HANSEN TECHNOLOGIES LIMITED
ABN 90 090 996 455
Annual Report
2005
T A K I N G T E C H N O L O G Y F U R T H E R
Annual Report
2005
Chairman’s Report
Managing Director’s Report
Board of Directors
Directors’ Report
Financial Statements and Notes
– Statements of financial performance
– Statements of financial position
– Statements of cash flows
– Notes to the financial statements
Directors’ Declaration
Independent Audit Report
Corporate Governance
ASX Additional Information
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Notice of Annual General Meeting
The Annual General Meeting of the Company is to be held:
ON Thursday 10 November 2005 at 11.00am
AT 2 Frederick Street, Doncaster, Victoria 3108
A separate Notice of Meeting and Proxy Form are included
with this report.
Company Profile
Hansen Technologies is a leading provider of billing
systems and IT outsourcing services, with customers
around the world. Hansen’s HUB billing software is used by
companies in the telecommunications, electricity, gas and
water industries and is particularly relevant to the needs of
energy companies in markets that are being deregulated.
Hansen also provides facilities management and
outsourcing services from its purpose-built data centres
in Melbourne and Sydney, as well as infrastructure and
asset management systems and superannuation
administration software.
The company prides itself on long-term relationships
with its customers, many of whom have renewed their
contracts several times.
We have an experienced management team, supported
by dedicated and highly capable business and technical
experts who have extensive knowledge of the
telecommunications and energy industries. Our IT
professionals are skilled in the development and delivery
of software systems and management of large-scale,
multi-tiered projects.
Founded in 1971, Hansen has offices in Australia, the
United Kingdom and the United States and employs
more than 300 people.
Kenneth Hansen
Chairman
Chairman’s Report
Hansen Technologies made considerable progress in
2004/5 with establishing the company as an international
provider of billing services for utility companies, while
maintaining our position in the IT outsourcing market.
Our financial performance in the first half was
encouraging, but second half margins were affected by
the investment necessary to adapt and enhance our
HUB billing software to meet the needs of key
customers. This limited Hansen's earnings before
interest, tax, depreciation and amortisation to $5.3 million
for the year, compared with $5.9 million in 2003/4.
During the year we announced our intention to focus our
energy division's activities on the Australian, European and
Japanese markets, where energy sector deregulation is
presenting significant opportunities. This decision resulted in
a reassessment of the carrying value of our USA businesses
and in accordance with the relevant accounting standards
a $3.6 million write-down was booked, contributing
substantially to the after-tax loss of $3.4 million for the
Group, compared with a profit for the previous year of
$0.6 million. An interim dividend of 1.0 cent per share
was paid in March, but there was no final dividend.
While the full year's financial results were disappointing,
there were a number of positive developments which
should position Hansen for growth and improved
earnings in coming years.
We maintained our strong position in the deregulating
Australian market, with the completion of the HUB
implementation for Alinta Western Australia Gas and the
more recent delivery of phase one of a new project for
Western Power Electricity. Our first Japanese contract
was completed in February and has already led to a
second contract in Japan. Our largest contract to date,
to install a customer information system for a Scottish
energy company, is well under way and due to be
completed later this year.
Each of these major HUB implementations will provide
an earnings stream in the future. They have also
broadened our expertise, extended HUB's applications
and given us additional products that can be adapted
for new customers. Importantly, we now have major
reference sites in our target markets, which we expect to
open up new opportunities.
01
To provide working capital for additional major projects,
we announced in September 2005 a 2 for 5 Rights Issue
to raise up to $9.3 million. Othonna Pty Ltd, a company
associated with my son Andrew Hansen and myself,
which controls approximately 56 per cent of Hansen’s
shares, intends to take up its full entitlement which will
ensure that the issue raises at least $5.2 million.
As approved by shareholders at the 2004 annual general
meeting, the company has rectified an accounting
anomaly, reducing issued capital by $54.3 million, with a
similar amount offset against accumulated losses. This
accounting adjustment had no impact on Hansen's cash
position or net worth.
Following his appointment as High Commissioner in
London, the Honourable Richard Alston retired from our
board on 31 December 2004. I thank him for his interest
and contribution while a non-executive director of the
company. We intend to appoint an additional non-
executive director in the near future.
The past six months have been challenging for our
company, and our results for the first half of the current
year will continue to reflect the investment required to
complete the new strategic HUB contracts. These
projects will, however, contribute to earnings in 2006
and, together with other opportunities we are pursuing
and the stable earnings from our IT outsourcing and
facilities management business, are expected to result in
solid performance for the second half.
In summary, our expansion into international markets
and the consequent product investment have caused a
short-term setback. The board, however, remains
confident in the direction of our company.
I would like to thank our team for their considerable
efforts over the past year and to our shareholders for
their continuing support.
Kenneth Hansen
Chairman
Managing Director’s Report
Over the past three years, we have re-focused Hansen Technologies as a
specialist provider of billing systems for the utilities and telecommunications
industries and of IT outsourcing services. We have also broadened our earnings
base and increased our annuity revenue streams. We no longer rely on any one
customer or industry, and no customer provides more than 8 per cent of revenue.
Hansen's major growth opportunities are in the deregulating utility markets.
Australia is our home and we have, and will strive to maintain, a significant share
of the local market. Billing systems, however, are an international market, and to
succeed we need to become a significant competitor for overseas contracts.
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Our HUB technology, with its flexible design, enabled us
to win three major energy sector contracts – each larger
than any we had secured before. One of these was for
the design and installation of an electricity network
management system for Western Power in Western
Australia; another was for a billing system for TEPCO, a
Japanese electricity retailer; and the third was for an
integrated customer care and billing system for Scottish
Power's electricity and gas operations. These projects
gave us the opportunity to demonstrate HUB's
competitive advantages in our three target markets,
where either deregulation and retail contestability are
being introduced or utility companies are pursuing
operational efficiency.
Adapting HUB so it was compatible with the current
technology and local requirements in Japan and the UK
took longer and required more investment than we had
originally anticipated, reducing our short-term margin
from these projects. Looking forward, however, this
investment has extended HUB's functionality and given
us additional intellectual property, which we capitalised
at $4 million during the year. We will also have products
which are fully developed for the Japanese and
European markets and, with limited customisation, can
be replicated for other major energy suppliers.
In addition, we will have strategic and prestigious HUB
reference sites; and already the TEPCO installation has
led to a contract from another Japanese electricity
retailer, HEPCO. The average life of a billing system is
more than ten years, leading to long-term relationships
Andrew Hansen
Managing Director & CEO
with our customers and revenue from upgrades and
other services, and these new contracts are expected to
make a positive contribution to earnings in the second
half of the current year.
Following our success in winning these contracts, we
decided to focus our energy billing systems business on
Australia, Europe and Japan, where markets are
deregulating and our extensive Australian experience
gives us an advantage. The US energy market does not
yet offer similar opportunities, so we have ceased pro-
active marketing there and for the time being our US
billing systems business will be limited to following up
enquiries, product delivery and customer support. In
accordance with Australian and International Accounting
Standards, this decision required us to write-off the
carrying value of our investment in the USA.
HUB is now accepted as a world-class billing solution
for the energy, water and telecommunications markets.
We are acknowledged as a leader in Australia, where
HUB's functional depth, flexibility and operational
stability have led to its selection by a range of utilities
and telecommunications companies.
Our experience in Australia, where retail contestability in
energy markets is well advanced, enabled us to forge a
relationship with Toshiba Solutions Corporation to
market and support HUB in Japan, where markets are
currently being deregulated. The initial contracts with
TEPCO and HEPCO position us as a significant
competitor for further projects.
Our project for Scottish Power, which serves more than
five million homes and businesses in the UK, also
provides a showcase for HUB. Further opportunities will
now be explored, initially in the UK and Ireland, and
subsequently across Europe.
Through restricting our energy sector activities to these
markets, we will be able to contain marketing
expenditure and focus on earnings growth. We will also
continue to market HUB to the telecommunications
industry, where there are indications that some
companies intend to refresh their technology.
Meanwhile, our outsourcing and facilities management
businesses in Victoria and New South Wales, which offer
a platform for enhanced HUB services, again provided
stable revenue streams and consistent cash flow. All
major contracts tendered during the year were renewed.
Since the end of the year, we have also renewed, for five
years, our agreement with Vision Super, a leading
superannuation fund with more than 100,000 members,
to provide facilities management and support services.
Under the renewed agreement, Hansen has been
granted an exclusive licence to market the CLASSIC
superannuation administration system, which we
developed with Vision Super. We have secured a five
year contract to supply CLASSIC to FuturePlus, a funds
management and services company jointly owned by
the New South Wales local government and energy
industries superannuation schemes. CLASSIC caters for
both defined benefit and accumulation fund schemes,
and we expect further interest from superannuation
managers with multiple benefit schemes.
We have also identified new opportunities for AssetLife,
our asset management product which has a strong
customer base with water authorities. Local authorities
are now using AssetLife to manage infrastructure, such
as roads, tunnels and bridges, over their life cycle, and
we expect further sales in the future.
I would like to thank our customers for their continuing
confidence in Hansen and in our products and services,
and also our staff for their contribution during a
challenging year.
While our efforts are yet to be reflected in the company's
financial results, Hansen is now established in three key
markets and has a broader range of more adaptable
products and more experienced resources than a year
ago, which I am confident will lead to a significantly
stronger business and more sustainable earnings.
Andrew Hansen
Managing Director & CEO
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From left:
Mr Kenneth Hansen,
Mr Geoff Tomlinson,
Mr Andrew Hansen and
Mr Bruce Adams
Board of Directors
The qualifications, experience and special responsibilities
of each person who has been a director of Hansen
Technologies Limited at any time during or since the end
of the financial year is provided below, together with
details of the company secretary as at the year end.
Mr Kenneth Hansen
Chairman
Non-Executive Director
Age 72
Over thirty years experience in the IT industry.
Recognising the need for the safeguarding of
computer records, Kenneth founded the business of
Hansen in 1971 by establishing a facility in Australia
providing offsite storage of computer media and
records management.
• Chairman since 2000.
Mr Geoff Tomlinson
Age 58
Deputy Chairman
Non-Executive Director
Chairman of Audit and Remuneration Committees
Geoff had 29 years with the National Mutual Group (now
known as AXA Asia Pacific), the last six as Group
Managing Director. He resigned from National Mutual in
late 1998. Geoff is now a Director of National Australia
Bank Ltd, Amcor Ltd and Mirrabooka Investments Ltd.
He is also Chairman of Funtastic Ltd and Programmed
Maintenance Services Ltd. Geoff resigned as Chairman
of Neverfail Springwater Ltd in September 2003 and as
Chairman of Reckon Ltd in August 2004.
• Director since 2000.
Mr Andrew Hansen
Age 45
Managing Director & CEO
Andrew has over 25 years experience in the IT industry,
joining Hansen in 1990. Prior to Hansen he held senior
management positions with Amfac-Chemdata, a
software provider in the health industry. Andrew is
responsible for formulating the strategic direction of the
Company’s growth into an established software
solutions provider.
• Managing Director since 2000.
Mr Bruce Adams
Age 45
Non-Executive Director
Member of Audit and Remuneration Committees
Bruce Adams has over 15 years experience as a
commercial lawyer. He has practised extensively in the
areas of information technology law, mergers and
acquisitions and has considerable experience advising
listed public companies. In early 2002, after more than
ten years as a partner of two Melbourne law firms,
Bruce took up a position as general counsel of Club
Assist Corporation Pty Ltd, a worldwide motoring club
service provider. Bruce holds degrees in law and
economics from Monash University.
• Director since 2000.
Hon. Richard Alston
Non-Executive Director
Age 64
Between 2 March 1996 and 7 October 2003 Richard
was the Deputy Leader of the Government in the Senate
and a senior Cabinet Minister with responsibility for
Communications, IT and the Arts. He was on the front
bench in Opposition and in Government for 14 years
with more than 11 years in the Communications
portfolio. He holds five degrees including a Master of
Business Administration and a Bachelor of Commerce.
Prior to entering Parliament he practised as a barrister
with particular emphasis on commercial law.
• Director appointed 29 July 2004
• Director resigned 31 December 2004
Mr Grant Lister
Age 53
CFO & Company Secretary
Grant is a qualified Chartered Accountant with more
than 25 years experience in senior financial management
roles and 10 years experience in such roles within the IT
industry, in Australia, Asia and the USA. As CFO he has
responsibility for all of the financial aspects of the Hansen
Group's operations throughout the world. Grant joined
the Hansen Group in 2002.
• CFO since 2002
• Company Secretary since 2004
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Directors’ Report
Principal activities
The principal activities of the consolidated entity during
the course of the financial year were the development,
integration and support of billing systems software for the
telecommunications and utilities (gas, electricity and water)
industries. Other activities undertaken by the consolidated
entity include IT outsourcing services and the
development of other specific software applications. There
were no significant changes in the nature of the activities
of the consolidated entity during the financial year.
Results
The consolidated profit after income tax attributable to
the members of Hansen Technologies Limited was
($3,436,442) (2004: $651,398).
Review of operations
Hansen Technologies Limited is a specialist provider of
proprietary billing systems for the energy utility and
telecommunications industries as well as facilities
management and IT outsourcing services.
Billing
Hansen is acknowledged as a leader in Australia, where
our proprietary HUB billing solution’s functional depth,
flexibility and operational stability have led to its selection by
a range of energy utility and telecommunications companies.
The outlook within the Australian energy markets is
strong and we are well positioned to maintain our
leadership in this market space.
During the year an investment was made into rolling out
HUB to the key international markets of Japan and the
United Kingdom. The margin from the initial international
projects was less than would normally be targeted but
reflects the investment necessary to establish HUB as a
core system for these key markets and to secure longer
term profitable relationships.
Also during the year we concentrated our energies on
the completion and implementation of the latest version
of HUB. The increasing size and complexity of the new
projects have resulted in a short term impact on profit,
but they represented the catalyst for enhancements to
our processes and procedures which will deliver a
stronger more sustainable base upon which to grow.
The Directors present their report together with the
financial report of the consolidated entity consisting of
Hansen Technologies Ltd and the entities it controlled,
for the financial year ended 30 June 2005 and
independent review report thereon. Hansen
Technologies Ltd is a publicly listed company.
Key customer projects during the year included:
• the design and installation of an electricity network
management system for Western Power in
Western Australia;
• a billing system for TEPCO, a Japanese electricity
retailer; and
• an integrated customer care and billing system for
Scottish Power's electricity and gas operations.
These projects provided the opportunity to demonstrate
HUB's competitive advantages in the target markets,
where either deregulation and retail contestability are
being introduced or utility companies are pursuing
operational efficiency.
Due to increasing opportunities in Asia and Europe, Hansen
decided to restrict its pro-active energy industry marketing
activities in the USA. We continue to maintain our product
delivery and customer support capability in the USA as well
as a capacity to respond to market driven opportunities. In
accordance with Australian and International Accounting
Standards, this decision required the Company to write-
off the carrying value of its investment in the USA.
Outsourcing
Hansen provides an extensive range of IT outsourcing
and facilities management services from its data centres
in Doncaster, Victoria and North Ryde, New South Wales
with a back up facility in South Melbourne.
The outsourcing and facilities management businesses
in Victoria and New South Wales, which offer a platform
for enhanced HUB services again provided stable
revenue streams and consistent cash flow. We have
been able to grow our annuity revenue streams and
further develop the opportunities for providing customers
with a full IT service capability.
All major contracts tendered during the year were renewed.
Other business activities
Hansen has expanded its services activities in the
superannuation industry with the signing of two
significant agreements to provide the CLASSIC
superannuation administration software to Vision Super
and Future Plus Financial Services. We are optimistic
that CLASSIC will become a popular solution for
superannuation administrators of accumulation and
defined benefit funds.
07
CLASSIC caters for both defined benefit and accumulation
fund schemes, and the Company expects further interest
from superannuation managers of multiple schemes.
A number of new opportunities have been identified for
AssetLife, our asset management product which has a
strong customer base with water authorities. Local
authorities are now using AssetLife to manage
infrastructure, such as roads, tunnels and bridges, over
their life cycle, and we expect further sales in the future.
Outlook
We remain confident in the direction our company is
heading. Our focus is unchanged. The results for the
second half of this year were not as positive as we
would have liked but we have been successful in
achieving strong progress in the evolution of our
proprietary billing systems and have expanded
considerably the solutions we can deliver to energy
industry customers. We have made strong inroads into
the energy billing markets in Japan and Europe whilst
maintaining our leadership position in Australia.
The marketing activities over the past year and the
enhancements to the software offering have positioned
Hansen to benefit from the growing international trend
towards deregulation of the energy markets.
We expect the first half of fiscal 2006 to be a
continuation of the consolidation of our business. Major
new opportunities are being developed which should
deliver a solid performance in the second half.
Significant changes in the state of affairs
Capital reduction
At the annual general meeting of the Company held on 10
November 2004 a resolution was passed to remove
confusion in the presentation of the Company’s equity
within the statements of financial position. This resolution
provided for the Company’s accumulated losses to be
reduced by $54,331,438 with a corresponding off set
against the Company’s contributed equity. The actions
resulting from this resolution did not impose any change on
a Shareholder’s equity interest in the Company nor was
there any cash impact or operating consequence as a
result. The Company’s net equity and net asset values
were unaffected by the change. It was purely an accounting
matter which impacted the presentation of the Company’s
equity within the statements of financial position.
