2007
HANSEN TECHNOLOGIES LIMITED
ABN 90 090 996 455
ANNUAL REPORTTaking Technology FurTher 2007 Annual Report
Highlights
Chairman’s Report
Managing Director’s Report
Board of Directors
Directors’ Report
Financial Statements and Notes
- Consolidated income statement
- Consolidated balance sheet
- Consolidated statement of changes in equity
- Consolidated statement of cash flow
- Notes to the financial statements
Directors' declaration
Independent audit report
Corporate governance
ASX additional information
page
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14
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56
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 as well as 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 and the United Kingdom and employs
more than 200 people.
Notice of Annual General Meeting
The Annual General Meeting of the Company is to be held:
on Wednesday 14 November 2007 at 11.00am
at 2 Frederick Street, Doncaster, Victoria 3108
A separate Notice of Meeting and Proxy Form are included with this report.
Highlights
7
0
0
2
01 EBITDA of $8.9 million After tax profit of $3.3 million 1 cent per share unfranked final dividend 3 cents per share additional return to shareholders in December 2007 Doubling of UK revenue $11.9 million cash on hand at 30 June 2007
Chairman’s Report
I am delighted to report on a significantly improved operating result which begins
to deliver on the promise which comes from our position as an international
provider of billing solutions to the energy and telecommunication industries.
Five years ago we set out to refocus our company based
around our vision of the strategic changes underway in
the energy and telecommunication industries and our
ability to deliver comprehensive billing solutions
consistent with these changes. Our objective was
sustainable growth and profitability. This year's strong
performance validates our business direction and I
remain confident we are on the right path.
We are fortunate at Hansen Technologies to have a
dedicated and truly professional group of employees. Our
improved operating result is very much a consequence of
the loyalty of our team, their industry experience and
dedication to our strategic objectives. I wish to record my
appreciation on behalf of the Board of Directors and
fellow shareholders for the commitment and
professionalism of our company’s employees and thank
them all for a job well done.
Our earnings before interest, tax, and depreciation
(EBITDA) of $8.9 million is a 63% improvement on last
year’s $5.4 million. More significantly, net profit has grown
to $3.3 million, up 357% on last year’s $0.7 million.
This improvement in performance has been achieved in
spite of a $1.1 million reduction in the capitalisation of our
R and D which has resulted in the amortisation of our R
and D this year exceeding the amount capitalised by
$0.7 million, making improved performance for the year
even more credible.
Even more significantly, for an information technology
company, we are generating a positive cash flow from
operations resulting in a substantially stronger balance
sheet with cash on hand at 30 June 2007 of $11.9
million.
I am truly pleased to announce the reintroduction of a
dividend. We have paid a final dividend of 1 cent per
share in respect of this past year. In addition, we have
announced our intention to seek approval from
shareholders at November’s annual general meeting for a
return of capital equal to 3 cents per share. In the mean
time we will be making an application to the Australian
taxation office for confirmation that this return of capital
will be non taxable in the hands of shareholders. In
September 2005 we raised $6.4 million from
shareholders through a rights issue and I am pleased we
are now able to return $4.5 million of this amount as
being surplus to our Company’s current requirements.
This year’s strong performance continues the trend which
started in the second half of last year. We have now
achieved a steady improvement over an 18 month period
and the outlook for the next 12 months is equally
positive.
My confidence in our future continues to grow.
Deregulation is ongoing in the Australian energy markets
with Western Australia and Queensland being the active
regions this past year. The NSW Government has now
demonstrated clear intent to begin deregulation of the
NSW energy markets. Rationalisation of Australian energy
market participants has been clearly apparent over this
last year with the restructuring of the Alinta and AGL
businesses as well as the subsequent take over battle for
Alinta. All of these market forces drive demand for billing
solutions.
In addition we are now seeing the evolution of advanced
metering solutions. Government regulatory bodies are
becoming strong advocates of new metering solutions
which offer the potential for efficiencies in energy
generation and environmental benefits. Automated
Interval Metering solutions are being implemented and
this trend is likely to accelerate over coming years. Billing
systems need to keep pace with these technology
changes. At Hansen we are working with the regulatory
bodies and our customers to ensure we are ready to
deliver the appropriate billing solutions to accommodate
these technology advances.
In the telecommunications industry we are seeing the
continuation of product convergence and structural
change. We are excited to be involved in delivering
innovative new billing solutions into these market
conditions.
02 Kenneth Hansen
Chairman
We continue to be well positioned in the Japanese
energy market. I am confident that when deregulation
accelerates in Japan we will be ready to deliver our billing
solutions to meet the demand which will arise. However,
major new billing opportunities in Japan are not likely to
be until fiscal 2009 and beyond.
Our UK business has grown significantly in the past year.
Revenue has doubled. We have recruited new senior
management, doubled our office size and significantly
increased our capacity to manage and deliver ongoing
growth. We have an excellent customer base and a great
spring board for future opportunities.
In August 2007 we announced the sale of our NSW
based facilities management and IT outsourcing business
for a cash consideration of $10.5 million, which, after
allowing for previously unrecognised capital tax losses
and the tax cost base of this subsidiary within our
consolidated tax group, is expected to generate an after
tax profit exceeding $9 million. Our NSW business was
very much a stand alone operation, complimentary to our
Melbourne data centre operations, but not integrated in
any way to our core businesses. The opportunity to
crystalise the value of our NSW operations through sale
of the business has generated the funds to allow us to
explore strategic growth opportunities which are more
aligned with our core businesses.
We will continue to own and operate our two data
centres in Melbourne and actively pursue ongoing IT
outsourcing business opportunities. We see this business
as a critical element of our IT offering. In addition, being a
full service IT company is an integral element of our core
HUB billing business as well as a key part of our ongoing
development and support of the CLASSIC
superannuation administration software.
I believe the future for Hansen is bright. We are
positioned in industries undergoing considerable change
which we are well situated to support. We have the
proprietary products our targeted industries require. We
have an outstanding team of professionals working for us
and we are cashed up and ready to grow both
organically as well as strategically.
Last year I was cautiously optimistic about the future.
This year we have validated our direction, delivered a
strongly improved outcome and we have momentum
going into next year. I am looking forward to a
continuation of our sustainable growth objective.
7
0
0
2
Kenneth Hansen
Chairman
03
Managing Director’s Report
2007 has been a landmark year for Hansen. We are now delivering tangible results
from the repositioning of our business. Our focus on developing and delivering
proprietary software solutions into our markets of choice is being validated by
improved operating performances. We are a stronger company now, especially with
the improved strength of our balance sheet. And we have a growing capacity to
continue to pursue our objective of sustainable profitable growth.
Our company’s reputation for a uniquely personal
relationship with customers which combines high levels
of responsive customer service with the delivery of
superior technology solutions is a testament to the quality
and dedication of our employees. I take great pride in our
ability to attract and retain highly talented and motivated
people. In the current tight labour markets we are proud
that the average years of service for Hansen staff is more
than double the industry average. I believe our customers
recognise this value and see it as a positive testimony for
the way we do business.
In fiscal year 2007, Hansen’s financial performance
improved at all levels across the organisation. I was
especially pleased with the doubling of revenue from the
United Kingdom. By focusing our attention on our core
competencies we enhanced our delivery and support
capabilities and improved our average rate of return on
operating revenue.
2007
2006
EBITDA
17.4%
10.9%
Net profit after tax
6.4%
1.4%
I am optimistic we will be able to continue to improve on
these performance ratios in 2008 as we pursue the initial
target ratio of 20% EBITDA to revenue.
As the fit for purpose nature of our Hansen Utility Billing
solution (HUB) parallels the energy industry requirements
we are able to implement HUB more efficiently, resulting
in increasing returns from our past investment in the
HUB solution. Because of our pro-active development of
HUB we have been able, this past year, to rapidly deploy
new billing solutions into the deregulating Queensland
energy market for AGL and Australian Pipeline Trust
within timeframes which would previously have been
considered impossible.
We continue to invest in developing our HUB solution
to meet the needs of the ongoing energy industry
deregulation in Australia as well as the world wide trend
towards smart and automated metering solutions.
However, the rate of development required is slowing
as a direct reflection of the increasing level of fit for
purpose of the HUB solution. Capitalised expenditure on
HUB decreased by $1.1 million to around $2 million for
2006/7. This rate of investment is half that which was
required in the 2004/5 year. Be assured, however, that
as industry trends and customer requirements dictate
we will respond with a balanced level of research and
development to ensure our proprietary solution remains
relevant with the market trends.
04
Managing Director’s Report
Andrew Hansen
Managing Director & CEO
Last year I mentioned that opportunities are emerging
again in the telecommunications industry. I am pleased
to report that this trend is continuing, especially in the UK
where the separation of wholesale service providers from
resellers and the convergence of fixed line, mobile and
data resellers is progressing. I was especially gratified
that our strategic partner relationship with Tesco stores
was further progressed with the selection of HUB to
deliver an enhanced mobile phone billing solution for
Tesco.
The sale of our asset management software (Asset Life)
last calendar year plus the recently announced sale of
the New South Wales data centre and IT outsourcing
business (HPS) in August 2007 completes the strategy of
rationalising our business embarked upon last year.
We are now primarily focused for growth -
•
•
•
Through the delivery of proprietary software billing
related solutions;
With a full end to end solution capability, including
hosting;
Into the deregulating energy and converging
telecommunication industries;
•
In Australia, United Kingdom, Europe and Japan.
As an integral part of this service offering we continue to
operate the A grade full service data centre in Melbourne
and provide facilities management and IT outsourcing
services to third parties. We also continue with our 15
plus years of supporting, developing and operation of
the CLASSIC administration software for its Australian
Superannuation Fund manager customers.
7
0
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2
With the sale of HPS we now have the capacity to
pursue strategic growth opportunities that are compatible
with our utility and telecommunications industry focus.
