ANNUAL REpORT
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FLEXIBLE SOLUTIONS 2
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Hansen Technologies Limited ABN 90 090 996 455
CONTENTS
02 Highlights
03 Chairman and Chief Executive Officer Joint Report
07 Information on Directors and Company Secretary
09 Directors’ Report
18 Financial Statements and Notes
19 Consolidated Statement of Comprehensive Income
20 Consolidated Statement of Financial Position
21 Consolidated Statement of Changes in Equity
22 Consolidated Statement of Cash Flows
23 Notes to the Financial Statements
52 Directors’ Declaration
53 Independent Auditor’s Report
55 Corporate Governance
65 ASX Additional Information
NOTICE OF ANNUAL
GENERAL MEETING
The Annual General Meeting of the Company is to be held on Thursday
25th November 2010 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 offices in
Australia, New Zealand, the United States,
and the United Kingdom and employs
more than 250 people.
HIGHLIGHTS
$11.1 million after-tax profit
EBITDA percentage of revenue 30%
Fully-franked dividends totalling
5 cents per share for the fiscal year
Increase in performance from
ongoing operations
Earnings per share - 7.2 cents
Operating revenue $57.8 million
Net tangible assets per share at
30 June 2010 - 13.8 cents
6%
EBITDA $17.2 million
20%
After-tax profit $11.1 million
37%
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CHAIRMAN AND CHIEF
EXECUTIVE OFFICER
jOINT REpORT
We are again pleased to be able to
report on a very positive year for Hansen
representing the 4th year of consecutive
year on year growth in operational
performance with:
Earnings after tax of 7.2 cents per share
Earnings before Interest, Taxation, Depreciation and
Amortisation (EBITDA) as a % of revenue reaching
30%, and
The annual dividend has been maintained at 5 cents per
share fully franked, representing a 70% distribution of
after tax profit.
We have successfully negotiated our way through the global
economic instability which has impacted the world over the
past two years and emerged with stronger and improved
operating efficiencies as well as a fundamentally
strengthened business and underlying net asset base.
During the period April 2009 to January 2010 we conducted
a share buy back programme which proved to be a positive
support for our business even though it did not result in a
large volume of shares actually being acquired, 211,418 in
total. In addition in recognition of the tightly held nature of
the Company’s shareholding and on the advice of E.L. & C.
Baillieu the Hansen family agreed to sell 5.5%, ( 5,700,000
shares) of their shareholding in the Company to increase the
liquidity of Hansen shares and to introduce a larger spread
of investors to the Hansen share register. As a result we now
have a larger number of active shareholders and there has
been substantially increased interest and trading activity in
our shares over recent months.
This past year we have achieved a heightened awareness of
Hansen in the investment community. Our improving operating
performance and strong dividend distribution have generated
a significant rise in our share price over the year. The increase
from 40 cents per share back in June 2009 to the mid 70 cents
per share in September 2010 has resulted in the market
capitalization of our Company rising from $ 62 million at
June 2009 to $110 million plus today, a rise of 75% plus.
We have been able to readily fund our business growth,
launch a number of sales and marketing initiatives and
distribute healthy franked dividends while maintaining a
strong liquid asset position. Our Net Tangible Asset backing
per share has risen 28% to 13.8 cents per share.
We have retained a core base of cash reserves sufficient to
fund our business initiatives and geographic sales expansion
plans for the current year and we are well positioned to
execute on and fund strategic growth utilising in house cash
resources, third party debt and additional equity as required.
In Fiscal 2010 we successfully invested in and
delivered on a number of key initiatives:
Enhancing the operational efficiency of our software
development processes and project delivery capabilities
to reduce development cycles and support costs and
maintain our admirable record of on budget delivery
of new project implementations
In response to the evolutionary technology advances
occurring within the Energy markets world wide, we
have completed the development of our Meter Data
Management (MDM) solution software to accommodate
the demanding requirements of smart/interval meters
and Smart Grid initiatives. We have also successfully bench
marked our MDM solutions to a linear performance of a
world class standard of 1 million multi registered interval
meters being processed within a one hour window.
We installed our software solution to handle complex
time of use meter billing at four customer locations in
three separate countries. As a result our capabilities in
this space are clearly demonstrable.
We have invested in growing our Sales and Marketing
capacity and capabilities in both the Energy and
Telecommunications markets. We have recruited a new
Sales Director and additional sales personnel. We have
conducted analysis on the world market demand for our
products and services and as a result we are investing
in those defined markets where we are confident we
have an identified market value proposition.
We have established a corporate presence and partner
relationships in India on the basis that this country is in
the process of a major government funded programme
to enhance electricity consumption management. New
Billing and Customer Information System solutions are an
integral part of this initiative. We are continuing to evaluate
the optimum consortium relationships for responding
to these opportunities so that we may optimise our
return on investment in this market.
We have continued to investigate compatible businesses
in our market space around the world with the objective
of delivering on our objective of strategic growth through
acquisition. Although we have not as yet closed the deal
on a desirable purchase we have been disciplined in the
process we followed and we have had the strength to walk
away when the business or the acquisition terms were
not right for us.
2009/10 FINANCIAL pERFORMANCE
Despite the unsettled global economic conditions we have
again been able to grow our business and maintain the
fundamental strength of our underlying asset value.
Operational Revenue for the year was $ 57.8 Million, an
increase for ongoing operations of 6% over the previous
year. EBITDA (Earnings before Interest, Tax Depreciation
and Amortisation) of $17.2 million was a 20% increase on
the previous year. EBITDA as a percentage of revenue
continues to be a key measurement of performance and
at 30% our business is performing at or above industry
standards. Profit after tax of $11.1 million represents a
37% ($3 Million) increase on the prior year.
ACqUISITIONS
With the benefits of recent acquisitions now demonstrable
and our managements’ ability to acquire and integrate a major
acquisition having been successfully confirmed, we have been
actively pursuing further opportunities to grow our business
through business acquisition.
This year we have evaluated a number of prospective targets
and undertaken due diligence on a select few. We have
identified a short list of genuine prospects deemed desirable
for reasons associated with product or industry compatibility
and/or which represent geographic expansion opportunities
for our business as a whole.
We are firmly committed to growing our IT business through
strategic expansion.
We have the internal cash resources as well as access to both
external debt and shareholder funding which are collectively
sufficient to provide the formulae we will need to support the
size of the acquisitions being contemplated.
OUR pEOpLE
At Hansen we are blessed with a team of true professionals
comprised of industry leading experts in our areas of
influence. Our Company’s strength is founded on our
people and it is their positive attitude and commitment that
represents a significant market differentiation for Hansen.
On behalf of the Board of Directors and shareholders we
wish to record our appreciation to our dedicated employees
for their efforts over the past year and strong commitment
to our Corporate goals.
In respect of this year’s operational performance
shareholders received in March 2010 an interim fully franked
dividend of 2 cents per share. Following the release of the
full year’s results the Director’s declared a final fully franked
dividend of 3 cents per share, paid to shareholders on 27
September 2010. This year’s total distribution to shareholders
of a 5 cent per share dividend is the third consecutive year of
consistent dividend distribution.
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KEY INDICATORS FROM CONTINUING OPERATIONS
KEY INDICATORS FROM CONTINUING OPERATIONS
KEY INDICATORS FROM CONTINUING OPERATIONS
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KEY INDICATORS FROM CONTINUING OPERATIONS
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OUR
BUSINESS
1. CORE MARkET FOCUS
3. ENERGY UTILITIES
Our core business is the delivery of proprietary customer
care, meter data management and billing software solutions
to the energy and telecommunications industry coupled with
an optional full scale outsourcing service.
2. MARkET DIFFERENTIATION
We compete on the international market with the worlds
largest software houses. These competitors commonly target
the delivery of full enterprise solutions through systems
integrators world wide.
We on the other hand differentiate ourselves by:
• Focusing on selected geographies where we may most
readily deliver our solutions on budget and on time
• Specialising in the provision of “best of breed” applications
that deliver the specific solution required by our customers.
• Commonly working directly with our customers with a
“hands on” and collaborative approach to delivering the
optimum outcome for their project
• Being large enough with a strong installed customer
base to provide the highest level of confidence for our
customers but while retaining a more flexible product
and management accessible approach than our
“hands off” competition.
• Offering to most of our customers the option of a fully
outsourced facility managed solution service
• Utilising our historical telecommunications product
history we deliver solutions to both Energy and Telco
customers which offer enhanced rating flexibility for the
increasing demand for complex, flexible and multi level
billing solutions.
We are positioned in our selected geographies as the flexible
alternative provider of best of breed solutions in our areas of
core business focus.
The Electricity industry, from the perspective of our core
business, continues to be strongly focused world wide on
initiatives associated with Smart Grid optimisation and the
associated roll out of automated interval/smart meters.
These changes are a direct response to environmental
and related political pressures requiring the optimisation
of raw material resource utilisation. To modify energy
consumption the industry requires tools by which they
may be able to influence and change energy usage patterns.
The introduction of time of use smart meters offers
electricity retailers, among other things, the opportunity to
introduce flexible rating tables to incentivise customers so
that the peaks of energy consumption may be lowered and
consumption of electricity optimised.
Changes in the way the electricity participants bill their
customers requires the software solutions we provide as
part of our core business to adapt to the dramatically
increased data volumes which result and offer the flexibility
in the rating tables which the competitive electricity industry
participants will require.
The shift towards enhanced metering technology is also
spreading into the gas and water industries but at a different
rate and with different economic drivers substantiating the
speed of change.
The environmental and political drivers behind these
initiatives are real. The technology required by this change
is substantially available and rapidly evolving further. However
the timing of the roll-out of these initiatives does have some
limitations. The Capital cost involved is considerable and
at this stage many industry participants are struggling to
understand where the return on investment will be generated.
Further more some of the political forces pushing these
changes are beginning to realise that variable rating patterns
may disadvantage certain sectors of the community and they
are imposing moratoriums on the introduction of variable
billing changes pending further community consultation.
Never the less the introduction of advanced metering
technologies is inevitable and they will require changes to and
enhancement of billing software.
We have developed the solution which will handle the volumes
of data required and we have the flexibility in our rating tables
that our customers will demand.
We are not just ready for these fundamental changes, we are
already there with four implementations of interval meter
solutions in operation this year.
4. TELECOMMUNICATIONS
THE FUTURE
The provision of software billing solutions to the
Telecommunications industry is the historical foundation
of the Hansen billing solution suite of products. We have
a long history of delivering reliable, market ready Telco
solutions and application support services.
The Mobile phone market is experiencing universal pain in
the ongoing need to reduce customer churn and be more
competitive. Legacy systems make it difficult to adapt to
changing demands for ever increasing complexity in tariff
and pricing models in order to attract new customers as
well as retain existing ones. The Hansen HUB solution is
highly configurable, enabling new and novel packages to
be launched with ‘speed-to-market’ in mind.
Building off the back of our recent successful implementations
we are taking measured steps to market our Telco solution
into selected geographies.
The Telecommunications industry, whilst a mature market,
is serviced by a number of fragmented software solution
providers. We have identified and are pursuing opportunities
for Hansen to acquire alternative Telco solution providers
which would extend our product range, expand our
geographic markets and drive economies of scale benefits.
5. SUpERANNUATION
We continue to evolve and develop the CLASSIC superannuation
membership administration solution on behalf of a select
group of key superannuation fund managers. In our 22nd
year of supporting this application we are converting the
product to a client server environment. We are optimistic
this will represent a significant step forward for the current
users and open opportunities for additional super funds to
utilise this first class member administration solution.
