth management and capital markets. Investment
in product development and GBST’s sales network is
accelerating as we seek to diversify our business and
penetrate the North American and Asian markets.
GBST maintains a strong balance sheet and cash flow, and
is well positioned to take advantage of market opportunities.
Our achievements would not have been possible without the
skills, dedication and hard work of our staff across the world.
We would also like to thank our customers and shareholders.
We are grateful for your support and confidence as we
continue to build a strong global company.
GBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORT
5
2015
KEY POINTS
AUSTRALIA
EUROPE
B R I S B A N E
S Y D N E Y
W O L L O N G O N G
M E L B O U R N E
L O N D O N
GBST Composer sales growth supported by
recurring revenue and technology migration
projects from major financial institutions
Solid capital markets revenue in an
increasingly competitive market
Significant investment to develop GBST Syn~
regional solutions
ASIA
H O N G KO N G
H O C H I M I N H C I T Y
S I N G A P O R E
Increased international GBST Syn~ revenue;
investment required to support growth
Global rollout for major international bank
continuing
Ongoing recurring licence fee revenue and
higher sponsored work
Technology development centre continues to
contribute to development of GBST products
•
•
•
•
•
•
•
6
•
•
•
•
•
•
•
Strong UK GBST Composer revenue growth
driven by ongoing legislation change
Substantial increase in higher margin
services work
Continuing investment to increase product
scale and capability
Capital markets environment remains
constrained
USA
N E W YO R K
Successful first phase of GBST Syn~
implementation completed for cornerstone
client
Preparations for second phase of
development under way
Strengthened leadership, sales and product
strategy team to drive business growth
•
Further investment required to support growth
THE GBST
PRODUCT SUITE
T
hrough 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 Derivatives and Client Accounting system (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 management
software 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 Gateway provides funds with flexibility and
control while connecting them with the Australian Taxation
Office. GBST Quant provides data analytics and quantitative
services for measuring portfolio performance and after-tax
tools and services.
Product
Capability
Market
• Wealth administration and registry software for the
Australian funds management industry
• Comprehensive platform for UK wraps, SIPPs, ISAs,
bonds, retail and wholesale unit trusts and OIECs
• Administers more than $500 billion funds under
management
• Supports more than 7,000 investment options
• Global post-trade processing platform
• Regional solutions for Asia, Australia, Europe and
North America
• Manages trades across multiple asset classes,
entities, markets and exchanges
• Consolidated business intelligence reporting
• Leading Australian client accounting and securities
transaction platform
• Services for capital markets’ institutional and retail
brokers
• Solutions include cash equities, derivatives and risk,
margin lending, cash management and front office
• Connects an extensive network of financial
institutions
i
i
n
o
i
t
a
r
t
s
n
m
d
a
h
t
l
a
e
w
d
n
a
n
o
i
t
c
a
s
n
a
r
t
s
e
i
t
i
r
u
c
e
s
g
n
d
a
e
L
i
y
r
t
s
u
d
n
i
i
s
e
c
v
r
e
s
l
i
a
c
n
a
n
fi
e
h
t
r
o
f
s
m
r
o
f
t
a
p
l
7
GBST HOLDINGS LIMITED ABN 85 010 488 874 2015 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 and
Company Secretary Andrew commenced
GBST in 2011 as Chief Financial Officer
and was appointed to the position of
Company Secretary on 18 August 2014.
Mr Ritter is a Chartered Accountant, holds
a Bachelor of Commerce degree, a Graduate Diploma of
Applied Corporate Governance and is a Fellow of the
Governance Institute of Australia and the Institute of
Chartered Secretaries and Administrators.
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 Australia and Asia Pacific 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.
Barry Raskin Chief Executive, GBST Capital
Markets North America Barry joined GBST in
March 2015 after 28 years with the SIX Group,
the past 20 serving as the Managing Director for
the Americas. Barry brings to GBST extensive
experience increasing growth of a non-US
based subsidiary through strategic alliances, product creation,
team development and aggressive sales activities. He is a member
of the Inside Market Data Hall of Fame and holds a Bachelor of
Science from Cornell University and an MBA in Finance.
Liz Bevan Chief Executive, Americas 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.
Dr Justin O’Sullivan Head of Technology
Strategy and Architecture Justin was
appointed as Head of Technology Strategy
and Architecture in February 2015. Having
joined GBST in 2008, he has 20 years’
engineering management experience and
previously held roles at Suncorp and RSA Security (EMC). He
holds Bachelor and Master of Applied Science (Computing)
degrees and a Doctorate in Philosophy from Queensland
University of Technology.
GBST BOARD
OF 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 is a member of the Council of the
Queensland University of Technology, as well as adjunct
Professor, School of Information Technology and Electrical
Engineering at the University of Queensland. He is a
member of the Hall of Fame of the Pearcey Foundation.
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.
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. Allan is Chairman of ASX listed mining
technology company RungePincockMinarco Limited (since
November 2011), Chairman of IT software company
Emagine Pty Ltd and Chairman of telecommunications
carrier Opticomm Pty Ltd. Allan is also a member of the
advisory board for several IT companies.
Joakim Sundell Non-Executive Director
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).
Christine Bartlett Independent Non-
Executive Director Ms Christine Bartlett was
appointed to the Board in June 2015, and
brings extensive commercial experience to
GBST, across a range of sectors including
finance, banking, superannuation, property
and information technology. Christine
recently held the position of Executive General Manager, Asset
Servicing at National Australia Bank (NAB) and successfully
led the NextGen technology transformation program through
the delivery of several key initiatives, including the successful
migration of UBank customers onto NAB’s new core banking
platform. From 2004 to 2009, Christine was Chief Executive
Officer of Jones Lang LaSalle Australia and prior to this served
for eight years at IBM, culminating as Chief Operating Officer for
IBM’s Business Consulting Services in the Asia Pacific region.
Christine is currently an Independent Non-Executive Director of
the Mirvac Group (ASX: MGR) and The Smith Family (a national
and independent children’s charity), and is a member of Chief
Executive Women, the Australian Institute of Company Directors
and the UNSW Australian School of Business Advisory Board.
David Adams Independent Non-Executive
Director Mr David Adams was appointed to
the Board in 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.
Ian Thomas Independent Non-Executive
Director Dr Ian Thomas was appointed to
the Board in December 2011. Ian
currently serves as president of Boeing
China, having previously served as
president of Boeing Australia and South
Pacific and, prior to that, president of
Boeing India. 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. and global security
issues. He is co-chair of the US-China Aviation
Cooperation Program. During his time in Australia, he
served as President of the American Chamber of
Commerce and Chairman of the Prime Minister’s
Manufacturing Leaders Group. In 2013 he received the
Royal Aeronautical Society’s Sir Charles Kingsford Smith
Medal for outstanding contributions to aviation.
Ian holds an MPhil in international relations and 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.
9
GBST HOLDINGS LIMITED ABN 85 010 488 874 2015 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 2015 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
Ms Christine N Bartlett
Executive
April 2008
April 2005
July 2001
December 2011
June 2015
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 2015 were:
• client accounting and securities transaction technology
solutions for the finance, banking and capital markets
industry globally;
• 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
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.
Key Financial Results
• Total revenue increased by 16% to $114.3 million
(2014: $98.5 million).
• EBITDA increased by 20% to $24.5 million
(2014: $20.5 million).
• Profit before income tax increased by 44% to
$17.3 million (2014: $12.0 million).
• Net profit after income tax (NPAT) increased by 52% to
$15.3 million (2014: $10.0 million).
• Adjusted cash net profit after income tax (Cash NPAT)
increased by 35% to $19.2 million (2014: $14.3 million)
• Senior debt was fully repaid during the year. Net
Debt (total borrowings less cash) has reduced from
$3.6 million at 30 June 2014 to a net cash position of
$7.5 million.
• Dividend payout ratio of 36% on adjusted Cash NPAT
(46% on NPAT) increased (2014: 40%).
GBST comprised three divisions during
the year:
• GBST Capital Markets, through the GBST Syn~
platform, provides new-generation technology to
process equities, derivatives, fixed income and
managed funds transactions for global capital markets.
In Australia, GBST also offers the GBST Shares and
DCA (derivatives) platforms which are the country’s
most widely used middle-office and back-office
equities and derivatives systems. 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. This division will now be
integrated into the GBST Capital Markets division and
will no longer be reported on separately.
DIVIDENDS
A final fully franked ordinary dividend of 4.5 cents per share
for the 2014 financial year was paid on 15 October 2014,
as declared in the financial report for the year ended
30 June 2014.
10
DIRECTORS’ REPORT for the year ended 30 June 2015 16
21
20
100
(3)
7
An interim fully franked ordinary dividend of 5.0 cents per
share was paid on 23 April 2015.
Dividends declared after the end of the year:
The Directors have declared a final dividend of 5.5 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 14 October 2015.
Group results
FULL YEAR TO 30 JUNE
2015
$‘000
2014
$‘000
%
Change
Total revenue and
other income
114,250
98,491
Operating EBITDA
24,468
20,210
Unallocated revenue/
(expenses)
–
264
EBITDA
24,468
20,474
Net finance costs
3
(1,115)
Depreciation
& Operating
Amortisation
Investment
Amortisation
Profit before
income tax
(3,191)
(3,100)
(3,957)
(4,250)
17,323
12,009
44
Income tax expense
(2,053)
(1,978)
Profit after
income tax
Adjusted Cash
NPAT
Basic EPS (cents)
Cash EPS (cents)
15,270
10,031
19,227
14,281
22.94
28.89
15.07
21.46
52
35
52
35
The table includes IFRS and non-IFRS financial information. Non-IFRS financial
information is Operating EBITDA, Operating & Investment Amortisation,
Adjusted Cash NPAT and Cash EPS which has not been audited or reviewed by
our auditor, KPMG.
Measures of profitability and basis
of preparation
GBST defines Operating EBITDA as profit before net
finance costs, tax, depreciation, amortisation, 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, Adjusted Cash NPAT and Cash EPS
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 revenue/(expenses) are legal expenses paid
or recouped 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 revenue/
(expenses) are reported to allow for reconciliation between
the Group and segment reports.
Group performance
ANOTHER YEAR OF RECORD SALES AND PROFIT
GBST reported record sales and profit for FY2015.
Total revenue and other income was $114.3 million, up
16% compared to $98.5 million in the previous year.
International sales were $63.0 million, 55% of the total and
up from 48% in the previous year. This was the first full
year that international sales exceeded Australian sales, a
significant milestone in GBST’s strategy for global growth.
Australian revenue was $51.3 million.
STRONG WEALTH MANAGEMENT PERFORMANCE
The Group reported increased revenue in Australia,
Asia and Europe in both of its main operating divisions,
GBST Capital Markets and GBST Wealth Management.
International growth was largely attributable to strong sales
of GBST Composer in the United Kingdom, mainly driven
by the UK Financial Services Authority’s ongoing regulation
change to protect consumers. Legislation change
continues to be a significant driver of GBST’s business.
EBITDA increased 20% to $24.5 million, up from
$20.5 million in the previous year. The Company repaid
senior debt in November 2014, and held net cash of
$7.5 million at 30 June 2015. Depreciation and operating
and amortisation charges increased slightly to $3.2 million.
Investment amortisation charges declined 7% to $4 million.
Cash flow from operations (excluding interest and taxes)
was $25.5 million, representing 104% conversion of
EBITDA to cash flow.
GBST’s strong momentum would not be possible without
significant investment in software development over a
prolonged period. Research and development related tax
concessions reduced GBST’s tax rate to 12%, down from
16% in the prior year.
The Company has also invested in broadening support for
its products through its global product and sales teams.
Employees increased to approximately 600 in June 2015
11
GBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORT from about 470 in June 2014, including staff in the
Company’s technology development centre located in Ho
Chi Minh City, Vietnam.
The Company reported a substantial increase in net profit
after tax to $15.3 million, up 52% from $10 million. The
Directors are pleased to announce a final dividend of 5.5
cents per share, fully franked, up from 4.5 cents per share,
fully franked, in the previous corresponding period.
ONGOING INVESTMENT IN R&D
GBST’s software innovation underpins its growth as the
robustness, flexibility and scalability of software platforms
ensures its product leadership and industry demand.
GBST’s clients include some of the world’s largest financial
institutions, stockbrokers and wealth management firms.
Among projects completed this year, the GBST Composer
platform was equipped to support deployment onto
multiple databases including Microsoft SQL Server.
Two clients are already live using the new software, and
a further three are expected to ‘go live’ by the end of
2015. This was a major program which transformed the
product’s capability and successfully maintained a single
line of code, allowing customers to select the relational
database that meets their requirements.
GBST Composer also completed major compliance
modifications to support the UK Financial Authority’s
Client Assets Sourcebook (CASS) and Pensions Freedom
requirements. GBST’s track record of fast delivery of
compliance changes, completed to meet strict deadlines,
has helped to win new clients.
GBST Composer’s capability has been extended to
support annuities, a first in the market and an exciting
development which will open new markets for the
Company. GBST also added services to support
guaranteed pensions; enabled settlement using the
Certificateless Registry for Electronic Share Transfer
(CREST) electronic trade confirmation used in Europe;
improved foreign exchange and global custody
support services, and increased scalability to enable
further growth.
