Hansen Technologies Limited Annual Report 2009

Plain-text annual report

2009 ANNUAL REPORT FLEXIBLE SOLUTIONS 1 Hansen Technologies Limited ABN 90 090 996 455 2009 ANNUAL REPORT CONTENTS Highlights Chairman and Chief Executive Ofﬁ cer Joint 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 Flows Notes to the Financial Statements Directors’ Declaration Independent Auditor’s Report Corporate Governance ASX Additional Information NOTICE OF ANNUAL GENERAL MEETING The Annual General Meeting of the Company is to be held on Wednesday 18 November 2009 at 11.00am at 2 Frederick Street, Doncaster, Victoria 3108. A separate Notice of Meeting and Proxy Form are included with this report. COMPANY PROFILE Hansen Technologies is a leading independent provider of billing, customer care, and IT solutions. Hansen’s billing software is used by companies in the telecommunications, electricity, gas, and water industries. Hansen also provides facilities management and IT 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 highly capable business and technical experts who have extensive industry knowledge. Founded in 1971, Hansen has ofﬁ ces in Australia, New Zealand, the United States, and the United Kingdom and employs more than 300 people. 2 3 7 9 18 19 20 21 22 24 50 51 53 63 HIGHLIGHTS $8.1 million after-tax proﬁ t Fully-franked dividends totalling Acquisition of Peace Software group 5 cents per share for the ﬁ scal year Increase in performance from ongoing operations Earnings per share - 5.3 cents Operating Revenue $54.3 million Net tangible assets per share at 30 June 2009 - 10.8 cents 39% EBITDA $14.3 million 31% After-tax proﬁ t $8.1 million 25% EBITDA as percentage of revenue 26% s t h g i l h g H i 2 CHAIRMAN AND CHIEF EXECUTIVE OFFICER JOINT REPORT We are pleased to report on another outstanding year for Hansen with both sustained improvement in performance and strategic expansion. During a year of considerable economic instability throughout the world we have been able to build on the momentum of the past three years and achieve record operating performances while also improving the fundamental strength of our business. This year we have delivered on our promise to pursue strategic growth with the successful acquisition and integration of the Peace Software business. Acquired in October 2008, Peace has substantially increased the number of utility customers served, opened North America as a key service geography, and added highly complementary software to the Hansen suite of proprietary software solutions. To reintroduce full franking credits on dividends while maintaining the 5 cents per share dividend distribution rate is a further positive step for our company. Hansen has maintained a strong liquid asset position throughout the year. We have been able to fund the growth of our business, the acquisition of Peace Software, distribute franked dividends, and commence a share buy-back program while remaining debt-free and retaining a base of core liquidity to fund further growth opportunities. During the year we commenced and completed a number of major client initiatives. We continued to strengthen relationships with our key accounts and a number of key investment initiatives came to fruition. The 2009 ﬁ scal year has seen continued improvement in performance of all of our regional operations: In Australia we expanded our market share and developed stronger relationships with existing customers. Our operations in the United Kingdom and Ireland continue to show improvement and provide an excellent launch pad for reviewing opportunities in Europe. With the acquisition of Peace Software our operations in North America have shown solid progress. We have established a new ofﬁ ce in Denver and are working to strengthen account relationships. Account relationships and opportunities in Japan continue to be strong. We remain strongly focused on our core business of delivering proprietary software solutions and a full service offering to the energy and telecommunications industries. This year we have raised our proﬁ le substantially within our sphere of inﬂ uence. We are well positioned to service the needs of these industries as they undergo regulatory, technological and environment-driven change. 2008/9 FINANCIAL PERFORMANCE ACQUISITIONS Management’s decision to reorient our revenue streams towards an annuity-based model has signiﬁ cantly reduced our exposure to the unsettled global economic conditions. Hansen has continued to grow revenue and maintained a substantial buffer of liquid assets. Total revenue for Fiscal 2008/9 was $54.3 million, an increase for continuing operations of 39% over the previous year with an EBITDA (Earnings Before Interest Tax and Depreciation) of $14.3 million, a 31% increase on the previous year. EBITDA as a percentage of revenue remains a key measurement for our business and an achievement of 26% this year is positive. Proﬁ t after tax from ongoing operations of $8.1 million is up 25% on the prior year. During the year shareholders received an interim fully-franked dividend of 2 cents per share. The Directors have declared a ﬁ nal dividend of 3 cents per share fully-franked to be paid on 2 October 2009. Given the Directors’ perception that our company’s share price remained undervalued the Board initiated a share buy-back in 2009, an investment that has delivered excellent value to shareholders thus far. Fiscal 2008/9 saw signiﬁ cant expansion of our operations with the acquisition of Peace Software. The smooth integration of the acquired entities was a testament to our organisation’s ability to adapt, the strength of our management team, and effectiveness of our operational procedures. Alignment of the Peace group to more closely reﬂ ect Hansen’s existing structure was completed ahead of schedule and we are pleased to report that since conclusion of restructuring activities staff turnover has been extremely low. We continue to work closely with the Peace solution clients to ensure they are served effectively and are investing to leverage off the Peace solutions. OUR PEOPLE Our Company’s strength continues to be a direct reﬂ ection of the quality and commitment of our staff. At Hansen we are proud to have a team of outstanding and committed professionals. We now have in excess of 300 engaged around the world. On behalf of the Board of Directors and all shareholders we wish to thank our dedicated employees for their efforts over the past year and strong commitment to our corporate goals. 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We package our proprietary IP solutions to include additional IT services where possible. We have completed a strategic review and have a good understanding of the markets we currently serve, namely Australasia, the United Kingdom, Ireland, North America, and Japan. The year has witnessed signiﬁ cant industry movement in supporting the smart metering phenomenon. The deployment of smart meters allows utilities to remotely activate and deactivate electric and gas meters, provide additional services, and automatically read meters at much shorter intervals. The move from manual readings every 30 to 90 days to meter readings delivered every 15 minutes dramatically increases the volume of data that utility billing solutions need to process. This trend will be a major driver of metering and billing systems change over the next 10 to 15 years. Whilst the approach to these meter replacement initiatives varies across markets globally, Hansen is extremely well positioned to support this change in all markets we serve. We have completed signiﬁ cant investment to ensure our solutions are capable of handling these vastly increased data requirements, and are continuing to invest in developments which allow utilities to take advantage of these new technologies. Deregulation, government-mandated energy efﬁ ciency programs, and aging systems continue to drive change to billing solutions. We are committed to providing solutions that support these market requirements – a commitment further strengthened with the addition of the Peace solution set. We continue to see signiﬁ cant opportunity in this market, and are investing in the development and expansion of our global sales and marketing team. We have redeﬁ ned our go-to-market messaging around a suite of core capabilities, and will continue to present this to clients and prospects globally over the coming year. We believe we have the right solutions, an outstanding team of industry experts, and a strong client base. In 2009, we have built a solid foundation for growth into our target markets and are quietly optimistic about another strong year in Fiscal 2010. TELECOMMUNICATIONS With the combination of continued market activity, and a recent successful go-live of a major telecommunications billing project, we are excited about the opportunity in the telecommunications market. We have mobilised resources in this market to ensure we develop and capture market opportunities and will be marketing our solution globally. SUPERANNUATION We continue to evolve and support the CLASSIC superannuation membership administration solution on behalf of a select group of key superannuation fund managers. OUTSOURCING As part of our overall total packaged solution approach we provide a full range of IT outsourcing services, including facilities management and IT operations. Kenneth Hansen Director 30 September 2009 Andrew Hansen Director 30 September 2009 THE FUTURE Hansen has the products, industry know-how and strength of balance sheet to beneﬁ t from the changes driving demand for our solutions in the company’s targeted industries and geographic markets. Activities for the coming year include: Leveraging and promoting our solutions to support the worldwide trend for smart meter installation by electricity and gas utilities Building on the foundation of exciting new functionality for telecommunications billing Evaluating opportunities for strategic entry into new geographies Hansen’s success with the Peace acquisition provides conﬁ dence in our ability to acquire and assimilate organisations successfully. We will continue to evaluate acquisition opportunities for companies that exhibit the ability to grow revenue and strongly align with our core target markets. r e c ﬁ f O i f e h C d n a n a m r i a h C m o r f t r o p e R t n o J i 6 BOARD OF DIRECTORS The qualiﬁ cations, 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 ﬁ nancial year is provided here, together with details of the company secretary as at the year end. Mr Kenneth Hansen Mr Andrew Hansen Age 76 Chairman Non-Executive Director Chairman since 2000 Kenneth has over 35 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. Age 49 Managing Director & CEO Managing Director since 2000 Andrew has over 29 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 implementing the Group’s strategic direction and overseeing the everyday affairs of the Hansen Group. Mr Bruce Adams Mr David Osborne Mr Phillip James Age 49 Non-Executive Director Director since 2000 Chairman of Audit and Remuneration Committees Age 60 Non-Executive Director Director since 2006 Member of Audit and Remuneration Committees Age 59 Non-Executive Director Director since October 2008 Member of Audit and Remuneration Committees Bruce has over 20 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 ﬁ rms, 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. Mr Grant Lister David is a Fellow of the Institute of Chartered Accountants, a Fellow of CPA Australia, and a Fellow of the Australian Institute of Company Directors, with over 30 years of ﬁ nancial 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. Phillip has over 30 years experience in the Australian and New Zealand energy sectors, holding senior executive positions with AGL Energy and NGC Holdings (NZ). Phillip’s extensive career of over 25 years with AGL (Australia’s largest energy retailer) included positions in sales, marketing, operations and senior executive roles, culminating in his appointment in 2005 as Group General Manager Retail, with responsibility for AGL’s energy retail business Australia wide. Age 57. CFO & Company Secretary. CFO since 2002. Company Secretary since 2004 Grant is a qualiﬁ ed Chartered Accountant with more than 30 years experience in senior ﬁ nancial management roles and 15 years experience in such roles within the IT industry in Australia, Asia and the USA. As CFO he has responsibility for all of the ﬁ nancial aspects of the Hansen Group’s operations throughout the world. Grant joined the Hansen Group in 2002. s r o t c e r i D f o d r a o B 8 No Directors of Hansen Technologies Ltd held any other directorships of listed companies at any time during the three years prior to 30 June 2009. DIRECTORS’ REPORT The Directors present their report, together with the ﬁ nancial report of the consolidated entity consisting of Hansen Technologies Ltd and the entities it controlled, for the ﬁ nancial year ended 30 June 2009 and auditor’s report thereon. This ﬁ nancial report has been prepared in accordance with Australian equivalents of International Financial Reporting Standards. We have successfully increased our revenues from continuing operations to $54.3 million and grown proﬁ tability to $8.1 million after tax. We have strengthened our market position in Australia, maintained our activities in the UK and Japan and acquired a strong foundation presence in the USA. In addition to maintaining a cash dividend distribution rate of 5 cents per share in respect to the 2008/9 ﬁ scal year, our dividend distribution is now also fully-franked. The energy industry worldwide is continuing to undergo technological change with considerable emphasis emerging on the roll-out of smart metering technology and the automation of the transmission of more frequent meter readings. We have developed adaptable industry-speciﬁ c billing solutions to service these fundamental industry changes and we expect to be well positioned as the demand for these enhanced solutions evolves. We have emerged from this year with a strengthened balance sheet and maintained a healthy liquidity. We remain focused on supporting our existing customer base. We have proprietary software solutions which will enable us to deliver solutions for the changing requirements of our core industries. Finally we have retained sufﬁ cient funding to support a continued objective of strategic as well as organic growth. PRINCIPAL ACTIVITIES The principal activities of the consolidated entity during the ﬁ nancial 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 speciﬁ c software applications. There were no signiﬁ cant changes in the nature of the activities of the consolidated entity during the ﬁ nancial year. RESULTS The consolidated proﬁ t after income tax attributable to the members of Hansen Technologies Ltd and its controlled entities was $8.13 million (2008: $6.5 million from continuing operations plus $8.9 million proﬁ t on sale of discontinued operations). REVIEW OF OPERATIONS Fiscal 2009 was a year of considerable economic instability around the world. Few businesses have been immune to the impact of the international credit crisis. However, the combination of our historical initiative in developing an annuity revenue model and the fundamental strength of our debt-free balance sheet has minimised the impact of these international inﬂ uences upon our operating performance. We have been able to maintain our historical business activity through this period as well as deliver on the promise of strategic growth. The acquisition of the Peace Software business in October 2008 and its successful subsequent integration has enhanced our core utility billing business and increased our industry presence globally. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS DIVIDEND PAID, RECOMMENDED AND DECLARED As notiﬁ ed to the Australian Securities Exchange (ASX), Hansen Technologies Ltd acquired 100% of the Peace Software business on 17 October 2008. AFTER BALANCE DATE EVENTS As part of normal business activities the company is from time to time in negotiations with customers and third parties over prospective new business opportunities. When these new opportunities are signiﬁ cant in the overall context of our business and the negotiations reach a level where the transaction contemplated is conﬁ rmed then releases are made to the ASX in accordance with the Listing rules on Continuous Disclosure. Subsequent to balance date a mediation occurred in an endeavour to resolve a contractual dispute in respect to one software implementation. The mediation was unsuccessful and Hansen has served a notice of termination. Appropriate actions to pursue resolution of the contractual dispute are expected to ensue in due course. At the date of this report there have been no further developments. No other matters or circumstances have arisen since the end of the ﬁ nancial year that have signiﬁ cantly affected or may signiﬁ cantly affect the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in future ﬁ nancial years. LIKELY DEVELOPMENTS The company will continue to pursue its operating strategy of providing proprietary billing solutions to our targeted industries of energy and telecommunication while pursuing appropriate acquisitions 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 signiﬁ cant environmental Commonwealth or State regulations or laws. A 3 cent per share fully-franked ﬁ nal dividend was declared on 28 August 2009 with payment to be made on 2 October 2009. The amount declared has not been recognised as a liability in the accounts of Hansen Technologies Ltd as at 30 June 2009. Dividends paid during the year - 1 cent per share ﬁ nal dividend paid 17 October 2008 - 2 cent per share interim dividend paid 26 March 2009 SHARE OPTIONS Options over unissued ordinary shares granted by Hansen Technologies Ltd during or since the end of the ﬁ nancial year to the key management personnel as part of their remuneration are as follows. No options were granted to Directors during or since the end of the ﬁ nancial year. C Hunter G Lister D Meade G Prior S Weir Total Granted Number 75,000 75,000 75,000 75,000 75,000 75,000 - 40,000 40,000 40,000 570,000 Grant Date 1 July 2008 1 July 2009 1 July 2008 1 July 2009 1 July 2008 1 July 2009 1 July 2008 1 July 2009 1 July 2008 1 July 2009 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. t r o p e R ’ s r o t c e r i D 10 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 Price $ Number of Options at Date of Report 1 July 2005 1 July 2008 1 July 2010 $0.260 1 Nov 2006 1 Nov 2009 1 Nov 2011 $0.110 1 July 2007 1 Jul 2010 1 July 2012 $0.265 1 July 2008 1 July 2011 1 July 2013 $0.390 1 July 2009 1 July 2012 1 July 2014 $0.410 Total 75,000 75,000 440,000 540,000 610,000 1,740,000 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 have been 610,000 ordinary shares of Hansen Technologies Ltd issued during and since the end of the ﬁ nancial year and prior to the date of this report as a result of the exercise of employee share options. Date Issued 8 January 2009 30 June 2009 31 August 2009 31 August 2009 14 September 2009 Total No. Ordinary Shares Issued Amount Paid per Share 40,000 75,000 190,000 230,000 75,000 610,000 $0.18 $0.18 $0.11 $0.26 $0.11 INDEMNIFICATION AND INSURANCE OF DIRECTORS, OFFICERS AND AUDITORS INDEMNIFICATION The Company has agreed to indemnify all of the current and former Directors and Ofﬁ cers 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 Ofﬁ cers of the Company and its controlled entities, except where the liability arises out of c onduct 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 ﬁ nancial report. INSURANCE PREMIUMS Since the end of the previous ﬁ nancial year, the Company has paid insurance premiums in respect of Directors’ and Ofﬁ cers’ liability and legal expenses, insurance policies for current and former Directors and Ofﬁ cers, including Executive Ofﬁ cers of the Company and Directors, Executive Ofﬁ cers 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 Ofﬁ cers’ liability and legal expenses insurance contracts, as such disclosure is inappropriate 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 ﬁ nancial year and the numbers of meetings attended by each Director were: Director Mr Kenneth Hansen Mr Andrew Hansen Mr Bruce Adams Mr David Osborne Mr Phillip James Board Meetings Audit Committee Meetings Remuneration Committee Meetings A 12 12 12 12 10 B 12 12 12 12 10 A - - 3 3 1 B - - 3 3 1 A - - 1 1 - B - - 1 1 - A - Number of meetings eligible to attend B - Number of meetings attended DIRECTORS’ INTERESTS IN SHARES OR OPTIONS Directors’ relevant interest in shares of Hansen Technologies Ltd or options over shares in the company are detailed below. Ordinary Shares of Hansen Technologies Ltd Options over Shares in Hansen Technologies Ltd Kenneth Hansen Andrew Hansen Bruce Adams David Osborne Phillip James 93,999,585 11,546,174 215,520 268,321 - - - - - - DIRECTORS’ INTERESTS IN CONTRACTS Directors’ interests in contracts with the Company are limited to the provision of leased premises on arms length terms and are disclosed in note 24 to the ﬁ nancial statements. AUDITOR’S INDEPENDENCE DECLARATION A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 in relation to the audit for the ﬁ nancial 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, and their afﬁ liates, are detailed below. The Directors are satisﬁ ed 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: REMUNERATION REPORT REMUNERATION POLICIES The Remuneration Committee is responsible for making recommendations to the Board on remuneration policies and packages applicable to the Board members and Senior Executives of the Company. The remuneration policy is to ensure the remuneration package properly reﬂ ects 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 discretion of the Directors. All bonuses are subject at a minimum to the achievement of speciﬁ ed 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 ﬁ nancial year are provided on pages 7 and 8 of this report. The other key management personnel in the consolidated group for the ﬁ nancial year are: EXECUTIVES POSITION C Hunter G Lister D Meade G Prior S Weir Chief Operations Ofﬁ cer Chief Financial Ofﬁ cer & Company Secretary Client Services Manager General Manager, North America General Manager, Europe Auditors of the Company Australia - taxation services - advisory services Overseas Firms - taxation services - advisory services Total non-audit services Consolidated 2009 $’000 2008 $’000 43 18 61 20 18 38 99 103 38 141 21 7 28 169 t r o p e R ’ s r o t c e r i D 12 Super $ - 50,000 3,333 3,333 39,152 95,818 19,817 49,047 19,876 2,517 4,112 95,369 191,187 Post- Employment Beneﬁ ts Super $ - DIRECTORS’ AND EXECUTIVES’ REMUNERATION 2009 Short-Term Employee Beneﬁ ts Post- Employment Beneﬁ ts Cash Bonus Non- Monetary Directors K Hansen A Hansen B Adams D Osborne P James Executives C Hunter G Lister D Meade G Prior began17/02/09 Salary Fees $ 70,648 $ - 431,919 199,541 37,037 37,037 52,753 - - - 629,394 199,541 174,312 207,846 174,976 45,872 50,459 45,872 83,903 - $ - - - - - - - 17,648 - - - S Weir 182,744 30,800 823,781 173,003 1,453,175 372,544 17,648 17,648 2008 Short-Term Employee Beneﬁ ts Directors K Hansen A Hansen B Adams D Osborne P James Executives C Hunter G Kentish G Lister D Meade S Weir Salary Fees $ 70,648 Cash Bonus Non- Monetary $ - $ - 390,000 180,849 30,401 51,976 37,037 37,037 - - - - - - - 3,333 3,333 - 534,722 180,849 30,401 58,642 152,158 36,697 17,152 16,711 161,956 199,071 134,832 114,196 - 36,697 27,523 - 762,213 100,917 1,296,935 281,766 - 11,299 34,763 - 63,214 93,615 - 56,617 14,056 - 87,384 146,026 Share- Based Beneﬁ ts Options Issued Other Long- Term Beneﬁ ts Other Beneﬁ ts $ - - - - - - 6,836 6,836 6,836 - 3,646 24,154 24,154 $ - - - - - - - - - - - - - Share- Based Beneﬁ ts Options Issued Other Long- Term Beneﬁ ts Other Beneﬁ ts $ - - - - - - 8,816 4,702 8,816 8,816 - 31,150 31,150 $ - - - - - - - - - - - - - Total $ 70,648 681,460 40,370 40,370 91,905 924,753 246,837 331,836 247,560 86,420 221,302 1,133,955 2,058,708 Total $ 70,648 653,226 40,370 40,370 - 804,614 231,534 166,658 312,500 219,990 114,196 1,044,878 1,849,492 Total Performance Related Options as % of Total % - 29% - - - 22% 21% 17% 21% - 16% 17% 19% % - - - - - - 3% 2% 3% - 2% 2% 1% Total Performance Related Options as % of Total % - 28% - - - 22% 20% 3% 15% 17% - 13% 17% % - - - - - - 4% 3% 3% 4% - 3% 2% Options granted as remuneration are valued at grant date in accordance with AASB 2 Share-Based Payments. No options previously granted as remuneration have lapsed during the year. COMPENSATION OPTIONS: GRANTED AND VESTED DURING THE YEAR During the ﬁ nancial year the Company granted options over unissued ordinary shares to the following key management personnel of the Company as part of their remuneration: Options Vested During the Year Options Granted Grant Date Value per Option at Grant Date Exercise Price Vesting Date Last Exercise Date Terms and Conditions For Each Grant Speciﬁ ed Executives C Hunter (Chief Operations Ofﬁ cer) G Lister (CFO & Company Secretary) D Meade (Client Services Manager) G Prior (General Manager, North America) S Weir (General Manager, Europe) 75,000 75,000 75,000 - - 75,000 1 July 2008 75,000 1 July 2008 75,000 1 July 2008 - 1 July 2008 40,000 1 July 2008 $0.390 $0.390 $0.390 $0.390 $0.390 $0.390 1 July 2011 1 July 2013 $0.390 1 July 2011 1 July 2013 $0.390 1 July 2011 1 July 2013 $0.390 1 July 2011 1 July 2013 $0.390 1 July 2011 1 July 2013 Total 225,000 265,000 NUMBER OF OPTIONS HELD BY KEY MANAGEMENT PERSONNEL (CONSOLIDATED) Speciﬁ ed Executives C Hunter (Chief Operations Ofﬁ cer) G Lister (CFO & Company Secretary) D Meade (Client Services Manager) G Prior (General Manager, North America) S Weir (General Manager, Europe) Balance 30 June 2008 225,000 225,000 300,000 - - Granted as Remuneration Options Exercised Options Forfeited Balance 30 June 2009 Total Exercisable Un-exercisable Vested at 30 June 2009 75,000 75,000 75,000 - 40,000 - - 75,000 - - - - - - - - 300,000 75,000 300,000 75,000 300,000 75,000 - 40,000 - - 75,000 75,000 75,000 - - 940,000 225,000 225,000 - - - - - - Total 750,000 265,000 75,000 Options are not issued to Directors. Accordingly no director is the beneﬁ cial owner of any options over unissued ordinary shares. t r o p e R ’ s r o t c e r i D 14 VALUE OF OPTIONS GRANTED AS REMUNERATION THAT HAVE BEEN EXERCISED OR LAPSED DURING THE FINANCIAL YEAR: Speciﬁ ed Executives C Hunter G Lister D Meade G Prior S Weir Total Balance 1 Jul 08 20,420 20,420 27,996 - - 68,836 Value Granted Value Exercised Value Lapsed Balance 30 Jun 09 6,836 6,836 6,836 - 3,646 24,154 - - 7,576 - - 7,576 - - - - - - 27,256 27,256 27,256 - 3,646 85,414 No options have been granted as remuneration to Directors. Accordingly no options have been exercised or allowed to lapse by Directors. ROUNDING OF AMOUNTS The amounts contained in the ﬁ nancial 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. Signed in accordance with a resolution of the Directors: Kenneth Hansen Director 30 September 2009 Andrew Hansen Director 30 September 2009 An independent Victorian Partnership ABN 27 975 255 196 AUDITOR’S INDEPENDENCE DECLARATION To the Directors of Hansen Technologies Ltd In relation to the independent audit for the year ended 30 June 2009, 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 S SCHONBERG Partner 30 September 2009 PITCHER PARTNERS Melbourne Liability limited by a scheme approved under Professional Standards Legislation Pitcher Partners, including Johnston Rorke, is an association of independent ﬁ rms Melbourne | Sydney | Perth | Adelaide | Brisbane An independent member of Baker Tilly International s e t o N d n a s t n e t m r o e p t e a t R S ’ s l a r i o c t