Throughout 2008, we will be examining the opportunity
to acquire IT based solutions from third parties which will
extend our geographic focus and product range as well
as offer economies of scale improvements.
Looking ahead to fiscal year 2008, I see the markets on
which we are focused continuing to undergo change
driven by metering technology advances, deregulation,
product convergence, as well as organisational change.
Our challenge is to have the software products to
service these developments and the resource capacity
to efficiently deliver the solutions requested of us. I am
confident we are well positioned, with the right products
and an outstanding team of industry experts which will
assure a successful year ahead.
We start the new year with a strong back log of work
and an excellent pipeline of significant opportunities. I
am looking forward to fiscal 2008.
Andrew Hansen
Managing Director & CEO
05
Board of Directors
The qualifications, experience and special responsibilities
of each person who has been a director of Hansen
Technologies Ltd 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 Age 74
Chairman
Non-Executive Director
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 Andrew Hansen Age 47
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
Non-Executive Director
Age 47
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
- Chairman of Audit and Remuneration Committees
Mr David Osborne Age 58
Non-Executive Director
David is a Fellow of the Institute of Chartered
Accountants, a Fellow of the Certified Practising
Accountants, and a member of the Australian Institute
of Company Directors, with over 30 years of financial
management, taxation and accounting experience in
public practice. David has a long standing association
with Hansen having been a Board member for some
years prior to the Company's listing on the ASX in
June 2000.
- Member of Audit and Remuneration Committees
Mr Grant Lister
CFO & Company Secretary
Age 55
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
06
7
0
0
2
Directors’ Report
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 2007 and auditors report thereon. This financial
report has been prepared in accordance with Australian Equivalents of International
Financial Reporting Standards. Compliance with AIFRS ensures compliance with
International Financial Reporting Standards (IFRS).
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 Ltd was $3,306,504
(2006: $724,361).
Review of operations
In the second half of this year we have been able
to accelerate the improvement in our operating
performances. We are now generating strong returns
off the back of the development we have made in our
proprietary billing solutions. Over the past year we have
enjoyed a number of new project successes resulting
in modest revenue growth. However much of the
improvement in earnings has been through refocusing our
products and enhancing our delivery capabilities.
Hansen’s new business this year included a number
of significant project wins across geographic and
industry sectors including two new projects for the
telecommunications division of Tesco in the UK as well
as energy billing solutions for AGL and the Australian
Pipeline Trust.
Customer interest in our HUB energy and
telecommunication billing solutions continues to be strong
with demand being generated from both existing as well
as new customers in Australia and the UK. We believe
we understand our strengths and these would seem to
parallel the market demand.
The sale of the subsidiary, Hansen Professional Services
Pty Ltd (HPS), subsequent to year end, completes the
rationalisation of our business structure started last fiscal
year. With the internal operational changes we have
implemented and the enhanced delivery capacity in the
UK, we are now ready to embark upon the next leg of the
journey towards sustainable profitable growth.
Our balance sheet has been strengthened by this year’s
strong performance. The retained net cash proceeds
from the sale of HPS will further enhance this position. In
declaring a dividend and the proposed capital distribution
to shareholders we have been mindful of retaining
sufficient cash resources to be able to take advantage
of strategic growth opportunities as well as the funding
required for organic growth. As we pursue strategic
change we have every intention of proceeding cautiously
to ensure any actions we take build upon the strength of
our basic business proposition.
We start fiscal year 2008 with a significant project work
load and a solid pipeline of opportunities. We have
developed the foundation required for growth within
our targeted industry markets. We are confident of
sustaining the momentum of this past year while we
pursue the next stage of our strategic growth.
07
Significant changes in the
state of affairs
There have been no significant changes in
the consolidated entity's state of affairs during the
financial year.
After balance date events
Subsequent to the year end and not reflected in these
results the wholly owned subsidiary Hansen Professional
Services Pty Ltd (HPS) was sold as a going concern
for a cash consideration of $10.5 million. Until the final
accounts of the subsidiary at the date of sale are finalised
we are unable to confirm the profit from the sale. However
based on preliminary estimates the profit is expected to
exceed $9 million. In addition because of the availability
of previously unrecognised capital tax losses and the tax
cost base of the subsidiary within the consolidated tax
group, there is not expected to be any related income tax
expense.
Likely developments
The company will continue to pursue its operating
strategy to create shareholder value. In the opinion
of the Directors, disclosure of any further information
would be likely to result in unreasonable prejudice to the
consolidated entity.
Environmental regulations
The consolidated entity's operations are not subject to
any significant environmental Commonwealth or State
regulations or laws.
Dividend paid, recommended
and declared
A one cent per share unfranked final dividend was
declared on 31 August 2007. In addition a resolution is to
be put to shareholders at the annual general meeting for a
3 cent per share return of capital to shareholders.
08 Share options
Options over unissued ordinary shares granted by Hansen
Technologies Ltd during or since the end of the financial
year to the 5 key management personnel as part of their
renumeration are as follows. No options were granted to
Directors during or since the end of the financial year.
.
C Hunter
G Kentish
G Lister
D Meade
K Speyer
Granted Number
Grant Date
75,000
75,000
40,000
40,000
75,000
75,000
75,000
75,000
-
-
1 Jul 06
1 Jul 07
1 Jul 06
1 Jul 07
1 Jul 06
1 Jul 07
1 Jul 06
1 Jul 07
1 Jul 06
1 Jul 07
Total
530,000
All grants of options are subject to the achievement of
performance measurements for the year of issue. Subject
to continuation of employment, options vest 3 years after
issue date. If the vesting criteria are not met the options
may be forfeited at the discretion of the Directors. Vested
options expire after two years or 28 days after termination
of employment.
Shares under option
Unissued ordinary shares of Hansen Technologies Ltd
under option at the date of this report are as follows:
Grant
Date
Exercise
Date
Expiry
Date
Exercise
Price $
Number of
Options at
Date of Report
1 Jul 03 1 Jul 06
1 Jul 08
$0.19
95,000
1 Jul 05 1 Jul 08
1 Jul 10
$0.28
305,000
1 Jul 06 1 Jul 09
1 Jul 11
$0.13
305,000
1 Nov 06 1 Nov 09
1 Nov 11
$0.13
75,000
1 Jul 07 1 Jul 10
1 Jul 12
$0.285
500,000
TOTAL
1,395,000
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.
Shares issued on exercise of
options
There were no ordinary shares of Hansen Technologies
Ltd issued during the financial year as a result of the
exercise of an option.
There have been 680,000 ordinary shares of Hansen
Technologies Ltd issued since the end of the financial
year and prior to the date of this report as a result of the
exercise of employee share options.
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 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:
7
0
0
2
Board
Meetings
B
A
11 11
Audit
Committee
Meetings
Remuneration
Committee
Meetings
A
-
-
3
3
B
-
-
3
3
A
-
-
1
1
B
-
-
1
1
Mr Andrew Hansen
11 11
Mr Bruce Adams
11 11
Mr David Osborne
11 11
A Number of meetings attended
B Number of meetings held during the time the Director held office
during the year
Directors’ interests in shares and
options
Director's relevant interest in shares of Hansen
Technologies Ltd or options over shares in the company
are detailed below:
K Hansen
B Adams
D Osborne
A Hansen
Ordinary Shares
of Hansen
Technologies Ltd
93,721,279
210,049
218,676
11,421,522
Options Over
Shares in Hansen
Technologies Ltd
-
-
-
-
1 Jul 04 1 Jul 07
1 Jul 09
$0.20
115,000
Mr Kenneth Hansen
09
Directors’ interests in contracts
Remuneration Report
Directors’ interests in contracts with the Company are
limited to the provision of leased premises on an arm's
length terms and are disclosed in Note 23 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, Pitcher Partners, are
detailed below. The Directors are satisfied that the provision
of the non-audit services during the year by the auditor 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
- Tax related services
Overseas Firms
- Tax related services
Consolidated
2007
$'000
2006
$'000
55
27
82
50
32
82
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 and options
at the absolute discretion of the Directors. All bonuses are
subject to the achievement of specified key performance
indicators which vary from executive to executive but are all
targeted at enhanced operating performance and agreed
corporate objectives. Options issued are conditional upon the
Group achieving budgeted performance levels for the year
of issue and are further subject to continuous employment
through to the third anniversary of the issue date. 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 6 of this report. The other five key
management personnel in the consolidated group for the
financial year are:
Executives
Position
C Hunter Chief Operations Officer
G Kentish General Manager, Hansen Europe
G Lister Chief Financial Officer & Company Secretary
D Meade Client Services Manager
K Speyer General Manager, Hansen Professional Services
10
Short-Term Employee Benefits
Post
Employment
Benefits
Share
Based
Benefits
Other
Long-Term
Benefits
Cash
Bonus
2007
$
Non-Monetary
2007
$
Super
2007
$
Options
Issued
2007
Other
Benefits
2007
Total
Performance
Related
2007
%
Total
Options
Related
2007
%
Total
2007
$
Directors’ and executives’ remuneration
Directors
K Hansen
B Adams
D Osborne
A Hansen
Executives
C Hunter
G Kentish
G Lister
D Meade
K Speyer
Salary
Fees
2007
$
70,648
37,037
37,037
351,697
150,274
258,120
219,266
117,478
129,878
-
-
-
72,477
18,349
-
36,697
13,761
18,349
-
-
-
31,650
11,202
-
-
36,948
-
-
3,333
3,333
38,176
14,795
-
28,830
11,812
13,340
-
-
-
-
3,026
1,614
3,026
3,026
-
- 70,648
- 40,370
- 40,370
- 494,000
- 197,646
- 259,734
- 287,819
- 183,025
- 161,567
Directors
K Hansen
G Tomlinson
B Adams
D Osborne
A Hansen
Executives
P Day
C Hunter
G Kentish
G Lister
J Payne
2006
$
2006
$
2006
$
2006
$
2006
2006
2006
$
64,815
30,864
37,037
12,345
333,349
58,444
137,242
219,912
211,009
154,128
-
-
-
-
-
-
18,349
-
18,349
27,523
-
-
-
-
31,650
5,543
13,157
-
-
-
5,833
2,778
3,333
1,111
30,001
8,064
13,828
-
20,642
16,349
-
-
-
-
-
-
8,577
-
8,577
8,577
- 70,648
- 33,642
- 40,370
- 13,456
- 395,000
- 72,051
- 191,153
- 219,912
- 258,577
- 206,577
0%
0%
0%
15%
11%
1%
14%
9%
11%
2006
%
0%
0%
0%
0%
0%
0%
14%
0%
10%
17%
0%
0%
0%
0%
2%
1%
1%
2%
0%
2006
%
0%
0%
0%
0%
0%
0%
4%
0%
3%
4%
7
0
0
2
Bonuses are paid in the August or September payroll after the financial results for the prior year have been determined
to ensure the performance measurements have been achieved.