Enhancements for the Australian market included improved
processes to assist Superstream rollovers, contributions
and insurance. GBST Quant extended its platform, which
supports after tax analysis of both Australian and global
equities, enabling calculations on a broad number of
underlying indices.
GBST’s new generation software platform for post-
trade processing, GBST Syn~, was strengthened with
several new capabilities. These included a new Order
Management System for derivatives, an enhanced GBST
BIR business intelligence product for cross product
reporting and GBST MarginSuite, which helps brokers
to manage risk. These applications, together with GBST
Front Office and customer relationship management
software, provide a fully integrated capital markets product
portfolio with client advisory, reporting and risk capability,
enabling GBST to provide industry-leading services to
retail and institutional stockbrokers, third-party clearers
and custodians.
GBST Wealth Management
FY2015
$000’s
FY2014
$000’s
%
Change
Revenue – Australia
18,952
18,150
Revenue –
International
50,094
35,607
Revenue – Total
69,046
53,757
EBITDA – Australia
7,362
6,956
EBITDA –
International
11,454
6,564
EBITDA – Total
18,816
13,520
4
41
28
6
74
39
The UK’s Retail Distribution Review (RDR) began a
transformational change to protect consumers which is
ongoing. This market represents a significant long-term
opportunity for GBST Composer, which is capable of
supporting more than 7000 investment options including
unit trusts, equities, retail and corporate pensions, offshore
bonds and investment savings accounts on a single digital
wealth administration platform.
The total value of assets managed in the UK is estimated
at £6 trillion, of which more than £770 billion is held in
retail mutual funds, including £260 billion in wraps and
platforms. GBST Composer serves three of the top six
UK wrap platforms today and this market is expected to
quadruple in size by 2020. GBST also provides services to
five of the UK’s top pensions providers.
Revenue from new sales, licensing and support of GBST
Composer increased 28% to $69.1 million, reflecting a
significant increase in work for new and existing clients,
particularly in the UK. EBITDA was $18.8 million, up 39%
from $13.5 million.
International sales were $50.1 million, up 41% from
$35.6 million. Licence fee was 35% of international income.
International EBITDA was $11.4 million, up 74% from
$6.6 million as the division benefited from higher volume
services work and scale benefits.
In April 2015 the UK introduced new Pensions Freedoms
legislation, a very significant change to the UK pensions
industry. This legislation has enabled people aged over 55
to draw from their defined contributions benefit schemes
for the first time. The government also introduced three
12
DIRECTORS’ REPORT for the year ended 30 June 2015 continued new pensions concepts including a flexi-access drawdown
fund; the uncrystallised funds pension lump sum and
flexible annuities.
Deployment of GBST Composer to support the Client
Assets Sourcebook (CASS) and Pensions Freedom
legislation helped secure new clients, including a leading
retirement products provider, a top three UK provider of
self-invested personal pension (SIPP) schemes and an
investment and financial services firm. The diversity of
these customers demonstrates GBST Composer’s ability
to assist both large and small clients with multiple offerings.
GBST’s product extension to support annuities is an
industry first, providing new opportunities in this market.
Continued product investment remains essential as
the market is developing and competition is growing.
New digital technologies are transforming the wealth
management industry as firms seek new ways to
engage with clients and manage risk. This includes
relationship management as financial advisors approach
retirement, helping to maintain established adviser-client
relationships. Increasingly, the industry is moving to target
higher wealth, higher margin consumers and the wealth
management and private banking/ high net worth markets
are converging. GBST Composer will receive significant
investment to ensure that it remains at the forefront of
this change.
Aiming to enter new markets, GBST has established
an alliance with leading business technology and
services provider Xchanging to combine GBST’s wealth
management products with Xchanging’s business process
optimisation (BPO) expertise. Leveraging Xchanging’s
expertise will enable GBST to participate in a broader
technology solution for the UK finance industry.
Work has commenced with an existing client to service
the Asian market through the ongoing development and
evolution of GBST Composer into a comprehensive wealth
management administration platform with international
capabilities. As Asian markets mature they are evolving,
and seeking to reach mass retail customers through digital
distribution channels. GBST’s experience assisting retail
banks in Australia and the UK market with sophisticated
wealth offerings is highly regarded.
In Australia, GBST Composer is well-established.
Australian revenue was $19.0 million, up 4%
from $18.2 million, as major banks and financial
services firms migrated older systems onto GBST
Composer. Enhancements to GBST’s platform in
Australia included updates to improve MySuper and
Superstream processing.
GBST Quant’s Tax Analyser increased market share,
securing new superannuation clients. Its’ Australian
and global equities after-tax service signed a
cornerstone client.
GBST Capital Markets
FY2015
$000’s
FY2014
$000’s
%
Change
Revenue – Australia
32,294
32,618
Revenue –
International
12,412
11,722
Revenue – Total
44,706
44,340
EBITDA – Australia
8,976
9,188
EBITDA –
International
(3,324)
(2,498)
EBITDA – Total
5,652
6,690
(1)
6
1
(2)
(33)
(16)
** Former GBST Financial Services division (FSD) now included in GBST
Capital Markets division. FSD revenue was $2.9 million and EBITDA $0.0
million in FY2015.
*** Includes write-off of $640k due to BBY administration.
GBST Capital Markets revenue was $44.7 million, up 1%
compared to the prior year. EBITDA was $5.7 million.
Results were impacted by the provision for a bad debt
of $640,000 related to BBY Limited being placed in
administration in Australia. While international expenses
exceeded sales due to ongoing commitment to product
investment, these markets offer significant scope for
growth and GBST has a strong pipeline of new business.
GROWTH CONTINUES IN ASIA – NEW
OPPORTUNITIES IN JAPAN
Global institutional and regional banks and broker-dealers
face significant business, operational and technological
challenges to leverage their infrastructures to benefit third
parties. There is a growing need for them to be able to
deliver low-cost transaction processing, quality service and
reliability. This requires highly automated, low cost, robust
operational platforms that use high quality new generation
technology such as GBST Syn~.
International capital markets sales were $12.4 million,
up 6% from $11.7 million despite delays to the start of
projects for Asia-based clients. Investment and growth
opportunities are shifting across the region and markets
can be grouped into developed markets – Hong Kong,
Australia, Japan, Singapore and Indonesia – where cost
reduction is the primary focus; and developing markets –
India, Malaysia, Vietnam, China – that are higher growth
environments, still building up their capabilities.
Asian deployments of GBST Syn~ for various customers
provide; record keeping and self-clearing services for
multiple Asian markets, including settlement through the
13
GBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORT Hong Kong, Singapore and Indonesia Stock Exchanges;
outsourced middle office services to broker dealers,
including post-trade processing for equities, with fixed
income and exchange traded derivatives to follow;
back- and middle-office and custody services, enabling
accounting and client settlement in several markets,
significantly improving efficiency. GBST’s Singapore
operations will soon provide full integration and settlement
with the Singapore Exchange for three clients.
Product development across asset classes continues
with the first phase of GBST Syn~ exchange traded
derivatives build commencing in 2015, for implementation
with an Asian customer, part of a well-defined roadmap
for a global derivatives product. The same client has also
chosen GBST Syn~ for fixed income processing in Japan.
The Company maintains a strong pipeline of potential new
work and is exploring the potential to use GBST Syn~‘s
Omgeo CTM connectivity to provide services in China’s
mainland, as well as fixed income and cash equities
services in Japan.
GBST BUILDS NORTH AMERICAN ACTIVITY
GBST recently transformed the middle-office services
of a cornerstone US client, enabling a full re-engineering
of the firm’s business processes. This has already
demonstrated a strong return on investment as GBST
Syn~ has greatly improved commission assignment,
increasing straight through processing from 30% to over
98%. This broker-dealer serves approximately 6300
financial advisors, managing about $496 billion in assets
and 2.6 million client accounts from nearly 2600 locations
in the US, Canada and other countries. Following provision
of further services including validation, workflow, and
collectivity for cross border trades, GBST is currently
scoping work for a second phase of activity.
GBST has strengthened its US team to build on this initial
success. New appointments include an experienced US
CEO, head of product and head of account management.
The US is the world’s largest securities processing
market and GBST believes the main drivers of a
transition to GBST Syn~ will be broker dealers’ needs
to meet regulatory compliance, cost control and client
management objectives.
Regulators are demanding greater transparency and
recent mandates such as the US Securities Exchange
Commission’s requirement for broker dealers to provide
consolidated audit trails for market reconstruction and
surveillance purposes provide opportunities for further
GBST Syn~ sales.
The market is also considering T+2 regulation to shorten
the settlement period for trading US equities from three
days after the transaction date (T+3) to two days (T+2).
14
This could be mandated as early as 2017 and represents
a strong catalyst for change as many broker dealers will
need to invest in new technology solutions to meet these
requirements. GBST Syn~ provides a new-generation
platform which enables institutional trades to be matched
before settling and accelerated processes for clearing and
settlement, and has already proven its ability to meet T+2
regulation in Europe and Australia.
While GBST’s costs are expected to increase ahead of
sales, the opportunities for growth are very significant.
Discretionary spending in European markets remained
constrained. GBST has partnered with SAP HANA to
roll out its GBST Syn~ Financial Transaction Tax (FTT)
product, which enables capital markets participants to
manage tax payment and compliance. While the FTT has
been implemented by France and Italy, activation dates
across further European Union member countries have
been delayed.
Australian capital markets revenue was steady at
$32.3 million as GBST Shares and GBST Syn~ projects
continued for existing clients.
GBST’s technologies support more than 60 Australian
market participants, and approximately 80% of Australian
sales come from recurring licence fees. The initial project
to transition a global institutional bank’s back- and middle-
offices from GBST Shares to GBST Syn~ is continuing.
Margins were consistent with the previous year and
EBITDA was $9.0 million. This was a sound performance in
a highly competitive market.
The former financial services division has been integrated
into the GBST capital markets division, and will no
longer be reported on separately. Financial services
division revenue was $2.9 million in FY2015 compared to
$3.1 million in the prior year.
Financial position
Net assets have increased by $13.2 million to $66.5 million
(June 2014: $53.3 million). Senior debt at 30 June 2015
was fully repaid, compared to $5.0 million at 30 June 2014.
GBST’s net debt reduced from $3.6 million to a net cash
position of $7.5 million over the same period.
Significant changes in state of affairs
As at the reporting date, GBST has on issue 66,561,725
ordinary shares. During the period 547,415 (2014: 528,302)
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.
DIRECTORS’ REPORT for the year ended 30 June 2015 continued 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.
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 is
a member of the Council of the Queensland University
of Technology, as well as 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
4,559,356 Ordinary Shares of GBST Holdings Limited were
held by Dr Puttick and associated entities at 30 June 2015.
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.
Interest in Shares and Options
5,146,109 Ordinary Shares and 465,663 performance
rights of GBST Holdings Limited were held by Mr Lake at
30 June 2015.
Allan Brackin Independent Director
Mr Allan Brackin was appointed to the Board in April 2005.
He has detailed knowledge of the IT sector having served
as Director and Chief Executive Officer of Volante Group
Limited, one of Australia’s largest IT services companies
from November 2000 to October 2004. Prior to this, Allan
co-founded a number of IT companies including Applied
Micro Systems (Australia) Pty Ltd, Prion Pty Ltd and
Netbridge Pty Ltd. Allan is Chairman of ASX listed mining
technology company RungePincockMinarco Limited
(since November 2011), Chairman of IT software company
Emagine Pty Ltd and Chairman of telecommunications
carrier Opticomm Pty Ltd. Allan is also a member of the
advisory board for several IT companies.
Allan holds a Bachelor of Applied Science from the
Queensland University of Technology and has completed
the OPM (Owner/President Management) program at
Harvard Business School.
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
191,943 Ordinary Shares of GBST Holdings Limited were
held by Mr Brackin’s associated entities at 30 June 2015.
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.
15
GBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORT Interest in Shares and Options
5,781,610 Ordinary Shares of GBST Holdings Limited were
held by Mr Sundell’s associated entities at 30 June 2015.
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 currently serves as president of
Boeing China, having previously served as president
of Boeing Australia and South Pacific and, prior to that,
president of Boeing India.
Prior to joining Boeing in 2001, Ian served in a variety of
staff and policy roles in the U.S. Department of Defense
and is an authority on U.S. and global security issues. He
is co-chair of the US-China Aviation Cooperation Program.
During his time in Australia, he served as President of the
American Chamber of Commerce and Chairman of the
Prime Minister’s Manufacturing Leaders Group. In 2013
he received the Royal Aeronautical Society’s Sir Charles
Kingsford Smith Medal for outstanding contributions
to aviation.
Ian holds an MPhil in international relations and 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.
