GTN Limited
ABN 38 606 841 801
Annual Report 2023
CONTENTS
Item
Chair 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
Page
1
3
6
7
23
37
38
44
83
84
87
91
CHAIR OF THE BOARD OF DIRECTOR’S LETTER
Dear Shareholders,
On behalf of the Board of Directors, we are pleased to present GTN Limited’s (“GTN” or
the “Company” and its subsidiaries (the “Group”)) annual report for fiscal year ended
30 June 2023.
Overall, we are pleased with the significant ongoing improvement in our business
performance. GTN reported annual net revenues of $177.0 million which was an
increase of 11% over the previous fiscal year. This is GTN’s second consecutive year
of double-digit revenue growth. As a result of the revenue increase, Adjusted EBITDA
rose 13% to $19.3 million for the fiscal year. The Company was able to increase
Adjusted EBITDA while investing significantly in its drone light show opportunity.
Australia, Brazil and Canada each posted strong revenue and EBITDA growth during
FY 2023. Canada posted the highest revenue in its history in FY 2023, increasing 28%
(+25% in local currency). Australia revenue increased 13% (12% ex-drones) in FY
2023, which was significantly higher than our peer group, based on published industry
data. Brazil increased revenue 30% (+19% in local currency) and improved EBITDA to
virtually break-even for the period. We are delighted with this very solid performance in
our core business which enabled us to invest in new opportunities such as drones.
We view FY 2023 as a proof-of-concept year with regard to the drone operations. We
performed a large number of shows, built a leading market presence, established that
there is sufficient demand for our shows and that we have the operational expertise to
perform shows that are memorable and crowd pleasing. The next phase in the drone
plan is to determine the revenue potential of the business and to combine this with a
rigorous analysis of the costs of performing the shows to stage consistently profitable
events. We have learned quite a bit in the past year and half and remain excited about
the opportunity.
Our long-term strategy remains the same; protect our two most valuable assets, radio
and television network contracts, and our experienced sales and management teams.
This, combined with our strong balance sheet, enables our business to be resilient
during any downturn while being positioned for ongoing growth. We will continue to
pursue new opportunities in the future, such as expansion of the current drone
operations.
As at 30 June 2023, we held a net cash balance (including lease liabilities recognised
under AASB 16) of $3.4 million with a total cash balance of $30.6 million. We
accomplished this while returning over $11 million to shareholders in the form of
dividends and share buybacks, retiring more than 11 million shares (over 5% of the
outstanding shares at the beginning of the fiscal year) during FY 2023. The Board
remains committed to a meaningful share buyback and a dividend of approximately
100% of NPAT for FY24. In order to more evenly distribute the dividend, given the
seasonality of our business, we plan to distribute 50% of 1H NPAT as an interim
dividend with the final dividend approximating NPAT less the interim dividend. The
Company also continued to reduce our bank debt facility during FY 2023, repaying $6
million during the fiscal year. Since July 1, 2020, the Company has reduced its
outstanding bank debt by $36 million from $60 million to $24 million and anticipates
further repayments during FY 2024.
1
We would like to recognise the outstanding efforts of our local management, operations,
IT, sales and administrative staff during the past year. They attack their jobs with
passion and zeal, in addition to exceptional skill. We would not have been able to
continue to grow and thrive without their extraordinary efforts around the world
especially through the recent transition from our previous global CEO.
We look forward to FY 2024 and expect our performance to continue to improve. We
have maintained a strong balance sheet and excellent local management teams in all
our markets. These factors position us favourably to continue to grow our business into
the future.
Peter Tonagh
Chair
2
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, the United Kingdom and 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 cash compensation in most
instances, 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 most 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 FY 2023, approximately 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.
During FY 2022, GTN commenced drone light show operations in Australia. Drone light shows
involve the operation of many drones simultaneously to create images that are viewed by
audiences in a manner similar to traditional fireworks shows. GTN’s revenue model consists of
both advertising supported shows (where the sponsor’s logo is incorporated into the display) and
cash fees. Drone related revenue was less than 1% of GTN’s revenues in FY 2023.
Overview of GTN’s divisions
Country
Australia
Canada
United
Kingdom
Brazil
Population
(millions)
(years)
26.5
26
38.8
18
67.8
216.5
14
12
GTN years
of
operation
FY 2023
revenue (1)
(millions)
88.6
34.2
42.4
11.9
3
% of FY
2023
revenue (1)
GTN
audience
Number of
affiliates
FY 2023
radio spots
inventory
(%)
50%
19%
24%
7%
(#)
11.7m
radio (2)
15.6m
radio
29.9m
radio
26.6m
radio
3.5 m TV
11.3m TV
(#)
147 radio
109 radio
242 radio
96 radio
8 TV
6 TV
(‘000’s)
1,102
667 20,582 (3)
495
(1) Amounts may not add due to rounding
(2) Includes approximately 817 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 8
million persons.
(3) The UK market measures inventory and units sold based on impacts
instead of spots. An impact in 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 obtains radio spots that
are primarily aired during peak listenership hours (i.e. during morning and afternoon commutes).
The placement and format of GTN’s advertising spots are designed to maximise efficacy,
enhance recall and minimise switching during advertisements.
Advertisers purchase a schedule of radio spots on a national, regional or specific market basis.
The schedule includes spots on all radio Affiliates in the relevant market. Spots sold in
advertising packages are allocated on a percentage-based rotation such that each advertiser
receives a pro rata share of advertising spots on each Affiliate throughout the relevant markets.
GTN does not sell spots on individual radio Affiliates.
In order to provide this advertising platform, GTN must appeal to the radio and television stations
that provide the advertising spots GTN sells to advertisers. GTN accomplishes this by providing
Affiliates with information reports at no charge, and in most cases, provides cash compensation
to the Affiliates in exchange for advertising spots. This allows 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.
4
GTN value proposition
Revenue model
GTN primarily generates revenue by selling schedules of advertising spots to advertisers. The
majority of GTN’s advertising revenue is placed 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, the United Kingdom and Brazil. This enables
advertisers to communicate with a large number and broad demographic of potential
consumers.
• High frequency: GTN’s advertisements are heard frequently throughout the day on every
Affiliate in the purchased market or region, enabling advertisers to communicate their
message repeatedly. This format is designed to maximise efficacy, enhance recall and
minimise switching during advertisements.
• High engagement: GTN’s advertising spots are adjacent to information reports that have
been found to be useful and engaging for listeners. GTN has previously 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. A Neuro Insight study demonstrated that shorter messages create greater
recall.
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• 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 station Affiliates.
• 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 most Affiliates in the form of
cash payments. These station compensation payments represent stable recurring cash
flows for these Affiliates and, in some instances, form a material part of that Affiliate’s overall
profits; and
Revenue opportunity: Affiliates are permitted to sell sponsorships at the opening of an
information report (i.e. “this report is brought to you by”), providing them with a revenue
source without a cost base.
By addressing multiple needs of our radio and television station Affiliates and providing our
advertising customers with a highly effective advertising vehicle, we are able to meet the needs
of both constituencies and continue to grow our business.
Corporate Governance
The Corporate Governance Statement outlining GTN Limited’s corporate governance framework
and practices in the form of a report against the ASX Corporate Governance Council’s Corporate
Governance Principles and Recommendations, 4th 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 2023 Corporate Governance Statement on
29 August 2023.
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 2023 and the auditor’s
report thereon.
Directors and Company Secretaries
The following persons were directors of GTN Limited during the whole of the financial year and
up to the date of this report unless otherwise stated:
Peter Tonagh
Independent Non-
Executive Chair
Chair of the Nomination and
Remuneration Committee
David Ryan AO
Independent Non-
Executive Director
Chair of the Audit and
Risk Committee and
Member of the Nomination and
Remuneration Committee
Peter Tonagh has a background as a C-suite executive in large Australian media
companies, including as CEO of Foxtel and News Corp Australia, interim-CEO of
REA Group and Chairman of MCN.
Peter is a former partner of The Boston Consulting Group where he led the Asia
Pacific Organisation Practice and worked across media, consumer and financial
services businesses. Peter is currently Deputy Chair of the Australian
Broadcasting Corporation (ABC), and Chair of Quantium Group Holdings Pty
Limited. Peter was previously the lead independent director of Village Roadshow
Limited.
Peter has a Bachelor of Commerce from the University of New South Wales and
a Masters of Business Administration from INSEAD, Europe’s leading business
school. In 2012 he was named AFR’s CFO of the Year.
David Ryan AO has over 40 years of experience in commercial banking,
investment banking and operational business management.
David is currently Chairman of Visit Sunshine Coast 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,
Board member of the Sunshine Coast Events Board and a Board Member of the
Ted Noffs Foundation.
David has previously held positions as a non-executive director of GetSwift
Limited from April 2018 to April 2019, a non-executive director of Lendlease
Corporation Limited from December 2004 until his retirement in November 2017,
non-executive director of Aston Resources from 2011 until its merger with
Whitehaven Coal and as non-executive chairman of Transurban Holdings
(appointed director in 2003, chairman in 2007, and retired in 2010).
David holds a Bachelor of Business from the University of Technology, Sydney
and is a Fellow of Australian Institute of Company Directors and of CPA
Australia.
7
Robert Loewenthal
Independent Non-
Executive Director
Member of the Audit and
Risk Committee and Nomination
and Remuneration Committee
Corinna Keller
Independent Non-
Executive Director
Member of the Audit and
Risk Committee and Nomination
and Remuneration Committee
Alexandra Baker
(“Alexi”)
Non-Independent Non-
Executive Director
Robert Loewenthal has over 17 years of experience in the radio industry.
He is currently a Business Development Director for Spotify. He was the
Founder and CEO of Whooshkaa, a Podcast Platform which was sold to Spotify
in December 2021.
Robert formerly held the role of Managing Director of the Macquarie Radio
Network Ltd, where he also 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.
Corinna Keller is the former Vice President of Advertising Sales for the Americas
for CNN International Commercial (a WarnerMedia company), which she joined
in 2016. Corinna oversaw the pan-regional ad sales business for CNN
International, CNN en Español, CNN.com/international and CNNEspañol.com for
Latin America and clients based in the U.S. and Canada who want to target
international viewers.
From 1999 to 2015, Corinna was with Viacom in various roles, her last as Vice
President, International Marketing Partnerships and Pan-regional Ad Sales,
running the pan-regional advertising business for Nickelodeon, MTV, Comedy
Central, Paramount Channel, VH1 and a diverse digital portfolio. She held a
number of senior positions with Viacom in both the U.S. and Mexico and
managed client relationships with Fortune 500 companies across the U.S., Latin
America, Europe and Asia.
Prior to Viacom, Corinna was in the pay television industry at Turner
Broadcasting, where she assisted in distribution for the newly launched CNN en
Español.
Corinna holds a BAS from Kalamazoo College and speaks English, Spanish,
German and Portuguese.
Alexi Baker is Chief Digital and Customer Officer for National Rugby League
which she joined in 2021.
Alexi was previously employed at Nine Entertainment Co. from 2011 to 2020,
holding the positions of Strategy Manager, Corporate Development Director,
Director of Strategy & Corporate Development and culminating as Managing
Director, Commercial.
Alexi has previously held non-executive directorships with CarAdvice, Pedestrian
TV, LiteracyPlanet, and RateCity as well as sitting on the industry boards of
Commercial Radio and Freeview.
Alexi holds a Bachelor of Law and a Bachelor of Commerce (Finance) from the
University of New South Wales and is a graduate of Australian Institute of
Company Directors.
William Yde III (“Bill”)
(Resigned 30 June 2023)
Former Managing Director and
Chief Executive Officer
Bill Yde has resigned as Managing Director and Chief Executive Officer effective
30 June 2023.
Bill has over 40 years of experience in the radio and media industry.
Bill co-founded The Australia Traffic Network (“ATN”) in 1997, later co-founding
Global Traffic Network, Inc. and had served as Chief Executive Officer and
President since its inception in 2005.
8
Anna Sandham
Joint Company Secretary
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 had previously owned and operated radio and television stations in major
markets in the United States.
Bill holds a Bachelor of Arts degree in Accounting from Indiana University and is
a Certified Public Accountant.
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,
is a Certified Practicing Accountant and a Chartered Company Secretary.
Senior Executives
The Senior Executives of the Company currently are:
Scott Cody
Chief Operating Officer and
Chief Financial Officer
Gary Worobow
Executive Vice President,
Business and Legal
Affairs
Scott Cody has over 35 years of experience in the radio media industry.
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.
Gary Worobow has over 25 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.
9
Victor Lorusso (“Vic”)
Chief Executive Officer
ATN
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.
Vic Lorusso has over 20 years of experience in the media industry, all of those
with ATN in various operational and management positions.
Vic is currently Chief Executive Officer of ATN having been promoted into the
position in July 2023. Vic joined ATN in 1999.
Vic was previously the Chief Operations Manager for ATN and 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
Chief Operating Officer
United Kingdom Traffic Network
(”UKTN”)
John Quinn has over 30 years of experience in the radio and media industry.
John is currently the Chief Operating Officer of Global Traffic Network’s United
Kingdom operations after joining Global Traffic Network in 2009 following 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.
Donna Gardener
President
Canadian Traffic Network ULC
(”CTN”)
Donna Gardener has over 25 years of advertising and marketing experience.
Immediately prior to joining CTN, Donna operated her own advertising and
marketing consulting business, DG Consulting representing Brunswick
Newspaper Group and Berenson Decorative Hardware.
Prior to launching her own consulting business, Donna was VP, Sales & GM for
Trico Evolution, a printing and packaging company in Ottawa, Ontario from 2017
to 2018. From 2014 to 2017, Donna was the VP, Sales for TC Media
Newspapers (a division of Transcontinental Printing) managing the advertising
sales teams across Atlantic Canada. Donna served as a Regional Director of
Advertising and then Publisher for Sun Media Corporations newspapers and
magazine publishing divisions from 2009 to 2014.
Donna began her media career in the advertising department of TorStar
Corporation where she held various management positions during her 19 years
there.
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.
10
Board
Audit and Risk
Management
Committee
Nomination and
Remuneration
Committee
Held
Attended
Held
Attended
Held
Attended
William Yde III
Peter Tonagh
David Ryan
Robert
Loewenthal
Corinna Keller
Alexandra
Baker
7
7
7
7
7
6
7
7
7
7
-
-
4
4
4
-
-
4
4
4
-
3
3
3
3
-
3
3
3
3
7
7
-
-
-
-
Principal activities
The principal activity of GTN during the course of the financial year was that of provider of an
advertising platform to advertisers in Australia, United Kingdom, Canada and Brazil.
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 for
its 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 additional regional markets in Australia and opening of additional markets
in Brazil.
Risk Factors
The business 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 2023, 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.
11
• For the most important radio stations, pay a significant amount of cash to the stations in
the form of station compensation. For certain of our most important Affiliates, this
amount has become a significant portion of their EBITDA based on our review of their
public filings.
Potential impact of Company’s fixed cost structure
A substantial majority of Company’s costs are fixed and difficult to reduce in the short term, in
particular, compensation paid to radio stations, which is the largest expense of the Group. In
addition to being fixed, the majority of station compensation costs are contractual and often
committed to for a number of years and thus cannot be reduced in the short run. These fixed
costs mean that any decrease in revenue could largely flow through to earnings and therefore
disproportionately adversely affect GTN’s future financial performance and cash flows. The
impact of the Group’s fixed cost structure was demonstrated during the COVID-19 pandemic as
Adjusted EBITDA and profit before tax both were negatively impacted by the lower revenue.
The Company’s strategy for dealing with the potential negative impact of its fixed cost structure
is to maintain a low-leveraged balance sheet and substantial cash balances in order to be able
to continue to operate the Group during periods of reduced revenue.