Write-off of investment - Hansen USA business
In a release to the Australian Stock Exchange on 3 June
2005 the Company announced its intention to
concentrate its international growth strategies on the
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energy markets of Europe and Asia, and as a result,
restricting its pro-active marketing activities in the USA. In
light of this decision, and in compliance with the
requirements of the Australian and International Accounting
Standards, the carrying value of Hansen’s USA business
was reassessed. The parent entity has also assessed the
carrying value of the investment in subsidiaries and has
written them down. As a result a one-off write-down of
$3.6 million has been charged to the Group's consolidated
results and an $8.5 million charge has been made in the
parent Company entity's accounts against this fiscal years
results. This adjustment is an accounting book entry only
and has no direct cash-related consequence.
Sale of intellectual property
A non core proprietary software solution for staff
rostering was disposed of last year. The balance of the
consideration $0.558 million has been recognised as
revenue in this year's results.
Surplus lease provision
During the year office lease space deemed surplus to
current needs was sub let to third parties. As no
substantive benefit is to be derived from these sub let
premises a provision has been charged to this year's results
of $0.572 million to reflect the short fall in sub lease rental
income and the write-off of related furniture and fittings.
Events subsequent to balance date
Rights Issue
The Directors decided at their meeting on 25 August 2005
to raise additional working capital to fund future growth
opportunities by proceeding with a Non-renounceable
Rights Issue to raise a maximum of $9.3 million. The
Rights Issue was initiated on 9 September 2005 and
represented a 2 for 5 offer to existing shareholders with
an application price of 20 cents per share.
Likely developments
Further information about likely developments in the
operations of the consolidated entity and the expected
results of the operations in the future financial years has
not been included in this report because disclosure of
the information would be likely to result in unreasonable
prejudice to the consolidated entity.
Environmental regulations
The consolidated entity is not subject to any particular or
significant environmental regulation.
Dividend paid, recommended and declared
Shares under option
On the 26 August 2004 the Directors declared, out of
the profits to 30 June 2004, a dividend of 1 cent per
share fully franked. On 17 February 2005 the Directors
declared an interim dividend in respect of the fiscal year
ended 30 June 2005 of 1 cent per share partially
franked to 0.12 cents (12%) per share. The Directors
have determined that no final dividend will be paid in
relation to the fiscal year ended 30 June 2005.
Share options
During or since the end of the financial year, the
Company granted options over unissued ordinary shares
to the following five highest paid executives. No options
have been granted to Directors during or since the end
of the financial year:
Unissued ordinary shares of Hansen Technologies Limited
under option at the date of this report are as follows:
Grant date
Exercise
date
Expiry
date
Consolidated and Company
Exercise
Number of
price options at date
of report
$
25-Dec-02 25-Dec-02 25-Dec-05
$1.90
50,000
1-Jul-01
1-Jul-04
1-Jul-06
$1.50
650,000
1-Oct-01
1-Jul-04
1-Jul-06
$1.50
145,000
1-Jan-02
1-Jan-05
1-Jan-07
$1.20
15,000
1-Jul-03
1-Jul-06
1-Jul-08
$0.19
660,000
1-Jul-04
1-Jul-07
1-Jul-09
$0.20
455,000
1-Jul-05
1-Jul-08
1-Jul-10
$0.28
530,000
Granted Number
Grant Date
TOTAL
2,505,000
09
Executives
G Lister
C Hunter
M Collins
G Brookman
G Kentish
75,000
75,000
75,000
75,000
40,000
–
75,000
–
–
–
1-Jul-04
1-Jul-05
1-Jul-04
1-Jul-05
1-Jul-04
1-Jul-05
1-Jul-04
1-Jul-05
1-Jul-04
1-Jul-05
Total
415,000
All grants of options vest after 3 years to the extent that
vesting criteria are met. If the vesting critera are not met
the options may be forfeited. Options expire two years
after vesting.
Shares issued on exercise of options
There were no ordinary shares of Hansen Technologies
Limited issued during or since the end of the financial
year as a result of the exercise of an option.
Indemnification and insurance of Directors,
Officers and Auditors
Indemnification
The Company has agreed to indemnify all the current
and former Directors and Officers of the Company and
its controlled entities against all liabilities to another
person (other than the Company or a related body
corporate) that may arise from their position as Directors
and Officers of the Company and its controlled entities,
except where the liability arises out of conduct involving
a lack of good faith. The agreement stipulates that the
Company will meet the full amount of any such liabilities,
including costs and expenses. The Company has not
entered into any agreement to indemnify its auditors
against any claims that might be made by third parties
arising from their report on the annual financial report.
Insurance premiums
Since the end of the previous financial year, the Company
has paid insurance premiums in respect of Directors' and
Officers' liability and legal expenses insurance policies for
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current and former Directors and Officers, including
executive Officers of the Company and Directors,
executive Officers and secretaries of its controlled
entities. The Directors have not included details of the
nature of the liabilities covered or the amount of the
premium paid in respect of the Directors' and Officers'
liability and legal expenses insurance contracts, as such
disclosure is prohibited under the terms of the contract.
Directors’ meetings
The number of meetings of the Board of Directors and of
each board committee held during the financial year and
the numbers of meetings attended by each Director were:
Director
Mr Kenneth Hansen
Board
meetings
A
B
10 10
Mr Geoff Tomlinson
10 10
Mr Andrew Hansen
10 10
Mr Bruce Adams
10 10
Hon. Richard Alston
4
5
Audit
Committee
meetings
Remuneration
Committee
meetings
A
2
2
2
2
1
B
2
2
2
2
2
A
1
1
1
1
1
B
1
1
1
1
1
A Number of meetings attended
B Number of meetings held during the time the Director held office
during the year
Directors’ interests in shares of options
Director's relevant interest in shares of Hansen
Technologies Limited or options over shares in the
company are detailed below:
K Hansen
G Tomlinson
B Adams
A Hansen
Ordinary Shares
of Hansen
Technologies Ltd
Options over
shares in Hansen
Technologies Ltd
67,256,298
437,312
150,035
9,921,522
–
–
–
150,000
Directors’ interests in contracts
Directors’ interests in contracts are disclosed in Note 30
to the financial statements.
Auditor’s independence declaration
A copy of the auditor’s independence declaration in relation
to the audit for the financial year is provided with this report.
Non-audit services
Non-audit services are approved by resolution of the Audit
Committee and approval is provided in writing to the
Board of Directors. Non-audit services provided by the
auditors of the consolidated entity during the year are
detailed below. The directors are satisfied that the provision
of the non-audit services during the year by the auditors is
compatible with the general standard of independence for
auditors imposed by the Corporations Act 2001.
Amounts paid or payable to an auditor for non-audit
services provided during the year by the auditor to any
entity that is part of the consolidated entity for:
Auditors of the Company
Australia
- Taxation services
Overseas Firms
- Taxation services
CONSOLIDATED
2005
$’000
2004
$’000
41
38
79
36
34
70
Remuneration report
Remuneration Policies
The Remuneration Committee is responsible for making
recommendations to the Board on remuneration policies
and packages applicable to the Board members and
senior executives of the Company. The remuneration
policy is to ensure the remuneration package properly
reflects the person's duties and responsibilities and that
the remuneration is competitive in attracting, retaining
and motivating people of the highest quality. Executive
Directors and senior executives may receive bonuses
determined at the discretion of the Board of Director’s
Remuneration Committee. Options may also be issued
under the Employee Share Option Plan. The ability to
exercise the options is conditional in part on the
Company achieving certain performance hurdles. Non-
Executive Directors do not receive any performance
related remuneration.
The names and positions of each person who held the position of director at any time during the financial year is provided on
page 5 of this report. The five named executives in the consolidated group who received the highest remuneration for the
financial year are:
Position
Executives
Chief Financial Officer & Company Secretary
G Lister
General Manager, Hansen Europe
G Kentish
General Manager, Sales and Marketing
M Collins
C Hunter
Chief Operations Officer
G Brookman Client Services Manager
Directors’ and executives’ remuneration
Directors
K Hansen
G Tomlinson
B Adams
Hon. R Alston
A Hansen
Executives
G Lister
G Kentish
M Collins
C Hunter
G Brookman
Directors
K Hansen
G Tomlinson
B Adams
A Hansen
Executives
G Lister
D Meade
J Payne
C Hunter
G Brookman
Base
emolument
2005
$
Bonuses
2005
$
Non-cash
benefits
2005
$
Super
contributions
2005
$
issued (A)
2005
Options Remuneration
granted as
options
%
Total
2005
$
64,815
46,296
37,037
15,432
5,833
–
4,166
–
3,333
–
1,389
–
354,257 82,569 25,000 37,844
–
–
–
–
–
–
–
–
–
– 21,468
201,835 36,697
–
–
203,244
–
160,721 18,349
– 25,712
123,759 18,349 20,102 12,790
116,461 18,349 25,184 17,496
7,575
–
4,040
7,575
7,575
11
70,648
–
50,462
–
40,370
–
–
16,821
– 499,670
3% 267,575
– 203,244
2% 208,822
4% 182,575
4% 185,065
Base
emolument
2004
$
Bonuses
2004
$
Non-cash
benefits
2004
$
Super
contributions
2004
$
issued (A)
2004
Options Remuneration
granted as
options
%
Total
2004
$
64,815
46,296
37,037
5,833
–
4,166
–
3,333
–
321,101 45,872 25,000 33,027
–
–
–
183,486
– 16,514
–
154,636 18,349 22,062 11,389
– 14,449
146,131 14,420
111,039 14,335 23,342 11,283
98,857 18,349 34,440 22,136
–
–
–
–
4,275
4,275
4,275
4,275
4,275
70,648
–
50,462
–
–
40,370
– 425,000
2% 204,275
2% 210,711
2% 179,275
3% 164,274
2% 178,057
In accordance with the remuneration policy described above, options granted as remuneration are subject in part to
continuing service with the company. Options granted as remuneration are valued at grant date in accordance with
AASB 2 Share-based Payments.
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Value of options granted as remuneration that have been exercised or lapsed during the financial year
Hansen Technologies Ltd year ended 30 June 2005
Balance
30-Jun-04
Value
Granted
Value
Exercised
–
940
564
120,760
4,275
–
–
64,279
64,279
255,097
–
–
–
–
7,575
–
–
7,575
7,575
22,725
–
–
–
–
–
–
–
–
–
–
Value
Lapsed
–
940
564
3,760
–
–
–
1,504
1,504
8,272
Balance
30-Jun-05
–
–
–
117,000
11,850
–
–
70,350
70,350
269,550
Directors
K Hansen
G Tomlinson
B Adams
A Hansen
Executives
G Lister
G Kentish
M Collins
C Hunter
G Brookman
Total
Rounding off
The amounts contained in the report and in the financial
report have been rounded to the nearest thousand
(where rounding is applicable) under the option available
to the Company under ASIC Class Order 98/0100. The
Company is an entity to which the Class Order applies.
Dated at Melbourne this 30th day of September 2005.
Signed in accordance with a resolution of the Directors:
Kenneth Hansen
Director
Andrew Hansen
Director
Financial
statements and
Notes
Statements of financial performance
Statements of financial position
Statements of cash flows
Notes to the financial statements
Directors’ declaration
Independent audit report
Corporate governance
ASX additional information
PAGE
14
15
16
17
50
51
52
60
13
Statements of financial performance
For the year ended 30 June 2005
CONSOLIDATED
THE COMPANY
NOTE
2005
$’000
2004
$’000
2005
$’000
2004
$’000
Revenue from rendering of services
Other revenues from ordinary activities
Total revenue
2
Employee expenses
Depreciation and amortisation expenses
Write-down in carrying value of non-current assets
Borrowing costs
Operating lease rental expenses
Contractor and consultant expenses
Software licence expenses
Hardware and software expenses
Transportation expenses
Travel expenses
Data communication expenses
Legal, settlement and liquidation costs
Other expenses from ordinary activities
Profit / (loss) from ordinary activities before
related income tax expense
Income tax credit relating to ordinary activities
Net profit / (loss) attributable to members
of the parent entity
14
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51,840
1,946
53,786
(30,797)
(5,968)
(3,640)
(281)
(4,954)
(1,864)
(719)
(4,409)
(586)
(1,183)
(3,099)
(40)
(897)
50,191
3,006
53,197
(27,763)
(5,741)
(221)
(169)
(5,145)
(1,734)
(451)
(2,310)
(745)
(1,289)
(2,967)
(971)
(3,524)
–
1,269
1,269
(671)
(18)
(8,500)
(6)
–
(6)
–
–
(7)
–
–
17
(110)
–
5,045
5,045
(711)
(19)
(52)
(9)
–
(9)
–
–
(8)
–
–
230
(1,232)
(4,652)
1,216
5a
166
485
(8,033)
(120)
3,236
(1,154)
(3,436)
651
(8,153)
2,082
Net exchange difference relating to self-sustaining
foreign operations
19
(2)
(33)
–
–
Total valuation adjustments attributable to members
of the entity and recognised directly in equity
21
(3,438)
618
(8,153)
2,082
Basic earnings / (loss) per share
Diluted earnings / (loss) per share
6
6
($0.030)
$0.006
($0.030)
$0.006
The statements of financial performance are to be read in conjunction with
the notes to the financial statements set out on pages 17 to 49.
Statements of financial position
For the year ended 30 June 2005
CONSOLIDATED
THE COMPANY
NOTE
2005
$’000
2004
$’000
2005
$’000
2004
$’000
8
9
11
9
10
12
13
5d
11
14
15
5b
16
17
14
15
5c
16
18
19
20
21
887
5,471
2,763
9,121
893
–
6,746
20,429
5,011
35
33,114
3,623
5,275
1,817
10,715
1,179
–
6,819
23,147
3,054
155
34,354
12
77
4
93
26,510
11,000
81
–
1,442
–
39,033
(24)
35
3
15
27,090
19,500
98
–
1,033
–
47,721
42,235
45,069
39,126
47,736
4,670
962
–
4,247
3,160
13,039
–
1,177
2,699
621
4,497
4,943
556
51
4,013
3,438
13,001
300
893
1,947
153
3,293
434
20
–
350
–
804
2,749
63
391
–
3,204
462
21
–
350
–
833
2,601
84
310
–
2,995
17,536
16,294
4,008
3,828
24,699
28,775
35,118
43,908
43,452
(480)
(18,273)
96,158
(478)
(66,905)
43,452
–
(8,334)
96,158
–
(52,249)
24,699
28,775
35,118
43,908
15
Current assets
Cash assets
Receivables
Other
Total current assets
Non-current assets
Receivables
Other financial assets
Plant and equipment
Intangible assets
Deferred tax assets
Other
Total non-current assets
Total assets
Current liabilities
Payables
Interest-bearing liabilities
Current tax liabilities
Provisions
Other
Total current liabilities
Non-current liabilities
Payables
Interest-bearing liabilities
Deferred tax liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Foreign currency translation reserve
Retained profits / (accumulated losses)
Total equity
The statements of financial position are to be read in conjunction with the
the notes to the financial statements set out on pages 17 to 49.
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Statements of cash flows
For the year ended 30 June 2005
CONSOLIDATED
THE COMPANY
NOTE
2005
$’000
2004
$’000
2005
$’000
2004
$’000
Cash provided by operating activities
Cash receipts in the course of operations
Cash payments in the course of operations
Interest received
Borrowing costs paid
Income taxes (paid) / refund
Net cash provided by / (used in) operating activities
50,889
(46,480)
175
(502)
(41)
4,041
54,536
(51,568)
201
(169)
116
3,115
27b
Cash flows from investing activities
Payments for plant and equipment
Proceeds from sale of plant and equipment
Proceeds from sale of intellectual property
Payments for controlled entities (net of cash acquired)
Payment for resolution of legal dispute
Payments for:
Capitalised research and development
Net cash provided by / (used in) investing activities
Cash flows from financing activities
Proceeds from issue of shares
Funds provided under lease arrangement
Proceeds from borrowings
Net advances from / (to) controlled entities
Finance and hire purchase lease payments
Distributions / dividends paid
Net cash provided by / (used in) financing activities
(2,921)
19
558
(223)
(300)
(3,933)
(6,800)
1,625
–
1,480
–
(819)
(2,263)
23
(1,308)
85
–
(628)
(525)
(2,000)
(4,376)
72
(676)
1,334
–
(509)
–
222
Net increase / (decrease) in cash held
(2,736)
(1,040)
Cash at the beginning of the financial year
3,623
4,663
Cash at the end of the reporting period
27a
887
3,623
1,068
(650)
1
(6)
–
413
–
–
–
–
(300)
–
(300)
1,625
–
–
582
(21)
(2,263)
(77)
36
(24)
12
4,970
(1,336)
–
(9)
–
3,626
–
45
–
–
–
–
45
72
–
–
(3,707)
(64)
–
(3,699)
(29)
5
(24)
The statements of cash flows are to be read in conjunction with the notes
to the financial statements set out on pages 17 to 49.