6. OUTSOURCING
With a large internal demand for IT development capacity and
with a full service approach offering to our customers we run
and operate a 24*7 IT department incorporating a first grade
data centre and facilities management operation. As a natural
business progression we offer a full range of IT service to
customers who are in need of varying degrees of outsourced
support. This business unit represents a valuable contribution
to our Company’s market differentiation and is a strong
contributor to our overall business performance.
In recognition of a limited supply of outsourced data centre
capacity in Australia we intend this year to invest in increasing
the energy supply to our Melbourne based data centre. This
initiative will deliver a substantially increased capacity for
growth in our provision of outsourced facilities management
services to existing customers as well as our ability to attract
additional customers.
We have an outstanding team of world leading industry experts
and our products are positioned in industries undergoing
fundamental structural and operational change which we
are ideally situated to service. We have a clearly defined
market differentiation which we believe is valued by existing
and prospective customers.
In addition, we have the strength of balance sheet to drive
our organic growth objectives as well as our acquisitive
growth aspirations.
In the coming year we will be focusing on:
Deriving return on our investment in our product suite as
smart meter and smart grid initiatives gain momentum
Expanding our direct sales force, partnering relationships
and marketing focus into selected international markets
Continuing to pursue efficiencies in our software
development processes and project delivery practises
Expanding the level of thought leadership activities we
provide to our existing as well as prospective customers
Pursuing compatible acquisition opportunities in IT with
businesses in possession of intellectual property in software
solutions which have a healthy mix of annuity and growth
revenue potential.
We are conscious that the speed of change in our target markets
may be influenced by unpredictable economic and political factors
but we have a solid base of customers with a high level of annuity
business which under pins our financial strength.
Fiscal 2010 was a solid year of consolidation and product
investment. We continue to be quietly optimistic of another
strong year in fiscal 2011.
Finally may we record our appreciation for the continued
support of our shareholders. This past year we are
pleased to have been able to deliver strong growth
in value to our shareholders. We remain absolutely
committed to the objective of growing and improving
the business of Hansen Technologies with the objective
of continuing to enhance shareholder value.
kenneth Hansen
Chairman
Director
30 September 2010
Andrew Hansen
Chief Executive Officer
Director
30 September 2010
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INFORMATION ON
DIRECTORS AND
COMpANY SECRETARY
The qualifications, experience and special responsibilities of each person who has been
a director of Hansen Technologies Ltd at any time during or since the end of the financial
year is provided below, together with details of the Company Secretary as at the year end.
Mr kenneth Hansen
Age 77
Chairman
Chairman since 2000
Non-Executive Director
Mr Andrew Hansen
Age 50
Managing Director & CEO
Managing Director 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.
Andrew has over 30 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 Grant Lister
Age 58
CFO & Company Secretary
CFO since 2002
Company Secretary since 2004
Grant is a qualified Chartered Accountant with more than 30 years experience in
senior financial management roles and over 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 financial aspects of the Hansen Group’s operations throughout the
world. Grant joined the Hansen Group in 2002.
Mr Bruce Adams
Age 50
Non-Executive Director
Director since 2000
Chairman of Audit and
Remuneration Committees
Mr David Osborne
Age 61
Non-Executive Director
Director since 2006
Member of the Audit and
Remuneration Committees
Mr phillip james
Age 60
Non-Executive Director
Director since 2008
Member of the Audit and
Remuneration Committees
Bruce has over 20 years experience
as a commercial lawyer. He has
practiced extensively in the areas of
information technology law, mergers
and acquisitions and has considerable
experience advising listed public
companies. In early 2002, after
more than ten years as a partner of
two Melbourne law firms, Bruce took up
a position as General Counsel of Club
Assist Corporation Pty Ltd, a worldwide
motoring club service provider. Bruce
holds degrees in law and economics
from Monash University.
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 financial management,
taxation and accounting experience
in public practice. David has a long
standing association with Hansen having
been a Board member for some years
prior to the Company’s listing on the
ASX in June 2000.
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.
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No Directors of Hansen Technologies Ltd held any other Directorships of listed companies at any time during the three years prior to 30 June 2010.
DIRECTORS’
REpORT
The Directors present their report together with the financial report of the consolidated
entity consisting of Hansen Technologies Ltd and the entities it controlled, for the
financial year ended 30 June 2010 and Auditor’s report thereon. This financial report
has been prepared in accordance with Australian equivalents of International Financial
Reporting Standards.
pRINCIpAL ACTIVITIES
The principal activities of the consolidated entity during the
financial year were the development, integration and support
of billing systems software for the telecommunications and
utilities (gas, electricity and water) industries. Other activities
undertaken by the consolidated entity include IT outsourcing
services and the development of other specific software
applications. There has been no significant change in the
nature of these activities during the financial year.
RESULTS
The consolidated profit after income tax attributable to the
members of Hansen Technologies Ltd increased by 37%
to $11,139,573 (2009: $8,130,920).
REVIEW OF OpERATIONS
Fiscal 2010 represents the 4th year of consecutive year on year
growth in operational performance for Hansen Technologies
Ltd. The strong performance of the first half year continued
throughout the second half, with the full year’s results
highlighted by:
Operating revenue of $57.8 million, up 6%
Earnings before interest, tax, depreciation and
amortisation (EBITDA)
- $17.2 million, an increase of 20%.
- representing a return on revenue of 30%
After Tax Profit ($11.1 million) representative
of 7.2 cents per share
With an EBITDA to revenue ratio approaching 30%, we are
positioned at the high end of operating performance for an IT
business. Our products are targeted at industries undergoing
technological and structural change which we are ideally suited
to support. We have an excellent customer base with strong
annuity revenue streams. Our balance sheet is strong with a
solid level of cash reserves.
This past year we have made strategic investments in our future:
We have invested substantially in improving our internal
processes to deliver both short and long term efficiencies
in our software development and support activities
Increased our sales and marketing commitment in both
the Energy and Telecommunications industries in our core
geographies as well as investing in new geographies to
generate partnering opportunities
Enhanced our products and services to deliver the
solution requirements of billing systems arising from
the development in energy metering technology and
energy grid optimisation initiatives
Completed the full integration of the Peace Software business
acquired in October 2008 while optimising the Hansen and
Peace Software development methodologies
Advanced our relationships with key existing customers
worldwide resulting in a number of major new projects
being undertaken
We remain as focused on supporting our existing customers
as we are committed to also growing our business through
delivering new software solutions to new customers.
We have once again emerged from the year with a strengthened
balance sheet and accordingly remain positioned to support our
continued objective of growth through prudent acquisitions.
SIGNIFICANT CHANGES IN THE STATE
OF AFFAIRS
DIVIDEND pAID, RECOMMENDED
AND DECLARED
There have been no significant changes in the consolidated
entity’s state of affairs during the financial year.
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 significant in the overall context of
our business and the negotiations reach a level where the
transaction contemplated is confirmed then releases are
made to the ASX in accordance with the Listing rules on
Continuous Disclosure.
No other matters or circumstances have arisen since the end
of the financial year that have significantly affected or may
significantly affect the operations of the consolidated entity,
the results of those operations, or the state of affairs of the
consolidated entity in future financial 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 significant environmental Commonwealth or State
regulations or laws.
A 3 cent per share fully franked final dividend was
declared on 23 August 2010 with payment made on 27
September 2010.
The amount declared has not been recognised as a liability in
the accounts of Hansen Technologies Ltd as at 30 June 2010.
Dividends paid during the year:-
3 cent per share fully franked final dividend paid
2 October 2009
2 cent per share fully franked interim dividend paid
29 March 2010
SHARE OpTIONS
Options over unissued ordinary shares granted by Hansen
Technologies Ltd during or since the end of the financial 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 financial year.
Executives
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 2009
1 July 2010
1 July 2009
1 July 2010
1 July 2009
1 July 2010
1 July 2009
1 July 2009
1 July 2010
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SHARES UNDER OpTION
INSURANCE
Unissued ordinary shares of Hansen Technologies Ltd
under option at the date of this report are as follows:
Grant
Date
Exercise
Date
Expiry
Date
Exercise
price
1 July 2007
1 July 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
1 July 2010
1 July 2013 1 July 2015
$0.580
Total
Number of
Options at Date
of Report
180,000
540,000
610,000
680,000
2,010,000
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
The following ordinary shares of Hansen Technologies Ltd were
issued during or since the end of the financial year as a result of
the exercise of an option:
Date Issued
31 August 2009
31 August 2009
14 September 2009
4 November 2009
4 November 2009
25 August 2010
Total
Number of
Ordinary Shares Issued
Amount paid
per Share
190,000
230,000
75,000
75,000
75,000
260,000
905,000
$0.110
$0.260
$0.110
$0.260
$0.110
$0.265
There are no amounts unpaid on shares issued on exercise of options.
Since the end of the previous financial year, the Company has
paid insurance premiums in respect of Directors’ and Officers’
liability and legal expenses, insurance policies for current and
former Directors and Officers, including Executive Officers of the
Company and Directors, Executive Officers and Secretaries of its
controlled entities. The Directors have not included details of the
nature of the liabilities covered or the amount of the premium
paid in respect of the Directors’ and Officers’ liability and legal
expenses insurance contracts, as such disclosure is 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 financial year and the numbers
of meetings attended by each Director were:
Director
K Hansen
A Hansen
B Adams
D Osborne
P James
Board
Meetings
Audit
Committee
Meetings
Remuneration
Committee
Meetings
A
12
12
12
12
12
B
11
11
11
11
12
A
-
-
3
3
3
B
-
-
3
3
3
A
-
-
1
1
1
B
-
-
1
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.
Directors’ relevant
interests in:
Ordinary Shares of
Hansen Technologies Ltd
Options over Shares in
Hansen Technologies Ltd
K Hansen
A Hansen
B Adams
D Osborne
P James
93,784,600
5,846,174
215,520
301,802
-
-
-
-
-
-
INDEMNIFICATION AND INSURANCE OF
DIRECTORS, OFFICERS AND AUDITORS
INDEMNIFICATION
The Company has agreed to indemnify all of the current and
former Directors and Officers of the Company and its controlled
entities against all liabilities to another person (other than
the Company or a related body corporate) that may arise from
their position as Directors and Officers of the Company and its
controlled entities, except where the liability arises out of
conduct involving a lack of good faith. The agreement stipulates
that the Company will meet the full amount of any such liabilities,
including costs and expenses. The Company has not entered into
any agreement to indemnify its Auditors against any claims that
might be made by third parties arising from their report on the
annual financial report.
DIRECTORS’ INTERESTS IN CONTRACTS
REMUNERATION REpORT
Directors’ interests in contracts with the Company are limited
to the provision of leased premises on arms length terms and
are disclosed in note 23 to the financial 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 financial year is provided with this report.
NON-AUDIT SERVICES
Non-audit services are approved by resolution of the Audit
Committee and approval is provided in writing to the Board
of Directors. Non-audit services provided by the Auditors of
the consolidated entity during the year, Pitcher Partners, and
their affiliates, are detailed below. The Directors are satisfied
that the provision of the non-audit services during the year
by the Auditor is compatible with the general standard of
independence for Auditors imposed by the Corporations
Act 2001.
