GTN Limited
ABN 38 606 841 801
Year ended 30 June 2018
(Previous corresponding period:
Year ended 30 June 2017)
Results for Announcement to the Market
Revenue from ordinary activities
up
4.4% to
185,013
$’000
Profit from ordinary activities after tax
attributable to members (continuing
operations)
down
11.9% to
24,831
Loss from discontinued operation
down
81.8% to
(39,932)
Net loss for the period attributable to
members
down
343.4% to
(15,101)
Dividends/distributions
Amount per security
Franked amount per
security
Final dividend
Interim dividend
$0.110
N/A
70%
N/A
Record date for determining entitlements to the dividend
7 September 2018
Additional dividend/distribution information
● Declaration Date – 30 August 2018
•
•
•
Ex-Dividend Date - 6 September 2018
Date of Record – 7 September 2018
Payment Date - 28 September 2018
Dividend/distribution reinvestment plans
N/A
NTA Backing
2018
2017
Net tangible asset backing per ordinary share
Net tangible assets consist of net assets less goodwill and intangible assets without any adjustment
for deferred tax liabilities related to purchased intangible assets.
$0.42
$0.40
GTN Limited
ABN 38 606 841 801
Annual Report 2018
CONTENTS
Item
Page
Chairman and CEO’s Letter
About GTN
Corporate Governance
Directors’ Report
Remuneration Report
Auditor’s Independence Declaration
Consolidated Financial Report
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Shareholder information
Corporate Directory
1
2
5
7
19
28
29
35
80
81
86
89
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 another productive and successful year and are pleased to present its
annual report for fiscal year ending 30 June 2018.
Perhaps the biggest event of the past fiscal year was the Company’s exit from the United States market
in March 2018. Despite a significant investment of time and money into the market, the Board
concluded that it was unlikely that the operations would generate sufficient income over the short or
intermediate term to justify the significant costs of operating in the United States. While we are
disappointed that our efforts were not successful, we recognized going in that this was a “high risk, high
reward” endeavour.
GTN reported net revenues for the year from continuing operations of $185.0 million which was 4.4%
ahead of last year with all four operating segments exceeding the previous year revenue. We believe
we continue to perform well in relation to the radio markets in which we operate. Adjusted EBITDA was
$48.1 million which was 1% behind last year. Adjusted EBITDA was negatively impacted by increases
in station compensation of almost $9 million. While we expect further increases in station compensation
during FY 2019, we expect the increases to be lower since the majority of the increase in FY 2018
related to multi-year contract renewals. Station compensation for these multi-year contracts will remain
at roughly the FY 2018 level for FY 2019 and beyond. NPATA from continuing operations was down
10% from FY 2017 primarily due to higher income tax expense. FY 2017 income tax was reduced
approximately $5 million due to the reversal of the valuation allowance for Canada’s deferred tax assets,
which was a one-off positive benefit. We would like to commend our local management for delivering
strong revenue results on the heels of a strong fiscal 2017.
Once we exited the United States market, we deployed a portion of our excess cash to reduce our debt.
Since April 2018, we have repaid $40 million of debt and our outstanding debt at 30 June 2018 was
$60 million. Our cash balances at that date was $52.2 million and our net debt was only $7.8 million.
Due to our strong balance sheet and all four operating segments (Australia, Brazil, Canada, United
Kingdom) generating positive cash, the Board has decided to reinstate the dividend which was
suspended in order to preserve funds for the United States turnaround effort. On 30 August 2018, the
Board declared a dividend of $0.110 per share for holders of record on 7 September 2018. Going
forward, the Board expects to allocate cash generated by the Company between further dividends and
debt repayment.
Despite our setback in the United States, we are pleased with our current operations. The Company
continues to grow revenue in its markets, 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 2019.
William L. Yde III
Managing Director and Chief Executive Officer
Robert Loewenthal
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.
In FY2018, 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)
25.0
21
37.0
13
66.6
211.0
9
6
GTN years of
operation
FY 2018
revenue (1)
% of FY 2018
revenue (1)
GTN
audience
(millions)
100.8
29.8
42.2
12.2
(%)
54%
16%
23%
7%
(#)
11.2m
radio (2)
14.5m
radio
28.0m
radio
14.6m
radio
2 5.0m TV
7.5m TV
(#)
137 radio
108 radio
234 radio
59 radio
13 TV
(%)
100%
5 TV
88%
100%
58%
(%)
83%
81%
78%
62%
(‘000’s)
958
630
19,307(3)
216
Number of
affiliates
Proportion of
metropolitan
commercial
radio
listeners in
GTN’s
existing
markets
GTN
penetration
within
existing
metropolitan
commercial
radio markets
FY 2018
spots
inventory
(1) Amounts may not add due to rounding
(2) Includes 814 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 5.3
million persons.
(3) The UK market measures inventory and units sold based on impacts instead
of spots. An impact is a thousand listener impressions.
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.
3 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, third party providers, radio
scanners and station listener lines, to provide up-to-the-minute information to Affiliates.
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, such as 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
4 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.
• 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 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
5 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 2018 Corporate Governance Statement on
30 August 2018.
6 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 2018 and the auditor’s
report thereon.
Directors and Company Secretaries
Robert Loewenthal
Independent Non-
Executive Chairman
Chairman of the Nomination
and Remuneration Committee
Member of the Audit and Risk
Committee
Robert Loewenthal has over 10 years of experience in the radio industry.
He currently operates a private corporate advisory and consulting business, Free
Trade Hall, and is the founder of the Whooshkaa Podcasting Platform.
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.
Robert is a Chartered Accountant and holds a Bachelor of Commerce degree
from The University of Sydney.
William Yde III (“Bill”)
Managing Director and
Chief Executive Officer
Bill Yde has 35 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.
7 David Ryan AO
Independent Non-
Executive Director
Chairman of the Audit and
Risk Committee
Member of the Nomination and
Remuneration 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 GetSwift Limited since
April 2018, where he serves as the Chairman of the Audit and Risk Committee
and is a member of the Remuneration and Nomination Committee.
David is also currently Chairman of Sunshine Coast Destination Limited, a
director of First American Title Insurance Company of Australia Pty Ltd, a
director of First Mortgage Services Pty Ltd, a director of Sunshine Coast Airport
Pty Limited and Board member of the Sunshine Coast Events Board
David has previously held positions as a non-executive director of Lendlease
Corporation Limited from December 2004 until his retirement in November 2017,
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 retired 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.
Anna Sandham
Joint Company Secretary
Anna Sandham is a Chartered Company Secretary employed by Company
Matters Pty Limited. Anna is an experienced company secretary and
governance professional with over 20 years’ experience in various large and
small, public and private, listed and unlisted companies.
Anna has previously worked for companies including AMP Financial Services,
Westpac Banking Corporation, BT Financial Group and NRMA Limited.
Anna is a fellow of the Governance Institute of Australia, in addition to being a
member of their Legislative Review Committee.
Patrick Quinlan
Joint Company Secretary
Patrick Quinlan 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.
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 over 30 years of experience in the radio media industry.
Chief Operating Officer and
Chief Financial Officer
Prior to joining Global Traffic Network, 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.
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.
8 Gary Worobow
Executive Vice President,
Business and Legal
Affairs
Christopher Thornton
(“Chris”)
National Sales Director
The Australia Traffic Network
(“ATN”)
Victor Lorusso (“Vic”)
Chief Operations Manager
ATN
John Quinn
Chief Operating Officer
United Kingdom Traffic Network
(”UKTN”)
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 Global Traffic Network, 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 ATN, 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, a Graduate
Certificate in Management and a Masters of Business Administration from
the Australian Institute of Business.
Vic Lorusso has over 19 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 ATN, 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 has a Business Licence for Real Estate.
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 its 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”)
President and Executive
Lannie Sibian has over 30 years of experience working in the radio and
advertising industries.
9 Vice-President Sales
Canadian Traffic Network (“CTN”)
Lannie joined CTN in 2012 as President and Executive Vice-President of
Sales for CTN. Prior to joining CTN, 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
William Yde III
Mark
Anderson (1)
David Ryan
Robert
Loewenthal
15
10
15
15
15
10
15
15
-
2
3
3
-
2
3
3
-
2
2
2
-
2
2
2
(1) Resigned 26 March 2018
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, Brazil and the United
States. In March 2018 GTN exited the United States market.
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 where 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 and Porto Alegre and Salvador in Brazil.
10 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 2018, 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 22% of our advertising
inventory in the five metro markets is adjacent to news reports.
We believe that combining high levels 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 advertising 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:
• 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 almost 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.
11 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 2018) 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 than the overall
group revenues. 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
Revenue increased in FY 2018 4.4% to $185.0 million. EBITDA and Adjusted EBITDA
decreased slightly (1%) due primarily to increased station compensation costs across all
geographies. While the company expects station compensation to continue to increase in FY
2019, the majority of the FY 2018 increase related to the renewal of multi-year agreements and it
is expected that the FY 2019 station compensation increase will be less than that in FY 2018.
The non-IFRS measurements used are defined in the table below and further discussed later in
the report.
(m)(4)
FY18
FY17 % Difference
Revenue (5)
EBITDA (2)(5)
Adjusted EBITDA (3)(5)
NPAT (5)
NPATA (1)(5)
185.0
177.3
39.7
48.1
24.8
29.2
40.2
48.9
28.2
32.5
NPATA per share (cents) (5)
$0.13
$0.15
4%
(1)%
(1)%
(12)%
(10)%
(15)%
(1)
NPATA is defined as net profit after tax (NPAT) from continuing operations 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, amortization and non-cash impairment charges.
(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, foreign
exchange gains and losses and transaction costs.
12 (4) Amounts in tables may not add due to rounding. Percentage changes based on actual amounts prior to
rounding.
(5) Results exclude discontinued operation.
Revenue
Group revenue was up $7.7 million (4.4%) from FY 2017 with all four operating segments
exceeding the previous year’s revenue.
FY18 Revenue by Geographic Segment
(m)(4)
Australia (ATN)
Canada (CTN)
United Kingdom (UKTN)
Brazil (BTN)
Total
EBITDA
FY18
100.8
29.8
42.2
12.2
185.0
FY17
% Difference
98.7
28.0
40.9
9.7
177.3
2.1%
6.5%
3.3%
25.6%
4.4%
Adjusted EBITDA for FY 2018 was $48.1 million, a decrease of 1% from FY 2018 due to higher
station compensation costs.
(m)(4)
Revenue
Network operations and station
compensation expenses
Selling, general and
administrative expenses
Equity based compensation
expense
Net F/X losses
FY18
185.0
177.3
FY 17 % Difference
(109.8)
(101.6)
(34.8)
(35.2)
(1)%
(0.7)
(0.1)
(0.1)
(0.2)
Operating expenses
(145.4)
(137.1)
EBITDA
39.7
40.2
Interest income on Southern
Cross Austereo Affiliate Contract
Net F/X losses
Adjusted EBITDA
8.4
0.1
48.1
8.5
0.2
48.9
4%
8%
393%
(65)%
6%
(1)%
(1)%
(65)%
(1)%
NPATA
The Group reported NPATA from continuing operations of $29.2 million which is a decrease of
10% from FY 2017.
The decrease in NPATA was primarily due to a $3.0 million increase in income tax expense. FY
2017 income tax was impacted favourably by a $5.0 million tax benefit related to the recognition
of previously unrecognized CTN tax assets, primarily net operating losses from previous periods.