Notes to the financial statements
For the year ended 30 June 2005
1 Statement of significant accounting policies
The significant policies which have been adopted in
the preparation of this financial report are:
(a) Basis of preparation
The financial report has been prepared in
accordance with Accounting Standards, Urgent
Issues Group Consensus Views, other authoritative
pronouncements of the Australian Accounting
Standards Board and the Corporations Act 2001.
The financial report covers Hansen Technologies
Limited as an individual parent entity and Hansen
Technologies Limited and controlled entities as a
consolidated entity. Hansen Technologies is a
company limited by shares, incorporated and
domiciled in Australia.
It has been prepared on an accruals basis and is
based on historical costs, and does not take into
account changing money values or, except where
stated, current valuations of non-current assets.
These accounting policies have been consistently
applied by each entity in the consolidated entity and
are consistent with those of the previous year.
(b) Principles of consolidation
Controlled entities
The financial statements of controlled entities are
included in the consolidated financial statements
from the date control commences until the date
control ceases.
Transactions eliminated on consolidation
Unrealised gains and losses and inter-entity balances
resulting from transactions with or between
controlled entities are eliminated in full on
consolidation.
(c) Revenue recognition
Revenues have been measured at fair value of the
consideration received net of the amount of goods
and services tax (GST) payable to the taxation
authority.
Rendering of services
Revenue for rendering of services is recognised in
proportion to the stage of completion of the contract
when the stage of contract completion can be
reliably measured.
Where the outcome of a contract cannot be reliably
estimated, contract costs are expensed as incurred.
Where it is probable that the costs will be recovered,
revenue is only recognised to the extent of costs
incurred. An expected loss is recognised immediately
as an expense.
A deferred income liability is recognised upon receipt
of payment for maintenance and enhancement
contracts. Revenue is then recognised and brought
to account over the time as it is earned.
Interest revenue
Interest revenue is recognised as it accrues, taking
into account the effective yield on the financial asset.
Sale of non-current assets
The gross proceeds of non-current asset sales are
included as revenue at the date control of the asset
passes to the buyer, usually when an unconditional
contract of sale is signed.
The gain or loss on disposal is calculated as the
difference between the carrying amount of the asset
at the time of disposal and the net proceeds on
disposal (including incidental costs).
(d) Goods and services tax
Revenues, expenses and assets are recognised net of
the amount of goods and services tax (GST), except
where the amount of GST incurred is not recoverable
from the taxation authority. In these circumstances,
the GST is recognised as part of the cost of
acquisition of the asset or as part of the expense.
Receivables and payables are stated with the
amount of GST included.
The net amount of GST recoverable from, or payable
to, the ATO is included as a current asset or liability
in the statements of financial position.
Cash flows are included in the statements of cash
flows on a gross basis. The GST components of
cash flows arising from investing and financing
activities which are recoverable from, or payable to,
the ATO are classified as operating cash flows.
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Notes to the financial statements
For the year ended 30 June 2005
(e) Foreign currency
(f) Borrowing costs
Transactions
Foreign currency transactions are translated to
Australian currency at the rates of exchange ruling at
the dates of the transactions. Amounts receivable and
payable in foreign currencies at reporting date are
translated at the rates of exchange ruling on that date.
Exchange differences relating to amounts payable
and receivable in foreign currencies are brought to
account as exchange gains or losses in the
statements of financial performance in the financial
year in which the exchange rates change, except
where amounts payable or receivable in foreign
currency form part of a net investment in a self-
sustaining foreign operation. In this case, the
exchange difference, together with any related
income tax expense / revenue, is transferred to the
foreign currency translation reserve on consolidation.
Translation of controlled foreign entities
The assets and liabilities of controlled foreign entities
that are self-sustaining are translated at the rates of
exchange ruling at reporting date. Equity items are
translated at historical rates. The statements of
financial performance are translated at a weighted
average rate for the year. Exchange differences
arising on translation are taken directly to the foreign
currency translation reserve until the disposal, or
partial disposal, of the operations.
The assets and liabilities of foreign controlled entities
that are integrated are translated using the temporal
method. Monetary assets and liabilities are
translated into Australian currency at rates of
exchange current at reporting date, while non-
monetary items and revenue and expense items are
translated at exchange rates current when the
transactions occurred. Exchange differences arising
on translation are brought to account in the
statements of financial performance.
The balance of the foreign currency translation
reserve relating to a foreign operation that is
disposed of, or partially disposed of, is transferred to
retained profits or accumulated losses in the year of
disposal.
The accounting policy will be impacted on first-time
adoption of AIFRS (refer to Notes 31 and 32).
Borrowing costs include interest, amortisation of
discounts or premiums relating to borrowings,
amortisation of ancillary costs incurred in connection
with the arrangement of borrowings, and lease
finance charges.
Ancillary costs incurred in connection with the
arrangement of borrowings are capitalised and
amortised over the life of the borrowings.
(g) Taxation
The consolidated entity adopts the income statement
liability method of tax effect accounting.
Income tax expense is calculated on operating profit
adjusted for permanent differences between taxable
and accounting income. The tax effect of timing
differences, which arise from items being brought to
account in different periods for income tax and
accounting purposes, is carried forward in the
statements of financial position as a future income
tax benefit or a provision for deferred income tax.
Future income tax benefits are not brought to
account unless realisation of the asset is assured
beyond reasonable doubt, or if relating to tax losses
when realisation is virtually certain.
The accounting policy will be impacted on first-time
adoption of AIFRS (refer to Notes 31 and 32).
The economic entity has undertaken tax consolidation
as at 1 July 2002 in respect of the Australian entities.
Tax consolidation
Hansen Technologies Limited and its Australian
subsidiaries have implemented the tax consolidation
legislation and have formed a tax-consolidated group
from 1 July 2002. The parent entity and subsidiaries
in the tax-consolidated group have entered into a tax
funding agreement such that each entity in the tax-
consolidated group recognises the assets, liabilities,
expenses and revenues in relation to its own
transactions, events and balances only. All entities in
the tax-consolidated group have adopted UIG 52 to
account for the effects of the tax funding agreement
under the tax consolidation system. This means that:
the parent entity recognises all current and
•
deferred tax amounts relating to its own
transactions, events and balances only;
•
•
•
the subsidiaries recognise current or deferred
tax amounts arising in respect of their own
transactions, events and balances;
all expenses and revenues arising under the tax
funding agreement are recognised as a
component of income tax expense or income
tax revenue by each individual entity; and
all assets and liabilities arising under the tax
funding agreement are recognised as tax-
related amounts receivable from or payable to
other entities in the group, rather than as tax
assets or tax liabilities.
The tax-consolidated group also has a tax sharing
agreement in place to limit the liability of subsidiaries
in the tax-consolidated group arising under the joint
and several liability requirements of the tax
consolidation system, in the event of default by the
parent entity to meet its payment obligations. At
balance date, the possibility of default is remote. The
parent entity of the tax-consolidated group is Hansen
Technologies Limited.
(h) Earnings per share
Basic earnings per share (“EPS”) is calculated by
dividing the net profit attributable to members of the
parent entity for the reporting period, after excluding
any costs of servicing equity, by the weighted
average number of ordinary shares of the Company.
Diluted EPS is calculated by dividing the basic EPS
earnings, adjusted by the after tax effect of financing
costs associated with dilutive potential ordinary
shares and the effect on revenues and expenses of
conversion to ordinary shares associated with dilutive
potential ordinary shares, by the weighted average
number of ordinary shares and dilutive potential
ordinary shares.
(i) Acquisition of assets
All assets acquired including property, plant and
equipment and intangibles other than goodwill are
initially recorded at their cost of acquisition at the
date of acquisition, being the fair value of the
consideration provided plus incidental costs directly
attributable to the acquisition. Acquired in-process
research and development is only recognised as a
separate asset when future benefits are expected
beyond any reasonable doubt to be recoverable.
When equity instruments are issued as
consideration, their market price at the date of
acquisition is used as fair value, except where the
notional price at which they could be placed in the
market is a better indication of the fair value.
Transaction costs arising on the issue of equity
instruments are recognised directly in equity subject
to the extent of proceeds received or otherwise
expensed.
Where settlement of any part of cash consideration
is deferred, the amounts payable are recorded at
their present value, discounted at the rate applicable
to the consolidated entity if a similar borrowing were
obtained from an independent financier under
comparable terms and conditions. The unwinding of
the discount is treated as interest expense.
The costs of assets constructed or internally
generated by the consolidated entity, other than
goodwill, include the cost of materials and direct
labour. Directly attributable overheads and other
incidental costs are also capitalised to the asset.
Expenditure, including that on internally generated
assets other than research and development costs,
is only recognised as an asset when the entity
controls future economic benefits as a result of the
costs incurred, that are probable and can be
measured reliably. Costs attributable to feasibility and
alternative approach assessments are expensed as
incurred.
Research and development costs
Research and development expenditure is expensed
as incurred except to the extent that its recoverability
is assured beyond any reasonable doubt, in which
case it is deferred.
Subsequent additional costs
Costs incurred on assets subsequent to initial
acquisition are capitalised when it is probable that
future economic benefits in excess of the originally
assessed performance of the asset will flow to the
consolidated entity in future years, otherwise,
expensed as incurred.
(j) Receivables
The collectability of debts is assessed at balance
date and specific provision is made for any doubtful
accounts.
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Notes to the financial statements
For the year ended 30 June 2005
(k) Investments
Controlled entities
Investments in controlled entities are carried in the
Company’s financial statements at the lower of cost
and recoverable amount. Refer to Note 1(n).
(l) Leased assets
Leases under which the consolidated entity assumes
substantially all the risks and benefits of ownership
are classified as finance leases. Other leases are
classified as operating leases.
Finance leases
Finance leases are capitalised. A lease asset and a
lease liability equal to the present value of the
minimum lease payments are recorded at the
inception of the lease.
Lease liabilities are reduced by repayments of
principal. The interest components of the lease
payments are expensed. Contingent rentals are
expensed as incurred.
Operating leases
Payments made under operating leases are
expensed on a straight line basis over the term of
the lease, except where an alternative basis is more
representative of the pattern of benefits to be derived
from the leased property.
(m) Goodwill
Goodwill represents the excess of the purchase
consideration plus incidental costs over the fair value
of the identifiable net assets acquired.
The accounting policy will be impacted on first-time
adoption of AIFRS (refer to Notes 31 and 32).
(n) Recoverable amount of non-current assets valued on
cost basis
The carrying amount of non-current assets valued on
the cost basis are reviewed to determine whether
they are in excess of their recoverable amount at
reporting date. If the carrying amount of a non-
current plant and equipment exceeds its recoverable
amount, the asset is written down to the lower
amount. The write-down is expensed in the reporting
period in which it occurs.
Where a group of assets working together supports
the generation of cash inflows, the recoverable
amount is assessed in relation to that group of assets.
In assessing recoverable amounts of non-current
intangible assets, the relevant cash flows have been
discounted to determine the fair carrying value and
adjusted if necessary.
The accounting policy will be impacted on first-time
adoption of AIFRS (refer to Notes 31 and 32).
(o) Depreciation and amortisation
Useful lives
All assets, including intangibles, have limited useful
lives and are depreciated / amortised using the
straight line (SL) and diminishing value (DV) methods
over their estimated useful lives, taking into account
estimated residual values, with the exception of
finance lease assets which are amortised over the
term of the relevant lease, or where it is likely the
consolidated entity will obtain ownership of the
asset, the life of the asset.
Assets are depreciated or amortised from the date of
acquisition or, in respect of internally constructed
assets, from the time an asset is completed and held
ready for use.
Depreciation and amortisation rates and methods are
reviewed annually for appropriateness. When
changes are made, adjustments are reflected
prospectively in current and future periods only.
Depreciation and amortisation are expensed, except
to the extent that it is included in the carrying
amount of another asset as an allocation of
production overheads.
The depreciation / amortisation rates or useful lives
used for each class of asset are as follows:
Method
2005
2004
Plant and equipment
Plant and equipment SL / DV 9% to 40% 9% to 40%
Leased plant and
equipment
SL / DV 9% to 40% 9% to 40%
Intangibles
Goodwill
SL
20 years
20 years
Other non-current assets
Research and
development costs
Intellectual property
SL
SL
5 years
3 years
5 years
3 years
(p) Payables
(s) Provisions
A provision is recognised when there is a legal,
equitable or constructive obligation as a result of a
past event and it is probable that a future sacrifice of
economic benefits will be required to settle the
obligation, the timing or amount of which is
uncertain.
If the effect is material, a provision is determined by
discounting the expected future cash flows
(adjusted for expected future risks) required to
settle the obligation at a pre-tax rate that reflects
current market assessments of the time value of
money and the risks specific to the liability, being
risk free rates on government bonds most closely
matching the expected future payments, except
where noted below.
In the statements of financial performance, the
expense recognised in respect of a provision is
presented net of the recovery. In the statements of
financial position, the provision is recognised net of
the recovery receivable only when the entity:
•
has a legally recognised right to set-off the
recovery receivable and the provision; and
intends to settle on a net basis, or to realise the
asset and settle the provision simultaneously.
•
Surplus leased premises
Provision is made for non-cancellable operating lease
rentals payable on surplus leased premises when it is
determined that no substantive future benefit will be
obtained from its occupancy and the sub-lease
rental income derived is less than the lease cost.
The estimate is calculated based on discounted net
future cash flows, using the interest rate implicit in
the lease or an estimate thereof.
21
Liabilities are recognised for amounts to be paid in
the future for goods or services received. Trade
accounts payable are normally settled within 60
days.
(q) Interest bearing liabilities
Lease and hire purchase liabilities are recognised at
their principal amount.
(r) Employee benefits
Wages, salaries and annual leave
Liabilities for employee benefits for wages, salaries
and annual leave expected to be settled within 12
months of the year-end represent present obligations
resulting from employees’ services provided to
reporting date, calculated at undiscounted amounts
based on remuneration wage and salary rates that
the consolidated entity expects to pay as at reporting
date including related on-costs.
Long service leave
The provision for employee benefits to long service
leave represents the present value of the estimated
future cash outflows to be made resulting from
employees’ services provided to reporting date.
The provision is calculated using estimated future
increases in wage and salary rates including related
on-costs and expected settlement dates based on
turnover history and is discounted using the rates
attaching to national government bonds at reporting
date which most closely match the terms of maturity
of the related liabilities.
Employee Share and Option Plans
An Employee Share Plan is available, which at the
discretion of the Directors allows for employees to
acquire ordinary shares in The Company from time
to time.
An Employee Share Option Plan exists through
which the Board may issue options to employees of
The Company and its subsidiaries.
Details of the Plans are disclosed in Note 28 of the
financial statements.
The accounting policy will be impacted on first-time
adoption of AIFRS (refer to Notes 31 and 32).
