GTN Limited
ABN 38 606 841 801
Annual Report 2016
CONTENTS
Item
Page
Chairman and CEO’s Letter
About GTN
Corporate Governance
Directors’ Report
Directors and Company Secretaries
Senior Executives
Principal Activities
Operating Strategy
Operating and Financial Review
Remuneration Report
Auditor’s Independence Declaration
Financial Statements
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Shareholder information
Corporate Directory
1
2
5
6
6
8
9
10
11
21
30
31
37
80
81
83
86
CHAIRMAN AND CHIEF EXECUTIVE OFFICER’S
LETTER
Dear Shareholders,
On behalf of the Board of Directors, we are pleased to announce that GTN Limited (“GTN”
or the “Company”) has completed a very active and successful year and are pleased to
present its annual report for fiscal year ending 30 June 2016.
First we would like to thank all of the shareholders for enabling us complete our initial public
offering this June. We believe that this will be a positive step for us in continuing our growth
plans. We would also like to thank all of our local management and employees. They have
achieved outstanding results despite all of the distractions that occur during an IPO. We
look forward to continued success in fiscal 2017.
GTN reported net revenues for the year of $166.1 million which was 1.2% ahead of
Prospectus Forecast and 8.2% ahead of last year with all four operating segments
exceeding the previous year in local currency. Pro Forma Adjusted EBITDA was $34.6
million which exceeded Prospectus Forecast by 7.1%. Pro Forma NPATA was $18.8 million
which was 18.7% higher than Prospectus Forecast and significantly higher than Pro Forma
fiscal 2015.
Our balance sheet is strong with $49.1 million in cash at 30 June 2016 while our operations
continue to generate strong cash flow. Our net debt position (including our cash on hand) is
$50.9 million and our leverage is low at 1.5 times Pro Forma Adjusted EBITDA. During the
year, GTN also continued to bolster its line-up of stations in Brazil and Canada and entered
into long term agreements in Australia that will help to maintain our strong operating position.
Our UK operations, while more mature than our other markets, continued to provide
significant cash flow to the Company.
We have continued due diligence work on our potential acquisition of Radiate Media which
operates a broadcast traffic network in the United States. Radiate has valuable affiliate
agreements as well as useful technology. We continue to believe that the United States
provides a tremendous growth opportunity for the Company.
We are very pleased with our initial performance as a public company. The Company
exceeded Prospectus Forecast revenue, Pro Forma EBITDA, Pro Forma Adjusted EBITDA,
Pro Forma NPAT and Pro Forma NPATA. The Company remains committed to strong
business principles. GTN has low leverage, produces strong cash flow, and has exciting
growth opportunities.
Once again we would like to thank our management and employees for their outstanding
effort and our shareholders for their support. We look forward to a successful and productive
fiscal 2017.
William L. Yde III
Managing Director and Chief Executive Officer
Gary L. Miles
Chairman
1
About GTN
Overview of GTN
GTN provides a broad reach advertising platform that enables advertisers to reach large
audiences frequently and effectively. GTN is one of the largest broadcast media advertising
platforms by audience reach in Australia, Canada and the United Kingdom and is
progressing towards its goal of achieving this status in Brazil.
GTN is the largest supplier of traffic information reports to radio stations in its operating
geographies. In exchange for providing these and other reports and in certain cases cash
compensation, GTN receives commercial advertising spots adjacent to traffic, news and
information reports from its large network of radio and television stations (“Affiliates”). The
spots are bundled together by GTN and sold to advertisers on a national, regional or specific
market basis.
GTN’s advertising platform provides advertisers with high impact campaigns because
advertisements are ideally placed during peak audience times and are aired frequently
across large audiences. GTN’s advertisements are short in duration, adjacent to engaging
information reports and are often read live on the air by well-known radio and television
personalities. This product is designed to create high audience engagement and high recall
among listeners, leading to a high return on investment for advertisers.
This has enabled GTN to establish longstanding relationships with large, national
advertisers, resulting in strong growth in revenue since GTN’s inception.
GTN has successfully established itself within its Affiliates’ operations by providing them with
quality, timely and important information. In some cases, GTN also provides cash
compensation to Affiliates in exchange for advertising spots, which, in many cases, allows
Affiliates to convert an important programming segment from a cost centre to a profit centre.
This stable income stream can constitute a material portion of the Affiliates’ overall profits,
further solidifying GTN’s position within their operations.
GTN currently operates in Australia, Canada, the United Kingdom and Brazil - four of the 10
largest advertising markets in the world. GTN began operations in Australia in 1997, and has
selectively and successfully expanded into other attractive markets including, most recently,
the promising Brazilian market. In addition, GTN has an option to purchase Radiate Media,
which operates in the United States, the largest advertising market in the world.
In FY2016, 96% of GTN’s Revenues were generated through the sale of radio advertising
spots and 4% were generated through the sale of television advertising spots.
Overview of GTN’s divisions
Country
Australia
Canada
Kingdom
Brazil
United
Population
(millions)
(years)
23.5
19
35.5
11
64.5
206.1
7
GTN years of
operation
FY 2016
revenue (1)
% of FY 2016
revenue (1)
GTN audience
(%)
(#)
(millions)
89.8
23.6
47.5
54%
14%
29%
4
5.2
3%
14.4m radio
27.9m radio 14.2m radio
8.4m TV
10.7m radio
(2)
5.5m TV
2
Number of
affiliates
Proportion of
metropolitan
commercial
radio listeners
in GTN’s
existing
markets
GTN
penetration
within existing
metropolitan
commercial
radio markets
FY 2016 spots
inventory
(#)
115 radio
103 radio
242 radio
36 radio
13 TV
100%
6 TV
59%
(%)
100%
54%
(%)
88%
87%
78%
47%
(‘000’s)
789
558
1,279
110
(1) Amounts may not add due to rounding
(2) Includes 840 thousand listeners in regional markets rated by GfK. Excludes
listeners in markets not rated by GfK. The population of the markets not rated by
GfK but serviced by ATN is approximately 4.5 million persons.
Operating model
GTN provides an advertising platform designed to enable advertisers, generally large
national advertisers, to reach high-value demographics cost effectively. The advertising
spots GTN offers are adjacent to information reports that listeners are typically highly
engaged with, as this content is “of use” to the consumer, such as traffic and news. The
advertising spots are generally 10 seconds long and read live by well-known on-air
personalities. GTN is able to obtain radio spots that are primarily aired during peak
listenership hours (i.e. during morning and afternoon commutes). The placement and format
of GTN’s advertising spots are designed to maximise efficacy, enhance recall and minimise
switching during advertisements.
Advertisers purchase a schedule of radio spots on a national, regional or specific market
basis. The schedule includes spots on all radio Affiliates in the relevant market. Spots sold in
advertising packages are allocated on a percentage-based rotation such that each advertiser
receives a pro rata share of advertising spots on each Affiliate throughout the relevant
markets. GTN does not sell spots on individual radio Affiliates.
In order to provide this advertising platform, GTN must appeal to the radio and television
stations that provide the advertising spots GTN sells to advertisers. GTN accomplishes this
by providing Affiliates with information reports at no charge, and in some cases, provides
cash compensation to the Affiliates in exchange for advertising spots, allowing Affiliates, in
many cases, to turn an important programming segment from a cost centre into a profit
centre. Affiliate contracts are typically multi-year, generally cover all of an Affiliate’s stations
across the relevant market and provide a fixed number of spots over the life of the
agreement.
By focusing on traffic reports, GTN believes it provides a better product to its Affiliates than
the stations could create on their own. GTN collates information for its traffic reports from a
range of sources including aircraft, access to government traffic centres, radio scanners and
station listener lines, to provide up-to-the-minute information to Affiliates.
3
GTN value proposition
Revenue model
GTN primarily generates revenue by selling schedules of advertising spots to large
advertisers. The majority of GTN’s advertising revenue is generated through advertising
agencies who have been engaged by advertisers. In these situations, GTN attempts to
maintain a relationship with the advertisers directly to assist with the sale process. GTN also
sells some spots directly to advertisers.
Each of GTN’s operating geographies has generally been able to grow its spots inventory
each year. Inventory is grown either through expanding the Affiliate network (in existing or
new markets) or growing the number of spots under contract with existing Affiliates.
GTN can accommodate orders from advertisers with short lead times, providing advertisers
the flexibility to conduct timely and relevant campaigns. Advertisers book a significant portion
of orders not more than four weeks in advance. This short forward sales pipeline is typical for
the radio business.
Value proposition to advertisers
GTN provides a different value proposition to advertisers in comparison with traditional
advertising models as summarised below. This has enabled GTN to build a loyal customer
base, comprised primarily of large advertisers.
• Audience reach: GTN operates one of the largest broadcast media advertising platforms
by audience reach in Australia, Canada and the United Kingdom, and GTN’s goal is to
achieve the same status in each market GTN enters, including Brazil. This enables
advertisers to communicate with a large number and broad demographic of potential
consumers.
• High frequency: GTN’s advertisements are heard frequently throughout the day on
every affiliate in the purchased market or region, enabling advertisers to communicate
their message repeatedly. This format is designed to maximise efficacy, enhance recall
and minimise switching during advertisements.
• High engagement: GTN’s advertising spots are adjacent to information reports that have
been found to be useful and engaging for listeners. In 2015, GTN commissioned a
research study conducted by Neuro Insight which measured brain activity and
demonstrated that traffic update content was the most engaging content for listeners.
•
Ideal placement: A large proportion of GTN advertising spots are aired during morning
and afternoon commute periods, which generally have the largest audience.
• High recall: GTN’s advertisements are designed to provide high recall rates by being
short in duration (10 seconds), adjacent to information reports and standalone to other
advertisements.
4
• Audience consistency: Advertisers using GTN’s platform are less exposed to ratings
swings of individual radio affiliate stations since GTN’s customers receive spots on
multiple radio affiliate stations.
• Audience coverage: GTN sells spots on a national, regional or specific market basis.
This allows the product to be relevant for both nationally and regionally-focused
advertisers.
Value proposition to broadcasters
GTN provides a strong value proposition to broadcasters as summarised below. This has
allowed GTN to develop longstanding relationships with Affiliates and consistently grow its
network of Affiliates. GTN seeks to provide Affiliates with:
Tailored content: GTN customises the information reports that it provides to Affiliates
by providing pertinent and geographically-relevant information that meets the content
and style requirements of each Affiliate. This helps to ensure that the reports appeal to
each Affiliate’s target audience;
Quality product: GTN commits substantial resources to its information gathering and
dissemination capabilities, including considerable training of its reporters and producers.
Consequently, Affiliates receive more substantive and higher quality reports than they
would likely be able to cost effectively produce themselves;
Cost efficiencies: Affiliates utilise GTN’s reports instead of having to procure this
information on their own, which could require significant capital outlay in order to acquire
aircraft and other information gathering infrastructure. This allows Affiliates to eliminate
the non-core operating costs associated with real time content development, which is
particularly helpful to many Affiliates that are not large enough to cost effectively produce
traffic reports on their own;
Contractual earnings: GTN provides station compensation to certain Affiliates in the
form of cash payments. These station compensation payments represent stable
recurring cash flows for these Affiliates and, in some instances, form a material part of
that Affiliate’s overall profits; and
Revenue opportunity: Affiliates are permitted to sell sponsorships at the opening of an
information report (i.e. “this report is brought to you by”), providing them with a revenue
source without a cost base.
By addressing multiple needs of our radio and television station Affiliates and providing our
advertising customers with a highly effective advertising vehicle, we are able to meet the
needs of both constituencies and continue to grow our business.
Corporate Governance
The Corporate Governance Statement outlining GTN Limited’s corporate governance
framework and practices in the form of a report against the ASX Corporate Governance
Council’s Corporate Governance Principles and Recommendations, 3rd Edition, is available
on the GTN Limited website at http://www.gtnetwork.com.au/home/?page=corporate-
governance in accordance with ASX listing rule 4.10.3. The Directors approved the 2016
Corporate Governance Statement on 29 September 2016.
5
Directors’ Report
The Directors present their report together with the consolidated financial statements of GTN
Limited and its Controlled Entities (“Group”), for the year ended 30 June 2016 and the
auditor’s report thereon.
Directors and Company Secretaries
Gary Miles
Independent Non-
Executive Chairman
Chairman of
the Nomination and
Remuneration Committee
William Yde III (“Bill”)
Managing Director and
Chief Executive Officer
Mark Anderson
Non-independent
Non-Executive Director
Member of the Audit and Risk
Committee and Nomination and
Remuneration Committee
Gary Miles has over 50 years of experience in the radio industry.
He is currently a director of Vista Radio, a Canadian-based radio station
operator.
Gary previously held the position of Chief Executive Officer of Rogers Radio and
President at the Radio Bureau of Canada and has held numerous board
positions both in the Canadian radio industry and the broader Canadian
community, including as Chairperson of:
• Numeris (formerly the Canadian Bureau of Broadcast Measurement);
• the Alcoholism Foundation of Manitoba; and
• the Radio Industry Associations of Canada, Manitoba and Western Canada.
Gary is a member of the Canadian Association of Broadcasters Hall of Fame.
Bill Yde has 33 years of experience in the radio and media industry.
Bill co-founded The Australia Traffic Network (“ATN”) in 1997, later co-founding
GTN and has served as Chief Executive Officer and President since its inception
in 2005.
Prior to forming ATN, Bill founded Wisconsin Information Systems, Inc. (trading
as the Milwaukee Traffic Network) in 1994, and expanded its operations to
create traffic networks in Milwaukee, Oklahoma City, Omaha and Albuquerque
before the business was sold to Metro Networks, Inc. (now part of iHeartMedia,
Inc.).
Bill holds a Bachelor of Arts degree in Accounting from Indiana University and is
a Certified Public Accountant.
Mark Anderson has over 15 years of experience in the private equity and finance
industry.
Mark is currently a Managing Director of GTCR. In addition to GTN, he is
currently a director on the boards of CAMP Systems, Cision, IQNavigator, Lytx
and XIFIN.
Mark holds a Master of Business Administration from Harvard Business School
and a Bachelor of Science from the McIntire School of Commerce at the
University of Virginia.
6
David Ryan AO
Independent Non-
Executive Director
Chairman of the Audit and
Risk Committee
David Ryan AO has over 40 years of experience in commercial banking,
investment banking and operational business management.
David has been a non-executive director on the board of Lend Lease since 2004,
where he serves as the chairman of the Risk Management and Audit Committee
and a member of the People and Culture Committee and the Nomination
Committee.
David is also currently a director of First American Title Insurance Company of
Australia Pty Ltd, a director of First Mortgage Services Pty Ltd and a director of
Sunshine Coast Destination Limited.
David has previously held positions as a non-executive director of Aston
Resources from 2011 until its merger with Whitehaven Coal and as non-
executive chairman of Transurban Holdings (appointed director in 2003,
chairman in 2007, and resigned in 2010).
David holds a Bachelor of Business from the University of Technology, Sydney
and is a Fellow of the Australian Institute of Company Directors and of CPA
Australia.
Robert Loewenthal
Independent Non-
Executive Director
Robert Loewenthal has over 10 years of experience in the radio industry.
He currently operates private corporate advisory and consulting business, Free
Trade Hall, and is the founder of the Whooshkaa Podcasting Platform.
Member of the Nomination and
Remuneration Committee
Robert is also a director of the Media Industry Charity, ‘Unltd’. Robert formerly
held the role of Managing Director of Macquarie Radio Network, where he had
previously acted as Chief Operating Officer and company secretary.
Nathan Bartrop
Joint Company Secretary
Patrick Quinlan
Joint Company Secretary
Robert is a Chartered Accountant and holds a Bachelor of Commerce degree
from The University of Sydney.
Nathan is both a qualified lawyer and Chartered Company Secretary employed
by Company Matters Pty Limited. Nathan has experience with ASX listed, dual
listed and unlisted entities. Nathan has been involved in the listing of a number
of entities on ASX, as well as advising other listed entities in relation to ASX
listing rules.
He also has prior experience at ASX, where he was a Senior Listings
Compliance Adviser in Sydney and Perth, responsible for advising and
monitoring listed entities' compliance with the ASX Listing Rules.
Nathan is a Fellow of Governance Institute of Australia, in addition to being a
member of the NSW State Council and the Corporate and Legal Issues
Committee.
Patrick is the finance manager for the Australian and Canadian entities, as well
as being the joint company secretary for GTN Limited.
Patrick holds a Bachelor of Business degree from University of Western Sydney
and is a member of CPA Australia. Patrick is currently studying to be a chartered
secretary at Governance Institute of Australia.
7
Senior Executives
The Senior Executives of the Company at any time during or since the end of the financial
year are:
Scott Cody
Scott Cody has 29 years of experience in the radio media industry.
Chief Operating Officer and
Chief Financial Officer
Prior to joining GTN, Scott held various positions with Metro Networks, Inc./
Westwood One, serving as Vice President of Finance from 1997 to 2002
and Senior Vice President of Business Development from 2002 to 2005.
Gary Worobow
Executive Vice President,
Business and Legal
Affairs
Christopher Thornton
(“Chris”)
National Sales Director
ATN
Victor Lorusso (“Vic”)
Chief Operations Manager
ATN
Prior to joining Metro Networks, Inc./ Westwood One, Scott was Vice
President of Finance for Tele-Media Broadcasting Company.
Scott graduated with a Bachelor of Arts in Accounting and Finance from
Juniata College.
Gary Worobow has over 20 years of experience in the radio and media
industry.
He was previously a member of the Global Traffic Network Board from
2006 to 2009. Prior to joining GTN, Gary held the position of Executive Vice
President and General Counsel of Five S Capital Management, Inc. from
2006 to 2009, Executive Vice President, Business Affairs and Business
Development for Metro Networks Inc./ Westwood One, Inc. from 2003 to
2006 and as Senior Vice President and General Counsel from 1999 to
2002.
Gary was a founder and the General Counsel of Columbus Capital
Partners and held the positions\ of Senior Vice President, General Counsel
and board member for Metro Networks, Inc./ Westwood One from 1995 to
1999.
Gary holds a Bachelor of Arts from the University of Rochester, a Masters
of Business Administration from the Simon School, University of Rochester
and a Juris Doctor from the Fordham Law School.
Chris Thornton has over 25 years of experience in the radio, media and
sales industries.
Chris is currently the National Sales Director for ATN after joining in 2005.
Prior to joining Global Traffic Network, Chris held positions as a National
Agency Sales Manager for the Macquarie Radio Network and a Senior
Account Manager for Southern Cross Radio.
Chris obtained a Marketing Certificate from TAFE NSW and is presently a
candidate for a Masters of Business Administration at the Australian
Institute of Business.
Vic Lorusso has over 17 years of experience in the media industry, all of
those with ATN in various operational and management positions.
Vic is currently the Chief Operations Manager for ATN after joining in 1999.
Vic is also an airborne traffic reporter for the Ten Network and various radio
stations. In addition to his role with Global Traffic Network, Vic is
associated with a number of charities throughout the country including the
Variety Children’s Charity, Redkite, Miracle Babies Foundation, Diabetes
Association NSW, Cure Cancer Foundation and the Special Olympics
Foundation.
Vic obtained a Business Licence for Real Estate.
8
John Quinn
Chief Operating Officer
United Kingdom Traffic Network
(”UKTN”)
John Quinn has over 30 years of experience in the radio and media
industry.
John is currently the Chief Operating Officer of Global Traffic Network’s
United Kingdom operations after joining Global Traffic Network in 2009
following Global Traffic Network’s acquisition of UBC Media’s commercial
division.
Prior to the acquisition, John was the Chief Operating Officer and a director
of UBC Media (a company listed on AIM, a sub-market of the London Stock
Exchange) and has held numerous other sales and management positions
within the United Kingdom commercial radio industry.
Lee Sibian (“Lannie”)
Lannie Sibian has over 30 years of experience working in the radio and
advertising industries.
President and Executive
Vice-President Sales
Canadian Traffic Network
(“CTN”)
Lannie joined Global Traffic Network in 2012 as President and Executive
Vice-President of Sales for CTN. Prior to joining Global Traffic Network,
Lannie was General Sales Manager at Rogers Broadcasting between 2001
and 2012 and previously held senior sales positions at Standard
Broadcasting Ltd., Rawlco Communications and Rogers Media.
Lannie holds an Executive Masters of Business Administration from the
University of Western Ontario, Richard Ivey School of Business.
Meetings of Directors
The number of meetings of the Board of Directors and its committees that were held during
the year and the number of meetings attended by each director are summarised in the table
below.
Board
Audit and Risk
Management
Committee
Nomination and
Remuneration
Committee
Held
Attended
Held
Attended
Held
Attended
Gary Miles
William Yde III
Mark
Anderson
David Ryan
Robert
Loewenthal
4
4
4
4
4
3
4
3
4
3
1
-
1
1
-
1
-
1
1
-
1
-
1
-
1
1
-
1
-
1
Principal activities
The principal activity of GTN during the course of the financial year was that of provider of an
advertising platform to advertisers in Australia, United Kingdom, Canada and Brazil.
9
Operating Strategy
The Company’s operating strategy is to grow its business through the obtaining of more
advertising inventory and selling a higher proportion of and obtaining a higher price per unit
of advertising inventory. The Company strategy to obtain more advertising inventory
consists of the following:
• Obtain more advertising inventory from existing radio and television stations for
•
existing products. This is primarily accomplished by the payment of higher station
compensation.