Decline in demand for traffic reports on radio
Individuals have other means of getting traffic information, including the internet, smart phone
apps, 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 17% of our advertising
inventory in the five metro markets is adjacent to news reports, with additional
advertising spots adjacent to weather and sports 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 from traditional radio advertising 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 informational programming
elements that are generally read live by the announcer. In our opinion, 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 on a
compounded annual basis has historically surpassed that of the overall radio advertising
industry 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 continuously
and proactively research additional opportunities outside of radio and television. During
FY 2022 we launched drone light shows in Australia for both cash fees and advertising
supported shows. While we believe this business has potential to be profitable, it is too
early to determine the ultimate success of the endeavour.
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Decline in advertising market in general
Our business model is currently virtually 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.
However, the limitations of this approach were demonstrated during the COVID-19 pandemic, as
advertisers in our markets sharply reduced their demand for advertising, which had a material
impact on our revenue and profitability.
Adverse economic conditions
The advertising market is highly correlated to economic conditions in the markets we serve.
Recessions, supply-chain disruptions, pandemics and other macro-economic factors can have a
significant negative impact on our business, as was demonstrated by the COVID-19 pandemic.
These factors are out of our control. We attempt to mitigate their negative impact by employing
highly trained, talented sales staffs to attempt to maximise our share of a smaller advertising
market while maintaining a strong balance sheet to position us to “ride out the storm” of
weakened economic conditions until better markets prevail.
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. The
Company does not currently have plans to enter new markets but may do so in the future.
Expansion into new business lines
Expansion beyond our core business of selling advertising attached to content that is broadcast
on radio and television stations entails significant risk due to lack of experience in operating
these new business opportunities. In FY 2022, GTN launched drone light show operations and
significantly expanded the business during FY 2023, which led to significantly increased losses.
GTN attempts to manage this risk by a thorough due diligence and approval process, but this
process mitigates the risk but does not eliminate it. In addition to the risk that a new business
line will not generate sufficient revenue to be profitable, there are additional foreseen and
unforeseen risks. For example, in July 2023, due to a weather related incident, GTN lost over
400 drones in one show, leading to a loss of approximately $1 million for both the net book value
of the drones as well as clean-up, recovery and other costs to mitigate the impact of the incident.
Foreign exchange fluctuations can have a negative impact on financial performance
A significant portion of our revenues (50% in FY 2023) 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 while we
currently do not have an intention to do so, we may enter into such hedging arrangements in the
future. This risk is mitigated by each country incurring virtually all its 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 and the profitability of the operating segment affected.
13
Review and Results of Operations
Operating and Financial Review
Revenue for FY 2023 increased 11% to $177.0 million. Operating expenses increased $14.6
million (+10%) which resulted in EBITDA increasing 25% and Adjusted EBITDA increasing 13%
for FY 2023. The non-IFRS measurements used are defined in the table below and further
discussed later in this report.
(m)(4)
Revenue
EBITDA (2)
Adjusted EBITDA (3)
NPAT
NPATA (1)
FY23
FY22
% Difference
177.0
160.1
11.3
19.3
2.6
7.2
9.1
17.1
2.8
7.4
+11%
+25%
+13%
(6)%
(2)%
(1)%
NPATA per share (cents)
$0.03
$0.03
(1) NPATA is defined as net profit after tax (NPAT) adjusted for the tax effected amortisation arising from
acquisition related intangible assets.
(2) EBITDA is defined as net profit after tax (earnings) before the deduction of interest expense/income, income
taxes, depreciation and amortisation.
(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, losses on debt refinancings, gains on lease forgiveness and transaction costs.
(4) Amounts in tables may not add due to rounding. Percentage changes based on actual amounts prior to
rounding.
Revenue
Group revenue increased 11% compared to FY 2022 as the Group’s business continues to
rebound after the negative impact of the COVID-19 pandemic. Revenue increased across all of
the Group’s operating geographies except United Kingdom during the period.
The Australia market constituted 50% of the Group’s revenue for FY 2023 compared to 49% in
FY 2022.
FY23 Revenue by Geographic Segment
(m)(4)
Australia (ATN)
Canada (CTN)
United Kingdom (UKTN)
Brazil (BTN)
Total
FY23
FY22
% Difference
88.6
34.2
42.4
11.9
78.1
26.8
46.0
9.2
177.0
160.1
13.4%
27.6%
(8.0)%
29.8%
10.6%
Revenue in local currency increased in Canada and Brazil while decreasing in the United
Kingdom. Fluctuations in exchange rates contributed to revenue growth in Canada and Brazil
while acting as a headwind in the United Kingdom.
14
FY23 Revenue by Geographic Segment – Local Currency
(m)(4)
Australia (ATN) (AUD)
Canada (CTN) (CAD)
United Kingdom (UKTN) (GBP)
Brazil (BTN) (BRL)
Non-IFRS measurements
FY23
88.6
30.8
23.7
41.3
FY22
% Difference
78.1
24.6
25.1
34.8
13.4%
25.2%
(5.6)%
18.8%
● EBITDA is earnings before interest, tax, depreciation and amortisation.
Management uses EBITDA to evaluate the operating performance of the business
without the non-cash impact of depreciation and amortisation and before interest and tax
charges, which are significantly affected by the capital structure and historical tax
position of the Group.
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 Group’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, losses on refinancings, gains on lease forgiveness
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 Southern Cross Austereo contract as a financing arrangement.
($m)(2)
FY23
FY22
Reconciliation of EBITDA and Adjusted EBITDA to Profit before
income tax
Profit before income tax
Depreciation and amortisation
Finance costs
Interest on bank deposits
Interest income on long-term
prepaid affiliate contract
EBITDA
Interest income on long-term
prepaid affiliate contract
Foreign currency transaction loss
Adjusted EBITDA
5.5
12.3
1.8
(0.3)
(7.9)
11.3
7.9
0.0
19.3
5.2
10.6
1.3
(0.0)
(8.1)
9.1
8.1
0.0
17.1
● Normalised Adjusted EBITDA is Adjusted EBITDA adjusted to a) eliminate the impact
of Jobkeeper/Canadian Emergency Wage Subsidy (“CEWS”), b) add-back the one-time
costs of the departure of the Company Chief Executive Officer and Managing Director,
and c) add back revenues and operating expenses related to the Group’s drone light
show operations.
Management considers that Normalised EBITDA is an appropriate measure of the
changes in performance from year to year since it excludes discontinued programs and
15
one-time expenses, as well as, in the case of drone light show operations, better reflects
the performance of the Group’s core business without the impact of the start-up losses
of a new business line.
($m)(2)
FY23
FY22
Reconciliation of Adjusted EBITDA to Normalised Adjusted EBITDA
Adjusted EBITDA
Eliminate Jobkeeper/CEWS
Drone network losses included in EBITDA
CEO/MD resignation
Normalised Adjusted EBITDA
19.3
-
2.6
0.7
22.6
17.1
(0.7)
0.7
-
17.1
● NPATA is net profit (loss) after tax adjusted to add-back the tax effected impact of
amortisation of intangible assets related to the purchase accounting arising from
GTCR’s acquisition of Global Traffic Network, Inc. in September 2011.
Management considers it appropriate to disclose NPATA because the amortisation of
the intangibles related to purchase accounting is both a non-cash charge and there will
be no future cash outlays to “replace” these assets once fully amortised.
($m)(2)
FY23
FY22
Reconciliation of Net profit after tax (NPAT) to NPATA
Profit for the year (NPAT)
Amortisation of intangible assets
(tax effected)
NPATA
2.6
4.6
7.2
2.8
4.6
7.4
Non-IFRS information has not been audited.
EBITDA and Adjusted EBITDA
(m)(4)
Revenue
Network operations and station
compensation expenses
Selling, general and
administrative expenses
Equity based compensation
expense
FY23
177.0
160.1
FY22
% Difference
11%
5%
(122.8)
(116.8)
(42.5)
(33.4)
27%
(0.4)
(0.8)
(53)%
Operating expenses
(165.6)
(151.0)
Net F/X losses
EBITDA
Interest income on Southern
Cross Austereo Affiliate Contract
Net F/X losses
Adjusted EBITDA
(0.0)
9.1
8.1
0.0
17.1
(0.0)
11.3
7.9
0.0
19.3
16
10%
68%
25%
(1)%
68%
13%
Adjusted EBITDA for FY 2023 was $19.3 million, an increase of 13% from FY 2022. Adjusted
EBITDA growth was driven by 11% growth in revenue compared to FY 2022. If the impact of
Jobkeeper and Canadian Emergency Wage Subsidy (“CEWS”), the loss-making start-up drone
network and one-time costs related to the CEO/MD resignation are removed from both periods’
results, Adjusted EBITDA increased 32% in FY 2023 compared to FY 2022. We believe that
while the form of the drone losses is that of a profit and loss item, that these losses are more
akin to an investment in the drone business.
Operating expenses (defined as the sum of network operations, station compensation, selling,
equity based compensation, and general and administrative expenses) increased $14.6 million
(+10%) for the fiscal year. The material components of that increase are discussed below.
Network operations and station compensation expenses increased $6.0 million (+5%). Station
compensation increased $1.7 million (+2%). Network operations expenses related to the drone
network increased $2.1 million when compared to FY 2022. The increase was primarily due to a
ramping up of the drone operations during the year and that the operations had not commenced
until 2H FY 2022, so there was not a full year of expense in the comparative period.
Selling, general and administrative expenses increased $9.0 million (+27%) compared to FY
2022. Selling expenses accounted for $4.5 million of the increase in selling, general and
administrative expenses. The majority of the increase in selling expenses was due to higher
personnel costs (+$2.7 million) due primarily to commissions and bonuses earned on the
increased revenue for the period. Travel and entertainment accounted for approximately $1.8
million of the increase in sales, general and administrative expenses. Jobkeeper and CEWS
accounted for $0.7 million of the increase in general and administrative expenses as these
programs were treated as a reduction in general and administrative expenses. The Group
recorded $0.7 million of benefit from these programs in FY 2022 (Australia: $0.6 million, Canada:
$0.1 million) compared to no benefit in FY 2023. Corporate overhead accounted for $2.4 million
of the increase in general and administrative expenses. The primary components included a
$0.7 million increase in salaries and bonuses as well as $1.0 million in costs related to the
resignation of the former CEO/MD. A portion of the increase in salaries and bonuses related to
changes foreign exchange rates between AUD and USD as all corporate salaries are paid in
USD and the exchange rates used for the profit and loss statement was 8% higher in FY 2023
compared to FY 2022. The impact on operating expenses of the CEO/MD resignation is lower
than the $1.0 million impact to general and administrative expenses due to a reduction in equity
based compensation expense, which was $0.4 million lower in FY 2023 than FY 2022, primarily
due to the former CEO/MD forfeiting 2.7 million unvested stock options.
Segment Adjusted EBITDA
Adjusted EBITDA by segment increased across the Group’s operating regions that posted a
revenue increase while the United Kingdom Adjusted EBITDA decreased due to the revenue
decrease for the period. The Group’s drone operations are included in the Australia segment.
EBITDA and Adjusted EBITDA from drone operations was $(2.6) million and $(0.7) million,
respectively, in FY 2023 and FY 2022.
(m)(4)
Australia (ATN)
Canada (CTN)
United Kingdom (UKTN)
Brazil (BTN)
Other(6)
Total
(6) Primarily corporate overhead
FY23
17.7
5.6
2.3
(0.0)
(6.2)
19.3
17
FY22
16.9
1.2
3.7
(0.3)
(4.4)
17.1
% Difference
5%
372%
(38)%
(90)%
43%
13%
NPATA
The Group reported NPATA of $7.2 million which is a decrease of 2% from FY 2022. The
decrease is primarily related to increases in depreciation and amortisation, finance costs and
income taxes offsetting the improved Adjusted EBITDA for the period. Depreciation and
amortisation increased $1.7 million primarily due to depreciation related to the drone fleet which
was purchased in 2H FY 2022 and FY 2023. Finance costs increased $0.4 million from FY 2022
primarily due to higher interest rates on the debt facility which offset the impact of the lower
outstanding debt balances. Income taxes increased $0.5 million due to both higher net profit
before taxes and a higher effective tax rate.
The Group net loss related to the drone light show operations increased from $0.5 million in FY
2022 to $3.0 million in FY 2023, primarily due to both a significant expansion of operations and
that the operations commenced in 2H FY 2022, so the previous year’s results did not include a
full year of operations.
FY23 Cash Flow
The Group reported an increase in cash flow from its operations primarily due to the increase in
Adjusted EBITDA and positive working capital movements compared to FY 2022.
(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 (excludes assets
acquired under leases)
Net free cash flow before financing, tax
and dividends
FY23
19.3
0.4
0.7
2.1
FY22
17.1
0.8
(4.6)
2.0
22.4
15.3
(5.6)
(4.1)
16.7
11.2
As a result of the Group’s strong cash generation, the Group was able to
• Pay $5.8 million in dividends, constituting FY 2022 final dividend and FY 2023 interim
dividend;
• Repurchase and retire 11.1 million shares (5% of the shares outstanding at the
beginning of the fiscal year) for $5.4 million, and
• Repay $6 million of the bank facility, reducing the outstanding debt from $30 million to
$24 million at 30 June 2023;
while maintaining a strong balance sheet including net cash of $3.4 million and cash balances of
$30.6 million at 30 June 2023. Since the beginning of FY 2021, the Group has reduced its
outstanding bank debt by $36 million, from $60 million on 1 July 2020 to $24 million on 30 June
2023.
The Company announced on 29 August 2023 that it has recommenced its on-market share buy-
back of up to 10% of its outstanding shares for a period of up to twelve months. No target share
price or minimum repurchase amount has been set.
18
Debt Financing
On 22 December 2022, the Group extended its current debt facility to 22 December 2025.
Previously, the debt facility was scheduled to mature on 30 September 2023. Other than the
repayment date, there were no material modifications to the previous debt facility.
There are no scheduled principal payments prior to the due date. Facility C consisted of a $30
million revolving line of credit. A commitment fee of 45% of the applicable margin (currently
2.50%) is incurred on any unutilised portion of Facility C. During FY 2023, the Group repaid $6
million of Facility C and reduced its commitment by the same amount. The total amount of
Facility C is $24 million which is 100% drawn down and there is no existing borrowing capacity
under the facility. The outstanding loan bears interest at BBSY plus the applicable margin
(6.6668% (including the applicable margin) at 30 June 2023).
Distributions (including dividends and share buybacks) are restricted under the bank loan facility
agreement to 100% of NPATA.
The ratio of net debt to Adjusted EBITDA is (0.18)x at 30 June 2023. The total gearing ratio
(“TGR”) used for debt compliance is based on gross leverage (debt balances prior to deduction
of cash balances) divided by EBITDA. The EBITDA used for the calculation of the leverage
under the debt facility differs from that of EBITDA or Adjusted EBITDA used in this report. Some
of the differences include that the debt facility is based on the actual cash outlay under the SCA
agreement, the exclusion of non-cash equity based compensation from EBITDA and the limited
ability to include pro forma cost savings in certain instances. Based on the applicable covenants
for the Group’s debt facility, the leverage was 1.25x at 30 June 2023.
The Group is currently in compliance with the loan covenants by a wide margin and expects to
continue to remain compliant in the future.
Key operating metrics
Radio revenue increased in the Group’s Australia, Brazil and Canada operating regions in FY
2023. The primary driver of this growth was an increase in the number of spots sold, which was
driven by either more spots available or higher sell-out, or in most cases, a combination of both
additional spots and higher sell-out rate.
United Kingdom revenue decreased for the period despite an increase in both the amount of
impacts available for sale and an increase in rate per impact compared to FY 2022. This was
due to a decrease in the number of impacts sold for the period.
We believe that there is an opportunity to continue to increase revenue by higher sell-out of our
existing inventory across all our operating regions.