Notes to the financial statements
For the year ended 30 June 2005
CONSOLIDATED
THE COMPANY
NOTE
2005
$’000
2004
$’000
2005
$’000
2004
$’000
2 Revenue from ordinary activities
Rendering of services revenue from operating activities
Other revenues:
From operating activities
Management fees
Net foreign exchange gains / (losses)
Interest – other parties
Other income
Sale of intellectual property
Distribution received from controlled entities
From outside operating activities
Gross proceeds from sale of non-current assets
Total other revenues
Total revenue from ordinary activities
3 Profit / (loss) from ordinary activities
before income tax expense
(a) Individually significant expenses / (revenues) included in profit
/ (loss) from ordinary activities before income tax expense:
22
5
0
0
2
l
a
u
n
n
A
t
r
o
p
e
R
51,840
50,191
–
–
–
(316)
175
1,510
558
–
–
48
201
2,339
333
–
810
–
1
–
–
458
19
1,946
53,786
85
3,006
53,197
–
1,269
1,269
930
–
–
–
–
4,070
45
5,045
5,045
–
–
–
–
–
1,128
1,128
Write-off of goodwill
Sale of intellectual property
Legal / settlement costs
Provision for surplus lease space
Write-down of investment
Provision for loan to controlled entity
13
16
10
3,603
(558)
–
572
–
–
3,617
–
(333)
895
–
–
–
562
–
–
–
–
8,500
–
8,500
CONSOLIDATED
THE COMPANY
NOTE
2005
$’000
2004
$’000
2005
$’000
2004
$’000
(b) Profit / (loss) from ordinary activities before income tax expense
has been arrived at after charging / (crediting) the following items:
Depreciation of:
- Plant and equipment
Amortisation of:
- Goodwill
- Software research and development
- Finance leased plant and equipment
Total depreciation and amortisation
Borrowing costs:
Other parties
- Finance charges on capitalised leases
- Bank overdraft
- Interest on deferred consideration
Net bad and doubtful debts expense including
movements in provision for doubtful debts
Net expense from movement in provision for
employee entitlements
Net (gain) / loss on disposal of non-current assets:
- Plant & equipment
Operating lease rental expense:
- Minimum lease payments
4 Auditors’ remuneration
Audit services:
Auditors of the Company
Australia
- Audit and review of financial reports
Overseas Firms
- Audit and review of financial reports
Other services:
Auditors of the Company
Australia
- Taxation services
Overseas Firms
- Taxation services
12
13
13
12
2,654
2,654
1,059
1,951
304
3,314
5,968
271
10
–
281
2,601
2,601
1,118
1,930
92
3,141
5,741
143
–
26
169
(154)
(115)
18
18
–
–
–
–
18
6
–
–
6
–
19
19
–
–
–
–
19
9
–
–
9
1,128
593
(14)
14
34
18
36
4,954
5,145
121
113
234
41
38
79
115
82
197
36
34
70
–
–
4
–
4
15
–
15
7
–
4
–
4
15
–
15
23
Notes to the financial statements
For the year ended 30 June 2005
CONSOLIDATED
THE COMPANY
NOTE
2005
$’000
2004
$’000
2005
$’000
2004
$’000
5 Taxation
(a) Income tax expense / (benefit)
Prima facie income tax expense / (benefit) calculated
at 30% (2004: 30%) on the profit from ordinary activities
Increases in income tax expense due to:
- Amortisation of goodwill
- Non deductible write-off of goodwill on consolidation
- Non deductible write-down of investment
- Current year losses not brought to account
- Prior period timing difference brought to account
- Non deductible expenditure
Decrease in income tax expense due to:
- Research and development allowances
- Dividend rebate
- Prior year under / (over) provision
- Prior period R&D allowances not previously brought
to account
- Non assessable income
Income tax expense / (benefit) on the profit / (loss) from
ordinary activities before individually significant income tax items
Individually significant income tax items:
- Tax losses and timing differences of controlled entities
(1,396)
50
(2,410)
315
1,081
–
151
–
64
(660)
–
(9)
(321)
(81)
315
–
–
–
–
392
(180)
–
–
–
(29)
–
–
2,551
–
–
–
–
–
–
(21)
–
971
–
–
–
–
282
347
–
(419)
–
–
(27)
(856)
548
120
1,154
recognised as a future income tax benefit (net)
(360)
(1,211)
–
–
- Tax losses and timing differences of controlled entities
no longer carried forward as a future income tax benefit
Income tax over provided in prior year
Income tax expense / (benefit) attributable to
profit / (loss) from ordinary activities
Income tax expense / (benefit) attributable to profit / (loss)
from ordinary activities is made up of:
- Current income tax provision
- Deferred income tax provision
- Future income tax benefit
- Transfer of losses within tax-consolidated group
- Prior period timing difference brought to account
- Under / (over) provision in prior year
–
(1,216)
–
294
(369)
(116)
–
120
–
–
1,154
–
(1,216)
(485)
120
1,154
–
752
(1,957)
–
–
(11)
(1,216)
50
(1,329)
910
–
–
(116)
(485)
–
370
(480)
230
–
–
120
-
135
310
–
709
–
1,154
24
5
0
0
2
l
a
u
n
n
A
t
r
o
p
e
R
CONSOLIDATED
THE COMPANY
NOTE
2005
$’000
2004
$’000
2005
$’000
2004
$’000
(b) Current tax liabilities
Provision for current income tax
Movements during the year:
- Balance at beginning of year
- Income tax (paid) / refund
- Current year income tax expense on taxable profit
from ordinary activities
- Under / (over) provision in prior year
- Transfer of losses within tax-consolidated group
(c) Deferred tax liabilities
Provision for deferred income tax
Provision for deferred income tax comprises the estimated
expense on the following items at the applicable rates for
the entities within the consolidated entity, that range
between 30% to 43% (2004: 30% to 43%):
51
(42)
–
(9)
–
–
–
116
51
(116)
–
51
–
–
–
(230)
230
–
–
–
709
–
(709)
–
Timing differences
2,699
1,947
391
310
(d) Deferred tax assets
Future income tax benefit
Future income tax benefit comprises the estimated future
benefit that is expected to be realised on the following
items at the applicable rates for the entities within the
consolidated entity, that range between 30% to 43%
(2004: 30% to 43%):
Timing differences
Tax losses carried forward
Future income tax benefit not taken to account
The potential future income tax benefit from tax losses and
timing differences, at the applicable rates for the entities
within the consolidated entity, that range between 30% to
43% (2004: 30% to 43%), has not been recognised as an
asset because recovery of tax losses is not virtually certain
and recovery of timing differences is not assured beyond
any reasonable doubt:
Tax losses carried forward
Timing differences
2,861
2,150
5,011
2,077
977
3,054
1,442
–
1,442
1,033
–
1,033
1,940
–
1,940
1,759
–
1,759
–
–
–
–
–
–
25
Notes to the financial statements
For the year ended 30 June 2005
6 Earnings per share
Earnings reconciliation
Basic earnings / (loss) - ordinary shares
Adjustments
Diluted earnings / (loss) - ordinary shares
CONSOLIDATED
2005
$’000
2004
$’000
(3,437)
3
(3,434)
651
2
653
2005
NUMBER
2004
NUMBER
Weighted average number of shares used as
the denominator
Number for basic earnings per share - ordinary shares
Number for diluted earnings per share - ordinary shares
114,204,086
115,494,086
111,703,324
112,363,324
Basic earnings / (loss) per share
Diluted earnings / (loss) per share
($0.030)
($0.030)
$0.006
$0.006
Classification of securities as potential ordinary shares
The securities that have been classified as potential ordinary
shares and included in diluted earnings per share only, are
options outstanding under the Employee Share Option Plan
The following employee share options have not been
included in the calculation of diluted EPS as they are
not dilutive:
ISSUE DATE
25 Dec 2000
1 July 2001
1 October 2001
1 Jan 2002
Total options not considered dilutive
Full details of these options are set out in Note 28.
NUMBER OF OPTIONS
50,000
650,000
145,000
15,000
860,000
26
5
0
0
2
l
a
u
n
n
A
t
r
o
p
e
R
7 Segment Reporting
Inter-segment pricing is determined on an arm's length basis.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be
allocated on a reasonable basis. Unallocated items mainly comprise income-earning assets and revenue, interest-
bearing loans, borrowings and expenses, and corporate assets and expenses.
Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are
expected to be used for more than one period.
Business segments
The consolidated entity comprises the following main business segments, based on the consolidated entity's
management reporting system:
Billing:
Represents the sale of billing applications and the provision of consulting services in regard to
billing systems.
IT Outsourcing:
Represents the provision of various IT outsourced services covering facilities management,
systems and operations support, network services, call centre services, telehousing and
business continuity support.
Other:
Represents software and service provision in the areas of call centre productivity,
superannuation administration and asset management.
27
Geographical segments
In presenting information on the basis of geographical segments, segment revenue is based on the geographical
location of customers. Segment assets are based on the geographical location of the assets.
The consolidated entity's business segments operate geographically as follows:
Australia:
Sales and services in all Australian states and territories
USA:
Europe:
Other:
Sales and services throughout the USA
Sales and services throughout Europe
Sales and services throughout Asia and New Zealand
28
5
0
0
2
l
a
u
n
n
A
t
r
o
p
e
R
Notes to the financial statements
For the year ended 30 June 2005
Primary reporting - business segments
2005
$’000
2004
$’000
2005
$’000
2004
$’000
2005
$’000
2004
$’000
2005
$’000
2004
$’000
BILLING
IT OUTSOURCING
OTHER
CONSOLIDATED
Revenue
External segment revenue
Other unallocated revenue
Total revenue
Result
Segment result
Unallocated corporate expenses
Profit / (loss) from ordinary activities before
income tax
Income tax (expense) / benefit
Net profit / (loss)
25,330 24,427 22,988 22,432
4,080
3,332 52,398 50,191
3,005
1,388
53,786 53,197
(1,138)
2,604
1,938
2,708
1,322
2,331
2,122
(6,774)
7,643
(7,477)
(4,652)
1,216
(3,436)
166
485
651
(4,768)
(1,199)
(5,967)
(4,541)
(1,200)
(5,741)
Depreciation and amortisation
Depreciation and amortisation - unallocated
(2,834)
(2,914)
(1,876)
(1,605)
(58)
(22)
Segment result is inclusive of some individually
significant items
Individually significant segment items
Write-off of goodwill
Legal / settlement costs
Provision for surplus lease space
Sale of intellectual property /
other unallocated revenue
Assets
Segment assets
Unallocated corporate assets
Consolidated total assets
Liabilities
Segment liabilities
Unallocated corporate liabilities
Consolidated total liabilities
(3,603)
–
–
–
(895)
–
–
–
(572)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(3,604)
–
(572)
–
(895)
–
558
333
19,458 20,784
8,274
9,549
1,064
8,262
7,086
7,134
6,996
882
974 28,796 31,307
13,439 13,762
42,235 45,069
685 16,278 14,767
1,527
1,258
17,536 16,294
Acquisition of non-current assets
1,553
1,003
1,325
260
43
44
2,921
1,308
Secondary reporting
- geographical segments
External segment revenue
by location of customers
Segment assets
by location of assets
Acquisition of
non-current assets
AUSTRALIA
USA
EUROPE
OTHER
CONSOLIDATED
2005
$’000
2004
$’000
2005
$’000
2004
$’000
2005
$’000
2004
$’000
2005
$’000
2004
$’000
2005
$’000
2004
$’000
47,903 39,173
820
3,125
3,592
4,454
83
3,439 52,398 50,190
38,403 23,867
716
4,663
3,030
2,719
86
59 42,235 31,308
2,815
1,270
15
11
91
27
–
–
2,921
1,308
CONSOLIDATED
THE COMPANY
NOTE
2005
$’000
2004
$’000
2005
$’000
2004
$’000
8 Cash assets
Cash at bank and on hand
Bank short term deposits
9 Receivables
Current
Trade debtors
Less: Provision for doubtful debts
Sundry debtors
Non-current
Term debtor
Loans to controlled entities
The weighted average effective interest rate on the term
debtor is 8.25% (2004: 8.25%) at 30 June 2005.
10 Other financial assets
Non-current
Investment in controlled entity
Less: Write-down in investment
In a release to the Australian Stock Exchange on 3 June 2005
the Company announced its intention to concentrate its
international growth strategies on the energy markets of Europe
and Asia and as a result restricting its pro-active marketing
activities in the USA. In light of this decision and in compliance
with the requirements of the Australian and International
Accounting Standards the carrying value of Hansen’s
investment in controlled entities was reassessed. As a result a
one-off write-down of this investment totalling $8.5 million has
been charged against the parent entity’s fiscal years results.
This adjustment is an accounting book entry only and has no
cash related consequence.
11 Other assets
Current
Prepayments
Accrued revenue
Non-current
Accrued revenue
879
8
887
3,249
374
3,623
4,087
(24)
4,063
1,408
5,471
893
–
893
4,293
(60)
4,233
1,042
5,275
1,179
–
1,179
12
–
12
–
–
–
77
77
(24)
–
(24)
–
–
–
35
35
–
26,510
26,510
–
27,090
27,090
–
–
–
–
–
–
19,500
(8,500)
11,000
19,500
–
19,500
29
1,110
1,653
2,763
35
35
1,204
613
1,817
155
155
4
–
4
–
–
3
–
3
–
–
Notes to the financial statements
For the year ended 30 June 2005
12 Plant and equipment
Plant and equipment, at cost
Accumulated depreciation
Finance leased plant and equipment, at cost
Accumulated amortisation
CONSOLIDATED
THE COMPANY
NOTE
2005
$’000
2004
$’000
2005
$’000
2004
$’000
20,766
(15,088)
5,678
27,027
(20,246)
6,781
3,762
(2,694)
1,068
297
(259)
38
117
(36)
81
–
–
–
117
(19)
98
–
–
–
Total plant and equipment at net book value
6,746
6,819
81
98
Reconciliations
Reconciliations of the carrying amounts for each class
of property, plant and equipment are set out below:
Plant and equipment
Carrying amount at beginning of year
Additions
Disposals
Depreciation
Foreign exchange adjustment
Carrying amount at end of year
Finance leased plant and equipment
Carrying amount at beginning of year
Additions
Disposals
Amortisation
Carrying amount at end of year
13 Intangible assets
Goodwill, at cost
Accumulated amortisation
Software research and development, at cost
Accumulated amortisation
6,781
1,609
(37)
(2,654)
(21)
5,678
38
1,334
–
(304)
1,068
18,479
(5,743)
12,736
15,900
(8,207)
7,693
8,213
1,308
(120)
(2,601)
(19)
6,781
130
–
–
(92)
38
23,005
(5,569)
17,436
11,967
(6,256)
5,711
Total intangible assets
20,429
23,147
99
–
–
(18)
–
81
165
–
(48)
(19)
–
98
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
30
5
0
0
2
l
a
u
n
n
A
t
r
o
p
e
R
CONSOLIDATED
THE COMPANY
NOTE
2005
$’000
2004
$’000
2005
$’000
2004
$’000
In a release to the Australian Stock Exchange on 3 June
2005 the Company announced its intention to
concentrate its international growth strategies on the
energy markets of Europe and Asia and as a result
restricting its pro-active marketing activities in the USA. In
light of this decision and in compliance with the
requirements of the Australian and International
Accounting Standards the carrying value of goodwill on
consolidation for Hansen’s USA business was
reassessed. As a result a one-off write-down of the
written down value of the USA goodwill on consolidation
of $3.6 million has been charged against this fiscal year’s
results. This adjustment is an accounting book entry only
and has no cash related consequence.
Reconciliation of goodwill at cost
Goodwill at cost at beginning of year
Increase / (decrease) due to acquisition adjustments
relating to previously acquired entities
Current year write-down
Foreign exchange adjustment
Goodwill at cost at end of year
Accumulated amortisation at beginning of year
Current year charge
Current year write-down
Accumulated amortisation at end of year
Reconciliation of software research and development
at cost
Software research and development at cost at beginning
of year
Expenditure capitalised in current period
Current year write-down
Accumulated amortisation prior to the software research
and development write-down netted-off
Software research and development at cost at end of year
Accumulated amortisation at beginning of year
Current year charge
Accumulated amortisation prior to the software research
and development write-down netted-off
31
23,005
23,317
–
(4,488)
(38)
18,479
(5,569)
(1,059)
885
(5,743)
11,967
3,933
–
–
15,900
(6,256)
(1,951)
–
(8,207)
(312)
–
–
23,005
(4,450)
(1,118)
–
(5,569)
9,967
2,000
–
–
11,967
(4,326)
(1,930)
–
(6,256)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Notes to the financial statements
For the year ended 30 June 2005
14 Payables
Current
Trade creditors
Other creditors and accruals
Other related parties
Non-current
Other creditors and accruals
Loans - controlled entities
15 Interest bearing liabilities
Current
Hire purchase liability
Finance lease liability
Non-current
Hire purchase liability
Finance lease liability
16 Provisions
Current
Employee benefits
Deferred consideration
Other
Non-current
Employee benefits
Other
CONSOLIDATED
THE COMPANY
NOTE
2005
$’000
2004
$’000
2005
$’000
2004
$’000
25
25
25
25
2,187
2,483
–
4,670
–
–
–
363
599
962
395
782
1,177
3,910
–
337
4,247
282
339
621
1,746
3,178
19
4,943
6
428
–
434
5
457
–
462
300
–
300
299
257
556
500
393
893
3,446
223
344
4,013
153
–
153
–
2,749
2,749
300
2,301
2,601
20
–
20
63
–
63
204
–
146
350
–
–
–
21
–
21
84
–
84
190
–
160
350
–
–
–
32
5
0
0
2
l
a
u
n
n
A
t
r
o
p
e
R
CONSOLIDATED
THE COMPANY
NOTE
2005
$’000
2004
$’000
2005
$’000
2004
$’000
Reconciliations
Reconciliations of the carrying amounts of each class of
provision, except for the employee benefits provision,
are set out below:
Deferred consideration - current
Carrying amount at beginning of year
Provisions made during the year
Payments made during the year
Transfer from non-current deferred consideration
Foreign exchange adjustment
Carrying amount at end of year
Provision for restructuring
Carrying amount at beginning of year
Provisions made during the year
Payments made during the year
Carrying amount at end of year
Deferred consideration - non-current
Carrying amount at beginning of year
Provisions made during the year
Payments made during the year
Transfer to current deferred consideration
Carrying amount at end of year
Provisions Other - current
Carrying amount at beginning of year
Provisions made during the year
- liquidation & surplus leased premises
Adjustments made during the year
Payments made during the year
Carrying amount at end of year
Provisions Other - non-current
Carrying amount at beginning of year
Provisions made during the year
- surplus leased premises
Adjustments made during the year
Payments made during the year
Carrying amount at end of year
17 Other liabilities
Current
Deferred income
33
223
–
(223)
–
–
–
–
–
–
–
–
–
–
–
–
669
(123)
(628)
301
4
223
363
–
(363)
–
301
–
–
(301)
–
344
660
233
(159)
(81)
337
–
339
–
–
339
–
–
(316)
344
–
–
–
–
–
3,160
3,160
3,438
3,438
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
34
5
0
0
2
l
a
u
n
n
A
t
r
o
p
e
R
Notes to the financial statements
For the year ended 30 June 2005
CONSOLIDATED
THE COMPANY
NOTE
2005
$’000
2004
$’000
2005
$’000
2004
$’000
18 Contributed equity
Share capital
116,426,968 (2004: 112,014,565) ordinary shares,
fully paid
Movements during the year
Balance at beginning of year
Nil (2004: 212,314 shares issued to settle liability arising
from purchase of intellectual property)
2,264,426 shares issued under Dividend Reinvestment
Plan (2004: Nil)
1,579,563 shares issued under Dividend Reinvestment
Plan (2004: Nil)
568,414 shares issued under Employee Share Plan
(2004: 350,960 shares issued under Employee Share Plan)
Capital Reduction *
Transaction costs on issue of shares
Balance at end of year
* In accordance with a resolution of shareholders the
Company’s contributed equity (issued and paid up share
capital) was reduced by $54,331 million with a
corresponding amount off set against the Company’s
accumulated losses.