Have existing radio stations provide advertising inventory outside traditional traffic
reporting, such as the number of stations in Australia we currently receive
advertising inventory adjacent to news reports.
• Expansion into additional operating regions within our current countries, such as the
expansion into regional markets in Australia.
• Expansion into additional countries, for example our commencement of operations in
Brazil in 2012.
This growth strategy is subject to a number of risks, some of which are out of our control.
Some of these risks and our strategy for mitigating them are as follows:
Loss of key radio station Affiliates
In FY 2016, 96% of our revenue came from the sale of advertising inventory obtained from
our radio station Affiliates. Loss of significant radio station Affiliates would have a material
impact on our revenue. We attempt to defend against this risk in the following ways:
• Provide a high quality product that resonates with stations’ listeners and would be
difficult for the stations to replicate in a cost effective manner, if at all.
• For the most important radio stations, pay a significant amount to the stations in the
form of station compensation. For our most important Affiliates, this amount has
become a significant portion of their EBITDA based on our review of their public
filings.
Decline in demand for traffic reports on radio
Individuals have other means of getting traffic information, including the internet, smart
phone aps, navigation systems, etc. and we expect that such options will continue to
proliferate in the future. It is possible that in the future that such other options will decrease
the demand for our traffic reports from radio stations. We attempt to defend against this
possibility in two ways:
• First, by paying significant station compensation, we attempt to make it a very
difficult decision to reduce or eliminate the number of traffic reports broadcast.
• Second, since we sell our reports as a network of information reports, we are
educating clients that the key element is that their spot be adjacent to high demand
information content, rather than just traffic. In Australia, approximately 24% of our
advertising inventory in the five metro markets is adjacent to news reports.
We believe that combining high level of compensation to stations to encourage their
continued provision of advertising inventory with an advertiser base that understands that
while traffic is a very effective area to place spots today, but is not the only attractive
placement option, is the best way to protect against a decline in interest in traffic reports
broadcast on traditional radio.
Decline in popularity of radio and television in general
Virtually all of our revenue is derived from the sale of spots on radio and television stations.
A decline in the popularity of these mediums as either an entertainment option or advertising
medium would likely have a material negative impact on our revenues and profitability.
While to a certain extent this risk is out of our control, we have employed several strategies
to attempt to mitigate this risk:
10
• Our product is different than traditional radio despite being broadcast on radio
stations. We sell a broad reach across all demographics with the spots having the
further advantage of sole placement, adjacent to popular information programming
elements and generally read live by the announcer. In our opinion, all of these
things make our advertising product more effective than traditional radio advertising.
We believe this contention is supported by the fact that our revenue growth
consistently surpasses that of the overall radio market in the markets in which we
operate.
• We continue to explore other platforms where our content and sales ability would
translate to. To date, these explorations have not been successful but we plan to
continue to research and pursue additional opportunities outside of radio and
television.
Decline in advertising market in general
Our business model is currently entirely based on the sale of advertising, which is cyclical in
nature. While we cannot control the fluctuations in the advertising market, we attempt to
mitigate this risk by providing a compelling advertising product that is both effective for
advertisers and not easily replicated by “buying around” our networks. A certain level of
advertising is still sold even in down business cycles so we attempt to position ourselves as
a key portion of an advertiser’s strategy, even if they are reducing their overall expenditures.
Expansion into new markets
Expansion into new markets entails risk as there is an upfront investment of monetary
resources to purchase equipment (often helicopters) and to fund the initial operating losses
and working capital requirements. There is also the opportunity cost of a diversion of
management’s time and focus away from the current operations. The Company attempts to
mitigate this risk by a thorough due diligence process prior to committing significant
resources to a new market. In addition, the Company hires virtually all of its employees in
the local market, which gives market insights that would not otherwise be readily available.
The Company believes by training local personnel in the Company’s business model, the
likelihood of success is increased.
Foreign exchange fluctuations can have a negative impact on financial performance
A significant portion of our revenues (46% in FY 2016) are generated outside of Australia
and subject to currency exchange fluctuations between AUD and the local currency of those
entities. We expect the portion of revenue subject to foreign exchange fluctuations will
increase in the future as we anticipate that our Canada and Brazil operations will grow faster
that the overall group revenues, and to the extent we exercise our option to acquire Radiate
this will also increase the proportion of our revenue from outside Australia. We do not hedge
for foreign currency fluctuations at this time and currently do not have an intention to do so
although we may enter into such hedging arrangements in the future. This risk is mitigated
by each country incurring virtually all their expenses in local currency as well. The impact of
this is should revenue be reduced by an unfavourable currency movement, expenses will
also be reduced, which would be considered a favourable movement. The negative impact
to the financial statements is only on the net difference between the revenue and expenses.
However, this net amount can still be material based on the magnitude of the currency shifts.
Review and Results of Operations
Operating and financial review
In June 2016, the GTN completed its initial public offering of shares (“IPO”). GTN exceeded
the Prospectus Forecast for revenue, EBITDA, Adjusted EBITDA, NPAT and NPATA on both
a pro forma and statutory basis while exceeding pro forma FY 2015 results by a significant
margin. The non-IFRS measurements used are defined in the table below and further
discussed later in the report.
11
(m)(5)
Revenue
EBITDA(2)
Adjusted EBITDA(3)
NPAT
NPATA(1)
NPATA per share
(cents)(6)
Statutory
FY16
Actual
166.1
12.0
15.6
(17.2)
(4.2)
Statutory
FY16
Prospectus
%
Difference
164.1
6.1
9.7
(23.9)
(11.3)
+1.2%
+96.5%
+61.6%
+27.8%
+62.8%
($0.02)
($0.06)
+62.8%
(1)
NPATA is defined as net profit after tax adjusted for the tax effected amortization arising from acquisition
related intangible assets.
(2) EBITDA is defined as net profit after tax (earnings) before the deduction of interest expense/income,
income taxes, depreciation and amortization.
(3) Adjusted EBITDA is defined as EBITDA adding back the non-cash interest income related to the long
term prepaid affiliation agreement with Southern Cross Austereo which is treated as a financing
transaction.
(4) Pro Forma Adjusted EBITDA is defined as Adjusted EBITDA adjusted to reflect the impact of the initial
public offering and related restructuring (“IPO”). Certain pro forma expenses are prospective in nature and
had not fully occurred as of 30 June 2016. These expenses, which are not material in nature, are
assumed to be at forecast for comparability. Foreign exchange gains and losses relate primarily to inter-
group loans that the lender and borrower had different functional currencies which led to foreign exchange
differences upon translation. These loans were eliminated as part of the restructure undertaken as part of
the initial public offering and these foreign exchange gains and losses will not occur on a go forward
basis and accordingly are considered a pro forma adjustment.
(5) Amounts in tables may not add due to rounding
(6) Based on IPO shares issued of 201.2 million assuming shares were outstanding for the entire period.
Pro Forma
FY16 Actual
Pro Forma
FY16
Prospectus
%
Difference
166.1
31.1
34.6
5.8
18.8
$0.09
164.1
28.8
32.3
3.3
15.8
+1.2%
+7.9%
+7.1%
+74.7%
+18.7%
$0.08
+18.7%
Pro Forma
Pro Forma
FY16 Actual
FY15 Actual
%
Difference
166.1
31.1
34.6
5.8
18.8
$0.09
153.5
28.6
28.6
(3.0)
12.5
+8.2%
+8.6%
+21.1%
-
+49.6%
$0.06
+49.6%
(m)(5)
Revenue
EBITDA(2)
Adjusted EBITDA(3)(4)
NPAT
NPATA(1)
NPATA per share
(cents)(6)
(m)(5)
Revenue
EBITDA(2)
Adjusted EBITDA(3)(4)
NPAT
NPATA(1)
NPATA per share
(cents)(6)
Revenue
Overall revenue exceeded Prospectus Forecast by $2.0 million, or 1.2%. Revenue
exceeded forecast for the Australian (ATN) and Canadian (CTN) business units while the
12
United Kingdom business unit (UKTN) reached forecast revenue in local currency but was
impacted by unfavourable foreign exchange differences.
FY16 revenue by geographic segment
(m)(5)
Australia (ATN)
Canada (CTN)
United Kingdom (UKTN)
Brazil (BTN)
Total
FY16 Actual
FY16 Prospectus
% Difference
89.8
23.6
47.5
5.2
166.1
86.4
22.8
49.4
5.6
164.1
+4.0%
+3.7%
(3.7%)
(8.2%)
+1.2%
Group revenue was up $12.6 million (8%) from FY 2015 with all four operating segments
exceeding the previous year’s revenue in local currency.
(m)(5)
Australia (ATN)
Canada (CTN)
United Kingdom (UKTN)
Brazil (BTN)
Total
EBITDA
FY16 Actual
FY15 Actual
% Difference
89.8
23.6
47.5
5.2
166.1
83.5
21.2
43.5
5.3
153.5
+7.6%
+11.6%
+9.2%
(2.6%)
+8.2%
Pro Forma Adjusted EBITDA for FY16 was $34.6 million, exceeding Prospectus Forecast by
$2.3 million (+7%).
Pro forma results
(m)(5)
Revenues
Network operations and station
compensation expenses
Selling, general and administrative
expenses
Pro-forma FY16
Actual
Prospectus
166.1
164.1
+1.2%
(101.9)
(102.7)
(0.7%)
(33.2)
(32.7)
+1.4%
Net F/X losses on borrowings
-
-
-
Operating expenses
EBITDA
Interest income on Southern Cross
Austereo Affiliate Contract
Adjusted EBITDA
(135.1)
31.1
3.6
34.6
(135.3)
(0.2%)
28.8
+7.9%
3.5
+1.1%
32.3
+7.1%
Pro forma EBITDA adjustments primarily pertain to costs incurred related to the initial public
offering and restructure, foreign exchange gains and losses incurred upon translation of
inter-group loans that were capitalized and costs that will either be incurred on a go forward
basis (e.g. public company costs) or historical costs related to the operation of the Group as
a private entity that will no longer be incurred.
13
Pro forma NPATA
The Group reported Pro Forma NPATA of $18.8 million, exceeding Prospectus Forecast by
18.7%.
The stronger than forecast Pro Forma NPATA result was driven primarily by the combination
of the higher than forecast revenue result and the high level of operational leverage which
the Group has due to its largely fixed cost base.
FY16 Pro forma Cash Flow
The Group reported strong cash flow from operations. GTN’s strong liquidity position is
underpinned by the positive cash impact of the long-term affiliate agreement signed with the
Southern Cross Austereo Group in February 2016.
(m)(5)
Adjusted EBITDA
Non-cash items in Adjusted EBITDA
Change in working capital
Impact of new Southern Cross Austereo Affiliate Contract
Operating free cash flow before capital expenditure
Capital expenditure
Net free cash flow before financing, tax and dividends
Pro-forma Results FY16
Actual
Prospectus
34.6
0.2
(4.8)
2.0
32.0
(2.3)
29.7
32.3
0.2
(4.7)
1.9
29.8
(1.7)
28.1
Due to the modest working capital requirements, positive cash impact of the Southern Cross
Austereo prepayment and low capital expenditures, a significant portion of Adjusted EBITDA
is converted into net free cash flow before financing, tax and dividends. As a result of GTN’s
strong cash generation and the IPO offering proceeds, the Group’s cash balance was $49.1
million at 30 June 2016. The Group also has a $15 million bank facility which is undrawn as
of 30 June 2016.
The Group has outstanding debt principal at 30 June 2016 of $100 million and net debt
(principal less cash balances) of $50.9 million. The ratio of net debt to Pro Forma Adjusted
EBITDA is 1.5x at 30 June 2016.
Segment Adjusted EBITDA
Adjusted EBITDA by segment (excluding allocation of corporate overhead) exceeded
Prospectus Forecast in Australia, Canada and the United Kingdom.
(m)(5)
Australia (ATN)
Canada (CTN)
United Kingdom (UKTN)
Brazil (BTN)
Other (1)
Total
(1) Primarily corporate overhead
FY16 Actual
FY16 Prospectus
% Difference
31.8
2.0
4.4
(0.4)
(5.5)
32.3
+5.5%
+48.8%
+10.0%
(252.2%)
+1.2%
+7.1%
33.6
2.9
4.8
(1.3)
(5.4)
34.6
14
Key operating metrics
Key operating metrics by jurisdiction (local currency)
Notes
Actual
Prospectus
FY2016
Australia
Radio spots inventory ('000s)
Radio sell-out rate (%)
Average radio spot rate (AUD)
Canada
Radio spots inventory ('000s)
Radio sell-out rate (%)
Average radio spot rate (CAD)
United Kingdom
Total radio impacts available ('000)
Radio sell-out rate (%)
Average radio net impact rate (GBP)
Brazil
Radio spots inventory ('000s)
Radio sell-out rate (%)
Average radio spot rate (BRL)
1
2
3
1
2
3
4
5
6
1
2
3
789
81%
133
558
59%
64
18,885
94%
1.3
110
45%
273
750
80%
138
550
58%
61
18,658
93%
1.3
92
60%
281
1.
2.
3.
4.
Available radio advertising spots adjacent to traffic, news and information reports.
The number of radio spots sold as a percentage of the number of radio spots available.
Average price per radio spot sold net of agency commission.
The UK market measures inventory and units sold based on impacts instead of spots. An impact is
a thousand listener impressions.
The number of impressions sold as a percentage of the number of impressions available.
Average price per radio impact sold net of agency commission
5.
6.
Foreign exchange rates
A significant portion of the Company’s revenue and expenses are in a currency other than
Australia dollars (“AUD”). The actual and forecast annual exchange rates utilized in
preparing the annual consolidated statement of profit or loss and other comprehensive
income are as follows:
FY2016
Actual
FY2016
Forecast
0.73
0.97
0.49
2.68
0.71
0.95
0.47
2.72
AUD:USD
AUD:CAD
AUD:GBP
AUD:BRL
Restructuring
GTN is incorporated in Victoria under the Corporations Act 2001 (Cth), Australia. GTN was
incorporated as an Australian public company on 2 July 2015 as A.C.N. 606 841 801 and
acquired GTCR Gridlock Holdings (Cayman), L.P. (“Cayman”) as part of a restructure in
conjunction with the initial public offering of GTN’s stock. On June 4, 2016 pursuant to a
public offering of GTN Limited’s shares, Cayman was acquired by GTN. Any financial
information prior to the merger pertains to Cayman. GTN had no operations prior to the
merger.
15
GTN elected to account for the acquisition of Cayman as a capital re-organisation rather
than a business combination. In GTN’s judgement, the continuation of the existing
accounting values is consistent with the accounting that would have occurred if the assets
and liabilities had already been in a structure suitable to IPO and most appropriately reflects
the substance of the internal restructure. As such, the consolidated financial statements of
GTN have been presented as a continuation of the pre-existing accounting values of assets
and liabilities in the Cayman consolidated financial statements. In adopting this approach,
GTN notes that there is an alternate view that such a restructure should be accounted for as
a business combination that follows the legal structure of GTN being the acquirer. If this view
had been taken, the net assets of GTN would have been uplifted to fair value based on the
market capitalisation at completion with consequential impacts on the consolidated
statement of profit or loss and other comprehensive income statement and the consolidated
statement of financial position.
Initial public offering
On June 3, 2016 GTN completed an initial public offering of its shares raising (net of
capitalized transaction costs) $80.6 million by issuing 44.2 million shares at an issue price of
$1.90 per share. Funds received by GTN were offset by $3.4 million in transaction costs (net
of tax) incurred in relation to the issue of the new shares in GTN. In addition to the shares
sold by GTN, existing shareholders sold 54.7 million shares of the GTN’s stock. On
completion of the initial public offering, the original shareholders held 102.3 million shares of
GTN stock. These shares are subject to a voluntary escrow agreements.
Shares
(‘000’s)
Amount
($,000’s)
Shares issued by GTN
44,209
83,997
Less: Transaction expenses
-
(3,355)
Shares sold by original shareholders
54,706
103,942
Shares held by original shareholders
102,297
194,364
201,212
378,948
Long-term station affiliation agreement
GTN’s Australian operating subsidiary (“ATN”) entered into a new Southern Cross Austereo
Affiliate Contract on 9 February 2016, which commenced with effect from 1 February 2016.
Under the Southern Cross Austereo Affiliate Contract, ATN provides Southern Cross
Austereo with: (i) information reports and (ii) the cash payments described below, in
exchange for a specified number of advertising spots across Southern Cross Austereo’s
radio stations for the next 30 years (20 year contract with 10 year extension at ATN’s option).
As part of the agreement, ATN’s cash payments to Southern Cross Austereo under the prior
contract (which amounted to $14.9 million in FY2015) were replaced by the $100 million
upfront cash payment and recurring annual cash payments commencing on 1 February 2017
of $2.75 million that will be indexed by the lower of CPI and 2.5%. These annual recurring
payments will continue if the contract continues beyond the initial 20 year term.
The accounting for the new Southern Cross Austereo Affiliate Contract over its 30 year
contract term results in the recognition of a number of accounting income and expense
components which will differ in magnitude and timing from the actual cash payments that
ATN will make to Southern Cross Austereo over this period. In summary, the expected:
16
•
income statement impact of the Southern Cross Austereo Affiliate Contract comprises
two parts, namely accounting for:
o
o
the $100 million prepayment as a financing arrangement with Southern
Cross Austereo, whereby initially GTN will record non-cash interest income
over the term of the contractual agreement, based on an estimate of
Southern Cross Austereo’s incremental borrowing rate with similar terms
(estimated to be 8.5%), which will reduce over time as the prepayment is
amortised. GTN will also record station compensation expense over the
contract period equal to the $100 million prepayment plus the total non-cash
interest income which will be recognised straight line over the 30 year
contract term; and
the total recurring indexed cash payments which will be recognised straight
line over the 30 year contract term period (20 year initial term plus 10 year
extension).
GTN’s Adjusted EBITDA in future periods will reflect each of these
components while the net expense relating to the Southern Cross
Austereo Affiliate Contract will progressively increase over the
contract term, the year-on-year increases over the initial 10 years
will not be material.
Given that EBITDA includes non-cash station compensation
expense, the Company considers it is appropriate to adjust EBITDA
to include the non-cash interest income arising over the term of the
Southern Cross Austereo Affiliate Contract, and therefore has
elected to disclose Adjusted EBITDA as a non-IFRS measure, which
it considers is an appropriate measure of GTN’s underlying EBITDA
performance; and
• Cash flow impact of the Southern Cross Austereo Affiliate Contract comprises the
$100 million prepayment on 9 February 2016 and annual recurring payments over
the contract term of $2.75 million indexed by the lower of CPI and 2.5%.
o GTN’s cash flow statements in future periods will reflect the annual recurring
indexed cash payments relating to the Southern Cross Austereo Affiliate
Contract which will progressively increase over the contract term; the year-
on-year increases over the initial 10 years will not be material.
Radiate Purchase Option
On 23 March 2016, a United States based subsidiary of GTN (“GTN US”) entered into an
exclusive option with Radiate and Radiate Holdings, the sole member of Radiate, to
purchase all of the outstanding assets of Radiate. The material terms of the Radiate Option
are:
- Term: 1 March 2016 to 30 September 2016 which is exercisable from 1 September 2016.
GTN US can extend the option term until 31 December 2016 by paying an additional non-
refundable payment of $50,000 USD on or prior to 30 September 2016. The option was
extended in September 2016;
- Price of Radiate Option: $200,000 USD (plus $50,000 USD to extend the option term to
31 December 2016);
- Exercise price: $15 million USD (inclusive of the assumption of up to $8 million USD in
liabilities);
- Due diligence: Radiate and Radiate Holdings are required to provide GTN US with all
books, agreements, papers and records related to Radiate which are reasonably
requested by GTN US and permit GTN US and its representatives reasonable access to
inspect and review Radiate’s business; and
- Covenants: During the term of the option, Radiate and Radiate Holdings shall conduct the
business of Radiate in the ordinary course, use commercially reasonably efforts to
preserve the value of Radiate’s business, keep GTN US informed of material
developments in relation to Radiate’s business, not sell or dispose of any material assets
of Radiate, without GTN US’ written consent (subject to certain exceptions), not sell or
17
transfer any equity interests in Radiate and not solicit or enter into negotiations regarding
an alternative transaction to the Radiate Option.
GTN expects to complete its due diligence during the extended option period and determine
whether it plans to exercise the option prior to the expiration date of the option.
Radiate operates a traffic network in the United States and GTN believes it is the second
largest traffic network by revenue in the United States, which is the largest advertising
market in the world. Subject to the satisfactory completion of due diligence, GTN sees
Radiate as a cost effective platform to launch operations in the United States.
Dividends
No dividend has been declared for the period in line with prospectus guidance.
Non-IFRS measurements
● EBITDA is earnings before interest, tax, depreciation and amortisation.
Management uses EBITDA to evaluate the operating performance of the business
without the non-cash impact of depreciation and amortisation and before interest
and tax charges, which are significantly affected by the capital structure and
historical tax position of the Company.
EBITDA can be useful to help understand the cash generation potential of the
business because it does not include the non-cash charges for depreciation and
amortisation. However, management believes that it should not be considered as an
alternative to net free cash flow from operations and investors should not consider
EBITDA in isolation from, or as a substitute for, an analysis of the Company’s results
of operations;
● Adjusted EBITDA is EBITDA adjusted to include the non-cash interest income
arising from the long-term prepaid Southern Cross Austereo Affiliate Contract which
is discussed above.