Options granted as remuneration are valued at grant date in accordance with AASB 2 Share-based Payments.
11
Options granted as remuneration that have been exercised or lapsed during the financial year
Directors
K Hansen
D Osborne
B Adams
A Hansen
Executives
C Hunter
G Kentish
G Lister
D Meade
K Speyer
Total
Rounding off
Balance
1 Jul 06
Value
Granted
Value
Exercised
Value
Lapsed
Balance
30 Jun 07
-
-
-
117,000
78,927
-
20,427
36,027
-
252,381
-
-
-
-
3,026
1,614
3,026
3,026
-
10,690
-
-
-
-
-
-
-
-
-
-
-
-
-
117,000
58,500
-
-
15,600
-
191,100
-
-
-
-
23,453
1,614
23,453
23,453
-
71,971
The amounts contained in the report and in the financial report have been rounded to the nearest $1,000 (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 28th day of September 2007.
Signed in accordance with a resolution of the Directors:
Kenneth Hansen
Director
Andrew Hansen
Director
Auditor's independence declaration
To the Directors of Hansen Technologies Ltd.
In relation to the independent audit for the year ended 30 June 2007,
to the best of my knowledge and belief there have been:
(i) No contraventions of the auditor independence requirements of the Corporations Act 2001
(ii) No contraventions of any applicable code of professional conduct
Dated at Melbourne this 28th day of September 2007.
PITCHER PARTNERS
Melbourne
D B RANKIN
Partner
Financial
statements
and notes
Consolidated income statement
Consolidated balance sheet
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the financial statements
Directors' declaration
Independent audit report
Corporate governance
ASX additional information
page
14
15
16
17
18
43
44
46
56
7
0
0
2
7
0
0
2
S
L
A
I
C
N
A
N
I
F
1213
Financial
statements
and notes
Consolidated income statement
Consolidated balance sheet
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the financial statements
Directors' declaration
Independent audit report
Corporate governance
ASX additional information
page
14
15
16
17
18
43
44
46
56
7
0
0
2
7
0
0
2
S
L
A
C
N
A
N
F
I
I
13
Consolidated income statement
For the year ended 30 June 2007
Revenue from rendering of services
Other revenues
Total revenue
Employee expenses
Depreciation and amortisation expenses
Finance costs
Operating lease rental expenses
Contractor and consultant expenses
Software licence expenses
Hardware and software expenses
Transportation expenses
Travel expenses
Data communication expenses
Legal expenses
Other expenses
Profit before income tax
Income tax benefit / (expense)
Consolidated Entity
Parent Entity
Note
3
3
4
4
4
4
4
5
2007
$’000
51,091
1,497
52,588
(27,146)
(5,039)
228
(3,405)
(1,355)
(221)
(5,597)
(171)
(1,209)
(2,723)
(132)
(1,370)
(48,140)
4,448
(1,141)
2006
$’000
49,482
1,768
51,250
(29,436)
(5,140)
(184)
(3,255)
(2,595)
(276)
(5,424)
(199)
(966)
(3,249)
94
(285)
(50,915)
335
389
2007
$’000
-
986
986
2006
$’000
-
799
799
(808)
-
-
-
(41)
-
-
-
(1)
-
-
(101)
(951)
35
(2)
(639)
(17)
(5)
-
(76)
-
-
(15)
-
-
138
(87)
(701)
98
(963)
Profit (loss) from continuing operations for the year
attributable to the members of the parent
3,307
724
33
(865)
Basic earnings per share
19
$0.022
$0.005
Diluted earnings per share
19
$0.022
$0.005
The consolidated income statement is to be read in conjunction with
the notes to the financial statements set out on pages 18 to 42.
14
Consolidated balance sheet
as at 30 June 2007
Current assets
Cash and cash equivalents
Receivables
Other current assets
Total current assets
Non-current assets
Receivables
Other financial assets
Plant and equipment
Intangible assets
Deferred tax assets
Total non-current assets
Total assets
Current liabilities
Payables
Short-term borrowings
Current tax payable
Short-term provisions
Unearned income
Total current liabilities
Non-current liabilities
Payables
Long-term borrowings
Long-term provisions
Total non-current liabilities
Total liabilities
Net assets
Consolidated Entity
Parent Entity
Note
2007
$’000
2006
$’000
2007
$’000
2006
$’000
7
9
7
8
10
11
5
12
13
5
14
12
13
14
11,958
8,422
1,441
21,821
153
-
4,182
21,224
1,597
27,156
6,895
7,934
1,838
16,667
243
-
4,700
21,952
2,728
29,623
15
33
5
53
9
58
5
72
32,907
11,000
-
-
1,913
45,820
32,786
11,000
-
-
3,558
47,344
48,977
46,290
45,873
47,416
4,866
320
6
3,879
3,115
12,186
-
61
504
565
4,245
835
-
4,100
3,399
12,579
206
-
-
150
-
356
125
-
-
113
-
238
-
330
555
885
4,518
-
-
4,518
6,419
-
-
6,419
12,751
13,464
4,874
6,657
36,226
32,826
40,999
40,759
7
0
0
2
Equity
Contributed equity
Foreign currency translation reserve
Options granted reserve
Retained earnings (accumulated losses)
Total equity
15
16 (a)
16 (b)
16 (c)
50,048
(448)
117
(13,491)
36,226
49,958
(425)
91
(16,798)
32,826
50,048
-
117
(9,166)
40,999
49,958
-
-
(9,199)
40,759
The consolidated balance sheet is to be read in conjunction with
the notes to the financial statements set out on pages 18 to 42.
15
Consolidated statement of changes in equity
For the year ended 30 June 2007
Consolidated Entity
Parent Entity
Note
2007
$’000
2006
$’000
2007
$’000
2006
$’000
Total equity at the beginning of the year
32,826
25,749
40,759
35,118
Exchange differences on translation of foreign operations
Employee share options
16
16
Net income (loss) recognised directly in equity
Profit (loss) for the year
(23)
26
3
3,307
(199)
46
(153)
724
-
117
117
33
-
-
-
(865)
Total recognised income and expense for the period
3,310
571
150
(865)
Transactions with equity holders in their capacity as
equity holders:
Contributions
Dividends paid
15
90
-
90
6,506
-
6,506
90
-
90
6,506
-
6,506
Total equity at the end of the year
36,226
32,826
40,999
40,759
The consolidated statement of changes in equity is to be read in conjunction
with the notes to the financial statements set out on pages 18 to 42.
16
Consolidated statement of cash flows
For the year ended 30 June 2007
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Borrowing costs
Net cash provided by (used in) operating activities
Cash flows from investing activities
Proceeds from sale of plant and equipment
Proceeds from sale of intellectual property
Payment for plant and equipment
Payment for capitalised research and development
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from share issue
Net advances from / (to) controlled entities
Finance and hire purchase lease payments
Net cash provided by (used in) financing activities
15
Consolidated Entity
Parent Entity
Note
2007
$’000
2006
$’000
2007
$’000
2006
$’000
52,840
(45,219)
382
228
8,231
54,382
(50,338)
200
(184)
4,060
1,011
(715)
-
-
296
818
(1,239)
4
(5)
(422)
17 (a)
9
1,333
(1,853)
(1,963)
(2,474)
90
-
(784)
(694)
70
-
(595)
(3,061)
(3,586)
6,506
-
(972)
5,534
7
0
0
2
-
-
-
-
-
58
-
-
-
58
90
(380)
-
(290)
6,506
(6,063)
(82)
361
6
9
15
(3)
12
9
Net increase / (decrease) in cash and cash equivalents
5,063
6,008
Cash and cash equivalents at beginning of year
6,895
887
Cash and cash equivalents at end of the year
17 (b)
11,958
6,895
The consolidated statement of cash flows is to be read in conjunction
with the notes to the financial statements set out on pages 18 to 42.
17
Notes to the financial statements
For the year ended 30 June 2007
1 Basis of preparation
(c) Revenue recognition
This financial report is a general purpose financial
report that has been prepared in accordance with
Australian Accounting Standards, Urgent Issues
Group Interpretations and other authoritative
pronouncements of the Australian Accounting
Standards Board and the Corporations Act 2001.
The financial report covers Hansen Technologies
Ltd as an individual parent entity and Hansen
Technologies Ltd and controlled entities as a
consolidated entity. Hansen Technologies Ltd is
a company limited by shares, incorporated and
domiciled in Australia.
The following is a summary of material accounting
policies adopted by the consolidated entity in the
preparation and presentation of the financial report.
The accounting policies have been consistently
applied, unless otherwise stated.
(a) Basis of preparation of the financial report
Compliance with IFRS
Australian Accounting Standards include Australian
Equivalents to International Financial Reporting
Standards (AIFRSs). Compliance with AIFRS ensures
compliance with International Financial Reporting
Standards (IFRSs).
Historical cost convention
The financial report has been prepared under the
historical cost convention.