n c a e n r i i D F 16 2009 FINANCIAL STATEMENTS AND NOTES CONTENTS 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 Auditor’s Report ASX additional Information 19 20 21 22 24 50 51 63 s e t o N d n a s t n e m e t a t S l a i c n a n F 9 0 0 2 i 18 CONSOLIDATED INCOME STATEMENT FOR YEAR ENDED 30 JUNE 2009 Note Revenue from continuing operations Other revenue Total revenue Employee expenses Depreciation and amortisation expenses Finance costs Property and operating rental expenses Contractor and consultant expenses Software licence expenses Hardware and software expenses Transportation expenses Travel expenses Communication expenses Legal costs Other expenses Proﬁ t before income tax Income tax expense Proﬁ t after income tax from continuing operations Proﬁ t from discontinued operations Proﬁ t on sale of business Proﬁ t after income tax from discontinued operations Consolidated Entity Parent Entity 4 4 5 5 5 5 2009 $’000 54,298 2,039 56,337 2008 $’000 39,084 1,531 40,615 (29,045) (19,521) (4,258) (3,697) - (2,485) (1,350) (309) (3,021) (117) (1,421) (741) (256) (6) (1,723) (1,359) (145) (2,609) (84) (1,002) (740) (111) (927) 5 (2,376) (45,379) (31,924) 10,958 (2,827) 8,131 - - - 8,691 (2,176) 6,515 164 8,766 8,930 6(b) 7 7 2009 $’000 - 7,810 7,810 (977) - - - (6) - - - - - (98) (96) (1,177) 6,633 (2,036) 4,597 - - - 2008 $’000 - 11,542 11,542 (916) - - - (310) - - - (2) - (61) (99) (1,388) 10,154 (4) 10,150 - - - Proﬁ t for the year attributable to the members of the parent 8,131 15,445 4,597 10,150 Basic earnings (cents) per share from continuing operations Basic earnings (cents) per share from discontinued operations Total basic earnings (cents) per share Diluted earnings (cents) per share from continuing operations Diluted earnings (cents) per share from discontinued operations Total diluted earnings (cents) per share 21 21 21 21 Cents per share Cents per share 5.3 - 5.3 5.3 - 5.3 4.3 5.9 10.2 4.2 5.9 10.1 This consolidated income statement is to be read in conjunction with the notes to the ﬁ nancial statements set out on pages 24 to 48. CONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2009 Consolidated Entity Note Current Assets Cash and cash equivalents Trade receivables Other current assets Total Current Assets Non-Current Assets Trade receivables Other ﬁ nancial assets Plant, equipment & leasehold improvements Intangible assets Deferred tax assets Total Non-Current Assets Total Assets Current Liabilities Trade and other payables Current tax payable Provisions Unearned income Total Current Liabilities Non-Current Liabilities Trade and other payables Deferred tax liabilities Provisions Total Non-Current Liabilities Total Liabilities Net Assets Equity Share capital Foreign currency translation reserve Options granted reserve Retained earnings (accumulated losses) Total Equity 9 10 11 10 12 13 14 6 15 16 15 6 16 17 18(a) 18(b) 18(c) 2009 $’000 20,518 7,016 1,961 29,495 - - 3,588 29,012 196 32,796 62,291 4,096 2,270 4,831 4,384 15,581 - - 887 887 16,468 45,823 48,199 (501) 166 (2,041) 45,823 2008 $’000 21,871 5,576 967 28,414 145 - 3,325 19,823 - 23,293 51,707 3,403 2,244 3,218 453 9,318 - 233 170 403 9,721 41,986 47,916 (479) 137 (5,588) 41,986 Parent Entity 2009 $’000 56 3 6 65 37,521 11,000 - - 148 48,669 48,734 303 2,131 223 - 2,657 4,257 - - 4,257 6,914 41,820 48,199 - 166 (6,545) 41,820 2008 $’000 168 25 6 199 37,228 11,000 - - 129 48,357 48,556 252 2,240 316 - 2,808 4,253 - - 4,253 7,061 41,495 47,916 - 137 (6,558) 41,495 s e t o N d n a s t n e m e t a t S l a i c n a n F i 20 This consolidated balance sheet is to be read in conjunction with the notes to the ﬁ nancial statements set out on pages 24 to 48. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2009 Note Total Equity at the Beginning of the Year Exchange differences on translation of foreign operations Employee share options Net income (loss) recognised directly in equity Proﬁ t for the year Total recognised income and expense for the period Transactions with equity holders in their capacity as equity holders: Employee share plan Options exercised Capital issued under dividend reinvestment plan Capital return paid Share buy back Dividends paid Total transactions with equity holders Total Equity at the End of the Year Attributable to Members of the Parent 18 18 17 17 17 17 17 8 Consolidated Entity Parent Entity 2009 $’000 41,986 (22) 29 7 8,131 8,138 126 21 188 - (52) (4,584) (4.301) 45,823 2008 $’000 36,226 (31) 20 (11) 15,445 15,434 130 148 641 (3,051) - (7,542) (9,674) 41,986 2009 $’000 2008 $’000 41,495 40,999 - 29 29 4,597 4,626 126 21 188 - (52) (4,584) (4,301) 41,820 - 20 20 10,150 10,170 130 148 641 (3,051) - (7,542) (9,674) 41,495 This consolidated statement of changes in equity is to be read in conjunction with the notes to the ﬁ nancial statements set out on pages 24 to 48. CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2009 Note Consolidated Entity Parent Entity 2009 $’000 2008 $’000 2009 $’000 2008 $’000 Cash ﬂ ows from operating activities Receipts from customers Payments to suppliers and employees Interest received Borrowing costs Income tax paid Net cash provided by (used in) operating activities Cash ﬂ ows from investing activities Payment for acquisition of business Net proceeds from sale of subsidiary Payment for plant and equipment Payment for capitalised research and development Net cash provided by (used in) investing activities Cash ﬂ ows from ﬁ nancing activities Proceeds from share issue Payments for share buy back Payment of capital return Proceeds from options exercised Net advances to controlled entities Dividends paid net of dividend re-investment Intercompany dividend Finance and hire purchase lease payments Net cash used in ﬁ nancing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of the year 66,198 45,736 (51,345) (33,520) 4 19(a) 927 - (3,230) 12,550 19(c) (7,465) 1,467 (6) - 13,677 - 9,942 (2,259) (1,694) 5,989 130 - (3,051) 148 - - (1,134) (1,003) (9,602) 126 (52) - 21 - (4,396) (6,901) - - (4,301) (1,353) 21,871 20,518 - (79) (9,753) 9,913 11,958 21,871 17 17 17 17 9 1,181 (1,478) 1 - (2,165) (2,461) - - - - - 126 (52) - 21 - (4,396) 6,650 - 2,349 (112) 168 56 1,604 (1,160) 4 - - 448 - - - - - 130 - (3,051) 148 (563) (6,901) 9,942 - (295) 153 15 168 s e t o N d n a s t n e m e t a t S l a i c n a n F i 22 This consolidated statement of cash ﬂ ows is to be read in conjunction with the notes to the ﬁ nancial statements set out on pages 24 to 48. NOTES TO THE FINANCIAL STATEMENTS 1. BASIS OF PREPARATION This ﬁ nancial report is a general purpose ﬁ nancial report that has been prepared in accordance with Australian Accounting Standards, Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. The ﬁ nancial 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 ﬁ nancial report was authorised for issue by the Directors on 30 September 2009. The following is a summary of material accounting policies adopted by the consolidated entity in the preparation and presentation of the ﬁ nancial report. The accounting policies have been consistently applied, unless otherwise stated. (a) Basis of preparation of the ﬁ nancial report COMPLIANCE WITH IFRS Australian Accounting Standards include Australian equivalents of International Financial Reporting Standards. Compliance with Australian equivalents of International Financial Reporting Standards ensures compliance with International Financial Reporting Standards (IFRSs). HISTORICAL COST CONVENTION The ﬁ nancial report has been prepared under the historical cost convention. (b) Principles of consolidation The consolidated ﬁ nancial statements are those of the consolidated entity, comprising the ﬁ nancial 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 24. The ﬁ nancial 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 proﬁ ts or losses have been eliminated on consolidation. (c) Revenue recognition Revenue from the sale of goods is recognised when the signiﬁ cant 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 ﬁ nancial assets. All revenue is stated net of the amount of goods and services tax (GST). s t n e m e t a t S l a i c n a n F e h t o t i s e t o N 24 (d) Cash and cash equivalents (g) Intangibles Cash and cash equivalents include cash on hand and at banks, and short-term deposits with an original maturity of three months or less held at call with ﬁ nancial institutions. (e) Plant, equipment & leasehold improvements COST AND VALUATION All classes of plant, equipment and leasehold improvements are stated at cost less depreciation. DEPRECIATION The depreciable amounts of all ﬁ xed assets are depreciated on a straight-line basis over their estimated useful lives commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements. The useful lives for each class of assets are: Plant, equipment & leasehold improvements: 2009 2008 2.5 to 12 years 2.5 to 12 years Leased plant and equipment: 2.5 to 12 years 2.5 to 12 years (f) Leases Leases are classiﬁ ed at their inception as either operating or ﬁ nance leases based on the economic substance of the agreement so as to reﬂ ect the risks and beneﬁ ts incidental to ownership. The cost of improvements to or on leasehold property is capitalised, disclosed as leasehold improvements, and amortised over the unexpired period of the lease or the estimated useful lives of the improvements, whichever is the shorter. OPERATING LEASES Lease payments for operating leases, where substantially all of the risks and beneﬁ ts remain with the lessor, are charged as expenses in the period in which they are incurred. GOODWILL Goodwill on consolidation represents the excess of the cost of an acquisition over the fair value of the Group’s share of net identiﬁ able 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. TRADEMARK AND LICENCES Trademark and licences are recognised at cost and are amortised over their estimated useful lives. Trademarks and licences are carried at cost less accumulated amortisation and any 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 beneﬁ ts 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 ﬁ ve years, during which the related beneﬁ ts are expected to be realised, once commercial production is commenced. Other development expenditure is recognised as an expense when incurred. (h) Impairment Assets with an indeﬁ nite 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 deﬁ ned as the higher of its fair value less costs to sell and value in use. (i) Taxes Current income tax expense or beneﬁ t 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 ﬁ nancial 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 proﬁ t or taxable proﬁ t 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. TAX CONSOLIDATION The parent entity and all eligible Australian-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 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 proﬁ t before tax of the tax consolidated group. (j) Employee beneﬁ ts Liabilities arising in respect of wages and salaries, annual leave, long-service leave and any other employee beneﬁ ts 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 beneﬁ t liabilities are measured at the present value of the estimated future cash outﬂ ow to be made in respect of services provided by employees up to the reportig 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 classiﬁ es its ﬁ nancial instruments in the following categories: loans and receivables and other ﬁ nancial assets. The classiﬁ cation depends on the purpose for which the investments were acquired. Management determines the classiﬁ cation of its ﬁ nancial instruments 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 ﬁ nancial 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 ﬁ nancial 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 ﬁ xed in the contract) are translated using the spot rate at the end of the ﬁ nancial year. Resulting exchange differences arising on settlement or re-statement are recognised as revenues and expenses for the ﬁ nancial year. s t n e m e t a t S l a i c n a n F e h t o t i s e t o N 26 GROUP COMPANIES The ﬁ nancial statements of foreign operations whose functional 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 actual exchange rates or average exchange rates for the period, where appropriate; 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 reclassiﬁ ed 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 ﬁ nancial statements have been rounded off to the nearest thousand dollars, or in certain cases, to the nearest dollar. (o) New accounting standards and interpretations A number of accounting standards and interpretations have been issued at the reporting date but are not yet effective. The Directors have not yet assessed the impact of these standards or interpretations. Issued standards that may impact include: Business combinations AASB 3 AASB 8 AASB 127 Consolidated and separate ﬁ nancial statements Operating segments 2. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS The group makes certain estimates and assumptions concerning the future, which, by deﬁ nition will seldom represent actual results. The estimates and assumptions that have a signiﬁ cant inherent risk in respect of estimates based on future events, which could have a material impact on the assets and liabilities in the next ﬁ nancial 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 ﬂ ow projection calculations based on management’s determination of budgeted cash ﬂ ow 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 ﬂ ow over a ﬁ ve year period plus a terminal value at the end of the period. In respect of this ﬁ scal year a 14.5% 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 beneﬁ ts are based on the assumption that no adverse change will occur in the income tax legislation and the anticipation that the company will derive sufﬁ cient future assessable income to enable the beneﬁ t to be realised and comply with the conditions of deductibility imposed by the law. There had been signiﬁ cant expenditure on research and development on the HUB billing software in the 2009 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 proﬁ ts of the group. 