Management considers that Adjusted EBITDA is an appropriate measure of GTN's
underlying EBITDA performance. Otherwise, the EBITDA would reflect significant
non-cash station compensation charges without offsetting non-cash interest income
arising from the treatment of the contract as a financing arrangement.
● NPATA is net profit (loss) after tax adjusted to add-back the tax effected impact of
amortization of intangible assets related to the purchase accounting arising from
GTCR’s acquisition of Global Traffic Network, Inc. in September 2011.
Management considers it appropriate to disclose NPATA because the amortization
of the intangibles related to purchase accounting is both a non-cash charge and
there will be no future cash outlays to “replace” these assets once fully amortized.
Non-IFRS information has not been audited.
Likely developments and expected results
The Company’s prospects and strategic direction are discussed in the Operating Strategy
section of the Directors’ Report.
Further information about likely developments in the operations of the Company and the
expected results of those operations in future financial years has not been included in the
report because disclosure of the information would be likely to result in prejudice to the
Company.
Significant changes in the state of affairs
Except as outlined elsewhere in this Directors’ Report, there were no significant changes in
the affairs of the Group during the fiscal year.
18
Events since the end of financial year
Except as outlined in the Financial Statements and elsewhere in this Directors’ Report, no
matter or circumstance has arisen since 30 June 2016 that has significantly affected the
Group’s operations, results or state of affairs or may do so in future years.
Environmental regulation
The operations of the Group are not subject to any particular or significant environmental
regulation or law.
Insurance of officers and Directors
Pursuant to its constitution, GTN may indemnify Directors and officers, past and present,
against liabilities that arise from their position as a Director or officer allowed under law.
Under the deeds of access, indemnity and insurance, GTN indemnifies each Director against
liabilities to another person that may arise from their position as a director of GTN to the
maximum extent permitted by law. The deeds of access, indemnity and insurance stipulate
that GTN will reimburse and compensate each Director for any such liabilities, including
reasonable legal costs and expenses, except where a director’s act is fraudulent, criminal,
dishonest or wilfully deceitful.
Pursuant to its constitution, GTN may arrange and maintain directors’ and officers’ insurance
for its Directors to the maximum extent permitted by law. Under the deeds of access,
indemnity and insurance, GTN must use reasonable endeavours to obtain such insurance
during each Director’s period of office and for a period of seven years after a Director ceases
to hold office. This seven year period can be extended where certain proceedings or
investigations commence before the seven year period expires.
GTN has obtained insurance in respect to directors’ and officers’ liability for the year ended
30 June 2016 and thereafter. These insurance policies insure against certain liabilities
(subject to exclusions) of persons that have been directors or officers of GTN or its direct or
indirect subsidiaries to the extent allowed by the Corporations Act 2001.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave
to bring proceedings on behalf of GTN, or to intervene in any proceedings to which GTN is a
party, for the purposes of taking responsibility on behalf of GTN for all or part of those
proceedings.
No proceedings have been brought or intervened in on behalf of GTN with leave of the Court
under section 237 of the Corporations Act 2001.
Non-audit services
The Company may decide to employ the auditor on assignments additional to their statutory
audit duties where the auditor’s expertise and experience with the Group is important.
Details of the amounts paid or payable to the auditor (PricewaterhouseCoopers Australia
and its related companies) for audit and non-audit services provided during the year are
included in Note 10 of the Consolidated Financial Report.
The Board has considered the position and, in accordance with advice received from the
Audit and Risk Committee, is satisfied the provision of the non-audit services is compatible
with the general standard of independence for auditors imposed by the Corporations Act
2001. The Directors are satisfied that the provision of non-audit services by the auditor, as
set forth below, did not compromise the auditor independence requirements of the
Corporations Act 2001 for the following reasons:
• all non-audit services have been reviewed by the Audit and Risk Committee
to ensure they do not impact the impartiality and objectivity of the auditor
19
• none of the services undermine the general principles relating to auditor
independence as set out in APES 110 Code of Ethics for Professional
Accountants.
During the year the following fees were paid or payable for non-audit services provided by
the auditor of GTN and its related practices:
Other assurance services
Other assurance services
Due diligence
Remuneration from other assurance services
Taxation services
Tax compliance
Tax advice on mergers and acquisitions
Due diligence
Remuneration for taxation services
2016
$
2015
$
1,189,000
1,189,000
244,000
167,000
1,956,000
2,367,000
-
-
261,000
445,000
-
706,000
Total remuneration for non-audit services
3,556,000
706,000
*Included in the above fees are amounts paid to network firms of PricewaterhouseCoopers Australia.
Auditor’s independence declaration
A copy of the auditor’s independence declaration as required under section 307C of the
Corporations Act 2001 is set forth on page 30.
Rounding of amounts
GTN is of a kind referred to in ASIC Corporations Instrument 2016/191, issued by the
Australian Securities and Investments Commission, relating to the ‘rounding off’ of amounts
in the Directors’ Report. Amounts in the Directors’ Report have been rounded off in
accordance with that ASIC Corporations Instrument to the nearest thousand dollars, or in
certain cases, the nearest dollar.
Directors’ interests in shares and options of GTN
The relevant interests of each Director in the equity of GTN as of the date of this Directors’
Report are disclosed in the Remuneration Report.
This report was made in accordance with a resolution of the Directors.
Gary L. Miles
Chairman
29 September 2016
20
Remuneration Report
The directors present the GTN 2016 remuneration report, outlining key aspects of our
remuneration policy and framework, and remuneration awarded this year.
The report is structured as follows:
a) Key management personnel (KMP) covered in this report
b) Remuneration policy and link to performance
c) Elements of remuneration
d) Link between remuneration and performance
e) Remuneration expenses for executive KMP
f) Contractual arrangements for executive KMP
g) Non-executive director arrangements
h) Other statutory information
(a) Key management personnel covered in this report
Non-executive and executive directors (see pages 6 to 7 - for details about each
director)
Gary Miles
William Yde III
Mark Anderson
David Ryan AO
Robert Loewenthal
Other key management personnel
Name
Scott Cody
Gary Worobow
Position
Chief Operating Officer and Chief Financial Officer
Executive Vice President, Business and Legal Affairs
Key management personnel are those executive management members that have
responsibility and authority for planning, controlling and directing resources for the
entire group. Other senior executives, such as jurisdictional management, are not
considered to be key management personnel for the purposes of the remuneration
report as their duties are related to their geographic area of operation only and do
not extend to strategic direction and control of resources of the Group.
Changes since the end of the reporting period
None
(b) Remuneration policy and link to performance
Our remuneration committee is made up of non-executive directors (a majority of whom
are independent). The committee reviews and makes recommendations to the Board
about our remuneration policy and structure annually to align it to business needs and
meet our business principles. From time to time, the committee may also engage
external remuneration consultants to assist with this review (see section (v) Reliance on
external remuneration consultants). In particular, the policies and practices are designed
to:
● enable the Company to attract, retain and motivate directors, executives and
employees who will create value for shareholders within an appropriate risk
management framework by providing remuneration packages that are equitable and
externally competitive;
● be fair and appropriate having regard to the performance of the Company and the
relevant director, executive or employee;
●foster exceptional human talent and motivate and support employees to pursue the
growth and success of the Company in alignment with the Company’s values; and
● equitably and responsibly reward employees, having regard to the performance of
the Company, individual performance and statutory and regulatory requirements.
21
Remuneration Framework
Purpose
Element
Fixed
Remuneration
(FR)
Provide
competitive
market salary
Short-term
incentive (STI)
Long-term
incentive (LTI)
Reward for in
year
performance
Alignment to
long-term
shareholder
value
Performance
metrics
N/A
Potential
Value
Varies
Adjusted EBITDA Varies
Varies
50% relative total
shareholder return
(TSR)
50% adjusted EPS
growth
Changes for
FY17
Reviewed in
line with
market
positioning
Targets
adjusted on an
annual basis
Expected to be
granted during
FY 2017
Balancing short-term and long-term performance
Annual incentives are set at levels designed to maximize performance.
Long-term incentives consist of share options that vest one third after the first year and
two thirds after three years and are designed to align management’s interests with those
of the shareholders and encourage retention.
Target remuneration mix for FY 2017
Chief Executive Officer
Other Executive
Management
FR
74%
82%
STI (Cash)
10%
8%
LTI
16%
10%
Assessing performance
The Board has overall responsibility for executive remuneration and receives
recommendations from the Remuneration Committee. To assist with its assessment of
executive compensation the committee receives reports on performance from
management which are based on independently verifiable data such as financial
measures and independent market data. There are no “claw-back” provisions in any of
the performance based remuneration plans.
(c) Elements of remuneration
(i)
Fixed annual remuneration (FR)
Executives may receive their fixed remuneration as cash or cash with non-monetary
benefits such as health insurance and similar benefits. FR is reviewed annually or upon
promotion or change in circumstance. Executive compensation is bench marked at the
25th percentile for companies of a similar market cap as determined by an independent
compensation survey. Superannuation is included for Australia based employees and
directors only.
(ii)
Short-term incentives (STI)
Feature
Maximum
bonus
Description
CEO – 22%, other executive management 15% of FR
66.7% of the maximum bonus is paid for achieving 100% of
the performance metrics. At 95% of the performance metric,
25% of the bonus is paid, which increases on a straight line
basis between 95% (@25%) and 100% (@ 66.7%) of
performance metrics. 100% of the maximum bonus is paid at
110% of performance metrics. Between 100% and 110%, the
bonus is paid out on a straight line basis between 66.7% (@
100%) and 100% (@110%). No additional bonus is paid for
22
performance in excess of 110% of performance metrics.
Performance
Metrics
Aligns executive compensation with market expectations.
Metric
Adjusted
EBITDA
Target
FY17
Prospectus
Forecast
Adjusted
EBITDA
Weighting Reason
Adjusted
100%
EBITDA is
primary criteria
by which
investors judge
performance
Delivery of STI 100% paid upon conclusion of fiscal year after completion of
Board
discretion
audit of financial statements
The Board has discretion to adjust remuneration outcomes up
or down to prevent any inappropriate reward outcomes.
(iii)
Long-term incentives
Feature
Allocation
Performance
Metrics
Description
CEO 70% FR, Other executive management 30%-50% of FR.
Target allocation is based on fair value of the grant, which
vests over three years.
50% subject to performance condition based on the
Company’s relative total shareholder return (TSR) compared
to members of the ASX 300 (excluding financials and
resources) over the performance period
TSR ranking
Percentage to
vest
Up to and including the 50th percentile
Between the 51st and 75th percentile
(inclusive)
At and above 75th percentile
0%
Pro rata straight
line between 50%
and 100%
100%
50% subject to performance condition based on Company’s
earnings per share (EPS) growth (adjusted for one-off items
associated with the IPO and amortization of intangibles as
determined by the Board) over the performance period
EPS Compound annual growth
rate
Less than threshold
Between threshold and stretch target
(inclusive)
Percentage to
vest
0%
Pro rata straight
line between 50%
and 100%
Above stretch target
100%
Exercise Price
Forfeiture and
termination
Initial exercise price $1.90 per share (IPO price). Thereafter
the exercise price of an option will be set out in the offer for
each particular grant and may be zero.
Options will lapse if performance conditions are not met. Any
unvested options granted will be forfeited where the participant
resigns or is dismissed during the performance period.
However, if the participant is considered a good leaver their
unvested options will vest or remain on foot.
23
(d)
Link between remuneration and performance
The Company’s pro forma adjusted EBITDA performance was strong for fiscal
2016 exceeding prospectus forecast by 7%. As a result, executive management
received 100% of their bonus potential for the period. In addition, executive
management was paid one-time IPO bonuses due to the Company’s successful
completion of its initial public offering.
As a newly listed entity a five year analysis of Company performance versus
remuneration was not performed as the Board does not feel the Company
compensation plans and performance as a private company is meaningful to its
current compensation plans and performance as a listed entity.
(e) Remuneration expenses for executive KMP
Fixed remuneration
Name
Year
Cash
Salary
Non-
monetary
benefits
Post-
employment
benefits
(1)(2)
(2)
Executive
Management
William Yde
III
(6)(4)
2016
2015
803,035
711,637
Scott Cody
(6)(4)
2016
2015
531,796
472,431
Gary
Worobow
2016
471,778
(6)(4)
2015
401,520
-
-
-
-
-
-
-
-
-
-
-
-
Variable
Remuneration
Fair
Value
of
Class D
Units
Cash
bonus
Total
(3)
(5)
Other
(4)
17,619
14,352
3,922,295
4,744,415
1,466
354,395 500,032 1,580,416
17,619
14,352
2,330,450
196,059 200,013
586 2,880,451
882,855
17,619
1,534,173
220
2,023,790
14,352
111,088
75,005
601,965
(1) Includes superannuation where applicable
(2) Excludes non-monetary benefits such as health insurance, annual leave, long service, social
security, Medicare that are extended to all or substantially all employees. Payments for annual leave
are considered a component of cash salaries.
(3) GTN Limited’s predecessor company granted equity (in the form of Class D units) and phantom
equity to certain management. This plan was cancelled as part of the IPO restructuring and each
remaining participant (excluding Mr. Yde) received a nominal sum ($1,000 USD) as full consideration
for the plan. Compensation expense is based on the amount of expense recognized in the
statement of profit or loss and was calculated using a Black-Scholes valuation model. Further
information with regards to these calculations can be found in Note 26 (Equity based compensation)
of the Consolidated Financial Report included as part of the Annual Report.
(4) United States based executive management receives cash stipend in lieu of the provision of health
insurance and similar employee benefits. The amount of the stipend was USD 1,000 per month until
June 2016 when it was increased to USD 2,000 per month.
(5) All amounts translated into AUD at the average exchange rate for the year.
(6) Paid in United States dollars (USD).
(f) Contractual arrangements with executive KMP’s
Component
CEO Description
Fixed remuneration(1)
$677,143
Contractual term
Notice by the
individual/Company
Ongoing contract
By the Employee voluntarily
upon at least twelve (12)
Other executive
management description
Range between $355,714
and $441,429
Ongoing contract
By the Employee voluntarily
upon at least twelve (12)
24
months written notice to the
Company, such notice not
to be given prior to July 1,
2017. Should the executive
terminate their employment
after 1 July 2017, they will
be entitled to up to one year
severance. Severance is
calculated based on a
formula that subtracts the
required transition time (as
determined by the
Company) from the
maximum one year period.
Entitled to pro-rata STI for the year
By the Company without
Cause upon twelve (12)
months written notice to
Employee, such notice not
to be given prior to July 1,
2017.
Entitled to pro-rata STI for the year
Immediately
Immediately
months written notice to the
Company, such notice not to
be given prior to July 1,
2017. Should the executive
terminate their employment
after 1 July 2017, they will
be entitled to up to one year
severance. Severance is
calculated based on a
formula that subtracts the
required transition time (as
determined by the
Company) from the
maximum one year period.
By the Company without
Cause upon twelve (12)
months written notice to
Employee, such notice not
to be given prior to July 1,
2017.
Termination of employment
(without cause)
Termination of employment
(with cause) or by the
individual
No STI entitlement.
(1) Based on Prospectus Forecast exchange rates for FY 2017
(g) Non-executive director arrangements
Non-executive directors receive a fixed monthly fee for participating on the board. They do
not receive performance based fees or retirement allowances. The directors’ fees are
inclusive of superannuation where applicable. The chairperson does not receive additional
fees for participating in or chairing committees, rather this is taken into account as part of
their overall director fee.
The current base fees were reviewed in fiscal 2016 when the board of directors was
established. Fees will be reviewed annually by the board taking into account comparable
roles at comparable sized companies and other available market data. The board may
engage an independent remuneration advisor at its discretion.
The maximum annual aggregate directors’ fee pool limit is $550,000 and was approved by
the shareholders on 12 May 2016.
Base fees
Chair(1)
Other independent non-executive directors (2)
$133,929
$90,000
Additional fees
Audit and risk committee – Chair
Audit and risk committee – member
Nomination and remuneration committee –
Chair
Nomination and remuneration committee –
member
$40,000
-
-
$10,000
(1) Chairperson is paid a fixed directors’ fee of CAD $125,000 per annum. Amount in
the table has been translated based on an assumption of CAD/AUD exchange rate
of 1.07.
(2) Mark Anderson is a non-executive director that is not considered independent due to
GTCR’s large shareholdings in the Company. Mr. Anderson is a managing director
of GTCR. Mr. Anderson receives no compensation from the Company for his
25
directorship.
All non-executive directors enter into a service agreement with the Company in the form of a
letter of appointment. The letter summarises the board policies and terms, including
remuneration, relevant to the office of director.
Non-executive director remuneration
Name
Year
Base fee
Audit and Risk
Committee
Remuneration
and
Nomination
Committee
Total
G Miles (1)(2)
2016
8,989
M Anderson
2016
-
R Loewenthal
2016
6,250
-
-
-
-
-
8,989
-
694
6,944
D Ryan
2016
6,250
2,778
-
9,028
Total non-
executive director
remuneration
2016
21,489
2,778
694
24,961
(1) Paid in Canadian dollars (CAD). Amount translated into AUD based on same
exchange rates as annual financial statements.
(2) Excludes fees paid as a consultant to the Company prior to becoming a director.
Relative proportions of fixed vs variable remuneration expense
(h) Additional statutory information
(i)
The following table shows the relative proportions of remuneration that are linked to
performance and those that are fixed, based on the amounts disclosed as statutory
remuneration expense above:
Relative proportions of fixed vs variable remuneration expense
Fixed
remuneration
2016
At Risk – STI
At Risk – LTI*
2016
2016
Name
Executive directors
W Yde
17%
Other key management personnel of the group
19%
S Cody
24%
G Worobow
83%
81%
76%
-
-
-
* Where applicable, the expenses include negative amounts for expenses reversed during
the year
(ii)
Performance based remuneration granted and forfeited during the year
The following table shows for each KMP how much of their STI cash bonus was
awarded and how much was forfeited. It also shows the value of options that were
granted, exercised and forfeited during FY 2016.
Total STI bonus (cash)
Total
Opportunity
$
2016
Awarded
%
2016
Forfeited
%
2016
LTI Options
Value
granted*
$
2016
Value
exercised**
%
2016
Name
26
B Yde (1)
S Cody (2)
G Worobow
(3)
3,922,295
2,330,450
1,534,173
100
100
100
-
-
-
-
-
-
-
-
-
(1) USD 2,857,000. Includes USD 2,500,000 bonus for successful completion of
the initial public offering. Amounts in the table have been translated into AUD
based on the exchange rate used to prepare the financial statements.
(2) USD 1,697,500. Includes USD 1,500,000 bonus for successful completion of
the initial public offering. Amounts in the table have been translated into AUD
based on the exchange rate used to prepare the financial statements.
(3) USD 1,117,500. Includes USD 1,000,000 bonus for successful completion of
the initial public offering. Amounts in the table have been translated into AUD
based on the exchange rate used to prepare the financial statements.
(iii)
Terms and conditions of equity-based payment arrangements.
The Company terminated its equity based compensation plan as part of the restructuring
related to the initial public offering. A full description of the terms of this plan can be found in
Note 26 (Equity based compensation) of the Consolidated Financial Report included as part
of the Annual Report.
(iv)
Reconciliation of Class D units and phantom equity held by KMP and directors
2016
Name &
Grant Date
Balance
at the
start of
the year
Unvested
Granted
as
Compen
sation
Vested
Exercised
Forfeited
Other
changes*
Balance at the end
of the year
#
%
#
%
Unvested
Vested
and
exercisa
ble
Class D Units
W. Yde
17 Apr
2012
27 Sept
2011
85,188
755,287
-
-
127,782
60
1,132,930
60
-
-
-
-
-
-
(212,970)
(1,888,217)
-
-
-
-
S Cody
(1)
12 Mar
2012
G
Worobow
(1)
31 Mar
2012
336,190
-
504,285
60
-
-
-
(840,475)
-
-
126,071
-
189,107
60
-
-
-
(315,178)
-
-
Phantom Equity Units
G Miles
(1)(2)
30 Apr
2012
42,024
-
63,035
60
-
-
-
(105,059)
-
-
*Plan terminated as part of IPO restructuring
27
(1) Paid USD 1,000 as consideration for cancellation of equity-based compensation plan. Preferred
shares value was in excess of fair market value of equity at time of IPO.
(2) Mr. Miles was granted phantom equity units in his previous role as a consultant to the Company.
Ordinary
Shares
2016
Name
Balance at
the start of
year
Received
during the
year on
exercise of
stock
options
G. Miles (1)
-
W. Yde (2)
6,394,509
M. Anderson
(3)
D. Ryan (1)
R.
Loewenthal
(1)(5)
S. Cody
G. Worobow
(4)
-
-
-
-
10
-
-
-
-
-
-
-
Shares
Purchased
Shares
Sold
Balance at
the end of
the year
60,000
-
60,000
-
-
68,421
15,789
-
-
2,967,792
3,426,717
-
-
-
-
-
-
68,421
15,789
-
10
(1) Shares purchased during Priority Offer of IPO
(2) Beginning shareholdings adjusted for restructuring during which Class A preferred
equity units were exchanged for 870 ordinary shares each. During the year Mr. Yde
sold the equivalent of 1,499,199 shares to the Company for USD $2.5 million. Mr.