Amounts paid or payable to an Auditor for non-audit services
provided during the year by the Auditor to any entity that is part
of the consolidated entity for:
REMUNERATION pOLICIES
The Remuneration Committee is responsible for making
recommendations to the Board on remuneration policies
and packages applicable to the Board members and Senior
Executives of the Company. The remuneration policy is to ensure
the remuneration package properly reflects the person’s duties
and responsibilities and that the remuneration is competitive
in attracting, retaining and motivating people of the highest
quality. Executive Directors and Senior Executives may receive
bonuses and options at the absolute discretion of the Directors.
All bonuses are subject at a minimum to the achievement of
specified key performance indicators which vary from executive
to executive but are all targeted at enhanced operating
performance and agreed corporate objectives. Options issued
are conditional upon the group achieving budgeted performance
levels for the year of issue and are further subject to continuous
employment through to the third anniversary of the issue date.
Non-Executive Directors do not receive any performance
related remuneration.
The names and positions of each person who held the position
of Director at any time during the financial year are provided
on pages 7 and 8 of this report. The other key management
personnel in the consolidated group for the financial year are:
Consolidated
EXECUTIVES
pOSITION
2010
$’000
2009
$’000
C Hunter
Chief Operations Officer
G Lister
D Meade
G prior
S Weir
Chief Financial Officer & 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
29
22
51
9
36
45
96
43
18
61
20
18
38
99
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DIRECTORS’ AND EXECUTIVES’ REMUNERATION
2010
Short-Term Employee Benefits
post-
Employment
Benefits
Cash
Bonus
Non-
Monetary
$
-
$
-
Directors
K Hansen
A Hansen
B Adams
D Osborne
P James
Executives
C Hunter
G Lister
D Meade
G Prior
S Weir
Salary
Fees
$
70,648
455,619
211,009
37,037
37,037
146,789
-
-
-
747,130
211,009
183,486
241,557
203,776
210,204
163,959
36,697
36,697
36,697
23,356
26,399
Directors
K Hansen
A Hansen
B Adams
D Osborne
P James
Executives
C Hunter
G Lister
D Meade
G Prior
(began 17 Feb 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
-
$
-
-
-
-
-
-
-
16,703
-
-
-
$
-
-
-
-
-
-
-
17,648
-
-
-
1,002,982
159,846
1,750,112
370,855
16,703
16,703
2009
Short-Term Employee Benefits
post-
Employment
Benefits
Cash
Bonus
Non-
Monetary
Share-
Based
Benefits
Options
Issued
Other Long-
Term Benefits
Other Benefits
$
-
-
-
-
-
-
6,175
6,175
6,175
3,293
3,293
25,111
25,111
$
-
-
-
-
-
-
-
-
-
-
-
-
-
Share-
Based
Benefits
Options
Issued
Other Long-
Term Benefits
Other Benefits
$
-
-
-
-
-
-
6,836
6,836
6,836
Super
$
-
50,000
3,333
3,333
13,211
69,877
19,817
25,043
20,642
6,481
7,385
79,368
149,245
Super
$
-
50,000
3,333
3,333
39,152
95,818
19,817
49,047
19,876
Total
$
70,648
716,628
40,370
40,370
160,000
1,028,016
246,175
326,175
267,290
243,334
201,036
1,284,010
2,312,026
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 performance
Related
Options as %
of Total
%
-
29%
-
-
-
21%
17%
13%
16%
11%
15%
14%
17%
%
-
-
-
-
-
-
3%
2%
2%
1%
2%
2%
1%
Total performance
Related
Options as %
of Total
%
-
29%
-
-
-
22%
21%
17%
21%
-
16%
17%
19%
%
-
-
-
-
-
-
3%
2%
3%
-
2%
2%
1%
$
-
-
-
-
-
-
-
-
-
-
-
-
-
S Weir
182,744
30,800
823,781
173,003
1,453,175
372,544
17,648
17,648
2,517
-
4,112
95,369
191,187
3,646
24,154
24,154
In accordance with the remuneration policy, options granted as remuneration are subject to continuing service with the
Company. 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.
2010
Short-Term Employee Benefits
Benefits
Benefits
Term Benefits
post-
Employment
Share-
Based
Other Long-
Cash
Bonus
Non-
Monetary
Options
Super
Issued
Other Benefits
Total performance
Options as %
Related
of Total
Directors
K Hansen
A Hansen
B Adams
D Osborne
P James
Executives
C Hunter
G Lister
D Meade
G Prior
S Weir
Directors
K Hansen
A Hansen
B Adams
D Osborne
P James
Executives
C Hunter
G Lister
D Meade
$
-
-
-
-
$
-
-
-
-
Salary
Fees
$
70,648
37,037
37,037
146,789
183,486
241,557
203,776
210,204
163,959
Salary
Fees
$
70,648
37,037
37,037
52,753
455,619
211,009
747,130
211,009
16,703
36,697
36,697
36,697
23,356
26,399
1,002,982
159,846
1,750,112
370,855
16,703
16,703
431,919
199,541
629,394
199,541
174,312
207,846
174,976
45,872
50,459
45,872
17,648
$
-
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
-
$
-
50,000
3,333
3,333
13,211
69,877
19,817
25,043
20,642
6,481
7,385
79,368
149,245
$
-
50,000
3,333
3,333
39,152
95,818
19,817
49,047
19,876
6,175
6,175
6,175
3,293
3,293
25,111
25,111
$
-
-
-
-
-
-
$
-
-
-
-
-
-
6,836
6,836
6,836
G Prior
(began 17 Feb 09)
83,903
-
2,517
-
S Weir
182,744
30,800
823,781
173,003
1,453,175
372,544
17,648
17,648
4,112
95,369
191,187
3,646
24,154
24,154
Total
$
70,648
716,628
40,370
40,370
160,000
1,028,016
246,175
326,175
267,290
243,334
201,036
1,284,010
2,312,026
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
$
-
-
-
-
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
-
-
-
-
29%
%
-
-
-
-
21%
17%
13%
16%
11%
15%
14%
17%
29%
%
-
-
-
-
22%
21%
17%
21%
-
16%
17%
19%
%
-
-
-
-
-
-
3%
2%
2%
1%
2%
2%
1%
%
-
-
-
-
-
-
3%
2%
3%
-
2%
2%
1%
2009
Short-Term Employee Benefits
Benefits
Benefits
Term Benefits
post-
Employment
Share-
Based
Other Long-
Cash
Bonus
Non-
Monetary
Super
Other Benefits
Options
Issued
Total performance
Options as %
Related
of Total
COMpENSATION OpTIONS: GRANTED AND VESTED DURING THE YEAR
During the financial year, options previously granted to key management personnel vested upon the third year anniversary
of their issue date. In addition, during the financial year the Company granted options over unissued ordinary shares to the
following key management personnel of the Company as part of their remuneration.
Vested During
the Year
During the
Year Granted
Grant
Date
Value per
Option at
Grant Date
Exercise
price
Vesting
Date
Last
Exercise
Date
Terms and Conditions For Each Grant
Specified Executives
C Hunter (Chief Operations Officer)
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 2009
75,000
1 July 2009
75,000
1 July 2009
40,000
1 July 2009
40,000
1 July 2009
$0.410
$0.410
$0.410
$0.410
$0.410
$0.410
1 July 2012
1 July 2014
$0.410
1 July 2012
1 July 2014
$0.410
1 July 2012
1 July 2014
$0.410
1 July 2012
1 July 2014
$0.410
1 July 2012
1 July 2014
Total
225,000
305,000
All grants of options are subject to the achievement of performance measurements for the year of issue. Subject to continuation
of employment criteria, options vest 3 years after issue date. If the vesting criteria are not met the options may be forfeited
at the discretion of the Directors. Vested options expire after two years or 28 days after termination of employment.
NUMBER OF OpTIONS HELD BY kEY MANAGEMENT pERSONNEL
Specified Executives
C Hunter (Chief Operations Officer)
G Lister (CFO & Company Secretary)
D Meade (Client Services Manager)
Balance
30 june
2009
300,000
300,000
300,000
G Prior (General Manager, North America)
-
S Weir (General Manager, Europe)
Total
40,000
940,000
Granted as
Remuneration
Options
Exercised
Options
Forfeited
75,000
150,000
75,000
150,000
75,000
150,000
40,000
40,000
-
-
305,000
450,000
-
-
-
-
-
-
Balance
30 june
2010
225,000
225,000
225,000
40,000
80,000
795,000
Vested at 30 june 2010
Total
Exercisable
Un-exercisable
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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VALUE OF OpTIONS GRANTED AS REMUNERATION THAT HAVE BEEN EXERCISED OR
LApSED DURING THE FINANCIAL YEAR:
Specified Executives
C Hunter
G Lister
D Meade
G Prior
S Weir
Total
Balance
1 july 2009
Value
Granted
Value
Exercised
Value
Lapsed
Balance
30 june 2010
27,256
27,256
27,256
-
3,646
85,414
6,175
6,175
6,175
3,293
3,293
11,604
11,604
11,604
-
-
25,111
34,812
-
-
-
-
-
-
21,827
21,827
21,827
3,293
6,939
75,713
ROUNDING OF AMOUNTS
The amounts contained in the report and in the financial report have been rounded to the nearest $1,000 (where rounding is
applicable) under the option available to the Company under ASIC Class Order 98/0100. The Company is an entity to which the
Class Order applies.
Signed in accordance with a resolution of the Directors:
kenneth Hansen
Director
30 September 2010
Andrew Hansen
Director
30 September 2010
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 2010, 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 2010
pITCHER pARTNERS
Melbourne
Liability limited by a scheme approved under Professional Standards Legislation
Pitcher Partners, including Johnston Rorke, is an association of independent firms
Melbourne | Sydney | Perth | Adelaide | Brisbane
An independent member of Baker Tilly International
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16
2010 FINANCIAL
STATEMENTS AND NOTES
CONTENTS
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
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
23
52
53
65
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2
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CONSOLIDATED STATEMENT OF COMpREHENSIVE INCOME
FOR YEAR ENDED 30 jUNE 2010
Note
Revenue from ongoing operations
Other revenues
Total revenues
Employee expenses
Depreciation and amortisation expenses
Property and operating rental expenses
Contractor and consultant expenses
Software licence expenses
Hardware and software expenses
Travel expenses
Communication expenses
Professional expenses
Other expenses
Total expenses
profit before income tax
Income tax expense
profit after income tax from ongoing operations
Other comprehensive income
Exchange difference on translation of foreign operations
Other comprehensive income for the year
Total comprehensive income for the year attributable to members of the parent
Basic earnings per share for ongoing operations
Total basic earnings per share
Diluted earnings per share for ongoing operations
Total diluted earnings per share
4
4
5
5
5
6
Consolidated Entity
2010
$’000
57,766
1,020
58,786
2009
$’000
54,298
2,039
56,337
(29,384)
(29,045)
(3,913)
(2,318)
(1,757)
(106)
(2,882)
(1,308)
(698)
(448)
(1,890)
(44,704)
14,082
(2,942)
11,140
94
94
11,234
(4,258)
(2,485)
(1,350)
(309)
(3,021)
(1,421)
(741)
(926)
(1,823)
(45,379)
10,958
(2,827)
8,131
(22)
(22)
8,109
Note
20
20
Cents per
Share
Cents per
Share
7.2
7.2
7.2
7.2
5.3
5.3
5.3
5.3
This consolidated statement of comprehensive income is to be read in conjunction with the notes to the financial statements
set out on pages 23 to 50.