Key operating metrics by jurisdiction (local currency)
Australia
Radio spots inventory ('000s)
Radio sell-out rate (%)
Average radio spot rate (AUD)
Canada
Radio spots inventory ('000s)
Radio sell-out rate (%)
Notes
1
2
3
1
2
19
FY23
1,102
56%
132
667
56%
FY22
1,031
51%
134
681
46%
Average radio spot rate (CAD)
United Kingdom
Total radio impacts available ('000)
Radio sell-out rate (%)
Average radio net impact rate (GBP)
Brazil
Radio spots inventory ('000s)
Radio sell-out rate (%)
Average radio spot rate (BRL)
3
4
5
6
1
2
3, 7
77
72
20,582
85%
1.4
495
46%
210
19,284
99%
1.3
486
38%
217
1.
2.
3.
4.
Available radio advertising spots (primarily adjacent to traffic, news and information reports).
The number of radio spots sold as a percentage of the number of radio spots available.
Average price per radio spot sold net of agency commission.
The UK market measures inventory and units sold based on impacts instead of spots. An impact is a
thousand listener impressions.
The number of impressions sold as a percentage of the number of impressions available.
Average price per radio impact sold net of agency commission.
Not adjusted for taxes or advertising agency incentives that are deducted from net revenue.
5.
6.
7.
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 utilised in preparing the annual
consolidated statement of profit or loss and other comprehensive income are as follows:
FY 2023
Actual
FY 2022
Actual
0.67
0.90
0.56
3.47
0.73
0.92
0.54
3.80
AUD:USD
AUD:CAD
AUD:GBP
AUD:BRL
Dividends
An interim dividend of $0.014 per share was paid 28 February 2023. The Board has not
declared a final dividend for FY 2023.
Likely developments and expected results
The Group’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 Group 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 Group.
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.
20
Events since the end of financial year
On 14 July 2023, The Australia Traffic Network Pty Limited, a wholly owned indirect subsidiary of
the Company, was conducting a drone light show in the Docklands Harbour area near the
Melbourne CBD. An incident occurred, which resulted in approximately 420 of the 500 drones
landing in the water in Docklands Harbour. There were no injuries and all the drones landed in
the designated safe zone. The estimated net loss to ATN is approximately $1 million as the
individual drones did not carry in-flight hull insurance due to their low individual costs. However,
ATN does carry liability insurance for its drone performances. The drone business revenues are
not material to GTN’s consolidated operations with revenues of approximately $1 million in FY
2023.
Except as outlined in the Financial Statements and elsewhere in this Directors’ Report, no other
matter or circumstance has arisen since 30 June 2023 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. In July 2023, the Group had an incident during a drone show that resulted in
losing over 400 drones in Docklands Harbour. The Group immediately began remediation
efforts to recover the drones. The Group notified the Environment Protection Agency (“EPA”)
and the EPA issued a Waste Abatement Notice. The Group believes it has complied with the
notice and any environmental impact from the remaining unrecovered drones will be negligible.
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 as 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 a wilful
default.
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 2023 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 $650 thousand for FY 2023.
Indemnity and insurance of the auditor
GTN has not, during or since the end of the financial year, indemnified or agreed to indemnify
the auditor of the consolidated entity or any related entity against a liability incurred by the
auditor. During the financial year, the Group has not paid a premium in respect of a contract to
insure the auditor of the consolidated entity or any related entity.
21
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 Group 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 for audit and non-audit services provided during the year
are included in Note 10 of the Consolidated Financial Report.
The Group has not engaged its auditor for non-audit services since engaging the auditor in FY
2020.
During the fiscal year the following fees were paid or payable for non-audit services provided by
the auditor of GTN and its related practices:
Total remuneration for non-audit services
-
-
2023
$
2022
$
22
Remuneration Report (audited)
The directors present the GTN 2023 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 9 - for details about each
director)
The following persons were Directors of GTN Limited for the whole of the financial
year and up to the date of this report unless otherwise stated:
Resigned 30 June 2023
William Yde III
Peter Tonagh
David Ryan AO
Robert Loewenthal
Corinna Keller
Alexandra Baker
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 Nomination and Remuneration committee is made up of non-executive directors (all 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 Group 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;
23
● be fair and appropriate having regard to the performance of the Group and the
relevant director, executive or employee;
● foster exceptional human talent and motivate and support employees to pursue the
growth and success of the Group in alignment with the Group’s values; and
● equitably and responsibly reward employees, having regard to the performance of the
Group, individual performance and statutory and regulatory requirements.
Remuneration Framework
Element
Purpose
Fixed
Remuneration
(FR)
Short-term
incentive (STI)
Long-term
incentive (LTI)
Provide
competitive
market salary
Reward for in
year
performance
Alignment to
long-term
shareholder
value
Performance
metrics
N/A
Potential
Value
Varies
See discussion in
(c)(ii) below
Varies
Changes for FY24
Contractual increases
of 5% effective 1
October 2023
Targets adjusted on
an annual basis
Vesting based on
continued service
only
Varies
Annual grants
anticipated during
FY24.
Balancing short-term and long-term performance
Annual incentives are set at levels designed to maximise performance. Long-term
incentives consist of share options that vest one third after two years and two thirds after
three years 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 Nomination and 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
Fixed annual remuneration (FR)
(i)
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 (former) – $467,422, other executive management
$155,488 to $240,555.
Performance
Metrics
See discussion below.
Delivery of STI 100% paid upon conclusion of fiscal year after completion of
audit of financial statements
24
Board
discretion
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 1.5004:1 at 30 June 2023. The STI has not
changed in USD from FY22 to FY23.
Previously, the sole metric considered was Adjusted EBITDA. The Board has determined that it
would be best to expand the performance metrics in order to achieve the following:
1. Metrics should be skewed towards key financial outcomes although some non-financial
outcomes could be considered;
2. The STI framework should be simple and easy to understand;
3. Financial metrics should be aligned with shareholder value drivers;
4. Financial targets should be set so that meeting budget is a qualifier with upside for
outperformance but no reward for not meeting budget;
5. Metrics should be as objective as possible but with allowance for Board discretion; and
6. Any adjustments to metrics should be identified and agreed with the Board as soon as
identified so that the Board can agree or disagree with the proposed change in advance.
With this in mind, the framework was changed to incorporate a combination of financial and non-
financial metrics whereby the financial targets are set to align with the budget and the non-
financial metrics are set by the board to reflect the key areas of focus for the year ahead.
For FY 2023:
1. Financial metrics account for 70% of the STI potential. There were two financial metrics
with equal weighting:
a. Gross Revenue (35% of STI potential) – As the business is judged based on
growth in revenues it makes sense to align incentives around revenue. For FY
2023 the target was set at $173m in line with budget. The bonus increases by
5% for every $2m of revenue earned above target with a cap of 150%.
b. Adjusted EBITDA Margin (35% of STI potential) – Adjusted EBITDA is the key
metric tracked by the investment community. By adding Adjusted EBITDA
Margin as a metric there is incentive for management to balance cost and
revenue to deliver Adjusted EBITDA. The target for Adjusted EBITDA Margin for
2023 was set at 12.1% (in line with budget) with payout increasing by 5% for
every 0.25% increase beyond 12.1% with a cap of 150%.
Based on these two metrics, the financial component of STI would pay out at
100% if the target of $173m of revenue at a 12.1% Adjusted EBITDA Margin is
achieved.
c. Non-Financial Metrics (30% of STI potential) –The non-financial components
emphasise key areas that the Board would like particular management focus on
over the course of the year. For FY 2023:
i. A comprehensive, board approved drone plan (10%);
ii. A succession plan for key executives together with associated staff
development plans for identified successors (10%); and
iii. An agreed investor relations plan including participation at agreed
investor events (10%).
This combination of metrics emphasises the key focus areas of the board, rewards
the Executive Team for outperforming budget and ensures that the importance of
key non-financial areas can be clearly flagged.
25
(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
the conditions summarised below.
Feature
Allocation
Current
Performance
Metrics
Description
Grants to the CEO are discretionary with grants to other
executive management determined as a percentage of the
CEO's grant.
Vesting is subject to continued employment only.
Exercise Price Exercise price equal to share price on date of grant.
Forfeiture and
termination
Options will lapse if the service 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
FY 2023
Based on the criteria outlined in (c) (ii) above, the following STI bonus criteria were achieved for
FY 2023:
Revenue
Adjusted EBITDA Margin
Approved Drone Plan
Succession Plan
Investor Relations
STI
achieved
(%)
36.75%
0%
0%
0%
0%
Due to Mr. Yde no longer being employed by the Group, none of his FY 2023 bonus was
awarded. Due to the extraordinary efforts of Mr. Cody and Mr. Worobow during the Managing
Director/CEO exit process, the Board awarded Messrs. Cody and Worobow 100% of their FY
2023 bonus potential.
Prior Periods
The Group’s Adjusted EBITDA performance for FY 2022 reached 92% of the target set by the
board (the target was a 33% increase over FY 2021) and the board awarded executive
management 25% of their bonus potential for the period.
26
The Group’s Adjusted EBITDA performance for FY 2021 reached 1,365% of the target set by the
board (the target was a 93% decrease over FY 2020) and the board awarded executive
management 50% of their bonus potential for the period. The Adjusted EBITDA target for FY
2021 was set during the significant uncertainty of the onset of the COVID-19 pandemic and the
Board discretionarily reduced the bonuses to reflect the relatively low amount of Adjusted
EBITDA achieved compared to fiscal years prior to the COVID-19 pandemic.
The Group reached 37% of its targeted Adjusted EBITDA for FY 2020 and executive
management received 0% of their short-term incentive potential for the year. The Group’s
performance was significantly negatively impacted by the onset of the COVID-19 pandemic.
The Group reached 82% of its target Adjusted EBITDA for FY 2019 and executive management
received 0% of their short-term incentive potential for the year.
Performance against key measures and impact on variable remuneration
(m)
FY
2023 (1)
FY
2022
FY
2021
FY
2020
FY
2019
Adjusted EBITDA
Increase/(decrease)
19,314
+13%
17,089
+22%
14,020
(2)%
14,248
(62)%
37,549
(22)%
STI paid (% of potential)
0% - 100%
Avg. 46%
25%
50%
0%
0%
‘(1) For FY 2023, the criteria for executive bonuses was modified and Adjusted EBITDA was
removed as a bonus metric. However, since Adjusted EBITDA was previously used as the sole
criteria, the information is being provided for comparability.
Statutory key performance indicators of the Company over the past five years
FY
2023
FY
2022
FY
2021
FY
2020
FY
2019
Profit (loss) from continuing operations
attributable to owners ($’000’s)
2,635
2,802
(89)
319
15,732
Basic earnings (loss) per share
Dividends paid ($‘000’s)
Dividend pay-out ratio (%)
$0.01
2,985
113%
$0.01
2,799
100%
$0.00
-
0%
$0.00
3,015
945%
$0.07
12,561
80%
Increase/(decrease) in share price (%)
+14%
(12)%
+10%
(55)%
(58)%
(e) Remuneration expenses for executive KMP
Fixed remuneration
Variable
Remuneration
Name
Year
Cash
Salary
Non-
monetary
benefits
Post-
employment
benefits
Other
STI -
Cash
bonus
Equity
based
comp
Total
(1)(2)(6)
(2)
(4)(6)(10)
(6)
(3)(7)(8)
(9)
(5)
Executive
Management
27
William Yde
III
(4)(6)(7)(8)
(10)
2023
1,341,116
2022
1,184,852
Scott Cody
(4)(6)
2023
2022
864,583
763,843
Gary
Worobow
(4)(6)
2023
716,605
2022
633,108
-
-
-
-
-
-
-
-
-
-
-
-
1,636,160
-
7,224
2,984,500
33,072
107,323
342,118
1,667,365
35,651
33,072
240,555
55,233
155,525
216,880
1,296,314
1,069,028
35,651
155,488
129,050
1,036,794
33,072
35,701
179,861
881,742
(1) Includes superannuation where applicable.
(2) Payments for annual leave are considered a component of cash salaries unless paid in addition to
salary.
(3) Amounts based on expense recognised 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 USD amounts translated into AUD at the average exchange rate for the year.
(6) Paid in United States dollars (USD) except for equity based compensation.
(7) Includes amounts expensed for financial statement purposes related to cancelled stock options.
(8) Mr. Yde was paid $260,000 in FY 2021 related to the cancellation of his existing options and the
issuance of replacement options. Since the fair value of the replacement options at cancellation date,
plus the cash consideration, was together less than the fair value of the original options valued at
cancellation date, the expense recognised for financial statement purposes equates to that of the
original options, which continued to be expensed during FY 2023 and FY 2022. No expense has been
recognised in relation to the fair value of the replacement options, being $189,230.
(9) Equity based compensation consists solely of stock options.
(10) Mr. Yde’s other compensation for FY 2023 is detailed in the table below.
Other Compensation – William Yde III – FY 2023
Mutual separation payment
Health care cash stipend
Airline flights for spouse
Fringe benefit tax on spousal flights
Vacation pay
Total Other compensation
1,017,956
35,651
241,770
236,377
104,406
1,636,160
(f) Contractual arrangements with executive KMP
CEO Description
Component
Fixed remuneration (1)
$1,370,918 from 1 October
2022 to 30 June 2023.
Contractual term
Notice by the individual
Terminated 30 June 2023
By the Employee voluntarily
upon at least twelve (12)
months written notice to the
Company. Should the
executive terminate their
28
Other executive
management description
Range between $732,530
and $883,796 from 1
October 2022 to 1 October
2023, 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.
Eligible for pro-rata STI for the year
By the Company without
Cause upon twelve (12)
months written notice to
Employee.
Eligible for pro-rata STI for the year
Immediately
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
Termination of employment
(without cause)
Termination of employment
(with cause) or by the
individual
No STI entitlement.
(1) Based on USD/AUD exchange rate of 1.5004:1 which is the exchange rate at 30 June
2023.
(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 November 2018. At that time the chair fee was
increased to $200,000 per annum (from $128,000) and the independent non-executive director
base fee was increased to $100,000 per annum (from $90,000). 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. Effective 1 April 2020 the directors agreed to a voluntary 20% reduction of their fees
to be reviewed on a regular basis due to the impact of COVID-19 on the Company’s business.
Effective 1 December 2021 the directors’ fees reverted to the pre-1 April 2020 levels.
Directors are contractually required to purchase Company shares equal to one year’s initial
salary within three years of joining the board. Currently all directors are in compliance with their
obligations to purchase Company shares. Due to the voluntary reduction in directors’ fees
discussed above, the Board deemed Corinna Keller to be in compliance with her share purchase
obligation as her share purchases exceeded her previously reduced base fee. Ms. Keller’s has
subsequently purchased shares so that the purchase price of her current shares in the Company
stock exceed her current annual director fee. Alexandra Baker was appointed to the Board on 1
June 2022 and has until 1 June 2025 to complete her obligation to purchase shares.
The maximum annual aggregate directors’ fee pool limit is $1,000,000 and was approved by the
shareholders on 8 November 2017.
Director compensation plans:
Chair
Other independent non-executive directors
Additional fees
Audit and risk committee – Chair
Audit and risk committee – member
Nomination and remuneration committee – Chair
Base
Fees
$200,000
$100,000
$40,000
-
-
29
Nomination and remuneration committee –
member
-
All non-executive directors enter into a service agreement with the Company in the form of a
letter of appointment. The letter summarises the board policies and terms, including
remuneration, relevant to the office of director.
Non-executive director remuneration
Name
Year
Base fee
Audit and Risk
Committee
Remuneration
and
Nomination
Committee
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
200,000
183,333
100,000
91,667
100,000
91,667
106,952
91,091
100,000
8,333
-
-
-
-
40,000
36,666
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
200,000
183,333
100,000
91,667
140,000
128,333
106,952
91,091
100,000
8,333
P Tonagh
R Loewenthal
D Ryan
C Keller (1)
A Baker (2)
Total non-
executive director
remuneration
2023
606,952
40,000
-
646,952
2022
466,091
36,666
-
502,757
(1) Paid in United States dollars (USD). Amount translated into AUD based on same
exchange rates as annual financial statements.