43,452
96,158
43,452
96,158
96,158
95,752
96,158
95,752
–
333
–
333
736
742
–
–
736
742
–
–
154
(54,331)
(7)
43,452
73
–
(2)
96,158
154
(54,331)
(7)
43,452
73
–
(2)
96,158
19 Reserves
Foreign currency translation
(480)
(478)
Movement in foreign currency translation
reserve during the year
Balance at beginning of year
Net translation adjustment
Balance at end of year
Nature and purpose of reserve
The foreign currency translation reserve records the
foreign currency differences arising from the translation of
self-sustaining foreign operations. Refer to accounting
policy Note 1(e).
20 Retained profits / (accumulated losses)
(478)
(2)
(480)
(444)
(33)
(478)
–
–
–
–
–
–
–
–
Retained profits / (accumulated losses) at beginning of year
Capital reduction
Dividends paid
Net profit / (loss) attributable to members of the parent entity
Accumulated losses at end of year
18
(66,905)
54,331
(2,263)
(3,436)
(18,273)
(67,556)
–
–
651
(66,905)
(52,249)
54,331
(2,263)
(8,153)
(8,334)
(54,331)
–
–
2,082
(52,249)
CONSOLIDATED
THE COMPANY
NOTE
2005
$’000
2004
$’000
2005
$’000
2004
$’000
28,775
27,752
43,908
41,421
(3,439)
618
(8,153)
2,082
1,625
(2,263)
24,699
405
–
28,775
1,625
(2,263)
35,118
405
–
43,908
35
3,000
2,139
1,450
1,000
7,589
–
2,139
–
–
2,139
3,000
–
1,450
1,000
5,450
3,000
1,449
1,250
1,000
6,699
–
1,449
–
–
1,449
3,000
–
1,250
1,000
5,250
–
84
–
–
84
–
84
–
–
84
–
–
–
–
–
–
105
–
–
105
–
105
–
–
105
–
–
–
–
–
21 Total equity reconciliation
Total equity at beginning of year
Total changes in parent entity interest in equity
recognised in statements of financial performance
Transaction with owners as owners:
Contribution of equity
Dividends paid
Total equity at end of year
22 Financing arrangements
The consolidated entity has access to the following
lines of credit:
Total facilities available:
Bank overdraft
Lease / hire purchase facility
Payroll facility
Creditor facility
Facilities utilised at balance date:
Bank overdraft
Lease / hire purchase facility
Payroll facility
Creditor facility
Facilities not utilised at balance date:
Bank overdraft
Lease / hire purchase facility
Payroll facility
Creditor facility
The 2005 facilities are secured in full by Mortgage
Debentures and Debt and Interest Guarantees over the
assets and undertakings of Hansen Corporation Pty Ltd in
its own right and in its capacity as trustee for the Kenneth
A Hansen Unit Trust, the assets and undertakings of
Hansen Professional Services Pty Ltd, Hansen Technologies
Limited and Director related entities in favour of Westpac
Banking Corporation.
Notes to the financial statements
For the year ended 30 June 2005
23 Dividends
2005
On the 26 August 2004 the Directors declared, out of the profits to 30 June 2004,
a final dividend of 1 cent per share fully franked, payable on 23 September 2004 to
shareholders on the register at 9 September 2004. Also on 17 February 2005 the
Directors declared an interim dividend of 1 cent per share partially franked to 0.12
cents (12%) per share.
2004
No dividends were paid or declared in the 2003/04 year.
Dividend franking account
30% franking credits, on a tax paid basis, are available to
shareholders of Hansen Technologies Limited for
subsequent financial years
THE COMPANY
2005
$’000
2004
$’000
–
542
The above available amounts are based on the balance of the dividend franking account at year-end adjusted for:
a) franking credits that will arise from the payment of any current tax liability;
b) franking debits that will arise from the payment of any dividends recognised as a liability at year-end;
c) franking credits that will arise from the receipt of any dividends recognised as receivables at year-end; and
d)
franking credits that the entity may be prevented from distributing in subsequent years.
The ability to utilise the franking credits is dependent upon there being sufficient available profits to declare dividends.
The Directors have determined that no final dividend will be paid in relation to the fiscal year ended 30 June 2005.
36
5
0
0
2
l
a
u
n
n
A
t
r
o
p
e
R
24 Additional financial instruments disclosure
(a) Interest rate risk
Interest rate risk exposures
The consolidated entity's exposure to interest rate risk and the effective weighted average interest rate for classes of
financial assets and financial liabilities is set out below:
2005
Financial assets
Cash
Receivables
Other
Financial liabilities
Payables
Lease liabilities
Employee entitlements
Deferred consideration
Other
2004
Financial assets
Cash
Receivables
Other
Financial liabilities
Payables
Lease liabilities
Employee entitlements
Deferred consideration
Other
(b) Credit risk exposures
WEIGHTED
AVERAGE
INTEREST
RATE
FLOATING
INTEREST
RATE
$’000
FIXED INTEREST MATURING IN:
1 YEAR
OR LESS
$’000
1 TO 5 MORE THAN
5 YEARS
YEARS
$’000
$’000
NON-
INTEREST
BEARING
$’000
NOTE
4.30%
8.25%
8.80%
8%
4.20%
8.25%
8.80%
8%
8
9
11
14
15
28
16
16
8
9
11
14
15
28
16
16
887
–
–
887
–
–
–
–
–
–
3,623
–
–
3,623
–
–
–
–
–
–
–
505
–
505
–
962
–
–
–
962
–
495
–
495
–
556
–
223
–
779
–
893
–
893
–
1,177
–
–
–
1,177
–
1,179
–
1,179
–
893
–
–
–
893
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
4,063
1,688
5,751
4,670
–
4,192
–
337
9,199
–
4,780
768
5,549
5,243
–
3,599
–
344
9,186
TOTAL
$’000
887
5,461
1,688
8,036
4,670
2,139
4,192
–
337
11,338
3,623
6,454
768
10,845
5,243
1,449
3,599
223
344
10,858
37
The credit risk on financial assets, excluding investments, of the consolidated entity that have been recognised on
the statements of financial position, is the carrying amount, net of any provision for doubtful debts.
The consolidated entity minimises concentrations of credit risk by undertaking transactions with a large number of
customers and counterparties and by performing extensive due diligence procedures on major new customers.
Concentrations of credit risk on trade and term debtors are: Utilities 35% (2004: 55%), Finance Sector 28% (2004: 24%),
Telecommunications 20% (2004: 13%) and Other 17% (2004: 8%). The consolidated entity has one individually significant
trade debtor, TXU Networks, which owed 7% (2004: 20% Alinta Ltd) of the consolidated entity's trade debtors.
(c) Net fair values of financial assets and liabilities
Net fair values at balance date of each class of financial asset and liability do not materially differ from the carrying
amounts disclosed in the statements of financial position.
38
5
0
0
2
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a
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A
t
r
o
p
e
R
Notes to the financial statements
For the year ended 30 June 2005
CONSOLIDATED
THE COMPANY
NOTE
2005
$’000
2004
$’000
2005
$’000
2004
$’000
25 Commitments
Non-cancellable operating lease expense commitments
Future operating lease commitments not provided for in
the financial statements and payable:
Within one year
One year or later and no later than five years
Later than five years
Hire purchase commitments
Hire purchase payments are payable:
Within one year
One year or later and no later than five years
Less: Future finance charges
Hire purchase liabilities provided for in the
financial statements:
Current
Non-current
Total lease liabilities
Finance lease commitments
Finance lease payments are payable:
Within one year
One year or later and no later than five years
Less: Future finance charges
Lease liabilities provided for in the financial statements:
Current
Non-current
Total lease liabilities
2,218
6,827
–
9,045
2,208
5,069
–
7,277
406
413
819
(61)
758
363
395
758
708
861
1,569
(188)
1,381
599
782
1,381
347
530
877
(78)
799
299
500
799
237
466
703
(53)
650
257
393
650
–
–
–
–
25
63
88
(4)
84
20
63
83
–
–
–
–
–
–
–
–
–
–
–
–
27
88
115
(10)
105
21
84
105
–
–
–
–
–
–
–
–
Non-cancellable operating lease expense commitments
The consolidated entity leases property under non-cancellable operating leases expiring from one to seven years. Leases
generally provide the consolidated entity with a right of renewal at which time all terms are renegotiated. Contingent rental
provisions within the lease agreements require the minimum lease payments to be increased by CPI per annum.
Hire purchase commitments
The consolidated entity leases motor vehicles and plant and equipment under hire purchase leases expiring from
one to four years. At the end of the lease term, the consolidated entity is deemed to have purchased the assets.
Finance lease commitments
The consolidated entity leases plant and equipment under finance leases expiring from one to three years. At the end of
the lease term, the consolidated entity has the option to return the assets to the lessor or to renew the lease agreements.
26 Controlled entities
(a) Particulars in relation to controlled entities
NAME
NOTE
COUNTRY OF INCORPORATION
Parent entity
Hansen Technologies Limited
Australia
Controlled entities
Hansen Corporation Pty Ltd as trustee for Kenneth A Hansen Unit Trust
Hansen Research & Development Pty Ltd
Hansen Corporation Investments Pty Ltd
Radius Computing Pty Ltd
Hansen Professional Services Pty Ltd
Hansen Corporation Asia Limited
Hansen Corporation Europe Limited
Hansen Corporation Limited
Hansen Corporation USA, Limited
Hansen Holdings (Asia) Pty Ltd
Hansen North America, Inc.
Hansen Marotz BV
Hansen IBP Ltd
Hansen SVi Ltd
Hansen Technologies (Malaysia) Sdn. Bhd.
Hansen Datatrue Ltd
Australia
Australia
Australia
Australia
Australia
Hong Kong
United Kingdom
New Zealand
United States of America
Australia
United States of America
Netherlands
Hong Kong
Hong Kong
(ii)
(i)
(i)
(i) Malaysia
(ii)
United Kingdom
ORDINARY SHARE
CONSOLIDATED
ENTITY INTEREST
2005
%
2004
%
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
100
100
100
39
Notes:
(i)
(ii) These entities are in the process of being deregistered.
These entities were placed into liquidation on 29 August 2002.
(b) Acquisition of controlled entities
There were no acquisitions during 2005 (2004: nil).
(c) Disposal of controlled entities
There were no entities disposed of during the year (2004: nil).
Notes to the financial statements
For the year ended 30 June 2005
CONSOLIDATED
THE COMPANY
NOTE
2005
$’000
2004
$’000
2005
$’000
2004
$’000
27 Notes to the statements of cash flows
(a) Reconciliation of cash
For the purposes of the statements of cash flows, cash
includes cash on hand and at bank and short-term deposits
at call. Cash as at the end of the financial year as shown in
the statements of cash flows is reconciled to the related
items in the statements of financial position as follows:
Cash assets
887
3,623
12
(24)
(b) Reconciliation of profit / (loss) from ordinary activities
after income tax to net cash provided by operating activities
Profit / (loss) from ordinary activities after income tax
Add / (less) items classified as investing / financing activities:
(Profit) / loss on sale of non-current assets
Payment for resolution of legal dispute
Proceeds from sale of intellectual property
Add / (less) non cash items:
Amortisation and depreciation
Transfer of tax losses within tax consolidation group
Write-down of non-current assets
Net cash provided by operating activities before change
in assets and liabilities
Changes in assets and liabilities adjusted for effects of
purchases and disposal of controlled entities during the year:
(Increase) / decrease in trade debtors
(Increase) / decrease in sundry debtors and other assets
Increase / (decrease) in trade creditors
Increase / (decrease) in other creditors and accruals
Increase / (decrease) in deferred income
Increase / (decrease) in provisions
(Increase) / decrease in future income tax benefits
Increase / (decrease) in income taxes payable
Increase / (decrease) in deferred taxes payable
Net cash (used in) / provided by operating activities
(3,436)
18
300
(558)
5,968
–
3,603
651
36
525
–
5,741
–
–
(8,153)
2,082
–
300
–
18
449
8,500
7
–
–
19
709
–
5,895
6,953
1,114
2,817
458
(1,191)
424
(973)
(279)
925
(1,958)
(10)
752
4,041
165
828
(251)
(924)
(3,152)
(136)
(1,329)
51
910
3,115
–
(43)
–
(329)
–
(1)
(409)
–
81
413
–
30
(95)
893
–
(465)
135
–
310
3,626
40
5
0
0
2
l
a
u
n
n
A
t
r
o
p
e
R
CONSOLIDATED
THE COMPANY
NOTE
2005
$’000
2004
$’000
2005
$’000
2004
$’000
28 Employee benefits
Provision for employee entitlements
Aggregate liability for employee entitlements,
including on-costs:
Current
Non-current
The present value of employee entitlements not expected
to be settled within twelve months of balance date have
been calculated using the following weighted averages:
Assumed rate of increase in wage and salary rates
Discount rate
Settlement term (years)
Number of employees
Number of employees at year end
3,910
282
4,192
3,446
153
3,599
204
–
204
190
–
190
3%
5.2%
3%
5.6%
3%
3%
5.2%
5.6%
10 years
10 years
10 years
10 years
315
309
1
1
Employee Share Option Plan
The Employee Share Option Plan ("the Plan") was approved by shareholders at the Company's annual general
meeting on 9 November 2001.
The maximum number of options on issue under the Plan must not at any time exceed 7.5% of the total number of
ordinary shares on issue at that time.
The Board may issue options under the Plan to any employee of the Company and its subsidiaries, including
executive Directors and non-executive Directors.
Options will be issued free of charge, unless the Board determines otherwise. Each option is to subscribe for one
ordinary share and, when issued, the shares will rank equally with other shares. The options are not transferable.
Quotation of the options on the ASX will not be sought but the Company will apply to the ASX for official quotation of
shares issued on the exercise of options. Options may be granted subject to conditions specified by the Board which
must be satisfied before the option can be exercised.
Unless the terms on which an option was offered specified otherwise, an option may be exercised at any time after the
vesting date. An option may also be exercised in special circumstances, that is, at any time within six months after the
employee's death, total and permanent disablement, retirement or retrenchment. An option lapses upon termination of
the employee's employment with the Company and, unless the terms of the offer of the option specify otherwise,
lapses five years after the date upon which it was granted. The Directors have the discretion to vary the terms of the
options as deemed appropriate.
The exercise price per share for an option will be the amount determined by the Board at the time of the grant of the
option. There are no voting rights or dividend rights attached to the options prior to the options being exercised.
Option holders will not be entitled to participate in any new issue of securities in the Company unless they exercise
their options prior to the record date for the determination of entitlements to the new issue.
If the Company makes a bonus issue of securities to ordinary shareholders, each unexercised option will, on
exercise, entitle its holder to receive the bonus securities as if the option had been exercised before the record date
for the bonus issue.
41
Notes to the financial statements
For the year ended 30 June 2005
28 Employee benefits
Employee Share Option Plan cont.
If the Company makes a pro-rata Rights Issue of ordinary shares for cash to its ordinary shareholders, the exercise
price of unexercised options may be adjusted to reflect the diluting effect of the issue.
If there is any reorganisation of the capital of the Company, the number of options and their exercise price will be
adjusted in accordance with the Listing Rules.
GRANT DATE
EXERCISE
DATE
EXPIRY
DATE
EXERCISE
PRICE
$
NUMBER OF
OPTIONS AT
BEGINNING
OF YEAR
OPTIONS
GRANTED
OPTIONS
EXERCISED
OR LAPSED
NUMBER OF OPTIONS
AT END OF YEAR
ISSUED
VESTED
Consolidated and
Company 2005
26 May 2000
26 May 2002 26 May 2005 $1.00 1,760,000
– 1,760,000
–
–
42
7 Aug 2000
7 Aug 2002
7 Aug 2005
$1.40
200,000
25 Dec 2000
25 Dec 2002 25 Dec 2005 $1.90
50,000
1 July 2001
1 July 2004
1 July 2006
$1.50
650,000
1 October 2001
1 July 2004
1 July 2006
$1.50
145,000
5
0
0
2
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a
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n
A
t
r
o
p
e
R
1 Jan 2002
1 July 2003
1 July 2004
TOTAL
Consolidated and
Company 2004
1 Jan 2005
1 Jan 2007
$1.20
15,000
1 July 2006
1 July 2008
$0.19
660,000
1 July 2007
1 July 2009
$0.20
–
630,000
3,480,000
630,000 1,760,000 2,350,000 1,060,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
200,000
200,000
50,000
50,000
650,000
650,000
145,000
145,000
15,000
15,000
660,000
630,000
–
–
– 1,760,000 1,760,000
200,000
200,000
50,000
50,000
–
–
–
650,000
25,000
145,000
–
–
15,000
660,000
–
–
–
–
26 May 2000
26 May 2002 26 May 2005 $1.00 1,760,000
7 Aug 2000
7 Aug 2002
7 Aug 2005
$1.40
200,000
25 Dec 2000
25 Dec 2002 25 Dec 2005 $1.90
50,000
1 July 2001
1 July 2004
1 July 2006
$1.50
650,000
1 October 2001
1 July 2004
1 July 2006
$1.50
170,000
1 Jan 2002
1 July 2003
TOTAL
1 Jan 2005
1 Jan 2007
$1.20
15,000
1 July 2006
1 July 2008
$0.19
–
660,000
2,845,000
660,000
25,000 3,480,000 2,010,000
Employee Share Plan
The Employee Share Plan ("ESP") was approved by shareholders at the Company's annual general meeting on 9
November 2001.