Interests in Shares and Options
Nil
Christine Bartlett Independent Director
Ms Christine Bartlett was appointed to the Board in
June 2015, and brings extensive commercial experience
to GBST, across a range of sectors including finance,
banking, superannuation, property and information
technology. Christine is currently a non-executive director
of the Mirvac Group and The Smith Family. Christine is a
member of the Minter Ellison Advisory Council, the UNSW
Australian School of Business Advisory Council and the
Australian Institute of Company Directors. Previously she
has been a director of PropertyLook, National Nominees
Ltd and Deputy Chairman of the Australian Custodial
Services Association.
Christine is an experienced CEO and senior executive with
extensive line management experience gained through
roles with IBM, Jones Lang LaSalle and National Australia
Bank. Her executive career has included Australian,
regional and global responsibilities based in Australia,
the USA and Japan. Christine brings a commercial
perspective especially in the areas of financial discipline,
identifying risk, complex project management, execution of
strategy, fostering innovation and taking advantage of new
emerging technologies.
Christine holds a Bachelor of Science from the University
of Sydney and has completed senior executive
management programs at INSEAD.
Interest in Shares and Options
1,750 Ordinary Shares of GBST Holdings Limited were
held by Ms Bartlett at 30 June 2015.
Company Secretary
Mr Andrew Ritter joined GBST in 2011 as Chief Financial
Officer and was appointed to the position of Company
Secretary on 18 August 2014. Mr Ritter is a Chartered
Accountant, holds a Bachelor of Commerce degree, a
Graduate Diploma of Applied Corporate Governance and
is a Fellow of the Governance Institute of Australia and the
Institute of Chartered Secretaries and Administrators.
Mr Sean Norman was appointed to the position of
Company Secretary on 14th February 2014. Mr Norman
holds Bachelor degrees in Law and Arts from University of
Adelaide and a Graduate Diploma in Legal Practice from
University of South Australia.
16
DIRECTORS’ REPORT for the year ended 30 June 2015 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
C Bartlett
DIRECTORS’ MEETINGS
AUDIT AND RISK
COMMITTEE
NOMINATION AND
REMUNERATION COMMITTEE
Eligible to
Attend
Attended
Eligible to
Attend
Attended
Eligible to
Attend
Attended
9
9
9
9
9
9
–
8
8
9
8
9
7
–
3
3
3
–
–
–
–
3
3
3
3*
–
–
–
2
2
2
2
–
–
–
2
2
2
2*
–
–
–
* At the request of the Audit and Risk Committee Mr S Lake (CEO) attends the Audit and Risk Committee meetings even though he is not a member of the
committee. During the year, Mr S Lake resigned from the Nomination and Remuneration Committee in recognition of the ASX listing rule requirement for ASX300
companies, however Mr Lake will still attend the meetings as an invitee.
Remuneration report – audited
The information provided in the remuneration report relates to the Group for the year ended 30 June 2015 and has been
audited as required by section 308(3C) of the Corporations Act (2001).
The remuneration report is set out under the following main headings:
a. Remuneration Policies and Practices
b. Group Performance and Remuneration
c. Service Agreements
d. Details of Remuneration
(a) Remuneration Policies and Practices
Remuneration Principles
Key Management Personnel comprise the Directors and Senior Executives who have authority and responsibility for
planning, directing and controlling the activities of the Group.
The principles for determining the nature and amount of remuneration of Key Management Personnel 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.
• Key Management Personnel 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.
17
GBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORT 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.
responsibilities, changes in responsibility, experience and
the geographic location for the performance of the work
are taken into account during the review process.
Remuneration Structure – Non-Executive Directors
Short Term Incentive Remuneration (STI)
Remuneration of non-executive Directors is determined by
the Board with reference to market rates for comparable
companies and reflective of the responsibilities and
commitment required of the Director. The remuneration of
Directors is voted on annually as part of the acceptance
of the Remuneration Report at the Company’s Annual
General Meeting. The current shareholder approved limit
is $750,000.
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 2015 are $135,000 for
the Chairman, $90,000 for Chairmen of Committees of
the Board and $80,000 for Non-Executive Directors.
Non-executive Directors may make investments in the
Company in accordance with the Company’s share trading
guidelines but they do not participate in the existing GBST
Performance Rights and Option Plan. GBST does not
operate a scheme for retirement benefits to Directors.
Remuneration Structure – Senior Executives
The Group’s remuneration structure for Senior Executives
has three components.
• Fixed remuneration of salary and superannuation.
• Bonus payments based upon Group performance
and the meeting of corporate objectives – Short Term
Incentive (STI).
• 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
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
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 2015
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.
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. All bonuses
awarded during the financial year fully vested and none
were forfeited.
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.
18
DIRECTORS’ REPORT for the year ended 30 June 2015 continued 2. Service Condition
Continuous employment with GBST Holdings Limited from
grant date to vesting date.
FY14 issue
No performance rights were issued to Key Management
Personnel. For issues to non-Executive Personnel refer to
Note 29.
FY15 issue
On 5 August 2014 and 2 March 2015, the Group issued
190,923 and 43,682 performance rights 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 2017 financial year, whichever
is later. 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.
On 16 October 2014 following shareholder approval at the
Company’s AGM, the Group issued 100,486 performance
rights to Mr Stephen Lake, Managing Director. The terms
and conditions relating to the issue to Mr Lake are the
same as the issue dated 5 August 2014 and 2 March 2015.
The performance criteria associated with the FY15 grants
of share performance rights to Executive employees
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 (2015 – 2017 financial
years) cumulative EPS targets of 45 cents, 50 cents, and
60 cents for 25%, 50% and 100% vesting respectively
(interpolated). There is also a vesting requirement that a
minimum EPS of 10 cents is achieved in each year; and,
2. Service Condition
Continuous employment with GBST Holdings Limited from
grant date for three years.
For issues to non-Executive Personnel refer to Note 29.
Long Term Incentive Remuneration (LTI)
Performance rights are issued under the GBST
Performance Rights and Options Plan 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 and selected employees 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 performance rights.
The Company uses Earnings per Share (EPS) as a
performance hurdle for the LTI plan, measured by growth
in earnings per share. EPS was selected to align employee
and shareholder interests.
FY13 issue
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, whichever is later. 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.
The performance criteria associated with the FY13 grant
of share performance rights to Executive employees
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 (interpolated).
There is also a vesting requirement that a minimum EPS of
5 cents is achieved in each year; and,
19
GBST HOLDINGS LIMITED ABN 85 010 488 874 2015 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
Basic EPS (cents)
Year on Year Growth
Closing share price
Dividends paid (cents per share)
2011
2012
2013
2014
2015
$13.7m
$14.2m
$16.5m
$20.5m
(16)%
$3.3m
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%
$7.8m
76%
$6.0m
86%
9.06
86%
$1.70
5.5
24%
$12.0m
53%
$10.0m
66%
15.07
66%
$3.15
7.5
$24.5m
20%
$17.3m
44%
$15.3m
52%
22.94
52%
$5.73
9.5
(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 is for a minimum term of
three years and a maximum term ending in February 2016. 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 Crichton and Associates to provide professional services in
respect of Long-term incentive plans and supply associated documentation and valuation reports.
In addition, Crichton and Associates provided the following other services to the Company throughout the year:
• CEO remuneration benchmark data
• Commentary on the structure of short-term and long-term components for Executive remuneration
Crichton and Associates was paid $14,962 for the remuneration recommendations for the financial year.
The Board is satisfied that the remuneration recommendations were made by Crichton and Associates 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 Crichton and
Associates during the course of its assignment and is satisfied that its remuneration recommendations were made free
from undue influence.
20
DIRECTORS’ REPORT for the year ended 30 June 2015 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
$
135,000
82,192
1,405
90,000
Bonus
$1
Other
$2
Super–
annuation
$
Leave
Entitlement
$
Equity
Options
$
Total
Remu-
neration
$
Equity
Based
%
Perfor-
mance
Related
%
–
–
–
–
–
–
–
–
–
7,808
133
–
–
–
–
–
–
–
–
–
135,000
90,000
1,538
90,000
–
–
–
–
–
–
–
–
640,946
155,000
297,510
2,154
14,750
249,577 1,359,937
18.4
29.7
80,000
80,000
–
–
–
–
–
–
–
–
–
–
80,000
80,000
–
–
–
–
1,109,543
155,000
297,510
10,095
14,750
249,577 1,836,475
2015
Directors
J Puttick
D Adams
C Bartlett4
A Brackin
S Lake
J Sundell
I Thomas
TOTAL
DIRECTORS
Executives
R De Dominicis
438,795
130,000
121,205
–
7,373
122,211
819,584
D Orrock
338,288
54,795
115,440
19,587
6,154
122,211
656,475
B Raskin
A Ritter
P Salis
111,833
–
240,000
9,132
320,000
45,662
I Sanchez
318,333
82,192
–
–
–
–
2,237
–
15,982
130,052
22,791
4,615
43,059
319,597
34,738
6,154
101,432
507,986
38,050
6,154
105,094
549,823
14.9
18.6
12.3
13.5
20.0
19.1
30.8
27.0
12.3
16.3
29.0
34.1
TOTAL
EXECUTIVES
GROUP
TOTAL
1,767,249
321,781
236,645
117,403
30,450
509,989 2,983,517
2,876,792
476,781
534,155
127,498
45,200
759,566 4,819,992
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.
3. The cost of performance rights is reported in accordance with accounting standard AASB 2 Share-based Payments, which has the effect of reporting the cost of
the performance rights over the period between the grant date and vesting date.
4. Appointed – June 2015
21
GBST HOLDINGS LIMITED ABN 85 010 488 874 2015 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
%
Perfor-
mance
Related
%
2014
Directors
J Puttick
D Adams
A Brackin
S Lake
J Sundell
I Thomas
TOTAL
DIRECTORS
Executives
135,000
82,380
90,000
–
–
–
–
–
–
–
7,620
–
–
–
–
–
–
–
135,000
90,000
90,000
–
–
–
–
–
–
641,275
120,000
292,087
1,825
14,750
99,219
1,169,156
8.5
18.8
80,000
80,000
–
–
–
–
–
–
–
–
–
–
80,000
80,000
–
–
–
–
1,108,655
120,000
292,087
9,445
14,750
99,219 1,644,156
R De Dominicis
438,795
70,000
121,205
D Orrock
349,604
70,000
236,575
–
–
7,373
49,609
686,982
5,385
49,609
711,173
A Ritter
P Salis
240,000
–
320,000
54,795
I Sanchez
300,000
63,927
–
–
–
22,200
4,615
31,750
298,565
34,805
6,154
39,687
455,441
33,823
5,769
39,687
443,206
7.2
7.0
10.6
8.7
9.0
17.4
16.8
10.6
20.7
24.7
TOTAL
EXECUTIVES
GROUP
TOTAL
1,648,399
258,722
357,780
90,828
29,296
210,342 2,595,367
2,757,054
378,722
649,867
100,273
44,046
309,561 4,239,523
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.
3. The cost of performance rights is reported in accordance with accounting standard AASB 2 Share-based Payments, which has the effect of reporting the cost of
the performance rights over the period between the grant date and vesting date.
22
DIRECTORS’ REPORT for the year ended 30 June 2015 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
C Bartlett
A Brackin
S Lake
J Sundell
I Thomas
Director (Non-executive Chairman)
Director (Independent)
Director (Independent) (appointed 24 June 2015)
Director (Independent)
Director (Managing Director and Chief Executive Officer)
Director (Non-executive)
Director (Independent)
R De Dominicis
Chief Executive Wealth Management
D Orrock
B Raskin
A Ritter
P Salis
I Sanchez
Chief Executive, GBST Capital Markets Australia and Asia Pacific
Chief Executive, GBST Capital Markets North America
Chief Financial Officer and Company Secretary
Chief Operating Officer
Chief Technology Officer
Performance Right Holdings for Key Management Personnel
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.
Granted as
Compen-
sation
$
Performance
rights
Exercised or
Sold
$
Performance
rights
Cancelled/
Forfeited/
Lapsed
$
Total
Vested and
Excercis-
able at
30/06/15
$
Total
Vested and
Unexercis-
able at
30/06/15
$
Balance
30/06/15
$
Total Vested
at 30/06/15
$
Balance
01/07/14
2015
Directors
S Lake
365,177
100,486
TOTAL DIRECTORS
365,177
100,486
Executives
R De Dominicis
182,588
50,243
D Orrock
B Raskin
A Ritter
P Salis
I Sanchez
182,588
50,243
–
43,682
116,857
–
146,071
43,544
146,071
46,893
TOTAL EXECUTIVES
774,175
234,605
GROUP TOTAL
1,139,352
335,091
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
465,663
465,663
232,831
232,831
43,682
116,857
189,615
192,964
1,008,780
1,474,443
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
465,663
465,663
232,831
232,831
43,682
116,857
189,615
192,964
1,008,780
1,474,443
23
GBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORT Performance Right Holdings for Key Management Personnel (continued)
Details of Performance rights held by Key Management Personnel affecting current and future remuneration
Vested
Number
#
Granted
Number
#
Grant Date
Average
Value per
Performance
right at Grant
Date
$
Exercise Price
$
First Exercise
Date
Last
Exercise Date
Directors
S Lake
S Lake
TOTAL DIRECTORS
Executives
R De Dominicis
R De Dominicis
D Orrock
D Orrock
B Raskin
A Ritter
P Salis
P Salis
I Sanchez
I Sanchez
TOTAL EXECUTIVES
GROUP TOTAL
–
–
–
–
–
–
–
–
–
–
–
–
–
–
365,177
08.11.12
100,486
16.10.14
0.8151
3.4339
465,663
182,588
08.11.12
50,243
05.08.14
182,588
08.11.12
50,243
05.08.14
43,682
02.03.15
116,857
08.11.12
146,071
08.11.12
43,544
05.08.14
146,071
08.11.12
46,893
05.08.14
1,008,780
1,474,443
0.8151
3.2800
0.8151
3.2800
3.4339
0.8151
0.8151
3.2800
0.8151
3.2800
Details of these performance rights are set out in Note 29 in the financial statements.