(2) Appointed to Board 1 June 2022.
Whooshkaa Podcasting Platform, a company controlled by Robert Loewenthal up until its sale in
December 2021, provided podcasting hosting services to the Group at no charge. The fair-
market value of the service provided was de minimus and the Group no longer provides
podcasts.
Spotify, a company which Robert Loewenthal serves as Business Development Director,
sells advertising time on its platform in Canada to the Group. The amount purchased for the
past two fiscal years was as follows:
FY 2023
FY 2022
$ 162,193
$ nil
Australian Broadcasting Corporation, a company of which Peter Tonagh is deputy chair of the
board of directors, has purchased traffic reporting services from the Group’s Australian
subsidiary. The amount purchased for the past two fiscal years was as follows:
30
FY 2023
FY 2022
$ 57,456
$ 57,456
National Rugby League, a company of which Alexandra Baker is employed, has purchased
advertising from the Group’s Australian subsidiary. The amount purchased for the past two
fiscal years was as follows:
FY 2023
FY 2022
$ 10,000
$ 22,940
(h) Additional statutory information
(i)
Relative proportions of fixed vs variable remuneration expense
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
2023
100%
Other key management personnel of the group
69%
S Cody
73%
G Worobow
At Risk – STI
2023
At Risk – LTI*
2023
0%
19%
15%
0%
12%
12%
*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 2023.
Total STI bonus (cash)
(1)(2)(3)
LTI Options(5)
Total
Opportunity
$
2023
462,770
238,161
153,941
Awarded
%
2023
Value
granted
$
2023
Value
exercised
%
2023
Forfeited (4)
%
2023
0%
100%
100%
168,473
84,237
69,916
-
-
-
89%
0%
0%
Name
W Yde (1)
S Cody (2)
G Worobow (3)
(1) USD 311,537. Amounts in the table have been translated into AUD based on the
exchange rate used to prepare the financial statements.
(2) USD 160,330. Amounts in the table have been translated into AUD based on the
exchange rate used to prepare the financial statements.
31
(3) USD 103,633. Amounts in the table have been translated into AUD based on the
exchange rate used to prepare the financial statements.
(4) Represents percentage of LTI Options forfeited during the period divided by LTI
Options outstanding at 1 July 2022 (vested and unvested) plus options granted in
FY 2023.
(5) Unvested options vest on a service time-based vesting criterion. Options vest if
the grantee is employed by the Group at the vesting date without further
performance hurdles. One third of the options vest on the second anniversary of
the grant whilst the remainder vest on the third anniversary of the grant.
(iii)
Terms and conditions of equity based payment arrangements.
Balance at the start of
the year
Vested
Unvested
Grants (1)
Forfeited (2)
Balance at the end of
the year
Vested during the
year (2)
#
%
Vested
Unvested
#
%
-
2,000,000
1,000,000
2,666,667 133%
333,333
-
333,333
17%
1,112,065
2,743,679
500,000
-
-
2,689,076
1,666,668
1,577,011
41%
921,729
2,275,816
415,000
-
-
2,229,211
1,383,334
1,307,482
41%
FY2023
Name
W Yde
(1)(3)
S Cody
(1)
G
Worobow
(1)
(1) Options were granted on 17 November 2022.
(2) Percentages based on options outstanding 1 July 2022.
(3) Mr. Yde’s unvested options expired on 30 June 2023 upon the cessation of his employment.
Ordinary Shares
FY2023
Name
Balance at
the start of
year
Received
during the
year on
exercise of
stock
options
Shares
Purchased
Shares
Sold
Balance at the
end of the
year
W Yde (4)
2,803,408
D Ryan (2)
150,000
R Loewenthal (2)
98,293
C Keller
P Tonagh (3)
A Baker (2)
S Cody
G Worobow (1)
140,450
567,287
30,000
-
10
-
-
-
83,000
-
-
-
-
-
-
-
-
-
-
-
-
32
-
-
-
-
-
-
-
-
N/A (4)
150,000
98,293
223,450
567,287
30,000
-
10
(1) Initial shares upon forming GTN Limited.
(2) Shares held indirectly through superannuation fund.
(3) Shares held indirectly by PT Ventures Pty Limited as trustee for The Tonagh Family Trust.
Mr Tonagh is a director of PT Ventures Pty Limited and a beneficiary of The Tonagh Family
Trust.
(4) Mr. Yde’s employment and directorship ended effective 30 June 2023 therefore his shares
are no longer included.
On 17 November 2022, the Company issued stock options to the following KMP as outlined in
the following table:
Grantee
Number of
Options
Issued
Fair Value of
Options Granted
William Yde III
1,000,000
$168,473
Scott Cody
500,000
$84,237
Gary Worobow
415,000
$69,916
The terms of the granted options are as follows:
17 November 2022 Grant
The Company employs a service time-based vesting criterion. Under this plan, options vest if
the grantee is employed by the Group at the vesting date without further performance hurdles.
The fair value of these options was estimated at the date of the grant using the Black-Scholes
option pricing model with the following assumptions:
Grant date
Expiration date
Share price 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)
17 November 2022
17 November 2027
$0.405
$0.168
$0.405
64.12
%
3.83 years
3.21
%
3.31
%
On 12 November 2021, the Company issued stock options to the following KMP as outlined in
the following table:
Grant Date
Number of
Options
Issued
Fair Value of
Options Granted
William Yde III
1,000,000
$246,073
Scott Cody
500,000
$123,037
33
Gary Worobow
415,000
$102,120
The terms of the granted options are as follows:
12 November 2021 Grant
The Company employs a service time-based vesting criterion. Under this plan, options vest if
the grantee is employed by the Group at the vesting date without further performance hurdles.
The fair value of these options was estimated at the date of the grant using the Black-Scholes
option pricing model with the following assumptions:
Grant date
Expiration date
Share price 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)
12 November 2021
12 November 2026
$0.52
$0.246
$0.52
62.91
%
3.83 years
0.00
%
1.11
%
(iv)
Other transactions with key management
In February 2020, in anticipation of spending additional time in the Australia market, the Group
rented an apartment for Mr. Yde’s use. During FY 2023 and FY 2022 the Group incurred
expenses of $127,397 and $162,696, respectively related to the apartment. The costs related to
the apartment have not been included in Mr. Yde’s remuneration disclosures since these costs
are intended to replace reimbursable hotel lodgings expense. Effective 26 July 2023, Mr. Yde
assumed the lease on the apartment and the Group’s obligations ceased. As part of the
agreement to transfer the lease, Mr. Yde paid the Group $16,750 USD for the apartment’s
furnishings.
In February 2021, the Group purchased a vehicle that was made available for Mr. Yde’s use
while in Australia. The purchase price of the vehicle was $111,391. During FY 2023 and FY
2022, the Group recognised $15,913 and $15,913 of depreciation expense and $22,929 and
$22,929 of fringe benefits tax related to the vehicle. The costs related to the vehicle have not
been included in Mr. Yde’s remuneration disclosures since the Group retained ownership of the
vehicle and the vehicle is intended to replace rental car fees that would otherwise have been
incurred. In July 2023, Mr. Yde purchased the car from the Group for $60,300 USD.
In addition to the car and apartment furnishings, in July 2023 the Group sold certain computer
equipment that had been used by Mr. Yde to him for $3,000 USD.
Mr. Yde’s daughter is employed by the Group with accounting and management duties. Her
cash salary (translated from USD to AUD at the same exchange rates as the Group’s financial
statements) was:
● FY 2023
● FY 2022
$202,380
$186,163
34
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
None during FY 2023.
(vi)
Voting of shareholders at last year’s annual general meeting
During the last annual general meeting, the shareholders voted 73.25% in favour of adoption of
the remuneration report for the year ended 30 June 2022 which therefore constitutes a ‘second
strike’ for the purposes of the Corporations Act 2001 (Cth). As a result of the Company receiving
a second strike, a conditional spill resolution was required to be put to the meeting. The
resolution received 0.87% votes in favour of the resolution and therefore did not pass.
The Board is committed to ongoing and transparent engagement with all stakeholders. It will
continue to review the effectiveness of the Company’s remuneration practices and their
alignment with strategic performance objectives to appropriately rewards its executives and
deliver shareholder value.
End of Remuneration Report
35
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 37.
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.
Peter Tonagh
Chair
29 August 2023
36
Grant Thornton Audit Pty Ltd
Level 17
383 Kent Street
Sydney NSW 2000
Locked Bag Q800
Queen Victoria Building NSW
1230
T +61 2 8297 2400
Auditor’s Independence Declaration
To the Directors of GTN Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit
of GTN Limited for the year ended 30 June 2023, 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.
Grant Thornton Audit Pty Ltd
Chartered Accountants
S M Coulton
Partner – Audit & Assurance
Sydney, 29 August 2023
www.grantthornton.com.au
ACN-130 913 594
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‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or
refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL).
GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member
firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one
another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127
556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
Legislation.
37
#10419540v2w
GTN Limited
ACN 606 841 801
Consolidated Financial Report
For the year ended 30 June 2023
38
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
40
41
42
43
44
83
39
GTN Limited
For the year ended 30 June 2023
Consolidated Statement of Profit or Loss and
Other Comprehensive Income
For the year ended 30 June 2023
Notes
2023
Revenue
Other income
Interest income on long-term prepaid affiliate contract
Gains on lease forgiveness
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
7
7
7
7
23
8
8
8
$’000
177,002
291
7,946
-
2022
$’000
160,083
8
8,052
41
(122,791)
(116,836)
(42,483)
(33,447)
(360)
(12,329)
(1,753)
(32)
5,491
(763)
(10,617)
(1,348)
(19)
5,154
Income tax expense
Profit for the year
9
(2,856)
(2,352)
2,635
2,802
Other comprehensive income (loss) for the year, net of income tax:
Items that may be reclassified to profit or loss
Foreign currency translation reserve
1,976
(546)
Total other comprehensive income/(loss) for the year
1,976
(546)
Total comprehensive income for the year
4,611
2,256
Earnings per share attributable to the ordinary equity holders:
Basic earnings per share
Diluted earnings per share
21
21
$0.01
$0.01
$0.01
$0.01
Total profit for the year and other comprehensive income (loss) are fully attributable to members of the Company
This statement should be read in conjunction with the notes to the financial statements.
40
GTN Limited
For the year ended 30 June 2023
Consolidated Statement of Financial Position
As at 30 June 2023
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
Contract liabilities
Current tax liabilities
Financial liabilities
Provisions
Current liabilities
Non-current
Trade and other payables
Financial liabilities
Deferred tax liabilities
Provisions
Non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Reserves
Accumulated losses
Total equity
Notes
11
12
16
13
15
14
14
16
13
17
19
16
20
18
17
20
16
18
22
2023
$’000
30,606
41,194
4,385
4,938
81,123
10,654
27,116
96,422
4,806
90,863
229,861
310,984
39,244
1,415
63
1,215
1,312
43,249
78
25,912
24,051
318
50,359
93,608
2022
$’000
34,844
37,751
4,086
3,714
80,395
9,735
33,212
95,998
5,501
92,373
236,819
317,214
35,148
987
91
1,376
1,090
38,692
75
32,142
22,406
330
54,953
93,645
217,376
223,569
432,128
8,159
(222,911)
217,376
437,508
10,214
(224,153)
223,569
This statement should be read in conjunction with the notes to the financial statements.
41
GTN Limited
For the year ended 30 June 2023
Consolidated Statement of Changes in Equity
For the year ended 30 June 2023
Balance at 30 June 2021
Total comprehensive income (loss):
Net profit
Other comprehensive loss
Transactions with owners in their capacity as owners:
Equity based compensation
Balance at 30 June 2022
Total comprehensive income (loss):
Net profit
Other comprehensive income
Transactions with owners in their capacity as owners
Equity based compensation
Dividends
Shares repurchased and retired
Reclass expired stock options
Balance at 30 June 2023
Notes
Issued
Capital
$’000
437,508
Common
Control
Reserve
$’000
(24,655)
Foreign Currency
Translation Reserve
$’000
29,642
Equity Based
Payments
Reserve
$’000
5,010
Accumulated
Losses
$’000
(226,955)
Total
Equity
$’000
220,550
-
-
-
-
-
-
-
-
-
-
437,508
(24,655)
-
-
-
-
-
(5,380)
-
(5,380)
432,128
-
-
-
-
-
-
-
-
(24,655)
-
(546)
(546)
-
(546)
29,096
-
1,976
1,976
-
-
-
-
1,976
31,072
-
-
-
763
763
2,802
-
2,802
-
2,802
2,802
(546)
2,256
763
3,019
5,773
(224,153)
223,569
-
-
-
360
-
-
(4,391)
(4,031)
2,635
-
2,635
-
(5,784)
-
4,391
1,242
2,635
1,976
4,611
360
(5,784)
(5,380)
-
(6,193)
1,742
(222,911)
217,376
23
22
This statement should be read in conjunction with the notes to the financial statements.
42
GTN Limited
For the year ended 30 June 2023
Consolidated Statement of Cash Flows
For the year ended 30 June 2023
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
Net cash used in investing activities
Financing activities
Shares repurchased
Dividends
Deferred financing costs
Debt repayment
Principal elements of lease payments
Net cash used in financing activities
Net change in cash and cash equivalents
Cash and cash equivalents, beginning of year
Exchange differences on cash and cash equivalents
Notes
2023
$’000
2022
$’000
195,245
173,615
(173,991)
(160,054)
25
291
(1,666)
(853)
19,026
(5,640)
(5,640)
(5,380)
(5,784)
(52)
(6,000)
(1,626)
(18,842)
(5,456)
34,844
1,218
8
(1,272)
(793)
11,504
(4,125)
(4,125)
-
-
-
(20,000)
(1,519)
(21,519)
(14,140)
49,376
(392)
Cash and cash equivalents, end of year
11
30,606
34,844
Non-cash financing and investing activities:
Property acquired under leases
1,132
2,052
This statement should be read in conjunction with the notes to the financial statements.
43
GTN Limited
For the year ended 30 June 2023
Notes to the Consolidated Financial Statements
1
Corporate information
Nature of operations
GTN Limited (the “Company”) and its subsidiaries (the “Group”’) derives a substantial majority of its
revenues from the sale of commercial advertising commercials adjacent to traffic and news information
reports that are broadcast on radio and/or television stations in Australia and international markets, including
Canada, the United Kingdom and Brazil. The Group obtains these advertising commercials from radio and
television stations.
General information
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 2023 (including comparatives) were
approved and authorised for issuance on 29 August 2023. The directors have the power to amend and reissue
the financial statements.
44
GTN Limited
For the year ended 30 June 2023
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), unless otherwise stated.
(ii) Historical cost convention
The financial statements have been prepared on a historical cost basis, except for the following:
● Financial assets and liabilities (including derivative instruments) – measured at fair value in profit or loss or
fair value in other comprehensive income.
Certain amounts reported in prior years have been reclassified to conform to the current year presentation.
2.2 Basis of consolidation
The Group’s financial statements consolidate those of GTN Limited and all of its subsidiaries as of 30 June
2023. 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 amongst the Group 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 Group.
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 combinations
The Group applies the acquisition method in accounting for business combinations.
The consideration transferred by the Group 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
Group, which includes the fair value of any asset or liability arising from a contingent consideration
arrangement. Acquisition costs are expensed as incurred.
45
GTN Limited
For the year ended 30 June 2023
The Group recognises identifiable assets acquired and liabilities assumed in a business combination regardless
of whether they have been previously recognised in the acquiree’s financial statements prior to the
acquisition. Assets acquired and liabilities assumed are generally measured at their acquisition-date fair values.
Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of
the sum of (a) fair value of consideration transferred; (b) the recognised amount of any non-controlling
interest in the acquiree; and (c) acquisition-date fair value of any existing equity interest in the acquiree, over
the acquisition-date fair values of identifiable net assets. If the fair values of identifiable net assets exceed the
sum calculated above, the excess amount (i.e. gain on a bargain purchase) is recognised in profit or loss
immediately.