Revenue from the sale of goods is recognised
when the significant risks and rewards of ownership
of the goods have passed to the buyer and the
costs incurred or to be incurred in respect of the
transaction can be measured reliably. Risks and
rewards of ownership are considered passed to
the buyer at the time of delivery of the goods to the
customer. Revenue from the provision of services to
customers is recognised upon delivery of the service
to the customer.
Interest revenue is recognised on a proportional
basis taking into account the interest rates applicable
to the financial assets.
All revenue is stated net of the amount of goods and
services tax (GST).
(d) Cash and cash equivalents
Cash and cash equivalents include cash on hand and
at banks.
(e) Plant and Equiptment
Cost and valuation
All classes of plant and equipment are stated at cost
less depreciation.
Depreciation
The depreciable amounts of all fixed assets are
depreciated on a straight-line basis over their
estimated useful lives commencing from the time the
asset is held ready for use.
(b) Principles of consolidation
The rates applicable for each class of asset are:
Plant and equipment
Plant and equipment
under finance lease
2007
9% to 40%
2006
9% to 40%
9% to 40%
9% to 40%
The consolidated financial statements are those
of the consolidated entity, comprising the financial
statements of the parent entity and of all entities,
which Hansen Technologies Ltd controlled from time
to time during the year and at balance date. Details
of the controlled entities are contained in Note 23.
The financial statements of subsidiaries are prepared
for the same reporting period as the parent entity,
using consistent accounting policies.
All inter-company balances and transactions,
including any unrealised profits or losses have been
eliminated on consolidation.
18
(f) Leases
Leases are classified at their inception as either
operating or finance leases based on the economic
substance of the agreement so as to reflect the risks
and benefits incidental to ownership.
Finance leases
Leases of fixed assets, where substantially all of
the risks and benefits incidental to ownership of the
asset, but not the legal ownership, are transferred to
entities within the consolidated entity are classified
as finance leases. Finance leases are capitalised,
recording at the inception of the lease an asset and
liability equal to the present value of the minimum
lease payments, and disclosed as plant and
equipment under lease.
Leased assets are depreciated over the shorter
of the estimated useful life of the assets and the
lease term. Lease payments are allocated between
interest expense and reduction of the lease liability.
The interest expense is calculated using the interest
rate implicit in the lease and is included in finance
costs in the Income Statement.
Operating leases
Lease payments for operating leases, where
substantially all of the risks and benefits remain with
the lessor, are charged as expenses in the period in
which they are incurred.
(g) Intangibles
Goodwill
Goodwill on consolidation represents the excess
of the cost of an acquisition over the fair value of
the Group’s share of net identifiable assets of the
acquired entities at the date of acquisition.
Goodwill is not amortised but is tested annually for
impairment, or more frequently if events or changes
in circumstances indicate that it might be impaired.
Goodwill is carried at cost less accumulated
impairment losses.
Research and development
Expenditure on research activities is recognised as
an expense when incurred.
Expenditure on development activities is capitalised
only when it is expected that future benefits will
exceed the deferred costs. Capitalised development
expenditure is stated at cost less accumulated
amortisation. Amortisation is calculated using a
straight-line method to allocate the cost over a
period of 5 years, during which the related benefits
are expected to be realised, once commercial
production is commenced.
Other development expenditure is recognised as an
expense when incurred.
(h) Impairment of assets
Assets with an indefinite useful life are not
amortised but are tested annually for impairment
in accordance with AASB 136. Assets subject to
annual depreciation or amortisation are reviewed for
impairment whenever events or circumstances arise
that indicate that the carrying amount of the asset
may be impaired. An impairment loss is recognised
where the carrying amount of the asset exceeds its
recoverable amount. The recoverable amount of an
asset is defined as the higher of its fair value less
costs to sell and value in use.
(i) Taxes
Current income tax expense or revenue is the tax
payable on the current period’s taxable income
based on the applicable income tax rate adjusted by
changes in deferred tax assets and liabilities.
A balance sheet approach is adopted under which
deferred tax assets and liabilities are recognised
for temporary differences between the tax bases
of assets and liabilities and their carrying amounts
in the financial statements. No deferred tax asset
or liability is recognised in relation to temporary
differences arising from the initial recognition of an
asset or a liability if they arose in a transaction, other
than a business combination, that at the time of the
transaction did not affect either accounting profit or
taxable profit or loss.
Deferred tax assets are recognised for temporary
differences and unused tax losses only when it is
probable that future taxable amounts will be available
to utilise those temporary differences and losses.
Current and deferred tax balances attributable
to amounts recognised directly in equity are also
recognised directly in equity.
7
0
0
2
19
Notes to the financial statements
For the year ended 30 June 2007
Tax consolidation
The parent entity and its controlled entities have
formed an income tax consolidated group under
the tax consolidation legislation. The parent entity is
responsible for recognising the current tax liabilities
and the deferred tax assets arising in respect of
tax losses for all entities in the tax consolidated
group. The tax consolidated group has also entered
a tax funding agreement whereby each company
in the group contributes to the income tax payable
in proportion to their contribution to the net profit
before tax of the tax consolidated group.
(j) Employee benefits
Liabilities arising in respect of wages and salaries,
annual leave, long service leave and any other
employee benefits expected to be settled within
twelve months of the reporting date are measured
at their nominal amounts based on remuneration
rates which are expected to be paid when the liability
is settled. All other employee benefit liabilities are
measured at the present value of the estimated
future cash outflow to be made in respect of services
provided by employees up to the reporting date.
Share-based payments
The Group operates an employee share option
plan and an employee share scheme. The total
amount to be expensed over the vesting period
is determined by reference to the fair value of the
options at grant date. The fair value of options at
grant date is determined using a Black-Scholes
option pricing model, and is recognised as an
employee expense over the period during which the
employees become entitled to the option.
(k) Financial instruments
Classification
The Group classifies its financial instruments in the
following categories: loans and receivables and other
financial assets. The classification depends on the
purpose for which the investments were acquired.
Management determines the classification of its
investments at initial recognition.
Loans and receivables
Loans and receivables are measured at fair value at
inception and subsequently at amortised cost using
the effective interest rate method.
Financial liabilities
Financial liabilities include trade payables, other
creditors and loans from third parties including inter-
company balances.
(l) Foreign currencies
Functional and presentation currency
The financial statements of each group entity are
measured using its functional currency, which is the
currency of the primary economic environment in
which that entity operates. The consolidated financial
statements are presented in Australian dollars, as
this is the parent entity’s functional and presentation
currency.
Transactions and balances
Transactions in foreign currencies of entities within
the consolidated entity are translated into functional
currency at the rate of exchange ruling at the date of
the transaction.
Foreign currency monetary items that are
outstanding at the reporting date (other than
monetary items arising under foreign currency
contracts where the exchange rate for that monetary
item is fixed in the contract) are translated using the
spot rate at the end of the financial year.
Resulting exchange differences arising on settlement
or re-statement are recognised as revenues and
expenses for the financial year.
Group companies
The financial statements of foreign operations whose
functwional currency is different from the Group’s
presentation currency are translated as follows:
- Assets and liabilities are translated at year-end
exchange rates prevailing at that reporting date;
- Income and expenses are translated at average
exchange rates for the period; and
- All resulting exchange differences are recognised
as a separate component of equity.
Exchange differences arising on translation of foreign
operations are transferred directly to the Group's
foreign currency translation reserve as a separate
component of equity in the balance sheet.
(m) Comparatives
Where necessary, comparative information has been
reclassified and repositioned for consistency with
current year disclosures.
(n) Rounding amounts
The company is of a kind referred to in ASIC Class
Order CO 98/0100 and in accordance with that
Class Order, amounts in the financial statements
have been rounded off to the nearest thousand
dollars, or in certain cases, to the nearest dollar.
20
2 Critical accounting estimates and judgements
The Group makes certain estimates and assumptions concerning the future, which, by definition will seldom
represent actual results. The estimates and assumptions that have a significant inherent risk in respect of
estimates based on future events, which could have a material impact on the assets and liabilities in the next
financial year, are discussed below:
(a) Impairment testing of intangible assets
The intangible assets of goodwill and capitalised software development are subjected to periodic review to
assess if their carrying value has been impaired. This assessment compares the carrying book value with the
recoverable amount of these assets using value in-use discounted cash flow projection calculations based on
management’s determination of budgeted cash flow projections and gross margins, past performance and its
expectation for the future. Given the long term income generating nature of the intangible assets the valuation
applies a discounted value to cash flow over an extended 5 year period plus a terminal value at the end of
the period. In respect of this fiscal year a 13.81% weighted cost of capital discount rate has been applied.
The growth rates utilised vary by business unit from zero to a maximum of 10% per annum.
(b) Income taxes
Income tax benefits are based on the assumption that no adverse change will occur in the income tax
legislation and the anticipation that the company will derive sufficient future assessable income to enable the
benefit to be realised and comply with the conditions of deductibility imposed by the law.
There had been significant expenditure on research and development on the HUB billing software in the 2007
year. Returns are beginning to be derived from this investment, which comprises the majority of the carried
forward losses. Recognition of the carried forward losses is based upon the probable future profits of the
Group.