CONSOLIDATED STATEMENT OF FINANCIAL pOSITION
AS AT 30 jUNE 2010
Note
Current Assets
Cash and cash equivalents
Receivables
Other current assets
Total Current Assets
Non-Current Assets
Plant, equipment & leasehold improvements
Intangible assets
Deferred tax assets
Total Non-Current Assets
Total Assets
Current Liabilities
Payables
Current tax payable
Provisions
Unearned income
Total Current Liabilities
Non-Current 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
8
9
10
11
12
6
13
6
14
14
15
16(a)
16(b)
16(c)
Consolidated Entity
2010
$’000
23,450
8,178
2,817
34,445
3,441
27,497
1,075
32,013
66,458
4,350
1,526
4,680
5,547
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
16,103
15,581
458
458
16,561
49,897
48,715
(407)
200
1,389
49,897
887
887
16,468
45,823
48,199
(501)
166
(2,041)
45,823
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This consolidated statement of financial position is to be read in conjunction with the notes to the financial statements
set out on pages 23 to 50.
CONSOLIDATED STATEMENT OF CHANGES IN EqUITY
FOR THE YEAR ENDED 30 jUNE 2010
Note
Contributed Equity
$’000
Reserves
$’000
Retained Earnings
$’000
Total Equity
$’000
Consolidated Entity
48,199
(335)
Balance as at 1 july 2009
Profit for the year
Exchange differences on translation of foreign operations
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Employee share plan
Options exercised
Value attributed to employee share options issued
Capital issued under dividend reinvestment plan
Share buy back
Dividends paid
Total transactions with owners in their capacity as owners
15
15
15
15
7
-
-
-
130
117
-
308
(39)
-
516
Balance as at 30 june 2010
15 & 16
48,715
-
94
94
-
-
34
-
-
-
34
(207)
(2,041)
11,140
-
11,140
-
-
-
-
-
(7,710)
(7,710)
1,389
45,823
11,140
94
11,234
130
117
34
308
(39)
(7,710)
(7,160)
49,897
Note
Contributed Equity
$’000
Reserves
$’000
Retained Earnings
$’000
Total Equity
$’000
Consolidated Entity
Balance as at 1 july 2008
Profit for the year
Exchange differences on translation of foreign operations
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Employee share plan
Options exercised
Value attributed to employee share options issued
Capital issued under dividend reinvestment plan
Share buy back
Dividends paid
Total transactions with owners in their capacity as owners
15
15
15
15
7
47,916
-
-
-
126
21
-
188
(52)
-
283
Balance as at 30 june 2009
15 & 16
48,199
(342)
-
(22)
(22)
-
-
29
-
-
-
29
(335)
(5,588)
8,131
-
8,131
-
-
-
-
-
(4,584)
(4,584)
(2,041)
41,986
8,131
(22)
8,109
126
21
29
188
(52)
(4,584)
(4,272)
(45,823)
This consolidated statement of changes in equity is to be read in conjunction with the notes to the financial statements
set out on pages 23 to 50.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 jUNE 2010
Note
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Income tax paid
Net cash provided by operating activities
17(a)
Cash flows from investing activities
Payment for acquisition of business
Payment for plant and equipment
Payment for capitalised research and development
Net cash used in investing activities
Cash flows from financing activities
Proceeds from share issue
Payments for share buy back
Proceeds from options exercised
Dividends paid net of dividend re-investment
Net cash used in financing 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
15
15
15
8
Consolidated Entity
2010
$’000
60,509
(44,136)
615
(4,566)
12,422
-
(1,212)
(1,103)
(2,315)
130
(39)
117
(7,383)
(7,175)
2,932
20,518
23,450
This consolidated statement of cash flows is to be read in conjunction with the notes to the financial statements
set out on pages 23 to 50.
2009
$’000
60,901
(46,048)
927
(3,230)
12,550
(7,465)
(1,134)
(1,003)
(9,602)
126
(52)
21
(4,396)
(4,301)
(1,353)
21,871
20,518
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NOTES TO THE
FINANCIAL STATEMENTS
CONTENTS
Note
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
Statement of Significant Accounting Policies
24-27
Critical Accounting Estimates and Judgements
Financial Risk Management
Revenue
Profit from Continuing Operations
Income Tax
Dividends
Cash and Cash Equivalents
Receivables
Other Current Assets
Plant, Equipment and Leasehold Improvements
Intangibles
Payables
Provisions
27
28-29
30
30
31-32
33
33
33
34
34
35
35
36
Contributed Equity
37-39
Reserves and Retained Earnings
Cash Flow Information
Business Combinations
Commitments and Contingencies
Earnings Per Share
39
40
41
42
43
Directors’ and Executives’ Equity Holdings
43-45
Auditor’s Remuneration
Related Party Disclosures
Parent Entity Details
Segment Information
Subsequent Events
45
46
47
48-50
50
1. STATEMENT OF SIGNIFICANT
ACCOUNTING pOLICIES
(a) Basis of preparation of the
financial report
This financial report is a general purpose financial
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.
COMpLIANCE WITH IFRS
Australian Accounting Standards include Australian equivalents
to International Financial Reporting Standards. Compliance
with Australian equivalents to International Financial Reporting
Standards ensures compliance with International Financial
Reporting Standards (IFRSs).
The financial report covers 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 financial report was authorised for issue by
the Directors on 30 September 2010.
The following is a summary of material accounting
policies adopted by the consolidated entity in the
preparation and presentation of the financial report.
The accounting policies have been consistently
applied, unless otherwise stated.
HISTORICAL COST CONVENTION
The financial report has been prepared under the historical
cost convention.
(b) principles of consolidation
The consolidated financial statements are those of the
consolidated entity, comprising the financial statements of the
parent entity and of all entities, which the parent has the power
to control the financial and operating policies of, so as to obtain
benefits from its activities.
The financial statements of subsidiaries are prepared for the
same reporting period as the parent entity, using consistent
accounting policies.
All inter-company balances and transactions, including
any unrealised profits or losses have been eliminated on
consolidation.
(c) Revenue
Revenue from the sale of goods is recognised when the
significant risks and rewards of ownership of the goods have
passed to the buyer and the costs incurred or to be incurred in
respect of the transaction can be measured reliably. Risks and
rewards of ownership are considered passed to the buyer at the
time of delivery of the goods to the customer. Revenue from the
provision of services to customers is recognised upon delivery
of the service to the customer.
Interest revenue is recognised on a proportional basis taking
into account the interest rates applicable to the financial assets.
All revenue is stated net of the amount of goods and services
tax (GST).
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(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 financial institutions.
(e) plant, equipment &
leasehold improvements
COST AND VALUATION
All classes of plant, equipment and leasehold improvements
are stated at cost less depreciation.
GOODWILL
Goodwill represents the excess of the cost of an acquisition
over the fair value of the consolidated entity’s share of net
identifiable assets of the acquired entities at the date
of acquisition.
Goodwill is not amortised but is tested annually for impairment,
or more frequently if events or changes in circumstances
indicate that it might be impaired. Goodwill is carried at cost
less accumulated impairment losses.
DEpRECIATION
TRADEMARk AND LICENCES
Trademark and licences are recognised at cost and are
amortised over their estimated useful lives, which range
from 5 to 10 years. 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
technical feasibility studies identify that the project will deliver
future economic benefits and these benefits can be measured
reliably. Capitalised development expenditure is stated at cost
less accumulated amortisation. Amortisation is calculated
using a straight-line method to allocate the cost of the
intangible asset over its estimated useful life commencing
when the intangible asset is available for use.
Other development expenditure is recognised as an expense
when incurred.
(h) Impairment
Assets with an indefinite useful life are not amortised but are
tested annually for impairment in accordance with AASB 136.
Assets subject to annual depreciation or amortisation are
reviewed for impairment whenever events or circumstances
arise that indicate that the carrying amount of the asset may
be impaired. An impairment loss is recognised where the
carrying amount of the asset exceeds its recoverable amount.
The recoverable amount of an asset is defined as the higher
of its fair value less costs to sell and value in use.
The depreciable amounts of all fixed assets are depreciated
on a straight-line basis over their estimated useful lives
commencing from the time the asset is held ready for use.
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:
2010
2009
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 classified at their inception as either operating
or finance leases based on the economic substance of the
agreement so as to reflect the risks and benefits incidental
to ownership.
FINANCE LEASES
Leases of fixed assets, where substantially all of the risks
and benefits incidental to ownership of the asset, but not the
legal ownership, are transferred to the consolidated entity are
classified as finance leases. Finance leases are capitalised,
recording an asset and liability equal to the present value
of the minimum lease payments, including any guaranteed
residual values. The interest expense is calculated using the
interest rate implicit in the lease and is included in finance
costs in the statement of comprehensive income.
Leased assets are depreciated on a straight line basis over
their estimated useful lives when it is likely the consolidated
entity will obtain ownership of the asset, or over the term
of the lease. Lease payments are allocated between the
reduction of the lease liability and the lease interest expense
for the period.
OpERATING LEASES
Lease payments for operating leases are recognised as an
expense on a straight line basis over the term of the lease.
(i) Income tax
Current income tax expense or revenue is the tax payable on
the current period’s taxable income based on the applicable
income tax rate adjusted by changes in deferred tax assets
and liabilities.
A balance sheet approach is adopted under which deferred tax
assets and liabilities are recognized for temporary differences
between the tax bases of assets and liabilities and their
carrying amounts in the financial statements. No deferred
tax asset or liability is recognised in relation to temporary
differences arising from the initial recognition of an asset or
a liability if they arose in a transaction, other than a business
combination, that at the time of the transaction did not affect
either accounting profit or taxable profit or loss.
Deferred tax assets are recognised for temporary differences
and unused tax losses only when it is probable that future
taxable amounts will be available to utilize 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 profit before
tax of the tax consolidated group.
(j) provisions
Provisions are recognised when the consolidated entity has
a legal or constructive obligation, as a result of past events,
for which it is probable that an outflow of economic benefits
will result and that outflow can be reliably measured.
(k) Employee benefits
Liabilities arising in respect of wages and salaries, annual
leave, long service leave and any other employee benefits
expected to be settled within twelve months of the reporting
date are measured at their nominal amounts based on
remuneration rates which are expected to be paid when
the liability is settled. All other employee benefit liabilities
are measured at the present value of the estimated future
cash outflow to be made in respect of services provided by
employees up to the reporting date.
DEFINED CONTRIBUTION SUpERANNUATION pLAN
The consolidated entity makes contributions to defined
contribution superannuation plans in respect of employee
services rendered during the year. These superannuation
contributions are recognised as an expense in the same
period when the employee services are received.
SHARE-BASED pAYMENTS
The consolidated entity operates an employee share option plan
and an employee share scheme. The fair value of the options
to which employees become entitled is measured at grant date
and recognised as an expense over the vesting period, with a
corresponding increase to an equity account. The fair value of
shares is ascertained as the market bid price. The number of
shares and options expected to vest is reviewed and adjusted at
each reporting date such that the amount recognised for services
received as consideration for the equity instruments granted shall
be based on the number of equity instruments that eventually vest.
(l) Financial instruments
CLASSIFICATION
The consolidated entity classifies its financial instruments in
the following categories: loans and receivables and financial
liabilities. The classification depends on the purpose for which
the investments were acquired. Management determines the
classification of its financial 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.
(m) Foreign currencies translations
and balances
FUNCTIONAL AND pRESENTATION CURRENCY
The financial statements of the entities in the consolidated
group are measured using the currency of the primary
economic environment in which that entity operates.