2.4 Foreign currency translation
Functional and presentation currency
The consolidated financial statements are presented in Australian dollars (AUD). ATN, Aus Hold Co and
GTN Limited’s functional currency is Australian dollars (AUD); CTN’s functional currency is Canadian
dollars (CAD); UK Hold Co, UKTN and UK Commercial’s functional currency is British pounds (GBP); and
BTN’s functional currency is Brazilian real (BRL). The remaining subsidiaries functional currency is United
States dollars (USD).
The presentation currency for these financial statements is AUD which is the functional currency of the
largest portion of the Group’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 recognised
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 recognised 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 Group’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 Group has remained unchanged
during the reporting period.
46
GTN Limited
For the year ended 30 June 2023
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
The Group derives a substantial majority of its revenues from the sale of advertising commercials adjacent to
traffic and news information reports that are broadcast on radio and/or television stations. The stations are
suppliers of the advertising spots to the Group.
The Group provides advertising commercials to advertisers and their agencies. In situations where the
advertisers engage advertising agencies in executing transactions with the Group, the Group records revenue
based on the amount it expects to receive from the agency and follows the agency’s directions in placing the
advertisements. Cash considerations are received net of agency commissions provided and are typically due
after the commercials are broadcast.
Advertising revenue is earned and recognised over time as the performance obligation - the delivery of the
advertising commercial - is delivered on the basis that the customer simultaneously receives and consumes
the benefits over the period of delivery of the advertisement.
Payments received in advance are deferred until the advertisements are broadcast and the amounts are
included as a component of contract liabilities in the accompanying consolidated statement of financial
position. Sales taxes, goods and service taxes, value added taxes and similar charges collected by the Group
on behalf of government authorities are not included as a component of revenue. The Group’s Brazilian
subsidiary is charged sales tax by the governmental authorities on its revenue which is treated as a reduction
of revenue for financial reporting. There is no variable consideration or financing components associated
with revenue. The Group’s revenue is disaggregated by geography based on where the advertisements are
broadcast. See Note 29 (Segment information)).
Interest and dividend revenue recognition
2.6
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.
2.7 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.
The Group generally enters into multiyear contracts with radio and television stations. Station compensation
is a component of network operations and station compensation expenses in 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 loss allowance. Trade receivables are generally due for settlement within 30
47
GTN Limited
For the year ended 30 June 2023
days and are presented as current assets unless collection is not expected for more than 12 months after the
reporting date.
The Group applies the simplified approach to measuring expected credit losses, which uses a lifetime
expected loss allowance for all trade receivables. Debts which are known to be uncollectible are written off by
reducing the carrying amount directly. The loss allowance is based on expected lifetime credit losses. To
measure the expected credit losses, trade receivables have been grouped based on the shared credit risk
characteristics and the days past due. The expected loss rates are based on the payment profiles of sales over a
period of five years before 30 June 2023 or 1 July 2022 respectively and the corresponding historical credit
losses experienced within this period. The historical loss rates are adjusted to reflect current and forward-
looking information on macroeconomic factors affecting the ability of the customers to settle the receivables.
The amount of the loss allowance is the difference between the asset's carrying amount and the present value
of estimated future cash flows (excluding future credit losses that have not been incurred), 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 any impairment loss is recognised in profit or loss as receivable impairment loss. When a
trade receivable for which a loss allowance had been recognised becomes uncollectible in a subsequent
period, it is written off against the loss allowance account. Subsequent recoveries of amounts previously
written off are credited against receivable impairment loss 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, which is 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
Group annually tests these assets for impairment. Trade names are considered indefinite lived assets because
there is not a predetermined time when they will be no longer be of value. There is no residual value
recognised with regard to intangible assets subject to amortisation.
48
GTN Limited
For the year ended 30 June 2023
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 to be capable of operating in the manner intended by the
Group’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
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
• drones: 2 years
• helicopters engine rebuilds: 2-3 years
•
•
•
•
furniture, equipment and other: 5-10 years
recording, broadcasting and studio equipment: 5 years
leasehold improvements: shorter of useful life or lease term
right of use assets: shorter of useful life or lease term
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
The Group leases various properties and equipment. Rental contracts are typically made for fixed periods of
one to five years but may have extension options as described below. Lease terms are negotiated on an
individual basis and contain a wide range of different terms and conditions. Contracts may contain both lease
and non-lease components and the Group applies the practical expedient per AASB 16.15 to not separate
these components out in the contract and are included in the liability in full.
Leases are recognised as a right of use asset and a corresponding liability at the date at which the leased asset
is available for use by the Group and are recognised on a present value basis. Each lease payment is allocated
between the liability and finance cost. The finance cost is charged to profit or loss over the lease period so as
to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The
right of use asset is depreciated over the shorter of the asset's useful life and the lease term (generally one to
five years) on a straight-line basis.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include
the net present value of the following lease payments:
• fixed payments (including in-substance fixed payments), less any lease incentives receivable
• variable lease payment that are based on an index or a rate
49
GTN Limited
For the year ended 30 June 2023
• amounts expected to be payable by the lessee under residual value guarantees
• the exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and
• payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.
Extension and termination options are included in a number of property and equipment leases across the
Group. These terms are used to maximise operational flexibility of managing the contracts. The majority of
extension and termination options held are exercisable only by the Group and not by the respective lessor.
The lease payments are discounted using the interest rate implicit in the lease, if that rate can be determined,
or the Group’s incremental borrowing rate.
Right of use assets are measured at cost comprising the following:
• the amount of the initial measurement of lease liability
• any lease payments made at or before the commencement date, less any lease incentives received
• any initial direct costs, and
• restoration costs.
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line
basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-
value assets comprise of IT equipment and small items of office furniture and equipment.
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 Group at which management monitors goodwill.
Cash-generating units to which goodwill and intangible assets that have an indefinite useful life (trade names)
have been allocated (determined by the Group’s management as equivalent to its operating segments) are
tested for impairment at least annually. All other individual assets (including property, plant and equipment)
or cash-generating units are tested for impairment whenever events or changes in circumstances indicate that
the carrying amount may not be recoverable.
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 of disposal 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 Group’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
50
GTN Limited
For the year ended 30 June 2023
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 Group 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
Financial assets are classified in the following measurement categories:
•
•
those to be measured subsequently at fair value (either through other comprehensive income or
loss or through profit and loss), and
those to be measured at amortised cost. Currently the Group only has one category of financial
instruments which is financial assets measured at amortised cost which includes cash and cash
equivalents, trade and other receivables. See Note 2.8 (Trade receivables).
The classification depends on the business model for managing the financial assets and the contractual terms
of the cash flows.
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 receivable impairment loss.
Classification and subsequent measurement of financial liabilities
The Group’s financial liabilities include borrowings, lease liabilities and trade and other payables.
Financial liabilities are measured subsequently at amortised cost using the effective interest method.
All interest-related charges that are reported in profit or loss are included within finance costs.
Deferred loan costs relate to the costs related to the debt financing and are amortised using the effective
interest method over the life of the loan. Expense recognised related to the effective interest method is
recognised as a component of finance costs in the Group’s consolidated statement of profit or loss and other
comprehensive income. Any deferred loan costs outstanding upon repayment or refinancing of debt balances
are immediately expensed as a component of loss on refinancing.
51
GTN Limited
For the year ended 30 June 2023
2.15 Income taxes
Income tax expense for the period is the tax payable on the current period’s taxable income based on the
applicable 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 Group 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 Group’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 Group 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 income 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.
Tax consolidation legislation
GTN Limited and its wholly owned Australian controlled subsidiaries have implemented the tax
consolidation legislation.
The head entity, GTN Limited, and the controlled subsidiaries in the tax consolidated group account for their
own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax
consolidated group continues to be a stand-alone taxpayer in its own right.
In addition to its own current and deferred tax amounts, GTN Limited also recognises 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
52
GTN Limited
For the year ended 30 June 2023
transferred to GTN Limited under the tax consolidation legislation. The funding amounts are determined by
reference to the amounts recognised 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. 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 recognised as
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 recognised 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, annual leave 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 Group’s liabilities for 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 for currencies
for which there is no deep market in such high-quality corporate bonds, that have maturity dates that
approximate the timing of the estimated future cash outflows. Any re-measurements arising from experience
adjustments and changes in assumptions are recognised in profit or loss in the periods in which the changes
occur. The obligations are presented as current liabilities on the statement of financial position if the entity
does not have an unconditional right to defer settlement for at least 12 months after the reporting period
regardless of when the actual settlement is expected to occur.
2.18 Trade and other payables
These amounts represent liabilities for goods and services provided to the Group 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.
53
GTN Limited
For the year ended 30 June 2023
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.
• 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 certain of the Group’s 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).
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.
54
GTN Limited
For the year ended 30 June 2023
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 Group 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 Group 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 Group 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 recognised 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 on the consolidated statement of financial position.
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 recognised 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 recognised 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
55
GTN Limited
For the year ended 30 June 2023
station compensation expense over the contract period is recognised 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 Group 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 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 estimates and judgements
The following are significant management judgements in applying the accounting policies of the Group 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
Group’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 16 (Current and deferred tax assets and liabilities).
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 (Intangible assets).
Useful lives of intangible assets
Management reviews its estimate of the useful lives of definite lived intangible assets, which consist of the
Group’s affiliate agreements with radio and television stations, at each reporting date, based on the expected
utility of the assets. Uncertainties in these estimates relate to the amount and length of expected future cash
flows from these assets that may impact the value of the station contracts. See Note 14 (Intangible assets).
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 anticipated contractual term including
renewal periods, if it is more likely than not the contract will be extended. See Note 13 (Other assets).
Uncertain tax positions
Management determines the recognition and valuation of deferred tax assets and liabilities where there is
uncertainty over tax treatment. Under IFRIC 23, this requires determining the likelihood that a tax treatment
will be upheld by the relevant tax authorities assuming that position is examined by the tax authorities and the
56
GTN Limited
For the year ended 30 June 2023
tax authorities have full access to all the relevant facts and circumstances related to the tax position. Many tax
positions are complex, and management must use judgement as to what the ultimate outcome of a tax
position will be prior to filing returns or rulings from the relevant tax authorities. See Note 16 (Current and
deferred tax assets and liabilities).
2.27 Parent Entity financial information
The financial information for the Parent Entity, GTN Limited disclosed in Note 27 (Parent Entity information)
has been prepared on the same basis as the consolidated financial statements except as set out below.
Investment in subsidiaries
Investments in subsidiaries are accounted for at cost in the financial statements of GTN Limited. Dividends
received are recognised 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
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. The
adoption of these Accounting Standards and Interpretations did not have any significant impact on the
financial performance or position of the Group.
3.2 Accounting Standards issued but not yet effective and not adopted early by the
Group
At the date of authorisation of these financial 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 Group. Management anticipates that all of the relevant pronouncements will be adopted in the
Group’s accounting policies for the first period beginning after the effective date of the pronouncement.
There are no 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 Group's activities expose it to a variety of financial risks: market risk (including currency risk and interest
rate risk), credit risk and liquidity risk. The Group's overall risk management program seeks to minimise
potential adverse effects on the financial performance of the Group. The Group has used derivative financial
instruments to manage interest rate risk exposures on borrowings but does not do so currently.
57
GTN Limited
For the year ended 30 June 2023
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 cooperation with the Group's operating units in accordance with the Board policy.
The Group holds the following financial instruments:
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial liabilities
Trade and other payables
Interest bearing liabilities
2023
$’000
30,606
41,194
71,800
32,084
27,127
59,211
2022
$’000
34,844
37,751
72,595
28,933
33,518
62,451
(a) Market risk
Market risk is the risk that the fair value or future cash flows of a financial asset or financial liability will
fluctuate because of changes in market prices. Market risk comprises interest rate risk and foreign exchange
risk.
(i) Cash flow and fair value interest rate risk
The Group's main interest rate risk arises from long term borrowings and cash. Borrowings issued at variable
rates expose the Group to cash flow interest rate risk. The Group has previously utilised fixed rate interest
rate swaps and interest rate collars to manage interest rate risk. Currently all the Group’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 Group had the following variable rate cash and borrowings
outstanding:
Cash and cash equivalents
Borrowings
Net exposure to cash flow interest rate risk
2023
2022
Weighted
average
interest rate
%
0.85%
5.52%
Weighted
average
interest rate
%
0.02%
3.26%
Balance
$’000
30,606
(24,000)
6,606
Balance
$’000
34,844
(30,000)
4,844
An official increase/decrease in interest rates of 100 (2022: 100) basis points would have favourable/adverse
effect on profit before tax of $66 thousand (2022: favourable/adverse $48 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 Group 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 Group to currency risk are
disclosed below. The amounts shown are those reported to key management translated into AUD at the
closing exchange rate:
58
GTN Limited
For the year ended 30 June 2023
Short Term Exposure
Long Term Exposure
USD
$’000
GBP
$’000
CAD
$’000
BRL
$’000
Other
$’000
USD
$’000
GBP
$’000
CAD
$’000
BRL
$’000
30 June 2023
Financial assets
Financial liabilities
215
(240)
21,130
21,697
2,938
(6,162)
(4,685)
(1,425)
Total exposure
(25)
14,968
17,012
1,513
30 June 2022
Financial assets
2,597
29,680
16,203
1,921
Financial liabilities
(204)
(6,369)
(3,959)
Total exposure
2,393
23,311
12,244
(988)
933
13
(138)
(125)
33
(51)
(18)
-
-
-
-
-
-
-
(83)
(83)
-
(342)
(342)
-
(1,007)
(1,007)
-
(1,398)
(1,398)
-
(137)
(137)
-
(164)
(164)
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
Credit risk is the risk that a contracting entity will not complete its obligations under a financial instrument
and cause a financial loss. The Group has exposures to credit risk on cash and cash equivalents and
receivables. The maximum exposure to credit risk is based on the total value of our financial assets net of any
loss allowance.
Ongoing credit evaluation is performed on the financial condition of customers and, where appropriate, a
loss allowance is raised. The Group applies the simplified approach to measuring expected credit losses,
which uses a lifetime expected loss allowance for all trade receivables (see Note 2.8 (Trade receivables)). Debtor
write-offs have historically been immaterial.
The Company's policy is to engage major financial institutions to provide financial facilities to the Group,
thereby minimising credit risk on cash deposits. The Group does not have any cash balances 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 Group did not have undrawn borrowing facilities at the end of the reporting period.
Total facilities
Bank debt facility
Used at balance date
Bank debt facility
2023
$’000
2022
$’000
24,000
30,000
24,000
30,000
59
GTN Limited
For the year ended 30 June 2023
Unused at balance date
Bank debt facility
(ii) Maturities of financial liabilities
Contractual maturities of financial liabilities
-
-
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 2023
Non-derivatives
Non-interest bearing
Trade and other payables
32,006
-
78
Interest bearing
Bank loans (1)(2)
Leases (1)
Total
1,600
1,321
34,927
1,600
1,639
3,239
24,767
440
25,285
-
-
-
-
32,084
32,084
27,967
3,400
63,451
23,936
3,191
59,211
(1) Cash flows include an estimate of future contractual payments of interest
(2) Carrying amounts are net of capitalised transaction costs
Within
1 year
Between
1 and 2
years
Between
2 and 5
years
Over
5 years
Total
contractual
cash flows
Carrying
Amount
(assets)/
Liabilities
$’000
$’000
$’000
$’000
$’000
$’000
At 30 June 2022
Non-derivatives
Non-interest bearing
Trade and other payables
28,858
-
75
Interest bearing
Bank loans (1)(2)
Leases (1)
Total
1,107
1,467
31,432
30,277
1,586
31,863
-
690
765
(1) Cash flows include an estimate of future contractual payments of interest
(2) Carrying amounts are net of capitalised transaction costs
-
-
82
82
28,933
28,933
31,384
3,825
64,142
29,901
3,617
62,451
(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:
● use of quoted market prices or dealer quotes for similar instruments
●for other financial instruments a discounted cash flow analysis
All of the resulting fair value estimates are included in level 2. Level 2 estimates involve inputs other than
quoted prices in active markets for identical assets and liabilities that are observable either directly or
indirectly for substantially the full term of the asset or liability.