Yde also sold 1,468,593 shares as part of the secondary portion of the IPO at the
offer price of $1.90 per share.
(3) Excludes GTCR holdings.
(4) Initial shares upon forming GTN Limited.
(5) Shares held indirectly through superannuation fund.
(v)
Other transactions with key management
Mr. Miles, prior to becoming our non-executive chairman provided consulting services to
the Company. His fees, translated from CAD into AUD (based on the exchange rates
used to prepare the financial statements) were as follows:
● FY 2016
● FY 2015
$143,684
$245,282
In addition, Mr. Miles held 105,059 phantom Class D equity units that were granted on
30 April 2012. The expense recognized with relation to these units was as follows:
● FY 2016
● FY 2015
($24,806)
$6,234
The equity-based compensation plan was cancelled in June 2016 as part of the
restructuring related to the IPO and Mr. Miles received a nominal amount (USD 1,000)
for his consent to the termination of the plan. Since the Phantom Equity units provide no
rights to acquire equity in the Partnership and it was expected that these Phantom
Equity units will be cash-settled, the Phantom Equity expense is treated as a liability
rather than additional capital. Once the plan was cancelled, the liability no longer
28
existed and the expense recognized in prior years was reversed, which resulted in the
negative expense in FY 2016.
The Company terminated the consulting agreement prior to Mr. Miles joining the board
and no further consideration is due.
Mr. Yde’s daughter is employed by the Company as an accountant. Her cash salary
(translated from USD to AUD at the same exchange rates as the Company’s financial
statements) was:
●FY2016
●FY2015
$164,710
$141,229
The Board considers the compensation received by Mr. Yde’s daughter to be consistent
with the compensation that would be paid to unrelated third parties for a similar position
and thus has not included any of these payments in Mr. Yde’s remuneration disclosures.
(vi)
Reliance on external remuneration consultants
During fiscal 2015, prior to the Company’s IPO, the owners of the Company engaged
Mercer to provide an analysis, benchmarking and recommendations of market
remuneration practices for similar size listed Australian companies for the following
positions: CEO, CFO and general counsel. Mercer was paid $49,000 for these services.
Effective with the date of the IPO these recommendations were substantially adopted,
which targeted compensation for these positions at the 25th percentile of the market
comparisons.
(vii)
Voting of shareholders at last year’s annual general meeting
N/A
29
GTN Limited
ACN 606 841 801
Consolidated Financial Report
For the year ended 30 June 2016
31
GTN Limited
For the year ended 30 June 2016
32
Contents
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Page
33
34
35
36
37
80
GTN Limited
For the year ended 30 June 2016
33
Consolidated Statement of Profit or Loss and
Other Comprehensive Income
For the year ended 30 June 2016
Revenue
Other income
Interest income on long-term prepaid affiliate contract
Network operations and station compensation expenses
Selling, general and administrative expenses
Transaction expenses
Depreciation and amortisation
Finance costs
Foreign currency transaction loss
Loss before income tax
Income tax (expense)/benefit
Loss for the year
Other comprehensive income for the year, net of income tax:
Foreign currency translation reserve
Unrealised gain on interest rate swaps
Total other comprehensive income for the year
Notes
2016
7
7
7
8
8
8
8
9
$’000
166,124
256
3,581
(101,919)
(32,697)
(14,029)
(19,931)
(8,160)
(5,461)
(12,236)
2015
$’000
153,484
514
-
(93,950)
(32,661)
(583)
(23,391)
(5,162)
(17,287)
(19,036)
(4,998)
867
(17,234)
(18,169)
(200)
799
599
19,068
168
19,236
Total comprehensive (loss)/income for the year
(16,635)
1,067
Earnings per share attributable to the ordinary equity holders:
Basic and diluted earnings per share (cents)
24
$(0.11)
$(0.11)
This statement should be read in conjunction with the notes to the financial statements.
GTN Limited
For the year ended 30 June 2016
34
Consolidated Statement of Financial Position
As at 30 June 2016
Assets
Current
Cash and cash equivalents
Trade and other receivables
Other current assets
Current assets
Non-current
Property, plant and equipment
Intangible assets
Goodwill
Deferred tax assets
Other assets
Non-current assets
Total assets
Liabilities
Current
Trade and other payables
Deferred revenue
Current tax liabilities
Financial liabilities
Provisions
Current liabilities
Non-current
Trade and other payables
Financial liabilities
Deferred tax liabilities
Derivatives
Other liabilities
Provisions
Non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Reserves
Accumulated losses
Total equity
Notes
11
12
13
16
15
14
17
13
18
20
17
21
19
18
21
17
22
23
19
25
2016
$’000
49,063
33,625
1,890
84,578
6,485
70,678
92,716
-
99,099
268,978
353,556
27,258
544
2,320
-
855
30,977
68
96,806
10,237
-
72
452
107,635
138,612
214,944
2015
$’000
25,880
28,848
856
55,584
6,790
89,232
93,885
7,956
323
198,186
253,770
26,182
206
1,078
2,559
709
30,734
66
46,711
22,125
1,229
779
476
71,386
102,120
151,650
378,948
6,706
(170,710)
214,944
248,717
30,728
(127,795)
151,650
This statement should be read in conjunction with the notes to the financial statements.
GTN Limited
For the year ended 30 June 2016
35
Consolidated Statement of Changes in Equity
For the year ended 30 June 2016
Notes
Balance at 1 July 2014
Total comprehensive income:
Net loss
Other comprehensive income
Transactions with owners in their capacity as owners:
Preferred equity dividends
Equity based compensation
Balance at 30 June 2015
Total comprehensive income:
Net loss
Other comprehensive income (loss)
Transactions with owners in their capacity as owners
Preferred equity dividends
Repurchase of equity units
Reverse existing capital resulting from restructure
Ordinary shares issued to existing shareholders
Ordinary shares issued
Costs relating to share issue net of tax
Common control reserve from restructure
Equity based compensation
Balance at 30 June 2016
25
Issued
Capital
$’000
226,419
-
-
-
22,298
-
22,298
248,717
-
-
-
25,681
(3,406)
(270,992)
298,306
83,997
(3,355)
-
-
130,231
378,948
Common
Control
Reserve
$’000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(24,655)
-
(24,655)
(24,655)
Foreign Currency
Translation Reserve
$’000
10,362
Hedging Reserve
$’000
Equity Based
Payments
Reserve
$’000
(967)
1,300
Accumulated
Losses
$’000
(87,328)
Total
Equity
$’000
149,786
-
19,068
19,068
-
-
-
-
168
168
-
-
-
-
-
-
-
797
797
(18,169)
-
(40,467)
(22,298)
-
-
(18,169)
19,236
1,067
-
23,095
23,095
29,430
(799)
2,097
(127,795)
151,650
-
(200)
(200)
-
-
-
-
-
-
-
-
(200)
29,230
-
799
799
-
-
-
-
-
-
-
-
799
-
-
-
-
-
-
-
-
-
-
-
34
-
(17,234)
-
(17,234)
599
(17,234)
(16,635)
(25,681)
-
-
-
-
-
-
-
-
(3,406)
(270,992)
298,306
83,997
(3,355)
(24,655)
34
(42,915)
63,260
2,131
(170,710)
214,944
This statement should be read in conjunction with the notes to the financial statements.
GTN Limited
For the year ended 30 June 2016
36
Consolidated Statement of Cash Flows
For the year ended 30 June 2016
Operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Finance costs
Income tax paid
Net cash from operating activities
Investing activities
Purchase of property, plant and equipment
Long-term prepaid station affiliate agreement
Proceeds from disposals of property, plant and equipment
Notes
2016
$’000
2015
$’000
28
172,304
169,707
(154,474)
(139,447)
244
(7,170)
(6,838)
4,066
(2,270)
(100,000)
-
514
(4,512)
(7,979)
18,283
(4,066)
-
1
Net cash used in investing activities
(102,270)
(4,065)
Financing activities
Proceeds from borrowings
Proceeds for initial public offering of stock (net of transaction costs)
Equity interests repurchased
Repayment of borrowings
Deferred financing costs
Net cash from (used) in financing activities
Net change in cash and cash equivalents
Cash and cash equivalents, beginning of year
Exchange differences on cash and cash equivalents
155,459
80,642
(3,406)
(105,913)
(4,229)
-
-
-
(15,884)
-
122,553
(15,884)
24,349
25,880
(1,166)
(1,666)
28,519
(973)
Cash and cash equivalents, end of year
11
49,063
25,880
This statement should be read in conjunction with the notes to the financial statements.
GTN Limited
For the year ended 30 June 2016
37
Notes to the Consolidated Financial Statements
Corporate information
1
Nature of operations
GTN Limited and its subsidiaries (the “Company”’) provides traffic and news information reports to radio
and/or television stations in international markets, including Australia, Canada, the United Kingdom and
Brazil. The Company derives a substantial majority of its revenues from the sale of commercial advertising
adjacent to information reports. The Company obtains these advertising commercials from radio and
television stations in exchange for information reports and/or cash compensation.
General information
GTN Limited is a registered Victoria company under the Corporations Act of 2001. GTN Limited was
formed on 2 July 2015 as A.C.N. 606 841 801. On June 4, 2016 pursuant to a public offering of GTN
Limited’s shares, GTCR Gridlock Holdings (Cayman), L.P. (“Cayman”) was merged into GTN Limited. Any
financial information prior to the merger pertains to Cayman. GTN Limited had no operations prior to the
merger.
Cayman was a Cayman Islands limited partnership that formed on 25 July 2011 for the purpose of acquiring
Global Traffic Network, Inc. (“GTN”). The purchase of GTN was completed 28 September 2011 with GTN
becoming a wholly owned indirect subsidiary of Cayman. Certain subsidiaries of GTN were transferred to
other indirect subsidiaries of Cayman. GTCR Gridlock Partners, Ltd. was the General Partner (the “General
Partner”) of Cayman.
The address of GTN Limited’s registered office and its principal place of business is Level 42, Northpoint,
100 Miller Street North Sydney, NSW Australia 2060.
The consolidated financial statements for the year ended 30 June 2016 (including comparatives) were
approved and authorised for issuance on 29 September 2016. The directors have the power to amend and
reissue the financial statements.
GTN Limited
For the year ended 30 June 2016
38
Summary of significant accounting policies
2
The significant accounting policies that have been used in the preparation of these consolidated financial
statements are summarised below. These policies have been consistently applied to all the period presented
unless otherwise stated. The financial statements are for the group consisting of GTN Limited and its
subsidiaries.
2.1 Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting
Standards and Interpretations issued by the Australian Accounting Standards Board and the Corporations Act
2001. GTN Limited is a for-profit entity for the purpose of preparing the financial statements.
(i) Compliance with IFRS
The consolidated financial statements of GTN Limited also comply with International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
(ii) Historical cost convention
The financial statements have been prepared on a historical cost basis, except for the following:
● available-for-sale financial assets, financial assets and liabilities (including derivative instruments), certain
classes of property, plant and equipment and investment property – measured at fair value,
● assets held for sale – measured at fair value less cost of disposal, and
● defined benefit pension plans – plan assets measured at fair value.
2.2 Basis of consolidation
The Company’s financial statements consolidate those of GTN Limited and all of its subsidiaries (the
“group”) as of 30 June 2016. The Company controls a subsidiary if it is exposed, or has rights, to variable
returns from its involvement with the subsidiary and has the ability to affect those returns through its power
over the subsidiary. All subsidiaries have a reporting date of 30 June.
All transactions and balances between the group are eliminated on consolidation, including unrealised gains
and losses on transactions between the Company and its subsidiaries. Where unrealised losses on “intra-
group” asset sales are reversed on consolidation, the underlying asset is also tested for impairment from a
group perspective. Amounts reported in the financial statements of subsidiaries have been adjusted where
necessary to ensure consistency with the accounting policies adopted by the Company.
Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are
recognised from the effective date of acquisition, or up to the effective date of disposal, as applicable.
2.3 Business combination
The Company applies the acquisition method in accounting for business combinations.
The consideration transferred by the Company to obtain control of a subsidiary is calculated as the sum of
the acquisition date fair values of assets transferred, liabilities incurred and the equity interests issued by the
Company, which includes the fair value of any asset or liability arising from a contingent consideration
arrangement. Acquisition costs are expensed as incurred.
GTN Limited
For the year ended 30 June 2016
39
The Company recognises identifiable assets acquired and liabilities assumed in a business combination
regardless of whether they have been previously recognised in the acquiree’s financial statements prior to the
acquisition. Assets acquired and liabilities assumed are generally measured at their acquisition-date fair values.
Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of
the sum of (a) fair value of consideration transferred; (b) the recognised amount of any non-controlling
interest in the acquiree; and (c) acquisition-date fair value of any existing equity interest in the acquiree, over
the acquisition-date fair values of identifiable net assets. If the fair values of identifiable net assets exceed the
sum calculated above, the excess amount (i.e. gain on a bargain purchase) is recognised in profit or loss
immediately.
2.4 Foreign currency translation
Functional and presentation currency
The consolidated financial statements are presented in Australian dollars (AUD). ATN, Aus Hold Co and
GTN Limited’s functional currency is Australian dollars (AUD); CTN’s functional currency is Canadian
dollars (CAD); UK Hold Co, UKTN and UK Commercial’s functional currency is British pounds (GBP); and
BTN’s functional currency is Brazilian real (BRL). The remaining subsidiaries functional currency is United
States dollars (USD).
The functional currency of GTN Limited is AUD. These financial statements presentation currency is AUD
which is the functional currency of the largest portion of the Company’s operations.
Foreign currency transactions and balances
Foreign currency transactions are translated using the exchange rates prevailing at the dates of the
transactions (spot exchange rate). Foreign exchange gains and losses resulting from the settlement of such
transactions and from the re-measurement of monetary items at year end exchange rates are recognised in
profit or loss.
Loans between group entities are eliminated upon consolidation. Where the loan is between group entities
that have different functional currencies, the foreign exchange gain or loss is not eliminated and is recognized
in the consolidated statement of profit and loss unless the loan is not expected to be settled in the foreseeable
future and thus forms part of the net investment in the foreign operation. In such a case, the foreign
exchange gain or loss is recognized in other comprehensive income.
Non-monetary items are not retranslated at year-end and are measured at historical cost (translated using the
exchange rates at the date of the transaction), except for non-monetary items measured at fair value which are
translated using the exchange rates at the date when fair value was determined.
Foreign operations
In the Company’s financial statements, all assets, liabilities and transactions of entities with a functional
currency other than AUD are translated into AUD upon consolidation. Goodwill and fair value adjustments
arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation
and translated at the closing rate. The functional currency of the entities in the Company has remained
unchanged during the reporting period.
GTN Limited
For the year ended 30 June 2016
On consolidation, assets and liabilities have been translated into AUD at the closing rate at the reporting date.
Income and expenses have been translated into AUD at the average rate over the reporting period. Exchange
differences are charged / credited to other comprehensive income and recognised in the currency translation
reserve in equity. On disposal of a foreign operation the cumulative translation differences recognised in
equity are reclassified to profit or loss and recognised as part of the gain or loss on disposal.
40
2.5 Revenue recognition
Advertising revenue
Advertising revenue is earned and recognised at the time commercial advertisements are broadcast.
Advertising revenues are reported net of commissions provided to third party advertising agencies that
represent a majority of the advertisers. Payments received or amounts invoiced in advance are deferred until
earned and such amounts are included as a component of deferred revenue in the accompanying consolidated
statement of financial position. Sales taxes, goods and service taxes, value added taxes and similar charges
collected by the Company on behalf of government authorities are not included as a component of revenue.
Interest and dividend income
Interest income and expenses are reported on an accrual basis using the effective interest method. Dividend
income, other than those from investments in associates, is recognised at the time the right to receive
payment is established.
2.6 Network operations and station compensation expenses
The cost of producing and distributing the radio and television traffic and news reports and services and the
obtaining of advertising inventory are considered network operations and station compensation expenses.
These consist mainly of personnel, aviation costs, facility costs, third party content providers and station
compensation. Network operations and station compensation expenses are recognised when incurred.
2.7 Station compensation and reimbursement
The Company generally enters into multiyear contracts with radio and television stations. These contracts call
for the provision of various levels of service (including, but not limited to providing professional
broadcasters, gathering of information, communications costs and aviation services) and, in some cases, cash
compensation or reimbursement of expenses. Station compensation and reimbursement is a component of
network operations and station compensation expenses on the accompanying consolidated statement of
profit or loss and other comprehensive income and is recognised over the terms of the contracts, which is not
materially different than when the services are performed.
2.8 Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method, less provision for impairment. Trade receivables are generally due for settlement
within 30 days. They are presented as current assets unless collection is not expected for more than 12
months after the reporting date.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be
uncollectible are written off by reducing the carrying amount directly. An allowance account (provision for
impairment of trade receivables) is used when there is objective evidence that the Company will not be able
to collect all amounts due according to the original terms of the receivables. Significant financial difficulties
GTN Limited
For the year ended 30 June 2016
41
of the debtor, probability that the debtor will enter bankruptcy or financial re-organisation, and default or
delinquency in payments (more than 30 days overdue) are considered indicators that the trade receivable is
impaired. The amount of the impairment allowance is the difference between the asset's carrying amount and
the present value of estimated future cash flows, discounted at the original effective interest rate. Cash flows
relating to short-term receivables are not discounted if the effect of discounting is immaterial.
The amount of the impairment loss is recognised in profit or loss within selling, general and administrative
expenses. When a trade receivable for which an impairment allowance had been recognised becomes
uncollectible in a subsequent period, it is written off against the allowance account. Subsequent recoveries of
amounts previously written off are credited against selling, general and administrative expenses in profit or
loss.
2.9 Goodwill
Goodwill represents the future economic benefits arising from a business combination that are not
individually identified and separately recognised. Goodwill is carried at cost less accumulated impairment
losses. Goodwill is not amortised but it is tested for impairment annually, or more frequently if events or
changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated
impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill
relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made
to those cash-generating units or groups of cash-generating units that are expected to benefit from the
business combination in which the goodwill arose. The units or groups of units are identified at the lowest
level at which goodwill is monitored for internal management purposes, being the operating segments.
2.10 Intangible assets
Intangible assets are stated at cost. Intangible assets with definite lives are amortised over their expected
useful lives on a straight line basis, as follows:
•
station contracts: 14 years
• advertising contracts: 4.5 years
Amortisation expense is not reflected for intangible assets with indefinite lives such as trade names and the
Company annually tests these assets for impairment. There is no residual value recognised with regard to
intangible assets subject to amortisation.
2.11 Property, plant and equipment
IT equipment, motor vehicles, aircraft and other equipment
IT equipment, motor vehicles, aircraft and other equipment (comprising furniture and fittings) are initially
recognised at acquisition cost or manufacturing cost, including any costs directly attributable to bringing the
assets to the location and condition necessary for it to be capable of operating in the manner intended by the
Company’s management.
IT equipment, motor vehicles, aircraft and other equipment are subsequently measured using the cost model,
cost less subsequent depreciation and impairment losses. An asset’s carrying amount is written down
GTN Limited
For the year ended 30 June 2016
immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable
amount.
Depreciation is recognised on a straight-line basis to write down the cost less estimated residual value of
computer equipment, motor vehicles, aircraft and other equipment. The following useful lives are applied:
42
• computer equipment and software: 3-5 years
• motor vehicles: 7 years
• helicopters and fixed wing aircraft: 6-8 years
• helicopters engine rebuilds: 2-3 years
•
•
furniture, equipment and other: 5 years
recording, broadcasting and studio equipment: 5 years.
Material residual value estimates and estimates of useful life are updated as required, but at least annually.
Gains or losses arising on the disposal of property, plant and equipment are determined as the difference
between the disposal proceeds and the carrying amount of the assets and are recognised in profit or loss
within other income or other expenses.
2.12 Leased assets
Finance leases
The economic ownership of a leased asset is transferred to the lessee if the lessee bears substantially all the
risks and rewards of ownership of the leased asset. Where the Company is a lessee in this type of
arrangement, the related asset is recognised at the inception of the lease at the fair value of the leased asset or,
if lower, the present value of the lease payments plus incidental payments, if any. A corresponding amount is
recognised as a finance lease liability. The corresponding finance lease liability is reduced by lease payments
net of finance charges. The interest element of lease payments represents a constant proportion of the
outstanding capital balance and is charged to profit or loss, as finance costs over the period of the lease.
Operating leases
All other leases are treated as operating leases. Where the Company is a lessee, payments on operating lease
agreements are recognised as an expense on a straight-line basis over the lease term. Associated costs, such as
maintenance and insurance, are expensed as incurred.
2.13 Impairment testing of goodwill, other intangible assets and property, plant and
equipment
For impairment assessment purposes, assets are grouped at the lowest levels for which there are largely
independent cash inflows (cash-generating units). As a result, some assets are tested individually for
impairment and some are tested at cash-generating unit level. Goodwill is allocated to those cash-generating
units that are expected to benefit from synergies of the related business combination and represent the lowest
level within the Company at which management monitors goodwill.
Cash-generating units to which goodwill has been allocated (determined by the Company’s management as
equivalent to its operating segments) and trade names are tested for impairment at least annually. All other
individual assets or cash-generating units are tested for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable.