The consolidated financial statements are presented in
Australian dollars which is the consolidated entity’s functional
and presentation currency.
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TRANSACTIONS AND BALANCES
Transactions in foreign currencies of entities within the
consolidated group are translated into functional currency
at the rate of exchange ruling at the date of the transaction.
Foreign currency monetary items that are outstanding at the
reporting date (other than monetary items arising under foreign
currency contracts where the exchange rate for that monetary
item is fixed in the contract) are translated using the spot rate
at the end of the financial year.
Resulting exchange differences arising on settlement or
re-statement are recognised as revenues and expenses
for the financial year.
Entities that have a functional currency different to the
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.
(n) Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the
amount of GST, except where the amount of GST incurred is
not recoverable from the Tax Office. In these circumstances
the GST is recognised as part of the acquisition of the asset or
as part of an item of the expense. Receivables and payables in
the statement of financial position are shown inclusive of GST.
Cashflows are presented in the statement of cashflows on
a gross basis, except for the GST component of investing
and financing activities, which are disclosed as operating
cashflows.
(o) Comparatives
Where necessary, comparative information has been
reclassified and repositioned for consistency with current
year disclosures.
(p) Rounding amounts
The parent entity and the consolidated entity have applied
the relief available under ASIC Class Order CO 98/0100 and
accordingly, amounts in the consolidated financial statements
and the Directors’ report have been rounded off to the nearest
thousand dollars, or in certain cases, to the nearest dollar.
(q) 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
2. CRITICAL ACCOUNTING ESTIMATES
AND jUDGEMENTS
The group makes certain estimates and assumptions
concerning the future, which, by definition will seldom
represent actual results. Estimates and assumptions based
on future events have a significant inherent risk, and where
future events are not as anticipated there could be a material
impact on the carrying amounts of the assets and liabilities
discussed below:
(a) Impairment testing of intangible
assets
The intangible assets of goodwill and capitalised software
development are subjected to annual review to assess if their
carrying value has been impaired. This assessment compares
the carrying book value with the recoverable amount of these
assets using value in-use discounted cash flow projection
calculations based on management’s determination of
budgeted cash flow projections and gross margins, past
performance and its expectation for the future. Given the long
term income generating nature of the intangible assets the
valuation applies a discounted value to cash flow over a five
year period plus a terminal value at the end of the period. In
respect of this fiscal year a 14.50% 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 tax
Income tax benefits are based on the assumption that no
adverse change will occur in the income tax legislation and
the anticipation that the group will derive sufficient future
assessable income to enable the benefit to be realised and
comply with the conditions of deductibility imposed by the law.
There has been significant expenditure on research and
development on the HUB billing software in the 2010 year.
Returns are now being derived from this investment,
which comprises the majority of the carried forward losses.
Recognition of the carried forward losses is based upon the
probable future profits of the group.
3. FINANCIAL RISk MANAGEMENT
The consolidated entity is exposed to a variety of financial 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 financial risks.
(a) Interest rate risk
Interest rate risk is the risk that the fair value or future cashflows of a financial instrument will fluctuate as a result of changes in
market interest rates.
The consolidated entity’s exposure to interest rate risk and the effective interest rates of financial assets and financial liabilities,
both recognised and unrecognised at balance date, are as follows:
Financial
Instruments
2010 Financial assets
Cash
Trade and other receivables
Other assets
Financial liabilities
Trade and other payables
2009 Financial assets
Cash
Trade and other receivables
Other assets
Financial liabilities
Trade and other payables
Consolidated Entity
Note
Interest
Bearing
$’000
Non-interest
Bearing
Total Carrying
Amount
Weighted Avg.
Effective Interest
Rate
Fixed / Variable
Rate
$’000
$’000
%
8
9
10
13
8
9
10
13
23,450
-
-
23,450
-
-
20,518
146
-
20,664
-
-
-
8,178
2,817
10,995
4,350
4,350
-
6,870
1,961
8,831
4,096
4,096
23,450
8,178
2,817
34,445
4,350
4,350
20,518
7,016
1,961
29,495
4,096
4,096
5.42%
fixed / variable
4.50%
8.17%
fixed / variable
fixed
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(b) Credit risk exposures
Credit risk is the risk that one party to a financial instrument
will cause a financial loss for the other party by failing to
discharge an obligation.
The maximum exposure to credit risk, excluding the value of
any collateral or other security, at balance date of recognised
financial assets is the carrying amount of those assets, net of
any provisions for impairment of those assets, as disclosed in
the consolidated statement of financial position and notes to
the consolidated financial statements.
Credit risk for derivative financial instruments arises from
the potential failure by counterparties to the contract to meet
their obligations. The credit risk exposure to forward exchange
contracts is the net fair value of these contracts.
The consolidated entity does not have any material credit
risk exposure to any single debtor or group of debtors under
financial instruments entered into by the consolidated entity.
The consolidated entity 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 68% (2009: 61%), Finance Sector 2% (2009: 9%),
Telecommunications 25% (2009: 22%) and Other 5%
(2009: 8%).
(c) Liquidity and foreign exchange risk
Liquidity risk is the risk that an entity will encounter difficulty
in meeting obligations associated with financial liabilities.
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 financial assets and financial liabilities
approximates their carrying amounts as disclosed in the
consolidated statement of financial position and notes to
the consolidated financial statements.
4. REVENUE
Revenues from continuing operations
Revenue from sale of goods and services
Other income from operating activities:
Interest received
Net foreign exchange gains / (losses)
Other income
Total other revenues
Total revenue from continuing operations
Consolidated Entity
2010
$’000
2009
$’000
57,766
57,766
823
(259)
456
1,020
58,786
54,298
54,298
927
1,054
58
2,039
56,337
5. pROFIT FROM CONTINUING OpERATIONS
profit from continuing operations before income tax has been determined after the following specific expenses:
Note
Consolidated Entity
2010
$’000
2009
$’000
Employee benefit expenses
Wages and salaries
Superannuation costs
Share based payments
Total employee benefit expenses
Depreciation of non-current assets
Plant, equipment & leasehold improvements
Total depreciation of non-current assets
Amortisation of non-current assets
Plant and equipment under finance lease
Patents, contracts and software
Research and development
Total amortisation of non-current assets
property and operating rental expenses
Rental charges
Total property and operating rental expenses
11
11
12
12
27,238
2,112
34
29,384
1,287
1,287
12
333
2,281
2,626
2,318
2,318
26,989
2,027
29
29,045
1,434
1,434
14
290
2,520
2,824
2,485
2,485
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6. INCOME TAX
(a) The components of tax expense:
Current tax
Deferred tax
Under / (over) provision in prior years
Total income tax expense
(b) prima facie tax payable
Consolidated Entity
2010
$’000
3,680
(879)
141
2,942
2009
$’000
2,992
(429)
264
2,827
The prima facie tax payable on profit before income tax is reconciled to the income tax expense as follows:
Prima facie income tax payable on profit before income tax at 30%
4,224
3,287
Add/(less) tax effect of:
Research and development allowances
Non deductible share based payments
Current year losses not brought to account
Losses brought forward
Non assessable income
Under / (over) provision in prior years
NZ deferred research and development expenditure utilised
NZ deferred research and development expenditure recognised
Investment allowance
Prior year losses not brought to account
Other non allowable items
Income tax expense attributable to profit
(c) Current tax liability
Current tax relates to the following:
Current tax liabilities / (assets)
Opening balance
Prior year under / (over) provision
Income tax
Tax payments
(92)
10
-
-
(105)
141
(985)
(527)
(24)
(79)
379
2,942
2,270
141
3,680
(4,565)
1,526
(107)
9
15
44
-
264
-
-
(39)
(1,630)
984
2,827
2,244
264
2,992
(3,230)
2,270
(d) Deferred tax
Deferred tax relates to the following:
Deferred tax assets balance comprises:
Difference in depreciation and amortisation of plant and equipment for accounting and income tax purposes
Other payables
Employee benefits
Provisions
Losses available for offset against future taxable income
NZ deferred research and development expenditure recognised
Other
Deferred tax liabilities balance comprises:
Research and development expenditure capitalised
Other income not yet assessable
Net deferred tax
(e) Deferred income tax (revenue) / expense included in income tax expense comprises:
Decrease / (increase) in deferred tax assets
Decrease in deferred tax liabilities
(f) Deferred tax assets not brought to account
Gross capital losses
Gross operating losses
Consolidated Entity
2010
$’000
2009
$’000
24
303
1,193
-
228
527
20
17
341
1,142
2
161
-
43
2,295
1,706
(1,146)
(74)
(1,220)
1,075
(589)
(290)
(879)
2,824
3,172
5,996
(1,499)
(11)
(1,510)
196
15
(444)
(429)
2,824
3,282
6,106
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7. DIVIDENDS
2010
A 3 cent per share fully franked final dividend was paid on 27 September 2010.
The amount paid, $4,652,907 (2009: $4,620,644), has not been recognised as a liability in the accounts of Hansen Technologies
Ltd as at 30 June 2010.
2009
A 3 cent per share fully franked final dividend was paid on 2 October 2009.
A 2 cent per share fully franked interim dividend was paid on 29 March 2010.
Dividends provided for or paid during the year
- 3 cent per share final dividend paid 2 October 2009
- 1 cent per share final dividend paid 17 October 2008
-2 cent per share interim dividend paid 29 March 2010
- 2 cent per share interim dividend paid 26 March 2009
period
2010
$’000
4,621
-
3,089
-
7,710
2009
$’000
-
1,527
-
3,057
4,584
Dividend franking account
30% franking credits, on a tax paid basis, are available to shareholders of
Hansen Technologies Ltd for subsequent financial years
2,201
2,890
The above available amounts are based on the balance of the dividend franking account at year-end adjusted for:
a) franking credits that will arise from the payment of any current tax liability;
b) franking debits that will arise from the payment of any dividends recognised as a liability at year-end;
c) franking credits that will arise from the receipt of any dividends recognised as receivables at year-end;
d) franking credits that the entity may be prevented from distributing in subsequent years
The ability to utilise the franking credits is dependent upon there being sufficient available profits to declare dividends.