60
GTN Limited
For the year ended 30 June 2023
Capital Management
5
Risk management
The Group’s objectives when managing capital are to
(i) safeguard its ability to continue as a going concern so it can continue to provide returns to the
shareholders and
(ii) maintain an optimal capital structure to reduce the cost of capital.
In order to accomplish these goals, the Group has entered into a secured bank loan. Under the terms of the
loan, the borrowers are required to comply with the following financial covenants:
(a) Total gearing ratio (gross debt) (“TGR”) (not greater than 2.75x at 30 June 2023 (actual
1.25x);
(b) Interest coverage ratio (at least 3.50x at 30 June 2023) (actual 15.79x)
The borrowers were in compliance with these and all other requirements of the loan for all periods presented.
The Group targets to have a maximum total gearing ratio (“TGR”) of less than 2.0x but does not target a
minimum TGR.
6
Interests in subsidiaries
Set out below details of the subsidiaries held directly and indirectly by the Company:
Name of the
Subsidiary
Country of Incorporation &
Principal Place of Business
Proportion of Ownership
Interests Held by the
Company
30-June-2023 30-June-2022
GTN Holdings Pty Limited (“LuxCo 1”)
Australia (NSW)
GTN US Holdco, Inc. (‘US Hold Co”)
Global Traffic Network, Inc. (“GTN”)
United States (Delaware) (1)
United States (Nevada) (1)
Gridlock Holdings (Australia) Pty Limited (“Aus Hold
Co”)
Australia (NSW)
The Australia Traffic Network Pty Limited (“ATN”)
Australia (NSW)
GTN Management, Inc. (“US Management Co”)
United States (Delaware)
GTCR Gridlock International (Luxembourg) S.a r.l.
(“LuxCo 2”)
Luxembourg
Canadian Traffic Network ULC (“CTN”)
Canada (Alberta)
GTN Holdings (UK) Limited (“UK Hold Co”)
United Kingdom (England &
Wales)
Global Traffic Network (UK) Commercial Limited
(“UK Commercial”)
United Kingdom (England &
Wales)
Global Traffic Network (UK) Limited (“UKTN”)
United Kingdom (England &
Wales)
GTCR Gridlock Holdings (Brazil) S.a r.l. (“LuxCo 3”) Luxembourg
BTN Informacao do Transito E Servicos Aereos
Especializados Ltda (“BTN”)
Brazil
Global Story Network LLC (“GSN”)
Global Drone Network, LLC (“GDN”) (2)
United States (Delaware)
United States (Delaware)
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
N/A
(1) Resident of Australia for tax purposes but still subject to U.S. taxes. Principal place of business
Australia.
(2) Formed 16 November 2022.
61
GTN Limited
For the year ended 30 June 2023
7
Revenue and other income
Revenue from contracts with customers
Sale of advertising commercials – net of agency commissions and taxes
recognised over time
Other income
Interest on bank deposits
2023
$’000
2022
$’000
177,002
177,002
160,083
160,083
291
291
8
8
Interest income on long-term prepaid affiliate contract (see Note 13)
7,946
8,052
Gain on forgiveness of lease payments due
-
41
See Note 29 (Segment information) for the geographical allocation of the Group’s revenue.
8
Expenses
Profit before income tax includes the following specific expenses:
Employee benefits expense
Defined contribution superannuation expenses
Depreciation
Amortisation
Finance costs - bank loan and line of credit
Finance costs - leases
Rental expenses relating to short-term and low value leases
Foreign exchange loss on intercompany loans within the group
2023
$’000
2022
$’000
45,765
38,926
1,253
5,982
6,347
1,630
123
1,347
32
1,146
4,267
6,350
1,231
117
648
19
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% (2022: 30%) and the reported tax expense in profit or loss are as follows:
Profit before income tax
Tax rate: 30% (2022: 30%)
Taxes on foreign earnings
2023
$’000
5,491
1,647
26
2022
$’000
5,154
1,546
39
62
GTN Limited
For the year ended 30 June 2023
Tax effect of permanent differences
Unrecognised tax losses
State taxes
Under (over) provision for income tax in prior year
Impact of tax rate changes
Other
Income tax expense
Expense
Current
Deferred
Income tax expense
Other comprehensive income
Current
Deferred
725
699
-
84
(43)
(282)
2,856
2023
$’000
516
2,340
2,856
-
-
-
441
221
2
14
(28)
117
2,352
2022
$’000
1,899
453
2,352
-
-
-
The recognition of deferred tax assets is limited to the extent that the Group anticipates making sufficient
taxable profits in the future to absorb the reversal of the underlying timing differences. The Group has an
unrecognised deferred tax asset of $21,556 thousand (2022: $20,125 thousand) in relation to the tax losses
and deductible temporary differences as management does not anticipate the Group will make sufficient
taxable profits in the foreseeable future to utilise this asset. The unrecognised deferred tax asset is primarily
related to the United States. The net operating losses that have not been recognised do not expire.
10 Auditor’s remuneration
Auditor remuneration details are as follows:
Grant Thornton
Audit and other assurance services
Auditors of the Group:
Audit and review of financial statements
Remuneration from audit and other assurance services
2023
$
2022
$
538,879
538,879
393,183
393,183
Total remuneration of Grant Thornton
538,879
393,183
Network firms of Grant Thornton
Audit and other assurance services
Auditors of the Group:
Audit and review of financial statements
Remuneration from audit and other assurance services
60,477
60,477
124,981
124,981
Total remuneration of network firms of Grant Thornton
60,477
124,981
Total auditor’s remuneration – Grant Thornton
599,356
518,164
11 Cash and cash equivalents
Cash and cash equivalents consist of the following:
63
GTN Limited
For the year ended 30 June 2023
Cash at bank and in hand:
Cash at bank and in hand
Short term deposits
Cash and cash equivalents
12 Trade and other receivables
Trade and other receivables consist of the following:
Trade receivables
Loss allowance
Trade receivables
2023
$’000
22,940
7,666
30,606
2023
$’000
42,256
(1,062)
41,194
2022
$’000
34,844
-
34,844
2022
$’000
38,687
(936)
37,751
All amounts are short-term. The net carrying value of trade receivables is considered a reasonable
approximation of fair value.
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method, less loss allowance. Impairment loss was $89 thousand (2022: $0 thousand) for the
years ended 30 June 2023 and 2022, respectively.
The movement in the loss allowance can be reconciled as follows:
Balance 1 July
Amounts written off (uncollectable)
Translation differences
Impairment loss
Balance 30 June
2023
$’000
(936)
-
(37)
(89)
(1,062)
2022
$’000
(1,005)
87
(18)
-
(936)
At 30 June 2023
Expected loss rate
Current
Not more
than 3
months
past due
More than
3 months
past due
Total
$’000
$’000
$’000
$’000
-%*
-%*
21%
3%
Gross carrying amount – trade
receivables
Loss allowance
32,696
4,562
4,998
42,256
-
-
1,062
1,062
*Less than 1%. The expected loss rate on receivables not more than three months past due is less than one percent
which is materially consistent with historical amounts written off.
64
GTN Limited
For the year ended 30 June 2023
At 30 June 2022
Expected loss rate
Current
Not more
than 3
months
past due
More than
3 months
past due
Total
$’000
$’000
$’000
$’000
-%*
-%*
24%
2%
Gross carrying amount – trade
receivables
Loss allowance
32,432
2,290
3,965
38,687
-
-
936
936
*Less than 1%. The expected loss rate on receivables not more than three months past due is less than one percent
which is materially consistent with historical amounts written off.
13 Other assets
Other assets reflected on the consolidated statement of financial position consist of the following:
Current
Prepaid station affiliate contracts(i)
Deposits on fixed assets
Prepaids and other current assets
Non-Current
Prepaid station affiliate contract(i)
Other assets
2023
$’000
1,657
1,376
1,905
4,938
90,636
227
90,863
2022
$’000
2,109
-
1,605
3,714
92,112
261
92,373
(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.
Intangible assets
14
Detail of the Group’s intangible assets and their carrying amounts are as follows:
Gross carrying amount
Balance at 1 July 2022
Net exchange differences
Balance at 30 June 2023
Goodwill
Trade names
Station
contracts
Advertising
contracts
$’000
$’000
$’000
$’000
95,998
424
96,422
12,573
120
12,693
88,896
844
89,740
65,916
627
66,543
Total
$’000
167,385
1,591
168,976
65
GTN Limited
For the year ended 30 June 2023
Amortisation
Balance at 1 July 2022
Amortisation
Net exchange differences
Balance at 30 June 2023
-
-
-
-
-
-
-
-
Carrying amount 30 June 2023
96,422
12,693
Gross carrying amount
Balance at 1 July 2021
Net exchange differences
Balance at 30 June 2022
Amortisation
Balance at 1 July 2021
Amortisation
Net exchange differences
Balance at 30 June 2022
96,616
(618)
95,998
12,563
10
12,573
-
-
-
-
-
-
-
-
Carrying amount 30 June 2022
95,998
12,573
(68,257)
(65,916)
(134,173)
(6,347)
(713)
(75,317)
14,423
88,814
82
88,896
(61,852)
(6,350)
(55)
(68,257)
20,639
-
(627)
(6,347)
(1,340)
(66,543)
(141,860)
-
27,116
65,858
58
65,916
167,235
150
167,385
(65,858)
(127,710)
-
(58)
(6,350)
(113)
(65,916)
(134,173)
-
33,212
The Group 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 2023 and 30 June 2022 was $6,347
thousand and $6,350 thousand, respectively.
Due to the long term and indefinite nature of goodwill and trade names, amortisation expense is not reflected
and the Group 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.
Goodwill
Australia
Canada
United Kingdom
Goodwill allocation at 30 June
Trade names
Australia
Canada
United Kingdom
Trade names allocation at 30 June
2023
$’000
86,548
2,603
7,271
96,422
$’000
9,564
1,658
1,471
12,693
2022
$’000
86,548
2,586
6,864
95,998
$’000
9,564
1,648
1,361
12,573
Goodwill and trade names allocation at 30 June
109,115
108,571
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.
66
GTN Limited
For the year ended 30 June 2023
Growth rates and discount rates used in calculations:
Australia
Canada
United Kingdom
Australia
Canada
United Kingdom
Discount Rates
2023
Post-Tax
11.8%
12.1%
12.0%
2022
Post-Tax
11.6%
12.1%
11.9%
Average 5-Year Growth Rates Per Annum
Revenue
EBITDA
2023
2022
6%
7%
3%
8%
8%
1%
2023
12%
21%
(2)%
2022
14%
51%
(6)%
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 Group’s approved
internal budget for the coming fiscal year. The long-term growth rate utilised was 1%.
The growth rates assume a continued recovery in the Group’s markets and an eventual recovery to pre-
COVID 19 pandemic revenue levels. Should the growth rates for the projection be measured from 30 June
2019 (the last fiscal year without COVID impact) the nine-year growth rates would be as follows:
Average Growth Rates
Revenue
EBITDA
2023
2%
3%
1%
2023
8%
13%
(7)%
Australia
Canada
United Kingdom
Discount rates
The discount rates reflect appropriate adjustments relating to market risk and specific risk factors of each
unit.
During the year ending 30 June 2020, the Group had an independent assessment of the CGU values. This
valuation was completed prior to the outbreak of COVID. The discount rates for FY 2022 used were
consistent with the rates used in the valuation and were updated to reflect the then current capital structures
of the CGU’s. The discount rates have been updated for FY 2023 to reflect the current capital structures of
the CGU’s as well as changes in the interest rate environment.
Cash flow assumptions
The calculations use cash flow projections based on financial budgets approved by management covering a
five-year period.
67
GTN Limited
For the year ended 30 June 2023
Sensitivity Analysis
Based on management’s assessment there are no reasonably possible scenarios that result in an impairment
charge for the Canadian and United Kingdom CGUs.
For the Australian CGU, management has run various scenarios to assess the impact on the headroom and
possible impairments which may be indicated:
- Scenario 1: decreasing forecast revenues by 5% in each year of the projection would not give rise to an
impairment.
- Scenario 2: decreasing forecast revenues by 10% in each year of the projection results in the carrying
amount of the CGU exceeding the recoverable amount of the CGU by approximately $14 million.
Significant estimate: Impact of possible changes in key assumptions
The COVID-19 pandemic has had an impact on the Group’s revenue that was beyond what could have been
reasonably anticipated. The projections used for impairment testing assume that the Group’s markets
operating performance will return to pre-COVID-19 pandemic levels in the future. Should the impact of the
COVID-19 pandemic or a similar disruption extend beyond management’s estimate or become more
pronounced than the current impact it could render the assumptions of the impairment testing invalid.
Management is not currently aware of any other reasonably possible changes in key assumptions that would
result in impairment.
15 Property, plant and equipment
Details of the Group’s property, plant and equipment and their carrying amount are as follows:
Helicopters,
drones and
fixed wing
aircraft
Recording,
broadcasting
and studio
equipment
Furniture,
equipment and
other
Right of use
assets – real
property
leases
$’000
$’000
$’000
$’000
3,451
294
-
94
3,839
7,372
1,132
(896)
201
7,809
Total
$’000
44,108
6,772
(896)
1,230
51,214
(2,790)
(3,865)
(34,373)
-
(79)
(306)
(3,175)
664
896
(134)
(1,586)
(4,689)
3,120
896
(1,101)
(5,982)
(40,560)
10,654
Gross carrying amount
Balance 1 July 2022
Additions during period
Disposals
Net exchange differences
Balance 30 June 2023
Depreciation and impairment
Balance 1 July 2022
Disposals
Net exchange differences
Depreciation
Balance 30 June 2023
Carrying amount 30 June 2023
32,272
5,325
-
908
38,505
(26,775)
-
(865)
(4,045)
(31,685)
6,820
1,013
21
-
27
1,061
(943)
-
(23)
(45)
(1,011)
50
68
GTN Limited
For the year ended 30 June 2023
Helicopters,
drones and
fixed wing
aircraft
Recording,
broadcasting
and studio
equipment
Furniture,
equipment and
other
Right of use
assets – real
property
leases
$’000
$’000
$’000
$’000
Gross carrying amount
Balance 1 July 2021
Additions during period
Disposals
Net exchange differences
Balance 30 June 2022
Depreciation and impairment
Balance 1 July 2021
Disposals
Net exchange differences
Depreciation
Balance 30 June 2022
Carrying amount 30 June 2022
27,521
3,764
-
987
32,272
(23,533)
-
(827)
(2,415)
(26,775)
5,497
987
11
-
15
1,013
(873)
-
(15)
(55)
(943)
70
3,063
350
-
38
3,451
(2,419)
-
(36)
(335)
(2,790)
661
6,602
2,052
(1,367)
85
7,372
(3,627)
1,244
(20)
(1,462)
(3,865)
3,507
Total
$’000
38,173
6,177
(1,367)
1,125
44,108
(30,452)
1,244
(898)
(4,267)
(34,373)
9,735
16 Current and deferred tax assets and liabilities
Current taxes can be summarised as follows:
Current tax assets
Current tax liabilities
Net current tax assets/(liabilities)
2023
$’000
4,385
(63)
4,322
2022
$’000
4,086
(91)
3,995
Deferred taxes arising from temporary differences can be summarised as follows:
Deferred Tax Assets
1 July 2022
Recognised in
Profit
and Loss
30 June 2023
$’000
$’000
$’000
Annual leave accrual
Long service leave provision
Audit accrual
Superannuation accrued
Allowance for doubtful debts
Leases
Fringe benefit tax
Deferred transaction costs
Fixed asset depreciation
Net tax losses
393
368
108
15
205
38
37
35
2,062
4,059
7,320
47
76
80
1
1
(12)
(12)
(10)
(410)
(1,465)
(1,704)
Set-off of deferred tax liabilities
pursuant to set-off provisions
Net deferred tax assets
(1,819)
5,501
440
444
188
16
206
26
25
25
1,652
2,594
5,616
(810)
4,806
69
GTN Limited
For the year ended 30 June 2023
Deferred Tax Liabilities
1 July 2022
Recognised
in Profit
and Loss
30 June 2023
$’000
$’000
$’000
Intangibles
Prepaid expenses
Set-off of deferred tax assets
pursuant to set-off provisions
Net deferred tax liabilities
9,600
14,625
24,225
(1,819)
22,406
(1,748)
2,384
636
7,852
17,009
24,861
(810)
24,051
Deferred tax assets consist of:
Current
Non-current
Deferred tax liabilities consist of:
Current
Non-current
2023
$’000
2022
$’000
1,293
4,323
5,616
-
24,861
24,861
692
6,628
7,320
-
24,225
24,225
Recognised deferred tax assets relate primarily to the Group’s CTN subsidiary. Based on FY 2023 utilisation,
the NOL related to CTN would be fully utilised over the next two years and the remaining deferred tax assets
thereafter.