7
0
0
2
3 Revenue
Revenues from continuing operations
Revenue from sale of goods and services
Sale of intellectual property
Other income:
From operating activities
Management fees
Net foreign exchange gains / (losses)
Interest - other parties
Other income
Total other revenues
Total revenue from ordinary activities
Consolidated Entity
Parent Entity
2007
$’000
2006
$’000
2007
$’000
2006
$’000
49,758
1,333
51,091
49,482
-
49,482
-
(302)
381
1,418
-
298
200
1,270
1,497
52,588
1,768
51,250
-
-
-
967
-
-
19
986
986
-
-
-
793
-
5
1
799
799
21
Notes to the financial statements
For the year ended 30 June 2007
Consolidated Entity
Parent Entity
Note
2007
$’000
2006
$’000
2007
$’000
2006
$’000
4 Profit from continuing operations
Profit from continuing operations before income tax has
been determined after the following specific expenses:
Employee benefits expense
Wages and salaries
Workers compensation costs
Superannuation costs
Expense of share based payments
Total employee benefits expense
Depreciation of non-current assets
Plant and equipment
Total depreciation of non-current assets
Amortisation of non-current assets
Plant and equipment under finance lease
Research and development
Total amortisation of non-current assets
24,901
78
2,141
26
27,146
27,028
78
2,285
45
29,436
748
2
32
26
808
10
10
11
1,916
1,916
2,122
2,122
431
2,692
3,123
431
2,587
3,018
Finance costs expensed
Interest charges (reversal)
Finance charges paid or payable under finance leases
Total finance costs expensed
(236)
8
(228)
170
14
184
Operating lease rental expenses
Lease rental charges
Total operating lease rental expenses
Other expenses
3,405
3,405
3,255
3,255
Movement in provision for doubtful debts
Net (profit) loss on disposal of plant and equipment
Other expenses
Total other expenses
27
(6)
1,349
1,370
(4)
17
272
285
-
-
101
101
607
2
30
-
639
17
17
-
-
-
-
5
5
-
-
-
6
81
87
-
-
-
-
-
-
-
-
-
-
22
5 Income tax
(a) The components of tax expense
Current tax
Deferred tax
Transfer of losses and other timing differences
Prior period timing differences bought to account
Under provision in prior year
Total income tax expense
Consolidated Entity
Parent Entity
2007
$’000
2006
$’000
2007
$’000
2006
$’000
10
962
-
-
169
1,141
-
(416)
-
-
27
(389)
-
1,645
(1,597)
-
(46)
2
-
(357)
1,128
25
167
963
(b) Income tax expense / (benefit)
Prima facie income tax expense calculated
at 30% (2006: 30%) on the profit from ordinary activities
1,334
101
11
755
Tax effect of amounts which are not deductible
in calculating taxable income
Current year losses not brought to account
Capital losses absorbed not previously brought to account
Other non allowable items
Under / (over) provision in prior years
Prior period temporary differences not previously
brought to account
Research and development allowances
Non assessable income
Income tax expense
76
(266)
24
169
-
(196)
-
1,141
112
-
34
27
(150)
(497)
(16)
(389)
-
-
37
(46)
-
-
-
2
-
-
23
167
18
-
-
963
7
0
0
2
23
Notes to the financial statements
For the year ended 30 June 2007
Consolidated Entity
Parent Entity
Note
2007
$’000
2006
$’000
2007
$’000
2006
$’000
5 Income tax cont...
(c) Deferred tax relates to the following:
Deferred tax liabilities
Research & development expenditure capitalised
Other income not yet assessable
Other
Total deferred tax liabilities
Deferred tax assets
Employee benefits
Provisions
Other payables
Difference in depreciation and amortisation of plant and
equipment for accounting and income tax purposes
Losses available for offset against future taxable income 2 (b)
Other
Total deferred tax assets
Net deferred tax
(d) Deferred tax assets not bought to
account, the benefits of which will only
be realised if the condition for deductibility
set out in Note 1(i) occur
Tax losses
2,231
-
-
2,231
1,185
135
572
1,193
733
10
3,828
1,597
2,451
222
86
2,759
1,292
74
417
1,078
2,624
2
5,487
2,728
-
-
5
5
890
6
271
-
731
20
1,918
1,913
-
222
86
308
964
74
170
21
2,624
13
3,866
3,558
4,476
4,476
4,479
4,479
2,082
2,082
2,082
2,082
24
Consolidated
PaRent entitY
note
2006
$’000
2005
$’000
6 Dividends on ordinary shares
2007
A one cent per share unfranked final dividend was declared on 31 August 2007.
2006
No dividend was declared in respect of the 2006 financial year.
Note
Dividend franking account
30% franking credits, on a tax paid basis, are available to shareholders of Hansen
Technologies Ltd for subsequent financial years
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.
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.
.
Parent Entity
2007
$’000
2006
$’000
Nil
Nil
7
0
0
2
7 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 6.33% (2006: 8.25%) at 30 June 2007.
Consolidated Entity
Parent Entity
2007
$’000
2006
$’000
2007
$’000
2006
$’000
7,773
(47)
7,726
696
8,422
153
-
153
5,830
(20)
5,810
2,124
7,934
-
-
-
33
33
-
-
-
58
58
243
-
243
-
32,907
32,907
-
32,786
32,786
25
Notes to the financial statements
For the year ended 30 June 2007
8 Other financial assets
Non-current
Investment in controlled entity
9 Other current assets
Current
Prepayments
Accrued revenue
Other revenue
10 Plant and equipment
Plant and equipment, at cost
Accumulated depreciation
Plant and equipment under finance lease, at cost
Accumulated amortisation
Total plant and equipment
Reconciliations
Reconciliations of the carrying amounts of plant and
equipment at the beginning and end of the financial year.
Plant and equipment
Carrying amount at beginning of year
Additions
Disposals
Depreciation expense
Net foreign currency movements arising from
foreign operation
Carrying amount at end of year
Plant and equipment under finance lease
Carrying amount at beginning of year
Additions
Disposals
Amortisation expense
Carrying amount at end of year
Consolidated Entity
Parent Entity
2007
$’000
2006
$’000
2007
$’000
2006
$’000
-
-
-
-
11,000
11,000
11,000
11,000
1,191
250
-
1,441
972
795
71
1,838
20,096
(16,120)
3,976
21,001
(16,938)
4,063
3,762
(3,556)
206
3,762
(3,125)
637
4,182
4,700
4,063
1,837
(3)
(1,916)
(5)
3,976
637
-
-
(431)
206
5,678
595
(87)
(2,122)
(1)
4,063
1,068
-
-
(431)
637
5
-
-
5
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5
-
-
5
-
-
-
-
-
-
-
81
-
(64)
(17)
-
-
-
-
-
-
-
26
11 Intangibles
Goodwill, at cost
Accumulated impairment
Software research and development, at cost
Accumulated amortisation
Total intangible assets
Reconciliation of goodwill at cost
Opening amount
Current year write down
Closing amount
Accumulated impairment at beginning of year
Current year write down
Accumulated impairment at end of year
Reconciliation of software research and development at cost
Opening amount
Expenditure capitalised in current period
Current year write down
Closing amount
Accumulated amortisation at beginning of year
Current year charge
Accumulated amortisation at end of year
12 Payables
Current
Trade payables
Other payables
Non-current
Loans - controlled entities
Consolidated Entity
Parent Entity
2007
$’000
2006
$’000
2007
$’000
2006
$’000
18,479
(4,693)
13,786
18,479
(4,693)
13,786
20,924
(13,486)
7,438
18,961
(10,795)
8,166
21,224
21,952
18,479
-
18,479
(4,693)
-
(4,693)
18,479
-
18,479
(4,693)
-
(4,693)
18,961
1,963
-
20,924
15,900
3,061
-
18,961
(10,795)
(2,692)
(13,487)
(8,208)
(2,587)
(10,795)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,547
3,319
4,866
-
-
1,388
2,857
4,245
3
203
206
3
122
125
-
-
4,518
4,518
6,419
6,419
7
0
0
2
27
Notes to the financial statements
For the year ended 30 June 2007
13 Borrowings
Current
Secured
Hire purchase liability
Finance lease liability
Non-current
Secured
Hire purchase liability
Finance lease liability
14 Provisions
Current
Employee benefits
Other
Non-current
Employee benefits
Other
Consolidated Entity
Parent Entity
Note
2007
$’000
2006
$’000
2007
$’000
2006
$’000
18
18
18
18
97
223
320
-
61
61
3,728
151
3,879
220
284
504
235
600
835
97
233
330
4,000
100
4,100
313
242
555
-
-
-
-
-
-
146
4
150
-
-
-
-
-
-
-
-
-
109
4
113
-
-
-
(a) Aggregate employee benefits liability
3,948
4,313
146
109
(b) Number of employees at year end
262
306
1
1
Reconciliations
Reconciliations of the carrying amounts of each class of
provision, except for the employee benefits provision,
are set out below:
Provisions other - current
Carrying amount at beginning of year
Provisions made during the year - other
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 - other
Payments made during the year
Carrying amount at end of year
Other provisions includes a provision for onerous lease
terms as well as providing for the make good in respect
of a sub tenancy arrangement. It is provided for in line
with the lease rental term and will be released or reversed
upon expiration of the lease.
100
51
-
-
151
242
42
-
284
336
(140)
7
(103)
100
339
(97)
-
242
-
4
-
-
4
-
-
-
-
-
-
-
-
-
-
-
-
-
28
15 Contributed Equity
(a) Issued and paid up capital
Ordinary shares, fully paid
note
note
(b) Movements in shares on issue
Balance at beginning of year
Shares issued under Rights Issue
Shares issued under Employee Share Plan
Transaction costs on issue of shares
Balance at end of year
(c) Share options
Consolidated Entity
Parent Entity
2007
$’000
2006
$’000
2007
$’000
2006
$’000
50,048
49,958
50,048
49,958
Consolidated Entity
Parent Entity
2007
Number
of Shares
149,421,445
-
350,010
-
149,771,455
2007
$’000
2006
Number
of Shares
2006
$’000
49,958 116,426,968
- 32,198,472
796,005
-
50,048 149,421,445
90
-
43,452
6,440
105
(39)
49,958
7
0
0
2
Employee share option plan
The company continued to offer employee participation in short-term and long-term incentive schemes as
part of the remuneration packages for the employees of the companies.
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 28 days after 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.
29
Notes to the financial statements
For the year ended 30 June 2007
15 Contributed Equity cont...
(c) Share options
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.
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 exercise price of the options will be adjusted in
accordance with the Listing Rules.