–
–
–
–
–
–
–
–
–
–
–
–
08.11.15
08.12.15
16.10.17
16.11.17
08.11.15
08.12.15
31.08.17
30.09.17
08.11.15
08.12.15
31.08.17
30.09.17
28.02.18
31.03.18
08.11.15
08.12.15
08.11.15
08.12.15
31.08.17
30.09.17
08.11.15
08.12.15
31.08.17
30.09.17
24
DIRECTORS’ REPORT for the year ended 30 June 2015 continued 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.
2015
Directors
J Puttick
C Bartlett
A Brackin
S Lake
J Sundell
TOTAL DIRECTORS
Executives
R De Dominicis
P Salis
TOTAL EXECUTIVES
GROUP TOTAL
Balance at
01/07/14
Received as
Compensation
Performance
Rights &
Options
Exercised
Net Change
Other(1)
Balance at
30/06/15
5,278,356
–
381,943
5,146,109
5,781,610
16,588,018
2,724,659
16,135
2,740,794
19,328,812
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(719,000)
4,559,356
1,750
1,750
(190,000)
191,943
–
–
5,146,109
5,781,610
(907,250)
15,680,768
(2,298,192)
426,467
–
16,135
(2,298,192)
442,602
(3,205,442)
16,123,370
(1) Shares purchased or sold, consideration for shareholdings purchased by Group, or excluded from disclosure due to resignation.
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.
In addition, the Company has entered into Deeds of Indemnity which ensure 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.
Certain legal expenses have been paid on behalf of a Director under the deed of indemnity with that Director. The Group
is not aware of any other 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 2015 are as follows:
Grant Date
08.11.12
16.09.13
05.08.14
16.10.14
02.03.15
Exercise Date Exercise Price
Number
08.11.15
16.09.16
05.08.17
16.10.17
28.02.18
$0.00
1,314,636
$0.00
$0.00
$0.00
$0.00
451,208
311,509
100,486
101,924
No further employee performance rights have been issued up to the date of this report.
25
GBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORT Proceedings on behalf of Company
Rounding
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.
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 12th day of August 2015
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) for the following reasons:
• All non-audit services were subject to the corporate
governance procedures adopted by the Group and
have been reviewed by the Audit and Risk Committee
to ensure they do not impact the integrity and objectivity
of the auditor; and
• The non-audit services provided do not undermine the
general principles relating to auditor independence as
set out in APES 110 Code of Ethics for Professional
Accountants, as they did not involve reviewing
or auditing the auditor’s own work, acting in a
management or decision making capacity for the
Group, acting as an advocate for the Group or jointly
sharing risks and rewards.
Details of the amounts paid to the auditor of the Group,
KPMG, and its network firms for audit and non-audit
services provided during the year are set out below:
Taxation services
Accounting & Corporate advice
$77,410
$17,000
$94,410
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 2015.
26
DIRECTORS’ REPORT for the year ended 30 June 2015 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 2015 there have been:
ABCD
•
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.
Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001
To: the directors of GBST Holdings Limited
KPMG
I declare that, to the best of my knowledge and belief, in relation to the audit for the financial
year ended 30 June 2015 there have been:
•
•
no contraventions of the auditor independence requirements as set out in the Corporations
Act 2001 in relation to the audit; and
Stephen Board
Partner
no contraventions of any applicable code of professional conduct in relation to the audit.
Brisbane
12 August 2015
KPMG
Stephen Board
Partner
Brisbane
12 August 2015
30
30
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.
27
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
Liability limited by a scheme approved under
International Cooperative (“KPMG International”), a Swiss entity.
Professional Standards Legislation.
GBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORTAUDITOR’S INDEPENDENCE DECLARATION for the year ended 30 June 2015
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
30 Jun 2015
$’000
30 Jun 2014
$’000
Note
64,871
46,292
2,589
58,559
37,646
1,892
113,752
98,097
498
394
114,250
98,491
(84,760)
(74,322)
(5,345)
(6,825)
17,320
(14)
17
3
(5,275)
(5,770)
13,124
(1,134)
19
(1,115)
4 (d)
4 (e)
17,323
12,009
5
(2,053)
(1,978)
PROFIT ATTRIBUTABLE TO MEMBERS OF THE PARENT ENTITY
15,270
10,031
OTHER COMPREHENSIVE INCOME
Items that may be reclassified subsequently to profit or loss
Exchange differences arising on translation of 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.
2,746
2,746
2,746
1,945
1,945
1,945
18,016
11,976
30
30
22.94
22.50
15.07
15.07
28
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME for the year ended 30 June 2015 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 2015
$’000
30 Jun 2014
$’000
Note
7
8
9
12
10
11
15
12
13
14
16
17
13
14
15
16
18
19
7,785
2,339
15,627
16,558
3,080
2,818
2,262
650
11
1,582
31,572
21,140
8,225
7,091
54,320
56,548
6,304
6,669
79
68
68,928
70,376
100,500
91,516
9,319
217
1,043
5,756
10,413
7,413
657
1,231
5,000
11,115
26,748
25,416
2,698
62
2,086
2,451
7,297
2,878
5,251
2,519
2,171
12,819
34,045
38,235
66,455
53,281
37,664
37,664
1,871
26,920
(2,356)
17,973
66,455
53,281
29
GBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORTCONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 30 June 2015
Issued
Capital
$’000
Retained
Earnings
$’000
Foreign
Currency
Translation
Reserve(a)
$’000
Equity
Remuneration
Reserve(b)
$’000
Total
$’000
Balance at 1 July 2013
37,664
12,934
(5,229)
230
45,599
Total comprehensive income for the year
Profit for the year
–
10,031
–
–
10,031
Other comprehensive income
Exchange differences arising on translation of
foreign operations
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 – performance rights
Total contributions by and distribution
to owners
Total transactions with owners
–
–
–
–
–
–
–
–
–
1,945
1,945
10,031
1,945
–
–
–
1,945
1,945
11,976
(4,992)
–
(4,992)
(4,992)
–
–
–
–
–
698
698
698
928
(4,992)
698
(4,294)
(4,294)
53,281
BALANCE AT 30 JUNE 2014
37,664
17,973
(3,284)
(a) The foreign currency translation reserve comprises all foreign currency differences arising from the transalation 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.
(b) 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
retained earnings.
The accompanying notes are an integral part of these consolidated financial statements.
30
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 30 June 2015 Issued
Capital
$’000
Retained
Earnings
$’000
Foreign
Currency
Translation
Reserve(a)
$’000
Equity
Remuneration
Reserve(b)
$’000
Total
$’000
Balance at 1 July 2014
37,664
17,973
(3,284)
928
53,281
Total comprehensive income for the year
Profit for the year
Other comprehensive income
Exchange differences arising on translation of
foreign operations
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
Total contributions by and distributions
to owners
Total transactions with owners
–
15,270
–
–
15,270
–
–
–
–
–
–
–
–
–
2,746
2,746
15,270
2,746
–
–
–
2,746
2,746
18,016
(6,323)
–
(6,323)
(6,323)
–
–
–
–
–
(6,323)
1,481
1,481
1,481
1,481
(4,842)
(4,842)
BALANCE AT 30 JUNE 2015
37,664
26,920
(538)
2,409
66,455
(a) The foreign currency translation reserve comprises all foreign currency differences arising from the transalation 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.
(b) 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
retained earnings.
The accompanying notes are an integral part of these consolidated financial statements.
31
GBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORTCONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 30 June 2015 Cash Flows from Operating Activities
Receipts from customers
Payments to suppliers and employees
Interest income
Sundry income
Finance costs paid
Income tax paid
Net cash provided by operating activities
Cash Flows from Investing Activities
Proceeds from sale of plant and equipment
Purchase of plant and equipment
Purchase of software intangibles
Deferred consideration received
Net cash used in investing activities
Cash Flows from Financing Activities
Repayment of finance leases
Repayment of borrowings
Dividends paid
Net cash used in financing activities
Net decrease 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 30 June
The accompanying notes are all an integral part of these consolidated financial statements.
30Jun 2015
$’000
30 Jun 2014
$’000
Note
122,510
105,939
(97,553)
(85,492)
17
497
(164)
19
394
(875)
(4,864)
(4,364)
24 (a)
20,443
15,621
1
(2,947)
(652)
–
(3,598)
(650)
(5,037)
6
(6,323)
2
(1,890)
(1,535)
1,512
(1,911)
(1,010)
(9,004)
(4,992)
(12,010)
(15,006)
4,835
(1,296)
611
2,339
7,785
130
3,505
2,339
24 (b)
32
CONSOLIDATED STATEMENT OF CASH FLOWS for the year ended 30 June 2015 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 2015
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
12 August 2015.
Basis of measurement
The consolidated financial report has been prepared on an
accruals basis and is based on historical costs.
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 3 and 11);
• utilisation of tax losses (Note 15).
Measurement of fair values
A number of the Group’s accounting policies and
disclosures require the measurement of fair values, for
both financial and non-financial assets and liabilities. The
Group has an established framework with respect to the
measurement of fair values, whereby significant fair value
measurements determined by Management, including
Level 3 fair values (refer below), are reported to the Group’s
Audit & Risk Committee. If third party information is used to
measure fair values, then evidence obtained from the third
parties to support the conclusion is assessed such that
valuations meet the requirements of IFRS, including the
level in the fair value hierarchy in which valuations should
be classified.
When measuring fair value of an asset or a liability, the
Group uses observable market data as far as possible.
Fair values are categorised into different levels in fair
value hierarchy based on the inputs used in the valuation
techniques as follows:
• Level 1 – quoted prices (unadjusted) in active markets
for identical assets or liabilities;
• Level 2 – inputs other than quoted prices included in
Level 1 that are observable for the asset or liability,
either directly or indirectly;
• Level 3 – inputs for the asset or liability that
are not based on observable market data
(unobservable inputs).
33
to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2015NOTESGBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORT Note 2: Basis of Preparation (continued)
If the inputs used to measure the fair value of an asset or
liability fall into different levels of the fair value hierarchy,
then the fair value measurement is categorised in its
entirety in the same level of the fair value hierarchy as the
lowest input that is significant to the entire measurement.
Changes in accounting policies
For the year ended 30 June 2015, there has been no
significant change in accounting policies since the previous
year for the Group. The impacts of amendments to AASB
132, effected through AASB 2012-3 Amendments to
Australian Accounting Standards Offsetting Financial
Assets and Financial Liabilities, has been considered and
no change to the classification or disclosures for the Group
are necessary.
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.
Basis of Consolidation
A controlled entity is any entity where the Group is
exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect
those returns through its power over the entity.
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.
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.
3434
Deferred income tax expense reflects movements in
deferred tax asset and deferred tax liability balances during
the year as well as unused tax losses.
Current and deferred income tax expense/(benefit) is
charged or credited directly to equity instead of the profit
or loss when the tax relates to items that are credited or
charged directly to equity.
Deferred tax assets and liabilities are ascertained based
on temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in
the financial statements. Deferred tax assets also arise
from unused tax losses. No deferred income tax will
be recognised from the initial recognition of an asset or
liability, excluding a business combination, where there is
no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the
tax rates that are expected to apply to the period when
the asset is realised or the liability is settled, based on tax
rates enacted or substantively enacted as at reporting
date. Their measurement also reflects the manner in which
Management expects to recover or settle the carrying
amount of the related asset or liability.
Deferred tax assets relating to temporary differences and
unused tax losses are recognised only to the extent that
it is probable that future taxable profit will be available
against which the benefits of the deferred tax asset can
be utilised.
Where temporary differences exist in relation to
investments in subsidiaries, deferred tax assets and
liabilities are not recognised where the timing of the
reversal of the temporary difference can be controlled
and it is not probable that the reversal will occur in the
foreseeable future.
Deferred tax assets and liabilities are offset if 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-consolidated Group was
1 July 2003.
to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2015 continuedNOTES Inventories & Work in Progress
Inventories are measured at the lower of cost and net
realisable value. The cost of inventories is based on first-
in first-out principle and includes expenditure incurred
in acquiring the inventories and other costs incurred in
bringing them to their existing location and condition.
Work in progress is stated at the aggregate of project
development contract costs incurred to date plus
recognised profits less any recognised losses and
progress billings.