3. FINANCIAL RISK MANAGEMENT The consolidated entity is exposed to a variety of ﬁ nancial risks comprising: (a) Interest rate risk (b) Credit risk (c) Liquidity and foreign exchange risk (d) Fair values The Board of Directors has overall responsibility for identifying and managing operational and ﬁ nancial risks. (a) Interest rate risk The consolidated entity’s exposure to interest rate risks and the effective interest rates of ﬁ nancial assets and ﬁ nancial liabilities, both recognised and unrecognised at balance date, are as follows: Financial Instruments 2009 Financial assets Cash Trade and other receivables Other assets 2009 Financial liabilities Trade and other payables 2008 Financial assets Cash Trade and other receivables Other assets 2008 Financial liabilities Trade and other payables Weighted average effective interest rate % Note Floating interest rate $’000 1 year or less $’000 Over 1 to 5 years $’000 More than 5 years $’000 Non- interest bearing $’000 Total carrying amount as per Balance sheet $’000 Fixed interest maturing in 9 10 11 15 9 10 11 15 4.50% 8.17% 7.90% 8.17% 10,518 10,000 - - 145 - 10,518 10,145 - - 21,871 - - 21,871 - - - - - 402 - 402 - - - - - - - - - - - - - - - - - - - - - - - - - - - 6,870 1,961 8,831 4,096 4,096 - 5,174 967 6,141 3,403 3,403 20,518 7,016 1,961 29,495 4,096 4,096 21,871 5,576 967 28,414 3,403 3,403 s t n e m e t a t S l a i c n a n F e h t o t i s e t o N 28 (b) Credit risk exposures (c) Liquidity and foreign exchange risk The Hansen Group operates internationally and as such has exposure to foreign currency movements as part of its day to day operational realities. The Group has a substantial surplus of cash assets compared to its nominal third party or foreign currency designated payables. The Group has no third party debt obligations, other than normal operational trade payables, which are designated in foreign currency. Accordingly the Group’s liquidity and foreign currency exchange risks are assessed as nominal. (d) Fair values The fair value of ﬁ nancial assets and ﬁ nancial liabilities approximates their carrying amounts as disclosed in the Balance Sheet and Notes to the Financial Statements. The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date of recognised ﬁ nancial 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 ﬁ nancial 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 ﬁ nancial instruments entered into by the consolidated entity. 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 61% (2008: 48%), Finance Sector 9% (2008: 10%), Telecommunications 22% (2008: 33%) and Other 8% (2008: 9%). 4. REVENUE Note Revenue from continuing operations Revenue from sale of goods and services Other income from operating activities Management fees Interest received Net foreign exchange gain Other income Intercompany dividend Total other revenue Total revenue from continuing operations Revenue from discontinued operations Revenue from sale of goods and services Proﬁ t on sale of business Total revenue from discontinued operations Total revenue from operations Consolidated Entity Parent Entity 2009 $’000 2008 $’000 2009 $’000 2008 $’000 54,298 54,298 - 927 1,054 58 - 2,039 56,337 - - - 56,337 39,084 39,084 - 1,467 - 64 - 1,531 40,615 2,809 8,766 11,575 52,190 7 7 - - - - 1,159 1,072 1 - - 6,650 7,810 7,810 - - - 4 - 524 9,942 11,542 11,542 - - - 7,810 11,542 5. PROFIT FROM CONTINUING OPERATIONS Note Consolidated Entity Parent Entity 2009 $’000 2008 $’000 2009 $’000 2008 $’000 Proﬁ t from continuing operations before income tax has been determined after the following speciﬁ c expenses: Employee beneﬁ t expenses Wages and salaries Superannuation costs Share based payments Total employee beneﬁ ts expense Depreciation of non-current assets Plant, equipment & leasehold improvements Total depreciation of non-current assets Amortisation of non-current assets Plant and equipment under ﬁ nance lease Patents, contracts and software Research and development Total amortisation of non-current assets Finance costs expensed Interest charges (reversal) Finance charges paid or payable under ﬁ nance leases Total ﬁ nance costs expensed Property and operating rental expenses Rental charges Total property and operating rental expenses Other expenses Net foreign exchange losses Net loss on disposal of plant and equipment Advertising & marketing Entertainment Insurance charges Outgoings, equipment & materials Professional services Recruitment & training Other expenses Capitalised R&D expenditure Total other expenses 13 13 14 14 26,989 2,027 29 29,045 1,434 1,434 14 290 2,520 2,824 - - - 17,564 1,957 - 19,521 926 926 153 - 2,618 2,771 3 3 6 2,485 2,485 1,723 1,723 - 31 88 284 254 917 670 437 698 462 22 4 147 197 430 459 454 446 (1,003) 2,376 (1.694) 927 916 32 29 977 - - - - - - - - - - - - - - - - - - - 96 - 96 880 36 - 916 - - - - - - - - - - - - - - 4 - - - - 95 - 99 s t n e m e t a t S l a i c n a n F e h t o t i s e t o N 30 6. INCOME TAX (a) The components of tax expense: Current tax Deferred tax Under / (over) provision in prior year Total income tax expense (b) Income tax expense / (beneﬁ t) Consolidated Entity Parent Entity 2009 $’000 2,992 (429) 264 2,827 2008 $’000 2,951 (678) (26) 2,247 2009 $’000 2,033 (19) 22 2,036 Prima facie income tax expense calculated at 30% (2008:30%) on the proﬁ t from ordinary activities. 3,287 5,308 1,990 Tax effect of amounts which are non-deductible in calculating income tax Non deductible share based payments Non deductible write down of investment Current year losses not brought to account Losses brought forward Other non allowable items Under / (over) provision in prior years Research and development allowances Capital losses absorbed not previously brought to account Prior year losses not brought to account Investment allowance Income tax expense Comprising;- Income tax expense for continuing operations Income tax expense for discontinuing operations (c) Deferred tax relates to the following: Deferred tax liabilities Research and development expenditure capitalised Other income not yet assessable Total deferred tax liabilities Deferred tax assets Employee beneﬁ ts 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 Other Total deferred tax assets Net deferred tax 9 - 15 44 984 264 (107) - (1,630) (39) 2,827 2,827 - 2,827 1,499 11 1,510 1,142 2 341 17 161 43 1,706 196 - (128) 18 - 1 (26) (184) (2,742) - - 9 - - - 15 22 - - - - 2,247 2,036 2,176 71 2,247 1,954 - 1,954 970 4 673 4 - 70 1,721 (233) 2,036 - 2,036 - - - 58 87 - - - 3 148 148 2008 $’000 - 23 (19) 4 14 - - - - 9 (19) - - - - 4 4 - 4 - - - 48 75 - - - 6 129 129 (d) Deferred tax assets not brought to account, the beneﬁ ts of which will only be realised if the conditions for deductibility set out in Note 1 (i) occur Capital losses 2,824 2,824 2,824 2,824 7. DISCONTINUED OPERATIONS In August 2007 the Company sold its subsidiary Hansen Professional Services Pty Ltd, disclosed in this ﬁ nancial report as a discontinued operation. Financial information relating to the discontinued operation for the period to the date of disposal is set out below. Further information is set out in Note 25 - Segment Reporting. Financial performance information Revenue Expenses Proﬁ t before income tax Income tax expense Proﬁ t after income tax of discontinued operations Gain on the sale of the entity before income tax Income tax expense Gain on the sale of the entity after income tax Proﬁ t from discontinued operations Period 2009 $’000 - - - - - - - - - 2008 $’000 2,809 (2,574) 235 (71) 164 8,766 - 8,766 8,930 8. DIVIDENDS ON ORDINARY SHARES 2009 A 3 cent per share fully franked ﬁ nal dividend was declared on 28 August 2009. The amount declared has not been recognised as a liability in the accounts of Hansen Technologies Ltd as at 30 June 2009. Dividends provided for or paid during the year - 1 cent per share ﬁ nal dividend paid 17 October 2008 - 1 cent per share ﬁ nal dividend paid 8 October 2007 - 2 cent per share interim dividend paid 26 March 2009 - 3 cent per share interim dividend paid 17 December 2007 - 1 cent per share interim dividend paid 19 March 2008 Dividend franking account Consolidated Entity Parent Entity 2009 $’000 1,527 - 3,057 - - 4,584 2008 $’000 - 1,505 - 4,524 1,513 7,542 2009 $’000 1,527 - 3,057 - - 4,584 2008 $’000 - 1,505 - 4,524 1,513 7,542 30% franking credits, on a tax paid basis, are available to shareholders of Hansen Technologies Ltd for subsequent ﬁ nancial years 2,591 2,240 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 sufﬁ cient available proﬁ ts to declare dividends. s t n e m e t a t S l a i c n a n F e h t o t i s e t o N 32 9. CASH AND CASH EQUIVALENTS Current Cash at bank and on hand Deposits at call 10. RECEIVABLES Current Trade debtors Less: Provision for impairment Term and sundry debtors Non-current Term debtor Loans to controlled entities Consolidated Entity Parent Entity 2009 $’000 5,121 15,397 20,518 2008 $’000 1,795 20,076 21,871 2009 $’000 56 - 56 2008 $’000 168 - 168 Consolidated Entity Parent Entity 2009 $’000 6,588 (13) 6,575 441 7,016 - - - 2008 $’000 5,187 (13) 5,174 402 5,576 145 - 145 2009 $’000 2008 $’000 - - - 3 3 - - - - 25 25 - 37,521 37,521 37,228 37,228 The weighted average effective interest rate on the term debtor is 8.165% (2008: 8.165%) at 30 June 2009. 11. OTHER CURRENT ASSETS Consolidated Entity Parent Entity Current Prepayments Accrued revenue 12. OTHER FINANCIAL ASSETS Non-current Investment in controlled entity 2009 $’000 1,089 872 1,961 2008 $’000 804 163 967 2009 $’000 2008 $’000 6 - 6 Consolidated Entity Parent Entity 2009 $’000 - - 2008 $’000 - - 2009 $’000 11,000 11,000 6 - 6 2008 $’000 11,000 11,000 13. PLANT, EQUIPMENT & LEASEHOLD IMPROVEMENTS Consolidated Entity Parent Entity Plant, equipment & leasehold improvements, at cost Accumulated depreciation Plant and equipment under ﬁ nance lease, at cost Accumulated amortisation Total plant, equipment & leasehold improvements 2009 $’000 16,175 2008 $’000 9,572 (12,599) (6,273) 3,576 3,566 3,299 3,566 (3,554) (3,540) 12 3,588 26 3,325 Reconciliations Reconciliations of the carrying amounts of plant and equipment at the beginning and end of the current ﬁ nancial year. Plant, equipment & leasehold improvements Carrying amount at 1 July 2008 Additions Disposals Depreciation expense Net foreign currency movements arising from foreign operation Carrying amount at 30 June 2009 Plant and equipment under ﬁ nance lease Carrying amount at 1 July 2008 Disposals Amortisation expense Carrying amount at 30 June 2009 3,299 1,740 (31) (1,434) 2 3,576 26 - (14) 12 3,976 2,259 (1,794) (1,079) (63) 3,299 206 (27) (153) 26 2009 $’000 2008 $’000 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - s t n e m e t a t S l a i c n a n F e h t o t i s e t o N 34 14. INTANGIBLES Goodwill, patents, contracts at cost Accumulated amortisation & impairment Software research and development, at cost Accumulated amortisation Total intangible assets Reconciliation of goodwill, patents and contracts, at cost Opening amount Increase due to acquisition Closing amount Accumulated amortisation & impairment at beginning of year Amortisation of patents and contracts Amortisation adjustment Accumulated amortisation & impairment at end of year Reconciliation of software research and development at cost Opening amount Expenditure capitalised in current period Closing amount Accumulated amortisation at beginning of year Current year charge Accumulated amortisation at end of year 15. PAYABLES Current Trade payables Other payables Non-current Loans to controlled entities Consolidated Entity Parent Entity 2009 $’000 28,928 (4,912) 24,016 23,621 (18,625) 4,996 29,012 17,935 10,993 28,928 (4,625) (290) 3 (4,912) 22,618 1,003 23,621 (16,105) (2,520) (18,625) 2008 $’000 17,935 (4,625) 13,310 22,618 (16,105) 6,513 19,823 18,479 (544) 17,935 (4,693) - 68 (4,625) 20,924 1,694 22,618 (13,487) (2,618) (16,105) 2009 $’000 2008 $’000 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Consolidated Entity Parent Entity 2009 $’000 863 3,233 4,096 - - 2008 $’000 1,200 2,203 3,403 - - 2009 $’000 - 303 303 4,257 4,257 2008 $’000 3 249 252 4,253 4,253 16. PROVISIONS Current Employee beneﬁ ts Onerous lease* Other Non-current Employee beneﬁ ts Onerous lease* (a) Aggregate employee beneﬁ ts liability (b) Number of employees at year end Reconciliations Consolidated Entity Parent Entity 2009 $’000 4,101 523 207 4,831 248 639 887 4,349 296 2008 $’000 3,063 - 155 3,218 170 - 170 3,233 194 Reconciliations of the carrying amounts of each class of provision, except for the employee beneﬁ ts provision, are set out below: Provisions Onerous Lease - current Carrying amount at beginning of year Provisions made during the year Adjustments made due to sale of subsidiary Carrying amount at end of year Provisions Onerous Lease - Non current Carrying amount at beginning of year Provisions made during the year Adjustments made due to sale of subsidiary Carrying amount at end of year Other - current Carrying amount at beginning of year Net provisions (payments) made during the year Carrying amount at end of year - 523 - 523 - 639 - 639 155 52 207 147 - (147) - 284 - (284) - 4 151 155 * The onerous lease arose upon the acquisition of the Peace Software business due to vacant ofﬁ ce space not being fully utilised. 