Since the end of the financial year 500,000 (2006: 380,000) options have been granted under this scheme.
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
Grant Date
Consolidated and
Company 2007
1 July 2001
1 Jul 2004
1 Jul 2006
$1.50
650,000
1 October 2001
1 Jul 2004
1 Jul 2006
$1.50
145,000
1 January 2002
1 Jan 2005 1 Jan 2007
$1.20
-
1 July 2003
1 Jul 2006
1 Jul 2008
$0.19
585,000
1 July 2004
1 Jul 2007
1 Jul 2009
$0.20
455,000
1 July 2005
1 Jul 2008
1 Jul 2010
$0.28
455,000
-
-
-
-
-
-
650,000
145,000
-
-
-
-
-
-
-
75,000
510,000 510,000
75,000
380,000
75,000
380,000
1 July 2006
1 Jul 2009
1 Jul 2011
$0.13
1 November 2006 1 Nov 2009 1 Nov 2011
$0.13
-
-
380,000
75,000
305,000
75,000
-
75,000
TOTAL
2,290,000
455,000 1,095,000 1,650,000 510,000
Consolidated and
Company 2006
7 August 2000
7 Aug 2002 7 Aug 2005
$1.40
200,000
25 December 2000 25 Dec 2002 25 Dec 2005
$1.90
50,000
1 July 2001
1 Jul 2004
1 Jul 2006
$1.50
650,000
1 October 2001
1 Jul 2004
1 Jul 2006
$1.50
145,000
1 January 2002
1 Jan 2005 1 Jan 2007
$1.20
15,000
1 July 2003
1 Jul 2006
1 Jul 2008
$0.19
660,000
1 July 2004
1 Jul 2007
1 Jul 2009
$0.20
630,000
-
-
-
-
-
-
-
200,000
50,000
-
-
-
-
-
-
650,000 650,000
145,000 145,000
15,000
-
75,000
585,000
175,000
455,000
1 July 2005
1 Jul 2008
1 Jul 2010
$0.28
-
530,000
75,000
455,000
TOTAL
2,350,000
530,000
590,000 2,290,000 795,000
-
-
-
-
-
-
-
-
30
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.
7
0
0
2
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:
Consolidated Entity the ComPanY
2007
Number of Shares
2006
Number of Shares
Number of shares at beginning of year
1,865,846
1,146,434
Number of shares distributed to employees
350,010
796,500
Number of shares transferred to main share registry and/or
disposed of
Number of shares at year-end
(860,141)
1,355,715
(77,088)
1,865,846
The consideration for the shares issued on 21 May 2007 was 25.71 cents (23 June 2006: 13.19).
The amounts recognised in the financial statements of the consolidated entity and the Company in relation to the
ESP during the year were:
Consolidated Entity
2006
$’000
2007
$’000
Parent Entity
2006
$’000
2007
$’000
Current receivables
Issued ordinary share capital
33
90
53
105
33
90
53
105
The market value of ordinary Hansen Technologies Ltd shares closed at $0.285 on 30 June 2007 ($0.13 on 30 June 2006).
31
Notes to the financial statements
For the year ended 30 June 2007
Consolidated Entity
Parent Entity
Note
2007
$’000
2006
$’000
2007
$’000
2006
$’000
16 Reserves and retained profits
Foreign currency translation
Options granted reserve
Retained earnings (accumulated losses)
(a) Foreign currency translation reserve
16 (a)
16 (b)
16 (c)
(448)
117
(13,491)
(425)
91
(16,798)
-
117
(9,166)
-
-
(9,199)
Movements in reserve
Balance at beginning of year
Movement during the year
Balance at end of year
(b) Options granted reserve
Movements in reserve
Balance at beginning of year
Movement during the year
Balance at end of year
(c) Retained earnings (accumulated losses)
Balance at beginning of year
Dividends paid
Net profit / (loss) attributable to members of
Hansen Technologies Ltd
Balance at end of year
17 Cash flow information
(425)
(23)
(448)
91
26
117
(226)
(199)
(425)
45
46
91
(16,798)
-
(17,522)
-
3,307
(13,491)
724
(16,798)
-
-
-
-
117
117
(9,199)
-
33
(9,166)
-
-
-
-
-
-
(8,334)
-
(865)
(9,199)
(a) Reconciliation of profit / (loss) from ordinary activities
after income tax to net cash flows from operations
Profit / (loss) from ordinary activities after income tax
Add / (less) items classified as investing / financing activities:
(Profit) / loss on sale of non-current assets
Proceeds from sale of intellectual property
Add / (less) non cash items:
Amortisation and depreciation
Transfer of tax losses within tax consolidation group
Net cash (used in) / 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 deferred tax assets
Increase / (decrease) in deferred tax liabilities
Increase / (decrease) in reserves
Net cash (used in) / provided by operating activities
3,307
724
33
(865)
(3)
(1,333)
5,039
-
17
-
-
-
5,140
-
-
(1,642)
6
-
17
830
7,010
5,881
(1,609)
(12)
(1,828)
1,826
159
480
(284)
(273)
1,640
(503)
4
8,231
(1,097)
243
(800)
375
240
(212)
(416)
-
(154)
4,060
-
25
-
81
-
38
1,934
(290)
117
296
-
18
(2)
168
-
(237)
(357)
-
-
(422)
(b) Reconciliation of cash
Cash assets
11,958
6,895
15
9
32
7
0
0
2
Consolidated Entity
Parent Entity
2007
$’000
2006
$’000
2007
$’000
2006
$’000
18 Commitments and contingencies
Lease expenditure commitments
Operating leases (non-cancellable):
Not later than one year
Later than one year and not later than five years
Later than five years
Aggregate lease expenditure contracted for at reporting date
2,276
4,290
-
6,566
2,287
5,917
-
8,204
Hire purchase commitments:
Not later than one year
Later than one year and not later than five years
Total minimum hire purchase payments
Less: Future finance charges
Present value of minimum hire purchase payment
Hire purchase liabilities provided for in the financial statements:
Current
Non-current
Total hire purchase liabilities
Finance lease commitments:
Not later than one year
Later than one year and not later than five years
Total minimum lease payments
Less: Future finance charges
Present value of minimum lease payment
Lease liabilities provided for in the financial statements:
Current
Non-current
Total lease liabilities
101
-
101
(4)
97
97
-
97
238
67
305
(21)
284
223
61
284
249
101
350
(18)
332
235
97
332
657
239
896
(63)
833
600
233
833
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Operating leases (non-cancellable)
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 three 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.
33
Notes to the financial statements
For the year ended 30 June 2007
Consolidated Entity
Parent Entity
2007
$’000
2006
$’000
2007
$’000
2006
$’000
19 Earnings per share
The following reflects the income and share data used in
the calculations of basic and diluted earnings per share:
Basic earnings - ordinary shares
Diluted earnings - ordinary shares
3,307
3,307
724
724
-
-
-
-
Consolidated Entity
Parent Entity
2007
Number
Shares
2006
Number
Shares
2007
2006
Number Number
Shares
Shares
Weighted average number of ordinary shares used in
calculating basic earnings per share:
Number for basic earnings per share - ordinary shares
Number for diluted earnings per share - ordinary shares
149,459,802 140,142,288
151,383,282 141,637,288
Basic earnings per share
Diluted earnings per share
$0.022
$0.022
$0.005
$0.005
-
-
-
-
-
-
-
-
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.
34
20 Directors' and executives' compensations
Short-Term Employment Benefits
Post
Employment
Benefits
Share
Based
Benefits
Salary
Fees
2007
$
Cash
Non-
Bonus Monetary
2007
2007
$
$
Super Options
(A)
2007
2007
$
Total
Total
Total Performance Options
Related Related
2007 2007
%
2007
$
%
Directors
Non-executive
K Hansen (Chairman)
B Adams
D Osborne
Executive
A Hansen (MD & CEO)
Key management personnel
Consolidated
C Hunter (Chief Operations Officer)
G Kentish (GM, Hansen Europe)
G Lister (CFO & Company Secretary)
D Meade (Client Services Manager)
K Speyer (GM, HPS)
Directors
Non-executive
K Hansen (Chairman)
G Tomlinson
B Adams
D Osborne
Executive
A Hansen (MD & CEO)
70,648
37,037
37,037
-
-
-
-
-
-
-
3,333
3,333
-
-
-
70,648
40,370
40,370
0%
0%
0%
0%
0%
0%
351,697
72,477 31,650
38,176
- 494,000
15%
0%
150,274
258,120
219,266
117,478
129,878
11,202
18,349
-
-
36,697
-
13,761 36,948
-
18,349
14,795 3,026
197,646
- 1,614 259,734
28,830 3,026 287,819
11,812 3,026 183,025
- 161,567
13,340
11%
1%
14%
9%
11%
2%
1%
1%
2%
0%
7
0
0
2
2006
$
2006
$
2006
$
2006
$
2006
(B)
2006
$
2006 2006
%
%
64,815
30,864
37,037
12,345
-
-
-
-
-
-
-
-
5,833
2,778
3,333
1,111
-
-
-
-
70,648
33,642
40,370
13,456
0%
0%
0%
0%
0%
0%
0%
0%
333,349
- 31,650
30,001
- 395,000
0%
0%
Key management personnel
Consolidated
P Day (Chief Information Officer)
C Hunter (Chief Operations Officer)
G Kentish (GM, Hansen Europe)
G Lister (CFO & Company Secretary)
J Payne (GM, Outsourcing)
58,444
137,242
219,912
211,009
154,128
-
5,543
18,349 13,157
-
-
-
-
18,349
27,523
-
8,064
72,051
13,828 8,577 191,153
- 219,912
20,642 8,577 258,577
16,349 8,577 206,577
-
0%
14%
0%
10%
17%
0%
4%
0%
3%
4%
Executive Directors and Senior Executives may receive bonuses at the absolute discretion of the Directors.