GTN Limited
For the year ended 30 June 2016
43
An impairment loss is recognised for the amount by which the asset’s or cash-generating unit’s carrying
amount exceeds its recoverable amount, which is the higher of fair value less costs to sell and value-in-use.
To determine the value-in-use, management estimates expected future cash flows from each cash-generating
unit and determines a suitable discount rate in order to calculate the present value of those cash flows. The
data used for impairment testing procedures are directly linked to the Company’s latest approved budget,
adjusted as necessary to exclude the effects of future reorganisations and asset enhancements. Discount
factors are determined individually for each cash-generating unit and reflect management’s assessment of
respective risk profiles, such as market and asset-specific risks factors.
Impairment losses for cash-generating units reduce first the carrying amount of any goodwill allocated to that
cash-generating unit. Any remaining impairment loss is charged pro rata to the other assets in the cash-
generating unit. With the exception of goodwill, all assets are subsequently reassessed for indications that an
impairment loss previously recognised may no longer exist. An impairment charge is reversed if the cash-
generating unit’s recoverable amount exceeds its carrying amount.
2.14 Financial instruments
Recognition, initial measurement and derecognition
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual
provisions of the financial instrument, and are measured initially at fair value adjusted by transactions costs,
except for those carried at fair value through profit or loss, which are measured initially at fair value.
Subsequent measurement of financial assets and financial liabilities are described below.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire,
or when the financial asset and all substantial risks and rewards are transferred. A financial liability is
derecognised when it is extinguished, discharged, cancelled or expires.
Classification and subsequent measurement of financial assets
For the purpose of subsequent measurement, financial assets other than those designated and effective as
hedging instruments are classified into the following categories upon initial recognition:
•
loans and receivables;
All financial assets are subject to review for impairment at least at each reporting date to identify whether
there is any objective evidence that a financial asset or a group of financial assets is impaired. Different
criteria to determine impairment are applied for each category of financial assets, which are described below.
All income and expenses relating to financial assets that are recognised in profit or loss are presented within
finance costs, finance income or other financial items, except for impairment of trade receivables which is
presented within selling, general and administrative expenses.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market. After initial recognition, these are measured at amortised cost using the effective
interest method, less provision for impairment. Discounting is omitted where the effect of discounting is
GTN Limited
For the year ended 30 June 2016
44
immaterial. The Company’s cash and cash equivalents, trade and most other receivables fall into this category
of financial instruments.
Individually significant receivables are considered for impairment when they are past due or when other
objective evidence is received that a specific counterparty will default. Receivables that are not considered to
be individually impaired are reviewed for impairment in groups, which are determined by reference to the
industry and region of a counterparty and other shared credit risk characteristics. The impairment loss
estimate is then based on recent historical counterparty default rates for each identified group.
Deferred loan costs relate to the costs related to the debt financing and are amortised using the effective
interest method over the five year life of the loan. Expense recognised related to the effective interest
method is recognised as a component of finance costs in the Company’s consolidated statement of profit or
loss and other comprehensive income. Any deferred loan costs outstanding upon prepayment or refinancing
of debt balances are immediately expensed as a component of finance costs.
Classification and subsequent measurement of financial liabilities
The Company’s financial liabilities include borrowings, trade and other payables and derivative financial
instruments.
Financial liabilities are measured subsequently at amortised cost using the effective interest method, and are
carried subsequently at fair value with gains or losses recognised in profit or loss.
All interest-related charges and, if applicable, changes in an instrument’s fair value that are reported in profit
or loss are included within finance costs or finance income.
Derivative financial instruments and hedge accounting
Derivative financial instruments are accounted for as hedging instruments in cash flow hedge relationships,
which requires a specific accounting treatment. To qualify for hedge accounting, the hedging relationship
must meet several strict conditions with respect to documentation, probability of occurrence of the hedged
transaction and hedge effectiveness.
All derivative financial instruments used for hedge accounting are recognised initially at fair value and
reported subsequently at fair value in the statement of financial position.
To the extent that the hedge is effective, changes in the fair value of derivatives designated as hedging
instruments in cash flow hedges are recognised in other comprehensive income and included within the
interest rate hedging reserve in equity. Any ineffectiveness in the hedge relationship is recognised
immediately in profit or loss.
At the time the hedged item affects profit or loss, any gain or loss previously recognised in other
comprehensive income is reclassified from equity to profit or loss and presented as a reclassification
adjustment within other comprehensive income. However, if a non-financial asset or liability is recognised as
a result of the hedged transaction, the gains and losses previously recognised in other comprehensive income
are included in the initial measurement of the hedged item.
GTN Limited
For the year ended 30 June 2016
If a forecast transaction is no longer expected to occur any related gain or loss recognised in other
comprehensive income is transferred immediately to profit or loss. If the hedging relationship ceases to meet
the effectiveness conditions, hedge accounting is discontinued and the related gain or loss is held in the equity
reserve until the forecast transaction occurs.
45
2.15 Income taxes
Income tax expense for the period is the tax payable on the current period’s taxable income based on the
national tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to
temporary differences between the tax base of the asset and liabilities and their carrying amount in the
financial statements.
Deferred income taxes are calculated using the liability method on temporary differences between the
carrying amounts of assets and liabilities and their tax bases. However, deferred tax is not provided on the
initial recognition of goodwill or on the initial recognition of an asset or liability unless the related transaction
is a business combination or affects tax or accounting profit. Deferred tax on temporary differences
associated with investments in subsidiaries is not provided if reversal of these temporary differences can be
controlled by the Company and it is probable that reversal will not occur in the foreseeable future.
Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to apply to
their respective period of realisation, provided they are enacted or substantively enacted by the end of the
reporting period.
Deferred tax assets are recognised to the extent that it is probable that they will be able to be utilised against
future taxable income, based on the Company’s forecast of future operating results which is adjusted for
significant non-taxable income and expenses and specific limits to the use of any unused tax loss or credit.
Deferred tax liabilities are always provided for in full.
Deferred tax assets and liabilities are offset only when the Company has a right and intention to set off
current tax assets and liabilities from the same taxation authority.
Changes in deferred tax assets or liabilities are recognised as a component of tax benefit or expense in profit
or loss, except where they relate to items that are recognised in other comprehensive income (such as the
revaluation of land) or directly in equity, in which case the related deferred tax is also recognised in other
comprehensive income or equity, respectively.
(ii) Tax consolidation legislation
GTN Limited and its wholly-owned Australian controlled subsidiaries have implemented the tax
consolidation legislation.
The head entity, GTN Limited, and the controlled subsidiaries in the tax consolidated group account for their
own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax
consolidated group continues to be a stand-alone taxpayer in its own right.
In addition to its own current and deferred tax amounts, GTN Limited also recognizes the current tax
liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed
from controlled subsidiaries in the tax consolidated group.
GTN Limited
For the year ended 30 June 2016
46
The subsidiaries have also entered into a tax funding arrangement under which the wholly-owned entities
fully compensate GTN Limited for any current tax payable assumed and are compensated by GTN Limited
for any current tax receivable and deferred tax assets relating to unused tax losses or unused tax credits that
are transferred to GTN Limited under the tax consolidation legislation. The funding amounts are determined
by reference to the amounts recognized in the wholly-owned subsidiaries’ financial statements.
The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice
from the head entity, which is issued as soon as practicable after the end of each financial year. The head
entity may also require payment of interim funding amounts to assist with its obligations to pay tax
instalments.
Assets or liabilities arising under tax funding agreements with tax consolidated subsidiaries are recognized as
current amounts receivable or payable to other entities in the group.
Any difference between the amounts assumed and amounts receivable or payable under the tax funding
agreement are recognized as a contribution to (or distribution from) wholly-owned tax consolidated
subsidiaries.
2.16 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term,
highly liquid investments that are readily convertible into known amounts of cash and which are subject to an
insignificant risk of changes in value.
2.17 Employee Benefits
Short-term employee benefits
Short-term employee benefits are benefits, other than termination benefits, that are expected to be settled
wholly within twelve months after the end of the period in which the employees render the related service.
Examples of such benefits include wages and salaries, non-monetary benefits and accumulating sick leave.
Short-term employee benefits are measured at the undiscounted amounts expected to be paid when the
liabilities are settled.
Other long-term employee benefits
The Company’s liabilities for annual leave and long service leave are included in other long term benefits
when they are not expected to be settled wholly within twelve months after the end of the period in which
the employees render the related service. They are measured at the present value of the expected future
payments to be made to employees. The expected future payments incorporate anticipated future wage and
salary levels, experience of employee departures and periods of service, and are discounted at rates
determined by reference to market yields at the end of the reporting period on high quality corporate bonds
or government bonds that have maturity dates that approximate the timing of the estimated future cash
outflows. Any re-measurements arising from experience adjustments and changes in assumptions are
recognised in profit or loss in the periods in which the changes occur. The obligations are presented as
current liabilities on the statement of financial position if the entity does not have an unconditional right to
defer settlement for at least 12 months after the reporting period regardless of when the actual settlement is
expected to occur.
2.18 Trade and other payables
These amounts represent liabilities for goods and services provided to the Company prior to the end of
financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of
GTN Limited
For the year ended 30 June 2016
47
recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12
months from the reporting date.
2.19 Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to owners of the company, excluding
any costs of servicing equity other than ordinary shares by the weighted average number of ordinary shares
outstanding during the financial year adjusted for bonus elements in ordinary shares issued during the year
and excluding treasury shares.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the amounts used in the determination of basic earnings per share to take
into account the after income tax effect of interest and other financing costs associated with dilutive potential
ordinary shares and the weighted average number of additional ordinary shares that would have been
outstanding assuming the conversion of all dilutive potential ordinary shares.
Prior to the Company’s initial public offering, the share capital of the Company consisted of partnership units
that were converted into share capital as part of the IPO restructuring. Earnings per share calculations
presented herein assume the conversion took place at the beginning of the periods presented to provide a
uniform presentation.
2.20 Equity and reserves
Issued capital represents the fair value of shares that have been issued. Any transaction costs associated with
the issuing of shares are deducted from issued capital.
Other components of equity include the following:
• Foreign currency translation reserve – comprises foreign currency translation differences arising on the
translation of financial statements of the Company’s foreign entities into AUD.
• Hedging reserve – comprises changes in the fair value of interest rate hedges that are deemed effective.
• Equity based payments reserve – comprises the cumulative charge to the statement of profit or loss and
other comprehensive income for employee equity-settled equity-based remuneration.
• Common control reserve – represents difference between the fair value of the shares issued under the
initial public offering net of transaction costs, plus carried forward reserves and accumulated losses and
the book value of the total equity of the predecessor company.
Retained earnings include all current and prior period retained profits including those related to GTCR
Gridlock Holdings (Cayman), L.P, the predecessor company to GTN Limited.
2.21 Equity based remuneration
The Company operated equity-settled equity-based remuneration plans for its employees. The Company also
operated a cash-settled equity-based remuneration plan for its employees.
All goods and services received in exchange for the grant of any equity-based payment are measured at their
fair values. Where employees are rewarded using equity-based payments, the fair values of employees’
services are determined indirectly by reference to the fair value of the equity instruments granted. This fair
GTN Limited
For the year ended 30 June 2016
48
value is appraised at the grant date and excludes the impact of non-market vesting conditions (for example
profitability and sales growth targets and performance conditions).
All equity-settled equity-based remuneration is ultimately recognised as an expense in profit or loss with a
corresponding credit to equity based payments reserve. If vesting periods or other vesting conditions apply,
the expense is allocated over the vesting period, based on the best available estimate of the number of equity
instruments expected to vest.
Non-market vesting conditions are included in assumptions about the number of equity instruments that are
expected to become exercisable. Estimates are subsequently revised if there is any indication that the number
of equity instruments expected to vest differs from previous estimates. Any cumulative adjustment prior to
vesting is recognised in the current period. No adjustment is made to any expense recognised in prior
periods if equity instruments ultimately exercised are different to that estimated on vesting.
Upon exercise of equity instruments, the proceeds received net of any directly attributable transaction costs
are allocated to issued capital.
The same policy is in place for phantom partnership interests, except that it is treated as a liability since it is
anticipated these interests will be cash-settled. The liabilities are remeasured to fair value at each reporting
date and are presented as non-current other liabilities in the statement of financial position.
2.22 Provisions, contingent liabilities and contingent assets
Provisions for legal disputes, onerous contracts or other claims are recognised when the Company has a
present legal or constructive obligation as a result of a past event, it is probable that an outflow of economic
resources will be required from the Company and amounts can be estimated reliably. Timing or amount of
the outflow may still be uncertain.
Restructuring provisions are recognised only if a detailed formal plan for the restructuring has been
developed and implemented, and management has at least announced the plan’s main features to those
affected by it. Provisions are not recognised for future operating losses.
Provisions are measured at the estimated expenditure required to settle the present obligation, based on the
most reliable evidence available at the reporting date, including the risks and uncertainties associated with the
present obligation. Where there are a number of similar obligations, the likelihood that an outflow will be
required in settlement is determined by considering the class of obligations as a whole. Provisions are
discounted to their present values, where the time value of money is material.
Any reimbursement that the Company can be virtually certain to collect from a third party with respect to the
obligation is recognised as a separate asset. However, this asset may not exceed the amount of the related
provision.
No liability is recognised if an outflow of economic resources as a result of present obligation is not probable.
Such situations are disclosed as contingent liabilities, unless the outflow of resources is remote in which case
no liability is recognised.
GTN Limited
For the year ended 30 June 2016
49
2.23 Goods and services taxes (GST)
Revenues, expenses and assets are recognized net of any amount of associated GST, value added taxes
(VAT), Quebec sales tax (QST), harmonized sales tax (HST) and similar taxes unless the tax incurred is not
recoverable from the taxation authority. In such case the tax is recognized as part of the cost of the
acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST and related taxes receivable or payable.
The net amount of these taxes recoverable from, or payable to, the taxation authority is included in trade and
other payables in the balance sheet.
Cash flows are presented on a gross basis. The components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the taxation authority, are presented as operating cash
flows.
2.24 Long-term prepaid affiliate contract
Long term prepayments of station compensation are accounted for as a financing arrangement whereby non-
cash interest income over the term of the contractual agreement is recognized based on an estimate of the
radio stations’ incremental borrowing rate with similar terms which will reduce over time as the prepayment is
amortised. Station compensation expense is also recognized over the contract period equal to the
prepayment amount plus the total non-cash interest income on a straight line basis over the expected term of
the contract including renewal periods, if it is more likely than not the contract will be extended. Additional
station compensation expense over the contract period is recognized equal to any cash payments, including
an estimate of inflationary adjustments expected to be paid on a straight line basis over the contract term.
2.25 Rounding of amounts
The Company is of a kind referred to in ASIC Corporations Instrument 2016/191, issued by the Australian
Securities and Investments Commission, relating to the ‘rounding off’ of amounts in the financial statements.
Amounts in the financial statements have been rounded off in accordance with that ASIC Corporations
Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
2.26 Significant management judgement in applying accounting policies and estimation
uncertainty
When preparing the financial statements, management undertakes a number of judgements, estimates and
assumptions about the recognition and measurement of assets, liabilities, income and expenses.
Significant management judgement
The following are significant management judgements in applying the accounting policies of the Company
that have the most significant effect on the financial statements.
Recognition of deferred tax balances
The extent to which deferred tax balances are recognised is based on an assessment of the probability of the
Company’s future taxable income against which the deferred tax assets can be utilised or liabilities assessed.
In addition, significant judgement is required in assessing the impact of any legal or economic limits or
uncertainties in various tax jurisdictions.
GTN Limited
For the year ended 30 June 2016
Impairment
In assessing impairment, management estimates the recoverable amount of each asset or cash-generating unit
based on expected future cash flows and uses an interest rate to discount them. Estimation uncertainty
relates to assumptions about future operating results and the determination of a suitable discount rate.
50
Useful lives of depreciable assets
Management reviews its estimate of the useful lives of depreciable assets at each reporting date, based on the
expected utility of the assets. Uncertainties in these estimates relate to technical obsolescence that may
change the utility of certain property, plant and equipment.
Fair value of financial instruments
Management uses valuation techniques to determine the fair value of financial instruments (where active
market quotes are not available) and non-financial assets. This involves developing estimates and
assumptions consistent with how market participants would price the instrument. Management bases its
assumptions on observable data as far as possible but this is not always available. In that case management
uses the best information available. Estimated fair values may vary from the actual prices that would be
achieved in an arm’s length transaction at the reporting date.
Recoverability of long-term prepaid station compensation
Management reviews the recoverable amount of long-term prepaid station compensation at each reporting
period, analysing such factors as number of advertising spots received, market conditions for the advertising
spots, ratings of the stations, counter party risk (i.e. the financial viability of the provider of the advertising
spots and its ability to continue to meet its obligations) and other relevant factors to determine the
recoverability of long-term prepaid station compensation over its contractual term.
2.27 Parent entity financial information
The financial information for the parent entity, GTN Limited disclosed in Note 31 has been prepared on the
same basis as the consolidated financial statements except as set out below.
(i) Investment in subsidiaries
Investments in subsidiaries are accounted for at cost in the financial statements of GTN Limited. Dividends
received are recognized when the right to receive the dividend is established.
2.28 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker.
2.29 Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at
the discretion of the Company, on or before the end of the reporting period but not distributed at the end of
the reporting period.
2.30 Corporate restructure
GTN Limited was incorporated as an Australian public company on 2 July 2015 and acquired GTCR
Gridlock Holdings (Cayman), L.P. as part of a restructure in conjunction with the initial public offering of
GTN Limited’s stock.
GTN Limited
For the year ended 30 June 2016
51
The Company elected to account for the purchase of Cayman by GTN Limited as a capital re-organisation
rather than a business combination. In the Company’s judgement, the continuation of the existing accounting
values is consistent with the accounting that would have occurred if the assets and liabilities had already been
in a structure suitable to IPO and most appropriately reflects the substance of the internal restructure. As
such, the consolidated financial statements of the Company have been presented as a continuation of the pre-
existing accounting values of assets and liabilities in the Cayman consolidated financial statements. In
adopting this approach, the Company notes that there is an alternate view that such a restructure should be
accounted for as a business combination that follows the legal structure of GTN Limited being the acquirer.
If this view had been taken, the net assets of the GTN Group would have been uplifted to fair value based on
the market capitalisation at completion with consequential impacts on the consolidated statement of profit or
loss and other comprehensive income statement and the consolidated statement of financial position.
Changes in accounting policies
3
3.1 New and revised standards that are effective for these financial statements
A number of new and revised standards and an interpretation became effective for the first time to annual
periods beginning on or after 1 July 2015. Information on these new standards is presented below.
AASB 2014-1 Amendments to Australian Accounting Standards (Part A: Annual Improvements 2010-
2012 and 2011-2013 Cycles)
Part A of AASB 2014-1 makes amendments to various Australian Accounting Standards arising from the
issuance by the IASB of International Financial Reporting Standards Annual Improvements to IFRSs 2010-2012
Cycle and Annual Improvements to IFRSs 2011-2013 Cycle.
Among other improvements, the amendments arising from Annual Improvements to IFRSs 2010-2012 Cycle:
-
-
clarify that the definition of a ‘related party’ includes a management entity that provides key
management personnel services to the reporting entity (either directly or through a group entity)
amend AASB 8 Operating Segments to explicitly require the disclosure of judgements made by
management in applying the aggregation criteria
Among other improvements, the amendments arising from Annual Improvements to IFRSs 2011-2013 Cycle
clarify that an entity should assess whether an acquired property is an investment property under AASB 140
Investment Property and perform a separate assessment under AASB 3 Business Combinations to determine
whether the acquisition of the investment property constitutes a business combination.
Part A of AASB 2014-1 is applicable to annual reporting periods beginning on or after 1 July 2014.
The adoption of these amendments has not had a material impact on the Company as they are largely of the
nature of clarification of existing requirements.
AASB 2015-3 Amendments to Australian Accounting Standards arising from the Withdrawal of AASB
1031 Materiality
The Standard completes the AASB’s project to remove Australian guidance on materiality from Australian
Accounting Standards. This Standard was first adopted for the year ending 30 June 2016 and there was no
material impact on the financial statements.
3.2 Accounting Standards issued but not yet effective and not been adopted early by
the Company
At the date of authorisation of these financials statements, certain new standards, amendments and
interpretations to existing standards have been published but are not yet effective, and have not been adopted
early by the Company. Management anticipates that all of the relevant pronouncements will be adopted in the
Company’s accounting policies for the first period beginning after the effective date of the pronouncement.
Information on new standards, amendments and interpretations that are expected to be relevant to the
GTN Limited
For the year ended 30 June 2016
52
Company’s financial statements is provided below. Certain other new standards and interpretations have been
issued but are not expected to have a material impact on the Company’s financial statements.
AASB 9 Financial Instruments
AASB 9 introduces new requirements for the classification and measurement of financial assets and liabilities.
These requirements improve and simplify the approach for classification and measurement of financial assets
compared with the requirements of AASB 139. The main changes are:
a. Financial assets that are debt instruments will be classified based on: (i) the objective of the entity’s
business model for managing the financial assets; and (ii) the characteristics of the contractual cash
flows.
b. Allows an irrevocable election on initial recognition to present gains and losses on investments in
equity instruments that are not held for trading in other comprehensive income (instead of in profit
or loss). Dividends in respect of these investments that are a return on investment can be recognised
in profit or loss and there is no impairment or recycling on disposal of the instrument.