2009 $’000 2008 $’000 194 - 29 223 - - - 194 1 - - - - - - - - 155 (126) 29 161 - 155 316 - - - 161 1 - - - - - - - - 4 151 155 s t n e m e t a t S l a i c n a n F e h t o t i s e t o N 36 17. CONTRIBUTED EQUITY a) Issued and paid-up capital Ordinary shares, fully paid Fully paid ordinary shares carry one vote per share and carry the right to dividends. Consolidated Entity Parent Entity 2009 $’000 2008 $’000 2009 $’000 2008 $’000 48,199 47,916 48,199 47,916 Parent Entity Parent Entity 2009 Number of Shares 2009 $’000 2008 Number of Shares 2008 $’000 b) Movements in shares on issue Balance at beginning of the ﬁ nancial year 152,654,389 47,916 149,771,455 50,048 Shares issued under Dividend Reinvestment Plan Shares issued under Employee Share Plan Options exercised Capital Reduction * Share Buy Back 580,530 359,982 115,000 - (134,307) 188 126 21 - (52) 1,746,924 361,010 775,000 - - Balance at end of the ﬁ nancial year 153,575,594 48,199 152,654,389 641 130 148 (3,051) - 47,916 * In accordance with a resolution of shareholders the Company’s contributed equity (issued and paid up share capital) was reduced by a 2 cent per share capital return paid to shareholders on 27 June 2008. c) Share options 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 ofﬁ cial quotation of shares issued on the exercise of options. Options may be granted subject to conditions speciﬁ ed by the Board which must be satisﬁ ed before the option can be exercised. Unless the terms on which an option was offered speciﬁ ed 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 ﬁ ve years after the date upon which it was granted. The Directors have the discretion to vary the terms of the options as deemed appropriate. The exercise price per share for an option will be the amount determined by the Board at the time of the grant of the option. There are no voting rights or dividend rights attached to the options prior to the options being exercised. Option holders will not be entitled to participate in any new issue of securities in the Company unless they exercise their options prior to the record date for the determination of entitlements to the new issue. If the Company makes a bonus issue of securities to ordinary shareholders, each unexercised option will, on exercise, entitle its holder to receive the bonus securities as if the option had been exercised before the record date for the bonus issue. 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 reﬂ ect 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 ﬁ nancial year 610,000 (2008:540,000) options have been granted under this scheme. Options issued and not yet exercised at 30 June. Grant Date Exercise Date Consolidated and Company 2009 Expiry Date Exercise Price No. of options at beg of year Options Granted Options Exercised or Lapsed No. of options at end of year Issued Vested 1 July 2004 1 July 2005 1 July 2006 1 July 2007 1 July 2009 1 July 2008 1 July 2010 1 July 2009 1 July 2011 1 November 2006 1 Nov 2009 1 Nov 2011 1 July 2007 1 July 2008 TOTAL 1 July 2010 1 July 2012 1 July 2011 1 July 2013 $0.18 $0.26 $0.11 $0.11 $0.265 $0.39 115,000 305,000 265,000 75,000 440,000 - - - - - - 540,000 115,000 - - - - - - 305,000 265,000 75,000 440,000 540,000 - 305,000 - - - - 1,200,000 540,000 115,000 1,625,000 305,000 Grant Date Exercise Date Consolidated and Company 2008 Expiry Date Exercise Price No. of options at beg of year Options Granted Options Exercised or Lapsed No. of options at end of year Issued Vested 1 July 2003 1 July 2004 1 July 2005 1 July 2006 1 July 2006 1 July 2008 1 July 2007 1 July 2009 1 July 2008 1 July 2010 1 July 2009 1 July 2011 1 November 2006 1 Nov 2009 1 Nov 2011 $0.17 $0.18 $0.26 $0.11 $0.11 510,000 380,000 380,000 305,000 75,000 - - - - - 510,000 265,000 75,000 40,000 - - 115,000 305,000 265,000 75,000 1 July 2010 1 July 2012 $0.265 - 500,000 60,000 440,000 - 115,000 - - - - 1,650,000 500,000 950,000 1,200,000 115,000 1 July 2007 TOTAL EMPLOYEE SHARE PLAN The Employee Share Plan (“ESP”) was approved by shareholders at the Company’s annual general meeting on 9 November 2001. To qualify, employees must be full-time or permanent part-time employees of the Company or any subsidiary of the Company. The ESP is available to all eligible employees to acquire ordinary shares in the Company. Shares issued under the ESP will rank equally in all respects with all existing shares from the date of allotment. 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 ﬁ ve business days immediately preceding the day the shares are issued or transferred to qualifying employees or participants. The Board has a 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). 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 speciﬁ ed 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. s t n e m e t a t S l a i c n a n F e h t o t i s e t o N 38 Details of the movement in employee shares under the ESP are as follows: Number of shares at beginning of year Number of shares distributed to employees Number of shares transferred to main share registry and/or disposed of Number of shares at year-end The consideration for the shares issued in 2009 was 35c (2008: 36c) Consolidated Entity 2009 No of Shares 1,212,049 359,982 (646,661) 925,370 2008 No of Shares 1,355,715 361,010 (504,676) 1,212,049 The amounts recognised in the ﬁ nancial statements of the consolidated entity and the Company in relation to the ESP during the year were: 2008 $’000 33 130 2008 $’000 - 137 Current receivables Issued ordinary share capital Consolidated Entity Parent Entity 2009 $’000 32 126 2008 $’000 33 130 2009 $’000 32 126 The market value of ordinary Hansen Technologies Ltd shares closed at $0.42 on 30 June 2009 ($0.39 on 30 June 2008). 18. RESERVES AND RETAINED EARNINGS Consolidated Entity Parent Entity Foreign currency translation reserve Options granted reserve Accumulated losses (a) Foreign currency translation reserve 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) Accumulated losses Balance at the beginning of year Dividends paid Net proﬁ t attributable to members of Hansen Technologies Ltd Balance at end of year Note 18 (a) 18 (b) 18 (c) 2009 $’000 (501) 166 (2,041) (479) (22) (501) 137 29 166 (5,588) (4,584) 8,131 (2,041) 2008 $’000 (479) 137 2009 $’000 - 166 (5,588) (6,545) (6,558) (448) (31) (479) 117 20 137 (13,491) (7,542) 15,445 (5,588) - - - 137 29 166 (6,558) (4,584) 4,597 (6,545) - - - 117 20 137 (9,166) (7,542) 10,150 (6,558) 19. CASH FLOW INFORMATION (a) Reconciliation of the net proﬁ t / (loss) after tax to net cash ﬂ ows from operations Net proﬁ t from ordinary activities after income tax 8,131 15,445 4,597 10,150 Consolidated Entity Parent Entity 2009 $’000 2008 $’000 2009 $’000 2008 $’000 Add / (less) items classiﬁ ed as investing / ﬁ nancing activities: (Proﬁ t) / loss on sale of non-current assets Proceeds from sale of business Intercompany dividend Add / (less) non cash items: Amortisation and depreciation Transfer of tax losses within tax consolidation group 30 - - 4,258 - 22 (8,766) - - - - - (6,650) (9,942) 3,849 - - (290) Net cash (used in) / provided by operating activities before change in assets and liabilities 12,419 10,550 (2,343) 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 prepayments 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 income tax payable Increase / (decrease) in reserves 4,146 (750) (285) (5,970) 2.245 3,930 (2,790) 26 (455) 26 8 96 334 - (476) 524 - 416 - 2,247 - (14) - 22 - 4 (79) - 33 (19) - (109) 30 Net cash (used in) / provided by operating activities 12,550 13,677 (2,461) - (4,021) (3,813) - 7 - (7) 51 - 166 1,802 2,222 - 20 448 (b) Reconciliation of cash Cash at bank 20,518 21,871 56 168 s t n e m e t a t S l a i c n a n F e h t o t i s e t o N 40 (c) Business combinations i) The company acquired 100% of the share capital of Peace Software, with the effective date being 17 October 2008. Consideration Cash Paid Professional Fees Total Cash Paid Shares Issued as Consideration Total Acquisition Cost Less cash acquired Payment for acquisition of business Net Assets Acquired Assets Cash Trade and other receivables Plant & equipment Total Assets Acquired Liabilities Trade and other payables Provisions Total Liabilities Acquired Net Assets Acquired Total Acquisition Cost adjusted for Net Assets Acquired Tradename Customer relationships & patented technology Goodwill Net Intangibles Consolidated Entity 2009 $’000 8,317 417 8,734 - 8,734 (1,269) 7,465 2008 $’000 - - - - - - - Fair Value $’000 Carrying Amount on Acquisition $’000 1,269 5,401 937 7,607 5,633 2,577 8,210 (603) 1,269 5,401 610 7,280 5,633 3,906 9,539 (2,259) 10,993 717 1,794 8,482 10,993 Goodwill arose on the acquisition of Peace Software due to the difference between the consideration paid for the business and the net assets acquired, less intangibles in the form of tradenames, customer relationships and patented technology. ii) Proﬁ t of Peace Software included in consolidated proﬁ t of the group since the acquisition date of 17 October 2008. Proﬁ t after income tax Period 2009 $’000 2,374 2008 $’000 - iii) Results of combined entity for the period as though the acquisition date for the acquisition of Peace Software occurred at 1 July 2008. It is impracticable to disclose this fact as Peace Software operated on a calendar year basis and therefore audited ﬁ gures are not available as the basis for reliable estimates to be made. 20. COMMITMENTS AND CONTINGENCIES Lease expenditure commitments Operating leases (non-cancellable): Not later than one year Later than one year and not later than ﬁ ve years Later than ﬁ ve years Aggregate lease expenditure contracted for at reporting date OPERATING LEASES (NON-CANCELLABLE) Consolidated Entity Parent Entity 2009 $’000 2,306 5,194 499 7,999 2008 $’000 810 3,659 665 5,134 2009 $’000 2008 $’000 - - - - - - - - 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. s t n e m e t a t S l a i c n a n F e h t o t i s e t o N 42 21. EARNINGS PER SHARE Reconciliation of earnings used in calculating earnings per share: Basic earnings - ordinary shares Diluted earnings - ordinary shares Consolidated Entity Parent Entity 2009 $’000 8,131 8,131 2008 $’000 15,445 15,445 2009 $’000 - - 2008 $’000 - - 2009 Number of Shares 2008 Number of Shares Weighted average number of ordinary shares used in calculating basic earnings per share: Number for basic earnings per share - ordinary shares 152,973,482 151,121,576 Number for diluted earnings per share - ordinary shares 154,597,002 152,320,374 Basic earnings (cents) per share from continuing operations Basic earnings (cents) per share from discontinued operations Total basic earnings (cents) per share Diluted earnings (cents) per share from continuing operations Diluted earnings (cents) per share from discontinued operations Total diluted earnings (cents) per share Cents per Share Cents per Share 5.3 - 5.3 5.3 - 5.3 4.3 5.9 10.2 4.2 5.9 10.1 CLASSIFICATION OF SECURITIES AS POTENTIAL ORDINARY SHARES The securities that have been classiﬁ ed as potential ordinary shares and included in diluted earnings per share only, are options outstanding under the Employee Share Option Plan. 22. DIRECTORS’ AND EXECUTIVES’ EQUITY HOLDINGS a) Compensation Options: Granted and vested during the year: During the ﬁ nancial year the Company granted options over unissued ordinary shares to the following ﬁ ve key management personnel of the Company as part of their remuneration: Speciﬁ ed Executives C Hunter (Chief Operations Ofﬁ cer) G Lister (CFO & Company Secretary) D Meade (Client Services Manager) G Prior (General Manager, North America) S Weir (General Manager, Europe) Vested Number Granted Number Grant Date Value per Option at Grant Date Exercise Price First Exercise Date Last Exercise Date Terms & Conditions for each Grant 75,000 75,000 75,000 - - 75,000 1 July 2008 75,000 1 July 2008 75,000 1 July 2008 - 1 July 2008 40,000 1 July 2008 $0.390 $0.390 $0.390 $0.390 $0.390 $0.390 $0.390 $0.390 $0.390 $0.390 1 July 2011 1 July 2013 1 July 2011 1 July 2013 1 July 2011 1 July 2013 1 July 2011 1 July 2013 1 July 2011 1 July 2013 Total 225,000 265,000 b) Number of options held by Key Management Personnel: Balance 30-Jun-08 Granted as Remuneration Options Exercised Options Forfeited Balance 30-Jun-09 Total Exercisable Unexercisable Vested at 30 June 2009 Speciﬁ ed Executives C Hunter (Chief Operations Ofﬁ cer) G Lister (CFO & Company Secretary) D Meade (Client Services Manager) G Prior (General Manager, North America) S Weir (General Manager, Europe) 225,000 225,000 300,000 - - 75,000 75,000 75,000 - 40,000 - - 75,000 - - Total 750,000 265,000 75,000 - - - - - - 300,000 75,000 300,000 75,000 300,000 75,000 - 40,000 - - 75,000 75,000 75,000 - - 940,000 225,000 225,000 - - - - - - Options are not issued to Directors. Accordingly no director is the beneﬁ cial owner of any options over unissued ordinary shares. NOTE: Any options not exercised are forfeited if not exercised within 28 days of termination of employment. Share based payments represent a value attributed to options over ordinary shares issued to Executives. They expire during the period up to 1 July 2013. 