FY18 Cash Flow
13 The Group reported strong cash flow from continuing operations.
(m)(4)
Adjusted EBITDA
Non-cash items in Adjusted EBITDA
Change in working capital
Impact of Southern Cross Austereo
Affiliate Contract
Operating free cash flow before capital
expenditure
Capital expenditure
Net free cash flow before financing, tax
and dividends
FY18
48.1
0.7
(2.8)
FY17
48.9
0.1
(1.2)
2.0
3.5
48.0
(3.3)
51.3
(3.3)
44.6
48.0
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, large cash balance at 30 June 2017 and the discontinuance of funding the
United States operating losses and cash requirements, the Group was able to repay $40 million
of its outstanding debt during FY 2018. The Group’s cash balance was $52.2 million at 30 June
2018. The Group also has a $15 million bank facility which is undrawn as of 30 June 2018.
The Group has outstanding debt principal at 30 June 2018 of $60 million and net debt (principal
less cash balances) of $7.8 million. The ratio of net debt to Adjusted EBITDA is 0.16x at 30 June
2018. The Group’s debt is only secured by the Groups’ Australia and United Kingdom
operations. Based on the applicable covenants for the Group’s debt facility, the leverage is
0.50x at 30 June 2018. The EBITDA used for the calculation of the leverage under the debt
facility differs from that of Adjusted EBITDA used herein.
Segment Adjusted EBITDA
Adjusted EBITDA by segment increased in Canada and Brazil while decreasing in Australia and
UK. All of the segments revenue and station compensation increased during FY 2018. In
Australia and UK, station compensation increased greater than revenue due primarily to multi-
year renewals with key radio station affiliates.
(m)(4)
Australia (ATN)
Canada (CTN)
United Kingdom (UKTN)
Brazil (BTN)
Other(6)
Total
FY18(7)
FY17(7) % Difference
40.6
7.7
3.7
1.8
(5.6)
48.1
43.4
5.9
4.4
1.3
(6.1)
48.9
(7)%
30%
(16)%
43%
(8)%
(1)%
(6) Primarily corporate overhead
(7) Excludes intercompany management fees charged to certain subsidiaries
Key operating metrics
Key operating metrics by jurisdiction (local currency)
14 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)
Notes
1
2
3
1
2
3
4
5
6
Brazil
Radio spots inventory ('000s)
Radio sell-out rate (%)
Average radio spot rate (BRL)
1
2
3, 7
FY18
958
73%
138
630
63%
69
19,307
97%
1.3
216
60%
275
FY17
866
81%
134
598
67%
66
19,055
99%
1.3
151
64%
277
1. Available radio advertising spots (primarily adjacent to traffic, news and information reports).
2. The number of radio spots sold as a percentage of the number of radio spots available.
3. Average price per radio spot sold net of agency commission.
4. The UK market measures inventory and units sold based on impacts instead of spots. An impact is a
thousand listener impressions.
5. The number of impressions sold as a percentage of the number of impressions available.
6. Average price per radio impact sold net of agency commission.
7. Not adjusted for taxes or advertising agency incentives that are deducted from net revenue.
Foreign exchange rates
A significant portion of the Company’s revenue and expenses are in a currency other than
Australia dollars (“AUD”). The actual annual exchange rates utilized in preparing the annual
consolidated statement of profit or loss and other comprehensive income are as follows:
FY2018
Actual
FY2017
Actual
0.78
0.98
0.58
2.56
0.75
1.00
0.60
2.43
AUD:USD
AUD:CAD
AUD:GBP
AUD:BRL
Discontinued Operation
On 13 March 2018, the Company sold its United States Traffic Network, LLC (“USTN”)
subsidiary for $1 USD. The Company exited the U.S. market because it believed that it would
not be able to sufficiently increase revenue in the short or intermediate term sufficiently to justify
the costs (primarily station compensation) of operating in the United States. The Company
recognized a gain of $24,865 thousand on the disposal of USTN. The net loss associated with
15 the USTN segment was $39,932 thousand for the period from 1 July 2017 to 13 March 2018
(“FY 2018”) and $21,967 thousand for the period 1 December 2016 to 30 June 2017 (“FY 2017”)
and is reflected as loss from discontinued operation in the consolidated statement of profit or
loss and other comprehensive income.
Dividends
A final dividend of $0.110 per share (70% franked) was declared 30 August 2018 and will be
paid to holders of record as of 7 September 2018.
Non-IFRS measurements
● EBITDA is earnings before interest, tax, depreciation, amortisation and non-cash
impairment charges which exclude the results of discontinued operations.
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 and excludes
foreign exchange gains or losses and transaction costs.
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 from continuing operations 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.
16 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 2018 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 2018 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. The expense related to this
insurance was $172 thousand for FY 2018.
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
● none of the services undermine the general principles relating to auditor independence
as set out in APES 110 Code of Ethics for Professional Accountants.
17 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
2018
$
2017
$
-
-
123,000
123,000
524,000
-
-
524,000
441,000
49,000
139,000
629,000
Total remuneration for non-audit services
524,000
752,000
*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 28.
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.
Robert Loewenthal
Chairman
30 August 2018
18 Remuneration Report
The directors present the GTN 2018 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 with executive KMP
g) Non-executive director arrangements
h) Additional statutory information
(a) Key management personnel covered in this report
Non-executive and executive directors (see pages 7 to 8 - for details about each
director)
William Yde III
Mark Anderson (resigned 26 March 2018)
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 (h)(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
19
● equitably and responsibly reward employees, having regard to the performance of the
Company, individual performance and statutory and regulatory requirements.
Remuneration Framework
Element
Purpose
Fixed
Remuneration
(FR)
Provide
competitive
market salary
Short-term
incentive (STI)
Reward for in
year
performance
Performance
metrics
N/A
Potential
Value
Varies
Adjusted EBITDA
Varies
Long-term
incentive (LTI)
Alignment to
long-term
shareholder
value
50% relative total
shareholder return
(TSR)
50% adjusted EPS
growth
Varies
Changes for FY19
Contractual
increases of 5%
effective 1 October
2018
Targets adjusted on
an annual basis. STI
based on 30 June
2018 share price
expired.
Contractually
obligated options
expected to be
granted in FY19.
Future performance
metrics based on
service time only.
Incentives based on
United States
operating
performance no
longer applicable.
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 two years and two
thirds after three years (subject to performance criteria) and are designed to align
management’s interests with those of the shareholders and encourage retention.
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. Superannuation is included for Australia based employees and
directors only.
(ii)
Short-term incentives (STI)
Feature
Maximum
bonus
Description
CEO – $420,712, other executive management $139,950 to
$216,516
20 100% of the maximum bonus is paid for achieving 100% of the
performance metrics. Board may award discretionary bonus
for performance that is less than 100% of the performance
metrics.
Performance
Metrics
Aligns executive compensation with market expectations.
Metric
Adjusted
EBITDA
Target
FY19 Board
approved
Adjusted
EBITDA target
Weighting Reason
100%
Adjusted
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 in certain situations to prevent any inappropriate
reward outcomes.
Note: Amounts are paid in USD and amounts to be paid are based on estimated
USD/AUD exchange rate of 1.3504:1.
(iii)
Long-term incentives (“LTIP”)
Executive key management personnel participate in the LTIP comprising of annual
grants of options which vest one third after two years and two thirds after three
years and are subject to performance conditions summarized below.
Feature
Allocation
Description
CEO 70% FR, Other executive management 50% of FR.
Target allocation is based on fair value of the grant, which
vests over three years.
Current
Performance
Metrics
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 amortisation of intangibles and
excluding United States Traffic Network, LLC operations, 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%
21 Future
Performance
Metrics
Vesting will be subject to continued employment only. Other
terms of the grants to remain unchanged.
Exercise Price Exercise price equal to share price on date of grant.
Forfeiture and
termination
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.
(d)
Link between remuneration and performance
The Company’s Adjusted EBITDA (excluding the discontinued United States
segment) performance for fiscal 2018 reached 95% of the target set by the board
(1% decrease over fiscal 2017). As a result, the board awarded executive
management 50% of their bonus potential for the period.
As a recently 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. The Company
reached its Prospectus Forecast Adjusted EBITDA target for both FY2016 and
FY2017 and executive management received 100% of their short-term incentive
potential. The Company reached 95% its target Adjusted EBITDA from continuing
operations for FY2018 and executive management received 50% of their short-term
incentive potential for the year.
(m)
FY 2016(1)
FY2017(2) FY2018(2)
Adjusted EBITDA
Increase/(decrease)
34,646
+21%
48,856
+41%
48,140
(1)%
STI paid (% of potential)
100%
100%
50%
(1) Pro forma. See previous filings for detail of pro forma
adjustments.
(2) Adjusted to reflect disposal of United States Traffic Network
LLC
(e)
Remuneration expenses for executive KMP
Fixed remuneration
Variable
Remuneration
Name
Year
Cash
Salary
Non-
monetary
benefits
Post-
employment
benefits
(1)(2)
(2)
Cash
bonus
Equity
based
comp
Total
(3)(7)
(5)
Other
(4)
Executive
Management
William Yde
III
(6)(4)
2018
880,311
-
-
30,948
183,733
390,458
1,485,450
22
2017
655,336
Scott Cody
(6)(4)
2018
2017
566,691
416,840
Gary
Worobow
(6)(4)
2018
467,891
2017
333,099
-
-
-
-
-
-
-
-
-
-
31,818
359,959
79,117
1,126,230
30,948
31,818
93,896
168,855
176,636
35,791
868,171
653,304
30,948
61,185
83,669
643,693
31,818
90,536
16,954
472,407
(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) Amounts based on expense recognized in the Consolidated Statement of Profit or Loss and Other
Comprehensive Income.
(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 is 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).
(7) Includes amounts expensed for financial statement purposes related to forfeited stock options.
(f) Contractual arrangements with executive KMP
CEO Description
Component
Fixed remuneration (1)
Contractual term
Notice by the
individual/Company
Termination of employment
(without cause)
Termination of employment
(with cause) or by the
individual
$966,809 from 1 October
2017 to 1 October 2018,
minimum 5% increase per
annum thereafter.
Ongoing contract
By the Employee voluntarily
upon at least twelve (12)
months written notice to the
Company. Should the
executive terminate their
employment, 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.
Entitled to pro-rata STI for the year
Immediately
Other executive
management description
Range between $516,600
and $623,276 from 1
October 2017 to 1 October
2018, minimum 5% increase
per annum thereafter.
Ongoing contract
By the Employee voluntarily
upon at least twelve (12)
months written notice to the
Company. Should the
executive terminate their
employment, 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.
Immediately
No STI entitlement.
23 (1) Based on USD/AUD exchange rate of 1.3504:1.
(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 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 $1,000,000 and was approved by the
shareholders on 8 November 2017.
Base fees
Chair (2)
Other independent non-executive directors (1)
Additional fees
Audit and risk committee – Chair
Audit and risk committee – member
Nomination and remuneration committee –
Chair
Nomination and remuneration committee –
member
$128,000
$90,000
$40,000
-
-
-
(1) Mark Anderson was a non-executive director that was not considered independent
due to GTCR’s large shareholdings in the Company. Mr. Anderson is a managing
director of GTCR. Mr. Anderson received no compensation from the Company for
his directorship.
(2) 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.