8. CASH AND CASH EqUIVALENTS
Current
Cash at bank and on hand
Term deposits
9. RECEIVABLES
Current
Trade receivables
Less: Provision for impairment
Term and sundry debtors
Consolidated Entity
2010
$’000
1,514
21,936
23,450
Consolidated Entity
2010
$’000
7,683
-
7,683
495
8,178
2009
$’000
5,121
15,397
20,518
2009
$’000
6,588
(13)
6,575
441
7,016
10. OTHER CURRENT ASSETS
Current
Prepayments
Accrued revenue
11. pLANT, EqUIpMENT & LEASEHOLD IMpROVEMENTS
Plant, equipment & leasehold improvements, at cost
Accumulated depreciation
Plant and equipment under finance lease, at cost
Accumulated amortisation
Total plant, equipment & leasehold improvements
Consolidated Entity
2010
$’000
1,134
1,683
2,817
Consolidated Entity
2010
$’000
14,686
(11,245)
3,441
3,566
(3,566)
-
3,441
Reconciliations
Reconciliations of the carrying amounts of plant, equipment & leasehold improvements at the beginning and end of the current financial year.
plant, equipment & leasehold improvements
Carrying amount at 1 July 2009
Additions
Disposals
Depreciation expense
Net foreign currency movements arising from foreign operation
Carrying amount at 30 june 2010
plant and equipment under finance lease
Carrying amount at 1 July 2009
Amortisation expense
Carrying amount at 30 june 2010
3,576
1,212
(1)
(1,287)
(59)
3,441
12
(12)
-
2009
$’000
1,089
872
1,961
2009
$’000
16,175
(12,599)
3,576
3,566
(3,554)
12
3,588
3,299
1,740
(31)
(1,434)
2
3,576
26
(14)
12
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12. 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
13. pAYABLES
Current
Trade payables
Other payables
Consolidated Entity
2010
$’000
28,928
(5,249)
23,679
24,724
(20,906)
3,818
27,497
28,928
-
28,928
(4,912)
(333)
(4)
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
(5,249)
(4,912)
23,621
1,103
24,724
(18,625)
(2,281)
(20,906)
Consolidated Entity
2010
$’000
941
3,409
4,350
22,618
1,003
23,621
(16,105)
(2,520)
(18,625)
2009
$’000
863
3,233
4,096
14. pROVISIONS
Current
Employee benefits
Onerous lease*
Other
Non-current
Employee benefits
Onerous lease*
(a) Aggregate employee benefits liability
(b) Number of employees at year end
Reconciliations
Movements in provisions other than employee benefits:
provisions Onerous Lease - current
Carrying amount at beginning of year
Provisions made during the year
Provisions released during the year
Carrying amount at end of year
provisions Onerous Lease - Non current
Carrying amount at beginning of year
Provisions made during the year
Provisions released during the year
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
* The onerous lease arose upon the acquisition of the Peace Software business due to vacant office space not being fully utilised.
Consolidated Entity
2010
$’000
4,253
378
49
4,680
273
185
458
4,526
264
523
-
(145)
378
639
-
(454)
185
207
(158)
49
2009
$’000
4,101
523
207
4,831
248
639
887
4,349
296
-
523
-
523
-
639
-
639
155
52
207
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15. 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
2010
$’000
2009
$’000
48,715
48,199
Consolidated Entity
2010
Number of Shares
2010
$’000
2009
Number of Shares
2009
$’000
b) Movements in shares on issue
Balance at beginning of the financial year
153,575,594
48,199
152,654,389
47,916
Shares issued under dividend reinvestment plan
Shares issued under employee share plan
Options exercised
Share buy back
477,358
216,060
645,000
(77,111)
308
130
117
(39)
580,530
359,982
115,000
(134,307)
188
126
21
(52)
Balance at end of the financial year
154,836,901
48,715
153,575,594
48,199
c) Rights of each type of share
Ordinary shares participate in dividends and the proceeds on
winding up of the parent entity in proportion to the number of
shares held. At shareholders meetings each ordinary share is
entitled to one vote when a poll is called.
d) Share options
Employee share option plan
The Company continues to offer employee participation in
short-term and long-term incentive schemes as part of the
remuneration packages for the employees of the companies.
The Employee Share Option Plan (“the Plan”) was approved by
shareholders at the Company’s annual general meeting on 9
November 2001.
The maximum number of options on issue under the Plan
must not at any time exceed 7.5% of the total number of
ordinary shares on issue at that time.
The Board may issue options under the Plan to any employee
of the Company and its subsidiaries, including Executive
Directors and Non-Executive Directors.
Options will be issued free of charge, unless the Board
determines otherwise. Each option is to subscribe for one
ordinary share and, when issued, the shares will rank equally
with other shares. The options are not transferable. Quotation
of the options on the ASX will not be sought but the Company
will apply to the ASX for official quotation of shares issued
on the exercise of options. Options may be granted subject
to conditions specified by the Board which must be satisfied
before the option can be exercised.
Unless the terms on which an option was offered specified
otherwise, an option may be exercised at any time after the
vesting date. An option may also be exercised in special
circumstances, that is, at any time within six months after the
employee’s death, total and permanent disablement, retirement
or retrenchment. An option lapses 28 days after termination of
the employee’s employment with the Company and, unless the
terms of the offer of the option specify otherwise, lapses five
years after the date upon which it was granted. The Directors
have the discretion to vary the terms of the options as
deemed appropriate.
The exercise price per share for an option will be the amount
determined by the Board at the time of the grant of the option.
There are no voting rights or dividend rights attached to the
options prior to the options being exercised.
Option holders will not be entitled to participate in any new issue
of securities in the Company unless they exercise their options
prior to the record date for the determination of entitlements to
the new issue.
If the Company makes a bonus issue of securities to ordinary
shareholders, each unexercised option will, on exercise, entitle
its holder to receive the bonus securities as if the option had
been exercised before the record date for the bonus issue.
If the Company makes a pro-rata rights issue of ordinary shares
for cash to its ordinary shareholders, the exercise price of
unexercised options may be adjusted to reflect the diluting effect
of the issue.
If there is any reorganisation of the capital of the Company, the
exercise price of the options will be adjusted in accordance with
the Listing Rules.
Since the end of the financial year 680,000 (2009: 610,000)
options have been granted under this scheme.
Grant Date
Consolidated 2010
1 July 2005
1 July 2006
1 July 2007
1 July 2008
1 July 2009
TOTAL
Grant Date
Consolidated 2009
1 July 2004
1 July 2005
1 July 2006
Options issued and not yet exercised at 30 june.
Exercise
Date
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 November 2006
1 Nov 2009
1 Nov 2011
1 July 2008
1 July 2010
1 July 2009
1 July 2011
1 July 2010
1 July 2012
1 July 2011
1 July 2013
1 July 2012
1 July 2014
$0.260
$0.110
$0.110
$0.265
$0.390
$0.410
305,000
265,000
75,000
440,000
540,000
-
-
-
-
-
-
610,000
305,000
265,000
75,000
-
-
-
-
-
-
440,000
540,000
610,000
1,625,000
610,000
645,000
1,590,000
-
-
-
-
-
-
-
Exercise
Date
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 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
$0.180
$0.260
$0.110
$0.110
$0.265
$0.390
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
EMpLOYEE SHARE pLAN
The Employee Share Plan (“ESP”) was approved by
shareholders at the Company’s annual general meeting
on 9 November 2001.
The ESP is available to all eligible employees to acquire
ordinary shares in the Company.
Shares to be issued or transferred under the ESP will be
valued at the volume weighted average share price of shares
traded on the ASX in the ordinary course of trading during
the five business days immediately preceding the day the
shares are issued or transferred to qualifying employees
or participants.
The Board has 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).
To qualify, employees must be full-time or permanent part-time
employees of the Company or any subsidiary of the Company.
Shares issued under the ESP will rank equally in all respects
with all existing shares from the date of allotment.
A participant must not sell, transfer or otherwise dispose
of any shares issued or transferred to the participant under
the ESP until the earlier of:
(a) the end of the period of 3 years (or, if a longer
period is specified by the Board in the offer, the end of
that period) commencing on the date of the issue or transfer
of the shares to the participant; and
(b) the date on which the participant is no longer employed
by the Company or a related body corporate of the Company.
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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
Consolidated Entity
2010
No of Shares
2009
No of Shares
925,370
216,060
(312,585)
828,845
1,212,049
359,982
(646,661)
925,370
The consideration for the shares issued on the 23 April 2010 was 60.16 cents (17 April 2009: 35 cents).
The amounts recognised in the financial statements of the consolidated entity and the Company in relation to
the ESp during the year were:
Current receivables
Issued ordinary share capital
Consolidated Entity
2010
$’000
33
130
2009
$’000
32
126
The market value of ordinary Hansen Technologies Ltd shares closed at $0.565 on 30 June 2010 ($0.42 on 30 June 2009).
16. RESERVES AND RETAINED EARNINGS
Consolidated Entity
Foreign currency translation reserve
Options granted reserve
Accumulated profits (losses)
(a) Foreign currency translation reserve
This reserve is used to record the exchange differences arising on translation of a foreign entity.
Note
16 (a)
16 (b)
16 (c)
Movements in reserve
Balance at beginning of year
Movement during the year
Balance at end of year
(b) Options granted reserve
This reserve is used to record the fair value of options issued to employees as part of their remuneration.
Movements in reserve
Balance at beginning of year
Movement during the year
Balance at end of year
(c) Accumulated profits (losses)
Balance at the beginning of year
Dividends paid
Other comprehensive income
Net profit attributable to members of Hansen Technologies Ltd
Balance at end of year
2010
$’000
(407)
200
1,389
(501)
94
(407)
166
34
200
(2,041)
(7,710)
(94)
11,234
1,389
2009
$’000
(501)
166
(2,041)
(479)
(22)
(501)
137
29
166
(5,588)
(4,584)
22
8,109
(2,041)
17. CASH FLOW INFORMATION
(a) Reconciliation of the net profit / (loss) after tax to net cash flows from operations
Net profit from ordinary activities after income tax
Add / (less) items classified as investing / financing activities:
(Profit) / loss on sale of non-current assets
Add / (less) non cash items:
Amortisation and depreciation
Unrealised foreign exchange
Net cash provided by operating activities before change in assets and liabilities
Changes in assets and liabilities adjusted for effects of purchases and disposal of controlled entities during the year:
(Increase) / decrease in trade debtors
(Increase) / decrease in sundry debtors and other assets
Increase / (decrease) in trade creditors
Increase / (decrease) in other creditors and accruals
Increase/ (decrease) in provisions
(Increase) / decrease in deferred taxes
Increase / (decrease) in income tax payable
Increase / (decrease) in reserves
Net cash provided by operating activities
(b) Reconciliation of cash
Cash at bank
Consolidated Entity
2010
$’000
11,140
(4)
3,913
248
15,297
(1,161)
(856)
255
1,164
(599)
(352)
(1,272)
(54)
12,422
2009
$’000
8,131
30
4,258
-
12,419
4,146
(1,035)
(5,970)
6,175
(2,790)
(429)
26
8
12,550
23,450
20,518
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18. BUSINESS COMBINATIONS
a) 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
2010
$’000
-
-
-
-
-
-
-
2009
$’000
8,317
417
8,734
-
8,734
(1,269)
7,465
Fair Value
$’000
Carrying Amount
on Acquisition
$’000
2009
2009
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.
b) Revenue and profit of peace Software included in consolidated results of the Group in the year of acquisition
Total revenue
profit after income tax
19. COMMITMENTS AND CONTINGENCIES
Lease expenditure commitments
Operating leases (non-cancellable):
Not later than one year
Later than one year and not later than five years
Later than five years
Aggregate lease expenditure contracted for at reporting date
OpERATING LEASES (NON-CANCELLABLE)
period
Consolidated Entity
2010
$’000
1,961
2,598
-
4,559
2009
$’000
16,290
2,374
2009
$’000
2,293
4,367
-
6,660
The consolidated entity leases property under non-cancellable operating leases expiring from one to five 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.
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20. EARNINGS pER SHARE
Reconciliation of earnings used in calculating earnings per share:
Basic earnings - ordinary shares
Diluted earnings - ordinary shares
Weighted average number of ordinary shares used in calculating basic earnings per share:
Number for basic earnings per share - ordinary shares
Number for diluted earnings per share - ordinary shares
Basic earnings per share from continuing operations
Total basic earnings per share
Diluted earnings per share from continuing operations
Total diluted earnings per share
Consolidated Entity
2010
$’000
11,140
11,140
2009
$’000
8,131
8,131
2010
Number
of Shares
2009
Number
of Shares
154,359,555
152,973,482
155,947,884
154,597,002
Cents per Share
Cents per Share
7.2
7.2
7.2
7.2
5.3
5.3
5.3
5.3
CLASSIFICATION OF SECURITIES AS pOTENTIAL ORDINARY SHARES
The securities that have been classified as potential ordinary shares and included in diluted earnings per share only,
are options outstanding under the Employee Share Option Plan.