Contract costs include all costs directly related to specific
contracts, costs that are specifically chargeable to the
customer under the terms of the contract and an allocation
of overhead expenses incurred in connection with the
Group’s activities in general.
Plant and Equipment
Plant and equipment are carried at cost, less any
accumulated depreciation and where applicable,
impairment losses.
Cost includes expenditure that is directly attributable to the
acquisition of the asset.
Subsequent costs are included in the asset’s carrying
amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits
associated with the item will flow to the Group and the cost
of the item can be measured reliably. All other repairs and
maintenance are charged to the income statement during
the financial period in which they are incurred.
The depreciable amounts of all fixed assets including
capitalised lease assets, are depreciated over their
useful lives to the entity commencing from the time the
asset is held ready for use. Leasehold improvements
are depreciated over the shorter of either the
unexpired period of the lease or the estimated useful lives
of the improvements.
The depreciation rates used for each class of assets are:
Asset Retirement Obligations
The cost of plant and equipment includes an initial
estimate of the cost of make good allowances, and a
corresponding provision for these future costs is raised.
The Group has a number of lease agreements over office
premises which include an obligation to make good the
premises at the conclusion of the lease term. The Group
recognises a liability and an asset for the estimated cost
of making good at the time of entering a lease agreement.
The resulting asset is amortised over the term of the lease.
Leases
Leases where the Group assumes substantially all the
risks and rewards incidental of the ownership are classified
as finance leases. All other leases are operating leases
and are not recognised on the Group’s statement of
financial position.
Finance leases are capitalised by recording an asset and
a liability at the lower of the amounts equal to the fair value
of the leased property or the present value of the minimum
lease payments, including any guaranteed residual values.
Lease payments are allocated between the reduction of
the lease liability and the lease interest expense for the
period. Leased assets are depreciated on a straight-line
basis over the shorter of their estimated useful lives or the
lease term.
Lease payments for operating leases are charged as
expenses in the periods in which they are incurred.
Lease incentives under operating leases are recognised as
a liability and amortised on a straight-line basis over the life
of the lease term.
Intangible Assets
The Group’s major intangible assets are software systems,
customer contracts and goodwill.
The amortisation rates used for each class of assets
acquired outside a business combination are:
Class of
Fixed Asset
Depreciation
Rate
Class of Fixed Asset
Basis
Owned software
Owned plant, equipment
5-40%
Straight-Line
Leased software
Owned plant, equipment
13.3-67% Diminishing Value
Amortisation
Rate
Basis
25%
25%
Straight-Line
Straight-Line
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.
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.
3535
GBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORTGBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORT Note 3: Significant Accounting Policies (continued)
The useful lives of these intangible assets are assessed
and the asset is amortised over its useful life on a
straight-line basis.
Intangible assets are tested for impairment where an
indicator of impairment exists. Useful lives are also
examined on an annual basis and adjustments, where
applicable, are made on a prospective basis.
Internally developed (research and development)
Development costs are capitalised only if development
costs can be measured reliably, the product or process
is technically and commercially feasible, future economic
benefits are probable and the Group intends to and has
sufficient resources to complete development and to
use or sell the asset. The cost capitalised includes the
cost of materials, direct labour and overhead costs that
are directly attributable to preparing the asset for its
intended use. Once development is completed, capitalised
development costs are amortised over their useful life
as determined by Management on a straight-line basis.
Capitalised development expenditure is measured at
cost less accumulated amortisation and accumulated
impairment losses.
Expenditure during the research phase of a project is
recognised as an expense when incurred. Development
costs are expensed in the year in which they are incurred
when future economic benefits are uncertain or the future
economic benefits cannot be measured reliably.
Subsequent expenditure
Subsequent expenditure is capitalised only when it
increases the future economic benefits embodied in the
specific asset to which it relates. All other expenditure,
including expenditure on internally generated goodwill and
brands, is recognised in profit or loss as incurred.
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.
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
3636
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.
(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.
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.
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.
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.
to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2015 continuedNOTES Impairment of Assets
Financial assets
Financial assets at amortised cost
A financial asset at amortised cost is assessed at each
reporting date to determine whether there is objective
evidence that it is impaired. A financial asset at amortised
cost is impaired if objective evidence indicates that a
loss event has occurred after the initial recognition of the
asset and that the loss event had a negative effect on
the estimated future cash flows of that asset that can be
estimated reliably. Objective evidence that these financial
assets are impaired can include default or delinquency
by a debtor, restructuring of an amount due to the Group
on terms that the Group would not consider otherwise or
indications that a debtor or issuer will enter bankruptcy.
The Group considers evidence of impairment for
receivables at both a specific asset and collective level. All
individually significant receivables are assessed for specific
impairment. All individually significant receivables found not
to be specifically impaired are then collectively assessed
for any impairment that has been incurred but not yet
identified. Receivables that are not individually significant
are collectively assessed for impairment by grouping
together receivables with similar risk characteristics. In
assessing collective impairment the Group uses historical
trends of the probability of default, timing of recoveries and
the amount of loss incurred, adjusted for management’s
judgment as to whether current economic and credit
conditions are such that the actual losses are likely to be
greater or less than suggested by historical trends.
An impairment loss in respect of a financial asset
measured at amortised cost is calculated as the difference
between its carrying amount and the present value of
the estimated future cash flows discounted at the asset’s
original effective interest rate. Losses are recognised in
profit or loss and reflected in an allowance account against
receivables. Interest on the impaired asset continues to be
recognised through the unwinding of the discount. When
a subsequent event causes the amount of impairment loss
to decrease, the decrease in impairment loss is reversed
through profit or loss.
The early adoption of AASB 9 did not impact the Group’s
accounting policy for impairment in relation to financial
assets measured at amortised cost.
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.
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
3737
GBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORTGBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORT Note 3: Significant Accounting Policies (continued)
be made for those entitlements. Those cash flows are
discounted using market yields on corporate 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 an equity-settled employee
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 the share performance
rights is determined using the Binomial Approximation
Option Valuation Model. The number of performance
rights 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 is 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.
3838
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.
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 or Loss and Other
Comprehensive Income.
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) or Value added Tax (VAT).
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.
to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2015 continuedNOTES 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 of performance rights granted to employees.
Segment Reporting
An operating segment is a component of the Group
that engages in business activities from which it may
earn revenues and incur expenses, including revenues
and expenses that relate to transactions with any of the
Group’s other components. All operating segments’
operating results are regularly reviewed by the Group’s
CEO to make decisions about resources to be allocated
to the segment and assess its performance, and for which
discrete financial information is available.
Inter-segment pricing is determined on an arm’s
length basis.
Segment results, assets and liabilities that are reported to
the CEO include items directly attributable to a segment as
well as those that can be allocated on a reasonable basis.
Foreign Currency Transactions and Balances
Transactions and balances
Foreign currency transactions are translated into a Group
entities’ functional currency using the exchange rates
prevailing at the date of the transaction. Foreign currency
monetary items are translated at the year-end exchange
rate. Non-monetary items measured at historical cost
continue to be carried at the exchange rate at the date
of the transaction. Non-monetary items measured at fair
value are reported at the exchange rate at the date when
fair values were determined.
Exchange differences arising on the translation of
monetary items are recognised in profit or loss, except
where deferred in equity as a qualifying cash flow or net
investment hedge.
Exchange differences arising on the translation of non-
monetary items are recognised directly in equity to the
extent that the gain or loss is directly recognised in equity,
otherwise the exchange difference is recognised in profit
or loss.
Group companies
The financial results and position of foreign operations
whose functional currency is different from the Group’s
presentation currency are translated as follows:
a) Assets and liabilities are translated at year-end
exchange rates prevailing at that reporting date;
b) Income and expenses are translated at average
exchange rates for the period; and
c) Retained earnings are translated at the exchange rates
prevailing at the date of the transaction.
Exchange differences arising on translation of foreign
operations are recognised in other comprehensive income
and presented in the Group’s foreign currency translation
reserve in equity. These differences are recognised in profit
or loss in the period in which the operation is disposed.
When the settlement of a monetary item receivable from
or payable to a foreign operation is neither planned nor
likely in the foreseeable future, foreign exchange gains and
losses arising from such a monetary item are considered
to form part of a net investment in a foreign operation and
are recognised in other comprehensive income, and are
presented in the translation reserve in equity.
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.
3939
GBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORTGBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORT Note 3: Significant Accounting Policies (continued)
New Standards and Interpretations not yet adopted
A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after
1 July 2015, and have not been applied in preparing these consolidated financial statements. The effect of these on the
consolidated financial statements of the Group is still to be assessed.
Note 4: Profit for the Year
Profit before income tax expense includes the following items of revenue and expense:
GBST GROUP
30 Jun 2015
$’000
30 Jun 2014
$’000
5,633
2,977
3,829
3,130
11,722
10,790
2,019
595
4,534
7,148
1,734
926
4,690
7,350
54,233
50,579
1,481
698
55,714
51,277
(150)
(2)
39
127
14
17
17
219
351
74
490
1,134
19
19
(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 for superannuation & other retirement benefits
of $3.88 million (2014: $3.69 million))
Share based payments
(d) Finance costs:
Foreign currency (gains)/losses
Interest paid to external entities
Finance lease charges
Facility fees
(e) Finance income:
Bank interest
4040
to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2015 continuedNOTES Note 5: Income Tax Expense
(a) The components of tax expense comprise:
Current tax
Deferred tax (Note 15 (c) (i))
(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:
Research & development expenditure claim
UK R&D tax credit – current & prior years (1)
Under/(Over) provision in respect of prior years
Current year losses for which no deferred tax asset was recognised
Other (deductible) / non-allowable items
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 2015
$’000
30 Jun 2014
$’000
1,510
(121)
664
2,053
3,976
(1,970)
(28)
1,978
17,323
12,009
5,197
3,603
(2,969)
(1,330)
664
228
657
(394)
2,053
12%
(3,628)
–
(28)
1,565
377
89
1,978
16%
(i) The UK permits the surrender of research and development enhanced tax losses in exchange for a refundable tax credit. The above figure includes the credit arising as
a result of surrendering previously unrecognised tax losses as well as a claim in relation to the year ended 30 June 2015.
4141
GBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORTGBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORT Note 6: Dividends
Dividend paid in the period:
2014 final fully franked (at 30%) dividend paid of 4.5 cents per share (2014: 3.5)
2015 Interim fully franked (at 30%) dividend paid of 5.0 cents per share (2014: 4.0)
Net Dividend paid
GBST GROUP
30 Jun 2015
$’000
30 Jun 2014
$’000
2,995
3,328
6,323
2,330
2,662
4,992
After the reporting date the Directors recommended a final dividend of 5.5 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 14 October 2015. 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 2015
$’000
30 Jun 2014
$’000
16,828
14,835
16,147
14,779
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
Cash and cash equivalents in the Statement of Cash flows
GBST GROUP
30 Jun 2015
$’000
30 Jun 2014
$’000
7,785
7,785
2,339
2,339
4242
to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2015 continuedNOTES Note 8: Trade and Other Receivables
Current
Trade receivables
Accrued revenue
Other amounts receivable
GBST GROUP
30 Jun 2015
$’000
30 Jun 2014
$’000
14,552
15,840
467
608
144
574
15,627
16,558
An allowance for impairment is recognised when there is objective evidence that an individual trade or term receivable
is impaired, including factors such as the amount of time a receivable has been outstanding and the solvency of
the counterparty. The movement in allowance for impairment during the year was an impairment loss recognised of
$879 thousand (2014: $96 thousand), amounts written off $14 thousand (2014: $535 thousand).
Note 9: Inventories and Work in Progress
Current – at cost
Work in progress
GBST GROUP
30 Jun 2015
$’000
30 Jun 2014
$’000
3,080
3,080
650
650
4343
GBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORTGBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORT 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 2014
Balance at 1 July 2013
Additions
Disposals
Depreciation expense
Reclassification to owned assets – cost
Effect of movements in exchange rates
Balance at 30 June 2014
Year ended 30 June 2015
Balance at 1 July 2014
Additions
Depreciation expense
Effect of movements in exchange rates
Balance at 30 June 2015
GBST GROUP
30 Jun 2015
$’000
30 Jun 2014
$’000
20,036
16,750
(11,897)
(9,979)
8,139
1,243
(1,157)
86
6,771
1,229
(909)
320
8,225
7,091
Owned
$’000
Leased
$’000
Total
$’000
4,660
3,765
(36)
(1,734)
13
103
6,771
6,771
3,205
(2,019)
182
8,139
563
81
–
5,223
3,846
(36)
(315)
(2,049)
(13)
4
320
320
–
–
107
7,091
7,091
3,205
(234)
(2,253)
–
86
182
8,225
Plant and equipment was impairment tested in conjunction with intangible assets, refer Note 11.
