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THE ABILITY TO
ENABLE THE FUTURE.
Annual Report
2020
CONTENTS
04
Chairperson and Chief Executive Officer Joint Report
39 Consolidated Statement of Changes in Equity
08 Board of Directors and Company Secretary
40
Consolidated Statement of Cash Flows
10 Directors’ Report
16
35
Remuneration Report
Auditor’s Independence Declaration
36 Financial Report
41 Notes to the Financial Statements
94 Directors’ Declaration
95
Independent Auditor’s Report
101 Australian Securities Exchange (ASX) Shareholder Information
37
Consolidated Statement of Comprehensive Income
103 Corporate Directory
38 Consolidated Statement of Financial Position
Espoo
Stockholm
Kista
Trondheim
Førde
Dale
Sønderborg
London
Cwmbran
Rotterdam
Hamburg
Zürich
Toronto
New York
New York
Bethlehem
Hazleton
Bethlehem
Columbia
Atlanta
Columbia
Houston
Houston
Jyväskylä
Kuopio
Lillehammer
Hamar
Oslo
Pune
Carlsbad
Carlsbad
Tokyo
Shanghai
Hong Kong
Hyderabad
Ho Chi Minh City
Jakarta
São Paulo
Buenos Aires
Buenos Aires
Johannesburg
Melbourne
Auckland
Notice of Annual General Meeting of the Company
to be held on Thursday 26th November 2020 at
11am, via a video conferencing facility.
Hansen Technologies Ltd Annual Report 2020
TURNING TODAY’S ENERGY AND COMMUNICATIONS
INTO TOMORROW’S NEXT DIGITALLY DRIVEN EXPERIENCE
COMPANIES. USING OUR 1,365+ STAFF SPREAD
ACROSS 36 OFFICES TO SUPPORT OUR CUSTOMERS.
Espoo
Stockholm
Kista
Trondheim
Førde
Dale
Sønderborg
London
Cwmbran
Rotterdam
Hamburg
Zürich
Jyväskylä
Kuopio
Lillehammer
Hamar
Oslo
Carlsbad
Carlsbad
Pune
Tokyo
Shanghai
Hong Kong
Hyderabad
Ho Chi Minh City
Jakarta
São Paulo
Buenos Aires
Buenos Aires
Johannesburg
Operations
Customers Served
Offices
Regions
Melbourne
Auckland
01
Toronto
New York
Bethlehem
New York
Hazleton
Bethlehem
Columbia
Atlanta
Columbia
Houston
Houston
Hansen Technologies Ltd Annual Report 2020 GAS, ELECTRICITY
AND WATER
Regionally entrenched and global
challenger to SAP and Oracle.
$178.8m
Revenue
02
Hansen Technologies Ltd Annual Report 2020 COMMUNICATIONS
Agile innovation and
quick to market.
$117.3m
Revenue
03
Hansen Technologies Ltd Annual Report 2020 CHAIRPERSON AND CHIEF EXECUTIVE OFFICER JOINT REPORT
We are pleased to present the Annual Report for Hansen Technologies Limited for
financial year ended 30 June 2020 (FY20). It is with great pleasure that we share the
Hansen results with our shareholders for FY20. As we reflect on the 2020 financial year,
we would like to thank our employees who have remained committed and dedicated
to making Hansen the best company it can be for its customers and its shareholders.
The Hansen Team has once again risen to the challenges and delivered a great result.
When assessing the Company’s
success, we look at several
factors. These include:
The Hansen Mission
To further grow our best in class core
business through aggregating mature,
entrenched and predicable businesses in
the Energy and Communications sectors.
Our Strategy
• To continue to diversify and grow our
business over the long-term through
aggregation accelerating new market
entry be it geographic, vertical or by
further customer diversification;
• To continue to leverage our global
experience.
• To continue to evolve our product
offering ensuring our customers’
technical journey is on point and
cost-effective.
Our acquisition of the Sigma Group has
delivered strongly into our strategy and
provides the Company with further product
innovation. The integration of the Sigma
Group has been completed during the
period and the Company’s global reach
has been further enhanced. We also
continue to expect further incremental
margin improvement over the next few
years from the continued improvement in
companies recently aggregated into the
Hansen family, including Sigma. While
revenues have grown, and margins have
improved since initial integration, there
remains significant opportunity to generate
further increased revenue and profitability
from these businesses.
Hansen has had great success this year
welcoming 20 new customers to the
Hansen family. These customers have
committed more than $70m of revenue
over their initial contract term. These wins
have been across both the Energy and
Communications verticals. These new
customers add to the core that is Hansen.
CREATE. DELIVER. ENGAGE.
DIFFERENTLY.
04
Hansen Technologies Ltd Annual Report 2020 Hansen’s ability to win these new
customers in today’s competitive
environment underscores the strength of
our product offering and the relevance of
this offering in the marketplace. Revenue
growth across the year was also driven
by our existing customer base, with
many successful upgrades and projects
completed throughout the year.