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
G Miles (1)(3)
M Anderson (2)
R Loewenthal (4)
D Ryan
2018
2017
2018
2017
2018
2017
2018
2017
-
83,862
-
-
128,000
102,667
90,000
90,000
Audit and Risk
Committee
Remuneration
and
Nomination
Committee
Total
-
-
-
-
-
-
40,000
40,000
-
-
-
-
-
83,862
-
-
-
6,666
128,000
109,333
-
-
130,000
130,000
24 Total non-
executive director
remuneration
2018
218,000
40,000
-
258,000
2017
276,529
40,000
6,666
323,195
(1) Paid in Canadian dollars (CAD). Amount translated into AUD based on same
exchange rates as annual financial statements.
(2) Resigned effective 26 March 2018.
(3) Resigned effective 28 February 2017
(4) Named Acting Chairman effective 1 March 2017. Named Chairman effective 8
November 2017.
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
Name
Executive directors
W Yde
Fixed
remuneration
2018
61%
Other key management personnel of the group
69%
S Cody
77%
G Worobow
At Risk – STI
At Risk – LTI*
2018
2018
13%
11%
10%
26%
20%
13%
* 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 2018.
Total STI bonus (cash)
Total
Opportunity
$
2018
485,320
243,683
142,048
Awarded
%
2018
38%
39%
43%
Value
granted
$
LTI Options
Value
exercised
%
Forfeited
%
2018
2018
2018 (4)
-
-
-
-
-
-
17
17
17
Name
W Yde (1)
S Cody (2)
G Worobow
(3)
(1) USD 376,366. Includes USD 91,396 if the four (4) week volume weighted
average price of GTN Limited ordinary shares was at or above $2.71 (AUD) on
25 the close after the last day of trading June 2018. Amounts in the table have
been translated into AUD based on the exchange rate used to prepare the
financial statements.
(2) USD 188,976. Includes USD 43,344 if the four (4) week volume weighted
average price of GTN Limited ordinary shares was at or above $2.71 (AUD) on
the close after the last day of trading June 2018. Amounts in the table have
been translated into AUD based on the exchange rate used to prepare the
financial statements.
(3) USD 110,158. Includes USD 15,260 if the four (4) week volume weighted
average price of GTN Limited ordinary shares was at or above $2.71 (AUD) on
the close after the last day of trading June 2018. Amounts in the table have
been translated into AUD based on the exchange rate used to prepare the
financial statements.
(4) No LTI Options granted in fiscal 2018. Represents percentage of LTI Options
outstanding at 1 July 2017 that were forfeited.
(iii)
Terms and conditions of equity-based payment arrangements.
FY2018
Name &
Grant Date
Balance
at the
start of
the year
Unvested
Granted
Vested
Exercised
Forfeited
Balance at the end of
the year
#
%
#
%
Vested
Unvested
W Yde
S Cody
G
Worobow
968,906
-
161,484 17
-
161,484 17
161,484
645,938
438,315
-
73,053 17
-
73,053 17
73,053
292,209
207,623
-
34,604 17
-
34,604 17
34,604
138,415
Ordinary Shares
FY2018
Name
Balance at
the start of
year
Received
during the
year on
exercise of
stock
options
W Yde
3,603,408
D Ryan (2)
R Loewenthal (2)
S Cody
G Worobow (1)
75,475
17,417
-
10
-
-
-
-
-
(1) Initial shares upon forming GTN Limited.
Shares
Purchased
Shares
Sold
Balance at
the end of
the year
-
-
-
-
-
-
-
-
-
-
3,603,408
75,475
17,417
-
10
26 (2) Shares held indirectly through superannuation fund.
(iv)
Other transactions with key management
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:
●FY2018
●FY2017
$162,422
$161,706
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.
(v)
Reliance on external remuneration consultants
During FY18, the Company engaged PwC to discuss alternatives to the existing LTI
Plan. PwC was paid $6,403 for this work.
(vi)
Voting of shareholders at last year’s annual general meeting
During the last annual general meeting, the shareholders voted 100.00% in favour of
adoption of the remuneration report for the year ended 30 June 2017. In addition,
the shareholders voted 88.19% in favour of increasing the maximum aggregate
amount per annum available for payment as remuneration to the Non-Executive
Directors of the Company by $450,000 from $550,000 per annum to $1,000,000 per
annum.
27 Auditor’s Independence Declaration
As lead auditor for the audit of GTN Limited for the year ended 30 June 2018, I declare that to the best
of my knowledge and belief, there have been:
(a)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(b)
no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of GTN Limited and the entities it controlled during the period.
MW Chiang
Partner
PricewaterhouseCoopers
Sydney
30 August 2018
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
28
GTN Limited
ACN 606 841 801
Consolidated Financial Report
For the year ended 30 June 2018
29 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
31
32
33
34
35
80
30 GTN Limited
For the year ended 30 June 2018
Consolidated Statement of Profit or Loss and
Other Comprehensive Income
For the year ended 30 June 2018
Revenue
Other income
Interest income on long-term prepaid affiliate contract
Network operations and station compensation expenses
Selling, general and administrative expenses
Equity based compensation expenses
Depreciation and amortisation
Finance costs
Foreign currency transaction loss
Profit before income tax
Income tax expense
Profit for the year from continuing operations
Loss from discontinued operation
Profit (loss) for the year
Notes
7
7
7
26
8
8
8
2018
$’000
185,013
403
8,401
(109,816)
(34,807)
(651)
(9,476)
(4,784)
(79)
2017
$’000
177,289
487
8,471
(101,571)
(35,201)
(132)
(9,329)
(5,235)
(228)
34,204
34,551
9
(9,373)
(6,379)
35
24,831
(39,932)
(15,101)
28,172
(21,967)
6,205
Other comprehensive income (loss) for the year, net of income tax:
Items that may be reclassified to profit or loss
Foreign currency translation reserve
Unrealised gain (loss) on interest rate swaps
1,591
3
(2,540)
(3)
Total other comprehensive income (loss) for the year
1,594
(2,543)
Total comprehensive income (loss) for the year
(13,507)
3,662
Earnings per share attributable to the ordinary equity holders:
Basic and diluted earnings per share from continuing operations
24
Basic and diluted loss per share from discontinued operation
$0.11
$(0.18)
Basic and diluted earnings/(loss) per share (cents)
Total profit/ (loss) for the year and other comprehensive income are fully attributable to members of the Company
$(0.07)
24
$0.13
($0.10)
$0.03
This statement should be read in conjunction with the notes to the financial statements.
31 GTN Limited
For the year ended 30 June 2018
Consolidated Statement of Financial Position
As at 30 June 2018
Assets
Current
Cash and cash equivalents
Trade and other receivables
Current tax asset
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
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
17
13
16
15
14
17
13
18
20
17
19
18
21
17
22
23
19
25
2018
$’000
52,232
38,681
957
1,827
93,697
6,335
58,009
96,193
3,916
97,215
261,668
355,365
28,346
450
338
1,341
30,475
69
58,294
17,443
-
37
349
76,192
106,667
248,698
2017
$’000
100,727
53,678
-
4,842
159,247
6,768
85,221
97,997
4,679
98,244
292,909
452,156
57,613
5,430
683
1,167
64,893
66
97,569
16,796
5
77
409
114,922
179,815
272,341
444,981
6,540
(202,823)
248,698
444,981
4,295
(176,935)
272,341
This statement should be read in conjunction with the notes to the financial statements.
32 GTN Limited
For the year ended 30 June 2018
Consolidated Statement of Changes in Equity
For the year ended 30 June 2018
Notes
Balance at 30 June 2016
Total comprehensive income:
Net profit
Other comprehensive income (loss)
Transactions with owners in their capacity as owners:
Dividends
Ordinary shares issued
Costs relating to share issue net of tax
Equity based compensation
Balance at 30 June 2017
Total comprehensive income:
Net loss
Other comprehensive income (loss)
Transactions with owners in their capacity as owners
Dividends
Equity based compensation
Issued
Capital
$’000
378,948
-
-
-
67,622
(1,589)
-
66,033
444,981
-
-
-
-
-
Common
Control
Reserve
$’000
(24,655)
-
-
-
-
-
-
-
-
(24,655)
-
-
-
-
-
-
Balance at 30 June 2018
25
444,981
(24,655)
Foreign Currency
Translation Reserve Hedging Reserve
$’000
29,230
-
(2,540)
(2,540)
-
-
-
-
(2,540)
26,690
-
1,591
1,591
-
-
1,591
28,281
$’000
-
-
(3)
(3)
-
-
-
-
(3)
(3)
-
3
3
-
-
3
-
Equity Based
Payments
Reserve
$’000
2,131
Accumulated
Losses
$’000
(170,710)
Total
Equity
$’000
214,944
-
-
-
-
-
-
132
132
6,205
-
6,205
(2,543)
6,205
3,662
(12,430)
(12,430)
-
-
-
(6,225)
67,622
(1,589)
132
57,397
2,263
(176,935)
272,341
-
-
-
-
651
651
(15,101)
-
(15,101)
(15,101)
1,594
(13,507)
(10,787)
-
(10,787)
651
(25,888)
(23,643)
2,914
(202,823)
248,698
This statement should be read in conjunction with the notes to the financial statements.
33 GTN Limited
For the year ended 30 June 2018
Consolidated Statement of Cash Flows
For the year ended 30 June 2018
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
Cash outflow from sale of subsidiary
Acquisition of business
Net cash used in investing activities
Financing activities
Proceeds from offering of stock (net of transaction costs)
Dividends
Repayment of borrowings
Net cash from financing activities
Net change in cash and cash equivalents
Cash and cash equivalents, beginning of year
Exchange differences on cash and cash equivalents
Notes
2018
$’000
2017
$’000
253,445
(230,508)
403
(4,064)
(9,289)
28
9,987
(3,470)
(5,730)
-
(9,200)
-
(10,787)
(40,000)
(50,787)
(50,000)
100,727
1,505
216,336
(180,140)
487
(4,467)
(7,730)
24,486
(3,529)
-
(22,027)
(25,556)
64,068
(10,465)
-
53,603
52,533
49,063
(869)
Cash and cash equivalents, end of year
Cash flows of discontinued operation
52,232
100,727
11
35
This statement should be read in conjunction with the notes to the financial statements.
34 GTN Limited
For the year ended 30 June 2018
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 Australia and international markets, including 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.
GTN Limited is a company limited by shares, incorporated and domiciled in Australia. 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 2018 (including comparatives) were
approved and authorised for issuance on 30 August 2018. The directors have the power to amend and reissue
the financial statements.
35 GTN Limited
For the year ended 30 June 2018
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 periods 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) –
measured at fair value,
● assets held for sale – measured at fair value less cost of disposal.
Certain amounts reported in prior years have been reclassified to conform to the current year presentation.
.
2.2 Basis of consolidation
The Company’s financial statements consolidate those of GTN Limited and all of its subsidiaries (the
“Company” or “Group”) as of 30 June 2018. 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.
36 GTN Limited
For the year ended 30 June 2018
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).
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.
37 GTN Limited
For the year ended 30 June 2018
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.
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
38 GTN Limited
For the year ended 30 June 2018
of the debtor, probability that the debtor will enter bankruptcy or financial re-organisation, and default or
delinquency in payments (more than 90 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 (or fair value if acquired in a business combination) and subsequently
carried at cost less accumulated amortisation and impairment losses. 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
39 GTN Limited
For the year ended 30 June 2018
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:
computer equipment: 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.
40 GTN Limited
For the year ended 30 June 2018
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.
General and specific borrowing costs that are directly attributable to the acquisition of a qualifying asset are
capitalised during the period of time that is required to complete and prepare the asset for its intended use or
sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their
intended use or sale.