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 of the company’s historical share price movement compared with the industry average, for a period equal to the 3 year option vesting period of 52%, continuously compounding risk free interest rate of 5.58%, probability factor for the likelihood of the options being exercising based on historical trends of 64%, and comparison on the issue price of ($0.39 cents per share) with the market price on day of issue ($0.39 cents per share), weighted average fair value for the options issued as at grant date of $0.091 cents per option. s t n e m e t a t S l a i c n a n F e h t o t i s e t o N 44 c) Number of shares held by Key Management Personnel: Balance 30-Jun-08 Received as Remuneration Options Exercised Net Change Other Balance 30-Jun-09 Speciﬁ ed Directors K Hansen (Chairman) A Hansen (MD & CEO) B Adams D Osborne P James Speciﬁ ed Executives C Hunter (Chief Operations Ofﬁ cer) G Lister (CFO & Company Secretary) D Meade (Client Services Manager) G Prior (General Manager, North America) S Weir (General Manager, Europe) 23. AUDITOR’S REMUNERATION 93,934,680 11,546,174 215,520 245,096 - 250,525 907,092 81,777 - - 107,180,864 - - - - - - - - - - - - - - - - - - 64,905 93,999,585 - - 23,225 - 26,595 2,857 11,546,174 215,520 268,321 - 277,120 909,949 77,777 - - 75,000 (79,000) - - - - 75,000 38,582 107,294,446 Consolidated Entity Parent Entity 2009 $’000 2008 $’000 2009 $’000 2008 $’000 Audit services: Amounts received or due and receivable by the auditors of the company for: Australia - an audit and review of the ﬁ nancial report of the entity and any other entity in the consolidated entity 205 169 Overseas Firms - audit and review of ﬁ nancial reports Other ﬁ nancial services: Australia - tax related services - advisory services Overseas Firms - tax related services - advisory services Total auditor’s remuneration 139 344 43 18 61 20 18 38 99 443 34 203 103 38 141 21 7 28 169 372 - - - - - - - - - - - - - - - - - - - - - - 24. RELATED PARTY DISCLOSURES a) The consolidated ﬁ nancial statements include the ﬁ nancial statements of Hansen Technologies Ltd and its controlled entities listed below: Name Parent entity Hansen Technologies Ltd Subsidiaries of Hansen Technologies Ltd Hansen Corporation Pty Ltd Hansen Research & Development Pty Ltd Hansen Corporation Investments Pty Ltd Hansen Holdings (Asia) Pty Ltd Hansen Corporation Limited Hansen Corporation Europe Limited Hansen Datatrue Limited Hansen Corporation USA Limited Hansen North America, Inc. Hansen Corporation Asia Limited Hansen New Zealand Limited Peace Software New Zealand Limited Peace Software Australia Limited Peace Software Australia Pty Ltd Peace Software North America Limited Peace Software Inc Peace Software Canada Inc Peace Software Europe Limited Note Country of Incorporation Ordinary share consolidated entity interest 2009 % 2008 % Australia Australia Australia Australia Australia New Zealand United Kingdom United Kingdom United States of America United States of America Hong Kong New Zealand New Zealand New Zealand Australia New Zealand United States of America Canada New Zealand (i) (ii) (ii) (ii) (ii) (ii) (ii) (ii) (ii) 100 100 100 100 100 100 - 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 - - - - - - - - Notes: (i) This entity has been deregistered. (ii) Entities acquired 17 October 2008. b) The following provides the total amount of transactions that were entered into with related parties for the relevant ﬁ nancial year: Transactions with key management personnel of the entity or its parent and their personally related entities. K Hansen and A Hansen - Lease Rental Payments Consolidated Entity Parent Entity 2009 $ 2008 $ 2009 $ 2008 $ 794,616 805,678 - - 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. 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 arms length basis. Total lease rental payments made to these Director-related entities for the year ended 30 June 2009 were $134,777 and $659,839 respectively (2008: $134,898 and $670,780 respectively). s t n e m e t a t S l a i c n a n F e h t o t i s e t o N 46 25. 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, systems and operations support, network services, call centre services, telehousing and business continuity support. OTHER: Represents software and service provision in superannuation administration and other non-core products. DISCONTINUED OPERATIONS: Effective 31 August 2007 the Company sold its NSW outsourcing services subsidiary Hansen Professional Services Pty Ltd. GEOGRAPHICAL SEGMENTS In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of customers. Segment assets are based on the geographical location of the assets. The consolidated entity’s business segments operate geographically as follows: AUSTRALIA: Sales and services in all Australian states and territories NORTH AMERICA: Sales and services throughout North America EUROPE: Sales and services throughout Europe OTHER: Sales and services throughout Asia and New Zealand Business Segments Revenue Billing IT Outsourcing Other Total Continuing Operation Discontinued Operations Consolidated 2009 $’000 2008 $’000 2009 $’000 2008 $’000 2009 $’000 2008 $’000 2009 $’000 2008 $’000 2009 $’000 2008 $’000 2009 $’000 2008 $’000 External segment revenue 42,018 28,130 6,844 6,393 5,436 4,561 54,298 39,084 Other unallocated revenue Total Revenue Result Segment result Unallocated corporate expenses Proﬁ t from ordinary activities before income tax Income tax expense Net proﬁ t 2,039 1,531 56,337 40,615 10,397 9,687 3,157 2,555 2,456 1,791 16,010 14,033 (5,052) (5,342) 10,958 8,691 (2,827) (2,176) 8,131 6,515 Depreciation and amortisation 3,800 3,202 25 51 94 172 3,919 3,425 Depreciation and amortisation - unallocated 339 272 4,258 3,697 Segment result is inclusive of some individually signiﬁ cant items Individually signiﬁ cant segment items Proﬁ t on sale of subsidiary - - - - - - - - Assets Segment assets Unallocated corporate assets Consolidated total assets Liabilities 33,089 16,801 1,380 1,325 1,282 1,090 35,751 19,216 26,540 32,491 62,291 51,707 Segment liabilities 13,195 6,945 1,056 976 862 721 15,113 8,642 Unallocated corporate liabilities Consolidated total liabilities 1,355 1,079 16,468 9,721 Acquisition of non-current assets 285 357 3 44 923 1,851 1,211 2,252 - - - - - - - - - - - - - - - - - - - 2,809 54,298 41,893 8,766 2,039 10,297 11,575 56,337 52,190 9,001 16,010 23,034 - (5,052) (5,342) 9,001 10,958 17,692 (71) (2,827) (2,247) 8,930 8,131 15,445 152 3,919 3,577 - 339 272 152 4,258 3,849 8,766 - 8,766 - - - - - - 7 35,751 19,216 26,540 32,491 62,291 51,707 15,113 8,642 1,355 1,079 16,468 9,721 1,211 2,259 Geographical Segments External segment revenue by location of customers Australia North America Europe Other Consolidated 2009 $’000 2008 $’000 2009 $’000 2008 $’000 2009 $’000 2008 $’000 2009 $’000 2008 $’000 2009 $’000 2008 $’000 32,361 27,761 10,797 1,211 9,512 11,149 1,628 1,772 54,298 41,893 Segment assets by location of assets 42,095 47,472 3,828 Acquisition of capital expenditure 1,093 2,053 10 56 - 3,721 4,034 12,647 145 62,291 51,707 21 206 87 - 1,211 2,259 26. SUBSEQUENT EVENTS Subsequent to balance date a mediation occurred in an endeavour to resolve a contractual dispute in respect to one software implementation. The mediation was unsuccessful and Hansen has served a notice of termination. Appropriate actions to pursue resolution of the contractual dispute are expected to ensue in due course. At the date of this report there have been no further developments. There has been no other matter or circumstance which has arisen since 30 June 2009 that has, or may, signiﬁ cantly affect: (a) the operations, in ﬁ nancial years subsequent to 30 June 2009, of the consolidated entity, or (b) the results of those operations, or (c) the state of affairs, in ﬁ nancial years subsequent to 30 June 2009, of the consolidated entity. s t n e m e t a t S l a i c n a n F e h t o t i s e t o N 48 DIRECTORS’ DECLARATION The Directors declare that the ﬁ nancial statements and notes set out on pages 19 to 48 in accordance with the Corporations Act 2001: 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. (a) Comply with Accounting Standards and the Corporations Regulations 2001, and other mandatory professional reporting requirements; and (b) Give a true and fair view of the ﬁ nancial position of the company and the consolidated entity as at 30 June 2009 and of their performance as represented by the results of their operations, changes in equity and their cash ﬂ ows, for the year ended on that date. This declaration has been made after receiving the declarations required to be made by the Chief Executive Ofﬁ cer and Chief Financial Ofﬁ cer to the Directors in accordance with sections 295A of the Corporations Act 2001 for the ﬁ nancial year ending 30 June 2009. This declaration is made in accordance with a resolution of the Directors. Kenneth Hansen Director 30 September 2009 Andrew Hansen Director 30 September 2009 n o i t a r a l c e D ’ s r o t c e r i D 50 An independent Victorian Partnership ABN 27 975 255 196 INDEPENDENT AUDITOR’S REPORT To the Members of Hansen Technologies Limited We have audited the accompanying ﬁ nancial report of Hansen Technologies Ltd and controlled entities. The ﬁ nancial report comprises the balance sheet as at 30 June 2009, and the income statement, statement of changes in equity and cash ﬂ ow statement for the year ended on that date, a summary of signiﬁ cant 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 ﬁ nancial year. DIRECTORS’ RESPONSIBILITY FOR THE FINANCIAL REPORT The Directors of the company are responsible for the preparation and fair presentation of the ﬁ nancial 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 ﬁ nancial 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 of International Financial Reporting Standards ensures that the ﬁ nancial report, comprising the ﬁ nancial statements and notes, complies with International Financial Reporting Standards. AUDITOR’S RESPONSIBILITY Our responsibility is to express an opinion on the ﬁ nancial 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 ﬁ nancial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the ﬁ nancial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the ﬁ nancial 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 ﬁ nancial 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 ﬁ nancial report. We believe that the audit evidence we have obtained is sufﬁ cient and appropriate to provide a basis for our audit opinion. 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 ﬁ nancial 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 ﬁ nancial position as at 30 June 2009 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 ﬁ nancial report also complies with International Financial Reporting Standards as disclosed in Note 1. REPORT ON THE REMUNERATION REPORT We have audited the Remuneration Report included in pages 12 to 15 of the Directors’ report for the year ended 30 June 2009. The Directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. AUDITOR’S OPINION In our opinion the Remuneration Report of Hansen Technologies Ltd and controlled entities for the year ended 30 June 2009, complies with section 300A of the Corporations Act 2001. S SCHONBERG Partner 30 September 2009 PITCHER PARTNERS Melbourne Liability limited by a scheme approved under Professional Standards Legislation Pitcher Partners, including Johnston Rorke, is an association of independent ﬁ rms Melbourne | Sydney | Perth | Adelaide | Brisbane An independent member of Baker Tilly International t r o p e R ’ s r o t i d u A t n e d n e p e d n I 52 CORPORATE GOVERNANCE The Corporate Governance principles and related Charters and Policies for the management and operation of the Hansen Group of companies are available for review on the corporate website: www.hsntech.com. The Board Ethics and Responsibilities Risk Management Remuneration 53 57 60 62 APPROACH TO GOVERNANCE The Hansen Corporate Governance principles provide direction to the business to help meet our responsibilities to shareholders, customers, employees and community. In relation to Corporate Governance, the Board aims to: Embrace best practice in Corporate Governance Remain mindful of operating practices in the international jurisdictions in which we operate Recognise and comply with the principles of the ASX Corporate Governance Council Ensure Directors, Executives, Management, and staff are cognisant of the Hansen Governance principles. 1. THE BOARD The primary role of the Board of Directors is to provide effective governance over the performance and affairs of the Hansen Technologies Group. 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. DUTIES AND RESPONSIBILITIES The speciﬁ c functions established and reserved for the Board are: Providing strategic direction and approving corporate strategies. Selecting and appointing the Chief Executive, determining conditions of service and monitoring performance against established objectives. If necessary removing the CEO from ofﬁ ce. Monitoring ﬁ nancial performance against budgeted objectives. Ensuring adequate risk management controls and reporting mechanisms are maintained. Approving and monitoring progress of major capital expenditure, capital management, acquisitions and divestments. Ensuring that continuous disclosure requirements are met. Ensuring responsible corporate governance is understood and observed at Management, Executive, and Board level. The Board shall have full and free access to Executives and other employees of the Group. Collectively or individually, the Board may take independent advice considered necessary to fulﬁ l their relevant duties and responsibilities at the Group’s expense. 