4444
to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2015 continuedNOTES 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 2014
Balance at 1 July 2013
Additions
Adjustment to controlled entity
acquistion consideration
Disposals
Amortisation charge
Effect of movements in exchange rates
Balance at 30 June 2014
Year ended 30 June 2015
Balance at 1 July 2014
Additions
Amortisation charge
Effect of movements in exchange rates
Balance at 30 June 2015
GBST GROUP
30 Jun 2015
$’000
30 Jun 2014
$’000
45,338
42,234
(32,577)
(26,565)
12,761
15,669
13,069
12,820
(13,069)
(12,820)
–
–
47,823
46,036
(6,403)
(5,657)
41,420
40,379
451
(312)
139
1,916
(1,416)
500
54,320
56,548
Software
Systems
$’000
Customer
Contracts
$’000
Goodwill
$’000
Leased
Software
$’000
Total
$’000
17,703
1,535
–
(6)
(4,276)
713
15,669
15,669
700
(4,534)
926
12,761
401
40,573
1,111
59,788
–
–
–
(414)
13
–
–
–
–
–
–
–
(830)
–
–
636
–
–
–
(611)
–
1,535
(830)
(6)
(5,301)
1,362
40,379
500
56,548
40,379
500
56,548
–
–
1,041
41,420
–
700
(361)
(4,895)
–
1,967
139
54,320
4545
GBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORTGBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORT Note 11: Intangible Assets (continued)
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 indefinite life.
The effect of movements in exchange rates represent the period to period foreign currency translation of assets
denominated in Great British Pounds, Hong Kong Dollars, Singapore Dollars and US Dollars.
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) as below:
Capital Markets Australia (Palion)
Wealth Management (InfoComp)
Capital Markets International (Coexis)
Financial Services (Emu)
Total Goodwill
30 Jun 2015
$’000
30 Jun 2014
$’000
3,350
3,350
28,238
28,238
8,946
886
7,905
886
41,420
40,379
During the financial year ended 30 June 2015, the Company reassessed its segment reporting and CGU determinations.
Previously, the InfoComp CGU included both Australian and International Wealth Management businesses. Following
the reassessment of the CGU’s, all goodwill relating to the previous CGU has been allocated to the Australian Wealth
Management operations. This change in CGU determinations has not resulted in any impairment.
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 2016 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.
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 the CGU has been assessed using a fair value less costs to sell
calculation, which is based on the Board approved 2016 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.
The fair value measurement was categorised as a Level 3 fair value, based on the inputs in the valuation technique used
(refer to Note 2).
4646
to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2015 continuedNOTES A summary of key assumptions for Coexis and other CGU’s is presented below:
2014
Calculation Method
Revenue growth rates
Cost growth rates
Long term growth rates
Post-tax discount rate
2015
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%
4%
3%
-5%
3-5%
3%
7.5%
3-5%
3%
13.25% 9.64-13.25%
12.26%
12.26%
Coexis
Fair value less
cost to sell
InfoComp
Value-in-use
Palion
Value-in-use
EMU
Value-in-use
3-6%
3-5%
2%
7.5%
4%
3%
0%
4%
3%
7.5%
4%
3%
13.25%
9.64%
12.26%
12.26%
Future anticipated cash flows for all CGU’s indicate that the carrying value of the intangible assets were not required to be
impaired in 2015.
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
Increase of annual costs above forecast by
Increase of post-tax discount rate by
Note 12: Other Assets
Current
Prepaid expenditure
Non-Current
Prepaid expenditure
10.81% (June 2014: 13.42%)
14.69% (June 2014: 18.67%)
1,139 bps (June 2014: 1,365 bps)
GBST GROUP
30 Jun 2015
$’000
30 Jun 2014
$’000
2,262
2,262
1,582
1,582
79
79
68
68
4747
GBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORTGBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORT Note 13: Trade and other Payables
Current (unsecured)
Trade payables & accruals
Leasehold liability
Non-Current (unsecured)
Trade payables & accruals
Leasehold liability
Note 14: Loans and Borrowings
Current
Commercial loan facility (secured)
Finance lease liability (Note 20)
Non-Current
Senior bank facility (secured)(a)
Commercial loan facility (secured)
Finance lease liability (Note 20)
GBST GROUP
30 Jun 2015
$’000
30 Jun 2014
$’000
9,048
271
9,319
913
1,785
2,698
7,142
271
7,413
897
1,981
2,878
GBST GROUP
30 Jun 2015
$’000
30 Jun 2014
$’000
8
209
217
–
21
41
62
279
7
650
657
4,971
29
251
5,251
5,908
(a) During the year, the senior bank facility with the Commonwealth Bank of Australia was paid out in full, and the requirement for the Group to
comply with covenants was removed.
4848
to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2015 continuedNOTES Note 15: Tax
(a) Deferred tax liabilities
Deferred tax liability comprises:
Tax allowances relating to plant and equipment
Tax allowances relating to intangibles
Other items
(b) Deferred tax assets
Deferred tax assets comprise:
Provisions
Tax allowances relating to plant and equipment
Tax allowances relating to intangibles
Other items
Recognised tax losses
(c) Reconciliations
(i) Net Movement
The overall movement in the net deferred tax account is as follows:
Opening balance
Credited/(charged) to the income statement
Foreign currency translation
Charge to equity
Closing balance
(ii) Transaction costs on equity issue
Opening balance
Charged directly to equity
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 2015
$’000
30 Jun 2014
$’000
65
114
2,008
2,405
13
–
2,086
2,519
4,221
4,572
347
196
–
1,540
6,304
4,150
121
205
(258)
–
–
39
2,058
6,669
2,315
1,970
(115)
(20)
4,218
4,150
–
–
–
20
(20)
–
6,674
1,147
7,517
2,812
In respective of the deferred tax assets which have not been recognised in relation to operating losses for tax purposes,
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 it has allowable tax concessions.
4949
GBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORTGBST HOLDINGS LIMITED ABN 85 010 488 874 2015 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 2015
GBST GROUP
30 Jun 2015
$’000
30 Jun 2014
$’000
5,756
4,954
–
46
5,756
5,000
1,351
1,100
2,451
Employee
benefits
$’000
Make Good
$’000
6,291
4,123
(3,168)
(139)
7,107
880
291
(71)
–
1,337
834
2,171
Total
$’000
7,171
4,414
(3,239)
(139)
1,100
8,207
(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 2015 to 2023.
Note 17: Unearned Income
Current
Revenue received in advance for software usage and support services
GBST GROUP
30 Jun 2015
$’000
30 Jun 2014
$’000
10,413
10,413
11,115
11,115
5050
to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2015 continuedNOTES Note 18: Issued Capital
66,561,725 (2014: 66,561,725) fully paid ordinary shares
GBST GROUP
30 Jun 2015
$’000
30 Jun 2014
$’000
37,664
37,664
37,664
37,664
Ordinary shares participate in dividends and the proceeds of winding up of the parent entity in proportion to the number
of shares held, should that event occur. 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 29.
Note 19: Reserves
Equity remuneration reserve
Foreign currency translation reserve
GBST GROUP
30 Jun 2015
$’000
30 Jun 2014
$’000
2,409
(538)
1,871
928
(3,284)
(2,356)
5151
GBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORTGBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORT 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 2015
$’000
30 Jun 2014
$’000
218
43
261
(11)
250
209
41
250
689
263
952
(51)
901
650
251
901
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
3,799
13,495
6,555
3,312
9,975
8,983
23,849
22,270
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 for a further five years.
(c) Capital and Other Expenditure Commitments
Contracted for:
Capital purchases
Other operating purchases
Payable
Not later than one year
5252
GBST GROUP
30 Jun 2015
$’000
30 Jun 2014
$’000
259
132
391
391
391
136
198
334
334
334
to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2015 continuedNOTES Note 21: Auditors’ Remuneration
Audit Services
KPMG Australia
GBST GROUP
30 Jun 2015
$
30 Jun 2014
$
Audit & review of financial reports
199,100
193,800
Overseas KPMG firms
Audit & review of financial reports
Other Services
KPMG Australia
Taxation services
Other services (Accounting & Corporate advice)
116,146
111,046
315,246
304,846
77,410
17,000
94,410
–
41,200
41,200
5353
GBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORTGBST HOLDINGS LIMITED ABN 85 010 488 874 2015 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
Principal place of Business
Percentage Owned
Australia
Australia
Australia
100% (June 2014: 100%)
100% (June 2014: 100%)
100% (June 2014: 100%)
United Kingdom
100% (June 2014: 100%)
Australia
100% (June 2014: 100%)
United States of America
100% (June 2014: 100%)
GBST Singapore Pte Limited
Singapore
100% (June 2014: 100%)
Subsidiaries of GBST Australia Pty Ltd:
GBST Hong Kong Limited
Hong Kong
100% (June 2014: 100%)
GBST Registry Solutions Pty Ltd*
GBST Wealth Management Pty Ltd*
Australia
Australia
100% (June 2014: 100%)
100% (June 2014: 100%)
Subsidiaries of GBST Wealth Management Pty Ltd:
GBST UK Holdings Limited
United Kingdom
100% (June 2014: 100%)
Subsidiaries of GBST UK Holdings Ltd:
GBST Hosting Limited
United Kingdom
100% (June 2014: 100%)
GBST Wealth Management Limited
United Kingdom
100% (June 2014: 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 Australian 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.
5454
to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2015 continuedNOTES
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 2015 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
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 2015
$’000
30 Jun 2014
$’000
54,055
50,069
27,271
22,940
1,528
1,732
25
9
14,124
13,918
(100)
17
(83)
(937)
19
(918)
14,041
13,000
(3,555)
(2,306)
10,486
10,694
10,486
10,694
–
–
10,486
10,694
26,039
14,600
(7,659)
5,737
10,486
10,694
(6,323)
(4,992)
22,543
26,039
5555
GBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORTGBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORT Note 22: Other Group Entities (continued)
iii. Statement of Financial Position
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories and work in progress
Other assets
Total Current Assets
Non-Current Assets
Property, plant and equipment
Intangible assets
Investment
Deferred tax assets
Other assets
Total Non-Current Assets
TOTAL ASSETS
Current Liabilities
Trade and other payables
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
5656
CLOSED GROUP AND
PARTIES TO DEED OF CROSS
GUARANTEE
30 Jun 2015
$’000
30 Jun 2014
$’000
3,046
927
11,378
11,791
2,566
1,513
606
939
18,503
14,263
6,042
5,367
37,759
40,431
15,639
32,838
4,688
4,372
78
68
64,206
83,076
82,709
97,339
3,550
213
888
5,602
6,754
4,856
646
1,228
4,955
9,288
17,007
20,973
2,655
62
2,008
2,103
6,828
2,878
5,247
2,404
1,944
12,473
23,835
33,446
58,874
63,892
37,664
37,664
(1,333)
189
22,543
26,039
58,874
63,892
to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2015 continuedNOTES Note 23: Financing Arrangements
Financing facilities(a)
Amount utilised
Unused credit facility
GBST GROUP
30 Jun 2015
$’000
30 Jun 2014
$’000
13,608
20,943
(2,439)
11,169
(8,392)
12,551
(a) The balance as at 30 June 2015 primarily comprises of facilities for working capital, bank guarantees, equipment finance and corporate cards with
Commonwealth Bank of Australia (CBA) and HSBC. The senior debt facility with the CBA was repaid in full during the financial year.
Note 24: Cash Flow Information
(a) Reconciliation of Net Cash provided by Operating Activities to Profit after Income Tax
GBST GROUP
30 Jun 2015
$’000
30 Jun 2014
$’000
Profit after income tax
Non-cash flows in operating profit:
Depreciation and amortisation
Deferred borrowing costs
Loss on sale of plant & equipment
Share based payments
Changes in assets and liabilities:
Change in receivables
Change in other assets
Change in unearned income
Change in inventories and work in progress
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)
15,270
10,031
7,148
7,350
–
–
1,481
931
(691)
(702)
(2,430)
39
29
698
(2,504)
(357)
932
457
(68)
(1,835)
(2,995)
2,463
1,036
(302)
188
895
20,443
15,621
7,785
7,785
2,339
2,339
(c) Non-cash Financing Activities
During the 2015 financial year there was no plant and equipment or intangible asset acquired under a finance lease
(2014: $81 thousand).
5757
GBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORTGBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORT Note 25: Operating Segment
The Group has two primary strategic business units which are further segmented into Australia and International
geographic segments, as described below. 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. The segment now also incorporates 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.
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 Australia through the GBST Composer platform, provides end to end funds administration and
management software to the wealth management industry in Australia. It offers an integrated system for the administration
of wrap platforms for superannuations funds, 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.
Wealth Management Australia through the GBST Composer platform, provides end to end funds administration and
management software to the wealth management industry in 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), as well as master trusts, unit trusts, risk and debt; and other investment assets.