21. DIRECTORS’ AND EXECUTIVES’ EqUITY HOLDINGS
a) Compensation Options: Granted and vested during the year:
During the financial year, options previously granted to key management personnel vested upon the third year anniversary of their
issue date. In addition, during the financial year the Company granted options over unissued ordinary shares to the following key
management personnel of the Company as part of their remuneration.
Specified Executives
C Hunter (Chief Operations Officer)
G Lister (CFO & Company Secretary)
D Meade (Client Services Manager)
G Prior (General Manager, North America)
S Weir (General Manager, Europe)
Vested
During
the Year
Granted
During
the Year
Grant
Date
Value per
Option at
Grant Date
Exercise
price
Vesting
Date
Last
Exercise
Date
Terms & Conditions for each Grant
75,000
75,000
75,000
-
-
75,000
1 July 2009
75,000
1 July 2009
75,000
1 July 2009
40,000
1 July 2009
40,000
1 July 2009
$0.410
$0.410
$0.410
$0.410
$0.410
$0.410
$0.410
$0.410
$0.410
$0.410
1 July 2012
1 July 2014
1 July 2012
1 July 2014
1 July 2012
1 July 2014
1 July 2012
1 July 2014
1 July 2012
1 July 2014
Total
225,000
305,000
b) Number of options held by key Management personnel:
Balance
30-jun-09
Granted as
Remuneration
Options
Exercised
Options
Forfeited
Balance
30-jun-10
Total
Exercisable Unexercisable
Vested at 30 june 2010
Specified Executives
C Hunter (Chief Operations Officer)
G Lister (CFO & Secretary)
D Meade (Client Services Manager)
G Prior (General Manager, North America)
S Weir (General Manager, Europe)
300,000
300,000
300,000
-
40,000
75,000
75,000
75,000
40,000
40,000
150,000
150,000
150,000
-
-
Total
940,000
305,000
450,000
-
-
-
-
-
-
225,000
225,000
225,000
40,000
80,000
795,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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 2014. 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%,
a continuously compounding risk free interest rate of 5.58%.
a probability factor for the likelihood of the options being exercised based on historical trends of 64%, and
compared the issue price ($0.41 cents per share) with the market price on day of issue ($0.41 cents per share),
to determine a weighted average fair value for the options issued as at grant date of $0.082 cents per option.
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c) Number of shares held by key Management personnel:
Specified Directors
K Hansen (Chairman)
A Hansen (MD & CEO)
B Adams
D Osborne
P James
Specified Executives
C Hunter (Chief Operations Officer)
G Lister (CFO & Company Secretary)
D Meade (Client Services Manager)
G Prior (General Manager, North America)
S Weir (General Manager, Europe)
Balance
30-jun-09
Received as
Remuneration
Options
Exercised
Net Change
Other
Balance
30-jun-10
93,999,585
11,546,174
215,520
268,321
-
277,120
909,949
77,777
-
-
107,294,446
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(214,985)
93,784,600
(5,700,000)
5,846,174
-
21,243
-
215,520
289,564
-
150,000
150,000
150,000
-
-
2,038
429,158
-
1,059,949
(223,338)
4,439
-
-
-
-
450,000
(6,115,042)
101,629,404
22. AUDITOR’S REMUNERATION
Audit services:
Amounts received or due and receivable by the Auditors of the Company for:
Australia
- an audit and review of the financial report of the entity and any other entity in the consolidated entity
Overseas Firms
- audit and review of financial reports
Other financial services:
Australia
- tax related services
- advisory services
Overseas Firms
- tax related services
- advisory services
Consolidated Entity
2010
$’000
2009
$’000
179
122
301
29
22
51
9
36
45
96
205
139
344
43
18
61
20
18
38
99
Total Auditor’s remuneration
397
443
23. RELATED pARTY DISCLOSURES
a) The consolidated financial statements include the financial 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 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
2010
%
2009
%
Australia
Australia
Australia
Australia
Australia
New Zealand
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)
(i)
(i)
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Notes: (i) Merged into Peace Software New Zealand Limited, a New Zealand registered Company and subsidiary of Hansen Technologies Limited, on 30 June 2010.
b) The following provides the total amount of transactions
that were entered into with related parties for the
relevant financial year:
Transactions with key management personnel
of the entity or its parent and their personally
related entities
The terms and conditions of the transactions with Directors
and their Director-related entities were no more favourable
than those available, or which might reasonably be expected
to be available, on similar transactions to non-Director
related entities on an arm’s length basis.
The following table provides the total amount of transactions
that were entered into with related parties for the relevant
financial year:
K Hansen
- Lease Rental Payments
Consolidated Entity
2010
$
2009
$
819,218
794,616
LEASE RENTAL pAYMENTS
Mr K Hansen has, through entities with which he is 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 2010
were $137,581 and $681,637 respectively (2009: $134,777
and $659,839 respectively).
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24. pARENT ENTITY DETAILS
Summarised presentation of the parent entity, Hansen Technologies Ltd, financial statements:
(a) Summarised statement of financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Retained earnings
Share based payments reserve
Total equity
(b) Summarised statement of comprehensive income
Profit for the year
Other comprehensive income for the year
Total comprehensive income for the year
(c) parent entity guarantees
Hansen Technologies Ltd, being the parent entity, has not entered into any guarantees in relation to debts of its subsidiaries.
parent Entity
2010
$’000
2009
$’000
69
44,542
44,611
1,487
3,821
5,308
39,303
48,715
(9,612)
200
39,303
4,641
-
4,641
65
48,669
48,734
2,657
4,257
6,914
41,820
48,199
(6,545)
166
41,820
4,597
-
4,597
25. SEGMENT INFORMATION
a) Description of segments
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, 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, telehousing and
business continuity support.
OTHER: Represents software and service provision in
superannuation administration.
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
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b) Segment Information
2010
Segment revenue
Total segment revenue
Segment revenue from external source
Segment result
Total segment result
Segment result from external source
Total segment assets
Total segment liabilities
2009
Segment revenue
Total segment revenue
Segment revenue from external source
Segment result
Total segment result
Segment result from external source
Total segment assets
Total segment liabilities
Financial Year
$’000
Billing
Outsourcing
Other
Total
45,311
45,311
11,878
11,878
29,271
13,883
57,766
57,766
17,117
17,117
32,141
15,934
5,163
5,163
1,779
1,779
1,198
851
7,292
7,292
3,460
3,460
1,672
1,200
Financial Year
$’000
Billing
Outsourcing
Other
Total
42,018
42,018
10,397
10,397
33,089
13,195
6,844
6,844
3,157
3,157
1,380
1,056
5,436
5,436
2,456
2,456
1,282
862
54,298
54,298
16,010
16,010
35,751
15,113
2009
$000
32,361
10,797
9,512
1,628
2010
$000
34,413
13,235
9,626
492
57,766
54,298
i) Reconciliation of segment revenue from external source
to the consolidated statement of comprehensive income
Revenue from external customers attributed to
individual countries is detailed as follows:
Segment revenue from external source
57,766
54,298
Australia
2010
$000
2009
$000
Other revenue
Interest revenue
Total revenue
197
823
1,112
927
58,786
56,337
North America
Europe
Other
Total revenue
ii) Reconciliation of segment result from the
external source to the consolidated statement
of comprehensive income
iii) Reconciliation of segment assets to the consolidated
statement of financial position
2010
$000
2009
$000
Segment result from external source
17,117
16,010
Segment assets
Interest revenue
Interest expense
Depreciation & amortisation
Other expense
Total profit before income tax
Unallocated assets
Total assets
823
(12)
(269)
(3,577)
14,082
927
-
(311)
(5,668)
10,958
2010
$000
32,141
34,317
66,458
2009
$000
35,751
26,540
62,291
Non-current assets attributed to individual countries is
detailed as follows:
iv) Reconciliation of segment liabilities to the
consolidated statement of financial position
Australia
North America
Europe
Other
Total non-current assets
2010
$000
2009
$000
46,847
42,095
Segment liabilities
1,553
3,163
14,895
66,458
3,828
3,721
12,647
62,291
Unallocated liabilities
Total liabilities
2010
$000
15,934
627
16,561
2009
$000
15,113
1,355
16,468
26. SUBSEqUENT EVENTS
There has been no matter or circumstance, which has arisen
since 30 June 2010 that has significantly affected
or may significantly affect:
(a) the operations, in financial years subsequent to
30 June 2010, of the consolidated entity, or
(b) the results of those operations, or
(c) the state of affairs, in financial years subsequent to
30 June 2010, of the consolidated entity.
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DIRECTORS’
DECLARATION
The Directors of the Company declare that:
1. The financial statements and notes, as set out on pages 19 to 50, are in accordance with the Corporations Act 2001:
(a) Comply with Accounting Standards in Australia and the Corporations Regulations 2001; and
(b) As stated in Note 1, the consolidated financial statements also comply with International Financial Reporting
Standards; and
(c) Give a true and fair view of the financial position of the consolidated entity as at 30 June 2010 and its
performance for the year ended on that date.
2. In the Directors’ opinion there are reasonable grounds to believe that the Company will be able to pay its debts as
and when they become due and payable.
This declaration has been made after receiving the declarations required to be made by the Chief Executive Officer and
Chief Financial Officer to the Directors in accordance with sections 295A of the Corporations Act 2001 for the financial year
ending 30 June 2010.
This declaration is made in accordance with a resolution of the Board of Directors.
kenneth Hansen
Chairman
Director / Melbourne
30 September 2010
Andrew Hansen
Chief Executive Officer
Director / Melbourne
30 September 2010
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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 financial report of Hansen Technologies Ltd and controlled entities. The financial report
comprises the consolidated statement of financial position as at 30 June 2010, the consolidated statement of comprehensive
income, consolidated statement of changes in equity and consolidated statement of cash flows for the year ended on that date,
a summary of significant accounting policies, other explanatory notes and the Directors’ declaration of the consolidated entity
comprising the Company and the entities it controlled at the year’s end or from time to time during the financial year.
DIRECTORS’ RESpONSIBILITY FOR THE FINANCIAL REpORT
The Directors of the Company are responsible for the preparation and fair presentation of the financial report in accordance
with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001.
This responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of
the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate
accounting policies; and making accounting estimates that are reasonable in the circumstances.
In Note 1, the Directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements,
that compliance with the Australian equivalents to International Financial Reporting Standards ensures that the financial
report, comprising the financial statements and notes, complies with International Financial Reporting Standards.
AUDITOR’S RESpONSIBILITY
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance
with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements
relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report
is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report.
The procedures selected depend on the Auditor’s judgement, including the assessment of the risks of material misstatement
of the financial report, whether due to fraud or error. In making those risk assessments, the Auditor considers internal
control relevant to the entity’s preparation and fair presentation of the financial report in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s
internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
INDEpENDENCE
In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.
AUDITOR’S OpINION
In our opinion,
(a) the financial report of Hansen Technologies Ltd is in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2010 and of its performance
for the year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations)
and the Corporations Regulations 2001; and
(b) the consolidated financial report also complies with International Financial Reporting Standards as disclosed
in Note 1.
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 2010.
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 2010,
complies with section 300A of the Corporations Act 2001.