Other borrowing costs are expensed in the period in which they are incurred.
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.
41 GTN Limited
For the year ended 30 June 2018
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
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
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
42 GTN Limited
For the year ended 30 June 2018
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.
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.
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 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.
(i) 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.
43 GTN Limited
For the year ended 30 June 2018
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.
The subsidiaries 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.
44 GTN Limited
For the year ended 30 June 2018
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
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.
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 operates equity-settled equity-based remuneration plans 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
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).
45 GTN Limited
For the year ended 30 June 2018
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.
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.
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.
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.
46 GTN Limited
For the year ended 30 June 2018
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. See Note 17.
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. See
Note 14.
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. See Note 16.
47 GTN Limited
For the year ended 30 June 2018
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. See Note 13.
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.
3
Changes in accounting policies
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 for annual
periods beginning on or after 1 July 2017. Information on these new standards is presented below.
AASB 2016-1 – Recognition of Deferred Tax Assets for Unrealized Losses
AASB 2016-1 amends AASB 112 – Income Taxes to clarify the requirements on the recognition of deferred
tax assets for unrealized debt instruments measured at fair value. The amendment is effective for annual
periods beginning on or after 1 January 2017 but is available for early adoption.
The amendment was first adopted for the year ending 30 June 2018 and there was no material impact on the
financial statements.
AASB 107 – Statement of Cash Flows
AASB 2016-2 requires additional disclosures that will enable users of financial statements to evaluate changes
in liabilities arising from financing activities. The amendment requires disclosures of changes arising from:
● cash flows, such as drawdowns and repayments of borrowings
● non-cash changes, such as acquisitions, disposals and unrealized exchange differences.
The amendment was first adopted for the year ending 30 June 2018 and there was no material impact on the
financial statements as the amendment is limited to additional disclosure. The additional disclosure is set out
in Note 28(b).
48 GTN Limited
For the year ended 30 June 2018
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
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 amendment is effective for annual periods beginning on or after 1 January 2018
but is available for early adoption.
Management has largely completed its assessment of the impact of AASB 9 and 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. The Company’s preliminary assessment is that its financial
assets and liabilities balances at 30 June 2018 would not be modified under the provisions of AASB 9. The
Company’s primary non-cash financial asset is trade receivables and impairments losses related to trade
receivables have historically been immaterial (see Note 12). Therefore, there is not expected to be a material
49 GTN Limited
For the year ended 30 June 2018
impact upon changing to the expected credit loss model. In addition, the Company currently has no hedging
arrangements in place on its debt.
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
The amendment is effective for annual periods beginning on or after 1 January 2018 but is available for early
adoption. Management has largely completed its assessment of the impact of AASB 15 and 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. The Company’s preliminary assessment is that
there would be no adjustment to reported revenue for the years ended 30 June 2018 and 2017 had the
Company adopted AASB 15 for those periods. The Company recognizes revenue when the commercial
advertisements are aired which is consistent with AASB 15.
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 Company is not able to estimate the effect
of the new rules on the financial statements. The Company does not expect to adopt the new standard
before 1 July 2019.
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 has used
derivative financial instruments to manage interest rate risk exposures on borrowings.
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.
The Company holds the following financial instruments:
Financial assets
Cash and cash equivalents
2018
$’000
2017
$’000
52,232
100,727
50 GTN Limited
For the year ended 30 June 2018
Trade and other receivables
Financial liabilities
Trade and other payables
Interest bearing liabilities
Derivative financial instruments
Other liabilities
(a) Market risk
38,681
90,913
53,678
154,405
28,346
58,294
-
37
86,677
57,613
97,569
5
77
155,264
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.
(i) Cash flow and fair value 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. The Company has
utilized fixed rate interest rate swaps and interest rate collars to manage interest rate risk. In August 2016, the
Company entered into an interest rate collar on $50 million of its variable debt that expired 9 February 2018.
The hedge was determined to be effective when entered into and was tested for effectiveness at each balance
sheet date and been found effective.
The Company has at times managed its cash flow interest rate risk by using various interest rate derivatives.
Such interest rate derivatives have the economic effect of converting borrowings from floating rates to fixed
rates. The interest rate derivatives the Company has employed are fixed rate interest rate swaps and interest
rate collars. Under the fixed rate interest rate swaps, 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. Under interest rate collars, such
exchanges only occur should the floating interest rate fall outside the floor or the ceiling of the collar.
Otherwise the interest is paid on a floating rate basis. Currently all the Company’s outstanding debt is
floating based on one-month BBSY and none of the debt is subject to derivatives.
As at the end of the reporting period, the Company had the following variable rate cash and borrowings
outstanding:
2018
Weighted
average
interest rate
%
2017
Weighted
average
interest rate
Balance
Balance
Cash and cash equivalents
Borrowings – unhedged portion (1)
Net exposure to cash flow interest rate risk
$’000
100,727
(50,000)
50,727
(1) A portion of the hedged debt of $50 million is subject to cash flow risk because the hedging mechanism is
an interest collar which allows the interest rate to float between the interest rate floor and ceiling. The
collar expired 9 February 2018 at which time all outstanding debt became floating debt.
52,232
(60,000)
(7,768)
%
0.61%
5.24%
0.53%
5.27%
$’000
51 GTN Limited
For the year ended 30 June 2018
Effective 9 August 2016, in satisfaction of the interest rate hedging requirements under the Term Loan, the
Company’s Aus Hold Co subsidiary entered into interest rate collar agreements for $50 million of the Facility
C bullet loan. The interest rate collar agreements expired effective 9 February 2018. The interest rate collar
agreements set a range of interest rates at which below the floor interest rate (based on one-month BBSY)
Aus Hold Co paid the counter party the difference between the floor interest rate and actual interest rate on
the nominal amount of the interest rate collar agreements whilst the counter party paid Aus Hold Co any
difference between the ceiling interest rate and BBSY. The floor interest rate was 1.55% and the ceiling rate
was 2.20%. Aus Hold Co incurred no upfront costs to enter into the interest rate collar agreements and
neither party was required to make a payment to the other. At 30 June 2017, the fair value of the interest rate
collar was $5 thousand in favour of the counter party. The interest rate collar expired effective 9 February
2018 and the debt has been subject to floating interest rates since. Since the interest rate collar agreements
had been determined to be effective at inception and as of 30 June 2017, the expense related to the change in
fair value (net of taxes) has been charged to hedging reserve in other comprehensive income.
An official increase/decrease in interest rates of 100 (2017: 100) basis points would have favourable/adverse
effect on profit before tax of $78 thousand (2017: favourable/adverse $507 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:
USD
$’000
Short Term Exposure
CAD
$’000
GBP
$’000
BRL
$’000
30 June 2018
Financial assets
4,808
20,176
15,203
2,883
Financial liabilities
(550)
(6,520)
(2,648)
(1,507)
Total exposure
4,258
13,656
12,555
1,376
30 June 2017
Financial assets
Financial liabilities
28,433
(31,719)
15,847
(6,029)
10,307
(3,530)
Total exposure
(3,286)
9,818
6,777
1,950
(1,409)
541
Long Term Exposure
Other
$’000
USD
$’000
GBP
$’000
CAD
$’000
BRL
$’000
51
(69)
(18)
49
(161)
(112)
-
-
-
-
(13)
(13)
-
(3)
(3)
-
(5)
(5)
-
(11)
(11)
-
(10)
(10)
-
(15)
(15)
-
(17)
(17)
There are no material transactions of subsidiary entities made in currencies other than the functional currency
of the subsidiary. Therefore, no sensitivity analysis on foreign currencies affecting profit or loss has been
prepared.
(b) Credit risk
52 GTN Limited
For the year ended 30 June 2018
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”.
(c) Liquidity risk
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
2018
$’000
2017
$’000
75,000
115,000
60,000
100,000
15,000
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
At 30 June 2018
Non-derivatives
Non-interest bearing
Trade and other payables
28,346
-
-
-
28,346
28,346
53 GTN Limited
For the year ended 30 June 2018
Other liabilities
Interest bearing
Bank loans (1)(2)
Derivatives
Interest rate collars
Total
-
-
37
2,667
2,667
61,608
-
-
-
31,013
2,667
61,645
-
-
-
-
37
37
66,942
58,294
-
-
95,325
86,677
(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
57,613
-
-
-
-
77
4,165
4,165
106,675
-
5
-
61,778
4,170
106,752
-
-
-
-
-
57,613
57,613
77
77
115,005
97,569
5
5
172,700
155,264
At 30 June 2017
Non-derivatives
Non-interest bearing
Trade and other payables
Other liabilities
Interest bearing
Bank loans (1)(2)
Derivatives
Interest rate collars
Total
(1) Cash flows include an estimate of future contractual payments of interest
(2) Carrying amounts are net of capitalized transaction costs
(d) Fair value measurements
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement
or for disclosure purposes.
(i) 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.
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.
54 GTN Limited
For the year ended 30 June 2018
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 2.50x at 30 June 2018) (actual 0.50x)
(b) Interest coverage ratio (at least 3.50x at 30 June 2018) (actual 11.40x)
(c) Debt service ratio (at least 1.10x at 30 June 2018) (actual 9.30x)
The borrowers were in compliance with these and all other requirements of the loan for all periods presented.
The Group’s consolidated TGR at 30 June 2018 was 0.20x. 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
GTN Holdings Pty Limited (“LuxCo 1”)
GTN US Holdco, Inc. (‘US Hold Co”)
Global Traffic Network, Inc. (“GTN”)
Gridlock Holdings (Australia) Pty Limited (“Aus Hold
Co”)
The Australia Traffic Network Pty Limited (“ATN”)
GTN Management, Inc. (“US Management Co”)
GTCR Gridlock International (Luxembourg) S.a r.l.
(“LuxCo 2”)
Canadian Traffic Network ULC (“CTN”)
GTN Holdings (UK) Limited (“UK Hold Co”)
Global Traffic Network (UK) Commercial Limited
(“UK Commercial”)
Global Traffic Network (UK) Limited (“UKTN”)
Australia (2)
United States (Delaware) (1)
United States (Nevada) (1)
Australia (NSW)
Australia (NSW)
United States (Delaware)
Luxembourg
Canada (Alberta)
United Kingdom (England &
Wales)
United Kingdom (England &
Wales)
United Kingdom (England &
Wales)
GTCR Gridlock Holdings (Brazil) S.a r.l. (“LuxCo 3”) Luxembourg
BTN Servicos de Informacao do Transito Ltda
(“BTN”)
United States Traffic Network, LLC (3)
Brazil
United States (Delaware)
Proportion of Ownership
Interests Held by the
Company
30-June-2018 30-June-2017
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
0%
100%
100%
100%
(1) Resident of Australia for tax purposes but still subject to U.S. taxes. Principal place of business
Australia.
(2) Migrated to Australia from Luxembourg effective July 2016
(3) United States Traffic Network, LLC, a 100% owned indirect subsidiary was sold in March 2018.
7
Revenue and other income
From continuing operations
Sales revenue
Sale of advertising commercials – net of agency commissions and taxes
2018
$’000
2017
$’000
185,013
185,013
177,289
177,289
55 GTN Limited
For the year ended 30 June 2018
Other income
Interest on bank deposits
403
403
487
487
Interest income on long-term prepaid affiliate contract
8,401
8,471
Revenue has been restated from the previous period to reduce revenue by the taxes paid to Brazilian tax
authorities based on revenue. Previously these expenses were treated as a component of selling, general and
administrative expenses. It has subsequently been determined the proper accounting treatment is to report
revenue net of these taxes. There was no impact on profit or on operating cashflows from the adjustment.