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. DELEGATION OF RESPONSIBILITY The Board has delegated to the Chief Executive Ofﬁ cer the authority and responsibility for implementing the Group’s strategic direction and overseeing the everyday affairs of the Hansen Group. The Chief Executive Ofﬁ cer’s speciﬁ c responsibilities include ensuring business activities are in accordance with the Group’s overall business strategy, ensuring the Group conducts its affairs within the law and the principles outlined in Hansen’s Corporate Governance policies, keeping the Board informed of all major developments and approving expenditure and setting remuneration levels of personnel within the normal course of business. The Chief Executive consults with the Chairman of the Board and respective Committees on matters that are sensitive, extraordinary or of a strategic nature. Through the Chief Executive Ofﬁ cer, the Board has delegated authority and responsibility to other Executives and Management for their respective business functions. Where potential for conﬂ ict is identiﬁ ed the Board appoints a Sub-Committee speciﬁ cally structured, authorised and tasked to determine the appropriate actions or responses so as to eliminate any potential for conﬂ icts. PERFORMANCE Board members may periodically review and evaluate the Board’s performance and that of the Board Committees. Given the limited size of the Board and its Committees an annual formal review is not deemed warranted. However there is an ongoing and constant provision for each Director to contribute judgements and observations at any time. The performance evaluation process is as follows: Each Director, as they see ﬁ t, will periodically evaluate the effectiveness of the Board and its Committees and submit observations to the Chairman. The Chairman of the Board will make a presentation incorporating his assessment of such observations to enable the Board to assess and, if necessary, take action. The Board will agree and develop actions that may be required to improve performance. Outcomes and actions will be minuted. The Chairman will assess the progress of the actions to be achieved. This process aims to ensure that individual Directors have an unlimited opportunity to assess and comment on the performance of the Board and its Committees with the objective of enhancing the Board’s effectiveness in achieving its duties and responsibilities. Periodically the Chairman may propose a formal performance evaluation review and he may commission a third party to assist in such a review if deemed desirable. No such formal review was conducted during this reporting period. MEETINGS The Board will meet as often as deemed necessary by the Directors in order to fulﬁ l their duties and responsibilities as Directors, and as dictated by the needs of the business. As a matter of practice the Board schedules to meet once each month. COMPOSITION The Board determines the Board’s size and composition, subject to limits imposed by the Group’s Constitution. The Constitution determines the basis for the election and appointment of Directors and speciﬁ es a minimum of three Directors and a maximum of ten. Currently, the Board comprises the Chairman, Kenneth Hansen, three other Non-Executive Directors, and one Executive Director, the CEO Andrew Hansen. The skills, tenure of ofﬁ ce, experience and expertise relevant to the position of Director held by each Director is detailed in the Annual Report. INDEPENDENCE The Board’s deﬁ nition of an independent Director is one who is unafﬁ liated with the Executive and free from any business, signiﬁ cant shareholding, or other relationship that could materially interfere with the exercise of independent judgement. The Board currently has two independent Directors, Bruce Adams and Phillip James. The Chairman of the Board, Kenneth Hansen, is the original founder of the company and currently its majority shareholder. As a result he is not considered an independent Director. His background in computer services, outsourcing and software development offer a depth of experience and skills that are important for the position of Chairman. Given the specialist nature and industry speciﬁ c focus of Hansen’s business an independent Chairman is not regarded as necessary at this time. Whilst the current Board is not composed of a majority of independent Directors, when considering the Group’s level of operations and the experience of the current Directors, the Board is satisﬁ ed with the current composition. However, as it is an objective of the Board to strive for a majority of independent Directors the Board will continue to seek new Directors that possess relevant skills and experience speciﬁ c to the industries in which our company operates. e c n a n r e v o G e t a r o p r o C 54 COMMITTEES Purpose To assist it in carrying out its responsibilities, the Board has established two standing Committees comprising some or all of its members: the Audit Committee, and the Remuneration Committee. Considering the level of operations of the Group and the current number of Board members, the appointment of a formal Nominations Committee is not deemed necessary. Nominations for positions on the Board are considered during a meeting with all Board members present. Other Committees of the Board may be established to undertake speciﬁ c tasks if deemed appropriate. AUDIT COMMITTEE Membership The Audit Committee was formed in May 2000. The members are appointed by the Board of Directors and shall preferably comprise three Directors that have diverse and complementary backgrounds with a majority of independent members. The Committee Chairman shall be independent, possess leadership experience and a sound ﬁ nance or business background. All Committee members must be ﬁ nancially literate. Such qualiﬁ cation is interpreted by the Board in its business judgement. Furthermore, at least one member shall have accounting or related ﬁ nancial management expertise. The members of the Committee as at 30 June 2009 were Non-Executive Directors, David Osborne, Phillip James, and the Chairman of the Committee Bruce Adams. Both the Chairman of the Committee, Bruce Adams and Phillip James are considered independent members of the Committee. The skills, tenure of ofﬁ ce, experience and expertise relevant to the positions of the members of the Audit Committee is detailed in the Annual Report. Meetings The Committee shall meet as required, but no less than twice each year. The purpose of these meetings shall be to: Review and approve the half-year ﬁ nancial report. Review and approve the annual ﬁ nancial report. Review the external audit reports. Perform the general responsibilities of the Committee. The Audit Committee met three times throughout the year ended 30 June 2009 and all members of the Audit Committee at the time were present at all meetings. The Audit Committee shall provide assistance to the Board of Directors in fulﬁ lling its Corporate Governance and oversight responsibilities in relation to the Group’s ﬁ nancial 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 the Hansen Executive team. 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. The Committee has 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 signiﬁ cant risks faced by the Group in the current economic environment. Financial Reporting The primary responsibility of the Audit Committee is to oversee the Group’s ﬁ nancial reporting process on behalf of the Board and report the results of its activities to the Board. The external auditors are responsible for auditing the Group’s ﬁ nancial reports and for reviewing the Group’s interim ﬁ nancial reports. The Board of Directors is ultimately responsible for the Group’s ﬁ nancial reports including the appropriateness of the accounting policies and principles that are used by the Group. The Committee, in carrying out its responsibilities, believes its policies and procedures should remain ﬂ exible, in order to best react to changing conditions and circumstances. The Committee will take appropriate actions to guide corporate philosophies for quality ﬁ nancial reporting, sound business risk practices, and ethical behaviour. Scope of External Audit The Committee shall discuss with the external auditors the overall scope of the external audit, including identiﬁ ed 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. 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. 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. Furthermore, the Committee shall include in the Group’s annual report a statement that the Committee is satisﬁ ed the provision of non-audit services has not impacted the external auditors independence. REMUNERATION COMMITTEE Membership The Remuneration Committee currently consists of three Non–Executive Directors, David Osborne, Phillip James, and the Chairman Bruce Adams. Both the Chairman of the Committee, Bruce Adams and Phillip James are considered independent members of the Committee. Meetings The Committee will meet at least annually to assess annual remuneration changes, and will hold additional meetings where required. A performance evaluation of the CEO and Senior Executives was undertaken during the reporting period in accordance with this Remuneration Policy. The Remuneration Committee met one time during the ﬁ nancial year and all members of the Remuneration Committee at the time were present. Assessment of Accounting, Financial and Internal Controls The Committee shall discuss with the Senior Executives and the external auditors, the adequacy and effectiveness of the accounting and ﬁ nancial controls, including the Group’s policies and procedures to assess, monitor, and manage business risk, as well as legal and ethical compliance programs (including the Group’s Code of Conduct). The Committee shall receive periodic reports from the external auditor on the critical policies and practices of the Group as well as compliance with generally accepted accounting principles. Any opinion obtained from the external auditors on the Group’s choice of accounting policies or methods should include an opinion on both appropriateness and acceptability of that choice or method. Periodically, the Committee shall meet separately with the Senior Executive 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 sufﬁ cient opportunity for the external auditors to meet privately with the members of the Committee. The Committee shall review with the external auditor any audit observations and the Senior Executive’s responses. Appointment of External Auditors The Committee shall be directly responsible for making recommendations to the Board of Directors on the appointment, reappointment or replacement (subject, if applicable, to shareholder ratiﬁ cation), remuneration, monitoring of the effectiveness, and independence of the external auditors, including resolution of disagreements between the Senior Executives and the auditors regarding ﬁ nancial reporting. The Committee shall approve all audit and non-audit services provided by the external auditors and shall not engage the external auditors to perform any non- audit or assurance services that may 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 meet and discuss with the external auditors: Any material issues raised by any control review, or peer review, of the audit ﬁ rm, or by any inquiry or investigation by governmental or professional authorities, respecting one or more independent audits carried out by the ﬁ rm, and any steps taken to deal with any such issues. All relationships between the external auditor and the Group (to assess the auditor’s independence). e c n a n r e v o G e t a r o p r o C 56 Purpose, Duties and Responsibilities Behave as a good corporate citizen: The responsibilities of the Committee are to: Advise on remuneration policies and practices generally. Provide speciﬁ c recommendations on remuneration packages and other terms of employment for Executive Directors and Non-Executive Directors. Evaluate the performance of and determine an appropriate remuneration base and structure for the CEO in accordance with speciﬁ ed key performance indicators and budgeted ﬁ nancial performance expectations. Assess the reasonableness of and approve the remuneration proposals put forward by the CEO for the Executive team, including the performance objectives speciﬁ ed for each Executive. 2. ETHICS AND RESPONSIBILITY CODE OF CONDUCT At Hansen Technologies we recognise that our company is made up of the individual employees representing our operations globally. Each person has an individual responsibility for their own behaviour 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 with regard to their behaviour. The Code of Conduct reﬂ ects the Hansen Group’s primary values of ethical behaviour, compliance with legal obligations, and respecting the expectations of all stakeholders. 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 shall withdraw from involvement. Discharging of authority to sign documents on behalf of the Hansen Group should be performed responsibly and indicates we have received and understood the document being signed. We are not to act outside our authority. Breaches of any law should be notiﬁ ed to a Senior Executive. 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 conﬁ dentiality: We respect the conﬁ dential 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 conﬁ dential any information we obtain in the course of our employment. Conﬁ dential information is to be used only for authorised work-related tasks, and never for personal gain or for the gain of others. Value professionalism: A cornerstone of the Hansen business is the professionalism and conduct of individuals and of the Hansen Group. In addition to conducting ourselves ethically, we should continually aim for excellence in all our business activities. Act to avoid conﬂ icts of interest: A conﬂ ict of interest occurs where an employee has a personal or professional interest sufﬁ cient to inﬂ uence, or appear to inﬂ uence, 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 conﬂ ict 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 conﬂ ict 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. COMMUNICATIONS Hansen has established communication mechanisms to provide shareholders with information about the Group and to enable them to exercise their rights as shareholders in an informed manner. Communication Methods Information is communicated to shareholders through: Website: Hansen encourages the use of electronic communications by providing up-to-date information on the Group web site, www.hsntech.com. The “Investors” section of the website contains a range of information relevant to shareholders including: - ASX announcements - Annual Reports and presentations 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, Management, Executives, and Directors on disclosure guidelines and raising awareness of the principles underlying continuous disclosure. Supporting the Directors and Executives in ensuring that Hansen complies with continuous disclosure requirements. The Board has nominated a limited number of individuals that are authorised as spokespersons for Hansen as follows. The Chairman. The Chief Executive Ofﬁ cer. Company Secretary. The Chief Financial Ofﬁ cer. Other Executives may become spokespersons for speciﬁ c areas under their control, however any comments are to be limited to their area of expertise. - Financial results - Corporate Governance - Key dates - Share registry contact details and links - Contact link for more shareholder information Annual Report: distributed either over the web or by post. Notice of Annual General Meeting by mail. Mail or upload to the web site whenever there are other signiﬁ cant developments to report. The Annual General Meeting is 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 questions. 