5858
to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2015 continuedNOTES Reportable segments
CAPITAL
MARKETS
AUSTRALIA
CAPITAL
MARKETS
INTERNATIONAL
WEALTH
MANAGEMENT
AUSTRALIA
WEALTH
MANAGEMENT
INTERNATIONAL ELIMINATIONS
GBST GROUP
30 Jun
2015
$’000
30 Jun
2014
$’000
30 Jun
2015
$’000
30 Jun
2014
$’000
30 Jun
2015
$’000
30 Jun
2014
$’000
30 Jun
2015
$’000
30 Jun
2014
$’000
30 Jun
2015
$’000
30 Jun
2014
$’000
30 Jun
2015
$’000
30 Jun
2014
$’000
Revenue
Revenue from
external customers 32,294 32,618 12,412 11,722 18,952 18,150 50,094 35,607
22
1
202
236
87
446
–
12
4
–
–
270
158
–
–
–
(87)
(458)
–
–
–
–
– 113,752 98,097
–
498
395
Other income from
external customers
Inter-segment
revenues*
Total segment
revenue
31,903 32,565 12,614 11,470 18,956 18,150 50,364 35,765
(87)
(458) 114,250 98,492
EBITDA
8,976
9,188 (3,324)
(2,498)
7,362
6,956 11,454
6,564
Depreciation and
amortisation
(1,847)
(2,222) (2,347)
(2,486) (2,540)
(2,476)
(414)
(166)
Segment result
7,129
6,966
(5,671)
(4,984)
4,822
4,480 11,040
6,398
–
–
–
– 24,468 20,210
–
(7,148)
(7,350)
– 17,320 12,860
Unallocated revenue/(expenses)**
Net finance income/(costs)
Profit before income tax
Income tax expense
Profit after income tax
–
264
3
(1,115)
17,323 12,009
(2,053)
(1,978)
15,270 10,031
*
Inter-segment revenue received by Capital Markets International (CMI) from Capital Markets Australia (CMA) of $1.6 million (2014: $1.6 million) for use of intangible
assets is not included to align with reporting to CEO. In addition, margin to reflect arm’s length transactions for expense re-charges for software development
work charges and other costs between CMA and CMI of $374 thousand (2014: $158 thousand) and by Wealth Management Australia and Wealth Management
International of $664 thousand (2014: $58 thousand) are also not included. Inter-segment revenue with an associated direct external cost (typically direct labour
costs) is included.
** 2014 amount is net of a recovery of legal expenses previously expensed.
Geographical Location:
Australia
Europe
Asia
North America
SEGMENT REVENUES
FROM EXTERNAL
CUSTOMERS
CARRYING AMOUNT
OF SEGMENT
NON-CURRENT ASSETS
30 Jun 2015
$’000
30 Jun 2014
$’000
30 Jun 2015
$’000
30 Jun 2014
$’000
51,246
50,246
45,681
28,820
52,417
38,224
22,634
34,707
8,834
1,255
6,475
3,152
594
19
177
3
113,752
98,097
68,928
63,707
Information about Geographical Areas
The consolidated Group’s operating segments are managed in Australia. Capital Markets Australia has operations and
customers in Australia (as well as a customer in New Zealand and customers in Asia from sales to Australian entities).
Capital Markets International has operations and customers in Europe, North America and Asia. Wealth Management
5959
GBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORTGBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORT Note 25: Operating Segment (continued)
Australia has operations and customers in Australia.
Wealth Management International has operations and
customers in the United Kingdom.
Major Customer
Revenues from the top five customers of the Group
represents $55.3 million (2014: $44.4 million) of the Group’s
total revenues.
Reconciliation of Capital Expenditure
The $62 thousand (2014: $410 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.
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.
Segment reporting has changed from the previous
reporting period to reflect how the performance of the
divisions are reported to the CEO. The Financial Services
segment has been incorporated into the Capital Markets
Australia segment, and the Wealth Management segment
has been separated into segments for Australia and
International, which is consistent with internal reporting to
the CEO.
Note 26: Financial Risk Management
(a) Financial Risk Management Policies
The Group’s principal financial instruments comprise of
accounts receivable and payable, bank accounts, loans
and overdrafts and finance leases.
The main purpose of these financial instruments is to
provide operating finance to the Group.
It is, and has been throughout the period under review,
the Group’s policy that financial instruments held are not
intended for trading purposes.
The Group has exposure to the following risks from their
use of financial instruments – credit risk, liquidity risk and
market risk. This note presents information about the
exposure to each of the above risks. Further quantitative
disclosures are included throughout these consolidated
financial statements.
The Board of Directors has overall responsibility for
the establishment and oversight of the Group’s risk
management framework. Management is responsible for
developing and monitoring the risk management policies,
and reports to the Board.
The risk management policies are established to identify
and analyse the risks faced, to set appropriate risk limits
and controls, and to monitor risks and adherence to limits.
The Board of Directors meet on a regular basis to
analyse financial risk exposure and to evaluate treasury
management strategies in the context of current economic
conditions and forecasts.
The Executive Management Team’s overall risk
management strategy seeks to assist the consolidated
Group in meeting its financial targets, whilst minimising
potential adverse effects on financial performance.
Risk management policies are approved and reviewed by
the Board on a regular basis.
(b) Market Risk
Market risk is the risk that changes in market prices, such
as foreign exchange rates, share prices and interest rates
will affect income or the value of holdings of financial
instruments. The objective of market risk management
is to manage and control market risk exposures within
acceptable parameters, while optimising the return.
Interest Rate Risk
The exposure to market risk for the changes in interest
rates relates primarily to borrowing obligations. Low
interest rates over the past year have validated the variable
debt rate strategy employed by the Group.
6060
to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2015 continuedNOTES Australian variable interest rate risk
At reporting period, the Group had the following mix of financial assets and liabilities exposed to Australian variable
interest rate risk.
Financial assets
Cash
Financial liabilities
Bank loan
GBST GROUP
2015
$’000
2014
$’000
1,339
1,339
–
–
87
87
5,047
5,047
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.
Foreign currency variable interest rate risk
At reporting period, the Group had the following mix of foreign currency exposed to variable interest rate risk.
Financial assets – Cash
Great British Pounds
United States of America Dollars
Euros
Singapore Dollars
Hong Kong Dollars
Foreign Currency Risk
GBST GROUP
2015
$’000
5,308
546
11
70
511
2014
$’000
1,918
310
–
17
7
6,446
2,252
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 as follows:
Great British Pounds
United States of America Dollars
Euros
Singapore Dollars
Hong Kong Dollars
2015
2014
Cash and
Receivables
$’000
Payables
$’000
Cash and
Receivables
$’000
Payables
$’000
13,887
1,318
11
70
726
5,308
10,956
1,205
173
–
126
204
343
–
17
7
–
–
6
–
16,012
5,811
11,323
1,211
6161
GBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORTGBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORT Note 26: Financial Risk Management (continued)
(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.
Due to the repayment of senior debt during the financial year, the Group’s reporting compliance with covenants to the
Commonwealth Bank of Australia is no longer required.
(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
Australian entities 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 49% (2014: 44%) of the Group’s
revenue is derived from five customers providing financial services, who represent 27% of the gross trade debtor balance
as at 30 June 2015. 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 $3.62 million (2014: $3.48 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 34 days (2014: 29 days).
The aging of the Group’s trade receivables at the reporting date was:
Not past due
Past due 0-30 days
Past due 30-90 days
Past due more than
90 days
2015
Gross
$’000
10,987
1,524
1,668
1,253
15,431
Impairment
$’000
53
63
274
488
879
2014
Gross
$’000
11,848
879
2,179
423
15,329
Impairment
$’000
–
–
–
–
–
Trade receivables that have been impaired for 2015 relate to isolated occurrences (involving two customers).
6262
to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2015 continuedNOTES The movement in the allowance for impairment in respect of trade receivables during the year was as follows:
Opening balance
Impairment loss recognised
Amounts written off
Closing balance
GBST GROUP
CARRYING AMOUNT
2015
$’000
–
893
(14)
879
2014
$’000
440
95
(535)
–
The maximum exposure to credit risk to the Group is the carrying value, which at the reporting date was:
Cash and cash equivalents
Trade and other receivables
GBST GROUP
CARRYING AMOUNT
2015
$’000
7,785
15,627
23,412
2014
$’000
2,339
16,558
18,897
The maximum exposure to credit risk for trade and other receivables at reporting date by geographic region was:
Australia and New Zealand
Europe
Asia
North America
GBST GROUP
CARRYING AMOUNT
2015
$’000
6,061
6,499
2,296
772
2014
$’000
6,683
7,568
1,743
53
15,627
16,047
6363
GBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORTGBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORT Lease
facilities(2)
Trade
& other
payables
TOTAL
FINANCIAL
LIABILITIES
Note 26: Financial Risk Management (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
2015
$’000
2014
$’000
2015
$’000
2014
$’000
2015
$’000
2014
$’000
2015
$’000
2014
$’000
2015
$’000
2014
$’000
2015
$’000
2014
$’000
Financial Liabilities
Bank loan(1)
–
287
–
5,172
–
227
689
44
218
21
22
45
–
–
–
5,481
–
5,007
–
292
952
279
901
9,319
7,413
545
392
1308
1,233
845
1,253 12,017
10,291
12,017
10,291
9,546
8,389
589
5,782
1,329
1,300
845
1,253 12,309
16,724 12,296
16,199
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
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.
For financial assets and liabilities of the Group, the carrying value is a reasonable approximation of the 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 2015, 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
2015
$’000
2014
$’000
–
–
(50)
50
Increase/(Decrease) in Profit and Equity
Increase in interest rate by 1%
Decrease in interest rate by 1%
6464
to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2015 continuedNOTES Foreign Currency Risk Sensitivity Analysis
At 30 June 2015, the effect on profit as a result of changes in the value of currencies relevant to GBST’s operations (with
all other variables remaining constant) is as follows:
(i) Profit:
Increase/(Decrease) in Profit
Improvement in AUD to GBP by 10%
Decline in AUD to GBP by 10%
Improvement in AUD to USD by 10%
Decline in AUD to USD by 10%
Improvement in AUD to SGD by 10%
Decline in AUD to SGD by 10%
Improvement in AUD to HKD by 10%
Decline in AUD to HKD by 10%
(ii) Equity:
Change in Equity
Improvement in AUD to GBP by 10%
Decline in AUD to GBP by 10%
Improvement in AUD to USD by 10%
Decline in AUD to USD by 10%
Improvement in AUD to SGD by 10%
Decline in AUD to SGD by 10%
Improvement in AUD to HKD by 10%
Decline in AUD to HKD by 10%
GBST GROUP
2015
$’000
2014
$’000
539
(539)
(81)
81
9
(9)
11
(11)
(25)
25
92
(75)
(2)
2
(14)
11
GBST GROUP
2014
$’000
2013
$’000
1,499
(1,499)
(712)
712
36
(36)
69
(69)
12
(12)
92
(75)
(2)
2
(14)
11
Price Risk
At 30 June 2015 there no investments in listed shares.
Note 27: Contingent Liabilities
As at 30 June 2015, 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 under these warranties and indemnities is considered remote.
The Group is also involved in litigious matters arising in the course of business. Based on legal advice received,
management anticipates that such matters will be successfully defended.
6565
GBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORTGBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORT Note 28: Related Parties
Transactions between related parties are on normal commercial terms and conditions no more favourable than those
available to other parties unless otherwise stated.
Key Management Personnel Compensation
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Share-based payments
GBST GROUP
2015
$
2014
$
3,887,728
3,785,643
127,498
100,273
45,200
44,046
759,566
309,561
4,819,992
4,239,523
Detailed disclosures on compensation for Key Management Personnel are set out in the Remuneration Report included in
the Directors’ Report.
Note 29: Share Based Payments
To assist in the attraction, retention and motivation of employees, the Company operates a Performance Rights and
Option Plan.
Share based payments entered into in the year are detailed below.
Share Performance Rights
At the Company’s 2012 annual general meeting, the GBST Performance Rights and Option Plan was approved
by shareholders.
Under the plan, 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.
As at reporting date, the expense for these share performance rights for the period ended 30 June 2015 was
$1,481 thousand (2014: $698 thousand) included in share based payment expense.
The share performance rights outstanding at 30 June 2015 had a weighted remaining contractual life of 13 months.
Unless otherwise stated, all issues of performance rights under the plan have a nil exercise price and vest in thirty-six
months after the date of grant or the date of release of GBST’s audited financial results, whichever is later. The share
performance rights expire thirty days after the vesting date, and are conditional on the employees meeting continuous
service conditions and the group meeting certain financial performance measures.
The performance criteria associated with the grant of share performance rights outstanding from prior years under the
GBST Performance Rights and Option Plan is detailed in the following table:
Grant Date
8 November 2012(1)
Financial Performance hurdle
Cumulative Earnings Per Share (EPS) Target
1,314,636 performance rights
• 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 (interpolated).
Minimum EPS
• A minimum EPS of 5 cents is achieved in each year
Service Condition
• Continuous employment with the Group from grant date for three years.
6666
to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2015 continuedNOTES 16 September 2013(2)
Cumulative Earnings Per Share (EPS) Target
514,536 performance rights
• Subject to GBST achieving three year (2014 – 2016 financial years)
cumulative EPS targets of 32 cents, 36 cents, and 40 cents for 25%,
50% and 100% vesting respectively (interpolated).
Minimum EPS
• A minimum EPS of 5 cents is achieved in each year
Service Condition
• Continuous employment with the Group from grant date for three years.