Introduces a ‘fair value through other comprehensive income’ measurement category for particular
simple debt instruments.
c.
d. Financial assets can be designated and measured at fair value through profit or loss at initial
recognition if doing so eliminates or significantly reduces a measurement or recognition
inconsistency that would arise from measuring assets or liabilities, or recognising the gains and losses
on them, on different bases.
e. Where the fair value option is used for financial liabilities the change in fair value is to be accounted
for as follows:
the change attributable to changes in credit risk are presented in Other Comprehensive Income
(‘OCI’)
the remaining change is presented in profit or loss
-
-
If this approach creates or enlarges an accounting mismatch in the profit or loss, the effect of the changes in
credit risk are also presented in profit or loss.
Otherwise, the following requirements have generally been carried forward unchanged from AASB 139 into
AASB 9:
-
-
classification and measurement of financial liabilities; and
derecognition requirements for financial assets and liabilities.
AASB 9 requirements regarding hedge accounting represent a substantial overhaul of hedge accounting that
enable entities to better reflect their risk management activities in the financial statements.
Furthermore, AASB 9 introduces a new impairment model based on expected credit losses. This model
makes use of more forward-looking information and applies to all financial instruments that are subject to
impairment accounting.
The entity is yet to undertake a detailed assessment of the impact of AASB 9. However, based on the entity’s
preliminary assessment, the Standard is not expected to have a material impact on the transactions and
balances recognised in the financial statements when it is first adopted for the year ending 30 June 2019.
AASB 15 – Revenue from Contracts with Customers
AASB 15 replaces AASB 118 Revenue, AASB 111 Construction Contracts and some revenue-related
Interpretations:
-
-
-
-
establishes a new revenue recognition model
changes the basis for deciding whether revenue is to be recognised over time or at a point in time
provides new and more detailed guidance on specific topics (e.g., multiple element arrangements,
variable pricing, rights of return, warranties and licensing)
expands and improves disclosures about revenue
GTN Limited
For the year ended 30 June 2016
The entity is yet to undertake a detailed assessment of the impact of AASB 15. However, based on the entity’s
preliminary assessment, the Standard is not expected to have a material impact on the transactions and
balances recognised in the financial statements when it is first adopted for the year ending 30 June 2019.
53
AASB 16 – Leases
AASB 16 removes the balance sheet distinction between operating and finance leases for lessees. Changes
under AASB 16 will predominately affect lessees with almost all leases going on the balance sheet. The asset
(the right to use the leased item) and a financial liability to pay rentals are recognized under the new standard
with the only exemption being short-term and low-value leases. The new standard will be effective from 1
January 2019 but is available for early adoption. At this stage, the Group is not able to estimate the effect of
the new rules on the financial statements. The Group does not expect to adopt the new standard before 1
July 2018.
AASB 2014-1 Amendments to Australian Accounting Standards
Part D of AASB 2014-1 makes consequential amendments arising from the issuance of AASB 14. When
these amendments become effective for the first time for the year ending 30 June 2017, they will not have any
impact on the entity.
Part E of AASB 2014-1 makes amendments to Australian Accounting Standards to reflect the AASB’s
decision to defer the mandatory application date of AASB 9 Financial Instruments to annual reporting
periods beginning on or after 1 January 2018. Part E also makes amendments to numerous Australian
Accounting Standards as a consequence of the introduction of Chapter 6 Hedge Accounting into AASB 9
and to amend reduced disclosure requirements for AASB 7 Financial Instruments: Disclosures and AASB
101 Presentation of Financial Statements. Refer to the section on AASB 9 above.
AASB 2015-2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to
AASB 101
The amendments:
-
-
-
-
-
clarify the materiality requirements in AASB 101, including an emphasis on the potentially
detrimental effect of obscuring useful information with immaterial information
clarify that AASB 101’s specified line items in the statement(s) of profit or loss and other
comprehensive income and the statement of financial position can be disaggregated
add requirements for how an entity should present subtotals in the statement(s) of profit and loss
and other comprehensive income and the statement of financial position
clarify that entities have flexibility as to the order in which they present the notes, but also emphasise
that understandability and comparability should be considered by an entity when deciding that order
remove potentially unhelpful guidance in IAS 1 for identifying a significant accounting policy.
When these amendments are first adopted for the year ending 30 June 2017, there will be no material impact
on the financial statements.
There are no other standards that are not yet effective and that would be expected to have a material impact
on the entity in the current or future reporting periods and on foreseeable future transactions.
Financial risk management
4
The Company's activities expose it to a variety of financial risks: market risk (including currency risk, interest
rate risk and price risk), credit risk and liquidity risk. The Company's overall risk management program seeks
to minimise potential adverse effects on the financial performance of the Company. The Company uses
derivative financial instruments to manage interest rate risk exposures on borrowings.
GTN Limited
For the year ended 30 June 2016
Risk management is carried out by the senior management team with oversight from the audit and risk
committee and the board. The senior management team identifies, evaluates, reports and manages financial
risks in close co-operation with the Company's operation units in accordance with the Board policy.
54
The Company holds the following financial instruments:
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial liabilities
Trade and other payables
Interest bearing liabilities
Derivative financial instruments
Other liabilities
(a) Market risk
2016
$’000
49,063
33,625
82,688
27,258
96,806
-
72
124,136
2015
$’000
25,880
28,848
54,728
26,182
49,270
1,229
779
77,460
(i) Cash flow and fair value interest rate risk
Market risk is the risk that the fair value or future cash flows of a financial asset or financial liability will
fluctuate because of changes in market prices. Market risk comprises interest rate risk.
The Company's main interest rate risk arises from long term borrowings, cash, receivables and derivatives.
Borrowings issued at variable rates expose the Company to cash flow interest rate risk. Company has utilized
fixed rate interest rate swaps to manage interest rate risk in the past. At 30 June 2016 all of the Company’s
debt was at a variable rate. Subsequent to the date of the financial statements, in August 2016, the Company
entered into an interest rate collar on $50 million of its variable debt that runs until 9 February 2018. The
hedge was determined to be effective when entered into and will be tested for effectiveness at each balance
sheet date.
The Company has managed its cash flow interest rate risk by using interest rate derivatives. Such interest rate
derivatives have the economic effect of converting borrowings from floating rates to fixed rates. Under the
interest rate derivatives, the Company agrees with other parties to exchange, at specified intervals (mainly
monthly), the difference between fixed contract rates and floating rate interest amounts calculated by
reference to the agreed notional principal amounts. The Company repaid its outstanding hedging obligation
in June 2016 and had no interest rate hedges in place at 30 June 2016.
As at the end of the reporting period, the Company had the following variable rate cash and borrowings
outstanding:
GTN Limited
For the year ended 30 June 2016
Cash and cash equivalents
Borrowings – unhedged portion
Net exposure to cash flow interest rate risk
55
2016
2015
Weighted
average
interest rate
%
0.94%
5.34%
Weighted
average
interest rate
%
1.75%
5.19%
Balance
$’000
49,063
(100,000)
(50,937)
Balance
$’000
25,880
(6,017)
19,863
On 11 November 2011, the Company’s Aus Hold Co subsidiary borrowed $76.5 million (which included
$2.85 million loan fee deducted from the proceeds by the lenders) from a consortium of three banks in
Australia (Term Loan A and Term Loan B, collectively “Term Loans” or “Term Loan”). The interest rate on
the majority of the Term Loan was fixed until the repayment date (either by scheduled principal payments or
the date of maturity) via a fixed rate interest swap. The interest rate spread was subject to increase and
decrease based on the leverage ratio as defined in the Term Loan agreement. The Term Loan was refinanced
in November 2015 and again in February 2016. The fixed rate interest rate swap was novated and remained
in place during both refinancing prior to being settled in June 2016. See Note 21.
An official increase/decrease in interest rates of 100 (2015: 100) basis points would have favourable/adverse
effect on profit before tax of $509 thousand (2015: favourable/adverse $199 thousand) per annum.
(ii) Foreign currency risk
Exposures to currency exchange rates arise from the sales and purchases by its subsidiaries that are
denominated in currencies other than the subsidiaries’ functional currency.
The Company does not enter into forward exchange contracts to mitigate the exposure to foreign currency
risk.
Foreign currency denominated financial assets and liabilities which expose the Company to currency risk are
disclosed below. The amounts shown are those reported to key management translated into AUD at the
closing rate:
Short Term Exposure
Long Term Exposure
USD
$’000
GBP
$’000
CAD
$’000
BRL
$’000
Other
$’000
GBP
$’000
CAD
$’000
BRL
$’000
30 June 2016
Financial assets
659
13,339
10,228
1,398
Financial liabilities
(1,178)
(6,528)
(5,390)
(1,087)
Total exposure
(519)
6,811
4,838
311
30 June 2015
Financial assets
1,261
11,525
7,840
Financial liabilities
(1,375)
(6,693)
(4,244)
Total exposure
(114)
4,832
3,596
690
(872)
(182)
35
(211)
(176)
20
(153)
(133)
-
(10)
(10)
-
-
-
-
(11)
(11)
-
(575)
(575)
-
-
-
-
(83)
(83)
There are no material transactions in subsidiaries entities made in currencies other than the functional
currency. Therefore no sensitivity analysis on foreign currencies affecting profit or loss has been prepared.
GTN Limited
For the year ended 30 June 2016
The Company also has the following intercompany loan payable/receivables within the group translated to
AUD at closing rate as follow:
56
30 June 2015
Intercompany loan within the group
entities between functional currency
(AUD) and USD
Intercompany loan within the group
entities between functional currencies
(CAD, GBP, BRL) and USD
AUD
$’000
CAD
$’000
GBP
$’000
BRL
$’000
54,393
-
-
-
-
23,215
12,038
4,460
As part of the restructuring related to the IPO, the intercompany loans were converted to share capital of the
relevant subsidiary and no intercompany loans were outstanding as of 30 June 2016. There continue to be
immaterial inter group advances/payables amongst the various subsidiaries.
As shown in the table above, the group is primarily exposed to changes in USD/AUD. The group pre-tax
exposure if Australian dollar/ US dollar is increased/decreased by 10% are as follow:
FY 16 A$’000
FY 15 A$’000
N/A
N/A
4,854
5,933
Exposure of USD/AUD for
exchange rate movement increase
by 10%
Exposure of USD/AUD for
exchange rate movement decrease
by 10%
(b) Credit risk
Credit risk is the risk that a contracting entity will not complete its obligations under a financial instrument
and cause a financial loss. The Company has exposures to credit risk on cash and cash equivalents and
receivables. Our maximum exposure to credit risk is based on the total value of our financial assets net of any
provision for loss.
Ongoing credit evaluation is performed on the financial condition of customers and, where appropriate, an
allowance for doubtful debtors is raised. Increased attention is paid to past due clients to determine
collectability of outstanding receivables. The credit quality of debtors that are not impaired is assessed by
reference to historical information with regards to default rates. Debtor write-offs have historically been
immaterial.
Refer to Note 2.26 for management’s process to evaluate the recoverability of the long-term prepayment and
the exposure to credit risk.
The Company's policy is to engage major financial institutions to provide financial facilities to the Company,
thereby minimising credit risk on cash deposits. The Company does not have any cash balances or derivative
financial instruments with any financial institution rated below “A”.
GTN Limited
For the year ended 30 June 2016
(c) Liquidity risk
57
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial
liabilities.
Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an
adequate amount of committed credit facilities, and the ability to refinance borrowings.
(i) Financing arrangement
The Company had access to the following undrawn borrowing facilities at the end of the reporting period:
Total facilities
Bank loan facility
Used at balance date
Bank loan facility
Unused at balance date
Bank loan facility
(ii) Maturities of financial liabilities
Contractual maturities of financial liabilities
2016
$’000
2015
$’000
115,000
50,454
100,000
50,454
15,000
-
Within
1 year
$’000
Between
1 and 2
years
$’000
Between
2 and 5
years
$’000
Over
5 years
$’000
Total
contractual
cash flows
$’000
Carrying
Amount
(assets)/
liabilities
$’000
27,258
-
-
-
-
72
4,400
4,400
111,452
-
-
-
31,658
4,400
111,524
-
-
-
-
-
27,258
27,258
72
72
120,252
96,806
-
-
147,582
124,136
At 30 June 2016
Non-derivatives
Non-interest bearing
Trade and other payables
Other liabilities
Interest bearing
Bank loans(1)(2)
Derivatives
Interest rate swaps
Total
(1) Cash flows include an estimate of future contractual payments of interest
(2) Carrying amounts are net of capitalized transaction costs
Within
1 year
Between
1 and 2
years
Between
2 and 5
years
Over
5 years
Total
contractual
cash flows
Carrying
Amount
(assets)/
Liabilities
$’000
$’000
$’000
$’000
$’000
$’000
At 30 June 2015
Non-derivatives
Non-interest bearing
Trade and other payables
26,182
-
-
-
26,182
26,182
GTN Limited
For the year ended 30 June 2016
Other liabilities
Interest bearing
Bank loans (1)
Derivatives -
Interest rate swaps
-
-
779
2,559
47,895
-
1,229
-
-
779
58
-
-
-
-
779
779
50,454
49,270
1,229
1,229
78,644
77,460
Total
49,124
(1) Carrying amounts are net of capitalized transaction costs
28,741
(d) Fair value measurements
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement
or for disclosure purposes.
AASB 7 Financial Instruments: Disclosures requires disclosure of fair value measurements by level of the
following fair value measurement hierarchy:
(a)
(b)
(c)
quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)
inputs other than quoted prices included within level 1 that are observable for the asset or liability,
either directly (as prices) or indirectly (derived from prices) (level 2), and
inputs for the asset or liability that are not based on observable market data (unobservable inputs)
(level 3).
The following table presents the Company’s assets and liabilities measured and recognised at fair value at 30
June 2016 and 30 June 2015.
30 June 2016
Assets
Total Assets
Liabilities
Derivatives – interest rate swaps
Total Liabilities
at 30 June 2015
Assets
Total Assets
Liabilities
Derivatives – interest rate swaps
Total Liabilities
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
-
-
-
-
-
-
-
-
-
Level 1
$’000
Level 2
$’000
Level 3
$’000
-
-
-
-
1,229
1,229
-
-
-
-
-
-
Total
$’000
-
1,229
1,229
(ii) Valuation techniques used to determine fair values
Specific valuation techniques used to value financial instruments include the fair value of interest rate swaps is
calculated as the present value of the estimated future cash flows based on observable yield curves.
All of the resulting fair value estimates are included in level 2.
GTN Limited
For the year ended 30 June 2016
59
Capital Management
5
(a) Risk management
The Company’s objectives when managing capital are to
(i) safeguard its ability to continue as a going concern so it can continue to provide returns to the
shareholders and
(ii) maintain an optimal capital structure to reduce the cost of capital.
In order to accomplish these goals, the Company has entered into a secured bank loan with regard to its
Australia and United Kingdom operations. Under the term of the loans, the borrowers are required to
comply with the following financial covenants:
(a) Total gearing ratio(TGR) (not greater than 3.60x at 30 June 2016) (actual 1.73x)
(b) Interest coverage ratio (at least 3.50x at 30 June 2016)(actual 4.78x)
(c) Debt service ratio (at least 1.10x at 30 June 2016)(actual 2.68x)
The borrowers were in compliance with these and all other requirements of the loan for all periods presented.
The Company’s consolidated TGR on a pro forma basis at 30 June 2016 was approximately 1.5x. The
Company targets to have a maximum total gearing ratio of less than 2.0x but does not target a minimum
TGR.
6
Interests in subsidiaries
Set out below details of the subsidiaries held directly and indirectly by the Company:
Name of the
Subsidiary
Country of Incorporation &
Principal Place of Business
Proportion of Ownership
Interests Held by the
Company
30-June-2016 30-June-2015
GTCR Gridlock Holdings (Luxembourg) S.a r.l.
(“LuxCo 1”)(2)
Luxembourg (3)
100%
100%
GTCR Gridlock Holdings, Inc. (‘US Hold Co”)
United States (Delaware) (1)
Global Traffic Network, Inc. (“GTN”)
United States (Nevada) (1)
GTCR Gridlock Holdings (Australia) Pty Limited
(“Aus Hold Co”) (4)
Australia (NSW)
The Australia Traffic Network Pty Limited (“ATN”)
Australia (NSW)
GTCR Gridlock Management, Inc. (“US
Management Co”)
United States (Delaware)
Global Alert Network, Inc. (“GAN”)
United States (Nevada)
GTCR Gridlock International (Luxembourg) S.a r.l.
(“LuxCo 2”)
Luxembourg
Canadian Traffic Network ULC (“CTN”)
Canada (Alberta)
GTCR Gridlock Holdings (UK) Limited (“UK Hold
Co”) (5)
United Kingdom (England &
Wales)
Global Traffic Network Commercial (UK) Limited
(“UK Commercial”)
United Kingdom (England &
Wales)
Global Traffic Network (UK) Limited (“UKTN”)
United Kingdom (England &
Wales)
GTCR Gridlock Holdings (Brazil) S.a r.l. (“LuxCo 3”) Luxembourg
BTN Servicos de Informacao do Transito ltda
(“BTN”)
Brazil
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
(1) Resident of Australia for tax purposes but still subject to U.S. taxes
(2) Name changed to GTN Holdings Pty Limited effective July 2016
GTN Limited
For the year ended 30 June 2016
60
(3) Migrated to Australia effective July 2016
(4) Name changed to Gridlock Holdings (Australia) Pty Limited effective July 2016
(5) Name changed to GTN Holdings (UK) Limited effective August 2016
GAN was liquidated on 20 April 2016 and its assets transferred to GTN for nominal consideration and
forgiveness of an intercompany loan.
7
Revenue
From continuing operations
Sales revenue
Sale of advertising commercials – net of agency commissions
Other income
Interest on bank deposits
Other
Interest income on long-term prepaid affiliate contract
8
Expenses
Loss before income tax includes the following specific expenses:
Employee benefits expense
2016
$’000
2015
$’000
166,124
166,124
153,484
153,484
244
12
256
3,581
514
-
514
-
2016
$’000
2015
$’000
43,747
37,604
Defined contribution superannuation expenses
845
775
Amortisation and depreciation
19,931
23,391
Finance costs of bank loan and line of credit
Rental expenses relating to operating leases
Foreign exchange (gain) loss on intercompany loans within the group
8,160
1,803
5,461
5,162
1,698
17,287
Transaction expenses
14,029
583
Income tax expense
9
The major components of tax expense and the reconciliation of the expected tax expense based on the
statutory tax rate at 30% (2015: 35%) and the reported tax expense in profit or loss are as follows:
2016
$’000
2015
$’000
GTN Limited
For the year ended 30 June 2016
Loss before tax
Tax rate: 30% (2015 35%)
Taxes on foreign earnings
Tax effect of permanent differences
Write-off of DTA due to restructure
Foreign tax credits
Unrecognized tax losses
Foreign jurisdiction tax, net of federal tax benefit
Over-provision for income tax in prior year
Effect of tax rate changes
Effect of change in estimate on current period
Accrual of uncertain tax position
Other
Income tax expense (benefit)
Expense
Current
Deferred
Income tax benefit
Other comprehensive income
Current
Deferred
(12,236)
(3,671)
(19,036)
(6,663)
61
5,005
213
6,866
(5,198)
1,683
(44)
(202)
-
-
86
260
4,998
2016
$’000
6,440
(1,442)
4,998
-
(431)
(431)
5,817
343
-
(3,985)
1,687
(50)
(104)
(96)
2,184
-
-
(867)
2015
$’000
7,140
(8,007)
(867)
-
(90)
(90)
The recognition of deferred tax assets is limited to the extent that the Company anticipates making sufficient
taxable profits in the future to absorb the reversal of the underlying timing differences. The Company has an
unrecognised deferred tax asset of $10,395 thousand (2015: $9,551 thousand) in relation to the tax losses as
management does not anticipate the Company will make sufficient taxable profits in the foreseeable future to
utilise this asset.
The previous year tax provision was based on the Company being a U.S. based entity.
10 Auditor’s remuneration
Auditor remuneration details are as follows:
Audit and other assurance services
Auditors of the Company:
Audit and review of financial statements
Other assurance services
Due diligence
Remuneration from audit and other assurance services
Taxation services
Auditors of the Company:
Tax compliance
2016
$
2015
$
842,000
458,000
1,189,000
2,031,000
-
458,000
244,000
261,000
GTN Limited
For the year ended 30 June 2016
Tax advice on mergers and acquisitions
Due diligence
Remuneration for taxation services
62
167,000
1,956,000
2,367,000
445,000
-
706,000
Total auditor’s remuneration
*Included in the above fees are amounts paid to network firms of PricewaterhouseCoopers Australia.
4,398,000
1,164,000
11 Cash and cash equivalents
Cash and cash equivalents consist the following:
Cash at bank and in hand:
Cash at bank and in hand
Short term deposits
Cash and cash equivalents
12 Trade and other receivables
Trade and other receivables consist of the following:
Trade receivables
Allowance for doubtful debtors
Trade receivables
2016
$’000
49,063
-
49,063
2016
$’000
34,370
(745)
33,625
2015
$’000
19,130
6,750
25,880
2015
$’000
29,520
(672)
28,848
All amounts are short-term. The net carrying value of trade receivables is considered a reasonable
approximation of fair value.