The second half of the year has been
delivered against the backdrop of a global
pandemic. We are pleased to report that
the Hansen business transitioned quickly
to a remote working environment where
our customers continued to receive the
customary high levels of support Hansen
is renowned for. Delivering remotely is
something we have experience in and
the adoption of these methodologies
across the Company has resulted in no
deterioration in productivity. In fact, we
have been able to reduce our cost base
and we will take these learnings into our
future to further improve our margin.
At Hansen we are fortunate that in
servicing the Energy and Communications
sectors, our business is aligned with
essential services across the world.
This generates a stable business
environment in these uncertain times.
Energy and Communications are two
industries that are rapidly transforming
from delivering ‘just essentials’ to delivering
energy and connected experiences.
These things are the foundation of our
next society. We align ourselves with our
clients and provide proven products and
the right customer mindset.
These industry segments continue to
expand their offering to their customers.
Energy customers are looking to consume
energy responsibly while reducing
their environmental footprint, creating
complexity as they look to avail themselves
of green energy options and other related
services.
The offerings available through our
communications providers continue
to expand with the introduction of new
technology, most recently 5G, supported
by a customer base demanding the
ability to consume information in a mobile
environment.
Hansen is well placed to continue to
support its customers and provide a
positive customer experience as they
service end-user needs.
Company
Highlights
$301.4m
Operating revenue
$80.7
Reported EBITDA
05
Hansen Technologies Ltd Annual Report 2020 CHAIRPERSON AND CHIEF EXECUTIVE OFFICER JOINT REPORT
CONTINUED
Financials
The Group revenues increased by 30.3%
up to $301.4m with underlying EBITDA
for the year up 39.8% to $78.0m. The
integration of the Sigma business together
with a rationalisation of the Company’s
cost base driven by the global pandemic
has generated an improved underlying
EBITDA margin for the full year of 25.9%.
This strong profit performance is further
underpinned by the Company’s ability
to generate cash flow from operations,
which was $69.6m and free cash
flow of $44.2m after adjusting for the
repayment of lease liabilities. Hansen’s
ability to generate cash in the current
environment further underscores the
strength it has enabling it to invest in
its products and fund acquisitions.
This strong financial outcome has enabled
us to declare dividends amounting to
10 cents per share this year returning
46% of NPATA to shareholders.
The Group’s financial performance this year has been outstanding across all financial metrics.
A$ Million
Operating revenue
Underlying EBITDA excluding AASB 16 impact1, 2, 4, 5
Underlying NPAT4, 5
Underlying NPATA1, 3, 5
Basic EPS based on underlying NPATA (EPSa)(cents)1
FY20
301.4
78.0
29.5
47.4
23.9
FY19
231.3
55.8
24.0
33.7
17.1
Variance
%
30.3%
39.8%
22.9%
40.7%
39.8%
1. The Directors believe the information additional to IFRS measures included in the report is relevant and useful in measuring the financial performance
of the Group. These include: EBITDA, NPATA and EPSa.
2. EBITDA is a non-IFRS term, defined as earnings before interest, tax, depreciation and amortisation and excluding net foreign exchange gains (losses).
3. NPATA is a non-IFRS term, defined as net profit after tax, excluding tax-effected amortisation of acquired intangibles and impact of the adoption
of AASB 16 Leases (AASB 16).
4. Underlying EBITDA, underlying NPAT and underlying NPATA exclude separately disclosed items, which represent the restructuring and one-off costs
and income during the period. Further details of the separately disclosed items are outlined in Note 4 to the Financial Report.
5. On 1 July 2019, the Group adopted AASB 16 for the first time, resulting in an increase in EBITDA in the current financial year. Further details on the
adoption of AASB 16 are described in Note 13 to Financial Report on pages 63 to 67.
Operating Revenue ($m)
Underlying EBITDA* ($m)
2 3 %
C A G R :
5 - y e a r
301.4
230.8
231.3
174.7
149.0
106.3
350
300
250
200
150
100
50
0
100
80
60
40
20
0
2 0 %
C A G R :
5 - y e a r
85.7
66.7
63.1
49.7
51.0
34.1
2015
2016
2017
2018
2019
2020
2015
2016
2017
2018
2019
2020
* EBITDA is a non-IFRS term that relates to Earnings before Interest, Tax, Depreciation and Amortisation. The new accounting standard AASB 16 Leases has been
applied to FY20 and historical performance has been adjusted to reflect an estimated impact of the adoption of this standard. Non-recurring items have been
excluded from each year, where applicable.
06
Hansen Technologies Ltd Annual Report 2020 Every day we set out to inspire
and challenge today’s energy and
communications providers to
become tomorrow’s next digitally
driven experience companies.
Our Future
We will continue our successful
20-year history of aggregating
mature, entrenched, and predictable
businesses. Supported by the highly
cash generative nature of our business,
we will continue to ‘Hansenise’ these
businesses to drive growth and
enhance profitability.
What becomes imperative for our
customers is the ability to transition from
basic providers of services to ones that
can capitalise on the growing ecosystems
and variety of the next experiences that
surround the core connectivity and energy
services already provided.
At the core of our proposition is our
ability to evolve together with our
customers, providing business solutions
through our software products that
deliver a competitive advantage.