From continuing operations
Sale of advertising commercials – net of agency commissions
Less: Brazilian revenue related taxes
Sale of advertising commercials – net of agency commissions and taxes
8
Expenses
2018
$’000
186,581
(1,568)
185,013
2017
$’000
178,537
(1,248)
177,289
2018
$’000
2017
$’000
Profit/(Loss) before income tax includes the following specific
expenses:
Employee benefits expense
38,804
39,227
Defined contribution superannuation expenses
Amortisation and depreciation
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
942
9,476
4,784
1,933
79
886
9,329
5,235
1,898
228
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% (2017: 30%) and the reported tax expense in profit or loss are as follows:
Income (loss) before tax
Tax rate: 30% (2017 30%)
2018
$’000
34,204
10,261
2017
$’000
34,551
10,365
56 GTN Limited
For the year ended 30 June 2018
Taxes on foreign earnings
Tax effect of permanent differences
Foreign tax credits
Toll charge
(Recognition of previously unrecognised tax losses)/ unrecognized tax
losses
Foreign jurisdiction tax, net of federal tax benefit
Over-provision for income tax in prior year
Effect of tax rate changes
Accrual of uncertain tax position
Other
Income tax expense
Expense
Current
Deferred
Income tax expense
Other comprehensive income
Current
Deferred
(9,889)
564
(5,532)
4,023
7,445
1,154
(495)
1,250
(18)
610
9,373
2018
$’000
7,965
1,408
9,373
-
2
2
12,037
362
(10,610)
-
(5,711)
(21)
(198)
(312)
-
467
6,379
2017
$’000
8,039
(1,660)
6,379
-
(2)
(2)
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 $19,233 thousand (2017: $5,473 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.
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
Tax advice on mergers and acquisitions
Due diligence
Remuneration for taxation services
2018
$
2017
$
810,000
830,000
-
810,000
123,000
953,000
524,000
-
-
524,000
441,000
49,000
139,000
629,000
Total auditor’s remuneration
1,334,000
1,582,000
57 GTN Limited
For the year ended 30 June 2018
*Included in the above fees are amounts paid to network firms of PricewaterhouseCoopers Australia.
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
Trade and other receivables
12
Trade and other receivables consist of the following:
Trade receivables
Allowance for doubtful debtors
Trade receivables
2018
$’000
48,649
3,583
52,232
2018
$’000
39,347
(666)
38,681
2017
$’000
97,339
3,388
100,727
2017
$’000
54,363
(685)
53,678
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 $79 thousand (2017: $79 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)
Discontinued operations
Balance 30 June
Trade receivables aging analysis at 30 June is:
Not past due
Not more than 3 months
More than 3 months
Total
2018
$’000
(685)
34
(79)
64
(666)
2018
$’000
34,386
2,378
2,583
39,347
2017
$’000
(745)
205
(79)
(66)
(685)
2017
$’000
37,515
12,352
4,496
54,363
58 GTN Limited
For the year ended 30 June 2018
13 Other assets
Other assets reflected on the consolidated statement of financial position consist of the following:
Current
Prepaid station affiliate contracts(i)
Prepaids and other current assets
Non-Current
Prepaid station affiliate contract(i)
Other assets
2018
$’000
1,216
611
1,827
96,945
270
97,215
2017
$’000
3,444
1,398
4,842
97,927
317
98,244
(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 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.
14 Goodwill
The movements in the net carrying amount of goodwill and trade names (Note 15) are as follows:
Gross carrying amount
Balance 1 July
Discontinued operation
Net exchange difference
Trade names
2018
$’000
2017
$’000
12,341
12,464
-
104
-
(123)
Carrying amount at 30 June
12,445
12,341
Goodwill
2018
$’000
97,997
(2,030)
226
96,193
2017
$’000
96,258
2,143
(404)
97,997
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
2018
$’000
96,051
3,869
2017
$’000
96,223
3,776
59 GTN Limited
For the year ended 30 June 2018
United Kingdom
Discontinued operation
Goodwill and trade names allocation at 30 June
8,718
-
108,638
8,279
2,060
110,338
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
2018
Pre-Tax
2017
Pre-Tax
12.2%
15.8%
15.8%
10.8%
15.8%
15.8%
Average Growth Rates
Revenue
EBITDA
2018
2017
2018
2017
3%
6%
(1)%
5%
6%
1%
3%
12%
(7)%
7%
18%
0%
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%.
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 impairment.
15
Intangible assets
60 GTN Limited
For the year ended 30 June 2018
Detail of the Company’s intangible assets and their carrying amounts are as follows:
Gross carrying amount
Balance at 1 July 2017
Discontinued operation
Net exchange differences
Balance at 30 June 2018
Amortisation
Balance at 1 July 2017
Amortisation
Discontinued operation
Net exchange differences
Balance at 30 June 2018
Carrying amount 30 June 2018
Gross carrying amount
Balance at 1 July 2016
Discontinued operation
Net exchange differences
Balance at 30 June 2017
Amortisation
Balance at 1 July 2016
Amortisation
Discontinued operation
Net exchange differences
Balance at 30 June 2017
Carrying amount 30 June 2017
Station
contracts
$’000
Advertising
contracts
$’000
Software
$’000
Trade names
$’000
Total
$’000
100,600
(13,160)
544
87,984
73,543
(8,708)
414
65,249
(36,349)
(65,730)
(6,254)
73
110
-
1,445
(964)
(42,420)
(65,249)
45,564
-
88,106
13,896
(1,402)
65,346
9,194
(997)
100,600
73,543
(29,892)
(65,346)
(6,221)
(533)
297
-
(1,051)
667
(36,349)
(65,730)
64,251
7,813
1,014
12,341
187,498
(999)
(15)
-
(198)
-
193
5
-
-
-
1,055
(41)
1,014
-
-
(201)
3
(198)
816
-
104
(22,867)
1,047
12,445
165,678
-
-
-
-
-
(102,277)
(6,254)
1,711
(849)
(107,669)
12,445
58,009
12,464
165,916
-
(123)
24,145
(2,563)
12,341
187,498
-
-
-
-
-
12,341
(95,238)
(6,221)
(1,785)
967
(102,277)
85,221
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 2018 and 30 June 2017 was
$6,254 thousand and $6,221 thousand respectively. Indefinite life intangible assets (trade names) are also
subject to impairment testing as disclosed in Note 14.
Property, plant and equipment
16
Details of the Company’s property, plant and equipment and their carrying amount are as follows:
Helicopters and
fixed wing
aircraft
$’000
Recording,
broadcasting
and studio
equipment
$’000
Furniture,
equipment and
other
$’000
18,618
2,975
-
(6)
(384)
21,203
741
112
-
-
(10)
843
1,960
383
(508)
-
(8)
1,827
Total
$’000
21,319
3,470
(508)
(6)
(402)
23,873
Gross carrying amount
Balance 1 July 2017
Additions
Discontinued operation
Disposals
Net exchange differences
Balance 30 June 2018
Depreciation and impairment
61 Helicopters and
fixed wing
aircraft
$’000
Recording,
broadcasting
and studio
equipment
$’000
Furniture,
equipment and
other
$’000
GTN Limited
For the year ended 30 June 2018
Balance 1 July 2017
Disposals
Net exchange differences
Depreciation
Discontinued operation
Balance 30 June 2018
Carrying amount 30 June 2018
(12,530)
6
176
(2,943)
-
(15,291)
5,912
(599)
-
-
(64)
-
(663)
180
Gross carrying amount
Balance 1 July 2016
Additions
Discontinued operation
Disposals
Net exchange differences
Balance 30 June 2017
Depreciation and impairment
Balance 1 July 2016
Disposals
Net exchange differences
Depreciation
Discontinued operation
Balance 30 June 2017
Carrying amount 30 June 2017
15,987
3,187
-
-
(556)
18,618
(10,053)
-
335
(2,812)
-
(12,530)
6,088
697
53
-
-
(9)
741
(533)
-
7
(73)
-
(599)
142
Current and deferred tax assets and liabilities
17
Current taxes can be summarised as follows:
Current tax assets
Current tax liabilities
Net current tax assets/(liabilities)
(1,422)
(14,551)
-
169
(215)
(116)
(1,584)
243
1,561
289
169
-
(59)
1,960
6
345
(3,222)
(116)
(17,538)
6,335
Total
$’000
18,245
3,529
169
-
(624)
21,319
(1,174)
(11,760)
-
34
(223)
(59)
(1,422)
538
-
376
(3,108)
(59)
(14,551)
6,768
2018
$’000
957
(338)
619
2017
$’000
-
(683)
(683)
Deferred taxes arising from temporary differences can be summarised as follows:
Deferred Tax Assets
1 July 2017
Recognised
in OCI*
Recognised
in Profit
and Loss
30 June 2018
$’000
$’000
$’000
$’000
Annual leave accrual
Long service leave provision
Audit accrual
Superannuation accrued
Deferred rent
360
432
-
24
21
-
-
-
-
-
(102)
33
122
3
(5)
258
465
122
27
16
62 GTN Limited
For the year ended 30 June 2018
Hedging
Allowance for doubtful debts
Foreign exchange differences
Deferred transaction costs
Fixed asset depreciation
Net tax losses
Set-off of deferred tax liabilities
pursuant to set-off provisions
Net deferred tax assets
* Other Comprehensive Income
2
99
6
2,550
355
6,300
10,149
(5,470)
4,679
(2)
-
-
-
-
-
(2)
-
49
(6)
(1,379)
365
(1,276)
(2,196)
-
148
-
1,171
720
5,024
7,951
(4,035)
3,916
Deferred Tax Liabilities
Intangibles
Deemed U.S. branch attribution
Prepaid expenses
Other
Set-off of deferred tax assets
pursuant to set-off provisions
Net deferred tax liabilities
* Other Comprehensive Income
Deferred tax assets consist of:
Current
Non-current
Deferred tax liabilities consist of:
Current
Non-current
1 July 2017
$’000
Recognised
in OCI*
$’000
Recognised
in Profit
and Loss
$’000
30 June 2018
$’000
18,113
1,988
2,164
1
22,266
(5,470)
16,796
-
-
-
-
-
(1,662)
(1,988)
2,862
-
(788)
16,451
-
5,026
1
21,478
(4,035)
17,443
2018
$’000
2017
$’000
667
7,284
7,951
-
21,478
21,478
647
9,502
10,149
-
22,266
22,266
During the year ended 30 June 2017, CTN recognized previously unrecognized deferred tax assets, primarily
related to previous years’ net operating losses. This was due to CTN generating taxable income during the
period and the expectation that taxable income would continue at least at this amount in the future. Based
upon current performance, the net operating losses of CTN would be fully utilized well before the statute of
limitations to use the losses, which is 20 years. The balance of the CTN recognized net operating loss at 30
June 2017 was $6,300 thousand.
At 30 June 2018 the Company had a franking balance of $3,346 thousand.
Trade and other payables
18
Trade and other payables recognised consist of the following:
63 GTN Limited
For the year ended 30 June 2018
Current
Trade payables
Accrued payroll expenses
Accrued expenses and other liabilities
Non-current
Other
2018
$’000
21,554
4,735
2,057
28,346
2017
$’000
20,906
7,045
29,662
57,613
69
69
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
2018
$’000
1,341
1,341
211
138
349
1,690
2017
$’000
1,167
1,167
272
137
409
1,576
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.