The Group had a franking balance of $867 thousand and $117 thousand at 30 June 2023 and 2022,
respectively.
17 Trade and other payables
Trade and other payables recognised consist of the following:
Current
Trade payables
Accrued payroll expenses
Accrued taxes not based on income
Accrued expenses and other liabilities
Non-current
Other
2023
$’000
20,842
5,733
1,505
11,164
39,244
2022
$’000
19,087
5,047
1,243
9,771
35,148
78
78
75
75
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.
70
GTN Limited
For the year ended 30 June 2023
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 Group) is
included as a component of trade and other payables on the consolidated statement of financial position.
18 Provisions
Current
Long service leave provision
Non-Current
Long service leave provision
Lease restoration
2023
$’000
1,312
1,312
169
149
318
1,630
2022
$’000
1,090
1,090
137
193
330
1,420
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 Group does not have the
unconditional right to defer settlement. However, based on past experience the Group does not expect all
employees to take the full amount of their long service leave or require payment within the next 12 months.
The Group 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 2023 and 30 June 2022, the Group had a liability of $149
thousand and $193 thousand, respectively, accrued which it anticipates to be the amount required to restore
the premises at the end of the leases.
19 Contract liabilities
Contract liabilities
Balance 1 July
Additions during period
Earned during period
Net exchange differences
Balance 30 June
2023
$’000
1,415
1,415
2023
$’000
987
1,137
(773)
64
1,415
2022
$’000
987
987
2022
$’000
1,000
785
(807)
9
987
Payments received or amounts invoiced in advance are deferred until earned and such amounts are included
as a component of contract liabilities.
71
GTN Limited
For the year ended 30 June 2023
20
Financial liabilities
Current
Current portion of long-term debt
Current portion of leases
Non-current
Long-term debt, less current portion
Leases, less current portion
2023
$’000
-
1,215
1,215
23,936
1,976
25,912
2022
$’000
-
1,376
1,376
29,901
2,241
32,142
On 22 December 2022, the Group extended its current debt facility to 22 December 2025. Previously, the
debt facility was scheduled to mature on 30 September 2023. Other than the repayment date, there were no
material modifications to the previous debt facility.
There are no scheduled principal payments prior to the due date. Facility C consisted of a $30 million
revolving line of credit. A commitment fee of 45% of the applicable margin (currently 2.50%) is incurred on
any unutilised portion of Facility C. During FY 2023, the Group repaid $6 million of Facility C and reduced
its commitment by a like amount. The total amount of Facility C is $24 million which is 100% drawn down
and there is no existing borrowing capacity under the facility. The outstanding loan bears interest at BBSY
plus the applicable margin (6.6668% (including the applicable margin) at 30 June 2023).
Maturities of financial liabilities are included in Note 4 (c)(ii) (Financial risk management/Liquidity risk/Maturities
of financial liabilities). Cash outflows related to financial liabilities are included in Note 25(b) (Cash flow
information/Net debt reconciliation).
Distributions (including dividends and share buybacks) are restricted under the bank loan agreement to 100%
of net profit after tax adjusted (“NPATA”). NPATA is defined as net profit after tax adding back the tax
adjusted amortisation expense related to finite lived intangibles arising from acquisition accounting.
Assets pledged as security
Bank loan facilities are secured by a first ranking charge over all GTN Limited, ATN, Aus Hold Co, UK
Hold Co, UKTN, UK Commercial, LuxCo 1, LuxCo 2, LuxCo 3, US Hold Co, GTN, US Management Co,
CTN, GSN and GDN assets.
21 Earnings per share
Profit attributable to shareholders (basic and diluted):
Profit for the year
Weighted average number of ordinary shares used in calculating basic
earnings per share
Common stock equivalents arising from stock options outstanding
Weighted average number of ordinary shares and potential ordinary
shares used in calculating diluted earnings per share
2023
$’000
2022
$’000
2,635
2,802
211,926
431
212,357
215,279
312
215,591
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
$0.01
$0.01
$0.01
$0.01
72
GTN Limited
For the year ended 30 June 2023
At 30 June 2023 and 2022, the Company had common stock equivalents of 9,601,622 and 9,453,289,
respectively, outstanding in the form of stock options. For the years ended 30 June 2023 and 2022, 430,565
and 311,678, respectively, of these options were included in the calculation of diluted shares. The remaining
of these common stock equivalents are excluded from the calculation of diluted earnings per share since they
are anti-dilutive due to either the exercise price of the options exceeding the Company’s average share price
for the years ending 30 June 2023 and 2022, respectively and/or the fair value of the compensation for future
services per option to be provided plus the option exercise price exceeding the Company’s average share
price for the years ending 30 June 2023 and 2022, respectively.
22 Share capital
2023
2023
2022
2022
‘000’s
Ordinary shares
$’000
Issued capital
‘000’s
Ordinary shares
$’000
Issued capital
At beginning of reporting period
Share repurchased and retired
At the end of the reporting period
215,279
(11,132)
204,147
437,508
(5,380)
432,128
215,279
-
215,279
437,508
-
437,508
The Company’s ordinary shares have no par value, are all fully paid, have equal rights to dividends and other
distributions and represent one vote per share at shareholder meetings. There are currently no authorised but
unissued shares of the Company.
23 Equity based compensation
As of 30 June 2023 and 2022 there were 9,601,622 and 9,453,289 stock option grants to purchase shares of
GTN Limited 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 Group
does not anticipate incurring cash costs under the Plan (other than de minimus employer payroll tax expense)
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 equity based compensation 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.
FY 2023 Option Grants
The Company employs a service time-based vesting criterion. Under this plan, options vest if the grantee is
employed by the Group at the vesting date without further performance hurdles. The fair value of these
options was estimated at the date of the grant using the Black-Scholes option pricing model with the
following assumptions:
Grant date
Expiration date
Options granted
Share price at grant date
17 November 2022
17 November 2027
1,915,000
$0.405
27 February 2023
27 February 2028
900,000
$0.59
73
GTN Limited
For the year ended 30 June 2023
Fair value at grant date
Exercise price
Expected volatility (based on historic and
expected volatility of Company’s shares)
Expected life
Expected dividend yield
Risk-free interest rate (based on government
bonds)
$0.168
$0.405
64.12
%
3.83 years
3.21
%
3.31 %
$0.260
$0.59
64.52
%
3.83 years
2.47
%
3.67 %
The Company’s outstanding stock options as of 30 June 2023 and 2022 were as follows:
Balance, 1 July 2022
Exercisable, 1 July 2022
Grants
Exercised
Forfeitures
Expirations
Balance, 30 June 2023
Exercisable, 30 June 2023
Balance, 1 July 2021
Exercisable, 1 July 2021
Grants
Exercised
Expirations
Balance, 30 June 2022
Exercisable, 30 June 2022
Weighted
Average
Exercise
Price
Options
9,453,289 $ 0.71
2,033,794 $ 1.37
2,815,000 $ 0.46
-
$
$
-
-
$
9,601,622 $ 0.71
5,251,620 $ 0.92
-
(2,666,667)
-
Weighted
Average
Remaining
Contractual
Term
3.19 years
1.93 years
4.47 years
-
-
-
2.49 years
1.45 years
Weighted
Average
Exercise
Price
Options
7,398,819 $ 0.84
559,358 $ 2.42
2,315,000 $ 0.52
-
$
-
(260,530)
-
$
9,453,289 $ 0.71
2,033,794 $ 1.37
Weighted
Average
Remaining
Contractual
Term
3.69 years
1.49 years
4.36 years
-
-
3.19 years
1.93 years
The expense with regards to stock options for the years ended 30 June 2023 and 2022 is $360 thousand and
$763 thousand, respectively and is included in equity based compensation expenses. The Group recognised
$0 of income tax benefit related to share-based compensation for the years ended 30 June 2023 and 2022.
24 Operating agreements
The Group’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:
Within 1 year
1 to 5 years
After 5 years
Total
Minimum Payments Due
74
GTN Limited
For the year ended 30 June 2023
30 June 2023
30 June 2022
$’000
3,484
3,270
$’000
860
3,976
$’000
-
-
$’000
4,344
7,246
The Group 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 most cases, cash
compensation or reimbursement of expenses. Station compensation 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:
30 June 2023
30 June 2022
Within 1 year
1 to 5 years
After 5 years
Minimum Payments Due
$’000
54,760
42,369
$’000
42,620
48,341
$’000
23,335
25,778
Total
$’000
120,715
116,488
The Group had no contingent liabilities at 30 June 2023.
25 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 for the period
Adjustments for:
Allowance for doubtful accounts
Equity based compensation expenses
Amortisation of deferred borrowing costs
Depreciation and amortisation
Foreign currency loss
Non-cash station compensation from long-term prepaid affiliate contract
Interest income on long-term prepaid affiliate contract
Write-off of leases
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 contract liabilities
Change in current tax liabilities
Change in provisions
Change in deferred tax liabilities
Net cash from operating activities
2023
$’000
2022
$’000
2,635
2,802
126
360
87
12,329
32
13,142
(7,946)
-
(3,569)
286
396
(1,107)
428
(28)
210
1,645
19,026
(50)
763
76
10,617
19
13,142
(8,052)
(118)
(6,698)
351
164
(2,568)
(13)
(58)
30
1,097
11,504
75
GTN Limited
For the year ended 30 June 2023
(b) Net debt reconciliation
Cash and cash equivalents
Borrowings
Net cash
Borrowings consist of:
Financial liabilities
Deferred loan costs and original issue discount
Leases
2023
$’000
30,606
(27,191)
3,415
(23,936)
(64)
(3,191)
(27,191)
2022
$’000
34,844
(33,617)
1,227
(29,901)
(99)
(3,617)
(33,617)
Cash and cash
equivalent
Borrowings
$’000
$’000
Leases
$’000
Net (debt)/cash
$’000
Net (debt)/cash as at 30 June 2021
Cash flows
Borrowings
Repayments
Write-offs
49,376
(14,140)
-
-
-
Net exchange differences
(392)
(50,000)
-
-
20,000
-
-
Net (debt)/cash as at 30 June 2022
34,844
(30,000)
Cash flows
Borrowings
Repayments
Net exchange differences
Net (debt)/cash as at 30 June 2023
(5,456)
-
-
1,218
30,606
-
-
6,000
-
(24,000)
(3,150)
-
(2,052)
1,519
118
(52)
(3,617)
-
(1,132)
1,626
(68)
(3,191)
26 Transactions with Key Management Personnel
Key Management Personnel remuneration includes the following expenses:
2023
Total short-term employee benefits
Total equity based compensation
$
5,672,761
291,799
(3,774)
(14,140)
(2,052)
21,519
118
(444)
1,227
(5,456)
(1,132)
7,626
1,150
3,415
2022
$
3,382,032
738,859
Total remuneration
The majority Key Management Personnel compensation is paid in USD so a portion of the change in
compensation from the year ended 30 June 2022 to the year ended 30 June 2023 was due to changes in
foreign exchange rates between AUD and USD.
5,964,560
4,120,891
Whooshkaa Podcasting Platform, a company controlled by Robert Loewenthal (a Company director) up until
the sale of the company in December 2021, provided podcasting hosting services to the Group at no charge.
The fair-market value of the service provided was de minimus and the Group no longer provides podcasts.
76
GTN Limited
For the year ended 30 June 2023
Spotify, a company which Robert Loewenthal serves as Business Development Director, sells advertising
time on its platform in Canada to the Group. The amount purchased for the past two fiscal years was as
follows:
●FY 2023
●FY 2022
$162 thousand
$nil
Australian Broadcasting Corporation, a company of which Peter Tonagh (a Company director) is deputy chair
of the board of directors, has purchased traffic reporting services from the Group’s Australian subsidiary.
The amount purchased for the past two fiscal years was as follows:
●FY 2023
●FY 2022
$57 thousand
$57 thousand
National Rugby League, a company of which Alexandra Baker (a Company director) is employed as Chief
Digital and Customer Officer, has purchased advertising from the Group’s Australian subsidiary. The
amount purchased for the past two fiscal years was as follows:
●FY 2023
●FY 2022
$ 10 thousand
$ 23 thousand
The daughter of William Yde (former chief executive officer and managing director) is employed by the
Group with accounting and management duties. Her cash salary (translated from USD to AUD at the same
exchange rates as the Group’s financial statements) was:
●FY 2023
●FY 2022
$202 thousand
$186 thousand
In February 2020, in anticipation of spending additional time in the Australia market, the Group rented an
apartment for Mr. Yde’s use. During FY 2023 and FY 2022 the Group incurred expenses of $127 thousand
and $163 thousand, respectively related to the apartment. The costs related to the apartment have not been
included in Mr. Yde’s remuneration disclosures since these costs were expected to replace reimbursable hotel
lodgings expense. Effective 26 July 2023, Mr. Yde assumed the lease on the apartment and the Group’s
obligations ceased. As part of the agreement to transfer the lease, Mr. Yde paid the Group $17 thousand
USD for the apartment’s furnishings.
In February 2021, the Group purchased a vehicle that was made available for Mr. Yde’s use while in
Australia. The purchase price of the vehicle was $111 thousand. During FY 2023 and FY 2022, the Group
recognised $16 thousand and $16 thousand of depreciation expense and $23 thousand and $23 thousand of
fringe benefits tax related to the vehicle. The costs related to the vehicle have not been included in Mr. Yde’s
remuneration disclosures since the Group retained ownership of the vehicle and the vehicle was intended to
replace rental car fees that would otherwise have been incurred. In July 2023, Mr. Yde purchased the car from
the Group for $60 thousand USD.
In addition to the car and apartment furnishings, in July 2023 the Group sold certain computer equipment
that had been used by Mr. Yde to him for $3 thousand USD.
27 Parent Entity information
The below information relates to GTN Limited (the “Parent Entity”) which was incorporated on 2 July 2015.
77
GTN Limited
For the year ended 30 June 2023
Statement of financial position
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Share capital
Accumulated losses
Accumulated profit – Dividend Profit Reserve
Total equity
Statement of profit or loss and other comprehensive income
Profit (loss) for the year
Other comprehensive income (loss)
Total comprehensive income (loss)
2023
$’000
4,602
354,722
1,733
1,760
352,962
432,128
(86,909)
7,743
352,962
12,957
-
12,957
2022
$’000
151
351,623
419
453
351,170
437,508
(86,909)
571
351,170
(2,422)
-
(2,422)
Guarantees entered into by the parent entity
In addition, there are cross guarantees given by GTN Limited (as holding entity), GTN Holdings Pty Limited
(“LuxCo 1”), 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”) as
described in Note 28 (Deed of cross guarantee).