11 February 2014(2)
Cumulative Earnings Per Share (EPS) Target
13,766 performance rights
• Subject to GBST achieving three year (2014 – 2016 financial years)
cumulative EPS targets of 32 cents, 36 cents, and 40 cents for 25%,
50% and 100% vesting respectively (interpolated).
Minimum EPS
• A minimum EPS of 5 cents is achieved in each year
Service Condition
• Continuous employment with the Group from grant date for three years.
5 August 2014(3)
Cumulative Earnings Per Share (EPS) Target
345,005 performance rights
• Subject to GBST achieving three year (2015 – 2017 financial years)
cumulative EPS targets of 45 cents, 50 cents, and 60 cents for 25%,
50% and 100% vesting respectively (interpolated).
Minimum EPS
• A minimum EPS of 10 cents is achieved in each year
Service Condition
• Continuous employment with the Group from grant date for three years.
16 October 2014(4)
Cumulative Earnings Per Share (EPS) Target
100,486 performance rights
• Subject to GBST achieving three year (2015 – 2017 financial years)
cumulative EPS targets of 45 cents, 50 cents, and 60 cents for 25%,
50% and 100% vesting respectively (interpolated).
Minimum EPS
• A minimum EPS of 10 cents is achieved in each year
Service Condition
• Continuous employment with the Group from grant date for three years.
6767
GBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORTGBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORT Note 29: Share Based Payments (continued)
2 March 2015(4)
Cumulative Earnings Per Share (EPS) Target
101,924 performance rights
• Subject to GBST achieving three year (2015 – 2017 financial years)
cumulative EPS targets of 45 cents, 50 cents, and 60 cents for 25%,
50% and 100% vesting respectively (interpolated).
Minimum EPS
• A minimum EPS of 10 cents is achieved in each year
Service Condition
• Continuous employment with the Group from grant date for three years.
(1) The fair value of the share performance rights of $0.82 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.
(2) The fair value of the share performance rights of $2.54 each was determined using the Binomial Approximation Option Valuation Model. The model inputs were:
the share price at date of grant $2.85, expected volatility of 40.02 percent, expected dividend yield of 3.80 percent, a term of three years and a risk-free interest
rate of 2.81 percent. The exercise price for the share performance rights is nil.
(3) The fair value of the share performance rights of $3.28 each was determined using the Binomial Approximation Option Valuation Model. The model inputs were:
the share price at date of grant $3.52, expected volatility of 45 percent, expected dividend yield of 2.298 percent, a term of three years and a risk-free interest
rate of 2.62 percent. The exercise price for the share performance rights is nil.
(4) The fair value of the share performance rights of $3.43 each was determined using the Binomial Approximation Option Valuation Model. The model inputs were:
the share price at date of grant $3.67, expected volatility of 45 percent, expected dividend yield of 2.312 percent, a term of three years and a risk-free interest rate
of 2.46 percent. The exercise price for the share performance rights is nil.
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 2015
Number
Jun 2015
WAEP
Jun 2014
Number
Jun 2014
WAEP
1,832,383
547,415
(100,035)
–
–
2,279,763
–
–
–
–
–
–
–
–
1,314,636
528,302
(10,555)
–
–
1,832,383
–
–
–
–
–
–
–
–
No person entitled to exercise any performance right had or has any right by virtue of the performance right to participate
in any share issue of any other body corporate.
Note 30: 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 and dilutive EPS
6868
GBST GROUP
2015
22.94
22.50
$’000
15,270
15,270
2014
15.07
15.07
$’000
10,031
10,031
to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2015 continuedNOTES (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
66,561,725
Weighted average number of ordinary shares outstanding during the year used in
calculation of dilutive EPS
67,876,361
66,561,725
The weighted average number of performance rights that are due to vest (based on achievement of performance conditions) in the period immediately following the
reporting date are included for the purposes of calculating the Group’s dilutive EPS.
Note 31: Subsequent Events
The financial report was authorised for issue on 12 August 2015 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.
Note 32: Parent Entity Disclosures
As at, and throughout the financial year ending 30 June 2015 the parent company of the Group was GBST Holdings Limited.
GBST HOLDINGS
30 Jun 2015
$’000
30 Jun 2014
$’000
Results of the Parent Entity
PROFIT ATTRIBUTABLE TO MEMBERS OF THE PARENT ENTITY
4,170
2,608
OTHER COMPREHENSIVE INCOME
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
–
–
4,170
2,608
10,355
5,378
69,808
142,430
11,159
8,988
15,034
90,468
37,664
37,664
2,409
25,056
65,129
928
13,370
51,962
Parent Entity Contingencies
The Directors are of the opinion that no provisions are required in respect of parent entity contingencies.
6969
GBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORTGBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORT Note 32: Parent Entity Disclosures (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.
GBST HOLDINGS
30 Jun 2015
$’000
30 Jun 2014
$’000
Parent Entity Capital
and Other Expenditure
Commitments
Contracted for:
Capital and other
operating purchases
Payable
Not later than one year
Guarantees
Property Leases
64
64
64
105
105
105
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.
Note 33: 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, West Tower
410 Ann Street
BRISBANE QLD 4000
Level 24
259 George Street
SYDNEY NSW 2000
Level 2
63 Market Street
WOLLONGONG NSW 2530
Level 3
412 Collins 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
20th Floor
222 Broadway
NEW YORK NY 10038
6/F, Club Lusitano
16 Ice House Street, Central
HONG KONG
#03-01 Grace Global Raffles
137 Market St
SINGAPORE 048943
7070
to and forming part of the Consolidated Financial Statementsfor the year ended 30 June 2015 continuedNOTES 1. In the opinion of the Directors of GBST Holdings Limited (‘the Company’):
a) the consolidated financial statements and Notes 1 to 33 and the Remuneration report in the Directors’ report, set
out on pages 17-25, 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 2015 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 2015.
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 12th day of August 2015
71
GBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORTDIRECTORS’ DECLARATION for the year ended 30 June 2015 ABCD
ABCD
Independent audit 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 2015, and the
Independent audit report to the members of GBST Holdings Limited
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,
Report on the financial report
notes 1 to 33 comprising a summary of significant accounting policies and other explanatory
We have audited the accompanying financial report of GBST Holdings Limited (the company),
information, and the directors’ declaration of the Group comprising the company and the entities
which comprises the consolidated statement of financial position as at 30 June 2015, and the
it controlled at the year’s end or from time to time during the financial year.
consolidated statement of profit or loss and other comprehensive income, consolidated statement
Directors’ responsibility for the financial report
of changes in equity and consolidated statement of cash flows for the year ended on that date,
notes 1 to 33 comprising a summary of significant accounting policies and other explanatory
The directors of the company are responsible for the preparation of the financial report that gives
information, and the directors’ declaration of the Group comprising the company and the entities
a true and fair view in accordance with Australian Accounting Standards and the Corporations
it controlled at the year’s end or from time to time during the financial year.
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
Directors’ responsibility for the financial report
error. In note 2, the directors also state, in accordance with Australian Accounting Standard
The directors of the company are responsible for the preparation of the financial report that gives
AASB 101 Presentation of Financial Statements, that the financial statements of the Group
a true and fair view in accordance with Australian Accounting Standards and the Corporations
comply with International Financial Reporting Standards.
Act 2001 and for such internal control as the directors determine is necessary to enable the
Auditor’s responsibility
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
Our responsibility is to express an opinion on the financial report based on our audit. We
AASB 101 Presentation of Financial Statements, that the financial statements of the Group
conducted our audit in accordance with Australian Auditing Standards. These Auditing
comply with International Financial Reporting Standards.
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
Auditor’s responsibility
report is free from material misstatement.
Our responsibility is to express an opinion on the financial report based on our audit. We
An audit involves performing procedures to obtain audit evidence about the amounts and
conducted our audit in accordance with Australian Auditing Standards. These Auditing
disclosures in the financial report. The procedures selected depend on the auditor’s judgement,
Standards require that we comply with relevant ethical requirements relating to audit
including the assessment of the risks of material misstatement of the financial report, whether
engagements and plan and perform the audit to obtain reasonable assurance whether the financial
due to fraud or error. In making those risk assessments, the auditor considers internal control
report is free from material misstatement.
relevant to the entity’s preparation of the financial report that gives a true and fair view in order
An audit involves performing procedures to obtain audit evidence about the amounts and
to design audit procedures that are appropriate in the circumstances, but not for the purpose of
disclosures in the financial report. The procedures selected depend on the auditor’s judgement,
expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes
including the assessment of the risks of material misstatement of the financial report, whether
evaluating the appropriateness of accounting policies used and the reasonableness of accounting
due to fraud or error. In making those risk assessments, the auditor considers internal control
estimates made by the directors, as well as evaluating the overall presentation of the financial
relevant to the entity’s preparation of the financial report that gives a true and fair view in order
report.
to design audit procedures that are appropriate in the circumstances, but not for the purpose of
We performed the procedures to assess whether in all material respects the financial report
expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes
presents fairly, in accordance with the Corporations Act 2001 and Australian Accounting
evaluating the appropriateness of accounting policies used and the reasonableness of accounting
Standards, a true and fair view which is consistent with our understanding of the Group’s
estimates made by the directors, as well as evaluating the overall presentation of the financial
financial position, and of its performance.
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
We performed the procedures to assess whether in all material respects the financial report
basis for our audit opinion.
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.
83
72
83
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.
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.
INDEPENDENT AUDITOR’S REPORT for the year ended 30 June 2015
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 GBST Holdings Limited 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 2015 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 17 to 25 of the directors’ report
for the year ended 30 June 2015. 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
2015 complies with Section 300A of the Corporations Act 2001.
KPMG
Stephen Board
Partner
Brisbane
12 August 2015
84
73
GBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORT ADDITIONAL INFORMATION for the year ended 30 June 2015
Shareholding Information as at 31 August 2015
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 100,000
100,001 and over
Total
b. The number of shareholdings in less than marketable parcels is 178
c. The names of the substantial shareholders listed in the company’s register are:
Shareholder
Crown Financial Pty Ltd
Perpetual Limited and subsidiaries
Stephen Maurice Linton Lake
John Francis Puttick
National Australia Bank Limited and its associated entities
No. ordinary shares
1,310
1,555
373
234
38
3,510
Number ordinary
6,277,610
6,127,908
5,146,109
4,559,356
3,792,450
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.
74
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
J P MORGAN NOMINEES AUSTRALIA LIMITED
RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LIMITED
BNP PARIBAS NOMS PTY LTD
CROWN FINANCIAL PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
STEPHEN MAURICE LINTON LAKE
MR JOHN FRANCIS PUTTICK
MR JOAKIM SUNDELL & MRS SHARA SUNDELL
MRS AMBER ROBYN LAKE
DEKACROFT PTY LTD
BRISPOT NOMINEES PTY LTD
BERISLAV BECAREVIC & IVANKA BECAREVIC
MR STEPHEN MAURICE LAKE
BRAZIL FARMING PTY LTD
MR JOHN FRANCIS PUTTICK
CITICORP NOMINEES PTY LIMITED
MR DONAL O'BRIEN
MIRRABOOKA INVESTMENTS LIMITED
ROBERT DEDOMINICIS
Total Units
12,034,053
% IC
18.08%
5,769,659
4,343,946
4,296,915
3,768,040
3,728,418
2,343,096
2,050,000
2,013,462
1,691,000
1,620,000
1,012,857
751,553
730,123
707,415
697,215
696,997
615,908
520,000
426,467
8.67%
6.53%
6.46%
5.66%
5.60%
3.52%
3.08%
3.02%
2.54%
2.43%
1.52%
1.13%
1.10%
1.06%
1.05%
1.05%
0.93%
0.78%
0.64%
7575
GBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORTGBST HOLDINGS LIMITED ABN 85 010 488 874 2015 ANNUAL REPORT CORPORATE DIRECTORY for the year ended 30 June 2015
Share Registry
Link Market Services
Level 19, 324 Queen Street
Brisbane QLD 4000
Ph +61 1300 554 474
Fax +61 2 9287 0309
Stock Exchange Listing
GBST Holdings Limited shares are quoted on the Australian
Stock Exchange under the code GBT.
Unquoted Securities
The company has 2,279,763 Performance Rights on issue.
Auditors
KPMG
Level 16, 71 Eagle Street
Brisbane QLD 4000
Ph +61 7 3233 3111
Fax +61 7 3233 3100
Registered Office
c/- McCullough Robertson, Lawyers
Level 11, Central Plaza Two
66 Eagle Street
BRISBANE QLD 4000
Ph +61 7 3233 8888
Fax +61 7 3229 9949
Principal Place of Business
Level 4, 410 Ann Street
Brisbane QLD 4000
Ph +61 7 3331 5555
Fax +61 7 3839 7783
www.gbst.com
Postal Address
GPO Box 2221
Brisbane QLD 4000
Directors
John Francis Puttick
Stephen Maurice Linton Lake
Joakim James Sundell
Allan James Brackin
David Campbell Adams
Ian Thomas
Christine Nildra Bartlett
Company Secretary
Andrew David Ritter
Sean Anthony Norman
7676
www.gbst.com