20
Deferred revenue
Deferred revenue
2018
$’000
450
450
2017
$’000
5,430
5,430
Payments received or amounts invoiced in advance are deferred until earned and such amounts are included
as a component of deferred revenue. The decrease in deferred revenue from the year ended 30 June 2017 to
30 June 2018 was primarily due to balances related to the discontinued operation.
21
Financial liabilities
2018
2017
64 GTN Limited
For the year ended 30 June 2018
Current
Current portion of long term debt
Non-current
Long term debt, less current portion
$’000
$’000
-
-
58,294
58,294
-
-
97,569
97,569
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 a $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. During the year ended 30 June 2018, $40 million of
Facility C was repaid and the commitment reduced to $60 million. At 30 June 2018, 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 collar contracts
(i) Classification of derivatives
Derivatives are classified as hedging instruments.
2018
$’000
-
-
2017
$’000
5
5
Effective 9 August 2016, in satisfaction of the interest rate hedging requirements under the Term Loan, the
Company’s Aus Hold Co subsidiary entered into interest rate collar agreements for $50 million of the Facility
C bullet loan. The interest rate collar agreements expired effective 9 February 2018. The interest rate collar
agreements set a range of interest rates at which below the floor interest rate (based on one-month BBSY)
Aus Hold Co paid the counter party the difference between the floor interest rate and actual interest rate on
the nominal amount of the interest rate collar agreements whilst the counter party paid Aus Hold Co any
difference between the ceiling interest rate and BBSY. The floor interest rate was 1.55% and the ceiling rate
was 2.20%. Aus Hold Co incurred no upfront costs to enter into the interest rate collar agreements and
through the term of the interest rate collar agreements neither party was required to make a payment to the
other. At 30 June 2017, the fair value of the interest rate collar was $5 thousand in favour of the counter
party. Since the interest rate collar agreements had been determined to be effective at inception and as of 30
June 2017, the expense related to the change in fair value (net of taxes) was charged to hedging reserve in
other comprehensive income.
(ii) Fair value measurement
65 GTN Limited
For the year ended 30 June 2018
For information about the methods and assumptions used in determining the fair value of derivatives refer to
Note 4(d).
23 Other liabilities
Other
24
Earnings per share
Profit 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
Basic earnings per share from continuing operations (cents per share)
Diluted earnings per share from continuing operations (cents per share)
Basic earnings/(loss) per share (cents per share)
Diluted earnings/(loss) per share (cents per share)
2018
$’000
37
37
2018
$’000
24,831
224,721
224,721
2017
$’000
77
77
2017
$’000
28,172
213,697
213,697
$0.11
$0.11
$(0.07)
$(0.07)
$0.13
$0.13
$0.03
$0.03
At 30 June 2018 the Company had common stock equivalents of 1,345,703 outstanding in the form of
outstanding stock options. However, these common stock equivalents are excluded from the calculation of
diluted earnings per share since they are anti-dilutive due to the exercise price of the options exceeding the
Company’s share price on 30 June 2018.
25
Shareholders’ equity
2018
‘000’s
2018
$’000
2017
‘000’s
2017
$’000
Ordinary shares
Issued capital
Ordinary shares
Issued capital
At beginning of reporting period
Additional shares issued net of offering costs
At the end of the reporting period
224,721
-
224,721
444,981
-
444,981
201,212
23,509
224,721
378,948
66,033
444,981
In December 2016, the Company under took a fully underwritten 1 for 9.7 pro rata non-renounceable
entitlement offering to its existing shareholders for 20,744 thousand shares at $2.90 per share. The
institutional component was completed on 5 December 2016 and the retail component was completed on 20
December 2016.
The gross proceeds of $60,157 thousand were offset by costs related to the equity raising of approximately
$1,544 thousand and the net proceeds were recognized as additional issued capital in the consolidated
statement of changes in equity. The purpose of the equity raising was to fund the post-acquisition start-up
costs of the Company’s entry in the United States and a substantial majority of the funds not expended for
that purpose were used to repay debt during the year ended 30 June 2018.
66 GTN Limited
For the year ended 30 June 2018
On 31 March 2017, pursuant to its dividend reinvestment plan, the Company issued 2,765 thousand shares at
$2.70 per share. The gross proceeds of $7,465 thousand were offset by costs related to the equity raising of
approximately $45 thousand and the net proceeds were recognized as additional issued capital in the
consolidated statement of changes in equity. The dividend per share was $0.056. The purpose of the equity
raising was to fund the post-acquisition start-up costs of the Company’s entry in the United States and a
substantial majority of the funds not expended for that purpose were used to repay debt during the year
ended 30 June 2018.
26
Equity based compensation
As of 30 June 2018 and 2017 there were 1,345,703 and 1,614,844 outstanding stock option grants
outstanding, respectively under the Company’s Long-term Incentive Plan (“the Plan”). Options granted
under the Plan vest (subject to performance conditions) on an annual basis over three years (one third after
two years and the remaining grant after three years) and expire after five years from the date of the grant. The
Plan allows for cashless exercise under which employees surrender shares in lieu of paying the cash exercise
price and remitting the required amounts to satisfy tax withholding obligations. The Company does not
anticipate incurring cash costs under the Plan (other than de minimus payroll tax withholdings) since it does
not currently repurchase shares issued with regards to the Plan.
Stock Options
Under AASB 2, share-based compensation benefits are provided to employees via the Plan. The maximum
term of the options granted under the Plan is five years. The fair value of rights granted under the Plan is
recognised as an employee benefits expense with a corresponding increase in equity. The fair value is
measured at grant date and recognised over the period during which the employee becomes unconditionally
entitled to the rights.
The fair value at grant date is independently determined using a number of methods including the Monte-
Carlo option pricing model and the Binomial option pricing model which take into account the exercise price,
the term of the right, the vesting and performance criteria, the volume weighted average share price at grant
date, the expected price volatility of the underlying shares, the expected dividend yield and the risk-free
interest rate for the term of the right.
The fair value of the rights granted is adjusted to reflect the market vesting condition but excludes the impact
of any non-market vesting conditions. Non-market vesting conditions are included in assumptions about the
number of rights that are expected to become exercisable. At each reporting date, the Company revises its
estimate of the number of rights that are expected to become exercisable.
The employee benefits expense recognised each period takes into account the most recent estimate. The
impact of the revision to the original estimates is recognised in profit or loss with a corresponding adjustment
to equity. Shares related to the exercise of vested options under the Plan are issuable upon payment of the
strike price to the Company.
The performance criteria for vesting criteria are as follows:
Performance
Metrics
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
Up to and including the 50th percentile
Between the 51st and 75th percentile (inclusive)
Percentage to vest
0%
Pro rata straight line
between 50% and
100%
67 GTN Limited
For the year ended 30 June 2018
At and above 75th percentile
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 amortisation of intangibles and excluding United States Traffic
Network, LLC operations, as determined by the Board) over the
performance period
EPS Compound annual growth rate
Less than threshold
0%
Between threshold and stretch target (inclusive) Pro rata straight line
Percentage to vest
Above stretch target
between 50% and
100%
100%
The inputs used in the measurement of the fair values at grant date were as follows:
Grant date
Expiration date
Share price at grant date
5-day VWAP at grant date
Fair value at grant date
Exercise price
Expected volatility (based on historic and
expected volatility of Company’s shares)
Expected life
Expected dividends
Risk-free interest rate (based on government
bonds)
30 June 2018
5 April 2017
31 December 2021
$2.74
$2.72
$0.695
$2.74
45.00 %
4.75 years
4.00 %
2.14 %
The Company’s outstanding stock options as of 30 June 2018 were as follows:
Balance, 30 June 2017
Exercisable, 30 June 2017
Grants
Exercised
Forfeitures/expirations
Balance, 30 June 2018
Exercisable, 30 June 2018
Weighted
Average
Exercise
Price
$
$
$
$
$
$
$
2.74
-
-
-
2.74
2.74
2.74
Shares
1,614,844
-
-
-
269,141
1,345,703
269,141
Weighted
Average
Remaining
Contractual
Term
4.5
—
—
—
—
3.50 years
3.50 years
Aggregate
Fair
Value
,000’s
$
$
$
$
$
$
$
1,122
-
-
-
(187)
935
187
Based on the following assumptions, the fair value with regards to all options issued and outstanding as of 30
June 2018 is $935 thousand. As of 30 June 2018, there was $339 thousand of unrecognized compensation
cost related to non-vested share-based compensation under the Plan. The cost of the unrecognized
compensation is expected to be recognized over a weighted average period of 1.0 years on a pro rata basis
over the vesting period. This expense is based on an assumption that there will be no non-market forfeitures;
this assumption is based on the positions of the grantees of the stock options and the low number of
forfeitures under previous long-term incentive plans of members of the Company’s group. The expense with
68 GTN Limited
For the year ended 30 June 2018
regards to stock options for the years ended 30 June 2018 and 2017 is $651 thousand and $132 thousand,
respectively and is included in equity-based compensation expenses. The Company recognized $0 of income
tax benefit related to share-based compensation for the years ended 30 June 2018 and 2017.
Leases
27
The Company has various non-cancellable, long-term operating leases for its facilities, aviation services,
broadcast 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 2018:
30 June 2018
30 June 2017
Within 1 year
Minimum Lease Payments Due
After 5 years
1 to 5 years
$’000
1,533
3,435
$’000
2,540
6,686
$’000
-
30
Total
$’000
4,073
10,151
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 2018 and 30 June 2017, the Company had a liability of $138
thousand and $137 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 2018
30 June 2017
Minimum Payments Due
Within 1 year
$’000
1 to 5 years
$’000
After 5 years
$’000
3,761
3,569
1,736
1,736
-
-
Total
$’000
5,497
5,305
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:
Minimum Payments Due
69 GTN Limited
For the year ended 30 June 2018
30 June 2018
30 June 2017
Within 1 year
$’000
1 to 5 years
$’000
After 5 years
$’000
39,833
134,281
88,879
265,266
34,604
37,355
Total
$’000
163,316
436,902
The Company had no contingent liabilities at 30 June 2018.
28
Cash flow information
(a) Details of the reconciliation of cash flows from operating activities are listed in the
following table:
Cash flows from operating activities
Profit (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
Non-cash impairment charges
Non-cash gain from sale of subsidiary
Non-cash station compensation from long-term prepaid affiliate contract
Interest income on long-term prepaid affiliate contract
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
(b) Net debt reconciliation
Cash and cash equivalents
Borrowings repayable after one year
Net (debt)/cash
Borrowings repayable after one year consists of:
Financial liabilities
Deferred loan costs and original issue discount
2018
$’000
2017
$’000
(15,101)
6,205
(19)
651
49
(5)
11,078
79
21,744
(24,865)
13,142
(8,401)
676
(2,492)
2,228
763
12,836
(1,795)
(1,302)
114
647
(40)
-
9,987
2018
$’000
52,232
(60,000)
(7,768)
(58,294)
(1,706)
(60,000)
(60)
132
51
5
11,173
228
-
-
11,996
(8,471)
712
(6,010)
(6,058)
(4,679)
19,342
(2,080)
(1,637)
269
3,017
5
346
24,486
2017
$’000
100,727
(100,000)
727
(97,569)
(2,431)
(100,000)
70 GTN Limited
For the year ended 30 June 2018
Net (debt)/cash as at 1 July 2016
Cash flows
Net exchange differences
Net (debt)/cash as at 30 June 2017
Cash flows
Net exchange differences
Prepayment of debt
Net (debt)/cash as at 30 June 2018
Cash and cash
equivalent
$’000
Borrowings due
after one year
$’000
49,063
52,533
(869)
100,727
(50,000)
1,505
-
52,232
(100,000)
-
-
(100,000)
-
-
40,000
(60,000)
Net debt/(cash)
$’000
(50,937)
52,533
(869)
727
(50,000)
1,505
40,000
(7,768)
Related party transactions
29
As of 30 June 2018 and 2017, the Company had a liability of $69 thousand and $66 thousand, respectively to
entities affiliated with the former majority shareholders.