All bonuses are subject to the achievement of key performance indicators which vary from executive to executive but
are all targeted at enhanced operating performance and agreed corporate objectives. Bonuses are paid in the August
or September payroll after the financial results for the prior year have been determined to ensure the performance
measurements have been achieved. Non-executive Directors do not receive any performance related remuneration
Any options not exercised are forfeited if not exercised within 28 days of termination of employment.
Note:
Share based payments above represent a value attributed to options over ordinary shares issued to executives.
They expire during the period up to (A) 1 July 2012 and (B) 1 July 2011. Each option entitles the holder to purchase one ordinary share in the Company.
The share based payment value disclosed above is calculated at the date of grant using the Black-Scholes model.
For those options issued to key management personnel this year the Black Scholes model applied a:
- share price volatility factor in respect to the company's historical share price movement compared with the industry average, for a period equal to the
3 year option vesting period of 47%.
- a continuously compounding risk free interest rate of 5.58%.
- a probability factor for the likelihood of the Options being exercising based on historical trends of 64%, and
- compared the issue price ($0.13 cents per share) with the market price on day of issue ($0.13 cents per share), to
- determined a weighted average fair value for the options issued as at grant date of $0.063 cents per option.
35
Notes to the financial statements
For the year ended 30 June 2007
21 Directors' and executives' equity holdings
(a) Compensation options: Granted and vested during the year (consolidated)
During the financial year the Company granted options over unissued ordinary shares to the following five key
management personnel of the Company as part of their remuneration:
Specified Executives
C Hunter (Chief Operations Officer)
G Kentish (GM, Hansen Europe)
G Lister (CFO & Company Secretary)
D Meade (Client Services Manager)
K Speyer (GM, HPS)
Total
Value Per
Option at
Number Number Grant Date Grant Date
Vested Granted
Exercise
Price
$
First
Exercise
Date
Last
Exercise
Date
Terms & Conditions For Each Grant
75,000 75,000 1 Jul 06
- 40,000 1 Jul 06
75,000 75,000 1 Jul 06
75,000 75,000 1 Jul 06
$0.13
$0.13
$0.13
$0.13
$0.13 1 Jul 09 1 Jul 11
$0.13 1 Jul 09 1 Jul 11
$0.13 1 Jul 09 1 Jul 11
$0.13 1 Jul 09 1 Jul 11
-
-
225,000 265,000
All grants of options are subject to the achievement of performance measurements for the year of issue. Subject
to continuation of employment criteria options vest 3 years after issue date. If the vesting criteria are not met the
options may be forfeited at the discretion of the Directors. Options expire two years after vesting.
(b) Number of options held by key management personnel (consolidated)
Balance
Granted as
30 Jun 06 Remuneration
Lapsed
Balance
30 Jun 07
Vested at 30 June 2007
Total Exercisable Unexercisable
Specified Directors
K Hansen (Chairman)
B Adams
D Osborne
A Hansen (MD & CEO)
Specified Executives
C Hunter (Chief Operations Officer)
G Kentish (GM, Hansen Europe)
G Lister (CFO & Company Secretary)
D Meade (Client Services Manager)
K Speyer (GM, HPS)
Total
-
-
-
150,000
300,000
-
225,000
245,000
-
920,000
-
-
-
-
-
-
- 150,000
-
-
-
-
-
-
-
-
-
-
-
-
40,000
75,000 75,000 300,000 75,000
-
40,000
-
75,000
- 300,000 75,000
75,000 20,000 300,000 75,000
-
75,000
-
75,000
75,000
-
265,000 245,000 940,000 225,000 225,000
-
-
-
-
-
-
-
-
-
-
-
-
-
36
(c) Number of shares held by key management personnel
Balance
30 Jun 06
Received as
Remuneration
Options
Exercised
Net Change
Other
Balance
30 Jun 07
Specified Directors
K Hansen (Chairman)
B Adams
D Osborne
A Hansen (MD & CEO)
Specified Executives
C Hunter (Chief Operations Officer)
G Kentish (GM, Hansen Europe)
G Lister (CFO & Company Secretary)
D Meade (Client Services Manager)
K Speyer (GM, HPS)
Total
93,757,267
210,049
173,699
11,421,522
189,221
-
750,426
4,000
25,349
106,531,533
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(35,988)
-
44,977
-
93,721,279
210,049
218,676
11,421,522
91,110
(98,111)
-
-
754,315
3,889
4,000
-
(1,111)
24,238
(86,344) 106,445,189
Consolidated Entity
Parent Entity
2007
$’000
2006
$’000
2007
$’000
2006
$’000
7
0
0
2
22 Auditor's remuneration
Audit services:
Amounts received by the auditors of the company for:
Australia
- audit and review of the financial report of the entity
and any other entity in the consolidated entity
Overseas Firms
- audit and review of financial reports
Other financial services:
Australia
- tax related services
Overseas Firms
- tax related services
144
47
191
55
27
82
273
112
98
210
50
32
82
292
-
-
-
-
-
-
-
-
-
-
-
-
-
-
37
Notes to the financial statements
For the year ended 30 June 2007
23 Related party disclosures
(a) The consolidated financial statements include the financial statements of Hansen Technologies Ltd and its
controlled entities listed below:
Name
Note
Country of Incorporation
Parent entity
Hansen Technologies Ltd
Australia
Ordinary Share
Consolidated
Entity Interest
2007
%
2006
%
Subsidiaries of Hansen Technologies Ltd
Hansen Corporation Pty Ltd as trustee for Kenneth A Hansen Unit Trust Australia
Australia
Hansen Research & Development Pty Ltd
Australia
Hansen Corporation Investments Pty Ltd
Australia
Radius Computing Pty Ltd
(ii) Australia
Hansen Professional Services Pty Ltd
Australia
Hansen Holdings (Asia) Pty Ltd
New Zealand
Hansen Corporation Limited
United Kingdom
Hansen Corporation Europe Limited
Hansen Datatrue Ltd
(i) United Kingdom
Hansen Corporation USA, Limited
Hansen North America, Inc.
Hansen Corporation Asia Limited
United States of America
United States of America
Hong Kong
100
100
100
100
100
100
100
100
N/A
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Notes:
(i) This entity is in the process of being deregistered.
(ii) Subsequent to year end this subsidiary has been sold. See Note 26
(b) The following provides the total amount of transactions that were entered into with related parties for the
relevant financial year:
Transactions with key management personnel of the entity or its parent and their personally related
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 following table provides the total amount of transactions that were entered into with related parties for
the relevant financial year:
Consolidated Entity
Parent Entity
K Hansen and A Hansen - Lease rental payments
785,854
770,713
-
-
2007
$
2006
$
2007
$
2006
$
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 2007 were $130,619 and $655,235 respectively (2006: $126,920 and
$643,793 respectively).
38
24 Segment Information
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,
Other:
systems and operations support, network services, call centre services, telehousing and business
continuity support.
Represents software and service provision in the areas of call centre productivity, superannuation
administration and asset management.
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:
USA:
Europe:
Other:
Sales and services in all Australian states and territories.
Sales and services throughout the USA.
Sales and services throughout Europe.
Sales and services throughout Asia and New Zealand.
7
0
0
2
39
Notes to the financial statements
For the year ended 30 June 2007
24 Segment Information cont..
Business segments
Revenue
External segment revenue
Other unallocated revenue
Total revenue
Result
Segment result
Unallocated corporate expenses
Profit from ordinary activities before
income tax
Income tax (expense) / benefit
Net profit
Billing
IT Outsourcing
Other
Consolidated
2007
2006
2007
2006
2007
2006
2007
2006
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
23,274 21,849 22,915 23,322 4,902
4,311 51,091 49,482
1,497
1,768
52,588 51,250
4,933
1,252 2,741
2,703 1,805
669
9,479
(5,031)
4,624
(4,289)
4,448
(1,141)
3,307
335
389
724
4,872
167
5,039
5,074
66
5,140
Depreciation and amortisation
Depreciation and amortisation - unallocated
3,347
3,483 1,256
1,312
269
279
Segment result is inclusive of some individually
significant items.
Individually significant segment items
Sale of intellectual property
Assets
Segment assets
Unallocated corporate assets
Consolidated total assets
Liabilities
Segment liabilities
Unallocated corporate liabilities
Consolidated total liabilities
-
-
-
- 1,333
-
1,333
-
14,381 16,479 7,044
8,407 1,090
5,024
5,173 6,085
7,165
838
1,081 22,515 25,967
26,462 20,323
48,977 46,290
890 11,947 13,228
236
804
12,751 13,464
Acquisition of non-current assets
1,122
394
333
185
398
16
1,853
595
40
Australia
USA
Europe
Other
Consolidated
2007
$’000
2006
$’000
2007
$’000
2006
$’000
2007
$’000
2006
$’000
2007
$’000
2006
$’000
2007
$’000
2006
$’000
Geographical segments
External segment revenue
by location of customers
Segment assets by location
of assets
Acquisition of non-current
assets
44,562 46,120
129
278 6,400
3,084
-
- 51,091 49,482
44,213 42,729
20
114 4,623
3,330
121
117 48,977 46,290
1,245
451
-
2
608
142
-
-
1,853
595
25 Financial Instruments
(a) Interest rate risk
Interest rate risk exposures
The consolidated entity's exposure to interest rate risks and the effective interest rates of financial assets and
financial liabilities, both recognised and unrecognised at balance date, are as follows:
7
0
0
2
2007
Financial assets
Cash
Receivables
Other assets
Financial liabilities
Payables
Borrowings
Provisions
2006
Financial assets
Cash
Receivables
Other assets
Financial liabilities
Payables
Borrowings
Provisions
Weighted
Average
Interest
Rate
Floating
Interest
Rate
Fixed Interest Maturing In:
1 Year
or Less
1 to 5 More Than
5 Years
Years
Non-
Interest
Bearing
Total
Note
$’000
$’000
$’000
$’000
$’000
$’000
17
7
9
12
13
14
17
7
9
12
13
14
6.10% 11,958
-
7.45%
-
11,958
9.45%
-
-
-
-
-
696
-
696
-
320
-
320
5.13%
8.25%
6,895
-
-
6,895
-
2,124
-
2,124
8.80%
-
-
-
-
-
835
-
835
-
153
-
153
-
61
-
61
-
243
-
243
-
330
-
330
-
-
-
-
7,726
250
- 11,958
8,575
250
7,976 20,783
-
-
-
-
-
-
-
-
-
-
-
-
4,866
-
3,948
8,814
4,866
381
3,948
9,195
-
5,810
795
6,895
8,177
795
6,605 15,867
4,245
-
4,313
8,558
4,245
1,165
4,313
9,723
41
Notes to the financial statements
For the year ended 30 June 2007
25 Financial Instruments cont..
(b) Credit risk exposures
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date
of recognised financial assets is the carrying amount of those assets, net of any provisions for doubtful debts
of those assets, as disclosed in the balance sheet and notes to the financial statements.