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 ﬂ ow to Shareholders and potential investors, enabling them to make decisions in an informed manner. CONTINUOUS DISCLOSURE The Hansen Continuous Disclosure and Communication Policy has been developed to provide clear guidelines for the operations of the Hansen business and establishes appropriate processes and criteria for continuous disclosure to ensure compliance with the requirements of the ASX and other securities and corporations legislation. The Policy’s primary objective is the promotion of effective communication with Shareholders and related stakeholders. The key principles of the Policy are: Material company information is issued to shareholders and the market in a timely manner and 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. ASX reporting obligations are met. e c n a n r e v o G e t a r o p r o C 58 Directors and Executives responsibilities Directors and Senior Executives 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 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. All information, as speciﬁ ed by ASX and ASIC, that requires market announcements. Communications for Disclosure Hansen will make market disclosures on any event that is deemed to have possible material effect on the price of Hansen securities. Events warranting disclosure include: Financial performance and signiﬁ cant changes in ﬁ nancial performance. Changes in Board Directors and Senior Executives. Mergers, acquisitions, divestments, joint ventures or changes in assets. Signiﬁ cant 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. Signiﬁ cant changes in products, product lines, supplies or inventory. Industry issues that may have a material impact on the Group. Major litigation Decisions on signiﬁ cant 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 Senior 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 channels include: Investor brieﬁ ngs and presentations. One-on-one meetings with stockbroking analysts or institution fund managers. Industry forums. Company literature. Media interviews. In participating in such communications Hansen will act to avoid against unintended disclosure of material information to selected market participants. Communications Procedures A representative of Hansen, the Directors or the Senior Executives, may not release any information that is required to be disclosed to the 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. An acknowledgement of the receipt of that information has been received from ASX. SHARE TRADING POLICY Directors, ofﬁ cers, 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 Ofﬁ cers Employees, Directors, Executives 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 Group, 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. Must not communicate inside information to anybody who works for the Hansen Group except on a “need to know” basis and in accordance with the rules and policies of the relevant business division. As a general rule, Directors and 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. Hansen’s Annual General Meeting. A “special circumstance”, that will be notiﬁ ed on a case-by-case basis by the Chairman or Chief Executive Ofﬁ cer (example being the release of a trading update to the ASX or the issue of a prospectus). Where Directors or Executives want to trade outside of this general rule, they are required to discuss the matter with the Chairman and Chief Executive Ofﬁ cer 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 ﬁ ve years, or both. Where individuals are concerned about breaching the insider trading provisions of the Corporations Act they should immediately obtain independent legal advice. 3. RISK MANAGEMENT Hansen recognises that the daily activities and existence of its business is subject to various elements that can create uncertainty which brings with it potential risk and opportunity. At Hansen all members of the Group aim to promote a culture of 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. With contribution from all layers of management and the Board, a Register of Risks has been developed and will be maintained. Each risk is assessed for the likelihood and consequence of a risk eventuating and a combined inherent risk rating developed. Risk management practises to mitigate and manage the identiﬁ ed risks are then speciﬁ ed and put into action. It is the intention that the Risk Register be regularly reviewed and updated on a case by case basis as new risks are identiﬁ ed or the situation surrounding previously identiﬁ ed risks are varied. During this reporting period a thorough process has been undertaken, with the assistance of external risk advisors, to identify risks and develop relevant risk management practises. The outcome of this process and the effectiveness of the Group’s risk management processes are being reported to the Board. ROLES AND RESPONSIBILITIES The Board of Directors is responsible for approving and reviewing Hansen’s Risk Management Policy and overseeing all aspects of internal control including compliance activities, the appropriateness of accounting policies and the adequacy of ﬁ nancial reporting. It delegates daily management responsibility to the Chief Executive Ofﬁ cer. The Executive team is responsible for implementing the Board approved Risk Management Policy, maintaining the currency of the Risk Register and developing operational policies, internal controls, processes and procedures for identifying and managing risks in all of Hansen’s activities. Management must also periodically report to the Board on the maintenance of the Risk Register and the effectiveness of the risk management processes. 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. Independent reviews that may be conducted for special assessment as required. e c n a n r e v o G e t a r o p r o C 60 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 Risk Management 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 identiﬁ cation, measurement, monitoring and mitigation of operational risk. This is supported by input from corporate level functions such as the ofﬁ ce of Chief Operating Ofﬁ cer, 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 ﬁ nancial loss where customers or business associates fail to meet their ﬁ nancial 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. Speciﬁ c 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. Market Risk Market risk is the potential for ﬁ nancial 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 Environment Target markets Know your customers Know your vendors Assess the market & region Assess the product for the region Global Hansen policies to Product planning & management be observed Pricing models Resource planning Manage segregation of duties Monitoring and reporting Authorities Transparency and communication Delegation of authority Change management Central reporting on product, ﬁ nancials, Central authorities Supports segregation of duties operations, legal and operations, operations, legal and risk legal and risk management management Assurances The integrity of the Group’s ﬁ nancial reporting depends upon the existence of a sound system of risk oversight and management and internal control. The Board receives regular reports about the ﬁ nancial condition and operational results. The CEO and the CFO annually provide a formal statement to the Board that in all material respects: The ﬁ nancial records of the Group for the ﬁ nancial year have been properly maintained in that they: Accurately record and explain its ﬁ nancial position and performance. Enable true and fair ﬁ nancial statements to be prepared and audited. The ﬁ nancial statements and notes required by the accounting standards for the ﬁ nancial year comply with the accounting standards. The risk management and internal compliance and control systems are sound, appropriate and operating efﬁ ciently and effectively. Such a statement has been provided in respect of the current ﬁ nancial year. Overall Risk Treatment Base Pay 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, registered in the Risk Register and raised to the attention of the Executive team which will develop and document the steps which are required to manage the risk. Where Hansen identiﬁ es 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. 4. REMUNERATION The Group aim in remunerating the CEO and other Executives is to provide a base pay plus rewards and other beneﬁ ts that will attract, motivate and retain key Executives while aligning their ﬁ nancial 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. Recognises the individual’s capabilities and experience. Rewards the performance of individuals. Assists in Executive retention. The structure provides a mix of ﬁ xed and variable pay, and a blend of short- and long-term incentives. CEO AND EXECUTIVES The Remuneration Committee sets the remuneration package for the CEO. The CEO establishes employment arrangements and remuneration packages for the Executives. 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. 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. Details of the pay and rewards for Hansen’s top ﬁ ve key management personnel and their total remuneration are set out in the Annual Report each year. Senior Executives are offered a competitive base pay that reﬂ ects the market for each position. It is generally revised annually to recognise inﬂ ationary impacts, job responsibility changes or if there has been a marked structural shift in market rates. Short-term Performance Incentives Each year the performance of the Executives is reviewed by the CEO and the Remuneration Committee and key performance objectives are established with potential bonuses linked to the achievement of the objectives speciﬁ ed. If individual performance objectives are met, a short-term incentive in the form of a bonus may be paid. Long-term Performance Incentives Long-term incentives for the CEO and Senior Executives are designed to align their ﬁ nancial interests with those of our shareholders. 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 Beneﬁ ts – Superannuation All Executives and staff are required to be members of an approved superannuation fund. 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 have the option to elect to contribute additional amounts to superannuation from their remuneration package. NON-EXECUTIVE DIRECTORS The Remuneration Committee recommends the remuneration of Non-Executive Directors to the Board for ﬁ nal 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 signiﬁ cant change occurs. No retirement beneﬁ ts are provided for Non-Executive Directors. e c n a n r e v o G e t a r o p r o C 62 ASX ADDITIONAL INFORMATION As at 25 September 2009 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 is set out below: Shareholder Number of Ordinary Shares Percentage Held Othonna Pty Ltd – including associates Cogent Nominees Pty Limited Antan Pty Ltd – including associates 93,999,585 22,776,841 11,546,174 61.03% 14.79% 7.50% VOTING RIGHTS Ordinary shares and Options - refer Note 17 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 Equity Security Holders Ordinary Shares Options 100 369 224 355 42 - - - 8 5 The number of shareholders holding less than a marketable parcel of ordinary shares is 67. ON-MARKET BUY-BACK On 9 April 2009 the company announced an on-market buy-back program of up to 10% of the company’s issued Ordinary shares. As of 25 September 2009 a total of 211,418 Ordinary shares have been acquired under the buy-back program. TWENTY LARGEST SHAREHOLDERS Name Othonna Pty Ltd Cogent Nominees Pty Limited Antan Pty Ltd National Nominees Limited Mr Anthony David Hansen Mr Bruce Rodney Pettit Ozcun Pty Ltd Mr James Lucas & Ms Lesley Dormer Mrs Yvonne Irene Hansen Mr Kenneth Hansen Mr Bruce Rodney Pettit Mr Cameron Hunter Ms Tanya Jacinta Hansen Mr Stephen Cocker & Mrs Denise Cocker Mr Grant Lister Mr Denis Maxwell Fraser & Mrs Wendy Elena Fraser Mr John Eldred Williams & Mrs June Mabel Williams Mr Christopher James Piggott & Mrs Shirley Janice Piggott Layuti Pty Ltd Mr Gary Phillip Grey & Ms Stephanie Ann Reynolds Number of Ordinary Shares Held Percentage of Issued Capital 91,160,249 22,776,841 11,169,297 4,613,046 1,399,871 1,075,000 739,154 656,843 655,607 532,107 525,227 401,387 374,100 332,000 300,000 290,000 277,200 257,220 248,445 232,572 59.19% 14.79% 7.25% 3.00% 0.91% 0.70% 0.48% 0.43% 0.43% 0.35% 0.34% 0.26% 0.24% 0.22% 0.19% 0.19% 0.18% 0.17% 0.16% 0.15% 138,016,166 89.61% Directors Kenneth Hansen, Chairman Andrew Hansen, Managing Director & Chief Executive Ofﬁ cer Bruce Adams, Non-Executive Ofﬁ cer David Osborne, Non-Executive Ofﬁ cer Phillip James, Non-Executive Director Company secretary Grant Lister Principal registered ofﬁ ce 2 Frederick Street, Doncaster VIC 3108 T (03) 9840 3000 F (03) 9840 3099 Share registry Link Market Services Level 1, 333 Collins Street Melbourne VIC 3000 T (02) 8280 7761 or 1300 554 474 F (02) 9287 0309 - Proxy forms F (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 – Exposure By Design +64 9 366 3035 y r o t c e r i D 64 2 Frederick Street, Doncaster, Victoria, 3108 Australia T +61 3 9840 3000 F +61 3 9840 3099 E info@hsntech.com www.hsntech.com

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