All of the Company’s trade and other receivables have been reviewed for indicators of impairment. Certain
trade receivables were found to be impaired and impairment losses of $103 thousand (2015: $12 thousand)
has been recorded accordingly within selling, general and administrative expenses.
The movement in the allowance for doubtful debts can be reconciled as follows:
Balance 1 July
Amounts written off (uncollectable)
Impairment reversal (loss)
Balance 30 June
Trade receivables aging analysis at 30 June is:
Not past due
Not more than 3 months
More than 3 months
2016
$’000
(672)
30
(103)
(745)
2016
$’000
29,934
2,112
2,324
2015
$’000
(686)
26
(12)
(672)
2015
$’000
26,143
1,204
2,173
GTN Limited
For the year ended 30 June 2016
Total
34,370
29,520
63
13 Other assets
Other assets reflected on the consolidated statement of financial position consist of the following:
Current
Prepaid station affiliate contract(i)
Option to purchase business (ii)
Prepaids and other current assets
Non-Current
Prepaid station affiliate contract(i)
Other assets
2016
$’000
834
268
788
1,890
98,831
268
99,099
2015
$’000
-
-
856
856
-
323
323
(i) ATN made a $100 million prepayment of station compensation to a radio station group in February 2016.
This is being accounted for as a financing arrangement whereby ATN will record non-cash interest income
over the term of the contractual agreement, based on an estimate of radio station group’s incremental
borrowing rate with similar terms (estimated to be 8.5% per annum), which will reduce over time as the
prepayment is amortised. ATN will also record station compensation expense over the contract period equal
to the $100 million prepayment plus the total non-cash interest income, which will be recognised as on a
straight line basis over the 30 year contract term. ATN will make annual recurring cash payments
commencing on 1 February 2017 of $2.75 million payable on a monthly basis that will be indexed by the
lower of CPI and 2.5%. ATN will record an additional station compensation expense over the contract
period equal to the total recurring indexed cash payments, which will be recognised straight line over the 30
year contract term.
(ii) The Company’s US Management Co subsidiary has entered into an option agreement with Radiate and
Radiate Holdings, the sole member of Radiate, for an upfront non-refundable payment of USD 200
thousand, which gives an entity nominated by US Management Co the exclusive option to acquire
substantially all of the assets of Radiate for a total consideration of USD 15 million inclusive of the
assumption of up to USD 8 million of liabilities at any time from 1 September 2016 to 30 September 2016.
US Management Co can extend the option term until 31 December 2016 by paying an additional non-
refundable premium of USD 50 thousand on or prior to 30 September 2016. In September 2016, US
Management Co exercised its right to extend its option to purchase substantially all the assets of Radiate to 31
December 2016 by the payment of USD 50 thousand.
14 Goodwill
The movements in the net carrying amount of goodwill and trade names (Note 15) are as follows:
Trade names
Goodwill
Gross carrying amount
Balance 1 July
Net exchange difference
Carrying amount at 30 June
2016
$’000
12,663
(199)
12,464
2015
$’000
12,418
245
12,663
2016
$’000
93,885
(1,169)
92,716
2015
$’000
93,715
170
93,885
GTN Limited
For the year ended 30 June 2016
64
Due to the long term and indefinite nature of goodwill and trade names, amortisation expense is not reflected
and the Company annually reviews goodwill and trade names for impairment.
Impairment testing
For the purpose of annual impairment testing, goodwill and trade names are allocated to the following cash-
generating units, which are the units expected to benefit from the synergies of the business combinations in
which the goodwill and trade names pertain.
Australia
Canada
United Kingdom
2016
$’000
93,211
3,512
8,457
2015
$’000
93,365
3,514
9,669
Goodwill and trade names allocation at 30 June
105,180
106,548
The recoverable amounts of the cash-generating units were determined based on value-in-use calculations,
covering a detailed five-year forecast, followed by an extrapolation of expected cash flows for the units’
remaining useful lives using the growth rates determined by management. The present value of the expected
cash flows of each segment is determined by applying a suitable discount rate.
Growth rates and discount rates used in calculations:
Australia
Canada
United Kingdom
Australia
Canada
United Kingdom
Discount Rates
2016
Post-tax
2016
Pre-Tax
2015
Post-tax
2015
Pre-Tax
10.3%
15.8%
15.8%
10.9%
15.8%
15.8%
10.0%
10.6%
12.1%
11.3%
11.9%
12.8%
Average Growth Rates
Revenue
EBITDA
2016
2015
2016
2015
5%
7%
1%
6%
3%
2%
10%
27%
(3%)
14%
12%
2%
Growth rates
The growth rates reflect lower than the historic revenue growth rate of respective cash-generating units in the
local currency of the respective units. Expenses are then estimated based on a projected growth rate if fixed
in nature or in relation to revenue if variable. The base year for each calculation is the Company’s approved
internal budget for the coming fiscal year. The long term growth rate utilized was 1%.
GTN Limited
For the year ended 30 June 2016
65
Discount rates
The discount rates reflect appropriate adjustments relating to market risk and specific risk factors of each
unit.
Cash flow assumptions
The calculations use cash flow projections based on financial budgets approved by management covering a
five-year period. Cash flows beyond the five-year period assume a 1% long term growth rate which does not
exceed the long-term average growth rates for the industry in which each CGU operates.
Significant estimate: Impact of possible changes in key assumptions
Management is not currently aware of any other reasonably possible changes in key assumptions that would
result in an impairment.
Intangible assets
15
Detail of the Company’s intangible assets and their carrying amounts are as follows:
Station
contracts
Advertising
contracts
Trade names
$’000
$’000
$’000
Total
$’000
Gross carrying amount
Balance at 1 July 2015
Net exchange differences
Balance at 30 June 2016
Amortisation
Balance at 1 July 2015
Amortisation
Net exchange differences
Balance at 30 June 2016
89,481
(1,375)
88,106
(23,969)
(6,575)
652
66,360
(1,014)
65,346
(55,303)
(10,807)
764
(29,892)
(65,346)
Carrying amount 30 June 2016
58,214
-
12,464
12,663
168,504
(199)
(2,588)
12,464
165,916
-
-
-
-
(79,272)
(17,382)
1,416
(95,238)
70,678
Gross carrying amount
Balance at 1 July 2014
Net exchange differences
Balance at 30 June 2015
Amortisation
Balance at 1 July 2014
Amortisation
Net exchange differences
Balance at 30 June 2015
87,782
1,699
89,481
65,103
1,257
66,360
12,418
245
12,663
165,303
3,201
168,504
(17,242)
(6,317)
(410)
(39,787)
(14,580)
(936)
(23,969)
(55,303)
-
-
-
-
(57,029)
(20,897)
(1,346)
(79,272)
89,232
Carrying amount 30 June 2015
65,512
11,057
12,663
The Company expects to either renew or replace its advertiser contracts and renew its station contracts
beyond their expected life. Amortisation expense for the years ended 30 June 2016 and 30 June 2015 was
$17,382 thousand and $20,897 thousand respectively. Indefinite life intangible assets (trade names) are also
subject to impairment testing as disclosed in Note 14.
16 Property, plant and equipment
Details of the Company’s property, plant and equipment and their carrying amount are as follows:
GTN Limited
For the year ended 30 June 2016
66
Gross carrying amount
Balance 1 July 2015
Additions
Disposals
Net exchange differences
Balance 30 June 2016
Depreciation and impairment
Balance 1 July 2015
Disposals
Net exchange differences
Depreciation
Balance 30 June 2016
Carrying amount 30 June 2016
Gross carrying amount
Balance 1 July 2014
Additions
Disposals
Net exchange differences
Balance 30 June 2015
Depreciation and impairment
Balance 1 July 2014
Disposals
Net exchange differences
Depreciation
Balance 30 June 2015
Carrying amount 30 June 2015
Helicopters and
fixed wing
aircraft
Recording,
broadcasting
and studio
equipment
Furniture,
equipment and
other
$’000
$’000
$’000
13,867
1,948
(185)
357
15,987
(7,967)
185
(93)
(2,178)
(10,053)
5,934
688
10
-
(1)
697
(435)
-
1
(99)
(533)
164
1,569
312
(15)
(305)
1,561
(932)
15
15
(272)
(1,174)
387
Helicopters and
fixed wing
aircraft
Recording,
broadcasting
and studio
equipment
Furniture,
equipment and
other
$’000
$’000
$’000
10,501
3,465
-
(99)
13,867
(5,653)
-
(123)
(2,191)
(7,967)
5,900
499
179
-
10
688
(331)
-
(6)
(98)
(435)
253
1,092
422
(51)
106
1,569
(761)
51
(17)
(205)
(932)
637
Total
$’000
16,124
2,270
(200)
51
18,245
(9,334)
200
(77)
(2,549)
(11,760)
6,485
Total
$’000
12,092
4,066
(51)
17
16,124
(6,745)
51
(146)
(2,494)
(9,334)
6,790
17 Current and deferred tax assets and liabilities
Current taxes can be summarised as follows:
Current tax liabilities
2016
$’000
2,320
2015
$’000
1,078
Deferred taxes arising from temporary differences can be summarised as follows:
GTN Limited
For the year ended 30 June 2016
67
Deferred Tax Assets
1 July 2015
Recognised
in OCI*
Recognised
in Profit
and Loss
30 June 2016
$’000
$’000
$’000
$’000
Annual leave accrual
Long service leave provision
Audit accrual
Superannuation accrued
Deferred rent
Hedging
Allowance for doubtful debts
Foreign exchange differences
Deferred transaction costs
Net operating losses
Other
199
327
48
22
-
431
166
5,787
976
-
-
-
-
-
-
-
(431)
-
-
-
-
-
Set-off of deferred tax liabilities pursuant to set-off provisions
Net deferred tax assets
7,956
(431)
* Other Comprehensive Income
28
23
118
6
21
-
(8)
(5,787)
2,535
2,865
4
(195)
227
350
166
28
21
-
158
-
3,511
2,865
4
7,330
(7,330)
-
Deferred Tax Liabilities
1 July 2015
Recognised
in OCI*
Recognised
in Profit
and Loss
30 June 2016
$’000
$’000
$’000
$’000
Intangibles
Fringe benefit tax
Deemed U.S. branch attribution
Prepaid expenses
Other
19,235
1
2,889
-
-
22,125
Set-off of deferred tax assets pursuant to set-off provisions
Net deferred tax liabilities
* Other Comprehensive Income
-
-
-
-
-
-
(4,574)
14,661
(1)
(660)
670
7
(4,558)
-
2,229
670
7
17,567
(7,330)
10,237
Deferred tax assets consist of:
Current
Non-current
Deferred tax liabilities consist of:
Current
Non-current
2016
$’000
2015
$’000
839
6,491
7,330
-
17,567
17,567
648
7,308
7,956
1
22,124
22,125
GTN Limited
For the year ended 30 June 2016
68
18 Trade and other payables
Trade and other payables recognised consist of the following:
Current
Trade payables
Accrued payroll expenses
Accrued expenses and other liabilities
Non-current
Due to related parties
2016
$’000
17,459
5,356
4,443
27,258
68
68
2015
$’000
19,048
4,715
2,419
26,182
66
66
All current amounts are short-term. The carrying values of trade payables and other payables are considered
to be a reasonable approximation of fair value.
Goods and services, sales and value added taxes, which are charged by vendors to operating subsidiaries in
Australia, Canada and United Kingdom are included in trade payables until paid. The net amount of goods
and services, sales and value added tax payable (after deduction of amounts paid to vendors of the Company)
is included as a component of trade and other payables on the consolidated statement of financial position.
19 Provisions
Current
Long service leave provision
Non-Current
Long service leave provision
Lease restoration
2016
$’000
855
855
312
140
452
2015
$’000
709
709
381
95
476
The current portion of the long service leave provision includes all amounts that are either unconditional or
scheduled to become unconditional within 12 months. The entire amount of the unconditional and
scheduled to become unconditional long service leave are presented as current since the Company does not
have the unconditional right to defer settlement. However, based on past experience the Company does not
expect all employees to take the full amount of their long service leave or require payment within the next 12
months.
1,307
1,185
20 Deferred revenue
2016
$’000
2015
$’000
GTN Limited
For the year ended 30 June 2016
Deferred revenue
69
544
544
206
206
Payments received or amounts invoiced in advance are deferred until earned and such amounts are included
as a component of deferred revenue.
21
Financial liabilities
Current
Current portion of long term debt
Non-current
Long term debt, less current portion
2016
$’000
-
-
96,806
96,806
2015
$’000
2,559
2,559
46,711
46,711
In February 2016, the Company amended its existing bank loan facilities to increase the total borrowing
capacity to $155 million primarily to finance the $100 million long term prepayment of a radio station
affiliation agreement. Facility A consisted of $15 million revolving line of credit, Facility B a $40 million term
loan and Facility C a $100 million bullet loan. Deferred financing costs of $3,735 thousand were incurred and
are being recognized in finance costs via the effective interest method over the term of the facilities. Part of
the proceeds from the IPO were used to repay Facility A and Facility B. Facility B was automatically
terminated as part of the repayment. At 30 June 2016 Facility C is outstanding and Facility A is available but
undrawn. A commitment fee of 45% of the applicable margin (currently 2.50%) is incurred on unutilized
portion of Facility A. The outstanding loans bear interest at BBSY plus the applicable margin.
Assets pledged as security
Bank loan facilities are secured by a first ranking charge over all ATN, Aus Hold Co, UK Hold Co, UKTN
and UK Commercial assets.
22 Derivatives
Interest rate swap contract
(i) Classification of derivatives
Derivatives are classified as hedging instruments.
2016
$’000
-
-
2015
$’000
1,229
1,229
On 24 November 2011, as a requirement of the Term Loan, Aus Hold Co entered into fixed rate swap
agreements (“Interest Rate Swaps”) under which, effective 10 February 2012, 75% of the Term Loans’
outstanding balance (prior to any voluntary or mandatory prepayments under the excess cash flow sweep
provisions of the Term Loan) was fixed at 4.21% until November 11, 2016, the maturity date of the Term
Loan. Interest expense related to the Interest Rate Swaps was $1,256 thousand and $908 thousand for the
years ended 30 June 2016 and 30 June 2015, respectively, and is a component of finance costs on the
consolidated statement of profit or loss and other comprehensive income. The initial notional amounts of
the Interest Rate Swaps were each $28,688 thousand and reduced by a portion of the scheduled principal
GTN Limited
For the year ended 30 June 2016
70
payments of the Term Loans. The notional amount of the Interest Rate Swaps at 30 June 2016 was $0. At
inception and on a quarterly basis, the Company determined that these Interest Rate Swaps were highly
effective and therefore, recorded the change in fair value of $799 thousand for the year ended 30 June 2016
and $168 thousand for the year ended 30 June 2015 in other comprehensive income (net of taxes) on the
consolidated statement of changes in equity. Since the Interest Rate Swaps have been closed out, all of the
recorded change in fair value has been re-classed from other comprehensive income to finance costs in the
consolidated statement of profit or loss and other comprehensive income.
(ii) Fair value measurement
For information about the methods and assumptions used in determining the fair value of derivatives please
refer to Note 4(d).
23 Other liabilities
Withholding Tax
Other
24 Earnings per share
Loss attributable to shareholders from continuing operations
Weighted average number of ordinary shares used in calculating basic
earnings per share
Weighted average number of ordinary shares and potential ordinary
share used in calculating diluted earnings per share
2016
$’000
-
72
72
2016
$’000
(17,234)
161,284
161,284
2015
$’000
490
289
779
2015
$’000
(18,169)
158,503
158,503
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
$(0.11)
$(0.11)
$(0.11)
$(0.11)
25 Shareholders’ equity
2016
2016
2015
2015
‘000’s
Ordinary shares
$’000
Issued capital
‘000’s
Ordinary shares
$’000
Issued capital
At beginning of reporting period
Preferred equity dividends
Shares redeemed
Reverse existing capital structure (net)
Shares issued upon initial public offering net of
offering costs
At the end of the reporting period
158,503
-
(1,500)
-
44,209
201,212
Initial Public Offering
248,717
158,503
25,681
(3,406)
27,314
80,642
378,948
-
-
-
-
226,419
22,298
-
-
-
158,503
248,717
On June 3, 2016 the Company completed an initial public offering of its shares raising (net of capitalized
transaction costs) $80.6 million by issuing 44.2 million shares at an issue price of $1.90 per share. Funds
GTN Limited
For the year ended 30 June 2016
received by the Company were offset by $3.4 million in transaction costs (net of tax) incurred in relation to
the issue of the new shares in the Company. In addition to the shares issued by the Company, existing
shareholders sold 54.7 million shares of the Company’s stock. On completion of the initial public offering,
the original shareholders held 102.3 million shares of the Company’s stock. These shares are subject to a
voluntary escrow agreements.
71
Shares
(‘000’s)
Amount
($,000’s)
Shares issued by Company
44,209
83,997
Less: Transaction expenses
-
(3,355)
Shares sold by original shareholders
54,706
103,942
Shares held by original shareholders
102,297
194,364
201,212
378,498
Prior to the offering, the Company was a Cayman limited partnership and as part of the restructuring the
existing preferred equity was converted to common shares of GTN Limited.
The number of ordinary shares outstanding has been adjusted retrospectively back to 1 July 2014 for the
corporate restructure described in Note 2.30. The comparative EPS balances have been calculated
accordingly.
26 Equity based compensation
The Company terminated its equity based compensation plan as part of the restructuring related to the initial
public offering. Information related to the cancelled plans to the extent it impacts the financial statements is
provided below. The Partnership refers to GTCR Gridlock Holdings (Cayman), L.P. the predecessor of
GTN Limited.
The Partnership made available the equivalent of 4,832,730 of Class D LP units for incentive grants to
management and certain consultants (“Grantee”) of the Partnership.
The Class D LP units vested 20% on each of the first five anniversary dates of the grant and immediately
vested upon the sale of the Partnership but otherwise do not have a termination date. Upon separation of
employment, the Partnership may repurchase any unvested Class D LP units for the lower of a) the Grantee’s
original cost and b) fair market value. The Partnership may repurchase any vested Class D LP units at fair
market value, except in cases of termination for cause which such Class D LP units may be repurchased at the
same cost as unvested Class D LP units. In the event of a Grantee’s separation of employment, the
Partnership has six months to provide notice of its intent to repurchase the Class D LP units, which in certain
cases can be extended to up to eight months should not all the partners exercise their option to repurchase
the Class D LP units and these Class D LP units are offered to the partners already participating in the
purchase. Upon sale of the Partnership, the Partnership has the right to escrow 25% of the proceeds
GTN Limited
For the year ended 30 June 2016
72
(“Continuing Incentive Amount”) of the Class D LP units to ensure continued service from the Grantee at
their current compensation (excluding equity or other incentive based compensation) for one year. Should
the Grantee either complete the year of service or be terminated by the acquirer (except for cause) the escrow
shall be released to the Grantee otherwise the Continuing Incentive Amount shall be paid pro rata to the
Class B LP unit holders. The Class D LP unit agreement also contains a restrictive covenant which limits the
Grantees ability to compete with the Partnership (including its subsidiaries) for 48 months following the grant
date.
Due to the varying tax laws of the countries in which the Partnership’s subsidiaries operate, certain of these
incentive grants were structured as phantom equity units, which were intended to mirror the economics of
the Class D LP units (“Phantom Equity”). As such, the terms of individual country’s Phantom Equity units
vary from country to country in order to best reflect the economics of the Class D LP units. Each Phantom
Equity unit represents a contractual right to the economic value of a Class D LP unit. The Phantom Equity
units vest 20% on each of the first five anniversary dates of the grant and immediately vests upon the sale of
the Partnership but otherwise do not have a termination date. Any unvested Phantom Equity units are
forfeited upon separation of employment and all Phantom Equity units (vested and unvested) are forfeited if
the Grantee is terminated for cause. In the event of a Grantee’s separation of employment, the Partnership
for six months following the event has a cash-out option which allows the Partnership to repurchase the
vested Phantom Equity units at the fair market value of a hypothetical Class D LP unit with the same vesting
schedule and a participation threshold of USD $0.10 per unit. Upon sale of the Partnership, the Partnership
has the right to escrow 25% of the proceeds (“Continuing Incentive Amount”) of the Phantom Units to
ensure continued service from the Grantee at their current compensation (excluding equity or other incentive
based compensation) for one year. Should the Grantee either complete the year of service or be terminated
by the acquirer (except for cause) the escrow shall be released to the Grantee otherwise the Continuing
Incentive Amount shall be forfeited. Since the Phantom Equity units provide no rights to acquire equity in
the Partnership and it is expected that these Phantom Equity units will be cash-settled, the Phantom Equity
expense is treated as a liability rather than additional capital. The Phantom Equity unit agreement also
contains a restrictive covenant which limits the Grantees ability to compete with the Partnership (including its
subsidiaries) for 48 months following the grant date.
Noncash compensation expense related to Class D LP units (and Phantom Equity units) is included as a
component of selling, general and administrative expenses in the consolidated statements of operations and
was $(170) thousand and $848 thousand for the years ended 30 June 2016 and 30 June 2015, respectively.