Credit risk for derivative financial instruments arises from the potential failure by counterparties to the contract
to meet their obligations. The credit risk exposure to forward exchange contracts is the net fair value of
these contracts.
The consolidated entity does not have any material credit risk exposure to any single debtor or group of
debtors under financial instruments entered into by the consolidated entity.
The consolidated entity does not have any material credit risk exposure to any single debtor or group of
debtors under financial instruments entered into by the consolidated entity.
Concentrations of credit risk
The consolidated entity minimises concentrations of credit risk in relation to trade receivables by undertaking
transactions with a large number of customers. Concentrations of credit risk on trade and term debtors are:
Utilities 51% (2006: 36%), Finance Sector 16% (2006: 40%), Telecommunications 21% (2006: 13%) and
Other 12% (2006: 11%).
(c) Fair values
The fair value of financial assets and financial liabilities approximates their carrying amounts as disclosed in
the balance sheet and notes to the financial statements.
26 Subsequent events
Subsequent to the year end and not reflected in these results the wholly owned subsidiary Hansen Professional
Services Pty Ltd (HPS) was sold as a going concern for a cash consideration of $10.5 million. Until the final
accounts of the subsidiary at the date of sale are finalised we are unable to confirm the profit from the sale.
However based on preliminary estimates the profit is expected to exceed $9 million. In addition because of
the availability of previously unrecognised capital tax losses and the tax cost base of the subsidiary within the
consolidated tax group, there is not expected to be any related income tax expense.
42
Directors’ Declaration
The Directors declare that the financial statements and notes set out on pages 14 to 42 in accordance with the
Corporations Act 2001:
(a)
(b)
Comply with Accounting Standards and the Corporations Regulations 2001, and other mandatory professional
reporting requirements; and
Give a true and fair view of the financial position of the company and the consolidated entity as at 30 June
2007 and of their performance as represented by the results of their operations, changes in equity and their
cash flows, for the year ended on that date.
In the Directors’ opinion there are reasonable grounds to believe that Hansen Technologies Ltd will be able to pay its
debts as and when they become due and payable.
This declaration has been made after receiving the declarations required to be made by the Chief Executive Officer and
Chief Financial Officer to the Directors in accordance with sections 295A of the Corporations Act 2001 for the financial
year ending 30 June 2007.
This declaration is made in accordance with a resolution of the Directors.
Dated at Melbourne this 28th day of September 2007.
Signed in accordance with a resolution of the Directors:
7
0
0
2
Kenneth Hansen
Director
Andrew Hansen
Director
43
Independent Audit Report
Scope
We have audited the accompanying financial report of Hansen Technologies Ltd and controlled entities. The financial
report comprises the balance sheet as at 30 June 2007, and the income statement, statement of changes in
equity and cash flow statement for the year ended on that date, a summary of significant accounting policies, other
explanatory notes and the directors' declaration of the consolidated entity comprising the company and the entities it
controlled at the year's end or from time to time during the financial year.
Directors' Responsibility for the Financial Report
The directors' of the company are responsible for the preparation and fair presentation of the financial report in
accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the
Corporations Act 2001. This responsibility includes establishing and maintaining internal control relevant to the
preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or
error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in
the circumstances.
In Note 1, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial
Statements, that compliance with the Australian equivalents to International Financial Reporting Standards ensures
that the financial report, comprising the financial statements and notes, complies with International Financial Reporting
Standards.
Auditor's Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in
accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical
requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether
the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
report. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material
misstatement in the financial report, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity's preparation and fair presentation of the financial report in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall
presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
44 Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.
Auditor's Opinion
In our opinion,
(a) the financial report of Hansen Technologies Ltd is in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the company's and consolidated entity's financial position as at 30 June 2007
and of their performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations)
and the Corporations Regulations 2001; and
(b) the consolidated financial report also complies with International Financial Reporting Standards as disclosed
in Note 1.
7
0
0
2
Dated at Melbourne this 28th day of September 2007.
PITCHER PARTNERS
D B RANKIN
45
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.
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 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 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.
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
46 7
0
0
2
expenditure, capital management and acquisitions
and divestments;
• ensuring that continuous disclosure requirements are
responsibility. The Board’s contribution as a whole should
be reviewed and areas where improvement can be made
should be noted.
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
The Board reviews and evaluates the performance of
the Board and the Board committees. The process is to
involve the assessment of all of the Board’s key areas of
The performance evaluation process is as follows:
• each Director will periodically evaluate the effectiveness
of the Board and its committees and submit
observations to the Chairman;
• the Chairman of the Board will present a report
incorporating his assessment of such observations to
enable the Board to assess, and if necessary, take action;
• the Board will agree on development and actions
required to improve performance;
• 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 and complementary backgrounds. In addition, the
Committee chair shall be independent, possess leadership
experience and a sound finance 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 members of the Committee as at 30 June 2007 are two
non-executive directors, David Osborne and Bruce Adams.
The Chairman of the Audit Committee is currently
Bruce Adams.
47
A member 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.
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Appointment of External Auditors
Scope of External Audit
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.
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
49
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
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.
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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
• Target markets
• Within Group strategy
pROBLeM MaNageMeNT
• 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
51
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 either over the web
or by post 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 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
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policies of the relevant business division.
The Remuneration Committee
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 are required to
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 rewards and other
benefits that will attract and retain key executives and align
their financial interests with those of our shareholders.
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 currently consists of two
directors, David Osborne and Bruce Adams. Bruce
Adams 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
arrangements and remuneration packages for each
executive.
Each year performance based incentives, at the discretion
of the Directors, 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 five key management
personnel and their total remuneration is set out in the
Annual Report each year.
The CEO and the executive team approve the pay and
53
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. The issue of options would be based at the
absolute discretion of the Directors and in accordance with
the Employee Share Option Plan.
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
and the market in accordance with our obligations to the
market;
• such information is communicated in a way that allows
for all interested parties to have equal and timely access;
• communication is presented in a clear, factual and
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.
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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
• 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.
requires market announcements.
Communications procedures
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;
• mergers, acquisitions / divestments, joint ventures or
changes in assets;
• significant developments in regard to new projects or
ventures;
• events regarding an entity’s shares or securities;
• major new contracts, orders, or changes in suppliers or
customers;
• significant changes in products, product lines, supplies or
inventory;
• industry issues that may have a material impact on the
company;
• major litigation; and
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.
55
ASX Additional Information As at 25 September 2007
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 Ltd- including associates
Citicorp Nominees Pty Ltd
Andrew Alexander Hansen - including associates
Voting rights
Ordinary shares and Options - refer to Note 15.
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
93,721,279
23,350,651
11,421,522
Percentage Held
62.29%
15.52%
7.59%
Number of Equity Security Holders
Ordinary Shares
101
371
184
324
50
1,030
Options
-
-
-
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5
12
The number of shareholders holding less than a marketable parcel of ordinary shares is 125.
On-market buy-back
There is no current on-market buy-back.
Twenty largest shareholders
Name
Othonna Pty Ltd
Citicorp Nominees Pty Limited
Andrew Alexander Hansen
Antan Pty Ltd
National Nominees Limited
Mr Bruce Rodney Pettit
Mr Anthony David Hansen
Mr James Lucas & Ms Lesley Dormer
Mr Kenneth Albert Hansen
Mrs Yvonne Irene Hansen
Ozcun Pty Ltd
Ms Tanya Jacinta Hansen
Mr Denis Maxwell Fraser & Mrs Wendy Elena Fraser
J T W Sales Pty Ltd
Louras Nominees Pty Ltd
Andrew George Whitney
J H Beasy & Associates Pty Ltd
Layuti Pty Ltd
Mr Ronald Slamowicz
Mr Cameron Hunter
Number of Ordinary
Shares Held
91,160,249
23,350,651
8,745,022
2,302,400
2,208,364
1,621,055
1,229,618
600,000
532,107
521,293
510,321
374,100
333,000
277,200
260,000
238,651
200,000
200,000
200,000
177,666
135,041,697
Percentage of
Issued Capital
60.59%
15.52%
5.81%
1.53%
1.47%
1.08%
0.82%
0.40%
0.35%
0.35%
0.34%
0.25%
0.22%
0.18%
0.17%
0.16%
0.13%
0.13%
0.13%
0.12%
89.75%
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Corporate
Directory
Directors
Kenneth Hansen, Chairman
Andrew Hansen, Managing Director & Chief Executive Officer
Bruce Adams, Non-Executive Officer
David Osborne, 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
Link Market Services
Level 9, 333 Collins Street
Melbourne VIC 3000
Telephone: (02) 8280 7761 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.
Design and production - CAN Design 03 9682 6277 2 Frederick Street,
Doncaster, Vic 3108 Australia
Phone +61 (3) 9840 3000
Fax +61 (3) 9840 3099
Email info@hsntech.com
www.hsntech.com