S SCHONBERG
partner
30 September 2010
pITCHER pARTNERS
Melbourne
Liability limited by a scheme approved under Professional Standards Legislation
Pitcher Partners, including Johnston Rorke, is an association of independent firms
Melbourne | Sydney | Perth | Adelaide | Brisbane
An independent member of Baker Tilly International
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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
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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 specific 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 office.
Monitoring financial 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 fulfil 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 Officer the
authority and responsibility for implementing the Group’s
strategic direction and overseeing the everyday affairs of
the Hansen Group. The Chief Executive Officer’s specific
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 Officer, the Board has delegated authority
and responsibility to other Executives and Management for
their respective business functions.
Where potential for conflict is identified the Board appoints a
Sub-Committee specifically structured, authorised and tasked
to determine the appropriate actions or responses so as to
eliminate any potential for conflicts.
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 fit, 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 fulfil 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 specifies 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 office, experience
and expertise relevant to the position of Director held by each
Director is detailed in the Annual Report.
INDEpENDENCE
The Board’s definition of an independent Director is one
who is unaffiliated with the Executive and free from any
business, significant 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 specific 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 satisfied 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 specific to the industries
in which our Company operates.
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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 specific 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 finance or
business background. All Committee members must be
financially literate. Such qualification is interpreted by the
Board in its business judgement. Furthermore, at least
one member shall have accounting or related financial
management expertise.
The members of the Committee as at 30 June 2010 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 office, 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 financial report.
Review and approve the annual financial 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 2010 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 fulfilling its Corporate Governance and
oversight responsibilities in relation to the Group’s financial
reporting, internal control structure, risk management
systems, and external audit functions. In doing so, it is the
responsibility of the Committee to maintain free and open
communication between the Committee, external Auditors,
and 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 significant 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 financial 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 financial reports and for reviewing the Group’s
interim financial reports. The Board of Directors is ultimately
responsible for the Group’s financial 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 flexible, in order
to best react to changing conditions and circumstances. The
Committee will take appropriate actions to guide corporate
philosophies for quality financial 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 identified risk
areas and any additional agreed-upon procedures. In addition,
the Committee shall also review the external Auditor’s
compensation to ensure that an effective, comprehensive
and complete audit can be conducted for the agreed
compensation level.
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 satisfied 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 financial
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 financial 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
sufficient opportunity for the external Auditors to meet
privately with the members of the Committee. The Committee
shall review with the external Auditor any audit 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 ratification), remuneration,
monitoring of the effectiveness, and independence of the
external Auditors, including resolution of disagreements
between the Senior Executives and the Auditors regarding
financial 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 firm, or by any inquiry or investigation
by governmental or professional authorities, respecting
one or more independent audits carried out by the firm,
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).
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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 specific 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 specified key performance indicators and budgeted
financial performance expectations.
Assess the reasonableness of and approve the remuneration
proposals put forward by the CEO for the Executive team,
including the performance objectives specified 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 reflects 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 notified 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 confidentiality:
We respect the confidential nature of the Hansen Group’s
business affairs and those of our customers and colleagues.
As a part of our employment contract with the Hansen Group
we commit to keeping confidential any information we obtain
in the course of our employment. Confidential information is
to be used only for authorised work-related tasks, and never
for personal gain or for the gain of others.
Value 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 conflicts of interest:
A conflict of interest occurs where an employee has a personal
or professional interest sufficient to influence, or appear
to influence, the objective performance of their duties and
responsibilities to the Hansen Group. No employee of the
Group should allow themselves to be placed in a position where
they have a conflict with their duties and responsibilities to the
Hansen Group, or which are prejudicial to the Group. Employees
should speak to their manager where they have concerns
regarding a potential conflict of interest.
Breaches of the Code of Conduct
Employees who breach this Code may face disciplinary action,
which could result in changes to their employment.
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 Officer.
Company Secretary.
The Chief Financial Officer.
Other Executives may become spokespersons for specific
areas under their control, however any comments are to be
limited to their area of expertise.
- 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 significant 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 flow 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.
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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 specified by ASX and ASIC, that
requires market announcements.
Communications for Disclosure
Hansen will make market disclosures on any event that is
deemed to have possible material effect on the price of
Hansen securities. Events warranting disclosure include:
Financial performance and significant changes in
financial performance.
Changes in Board Directors and Senior Executives.
Mergers, acquisitions, divestments, joint ventures
or changes in assets.
Significant developments in regard to new projects
or ventures.
Events regarding an entity’s shares or securities.
Major new contracts, orders, or changes in suppliers
or customers.
Significant changes in products, product lines,
supplies or inventory.
Industry issues that may have a material impact on
the Group.
Major litigation.
Decisions on significant issues affecting the entity by
regulatory bodies in Australia such as the Australian
Foreign Investment Review Board, Australian Takeovers
Panel, Australian Competition and Consumer Commission.
If there is any uncertainty, Hansen Directors and 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 briefings 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, Officers, employees and their associates must
not engage in insider trading, or the disclosure of inside
information to third parties. Insider trading means the
buying and selling of shares on the basis of price-sensitive
information that is not generally available to others.
This includes procuring another person to purchase or
sell shares on the basis of insider information.
Rules for Employees, Directors and Officers
Employees, Directors, 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 notified on a
case-by-case basis by the Chairman or Chief Executive
Officer (example being the release of a trading update to
the ASX or the issue of a prospectus).
Where Directors or Executives want to trade outside of this
general rule, they are required to discuss the matter with
the Chairman and Chief Executive Officer who will only
give approval if determined that there is no price-sensitive
information held that is not available to the market.
The Corporations Act
The Corporations Act 2001 section 1002G deals with insider
trading. Contravention of the insider trading provisions of the
Corporations Act constitutes an offence that is punishable by
a maximum penalty of $200,000 or imprisonment for five
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 identified risks are then specified 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 identified or
the situation surrounding previously identified 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 financial reporting. It delegates daily management
responsibility to the Chief Executive Officer.
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.
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kEY RISk CATEGORIES
Operational Risk
Operational risk is the risk of loss resulting from inadequate
or failed internal processes or systems, decisions of employees
or from external events. Hansen operates under a 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
identification, measurement, monitoring and mitigation of
operational risk. This is supported by input from corporate
level functions such as the office of Chief Operating Officer,
Risk Management Group, Legal and Finance Departments.
The internal control system is an integral part of Hansen’s
operations and involves all levels of personnel. The controls
are preventative and detective in nature and are reviewed
regularly for relevance and effectiveness.
Key elements to the internal control system are Change
Management, Finance Procedures, Delegation of Authority,
Segregation of Duties, Access Security, Reconciliation,
Documentation and Reporting. This is further supported by
Contingency Planning and Continual Improvement activities.
Credit Risk
Credit risk is the potential for financial loss where customers
or business associates fail to meet their financial obligations
to Hansen. The foundation control is that individuals throughout
the Hansen Group are aware of credit risk and act to identify,
report and manage situations that arise. Specific policies and
procedures are in place to deal with credit risk, the critical
element of these policies being segregation of duties and
delegation of authority. Throughout the course of the credit
cycle each phase is assessed by the relevant specialist group.
Each group is trained and independent in the cycle.
Market Risk
Market risk is the potential for financial loss arising from
Hansen’s activities in the information technology market across
all regions. The components of the market risk framework
Hansen operates in are:
Origination
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, financials,
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 financial reporting depends upon the
existence of a sound system of risk oversight and management
and internal control. The Board receives regular reports about
the financial condition and operational results. The CEO and the
CFO annually provide a formal statement to the Board that in all
material respects:
The financial records of the Group for the financial year have
been properly maintained in that they:
Accurately record and explain its financial position
and performance.
Enable true and fair financial statements to be prepared
and audited.
The financial statements and notes required by the
accounting standards for the financial year comply with
the accounting standards.
The risk management and internal compliance and control
systems are sound, appropriate and operating efficiently
and effectively.
Such a statement has been provided in respect of the
current financial 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 identifies risk, the risk will be managed with
the aim of minimising the likelihood of an adverse event
occurring, maximising the likelihood of a positive outcome
and reducing the impact of the risk.
4. REMUNERATION
The Group aim in remunerating the CEO and other Executives is
to provide a base pay plus rewards and other benefits that will
attract, motivate and retain key Executives while aligning their
financial interests with those of our shareholders. Our policy
is to provide individual Executives with a level of income that:
Recognises the market value of each position in a
competitive market.
Recognises the individual’s capabilities and experience.
Rewards the performance of individuals.
Assists in Executive retention.
The structure provides a mix of fixed 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 five 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
reflects the market for each position. It is generally revised
annually to recognise inflationary 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 specified. 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 financial 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 Benefits – 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 final approval.
Remuneration for Non-Executive Directors consists of a base
pay and related superannuation to meet the requirements of
the Superannuation Guarantee Scheme. An increase in the
maximum amount paid to Non-Executive Directors is to be
submitted to shareholders for approval where significant
change occurs. No retirement benefits are provided for
Non-Executive Directors.
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ASX ADDITIONAL INFORMATION
As at 28 September 2010
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
Othonna Pty Ltd – including associates
Cogent Nominees Pty Limited
Number of Ordinary Shares
percentage Held
93,784,600
21,144,140
60.47%
13.60%
VOTING RIGHTS
Ordinary shares and Options - refer Note 15
DISTRIBUTION OF EqUITY SECURITY HOLDERS
Category
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and Over
Number of Equity Security Holders
Ordinary Shares
Options
130
460
283
541
49
-
-
-
7
8
The number of shareholders holding less than a marketable parcel of ordinary shares is 67.
TWENTY LARGEST SHAREHOLDERS
Name
Othonna Pty Ltd
Cogent Nominees Pty Limited
Antan Pty Ltd
National Nominees Limited
Mr Bruce Rodney Pettit
Mr Anthony David Hansen
Equitas Nominees Pty Limited
Ozcun Pty Ltd
Mr James Lucas & Ms Lesley Dormer
Mrs Yvonne Irene Hansen
J P Morgan Nominees Australia Limited
Mr Kenneth Hansen
Mr Cameron Hunter
Mr Stephen Cocker & Mrs Denise Cocker
Mr Grant Lister
Mr John Eldred Williams & Mrs June Mabel Williams
Exwere Investments Pty Ltd
Mr Christopher James Piggott & Mrs Shirley Janice Piggott
Layuti Pty Ltd
Rezann Pty Ltd
Total
Number of Ordinary Shares Held
percentage of Issued Capital
91,160,249
21,144,140
5,843,397
4,613,046
1,055,000
941,421
775,086
739,154
738,788
655,607
625,253
532,107
476,387
413,000
375,000
313,967
307,263
307,220
269,019
260,000
58.65%
13.60%
3.76%
2.97%
0.68%
0.61%
0.50%
0.48%
0.48%
0.42%
0.40%
0.34%
0.31%
0.27%
0.24%
0.20%
0.20%
0.20%
0.17%
0.17%
131,545,104
84.64%
Directors
Kenneth Hansen, Chairman
Andrew Hansen, Managing Director & Chief Executive Officer
Bruce Adams, Non-Executive Officer
David Osborne, Non-Executive Officer
Phillip James, Non-Executive Director
Company Secretary
Grant Lister
principal registered office
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 – www.forge.co.nz
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2 Frederick Street, Doncaster,
Victoria, 3108 Australia
T +61 3 9840 3000
F +61 3 9840 3099
E info@hsntech.com
www.hsntech.com