The ESP is available to all eligible employees to acquire ordinary shares in the Company.
Shares to be issued or transferred under the ESP will be valued at the volume weighted average share price of
Shares traded on the ASX in the ordinary course of trading during the five business days immediately preceding the
day the shares are issued or transferred to qualifying employees or participants.
The Board has discretion as to how the shares are to be issued or transferred to participants. Such shares may
be acquired on or off market or the Company may allot shares, or they may be obtained by any combination of
the foregoing.
On application, employees pay no application monies. The amount of the consideration to be provided by qualifying
employees to acquire the shares can be foregone from future remuneration (before tax).
To qualify, employees must be full-time or permanent part-time employees of the Company or any subsidiary of the
Company.
Shares issued under the ESP will rank equally in all respects with all existing shares from the date of allotment.
A participant must not sell, transfer or otherwise dispose of any shares issued or transferred to the participant under
the ESP until the earlier of:
(a) the end of the period of three years (or, if a longer period is specified by the Board in the offer, the end of that
period) commencing on the date of the issue or transfer of the shares to the participant; and
(b) the date on which the participant is no longer employed by the Company or a related body corporate of the
Company.
Details of the movement in employee shares under
the ESP are as follows:
Number of shares at beginning of year
Number of shares distributed to employees
Number of shares transferred to main share registry
Number of shares disposed of
Number of shares at year-end
CONSOLIDATED
2005
NUMBER
2004
NUMBER
808,807
568,414
(97,976)
(132,811)
1,146,434
485,616
350,960
–
(27,769)
808,807
The consideration for the shares issued on 14 April 2004 was 20.94 cents, which was equal to the fair value of
the shares.
The consideration for the shares issued on 24 June 2005 was 27.09 cents, which was equal to the fair value of
the shares.
The amounts recognised in the financial statements of
the consolidated entity and the Company in relation to
the ESP during the year were:
NOTE
Current receivables
Issued ordinary share capital
CONSOLIDATED
THE COMPANY
2005
$’000
77
154
2004
$’000
35
72
2005
$’000
77
154
2004
$’000
35
72
There were no shares eligible for issuance under the ESP on 30 June 2005.
43
44
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Notes to the financial statements
For the year ended 30 June 2005
29 Directors' and executives' remuneration
Directors
Non-executive
K Hansen
G Tomlinson
B Adams
R Alston
Executive
A Hansen (Managing Director & CEO)
Specified Executives
Consolidated
G Lister (CFO & Company Secretary)
G Kentish (GM, Hansen Europe)
A Di Fede (Chief Information Officer)
C Hunter (Chief Operations Officer)
J Payne (GM, Outsourcing)
Directors
Non-executive
K Hansen
G Tomlinson
B Adams
Executive
A Hansen (Managing Director & CEO)
Specified Executives
Consolidated
G Lister (CFO & Company Secretary)
J Payne (GM, Outsourcing)
C Hunter (Chief Operations Officer)
BASE
EMOLUMENT
2005
$
BONUSES
2005
$
NON-CASH
SUPER
BENEFITS CONTRIBUTIONS
2005
$
2005
$
OPTIONS
ISSUED
(A)
2005
REMUNERATION
GRANTED
AS OPTIONS
2005
%
TOTAL
2005
$
64,815
46,296
37,037
15,432
–
–
–
–
–
–
–
–
5,833
4,166
3,333
1,389
354,257
82,569 25,000
37,844
–
–
–
–
–
–
–
–
–
70,648
50,462
40,370
16,821
– 499,670
201,835
203,244
13,333
123,759
146,789
36,697
–
–
–
–
–
18,349 20,102
–
9,174
21,468 7,575
–
–
–
120
12,790 7,575
14,037 7,575
3% 267,575
– 203,244
13,453
–
4% 182,575
4% 177,575
2004
$
2004
$
2004
$
2004
$
2004
2004
%
2004
$
64,815
46,296
37,037
–
–
–
–
–
–
5,833
4,166
3,333
321,101
45,872 25,000
33,027
–
–
–
–
–
–
–
70,648
50,462
40,370
– 425,000
183,486
146,131
111,039
–
–
–
14,420
14,335 23,342
16,514 4,275
14,449 4,275
11,283 4,275
2% 204,275
2% 179,275
3% 164,274
Note:
(A) All options above expire during the period up to 1 July 2009 and each option entitles the holder to purchase one ordinary share in the Company. The
estimated value disclosed above is calculated at the date of grant using the Black-Scholes model. This model utilises the standard deviation in respect
to share price movement of the company and the industry average, based on historical trends for a period equal to the vesting period of the options
issued, and applies it against the issued price at grant date to determine a fair value for the options issued as at grant date.
(B) The value disclosed above relates to the pro-rata estimated combined value of options issued to the Directors and Executive Officers in the 2003,
2002 and 2000 financial years and is disclosed in accordance with the Australian Securities and Investments Commission's guidelines for valuing
and disclosing options as released on 30 June 2003. The valuation of the options issued to Directors and Executive Officers were disclosed in the
Directors' Report for the relevant years and in respect to the options issued in 2000 were disclosed in the Company's IPO Prospectus in 2000.
The options are exercisable between the price range of $0.19 - $1.50.
Remuneration Options
During the financial year the Company granted options over unissued ordinary shares to the following five officers
with the greatest authority for strategic direction and management of the Company as part of their remuneration:
Hansen Technologies Ltd year ended 30 June 2005
Specified Executives
G Lister
G Kentish
A Di Fede
C Hunter
J Payne
Total
VESTED
NUMBER
GRANTED
NUMBER
GRANT DATE
VALUE PER
OPTION AT
GRANT DATE
EXERCISE
PRICE
$
FIRST
EXERCISE
DATE
LAST
EXERCISE
DATE
TERMS & CONDITIONS FOR EACH GRANT
–
–
–
–
–
–
75,000
–
–
75,000
75,000
225,000
1-Jul-04
–
–
1-Jul-04
1-Jul-04
$0.20
–
–
$0.20
$0.20
$0.20
–
–
$0.20
$0.20
1-Jul-07
–
–
1-Jul-07
1-Jul-07
1-Jul-09
–
–
1-Jul-09
1-Jul-09
All grants of options vest after 3 years to the extent that vesting criteria are met. If the vesting criteria are not met the
options may be forfeited. Options expire two years after vesting.
No options were granted during the financial year to any Director.
Options and Rights Holdings
Hansen Technologies Ltd year ended 30 June 2005
Number of options held by Specified Directors and Executives:
Specified Directors
K Hansen
G Tomlinson
B Adams
A Hansen
Specified Executives
G Lister
G Kentish
A Di Fede
C Hunter
J Payne
Total
BALANCE
30-JUN-04
GRANTED AS
REMUNERATION
LAPSED
BALANCE
30-JUN-05
VESTED AT 30 JUNE 2005
TOTAL
EXERCISABLE UNEXERCISABLE
–
100,000
60,000
550,000
–
–
–
–
–
100,000
60,000
400,000
–
–
–
150,000
–
–
–
150,000
–
–
–
150,000
75,000
–
–
310,000
75,000
1,170,000
75,000
–
–
75,000
75,000
225,000
–
–
–
160,000
–
720,000
150,000
–
–
225,000
150,000
675,000
–
–
–
75,000
–
225,000
–
–
–
75,000
–
225,000
–
–
–
–
–
–
–
–
–
–
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Notes to the financial statements
For the year ended 30 June 2005
29 Directors' and executives' remuneration cont.
Shareholdings
Hansen Technologies Ltd year ended 30 June 2005
Number of shares held by Specified Directors and Executives:
Specified Directors
K Hansen
G Tomlinson
B Adams
A Hansen
Specified Executives
G Lister
G Kentish
A Di Fede
C Hunter
J Payne
Total
30 Related parties
BALANCE
30-JUN-04
NET CHANGE
OTHER
BALANCE
30-JUN-05
65,784,262
415,418
143,775
10,218,543
1,472,036
21,894
6,260
(297,021)
67,256,298
437,312
150,035
9,921,522
409,000
–
–
33,522
10,489
77,015,009
3,691
–
–
4,605
3,691
1,215,156
412,691
–
–
38,127
14,180
78,230,165
Directors
The names of each person holding the position of Director of Hansen Technologies Limited during the financial year
are:
Kenneth Hansen
Andrew Hansen
Geoff Tomlinson
Bruce Adams
Hon. Richard Alston
Details of Directors' remuneration and retirement benefits are set out in Note 29.
Apart from the details disclosed in this note, no Director has entered into a material contract with the Company or the
consolidated entity since the end of the previous financial year and there were no material contracts involving
Directors' interests subsisting at year-end.
Loans to Directors
No loans were made to the Directors during the year.
Directors' holdings of shares and share options
The interests of Directors of the reporting entity and their Director-related entities in shares and share options of entities
within the consolidated entity at year-end are set out below:
Hansen Technologies Limited
Ordinary shares
Options over ordinary shares
CONSOLIDATED
2005
NUMBER
2004
NUMBER
77,765,167 76,561,998
710,000
150,000
Directors' transactions with the Company or its controlled entities
The terms and conditions of the transactions with Directors and their Director-related entities were no more
favourable than those available, or which might reasonably be expected to be available, on similar transactions to
non-director related entities on an arm's length basis.
The aggregate amounts recognised during the year relating to Directors and their Director-related entities were
as follows:
CONSOLIDATED
THE COMPANY
K Hansen and A Hansen - Lease rental payments
791,899
750,547
NOTE
2005
$
2004
$
2005
$
–
2004
$
–
Lease rental payments
Mr K Hansen and Mr A Hansen have through entities with which they are related leased properties to the consolidated
entity on an arm’s length basis. Total lease rental payments made to these Director-related entities for the year ended
30 June 2005 were $123,612 and $668,287 respectively (2004: $122,352 and $628,195 respectively).
The son of Mr K Hansen, also the brother of Mr A Hansen, is a Director and shareholder of Hansen Couriers Pty Ltd
which provided courier services to the consolidated entity at ordinary commercial rates and terms on an arm's length
basis. Mr K Hansen is also a Director of Hansen Couriers Pty Ltd. Total courier fees paid to Hansen Couriers Pty Ltd
for the year ended 30 June 2005 was $68,597 (2004: $110,305).
47
Non-director related parties
The classes of non-director related parties are:
- Wholly-owned group
- Other related parties
Transactions
All transactions with non-director related parties are on normal terms and conditions.
Acquisition of Hansen North America, Inc.
During the 2002 financial year, the Company acquired Hansen North America, Inc. Group of entities from Mr W
Roetzheim, a Director of Hansen North America, Inc. At 30 June 2005, the financial information relating to payments
made in respect of this acquisition, including amounts outstanding at that date are as follows:
Consideration paid
Consideration provided for
NOTE
CONSOLIDATED
THE COMPANY
2005
$’000
223
–
2004
$’000
628
223
2005
$’000
2004
$’000
–
–
–
–
Percentage of equity interest
Details of equity interests held in controlled entities are set out in Note 26.
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Notes to the financial statements
For the year ended 30 June 2005
31 Impacts of adopting Australia's equivalents to IFRSs
The Company is currently evaluating the key differences in accounting policies, identifying the changes to the
Company’s financial reporting systems and commencing evaluation of the financial impact arising from key
differences in accounting policies that are expected to arise from adopting Australian equivalents of IFRS.
For first-time adoption of Australian equivalents to IFRSs, the date of transition will be 1 July 2004. The key
differences in accounting policies that are expected to arise from adopting Australian equivalents to IFRS are detailed
below. A reconciliation of estimated adjustments to opening balances at 1 July 2004, together with restated results
under IFRSs for the year ended 30 June 2005, is provided in Note 32.
(i) Share based payments
Under AASB 2 Share based payments, the Company will be required to determine the fair value of equity settled
transactions and recognise an expense in the statements of financial performance. Share-based payments to
employees (such as the grant of options under the Employee Option Plan) will also be expensed under IFRS.
Reliable estimation of the future financial effects of this change in accounting policy is impracticable as the details of
future equity based remuneration plans are unknown.
On adoption of Australian equivalents of IFRSs, retained earnings at 1 July 2004 and reported results for the year
ended 30 June 2005 will be adjusted for all share-based payments issued after 7 November 2002, which do not vest
prior to 1 January 2005. An estimate of the financial impact is provided in the reconciliation in Note 32 below.
(ii) Goodwill
Amortisation of goodwill will cease on adoption of IFRS. Under IFRS, goodwill will be subject to impairment testing.
An estimate of the financial impact is provided in the reconciliation in Note 32 below.
On adoption of Australian equivalents of IFRSs, reported results for the year ended 30 June 2005 will be adjusted for
amortisation charges from 1 July 2004. Amortisation charges prior to 30 June 2004 may not be reversed under the
first-time adoption provisions.
(iii) Impairment of assets
The recoverable amount test under Australian GAAP will be replaced by impairment testing whereby the recoverable
amount is determined as the higher of fair value less costs to sell and value in use. Value in use incorporates the use
of discounted cash flows.
The entity does not anticipate any additional write-downs for impairment of non-current assets on first-time adoption
of IFRSs, nor in the year ended 30 June 2005.
(iv) Income taxes
Under IFRS a balance sheet approach will be adopted under which temporary differences are identified for each
asset and liability rather than accounting for the effect of timing and permanent differences between taxable and
accounting profit. In addition, a future income tax benefit must be recognised for tax losses where their realisation is
considered probable. Under Australian accounting standards tax losses may only be recognised where realisation is
considered to be virtually certain.
(v) The effects of changes in foreign exchange rates
The parent entity has foreign subsidiaries, which were treated as integrated and self-sustaining entities under
Australian Accounting Standards. On first-time adoption of Australian equivalents of IFRSs new rules apply for
translation of the foreign subsidiary’s results to be included in the consolidated financial statements.
Upon first-time adoption of AASB 121 The Effects of Changes in Foreign Exchange Rates, the cumulative transaction
differences of all foreign operations classified as integrated operations under Australian Accounting Standards are
deemed to be zero at the date of transition to Australian equivalents of IFRS, as permitted by AASB 1, paragraph 22(a).
On adoption of Australian equivalents of IFRSs, retained earnings at 1 July 2004 and reported results for the year
ended 30 June 2005 will be adjusted for changes to the foreign currency translation rules. An estimate of the financial
impact is provided in the reconciliation in Note 32 below.
32 Reconciliation of reported amounts under Australian Accounting Standards to AIFRS
(a) Reconciliation of total equity at 1 July 2004
Total equity at 1 July 2004:
As reported under Australian Accounting Standards
Share-based payments / option reserve
Dr retained earnings
Cr options granted reserve
Adjustments relating to recalculation of deferred tax using the balance sheet method at 30 June 2004
Total equity at 1 July 2004 as restated under AIFRSs
(b) Reconciliation of operating profit after tax for the year ended 30 June 2005
Operating profit after tax for the year ended 30 June 2005:
As reported under Australian Accounting Standards
Share-based payments earned during the year ended 30 June 2005
Goodwill on consolidation adjustments
Reversal of amortisation for the year ended 30 June 2005
Deferred tax adjustment for the year ended 30 June 2005
Foreign currency translation reserve adjustment for foreign subsidiary during the year ended 30 June 2005
Operating profit after tax as restated under AIFRS for the year ended 30 June 2005
(c) Reconciliation of total equity at 30 June 2005
Total equity at 30 June 2005:
As reported under Australian Accounting Standards
Share-based payments / option reserve
Dr retained earnings
Cr options granted reserve
Foreign currency translation adjustment for foreign subsidiary arising during the year
Dr retained earnings
Cr foreign currency translation reserve
Adjustments relating to recalculation of deferred tax using the balance sheet method at 30 June 2005
Goodwill on consolidation adjustments
Reversal of amortisation for the year ended 30 June 2005
Total equity at 30 June 2005 as restated under AIFRS
$
28,775,208
(12,540)
12,540
nil
28,775,208
(3,436,142)
33,755
1,049,676
nil
(253,678)
(2,606,389)
24,699,022
(46,295)
46,295
(253,678)
253,678
nil
1,049,676
25,748,698
49
Directors’ Declaration
The Directors declare that the financial statements and notes set out on pages 14 to 49 in accordance with the
Corporations Act 2001:
(a) Comply with Accounting Standards, the Corporations Regulations and other mandatory professional reporting
requirements;
(b) Give a true and fair view of the financial position of the consolidated entity as at 30 June 2005 and of its
performance as represented by the results of its operations and its cash flows, for the financial year ended on that
date; and
(c) That the Directors have been given the declaration required under section 295A of the Corporations Act 2001.
In the Directors’ opinion there are reasonable grounds to believe that Hansen Technologies Limited will be able to pay
its debts as and when they become due and payable.