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.
Contingent liabilities and capital commitments of the parent entity
The parent entity did not have any contingent liabilities or capital commitments as at 30 June 2023 or 30 June
2022. For information about guarantees given by the parent entity, please see above.
28 Deed of cross guarantee
GTN Limited (as holding entity), GTN Holdings Pty Limited (“LuxCo 1”), 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’.
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 2023 and 2022 of the closed group consisting of the above companies.
78
GTN Limited
For the year ended 30 June 2023
Consolidated statement of profit or loss and other
comprehensive income
Revenue
Other income
Interest income on long-term prepaid affiliate contract
Network operations and station compensation expenses
Selling, general and administrative expenses
Equity based compensation expenses
Finance costs
Depreciation and amortisation
Foreign currency transaction loss
Profit before income tax
Income tax expense
Profit for the year
Other comprehensive income for the year, net of income tax
Total other comprehensive income for the year
Total comprehensive profit for the year
Summary of movement in consolidated retained earnings
Accumulated losses at the beginning of the financial year
Profit for the period
Dividends
Accumulated losses at the end of the financial year
2023
$’000
88,556
61
7,946
(58,379)
(24,668)
(360)
(1,682)
(7,938)
(3)
3,533
(1,777)
1,756
-
-
1,756
(121,013)
1,756
1,429
(117,828)
2022
$’000
78,097
-
8,052
(52,795)
(18,988)
(763)
(1,286)
(6,186)
(20)
6,111
(2,239)
3,872
-
-
3,872
(124,885)
3,872
-
(121,013)
Set out below is a consolidated statement of financial position as at 30 June 2023 and 2022 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 assets
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
Contract liabilities
Financial liabilities
Provisions
Current liabilities
Non-current
Financial liabilities
Deferred tax liabilities
Provisions
Total non-current liabilities
2023
$’000
8,306
17,514
4,385
2,117
32,322
6,651
19,805
86,548
77,692
104,744
295,440
327,762
23,777
755
426
1,312
26,270
24,650
23,253
318
48,221
2022
$’000
7,581
16,953
4,086
2,406
31,026
3,658
24,839
86,549
75,014
103,452
293,512
324,538
21,257
588
597
1,090
23,532
30,282
21,530
287
52,099
79
GTN Limited
For the year ended 30 June 2023
Total liabilities
Net assets
Equity
Share capital
Reserves
Accumulated losses
Total equity
74,491
253,271
75,631
248,907
432,128
(61,029)
(117,828)
253,271
437,508
(67,588)
(121,013)
248,907
29 Segment information
The Group’s chief operating decision maker, its chief executive officer, analyses the Group’s performance by
geographic area and has identified four reportable segments: Australia, Brazil, Canada and United Kingdom.
The Group’s drone light show operations are included in the Australia segment.
The segments’ revenues are as follows:
Australia
United Kingdom
Canada
Brazil
2023
$’000
2022
$’000
88,556
42,353
34,201
11,892
78,097
46,014
26,813
9,159
177,002
160,083
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, gains on lease forgiveness, losses on refinancing and other unusual non-
recurring items.
Adjusted EBITDA by Segments
Australia
United Kingdom
Canada
Brazil
Other
Adjusted EBITDA
Foreign exchange loss
Gain on lease forgiveness
Less: Interest income on long-term prepaid
affiliate contract
EBITDA
2023
$’000
2022
$’000
17,729
2,265
5,596
(27)
(6,249)
19,314
(32)
-
(7,946)
11,336
16,901
3,653
1,186
(274)
(4,377)
17,089
(19)
41
(8,052)
9,059
Depreciation and amortisation
Interest income on long-term prepaid affiliate
contract
Financing costs net of interest income
Profit before taxes
(12,329)
(10,617)
7,946
(1,462)
5,491
8,052
(1,340)
5,154
80
GTN Limited
For the year ended 30 June 2023
Segment assets and liabilities are classified by their physical location.
Segment assets
Total Assets:
Australia
United Kingdom
Canada
Brazil
2023
$’000
2022
$’000
230,441
234,396
33,449
31,263
5,047
42,042
27,842
3,223
Total segment assets
300,200
307,503
Unallocated:
Deferred tax assets
Others
Total assets
Segment liabilities
Total liabilities
Australia
United Kingdom
Canada
Brazil
Total segment liabilities
Unallocated:
Deferred tax liabilities
Borrowings
Intercompany eliminations
Others
Total liabilities
4,806
5,978
5,501
4,210
310,984
317,214
79,625
6,438
5,275
3,568
94,906
24,051
27,127
(68,055)
15,579
93,608
79,124
7,126
4,465
2,299
93,014
22,406
33,518
(66,436)
11,143
93,645
The Group’s non-current assets are allocated to the following segments:
Non-current segment assets
Australia
United Kingdom
Canada
Brazil
2023
$’000
2022
$’000
203,862
207,317
11,347
8,999
847
11,484
11,545
972
Total segment non-current assets
225,055
231,318
Unallocated:
Deferred tax assets
Total non-current assets
4,806
229,861
5,501
236,819
30 Capital commitments
At 30 June 2023, the Group had $1,376 of deposits related to the rebuilding of its helicopters. These rebuilds
will be completed during FY 2024.
81
GTN Limited
For the year ended 30 June 2023
31 Events subsequent to the reporting period
Subsequent to the end of the financial year, on 29 August 2023, the Company announced that it has
recommenced its on-market share buy-back of up to 10% of its outstanding shares for a period of up to
twelve months. No target share price or minimum repurchase amount has been set.
On 14 July 2023, ATN, a wholly owned indirect subsidiary of the Company, was conducting a drone light
show in the Docklands Harbour area near the Melbourne CBD. An incident occurred, which resulted in
approximately 400 of the 500 drones for the show landing in the water in Docklands Harbour. There were
no injuries and all the drones landed in the designated safe zone. The estimated net loss to ATN is
approximately $1 million as the individual drones did not carry in-flight hull insurance due to their low
individual costs. However, ATN does carry liability insurance for its drone performances. The drone
business revenues are not material to GTN’s consolidated operations with revenues of approximately $1
million in FY23.
No other 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.
82
GTN Limited
For the year ended 30 June 2023
Directors’ declaration
In the directors’ opinion:
(a)
The financial statements, set out on pages 38 to 82 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 2023 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 28 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 28.
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.
Peter Tonagh
Chair
Dated, this 29th day of August 2023
83
Grant Thornton Audit Pty Ltd
Level 17
383 Kent Street
Sydney NSW 2000
Locked Bag Q800
Queen Victoria Building NSW
1230
T +61 2 8297 2400
Independent Auditor’s Report
To the Members of GTN Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of GTN Limited (the Company) and its subsidiaries (the Group), which
comprises the consolidated statement of financial position as at 30 June 2023, the consolidated statement of
profit or loss and other comprehensive income, consolidated statement of changes in equity and
consolidated statement of cash flows for the year then ended, and notes to the consolidated financial
statements, including a summary of significant accounting policies, and the Directors’ declaration.
In our opinion, the accompanying financial report of 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 2023 and of its performance
for the year ended on that date; and
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
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 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 (including Independence
Standards) (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.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
www.grantthornton.com.au
ACN-130 913 594
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389.
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or
refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL).
GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member
firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one
another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127
556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
Legislation.
84
w
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 of the current period. These 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.
Key audit matter
How our audit addressed the key audit matter
Recoverable amount of goodwill and intangible assets
Refer to Notes 2.9, 2.10, 2.13, 2.26 and 14
As at 30 June 2023, the Group’s goodwill and other intangible
assets total $123.5 million.
AASB 136 Impairment of Assets requires that goodwill
acquired in a business combination be allocated to each of
the Group’s cash-generating units (CGUs) for impairment
testing purposes. Each CGU to which goodwill is allocated
must be tested for impairment annually.
Our procedures included, amongst others:
• Enquiring with management to obtain and document an
understanding of the processes and controls related to the
assessment of impairment, including identification of CGUs
and the calculation of the recoverable amount for each
CGU;
• Obtaining management’s value-in-use calculations to:
Management has assessed that the group has three CGUs to
which goodwill and other intangible assets must be allocated.
Management has tested the CGUs for impairment by
comparing their carrying amounts with their recoverable
amounts. The recoverable amounts were determined using
value-in-use models.
We have determined this is a key audit matter due to the
judgements and estimates required in determining the
appropriate CGUs and calculating the recoverable amount.
-
-
-
-
Test the mathematical accuracy;
Evaluate management’s ability to perform accurate
estimates by comparing historical forecasting to actual
results;
Test forecast cash inflows and outflows to be derived
by the CGUs’ assets; and
Assess the discount rates applied to forecast future
cash flows;
• Evaluating the value-in-use models against the
requirements of AASB 136, including consultation with our
valuations experts;
• Performing sensitivity analysis on the significant inputs and
assumptions made by management in preparing the
calculations, including those specifically related to the
recovery from the impact of COVID-19; and
• Assessing the adequacy of financial report and accounting
policy disclosures.
Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the information included
in the Group’s annual report for the year ended 30 June 2023, 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 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 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.
85
Grant Thornton Audit Pty Ltd
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 Group’s ability 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 this 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_2020.pdf This
description forms part of our auditor’s report.
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in pages 23 to 35 of the Directors’ report for the year
ended 30 June 2023.
In our opinion, the Remuneration Report of GTN Limited, for the year ended 30 June 2023 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.
Grant Thornton Audit Pty Ltd
Chartered Accountants
S M Coulton
Partner – Audit & Assurance
Sydney, 29 August 2023
86
Grant Thornton Audit Pty Ltd
SHAREHOLDER INFORMATION AS AT 1 AUGUST 2023
Number of security holders and securities on issue
Quoted equity securities
GTN has 204,146,982 fully paid ordinary shares on issue which are held by 535 shareholders.
Unquoted equity securities
GTN has 9,601,622 unquoted options on issue held by 8 option holders as follows:
•
298,828 options exercisable at $2.15 after 9 November 2020;
•
597,718 options exercisable at $2.15 after 9 November 2021;
• 1,137,248 options exercisable at $0.76 after 15 November 2021,
• 2,274,495 options exercisable at $0.76 after 15 November 2022,
•
333,333 options exercisable at $0.42 after 13 November 2022,
•
609,998 options exercisable at $0.32 after 25 June 2023,
• 1,220,002 options exercisable at $0.32 after 25 June 2024,
•
•
•
•
•
•
438,332 options exercisable at $0.52 after 12 November 2023,
876,668 options exercisable at $0.52 after 12 November 2024,
304,999 options exercisable at $0.405 after 17 November 2024,
610,001 options exercisable at $0.405 after 17 November 2025,
299,999 options exercisable at $0.59 after 27 February 2025, and
600,001 options exercisable at $0.59 after 27 February 2026.
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.
Unquoted equity securities
There are no voting rights attached to options. Options will rank equally with the company’s fully
paid ordinary shares if and when the options vest and are thereafter exercised (prior to the
applicable expiry date).
Distribution of security holders
Quoted equity securities
Fully paid ordinary shares
Holding
No. of shares
% of shares
1 – 1,000
35,405
0.02
No. of
shareholders
113
% of shareholders
21.12
87
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
444,294
521,950
4,268,803
198,876,530
204,146,982
0.22
0.26
2.09
97.42
100.00
197
63
128
34
535
36.82
11.78
23.93
6.36
100.00
Unquoted equity securities
Options
Holding
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
No. of options % of Options No. of holders
0
0
0
1
7
8
0
0
0
100,000
9,501,622
9,601,622
0
0
0
1.04
98.96
100.00
% of holders
0
0
0
12.50
87.50
100.00
Unmarketable parcel of shares
The number of shareholders holding less than a marketable parcel of fully paid ordinary shares
is 165.
1,176 fully paid ordinary shares comprise a marketable parcel at GTN’s closing share price of
$0.4250 as at 1 August 2023.
Substantial shareholders (as notified to ASX)
The number of securities held by substantial shareholders and their associates (as notified to
ASX) are set out below:
Fully paid ordinary shares
Name
Number
of Shares
66,127,448
Viburnum Funds Pty Limited and subsidiaries and funds
28,927,825
Spheria Asset Management Pty Ltd
Perennial Value Management Limited
24,278,591
Superannuation and Investments HoldCo Pty Limited *** 23,604,669
23,604,669
CBA and related bodies corporate
23,634,833
First Sentier Investors Holdings**
13,702,318
Smallco Investment Manager Limited
Microequities Asset Management Pty Limited
10,845,661
*As reported by the substantial shareholder at the time of lodgement
**Same as Mitsubishi UFJ Financial Group, Inc. lodged on 28 March 2023
Current
Interest*
Notice Date
31.97%
13.84%
11.61%
11.55%
11.41%
11.31%
6.10%
5.06%
24/04/2023
06/04/2023
28/03/2023
28/06/2023
26/04/2023
28/03/2023
29/06/2018
25/10/2022
88
***Same as Comet Asia Holdings II Pte Ltd, Comet Asia Holdings I Pte Ltd, KKR Asia III Fund Investments Pte
Ltd and KKR Asian Fund III L.P lodged on 30 June 2023
Twenty largest shareholders
Fully paid ordinary shares
Details of the 20 largest shareholders of quoted securities by registered shareholding are:
Rank Name
1 Aug 2023
%IC
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
17
17
18
19
20
J P MORGAN NOMINEES AUSTRALIA
PTY LIMITED
HSBC CUSTODY NOMINEES
(AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMS PTY LTD
HSBC CUSTODY NOMINEES
(AUSTRALIA) LIMITED
MR WILLIAM L YDE III
VIBURNUM FUNDS PTY LTD
COWOSO CAPITAL PTY LTD
MR CRAIG GRAEME CHAPMAN
INVIA CUSTODIAN PTY LIMITED
MR CRAIG COLEMAN & MRS PHYLLIS
COLEMAN
MRS NELLY MICHELLE CUNNINGHAM
COFLINK PTY LIMITED
MRS EVA XIRADIS
HEAVENLY STAR PTY LTD
WILLRYAN PTY LIMITED
VIVRE INVESTMENTS PTY LTD
TRUTEC PTY LTD
COMCERC INVESTMENTS PTY LTD
MR PAUL XIRADIS & MRS EVA
XIRADIS
FARR PTY LTD
Total
Balance of register
Grand total
89
68,282,356
33.45
56,640,086
27.74
36,774,729
15,739,126
6,257,594
18.01
7.71
3.07
2,911,976
2,803,408
2,500,000
1.43
1.37
1.22
1,007,707
0.49
1,000,000
0.49
567,287
0.28
500,000
470,671
315,000
300,000
292,800
200,000
200,000
200,000
188,895
0.24
0.23
0.15
0.15
0.14
0.10
0.10
0.10
0.09
163,258
0.08
149,679
197,464,572
6,682,410
0.07
96.73
3.27
204,146,982 100.00
On-market buy-back
On 29 August 2023, the Company announced that it has recommenced its on-market share
buyback of up to 10% of its outstanding shares for a period of up to twelve months.
Calendar of key dates
14 September 2023
Closing date for receipt of Director nominations
16 November 2023
2023 Annual General Meeting
90
Corporate Directory
Directors
Peter Tonagh – Independent Non-Executive Chair
Robert Loewenthal – Independent Non-Executive Director
David Ryan AO – Independent Non-Executive Director
Corinna Keller – Independent Non-Executive Director
Alexandra Baker – Non-Independent Non-Executive Director
Company secretaries
Anna Sandham
Patrick Quinlan
Registered office
Share register
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
Auditor
Grant Thornton
Level 17 383 Kent Street
Sydney, NSW 2000
Stock exchange listing
GTN Limited shares are listed on the Australian Securities
Exchange (ASX code: GTN)
Website
www.gtnetwork.com.au
ABN
38 606 841 801
91