The Partnership did not incur (other than de minimus) cash costs relating to the Class D LP units upon
termination of the plan. Class D LP units that are issued, outstanding or available for future issuance is
summarised below:
Class D LP units available for incentive compensation
Class D LP units outstanding
Phantom Equity outstanding (Class D LP unit equivalents)
Class D LP units available for issuance
2016
-
-
-
-
2015
4,832,730
(3,572,018)
(840,955)
419,757
Class D LP units outstanding, beginning of period
2016
3,572,018
2015
3,572,018
GTN Limited
For the year ended 30 June 2016
Class D LP units issued
Class D LP units cancelled
Class D LP units outstanding, end of period
Phantom Equity outstanding (Class D LP unit equivalents) outstanding,
beginning of period
Phantom Equity issued (Class D LP unit equivalents)
Phantom Equity cancelled (Class D LP unit equivalents)
Phantom Equity outstanding (Class D LP unit equivalents) end of period
73
-
(3,572,018)
-
-
-
3,572,018
840,955
-
(840,955)
-
840,955
-
-
840,955
A summary of the status of the Partnership’s unvested Class D LP units and Class D LP unit Phantom
Equity unit equivalents as of years ended 30 June 2016 and 30 June 2015, and changes during the years ended
30 June 2016 and 30 June 2015, is summarised below:
Unvested at 30 June 2014
Granted
Vested
Forfeited
Number of Class D
LP Phantom
Equity Units
Weighted Average
Grant Date Fair
Value (USD)
Number of Class D
LP Units
Weighted Average
Grant Date Fair
Value (USD)
504,573
-
(168,191)
-
0.62
-
0.62
-
2,143,211
-
(714,404)
-
0.56
-
0.56
-
Unvested at 30 June 2015
336,382
0.62
1,428,807
0.56
Granted
Vested
Cancelled
Unvested at 30 June 2016
-
(168,191)
(168,191)
-
-
0. 62
0. 62
-
-
(1,428,807)
-
-
-
0.56
-
-
The fair value of these units was estimated at the date of the grant with an option allocation methodology
utilising the Black-Scholes option pricing model. The option allocation methodology determines the fair
value of each participating class of equity based on the Partnership’s fair value of total equity and liquidation
preferences with the following assumptions:
(i)
(ii)
(iii)
(iv)
estimated term based on simplified plain-vanilla method (4 years),
a historical volatility over a period commensurate with the expected term based on observations of
volatility of publicly traded peers on a weekly basis (30.0%),
a risk-free interest rate consistent with the expected term and based on the U.S. Treasury yield curve in
effect at the time of the grant (0.71%),
annual dividend yield on preferred units consistent with the equity based compensation agreements
(8% for Class A LP units, 0% for Class B and Class D LP units). The Partnership estimated the fair
value of total equity at the date of grant using the market approach.
Based on these assumptions, the fair value with regards to all granted Class D LP units as of the grant date is
$1,985 thousand. As of 30 June 2016 and 30 June 2015, there was $0 and $305 thousand of total
unrecognised compensation cost related to equity based compensation, respectively.
Based on these assumptions, the fair value with regards to all granted Phantom Equity units as of the grant
date is $435 thousand. As of 30 June 2016 and 30 June 2015, there was $0 and $115 thousand of total
unrecognised compensation cost related to equity based compensation, respectively.
GTN Limited
For the year ended 30 June 2016
74
The Company recognised $(29) thousand and $14 thousand of income tax (expense)/benefit related to
equity-based compensation for the years ended 30 June 2016 and 30 June 2015, respectively.
Leases
27
The Company has various non-cancellable, long-term operating leases for its facilities, aviation services and
office equipment. The facility leases have escalation clauses and provisions for payment of taxes, insurance,
maintenance and repair expenses. Total expense under these leases is recognised rateably over the lease terms
or based on usage, based on the type of agreement. Renewal options are not included in future minimum
payments. Future minimum payments, by year and in the aggregate, under such non-cancellable operating
leases with initial or remaining terms of one year or more, consist of the following as of 30 June 2016:
30 June 2016
30 June 2015
Minimum Lease Payments Due
Within 1 year
1 to 5 years
After 5 years
$’000
1,759
1,552
$’000
2,730
3,227
$’000
95
153
Total
$’000
4,584
4,932
The Company has an obligation to restore certain of its leased premises back to their original condition at the
end of their respective leases. As of 30 June 2016 and 30 June 2015, the Company had a liability of $140
thousand and $95 thousand, respectively accrued, which it anticipates to be the amount required to restore
the premises at the end of the leases.
The Company’s UK Commercial subsidiary outsources the majority of its radio traffic and entertainment
news operations pursuant to contracts with unrelated third parties. These expenses are a component of
network operations and station compensation expense on the accompanying consolidated statement of profit
or loss and other comprehensive income and are recognised over the term of the applicable contracts, which
is not materially different than when the services are provided. The minimum future payments under these
contracts are as follows:
30 June 2016
30 June 2015
Within 1 year
1 to 5 years
After 5 years
Minimum Payments Due
$’000
3,841
4,358
$’000
1,868
2,107
$’000
-
-
Total
$’000
5,709
6,465
The Company generally enters into multiyear contracts with radio and television stations. These contracts call
for the provision of various levels of service (including, but not limited to providing professional
broadcasters, gathering of information, communications costs and aviation services) and, in some cases, cash
compensation or reimbursement of expenses. Station compensation and reimbursement is a component of
network operations and station compensation expenses on the accompanying consolidated statement of
profit or loss and other comprehensive income and is recognised over the terms of the contracts, which is not
materially different than when the services are performed. Contractual station commitments consist of the
following:
GTN Limited
For the year ended 30 June 2016
30 June 2016
30 June 2015
Within 1 year
1 to 5 years
After 5 years
Minimum Payments Due
$’000
26,668
54,387
$’000
16,993
27,745
$’000
40,105
-
Total
$’000
83,766
82,132
75
28 Reconciliation of cash flows from operating activities
Details of the reconciliation of cash flows from operating activities are listed in the following table:
Cash flows from operating activities
Loss for the period
Adjustments for:
Allowance for doubtful accounts
Equity based compensation expenses
Amortisation of deferred borrowing costs
Fair value movement on derivatives
Depreciation and amortisation
Foreign currency loss
Interest expense from amortisation of original issue discount
Net changes in working capital:
Change in trade and other receivables
Change in other assets
Change in deferred tax assets
Change in trade and other payables
Change in deferred revenue
Change in current tax liabilities
Change in provisions
Change in deferred tax liabilities
Change in other liabilities
Net exchange gain/(loss)
Net cash from operating activities
2016
$’000
2015
$’000
(17,234)
(18,169)
73
(170)
149
(1,229)
19,931
5,461
2,070
(4,850)
190
2,099
1,282
338
1,242
122
(4,558)
(707)
(143)
4,066
(14)
848
318
(258)
23,391
17,287
590
(2,076)
45
(3,995)
5,030
(1,326)
(594)
(48)
(4,136)
145
1,245
18,283
29 Related party transactions
The Company has entered into a professional services agreement with GTCR Management X LP, an affiliate
of the majority partnership owners, to provide management services. For the years ended 30 June 2016 and
30 June 2015 the Company incurred $635 thousand and $598 thousand of expense, which is included as a
component of selling, general and administrative expenses in the consolidated statement of profit or loss and
other comprehensive income, respectively. The management agreement was terminated in June 2016.
As of 30 June 2016 and 30 June 2015, the Company had a liability of $68 thousand and $66 thousand to
entities affiliated with the majority shareholders.
A previous line of credit was guaranteed by both GTCR Fund X/A AIV LP and GTCR Fund X/C AIV LP,
both of which are shareholders of GTN Limited. This line of credit was repaid in April 2015 and expired 31
May 2015.
30 Transactions with Key Management Personnel
Key Management Personnel remuneration includes the following expenses:
GTN Limited
For the year ended 30 June 2016
Total short term employee benefits
Total equity based compensation
Total remuneration
76
2016
$
9,646,384
2,272
9,648,656
2015
$
2,290,186
775,050
3,065,236
The Key Management Personnel are all paid in USD so a portion of the change in compensation from the
year ended 30 June 2015 to the year ended 30 June 2016 was due to translation differences related to the
weakening AUD.
31 Parent Entity information
The below information relates to GTN Limited (the “Parent Entity”) which was incorporated on 2 July 2015.
Statement of financial position
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Share capital
Accumulated losses
Reserves
Total equity
Statement of profit or loss and Other Comprehensive Income
Profit (loss) for the year
Other comprehensive income (loss)
Total comprehensive income (loss)
Guarantees entered into by the parent entity
2016
$’000
27,544
370,688
1,245
1,245
369,443
378,948
(9,505)
-
369,443
(9,505)
-
(9,505)
In addition, there are cross guarantees given by GTN Limited (as holding entity), GTCR Gridlock Holdings
(Australia) Pty Limited (“Aus Hold Co”), The Australia Traffic Network Pty Limited (“ATN”), GTCR
Gridlock Holdings, Inc. (‘US Hold Co”) and Global Traffic Network, Inc. (“GTN”) as described in Note 32.
No liability was recognised by the parent entity or the group in relation to the above guarantees, as the fair
value of the guarantees is immaterial.
(b) Contingent liabilities of the parent entity
The parent entity did not have any contingent liabilities as at 30 June 2016 or 30 June 2015. For information
about guarantees given by the parent entity, please see above.
32 Deed of cross guarantee
GTN Limited (as holding entity), GTCR Gridlock Holdings (Australia) Pty Limited (“Aus Hold Co”), The
Australia Traffic Network Pty Limited (“ATN”), GTCR Gridlock Holdings, Inc. (‘US Hold Co”) and
Global Traffic Network, Inc. (“GTN”) are parties to a deed of cross guarantee under which each company
guarantees the debts of the others. By entering into the deed, the wholly-owned entities have been relieved
GTN Limited
For the year ended 30 June 2016
77
from the requirement to prepare a financial report and directors’ report under Class Order 98/1418 (as
amended) issued by the Australian Securities and Investments Commission.
The above companies represent a ‘closed group’ for the purposes of the Class Order, and as there are no
other parties to the deed of cross guarantee that are controlled by GTN Limited, they also represent the
‘extended closed group’.
(a) Consolidated statement of profit or loss and other comprehensive income, summary of movements
in consolidated retained earnings and consolidated statement of financial position
Set out below is a consolidated statement of profit or loss and other comprehensive income for the year
ended 30 June 2016 of the closed group consisting of the above companies.
Consolidated statement of profit or loss and other
comprehensive income
Revenue
Other income
Interest income on long-term prepaid affiliate contract
Network operations and station compensation expenses
Selling, general and administrative expenses
Transaction expenses
Finance costs
Depreciation and amortisation
Foreign currency transaction loss
Loss before income tax
Income tax expense
Loss for the year
Other comprehensive income for the year, net of income tax
Unrealised gain on interest rate swaps
Total other comprehensive income for the year
Total comprehensive loss for the year
Summary of movement in consolidated retained earnings
Accumulated losses at the beginning of the financial year
Loss for the period
Accumulated losses at the end of the financial year
2016
$’000
89,813
238
3,581
(45,870)
(16,511)
(13,983)
(8,160)
(13,608)
(3,593)
(8,093)
(4,541)
(12,634)
799
799
(11,835)
(34,101)
(12,634)
(46,735)
Set out below is a consolidated balance sheet as at 30 June 2016 of the closed group consisting of the above
companies.
Consolidated statement of financial position
Assets
Current
Cash and cash equivalents
Trade and other receivables
Other current assets
Current assets
Non-current
Property, plant and equipment
Intangible assets
2016
$’000
38,498
18,542
1,054
58,094
1,091
54,152
GTN Limited
For the year ended 30 June 2016
78
Goodwill
Investment in subsidiaries
Other assets
Non-current assets
Total assets
Liabilities
Current
Trade and other payables
Deferred revenue
Current tax liabilities
Provisions
Current liabilities
Non-current
Financial liabilities
Deferred tax liabilities
Other liabilities
Provisions
Total non-current
Total liabilities
Net assets
Equity
Share capital
Reserves
Accumulated losses
Total equity
83,649
70,593
108,280
317,765
375,859
12,966
89
2,121
855
16,031
96,806
8,946
53
407
106,212
122,243
253,616
378,948
(78,597)
(46,735)
253,616
33 Segment information
The Company’s chief operating decision maker, it chief executive officer analyses the company’s performance
by geographic area and has identified four reportable segments: Australia, Brazil, Canada and United
Kingdom.
The segments’ revenues are as follows:
Australia
United Kingdom
Canada
Brazil
2016
$’000
2015
$’000
89,814
47,542
23,601
5,167
83,507
43,517
21,154
5,306
166,124
153,484
The chief operating decision maker tracks performance primarily by Adjusted EBITDA which is defined as
EBITDA adjusted for any foreign exchange profit or loss, interest income on the long-term prepaid affiliate
agreement, transaction costs and other unusual non-recurring items.
Adjusted EBITDA by Segments
Australia
United Kingdom
Canada
Brazil
Other
Adjusted EBITDA
2016
$’000
2015
$’000
31,285
4,302
2,263
(1,315)
(1,434)
35,101
24,620
3,250
1,252
(626)
(1,623)
26,873
GTN Limited
For the year ended 30 June 2016
79
Foreign exchange loss
Transaction costs
Less: Interest income on long-term prepaid
affiliate contract
EBITDA
Depreciation and amortization
Interest income on long-term prepaid affiliate
contract
Financing costs net of interest income
Loss before taxes and discontinued
operations
(5,461)
(14,029)
(3,581)
12,030
(17,287)
(583)
-
9,003
(19,931)
(23,391)
3,581
(7,916)
-
(4,648)
(12,236)
(19,036)
Segment assets and liabilities are classified by their physical location.
Segment assets
Total Assets:
Australia
UK
Canada
Brazil
2016
$’000
2015
$’000
268,399
186,038
30,118
23,456
4,488
32,970
23,562
3,682
Total segment assets
326,461
246,252
Unallocated:
Deferred tax assets
Intercompany eliminations
Other
Total assets
Segment liabilities
Total liabilities
Australia
UK
Canada
Brazil
-
(1,486)
28,581
7,956
(1,814)
1,376
353,556
253,770
53,931
6,701
6,041
1,562
70,065
18,989
28,041
5,559
Total segment liabilities
68,235
122,654
Unallocated:
Deferred tax liabilities
Borrowings
Derivatives
Intercompany eliminations
Others
Total liabilities
10,237
96,806
-
(50,970)
14,304
138,612
22,125
49,270
1,229
(101,530)
8,372
102,120
34 Events subsequent to the reporting period
Other than as disclosed in Note 13, no matters or circumstances have arisen since the end of the financial
year which significantly affected or may significantly affect the operations of the group, the results of those
operations, or the state of affairs of the group in future financial years.
GTN Limited
For the year ended 30 June 2016
Directors’ declaration
In the directors’ opinion:
80
(a)
The financial statements, set out on pages 31 to 79 are in accordance with the Corporations Act 2001,
including:
(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements, and
(ii) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2016 and of
its performance for the financial year ended on that date, and
(b)
(c)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable, and
at the date of this declaration, there are reasonable grounds to believe that the members of the closed
group identified in Note 32 will be able to meet any obligations or liabilities to which they are, or may
become, subject to virtue of the deed of cross guarantee described in Note 32.
Note 2.1 confirms that the financial statements also comply with International Financial Reporting Standards
as issued by the International Accounting Standards Board.
The directors have been given the declarations by the chief executive officer and chief financial officer
required by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the directors.
Gary L. Miles
Chairman
Dated, this 29th day of September 2016
SHAREHOLDER INFORMATION AS AT 15 SEPTEMBER 2016
Number of security holders and securities on issue
Quoted equity securities
GTN has 201,212,292 fully paid ordinary shares on issue which are held by 274 shareholders.
Unquoted equity securities
GTN has no unquoted equity securities.
Voting rights
Quoted equity securities
The voting rights attached to fully paid ordinary shares are that on a show of hands, every member
present, in person or proxy, has one vote and upon a poll, each share shall have one vote.
Distribution of security holders
Quoted equity securities
Fully paid ordinary shares
Holding
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Number of
shareholders
21
131
41
56
25
Number of shares
%
10,015
211,937
311,980
1,770,024
198,908,336
Total
274
201,212,292
Unmarketable parcel of shares
7.66
47.81
14.96
20.44
9.12
100
The number of shareholders holding less than a marketable parcel of fully paid ordinary shares is 4.
157 fully paid ordinary shares comprise a marketable parcel at GTN’s closing share price of $3.20 as at
15 September 2016.
Substantial shareholders
The number of securities held by substantial shareholders and their associates are set out below:
83
Fully paid ordinary shares
Name
GTCR Funds
Smallco Investment Manager Limited
JCP Investment Partners Ltd
Ausbil Investment Management Limited
Devon Funds Management Limited
Number of
Shares
102,296,985
16,008,382
13,531,713
13,226,174
11,257,094
Current
Interest
50.84%
7.96%
6.73%
6.57%
5.59%
Notice Date
6/06/2016
01/09/2016
7/09/2016
7/09/2016
23/06/2016
Twenty largest shareholders
Fully paid ordinary shares
Details of the 20 largest shareholders of quoted securities by registered shareholding are:
Name
Number of shares
%
1 MERRILL LYNCH (AUSTRALIA) NOMINEES PTY
2
3
4
LIMITED
J P MORGAN NOMINEES AUSTRALIA LIMITED
NATIONAL NOMINEES LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA)
LIMITED
BNP PARIBAS NOMS PTY LTD
BNP PARIBAS NOMS (NZ) LTD
CITICORP NOMINEES PTY LIMITED
UBS NOMINEES PTY LTD
5
6
7
8
9 MR WILLIAM L YDE III
10 HSBC CUSTODY NOMINEES (AUSTRALIA)
LIMITED - A/C 3
11 MIRRABOOKA INVESTMENTS LIMITED
12 MORGAN STANLEY AUSTRALIA SECURITIES
(NOMINEE) PTY LIMITED
13 RBC INVESTOR SERVICES AUSTRALIA
NOMINEES PTY LIMITED
ANACACIA PTY LIMITED
14
15 UBS NOMINEES PTY LTD
16 MRS EVA XIRADIS
17 DJERRIWARRH INVESTMENTS LIMITED
17
18
19
20
Total
Balance of Register
Grand Total
AMCIL LIMITED
INVIA CUSTODIAN PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD
BYDAND CAPITAL PTY LTD
98,881,276
22,010,650
17,389,953
13,593,148
12,368,466
11,140,603
7,223,409
4,841,536
3,426,717
1,385,251
1,185,937
1,080,831
49.14
10.94
8.64
6.76
6.15
5.54
3.59
2.41
1.70
0.69
0.59
0.54
1,016,649
0.51
800,000
450,000
407,000
279,552
279,552
262,335
230,612
158,000
198,411,477
2,800,815
201,212,292
0.40
0.22
0.20
0.14
0.14
0.13
0.11
0.08
98.61
1.39
100.00
Voluntary Escrow
Escrow Period - GTCR Funds
The escrow period for the GTCR Funds is the period commencing on the date on which
Completion of the Offer occurs and ending after 4.15pm on the date of the public announcement
by GTN of its financial results for FY2017.
84
Shares held by the GTCR Funds at the Completion of the Offer may only be sold in the period prior to
4.15pm on the date of the public announcement by GTN of its financial results for FY2017 on the
following basis:
(in respect of 25% of the Escrowed Shares held by the GTCR Funds at Completion of the
Offer):
(a)
After 4.15pm (Sydney time) on the first date on which both the conditions below have been
satisfied:
(i)
(ii)
GTN’s financial results for the first half of FY2017 are announced; and
the volume-weighted average price in any 10 consecutive trading days following
announcement of those financial results exceeds the Offer Price by more than 20%
(disregarding, for the purpose of ascertaining this 10 day trading period, any trading days
during which Shares are in trading halt for the entirety of that day).
After the announcement of GTN’s financial results for FY2017, any remaining Escrowed Shares held by
the GTCR Funds will cease to be subject to escrow restrictions.
Escrow Period - William Yde III
The escrow period for William Yde III is the period commencing on the date on which Completion of
the Offer occurs and ending after 4.15pm on the date of the public announcement by GTN of its
financial results for FY2017.
On-market buy-back
There is no current on-market buy-back.
Use of Funds
In accordance with Listing Rule 4.10.19, the Group states that it has used the cash and assets in a form
readily convertible to cash that it had at the time of admission in a way consistent with its business
objectives.
85
Corporate Directory
Directors
Gary Miles - Independent Non-Executive Chairman
William Yde III - Chief Executive Officer and Managing Director
Mark Anderson - Non-Executive Director
David Ryan AO – Independent Non-Executive Director
Robert Loewenthal – Independent Non-Executive Director
Company secretaries
Nathan Bartrop
Patrick Quinlan
Registered office
Share register
Auditor
Level 42, Northpoint
100 Miller Street
North Sydney NSW 2060
Telephone: +61 2 9955 3500
Link Market Services Limited
Level 12
680 George Street
Sydney, NSW 2000
Share registry telephone: +61 1300 554 474
PricewaterhouseCoopers
Darling Park Tower 2
201 Sussex Street
Sydney, NSW 2000
Stock exchange listing
GTN Limited shares are listed on the Australian Securities
Exchange (ASX code: GTN)
Website
www.gtnetwork.com.au
ABN 38 606 841 801
86