This declaration is made in accordance with a resolution of the Directors.
Dated at Melbourne this 30th day of September 2005.
Signed in accordance with a resolution of the Directors:
Kenneth Hansen
Director
Andrew Hansen
Director
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Independent Audit Report
Scope
We have audited the financial report of Hansen Technologies Limited and controlled entities for the financial year ended
30 June 2005 comprising the Directors' Declaration, statements of financial performance, statements of financial
position, statements of cash flows and notes to the financial statements.
The company's directors are responsible for the financial report. We have conducted an independent audit of this
financial report in order to express an opinion on it to the members of the Company.
Our audit has been conducted in accordance with Australian Auditing Standards to provide reasonable assurance
whether the financial report is free of material misstatement. Our procedures included examination, on a test basis, of
evidence supporting the amounts and other disclosures in the financial report, and the evaluation of accounting policies
and significant accounting estimates. These procedures have been undertaken to form an opinion whether, in all
material respects, the financial report is presented fairly in accordance with Accounting Standards and other mandatory
professional reporting requirements in Australia and Corporations Act 2001 so as to present a view which is consistent
with our understanding of the company's financial position and performance as represented by the results of their
operations and their cash flows.
51
The audit opinion expressed in this report has been formed on the above basis.
Audit Opinion
In our opinion, the financial report of Hansen Technologies Limited is in accordance with:
(a) the Corporations Act 2001, including:
(i) giving a true and fair view of the Company's financial position as at 30 June 2005 and of its performance for the
financial year ended on that date; and
(ii) complying with Accounting Standards in Australia and the Corporations Regulations 2001; and
(b) other mandatory professional requirements in Australia.
PITCHER PARTNERS
D B RANKIN
Partner
Melbourne, 30th September 2005
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Corporate Governance
The Corporate Governance principles for the management
and operation of the Hansen group of companies are
available for review on the corporate web site,
www.hsntech.com.
election/appointment of Directors and provides for a
minimum of three Directors and a maximum of ten. There
are currently 3 non-executive directors and one executive
director on the Board, the CEO Andrew Hansen.
Introduction
Hansen aims to govern our business to meet our
responsibilities to our shareholders, customers, employees
and community. The Hansen Corporate Governance
principles are designed to provide guidance to achieve this
in practice.
The Board is committed to achieving best practice in
Corporate Governance and the principles of the ASX
Corporate Governance Council are recognised and
supported. The Hansen Board, management and staff are
cognisant of the Hansen governance principles and the
Board aims is to revise the governance practices to ensure
we improve and keep in step with current standards.
The Hansen principles of Corporate Governance are
represented by:
1. Board Charter
2. Audit Charter
3. Code of Conduct
4. Risk Management Policy
5. Shareholder Communications
6. Share Trading Policy
7. Remuneration Policy
8. Continuous Disclosure
1. Board of Directors Charter
Introduction
The primary role of the Board of Directors is to provide
effective governance over the Hansen Technologies
Group’s performance and affairs. In carrying out its
responsibilities, the Board undertakes to serve the interest
of shareholders, employees, customers and the broader
community honestly, fairly, diligently and in accordance
with applicable laws.
Composition
The Board determines the Board’s size and composition,
subject to limits imposed by the Company’s Constitution.
The Constitution determines the basis for the
The Chairman of the Board, Kenneth Hansen, is the
original founder of the Company and currently its majority
shareholder. His background in computer services,
outsourcing and software development and his specific
experience in utility billing applications offer a depth of
experience and skills that are important for the position of
Chairman. Given the specialist nature and industry specific
focus of Hansen’s business an independent chairman is
not regarded as necessary at this time.
Meetings
The Board will meet as often as deemed necessary by the
directors in order to fulfil their duties and responsibilities as
directors and as dictated by the needs of the business. It
is expected that under normal circumstances the Board
will meet at least once each month.
Independence
The Board’s definition of an independent director is one
who is independent of management and free from any
business or other relationship that could materially interfere
with the exercise of independent judgment.
Consideration is always given to the issue of director
independence in respect to each given situation to be
considered. Where potential for conflict is identified the
Board appoints a sub committee specifically structured,
authorised and tasked to determine the appropriate actions
or responses so as to eliminate any potential for conflicts.
Board’s Duties and Responsibilities
The Board’s specific responsibilities include:
• providing strategic direction and approving corporate
strategies;
• selecting and appointing (and, if appropriate, removing
from office) the Chief Executive, determining his or her
conditions of service and monitoring his or her
performance against established objectives;
• monitoring management and financial performance;
• ensuring that adequate risk management controls and
reporting mechanisms are maintained;
• approving and monitoring the progress of major capital
expenditure, capital management and acquisitions
and divestments;
• ensuring that continuous disclosure requirements are
met; and
• ensuring responsible corporate governance is understood
and observed at management and Board level.
The Board delegates to the Chief Executive responsibility
for implementing the strategic direction, and for managing
the day-to-day operations, of the Hansen Group. The
Chief Executive consults with the Chairman, in the first
instance, on matters that are sensitive, extraordinary or of
a strategic nature.
Board’s Rights
The Board shall have full and free access to executives
and other employees of the Group.
The Board collectively and each Director individually may
take, at the Company’s expense, such independent advice
as is considered necessary to fulfil their relevant duties and
responsibilities. Individual Board members seeking such
advice must obtain the approval of the Chairman, which
will not be unreasonably withheld, and the advice will be
made available to all Board members as appropriate.
Board Committees
To assist it in carrying out its responsibilities, the Board has
established several standing committees comprising some
or all of its members. They are:
• Audit and Risk Management Committee
• Remuneration Committee
• Nominations Committee
The first two committees are composed of non-executive
Directors only. The Nominations Committee is a committee
of the full Board.
The Audit and Risk Management Committee meets at least
twice a year and the other committees meet as required.
Other committees of the Board are established from time
to time to undertake specific tasks for and on behalf of the
Board as and when deemed appropriate.
Performance Evaluation
involve the assessment of all of the Board’s key areas of
responsibility. The Board’s contribution as a whole should
be reviewed and areas where improvement can be made
should be noted.
The performance evaluation process is as follows:
• each member of the Board and Committees will
complete a written performance evaluation questionnaire
each year and submit this to the Chairman;
• the Chairman of the Board will present a report
incorporating his assessment of the questionnaires to
enable the Board to assess, and if necessary, take action;
• the Board will agree on development and action to
improve performance, to be completed by the end of
each year;
• outcomes and actions will be minuted; and
• the Chairman will assess during the year the progress of
the actions to be achieved.
This process aims to ensure that individual Directors and
the Board as a whole contribute effectively in achieving the
duties and responsibilities of the Board.
2. Audit Committee Charter
Introduction and Organisation
This charter governs the operations of the Audit
Committee. The Committee shall review and reassess the
charter at least annually and obtain the approval of the
Board of Directors for any changes.
Membership
The Audit Committee was formed in May 2000. Generally
the approach to the Committee is that the members will
be of, and appointed by, the Board of Directors and shall
preferably comprise three directors that have diverse,
complementary backgrounds, and are independent of
management. In addition, the Committee chair shall have
leadership experience and a sound finance, accounting
and / or business background. All Committee members
must be appropriately financially literate, such qualification
is interpreted by the Board in its business judgment.
Furthermore, at least one member shall have accounting
and / or related financial management expertise.
The Board reviews and evaluates the performance of the
Board and the Board committees. The process is to
The members of the Committee as at 30 June 2005 are two
non-executive directors, Geoff Tomlinson and Bruce Adams.
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The Chairman of the Audit Committee is currently Geoff
Tomlinson. During the past year the Honourable Richard
Alston was appointed to the Audit Committee. With his
departure in December 2004, a vacancy remains to be filled.
It remains the intention of the Board to appoint at least one
additional non-executive Director to this Committee.
Members of the Committee shall be considered
independent so long as they do not have any relationship
with the Hansen Group that may interfere with the exercise
of independent judgment. This means they shall not
accept any consulting, advisory, or other compensatory
fee from the Company and are not an affiliated person of
the Hansen Group or its related entities. The only
compensation shall be directors’ fees for services provided
to the Audit Committee.
Meetings
The Committee shall meet at least twice each year. The
purpose of these meetings shall be to:
1. review and approve the half-year financial report;
2. review and approve the annual financial report;
3. review the external audit reports; and
4. perform the general responsibilities of the Committee.
Purpose
The Audit Committee shall provide assistance to the Board
of Directors in fulfilling its corporate governance and
oversight responsibilities in relation to the Company’s
financial reporting, internal control structure, risk
management systems, and external audit functions. In
doing so, it is the responsibility of the Committee to
maintain free and open communication between the
Committee, external auditors and management of the
Hansen Group. In discharging its oversight role, the
Committee is empowered to investigate any matter
brought to its attention with full access to all books,
records, facilities, and personnel of the Hansen Group and
the authority to engage independent counsel and other
advisers as it determines necessary to carry out its duties.
Duties and Responsibilities
The following shall be the principal duties and
responsibilities of the Audit Committee. These are set forth
as a guide with the understanding that the Committee may
supplement them as appropriate.
Understanding the Business
The Committee shall ensure it understands the Group’s
structure, controls, and types of transactions in order to
adequately assess the significant risks faced by the Group
in the current environment.
Financial Reporting
The primary responsibility of the Audit Committee is to
oversee the Group’s financial reporting process on behalf of
the Board and report the results of its activities to the Board.
Whilst the Audit Committee has the responsibilities and
powers set forth in this Charter, it is not the duty of the Audit
Committee to plan or conduct audits. The Board of
Directors is responsible for the Group’s financial reports
including the appropriateness of the accounting policies and
principles that are used by the Group. The external auditors
are responsible for auditing the Group’s financial reports and
for reviewing the Group’s interim financial reports. The
Committee, in carrying out its responsibilities, believes its
policies and procedures should remain flexible, in order to
best react to changing conditions and circumstances. The
Committee will take appropriate actions to set the overall
corporate ‘tone’ for quality financial reporting, sound
business risk practices, and ethical behaviour.
Assessment of Accounting, Financial and
Internal Controls
The Committee shall discuss with management and the
external auditors, the adequacy and effectiveness of the
accounting and financial controls, including the Group’s
policies and procedures to assess, monitor, and manage
business risk, and legal and ethical compliance programs
(including the Group’s Code of Conduct). Any opinion
obtained from the external auditors on the Group’s choice
of accounting policies or methods should include an
opinion on the appropriateness and not just the
acceptability of that choice or method. The Committee
shall meet separately periodically with management and
the external auditors to discuss issues and concerns
warranting Committee attention, including but not limited
to their assessments of the effectiveness of internal
controls and the process for improvement. The Committee
shall provide sufficient opportunity for the external auditors
to meet privately with the members of the Committee. The
Committee shall review with the external auditor any audit
problems or difficulties and management’s response. The
Committee shall receive regular reports from the external
auditor on the critical policies and practices of the Group,
and all alternative treatments of financial information within
generally accepted accounting principles that have been
discussed with management.
Appointment of External Auditors
The Committee shall be directly responsible for making
recommendations to the Board of Directors on the
appointment, reappointment or replacement (subject, if
applicable, to shareholder ratification), remuneration,
monitoring of the effectiveness, and independence of the
external auditors, including resolution of disagreements
between management and the auditor regarding financial
reporting. The Committee shall pre-approve all audit and
non-audit services provided by the external auditors and
shall not engage the external auditors to perform any non-
audit / assurance services that may impair or appear to
impair the external auditor’s judgment or independence in
respect of the Hansen Group.
Assessment of External Audit
The Committee, at least on an annual basis, shall obtain
and review a report by the external auditors describing (or
meet, discuss and document the following with them):
• the audit firm’s internal quality control procedures;
• any material issues raised by the most recent internal
quality control review, or peer review, of the audit firm, or
by any inquiry or investigation by governmental or
professional authorities, within the preceding five years,
respecting one or more independent audits carried out
by the firm, and any steps taken to deal with any such
issues; and
• all relationships between the external auditor and the
Group (to assess the auditor’s independence).
In addition, the Committee shall give clear direction in
hiring policies for employees or former employees of the
external auditor in order to prevent the impairment or
perceived impairment of the external auditor’s judgment or
independence in respect of the Hansen Group.
Independence of External Auditors
The Committee shall review and assess the independence
of the external auditor, including but not limited to any
relationships with the Group or any other entity that may
impair or appear to impair the external auditor’s judgment
or independence in respect of the Group. Furthermore, the
Committee shall draft an annual statement for inclusion in
the Group’s annual report of whether the Committee is
satisfied the provision of non-audit services is compatible
with external auditor independence.
Scope of External Audit
The Committee shall discuss with the external auditors the
overall scope of the external audit, including identified risk
areas and any additional agreed-upon procedures. In
addition, the Committee shall also review the external
auditor’s compensation to ensure that an effective,
comprehensive and complete audit can be conducted for
the agreed compensation level.
Committee Performance
The Committee shall perform an evaluation of its
performance at least annually to determine whether it is
functioning effectively by reference to current best practice.
3. Code of Conduct
Introduction
At Hansen Technologies we recognise that our Group is
made up by the individual employees representing our
operation globally. Each person as an individual is
responsible for their own behaviours and should take
accountability for their actions and choices. The Hansen
Technologies Code of Conduct has been established to
assist all Hansen representatives to make considered
choices in regard to their behaviour. The Code of Conduct
reflects the Hansen’s Group primary values of integrity,
respect, teamwork and performance.
Our Code
To respect the law and act accordingly, including the
following:
• Hansen employees operate in numerous countries and it
is essential that the laws of each jurisdiction are
observed and followed. It is important to note that the
observance of the laws is not simply because they exist,
it is because it is right to do so. Breaching laws and
regulations can result in serious consequences for the
Hansen Group and the individual involved;
• we should respect customs and business practices of
countries in which we operate, whilst always observing
the primary principles of this code;
• where we believe our product or service provision would
be used in relation to illegal activities, we would withdraw
from involvement;
• discharging of authority to sign documents on behalf of
the Hansen Group should be performed responsibly and
indicates we have received and understood the
document being signed. We are not to act outside our
authority; and
• breaches of any law should be notified to management.
Behave as a good corporate citizen and build
community respect
Whilst pursuing our business objectives we should aim to
contribute to the communities we operate within and
should consider the impact of decisions on our colleagues,
customers and community.
Respect confidentiality and use information in an
appropriate manner
We respect the confidential nature of the Hansen Group’s
business affairs and those of our customers and colleagues.
As a part of our employment contract with the Hansen
Group we commit to keeping confidential information we
obtain in the course of our employment. Confidential
information is to be used only for authorised work-related
tasks, and never for personal gain or for the gain of others.
Value and build on our professionalism
A corner stone of the Hansen business is the
professionalism and conduct as individuals and of the
Hansen Group. In addition to conducting ourselves
ethically, we should continually aim for excellence in all
elements of our business activity.
Recognise potential conflicts of interest and act to
avoid them
A conflict of interest occurs where an employee has a
personal or professional interest sufficient to influence, or
appear to influence, the objective performance of their
duties and responsibilities to the Hansen Group. No
employee of the Group should allow themselves to be
placed in a position where they have a conflict with their
duties and responsibilities to the Hansen Group, or which
are prejudicial to the Group. Employees should speak to
their manager where they have concerns regarding a
potential conflict of interest.
Breaches of the Code of Conduct
Employees who breach this Code may face disciplinary
action, which could result in changes to their employment.
4. Risk Management Policy
Introduction
Hansen recognises that the daily activities and existence of
its business is subject to various elements that can create
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uncertainty and the challenge is to balance and manage
this process while striving to grow our stakeholder value.
Hansen recognises that such uncertainty brings with it
potential risk and opportunity. At Hansen all members of
the Group aim to promote culture, internal controls and
reporting which will empower all employees to manage risk
as and when it occurs, with the aim of achieving the stated
goals and strategic objectives.
Roles and Responsibilities
Board of Directors is responsible for approving and
reviewing Hansen’s risk management and policy. It
delegates daily management responsibility to the Chief
Executive Officer and is supported by sub-committees to
monitor risk management and performance controls.
Board Audit Risk Management Committee is
responsible for overseeing all aspects of internal control
including compliance activities, the appropriateness of
accounting policies and the adequacy of financial reporting.
Executive Management is responsible for implementing
Board approved Risk Management Policy and developing
operational policies, controls, processes and procedures for
identifying and managing risks in all of Hansen’s activities.
Independent Review will be conducted including:
• external audit being an overall independent evaluation of
the adequacy and effectiveness of management’s control
of operational risk;
• quality Assurance audits verifying that systems are
operating as planned; and
• independent reviews that may be conducted for special
assessment as required.
KEY RISK CATEGORIES
Operational Risk
Operational risk is the risk of loss resulting from inadequate
or failed internal processes or systems, decisions of
employees or from external events.
Hansen operates under a corporate governance
framework that is approved by the Board. Implementation
and accountability is the responsibility of management with
effectiveness being subject to external audit review.
Each individual business unit is responsible for the
identification, measurement, monitoring and mitigation of
operational risk. This is supported by input from corporate
level functions such as the office of Chief Operating Officer,
Risk Management Group, Legal and Finance Departments.