Transactions with Key Management Personnel
30
Key Management Personnel remuneration includes the following expenses:
Total short-term employee benefits
Total equity-based compensation
Total remuneration
2018
$
2,007,737
650,764
2,658,501
2017
$
2,120,079
131,862
2,251,941
The Key Management Personnel are all paid in USD so a portion of the change in compensation from the
year ended 30 June 2017 to the year ended 30 June 2018 was due to changes in foreign exchange rates
between AUD and USD.
Parent Entity information
31
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 – 2017
Accumulated losses – 2018 reserve
Total equity
Statement of profit or loss and other comprehensive income
2018
$’000
2,495
363,665
458
755
362,910
444,981
(9,949)
(72,122)
362,910
2017
$’000
50,480
435,926
604
894
435,032
444,981
(9,949)
-
435,032
71 GTN Limited
For the year ended 30 June 2018
Loss for the year
Other comprehensive income (loss)
Total comprehensive income (loss)
(61,335)
-
(61,335)
11,986
-
11,986
Loss for the year ended 30 June 2018 includes a $72,346 thousand charge for impairment of GTN Limited’s
investment in its subsidiary related to the Company’s exit from the United States market.
Dividends
As set out in Note 36, subsequent to the end of the financial year the Directors have declared the payment of
a final 2018 dividend of $0.110 per share (70% franked). This dividend will be paid to holders on record as of
7 September 2018.
Guarantees entered into by the parent entity
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 2018 or 30 June 2017. For information
about guarantees given by the parent entity, please see above.
32
Deed of cross guarantee
GTN Limited (as holding entity), Gridlock Holdings (Australia) Pty Limited (“Aus Hold Co”), The
Australia Traffic Network Pty Limited (“ATN”), GTN US Holdco, 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 from the
requirement to prepare a financial report and directors’ report under ASIC Corporations (Wholly-owned
Companies) Instrument 2016/785 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 years
ended 30 June 2018 and 2017 of the closed group consisting of the above companies.
Consolidated statement of profit or loss and other
comprehensive income
Revenue
2018
$’000
100,769
2017
$’000
98,692
72 GTN Limited
For the year ended 30 June 2018
Other income
Interest income on long-term prepaid affiliate contract
Network operations and station compensation expenses
Selling, general and administrative expenses
Finance costs
Depreciation and amortisation
Foreign currency transaction loss
Impairment charge
Profit (loss) before income tax
Income tax expense
Profit (loss)for the year
Other comprehensive income for the year, net of income tax
Unrealised gain (loss) on interest rate swaps
Total other comprehensive income for the year
375
8,401
(52,672)
(20,202)
(4,784)
(5,460)
(50)
(72,346)
(45,969)
(7,631)
(53,600)
3
3
474
8,471
(48,345)
(19,690)
(5,235)
(5,434)
(194)
-
28,739
(10,528)
18,211
(5)
(5)
Total comprehensive profit (loss) for the year
(53,597)
18,206
Summary of movement in consolidated retained earnings
Accumulated losses at the beginning of the financial year
Profit (loss) for the period
Dividends
Accumulated losses at the end of the financial year
(39,974)
(53,600)
(10,787)
(104,361)
(46,735)
18,211
(11,450)
(39,974)
Set out below is a consolidated balance sheet as at 30 June 2018 and 2017 of the closed group consisting of
the above companies.
Consolidated statement of financial position
Assets
Current
Cash and cash equivalents
Trade and other receivables
Current tax asset
Other current assets
Current assets
Non-current
Property, plant and equipment
Intangible assets
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
Derivatives
Other liabilities
Provisions
Total non-current
Total liabilities
Net assets
Equity
2018
$’000
2017
$’000
27,057
21,556
957
1,280
50,850
1,472
44,512
86,490
69,928
105,403
307,805
358,655
17,122
58
142
1,341
18,663
58,294
16,226
-
8
306
74,834
93,497
265,158
78,369
19,472
-
1,169
99,010
1,197
49,332
86,660
108,604
107,946
353,739
452,749
14,839
59
303
1,167
16,368
97,569
15,514
5
33
367
113,488
129,856
322,893
73 GTN Limited
For the year ended 30 June 2018
Share capital
Reserves
Accumulated losses
Total equity
444,981
(75,462)
(104,361)
265,158
444,981
(82,114)
(39,974)
322,893
Segment information
33
The Company’s chief operating decision maker, its 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
2018
$’000
100,769
42,203
29,845
12,196
185,013
2017
$’000
98,692
40,869
28,014
9,714
177,289
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
Foreign exchange loss
Less: Interest income on long-term prepaid
affiliate contract
EBITDA
2018
$’000
2017
$’000
38,757
3,223
6,986
1,827
(2,653)
48,140
(79)
(8,401)
39,660
41,602
3,914
5,194
1,279
(3,133)
48,856
(228)
(8,471)
40,157
Depreciation and amortization
Interest income on long-term prepaid affiliate
contract
Financing costs net of interest income
Profit before taxes and discontinued
operations
(9,476)
(9,329)
8,401
(4,381)
8,471
(4,748)
34,204
34,551
74 GTN Limited
For the year ended 30 June 2018
Segment assets and liabilities are classified by their physical location.
Segment assets
Total Assets:
Australia
United Kingdom
Canada
Brazil
Total segment assets
Unallocated:
Deferred tax assets
Intercompany eliminations
Others*
Total assets
Segment liabilities
Total liabilities
Australia
United Kingdom
Canada
Brazil
Total segment liabilities
Unallocated:
Deferred tax liabilities
Borrowings
Derivatives
Intercompany eliminations
Others*
Total liabilities
2018
$’000
2017
$’000
276,119
34,247
27,345
5,422
343,133
3,916
-
8,316
355,365
83,302
6,825
2,675
1,953
94,755
17,443
58,294
-
(70,852)
7,027
106,667
283,794
31,109
22,778
5,686
343,367
4,679
(926)
105,036
452,156
59,811
6,390
3,575
1,822
71,598
16,796
97,569
5
(76,951)
70,798
179,815
*Others for year ended 30 June 2017 includes the assets of the former United States segment, which was sold in March 2018 and is
included in discontinued operation in the consolidated statement of profit or loss and other comprehensive income.
Business Combination
34
On 5 December 2016, the Company’s United States Traffic Network LLC (“USTN”) subsidiary acquired
substantially all the assets of Radiate Media LLC (“Radiate”), a company that provided traffic reporting
services and sold advertising on radio and television stations for consideration of approximately $18,067
thousand USD ($24,393 thousand AUD). The acquisition was expected to be the Company’s entry into the
United States market as the Radiate business was similar to that of the Group’s existing operations.
Details of the purchase consideration, the net assets acquired and goodwill are as follows:
Purchase consideration
$’000
75 GTN Limited
For the year ended 30 June 2018
Cash paid
Option payments previously paid
Purchase price hold-back
Total purchase consideration
Accounts receivable
Prepaids
Property, plant and equipment
Software
Station contracts
Advertiser contracts
Payables and accrued expenses
Deferred revenue
Net identifiable assets acquired
Add: goodwill
22,027
338
2,028
24,393
Fair value $’000
13,983
469
169
1,055
13,896
9,194
(9,550)
(6,966)
22,250
2,143
24,393
The goodwill was attributable to Radiate’s position as the second largest traffic report service in the United
States, which is the largest advertising market in the world. Goodwill related to the acquisition was allocated
to the former United States segment. The goodwill was expected to be deductible over fifteen years for
United States tax purposes.
76 GTN Limited
For the year ended 30 June 2018
The station and advertiser contracts were expected to be deductible for United States tax purposes over
fifteen years and differed from the amortization expense recognition for financial reporting. No deferred tax
had been recognized related to the acquisition.
Acquisition-related costs
Acquisition related costs of $202 thousand are included in loss from discontinued operation in the
consolidated statement of profit or loss and other comprehensive income for the year ended 30 June 2017.
Contingent consideration
There is no contingent consideration. However, the Company held back $2,028 thousand from the purchase
consideration for post-closing liabilities not identified as of closing. This amount (adjusted for identified
differences in the preliminary purchase consideration) was included as a component of trade and other
payables in the accompanying consolidated statement of financial position at 30 June 2017.
Acquired receivables
The acquired receivables fair value is $13,983 thousand which consists of gross accounts receivable of
$14,393 thousand and an allowance for uncollectible accounts of $410 thousand. The fair value was adjusted
to the amounts actually received via the holdback mechanism described above.
Revenue and loss contribution
The acquired business contributed revenue of $35,111 thousand and net loss of $21,967 thousand to the
group for the period from 5 December 2016 to 30 June 2017 and is included in discontinued operation on
the consolidated statement of profit or loss and other comprehensive income for the year ended 30 June
2017. On a pro forma basis, if the acquisition has occurred on 1 July 2016, preliminary consolidated revenue
and consolidated loss after tax for the year ended 30 June 2017 would have been $57,844 thousand and
$24,112 thousand, respectively.
Discontinued operation
35
On March 13, 2018 the Company sold its United States Traffic LLC (“USTN”) subsidiary for $1 USD to an
entity owned by the president of USTN and is reported in the current period as discontinued operation.
Financial information related to the discontinued operation for the period to the date of disposal is set forth
below.
The financial performance and cash flow information presented is for the period 1 December 2016 to 30
June 2017 (“2017”) and 1 July 2017 to 13 March 2018 (“2018”).
Revenue
Network operations and station compensation expenses
Selling, general and administrative expenses
Transaction costs
Depreciation and amortisation
2018
$’000
49,210
(75,555)
(15,087)
-
(1,602)
2017
$’000
35,111
(43,911)
(11,121)
(202)
(1,844)
77 GTN Limited
For the year ended 30 June 2018
Loss before impairment charge and gain on disposal
Impairment charge
Gain on disposal
Loss before income tax
Income tax expense
Loss from discontinued operation
Net cash used in operating activities
Net cash used in investing activities
Net cash from financing activities*
Exchange differences on cash and cash equivalents
Net increase (decrease) in cash generated by discontinued operation
(43,034)
(21,744)
24,865
(39,913)
(19)
(39,932)
(21,967)
-
-
(21,967)
-
(21,967)
2018
$’000
(23,777)
(5,917)
28,400
-
(1,294)
2017
$’000
(8,848)
(22,231)
32,414
(41)
1,294
*Net cash from financing activities consisted on advances from the Company to United States Traffic Network, LLC and
eliminate in consolidation
The carrying amounts of the assets and liabilities as at the date of sale (13 March 2018) were:
Cash and cash equivalents
Trade and other receivables
Other current assets
Property, plant and equipment
Other assets
Total assets
Trade and other payables
Deferred revenue
Intercompany payable*
Total liabilities
Net assets
*Intercompany payable eliminated in consolidated statement of financial position.