The internal control system is an integral part of Hansen’s
operations and involves all levels of personnel. The controls
are preventative and detective in nature and are reviewed
regularly for relevance and effectiveness. Key elements to
the internal control system are Change Management,
Finance Procedures, Delegation of Authority, Segregation
of Duties, Access Security, Reconciliation, Documentation
and Reporting. This is further supported by Contingency
Planning and Continual Improvement activities.
Credit Risk
Credit risk is the potential for financial loss where
customers or business associates fail to meet their
financial obligations to Hansen.
The foundation control is that individuals throughout the
Hansen Group are aware of credit risk and act to identify,
report and manage situations that arise. Specific policies
and procedures are in place to deal with credit risk, the
critical element of these policies being segregation of
duties and delegation of authority. Throughout the course
of the credit cycle each phase is assessed by the relevant
specialist group. Each group is trained and independent in
the cycle.
ORIGINATION
PROBLEM MANAGEMENT
• Target markets
• Within Group strategy
• Senior management involved
• Loss recognition where necessary
Sales / Vendor Dept. responsible
Risk Group & Finance responsible
EVALUATION
• Credit assessment
• Currency assessment
Finance Dept. responsible
ONGOING MANAGEMENT
& ADMINISTRATION
• Customer management
• Vendor management
• Ongoing finance review
Account Mgrs & Finance responsible
APPROVAL
• Delegation of authority
• Relevant areas to approve
• Centralised
Finance, Legal &
Commercial Delivery responsible
DOCUMENTATION & EXECUTION
• Standardised
• Centralise
CEO / Co Sec
& Legal responsible
Market Risk
Market risk is the potential for financial loss arising from
Hansen’s activities in the information technology market
across all regions. The components of the market risk
framework Hansen operates in are:
ORIGINATION
• Target markets
• Know your customers
• Know your vendors
• Product planning & management
• Pricing models
• Resource planning
ENVIRONMENT
• Assess the market & region
• Assess the product for the region
• Global Hansen policies
to be observed
• Manage segregation of duties
MONITORING & REPORTING
AUTHORITIES
• Transparency and communication
• Change management
• Central reporting on
product, financials, operations,
legal & risk management
• Delegation of authority
• Central authorities
• Supports segregation of duties
Overall Risk Treatment
Hansen relies on the internal control systems and the
ability and culture of staff and management to identify,
report and manage risk. All risks are to be reported to the
appropriate line manager and risk manager. The line
manager and risk manager will then decide any further
steps which are required to manage the risk. The risk can
be escalated to the executive management group or the
Board where necessary.
Where Hansen identifies risk, the risk will be managed with
the aim of minimising the likelihood of an adverse event
occurring, maximising the likelihood of a positive outcome
and reducing the impact of the risk.
5. Shareholder Communications
Introduction
Hansen has established communication mechanisms to
provide shareholders with information about their
Company and to enable them to exercise their rights as
shareholders in an informed manner.
Communication Methods
Information is communicated to shareholders through:
• the Hansen web site, www.hsntech.com, providing up to
date information on the Hansen Group, but particularly,
the “Investor Relations” section contains a range of
information relevant to shareholders. The Investor
Relations section currently contains:
- ASX announcements
- Annual Reports
- Corporate Governance
- Financial Results
- Presentations
- Share registry contact details and links
- Key dates
- Share price link to ASX
- Contact link for more information;
• the distribution of the Annual Report and Notice of
Annual General Meeting by post; and
• post or on the web site whenever there are other
significant developments to report.
Annual General Meetings are seen as an important
communication forum. In preparing notices of meeting and
related explanatory information, Hansen aims to provide all
information that is relevant to shareholders in making a
decision on the matter to be voted on by shareholders in a
clear and concise format. During the meeting, time is
dedicated to accommodating shareholders questions and
the external auditors are in attendance to respond to any
relevant question. Following the meeting, refreshments are
served and directors and shareholders are able to further
communicate informally.
Hansen is committed to continuing to improve
communication with shareholders. Communication
mechanisms will be reviewed regularly to ensure they
provide the optimum information flow to shareholders and
potential investors, enabling them to make decisions in an
informed manner.
6. Share Trading Policy
Introduction
Directors, officers, employees and their associates must
not engage in insider trading, or the disclosure of inside
information to third parties.
Insider trading means the buying and selling of shares on
the basis of price-sensitive information that is not generally
available to others. This includes procuring another person
to purchase or sell shares on the basis of insider information.
Rules for Employees, Directors and Officers
Employees, directors, officers and their associates who
have price-sensitive information about Hansen shares, or
other securities, which is not generally available to others:
• must not subscribe for, buy or sell shares, other
securities of the Company, or other price sensitive
products to which the inside information relates, either
for themselves, or for others;
• must not get another person (whether a family member,
friend, associate, colleague, or your broker, investment
adviser, private company or trust) to subscribe for, buy or
sell the affected shares or other securities or other price
sensitive products for the employee, for another person
or for themselves;
• must not, either directly or indirectly, give the inside
information, or allow it to be given to another person who
they know, or should know, would be likely to do any of
the prohibited things described above; and
• must not communicate inside information to anybody
who works for the Hansen Group except on a "need to
know" basis and in accordance with the rules and
policies of the relevant business division.
As a general rule, directors and senior executives are only
permitted to trade Hansen shares in the 30-day period
commencing two days after:
• the release of Hansen’s half yearly results;
• the release of Hansen’s yearly results;
• the Hansen’s Annual General Meeting; and
• a "special circumstance", that will be notified on a case-
by-case basis by the Chairman or Chief Executive Officer
(example being the release of a trading update to the
ASX or the issue of a prospectus).
Where Directors or Executives of the Company want to
trade outside of this general rule, they should discuss the
matter with the Chairman and Chief Executive Officer who
will only give approval if determined that there is no price
sensitive information held that is not available to the
market.
The Corporations Act
The Corporations Act 2001 section 1002G deals with
insider trading. Contravention of the insider trading
provisions of the Corporations Act constitutes an offence
that is punishable by a maximum penalty of $200,000 or
imprisonment for 5 years, or both. Where individuals are
concerned about breaching the insider trading provisions
of the Corporations Act they should immediately obtain
independent legal advice.
7. Remuneration Policy
Introduction
The Company aim in rewarding the CEO and other
executives is to provide base pay plus performance-linked
rewards and other benefits that will attract and retain key
executives and align their financial interests with those of
our shareholders.
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Our policy is to provide individual executives with a level of
income that:
• recognises the market value of each position in a
competitive market;
• rewards the individual’s capabilities and experience;
• recognises the performance of individuals; and
• assists in executive retention.
The structure provides a mix of fixed and variable pay, and
a blend of short and long-term incentives.
The Remuneration Committee
In May 2000 the Remuneration Committee was formed,
consisting of two independent directors, Geoff Tomlinson
and Bruce Adams. Geoff Tomlinson is the Chairman of the
Committee.
The responsibilities of the Committee are to:
• advise on remuneration policies and practices generally;
• provide specific recommendations on remuneration
packages and other terms of employment for executive
directors and non-executive directors; and
• assess the reasonableness of the remuneration
proposals put forward by the CEO for the executive
managers, including the definition of performance
objectives.
The Committee will meet at least annually to assess annual
remuneration changes, and will hold additional meetings
where required to.
How remuneration is managed and structured
Non-Executive Directors
The Remuneration Committee recommends the
remuneration of non-executive directors to the Board for
final approval. Remuneration for non-executive directors
consists of a base pay and related superannuation to meet
the requirements of the Superannuation Guarantee
Scheme. An increase in the maximum amount paid to
non-executive directors is to be submitted to shareholders
for approval where significant change occurs. No
retirement benefits are provided for non-executive directors.
CEO and Executives
The Remuneration Committee sets the remuneration
package for the CEO. The CEO establishes employment
contracts and remuneration packages for each executive.
Each year performance based incentives are set for the
CEO and the executives, incorporating objectives designed
around Group, business unit and individual goals, with
agreed short and long-term performance incentives. The
CEO submits the proposed annual executive package to
the Remuneration Committee where it is assessed for
reasonableness. Details of the pay and rewards for
Hansen’s top fiive executives and the total executive
remuneration is set out in the Annual Report each year.
The CEO and the executive team approve the pay and
reward packages for key senior managers.
The structure of Hansen executive pay and reward is
made up of four parts:
• base pay;
• short-term performance incentives;
• long-term equity-linked performance incentives; and
• other compensation, being superannuation.
The combination of these comprises the executive’s total
compensation.
Base Pay
Executives are offered a competitive base pay that reflects
the fixed component of pay and rewards. Base pay is set
to reflect the marketplace for each position. It is generally
not revised annually unless an executive has been
promoted or there has been a marked structural shift in
marketplace rates.
Short-term performance incentives
Each year the performance of the executives is reviewed
by the CEO and future performance objectives are set and
relative potential bonuses linked to the achievement of the
objective. If individual performance objectives are met, a
short-term incentive in the form of a bonus may be paid.
Long-term performance incentives
Our long-term incentives for the CEO and senior
executives are designed to align their financial interests
with those of our shareholders, including by making use of
carefully designed share-based incentives.
Long-term performance incentives can be represented by
the issue of share options to the CEO and senior
executives. To be able to exercise the share options
issued, predetermined performance hurdles must have
been achieved. The hurdles are set based on achieving
financial targets that, if the targets are met, should result in
shareholder value increasing.
Other benefits - Superannuation
All executives and staff are required to be members of one
of the superannuation funds that are made available to all
Hansen staff. Hansen contributes superannuation for
executives and staff from their remuneration package to a
level that complies with the Superannuation Guarantee
Scheme. In addition to this, executives and staff can
contribute additional superannuation from their
remuneration package.
8. Continuous Disclosure Policy
Introduction
The Hansen Continuous Disclosure Policy has been
developed to provide clear guidelines for the operations of
the Hansen business to establish appropriate processes
and criteria for disclosure and to ensure compliance with
the requirements of the ASX and other securities and
corporations legislation. The best practice communication
guidelines, as published by the Australasian Investor
Relations Association, have been observed in drafting this
policy.
Principles of the Policy
The key principles of the market disclosure policy are that:
• material company information is issued to shareholders
• mergers, acquisitions / divestments, joint ventures or
and the market in accordance with our obligations to the
market;
changes in assets;
• significant developments in regard to new projects or
• such information is communicated in a way that allows
ventures;
for all interested parties to have equal and timely access;
• communication is presented in a clear, factual and
• events regarding an entity’s shares or securities;
• major new contracts, orders, or changes in suppliers or
balanced manner; and
• ASX reporting obligations are met.
Communications Representative
Hansen has appointed the Company Secretary as the
Communications Representative. The Communications
Representative has responsibility for:
• coordinating and controlling disclosure of information to
ASX, shareholders, analysts, brokers, the media and the
public;
• ensuring complete records are maintained of all
disclosures of information by Hansen and the related
authorisations;
• reporting and making recommendations to the Board on
information potentially warranting disclosure;
• developing and maintaining relevant guidelines to help
employees understand what information is price sensitive;
• educating Hansen staff, executives and directors on
disclosure guidelines and raising awareness of the
principles underlying continuous disclosure; and
• supporting the Directors and executives in ensuring that
Hansen complies with continuous disclosure requirements.
Directors and Executives responsibilities
Directors and executive officers are primarily responsible
for the compliance with continuous disclosure guidelines.
The appointment of the Communications Representative is
to facilitate overall awareness and the ability of Hansen to
comply with disclosure guidelines.
Directors and executives are responsible for
communicating to the Communications Representative:
• any price sensitive information of which they become
aware of which they believe the Communications
Representative will not be aware. If individuals are
uncertain as to whether an issue could be sensitive, they
should report the matter for the Board to consider;
• disclosures of any information from Hansen that they
may believe the Communications Representative may
not be aware;
• if they undertake any dealings in securities of Hansen;
• their comments and ultimate approval of draft
announcements, presentations and general
communications to shareholders, ASX and the market;
and
• all information, as specified by ASX and ASIC, that
requires market announcements.
Communications for disclosure
Hansen will make market disclosures on any event that is
deemed to have possible material effect on the price of
Hansen securities. Events warranting disclosure include:
• financial performance and significant changes in financial
performance;
• changes in Board Directors and senior executives;
customers;
• significant changes in products, product lines, supplies
or inventory;
• industry issues that may have a material impact on the
company;
• major litigation; and
• decisions on significant issues affecting the entity by
regulatory bodies in Australia such as the Australian
Foreign Investment Review Board, Australian Takeovers
Panel, Australian Competition and Consumer
Commission.
If there is any uncertainty, Hansen Directors and executives
will discuss the matter, seek legal advice if necessary, and
if considered appropriate, approach the ASX to seek its
position on whether the information should be disclosed to
the market.
Hansen is aware that outside of statutory and listing rule
requirements, communication with the market will occur in
other forms. Communication in the form of:
• investor briefings and roadshows;
• one-on-one meetings with stockbroking analysts or
institution fund managers;
• industry forums;
• company literature, and
• media interviews.
In participating in such communications Hansen will act to
avoid against unintended disclosure of material information
to selected market participants.
Communications procedures
A representative of Hansen, the Directors or the
executives, may not release any information that is required
to be disclosed to ASX under the continuous disclosure
rules to any person before:
• the information has been given to the Communications
Representative and the approval and sign-off process for
disclosure has been effected;
• the information has been given to ASX; and
• an acknowledgement of the receipt of that information
has been received from ASX.
The Board has nominated a limited number of individuals
that are authorised as spokespersons for Hansen. The
authorised spokespersons are:
• the Chairman;
• the Chief Executive Officer;
• Company Secretary; and
• the Chief Financial Officer.
Other executives may become spokespersons for specific
areas under their control, however any comments are to
be limited to their area of expertise and is to meet the
disclosure principles.
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ASX Additional Information As at 22 September 2005
Additional information required by the Australian Stock Exchange Limited Listing Rules and not disclosed elsewhere in this report is set out below.
Substantial shareholders
The number of shares held by substantial shareholders are set out below:
SHAREHOLDERS
Othonna Pty Limited - including associates
Citicorp Nominees Pty Ltd
Andrew Alexander Hansen - including associates
Voting rights
Ordinary shares - refer to Note 18.
Options - refer to Note 28.
Distribution of equity security holders
CATEGORY
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001 and over
NUMBER OF
ORDINARY SHARES
67,256,298
17,444,329
9,921,522
PERCENTAGE HELD
58%
15%
9%
NUMBER OF EQUITY SECURITY HOLDERS
ORDINARY SHARES
112
510
255
338
39
1,254
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The number of shareholders holding less than a marketable parcel of ordinary shares is 272.
On-market buy-back
There is no current on-market buy-back.
Twenty largest shareholders
NAME
Othonna Pty Limited
Citicorp Nominees Pty Limited
Andrew Alexander Hansen
ANZ Nominees Limited
Antan Pty Ltd
Mr Anthony David Hansen
Mirrabooka Investments Limited
Mrs Suzanne May Tomlinson
Mr Kenneth Albert Hansen
Mrs Yvonne Irene Hansen
Mr James Lucas & Ms Lesley Dormer
Ms Tanya Jacinta Hansen
Seeley Solutions Pty Ltd
Ozcun Pty Ltd
Berzins Asset Management Pty Ltd
Paso Holdings Pty Ltd
Mr Warwick Lee Sharp
Sabina Nominees Pty Ltd
Mr Reginald Lionel Kermode
J T W Sales Pty Ltd
NUMBER OF ORDINARY
SHARES HELD
65,114,463
17,444,329
7,596,522
3,411,256
2,000,000
878,298
815,000
437,312
380,076
372,352
350,000
325,000
288,267
283,511
252,578
240,000
236,667
205,000
200,000
198,000
101,028,631
OPTIONS
–
–
–
9
9
18
PERCENTAGE OF
ISSUED CAPITAL
55.93
14.98
6.52
2.93
1.72
0.75
0.70
0.38
0.33
0.32
0.30
0.28
0.25
0.24
0.22
0.21
0.20
0.18
0.17
0.17
86.78
Corporate Directory
Directors
Kenneth Hansen, Chairman
Geoff Tomlinson, Deputy Chairman
Andrew Hansen, Managing Director
& Chief Executive Officer
Bruce Adams, Non-Executive Officer
Company secretary
Grant Lister
Principal registered office
2 Frederick Street, Doncaster VIC 3108
Telephone: (03) 9840 3000
Facsimile: (03) 9840 3099
Share registry
ASX Perpetual Registrars Limited
Level 4, 333 Collins Street
Melbourne VIC 3000
Telephone: (03) 9615 9999 or 1300 554 474
Facsimile: (02) 9287 0309 - Proxy forms
(02) 9287 0303 - General
Stock exchange
The Company is listed on the Australian Stock Exchange.
ASX Code: HSN
Auditors
Pitcher Partners
Level 19, 15 William Street
Melbourne VIC 3000
Solicitors
TressCox
Level 9, 469 La Trobe Street
Melbourne VIC 3000
Other information
Hansen Technologies Limited, incorporated and
domiciled in Australia, is a publicly listed company
limited by shares.
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www.hsntech.com
2 Frederick Street, Doncaster, Victoria 3108 Australia
Phone +61 (3) 9840 3000 Fax +61 (3) 9840 3099 Email info@hsntech.com