Consideration received
Net assets disposed
Less: intercompany payable written off
Translation differences
Gain on disposal
36
Events subsequent to the reporting period
13 March 2018
$’000
5,730
17,508
1,816
333
28
25,415
46,846
3,185
60,426
110,457
(85,042)
-
(85,042)
60,426
(24,616)
(249)
24,865
78 GTN Limited
For the year ended 30 June 2018
Subsequent to the end of the financial year, on 30 August 2018, the Directors have declared the payment of a
final 2018 dividend of $0.110 per share (70% franked). This dividend will be paid to holders on record as of 7
September 2018.
Other than the matter referred to above, 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.
79 GTN Limited
For the year ended 30 June 2018
Directors’ declaration
In the directors’ opinion:
(a)
The financial statements, set out on pages 29 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 2018 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.
Robert Loewenthal
Chairman
Dated, this 30th day of August 2018
80 Independent auditor’s report
To the members of GTN Limited
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of GTN Limited (the Company) and its controlled entities (together
the Group) is in accordance with the Corporations Act 2001, including:
(a)
giving a true and fair view of the Group's financial position as at 30 June 2018 and of its
financial performance for the year then ended
(b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The Group financial report comprises:
the Consolidated Statement of Financial Position as at 30 June 2018
the Consolidated Statement of Profit or Loss and Other Comprehensive Income for the year then
ended
the Consolidated Statement of Changes in Equity for the year then ended
the Consolidated Statement of Cash Flows for the year then ended
the Notes to the Consolidated Financial Statements, which include a summary of significant
accounting policies
the Directors’ declaration.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant
to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities
in accordance with the Code.
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
81 Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial report as a whole, taking into account the geographic and management
structure of the Group, its accounting processes and controls and the industry in which it operates.
GTN is the largest supplier of traffic information reports to radio stations in Australia, Canada, the
United Kingdom and Brazil. In March 2018, the Group disposed of its operations in the United States.
In exchange for providing these reports, GTN receives commercial advertising spots adjacent to traffic,
news and information reports. These spots are bundled together by GTN and sold to Advertisers. The
financial report is a consolidation of these 4 geographical operating segments and the United States
operations for the period from 1 July 2017 to 13 March 2018.
Materiality
For the purpose of our audit we used overall Group materiality of $1.7 million, which represents
approximately 5% of the Group’s profit from continuing operations before tax.
We applied this threshold, together with qualitative considerations, to determine the scope of our
audit and the nature, timing and extent of our audit procedures and to evaluate the effect of
misstatements on the financial report as a whole.
We chose Group profit from continuing operations before tax because, in our view, it is the metric
against which the performance of the Group is most commonly measured and is a generally
accepted benchmark.
We selected 5% based on our professional judgement noting that it is also within the range of commonly
acceptable profit related thresholds.
Audit Scope
Our audit focused on where the directors made subjective judgements; for example, significant
accounting estimates involving assumptions and inherently uncertain future events.
We conducted full scope audit work over Australia, Canada and the United Kingdom operating
segments. We performed limited scope audit work over the Brazil operating segment. The former
United States operating segment, disclosed as a discontinued operation in the financial report, was
subject to full audit procedures for the period it was controlled by the Group. We engaged auditors
from another PwC network firm to conduct a full scope audit over the United Kingdom. Audit
instructions were issued by our Group audit team from the PwC Australia firm to the component
audit team. On-going dialogue was held throughout the year between the Group audit team and
the component audit team including consideration of how component audits are planned and
executed.
Where the directors made subjective judgements; for example, significant accounting estimates
82
involving assumptions and inherently uncertain future events, we focused our audit work on these
areas.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report for the current period. The key audit matters were addressed in the
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. Further, any commentary on the outcomes of a
particular audit procedure is made in that context. We communicated the following key audit matters
to the Audit Committee.
Key audit matter
Impairment of goodwill and indefinite
life intangible assets
Refer to:
Note 2.9 Goodwill
Note 2.13 Impairment testing of goodwill,
other intangible assets and property, plant
and equipment
Note 2.26 Significant management judgement
in applying accounting policies and
estimation uncertainty
The goodwill and trade names balance is $108.6
million. This is a key audit matter because of the
magnitude of the balance and the judgement
involved in the assessment of potential
impairment as at 30 June 2018.
The Group’s impairment assessment includes
assumptions in the forecasted future results of
each cash generating unit (CGU) including
terminal growth rate, revenue forecasts and the
discount rates applied to future cash flow
forecasts.
How our audit addressed the key audit
matter
We performed the following procedures:
evaluated and challenged management’s cash
flow forecasts and the process by which they
were developed.
tested that the forecast cash flows used in the
impairment model were consistent with the
most up-to-date budgets and business plans
formally approved by the directors.
compared previous forecasts to actual results,
to assess the performance of the business and
the accuracy of management’s forecasting.
performed sensitivity calculations by varying
the assumptions. We determined the
impairment testing result was most sensitive
to assumptions for revenue and EBITDA
growth rates and discount rates.
compared the recoverable amount of the
CGUs in the Group’s value in use models to
the carrying value of the respective CGUs to
the accounting records.
assessed the Group’s accounting policy and
the adequacy of the Group’s disclosures.
Recoverability of long-term prepaid
affiliate contract
We assessed the terms of the contract in light of
the Group’s accounting policies.
Refer to:
Note 2.24 Long-term prepaid affiliate
contract
Note 2.26 Significant management judgement
in applying accounting policies and
estimation uncertainty
We evaluated management’s assessment of
recoverability of the asset held by assessing
internal and external information including:
meeting minutes of the directors and key
management personnel;
This is a key audit matter because of the
magnitude of the contract prepayment ($97.9m)
and because the assessment of recoverability
involves significant judgement.
information about the affiliate such as ASX
market announcements and latest publically
available financial information;
information about the media industry such as
83
Key audit matter
The contract is to provide a service over 30 years
which has been paid for upfront. Management’s
assessment of recoverability of the asset held
includes consideration of factors including the
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).
Valuation, Completeness and Accuracy of
Income taxes
Refer to:
Note 2.15 Income Taxes
Note 2.26 Significant management judgement
in applying accounting policies and
estimation uncertainty
We consider this to be a key audit matter due to
the multiple tax jurisdictions in which the Group
operates and the judgement involved in
recognition of deferred tax balances.
How our audit addressed the key audit
matter
‘IBISWorld Industry Report J5610 - Radio
Broadcasting in Australia’.
We assessed the disclosure for compliance with
the Group’s accounting policies.
We worked with our internal taxation experts
from both Australia and other PwC network firms
in the audit of balances relating to the Group’s
consolidated tax position. This included:
assessment of uncertain tax positions and
challenge of management’s position with
consideration being given to applicable tax
law, relevant case law and alternate positions.
evaluating management’s assessment of the
recoverability of deferred tax balances and
assessment of indicators of impairment or
non-recoverability based on consideration of
factors such as taxable income status.
testing the accuracy of deferred tax balances
and income tax expense recognised by
management in the Consolidated Statement
of Profit or Loss and Other Comprehensive
Income and Consolidated Statement of
Financial Position.
Other information
The directors are responsible for the other information. The other information comprises the
information included in the annual report for the year ended 30 June 2018, including the Chairman
and Chief Executive Officer’s Letter, “About GTN”, Corporate Governance, Directors’ Report,
Shareholder Information and Corporate Directory, but does not include the financial report and our
auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
identified above and, in doing so, consider whether the other information is materially inconsistent
with the financial report or our knowledge obtained in the audit, or otherwise appears to be materially
misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
84
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This description forms part of our
auditor's report.
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 19 to 27 of the annual report for the year
ended 30 June 2018.
In our opinion, the remuneration report of GTN Limited for the year ended 30 June 2018 complies
with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the remuneration report, based on our audit conducted in accordance with
Australian Auditing Standards.
PricewaterhouseCoopers
MW Chiang
Partner
Sydney
30 August 2018
85
SHAREHOLDER INFORMATION AS AT 30 JULY 2018
Number of security holders and securities on issue
Quoted equity securities
GTN has 224,720,643 fully paid ordinary shares on issue which are held by 312
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
Total
Number of
shareholders
87
123
27
54
21
312
Number of
shares
33,696
230,257
220,908
1,601,247
222,634,535
224,720,643
%
0.01
0.10
0.10
0.71
99.07
100
Unmarketable parcel of shares
The number of shareholders holding less than a marketable parcel of fully paid ordinary
shares is 36.
86 204 fully paid ordinary shares comprise a marketable parcel at GTN’s closing share price
of $2.45 as at 30 July 2018.
Substantial shareholders
The number of securities held by substantial shareholders and their associates (as
notified to ASX) are set out below:
Fully paid ordinary shares
Name
Smallco Investment Manager
Limited
GTCR Gridlock II (Cayman),
L.P. (GTCR)
SG Hiscock & Co Limited
Renaissance Smaller
Companies Pty Ltd
Devon Funds Management
Limited
CBA and related bodies
corporate
Investment Services Group
Limited
Harbour Asset Management
Limited
Twenty largest shareholders
Fully paid ordinary shares
Number of
Shares
13,702,318
Current
Interest
6.10%
Notice Date
29/06/2018
89,063,081
39.6%
22/05/2018
13,065,423
16,042,555
5.81%
7.14%
18/05/2018
18/05/2018
14,238,765
6.34%
18/05/2018
12,895,691
5.74%
18/05/2018
11,324,319
5.04%
13/03/2018
11,467,352
5.103%
08/12/2017
Details of the 20 largest shareholders of quoted securities by registered shareholding are:
Rank Name
1
2
3
4
5
6
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY
LIMITED
J P MORGAN NOMINEES AUSTRALIA LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA)
LIMITED
CITICORP NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMS (NZ) LTD
30 Jul 2018
%IC
89,070,542
39.64
48,126,928
21.42
30,499,923
13.57
18,005,902
11,844,829
10,311,967
8.01
5.27
4.59
87 7
8
9
10
11
12
13
14
15
16
17
18
19
20
ANACACIA PTY LIMITED
MR WILLIAM L YDE III
BNP PARIBAS NOMS PTY LTD
MIRRABOOKA INVESTMENTS LIMITED
CS THIRD NOMINEES PTY LIMITED
ANACACIA PTY LTD & WATTLE FUND A/C
MRS EVA XIRADIS
COFLINK PTY LIMITED
WILLRYAN PTY LIMITED
INVESTMENT CUSTODIAL SERVICES LIMITED
MR PAUL XIRADIS & MRS EVA XIRADIS
COMCERC INVESTMENTS PTY LTD
BNP PARIBAS NOMINEES PTY LTD HUB24
CUSTODIAL SERV LTD DRP
CERTUS CAPITAL PTY LTD
5,035,058
3,603,408
2,203,750
990,625
723,738
513,660
398,959
315,000
200,000
168,500
163,258
124,824
118,664
2.24
1.60
0.98
0.44
0.32
0.23
0.18
0.14
0.09
0.07
0.07
0.06
0.05
Balance of register
110,000
Total 222,529,535
2,191,108
0.05
99.02
0.98
Grand total 224,720,643 100.00
On-market buy-back
There is no current on-market buy-back.
88 Corporate Directory
Directors
Robert Loewenthal - Independent Non-Executive Chairman
William Yde III - Chief Executive Officer and Managing Director
David Ryan AO – Independent Non-Executive Director
Company secretaries
Anna Sandham
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
One International Towers Sydney
Watermans Quay, Barangaroo
GPO Box 2650
Sydney, NSW 2001
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
89