Coupled with the Company’s drive to
aggregate strategic business we see
a future of sustainable revenue growth
and increased shareholder value.
Hansen’s ability to continue its investment
in its products, provide thought leadership
through its global experiences and
leverage its extensive industry knowledge
puts it at the forefront of the industry.
We are confident that our business
strategy combined with the strength
of our people will ensure the continued
success of Hansen, its customers,
and its shareholders.
Operational Highlights
1. There were significant new logo
wins across all regions with the
initial contract value totalling $70m.
2. We upgraded several clients in our
US Municipality marketplace, cemented
our position as the dominant provider
of Customer Information Systems
(CIS) products in the Nordics and
expanded the reach of the Sigma
products into new marketplaces
in Asia Pacific and EMEA.
3. We have successfully integrated
the Sigma Group into the Hansen
operations enhancing Sigma’s
operating margins in the second
half of the financial year.
4. A Hansen ‘Power the Next’
rebranding exercise was completed
and rolled out to all jurisdictions. This
rebranding represents our value to our
customers in helping them reshape how
Energy and Communications services
are experienced. It represents the ‘next
new’ experiences on the horizon that
our customers need to deliver and the
next experiences that end-customers
want to have and consume.
5. Our network of Industry experts is being
further supported with over 350 highly
skilled resources deployed within our
development centres found in Vietnam
and India. This investment commenced
in 2018 and is now delivering improved
margins across the Hansen Group.
6. We have responded immediately to
the global pandemic providing a safe
and productive workplace for our
people, allowing us to continue to
serve our customers effectively
today and into the future.
$47.4m
Underlying NPATA
23.9 cents
Basic EPS based on
underlying NPATA
(EPSa)(cents)
The Hansen
Create-Deliver-Engage
Suite is a set of
software applications
that powers today’s
energy, utility, water
and communications
companies.
07
Hansen Technologies Ltd Annual Report 2020 BOARD OF DIRECTORS AND COMPANY SECRETARY
The qualifications, experience and special responsibilities of each person who has been a Director of
Hansen Technologies Limited at any time during or since the end of the financial year are provided below,
together with details of the Company Secretary as at the year end.
Mr David Trude
Non-Executive Director
Chairman since 2011
Director since 2011
Age 72
David has extensive experience in a variety of financial services
roles within the banking and securities industries. He holds a
degree in commerce from the University of Queensland and
is a member of many professional associations including the
Stockbrokers and Financial Advisers Association of Australia
and the Australian Institute of Company Directors.
David is also a Non-Executive Director of Chi-X Australia
Limited and Non-Executive Director of ASX listed Acorn
Capital Investment Fund Limited and MSL Solutions Ltd.
Mr Andrew Hansen
Managing Director
and CEO
Managing Director
since 2000
Age 60
Andrew has over 40 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 led Hansen from its listing on the ASX in 2000
to today being a global business with a strong history
of decades of strong profitability and growth.
Andrew is responsible for implementing the Group’s
strategic direction and overseeing the everyday affairs
of the Hansen Group.
Mr Bruce Adams
Non-Executive Director
Director since 2000
Member of the Remuneration
Committee
Age 60
Bruce has over 30 years’ experience as a commercial lawyer.
He has practised extensively in the areas of information
technology law and mergers and acquisitions and has
considerable experience advising listed public companies.
From 2002 until 2019, after more than 10 years as a partner
of two Melbourne law firms, Bruce held the position as general
counsel of Club Assist Corporation Pty Ltd, a worldwide motoring
club service provider. Bruce holds degrees in Law and Economics
from Monash University.
Mr Don Rankin
Non-Executive Director
Appointed on
21 November 2019
Chair of the Audit
and Risk Committee
Member of the
Remuneration Committee
Age 68
Don joined the Hansen Technologies Board in 2019.
He was one of the founding partners of Pitcher Partners
and National Chairman of the Pitcher Partners Association for
11 years. He sits on the board of the Victorian Chamber of
Commerce and Industry and was its President for three years.
With over 30 years’ experience advising private and family
businesses across a broad range of industries, he specialises
particularly in assisting clients in the management, growth and
evolution of their business. Don sits on a number of Family Board
Advisory Committees.
08
Hansen Technologies Ltd Annual Report 2020 Mr David Osborne
Non-Executive Director
Director since 2006
Member of the Audit
and Risk Committee
Age 71
David is a Fellow of the Institute of Chartered Accountants,
and a Fellow of the Australian Institute of Company Directors,
with over 50 years of financial management, taxation and
accounting experience in public practice. David’s experience
includes having been the Audit Partner of his accounting practice
and a Registered Company Auditor for over 25 years. He also
has experience in the various aspects of risk management.
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.
Ms Jennifer Douglas
Non-Executive Director
Director since 2017
Member of the
Remuneration Committee
Member of the Audit and
Risk Committee
Age 54
Jennifer has over 25 years’ experience in the technology and
media industries. Jennifer started her career as a lawyer before
holding Senior Executive roles at Telstra and Sensis from 1997
to 2016. She has significant experience in driving growth and
customer-centred change. Jennifer holds degrees in Science
and Law from Monash University, a Masters of Law and Masters
of Business Administration from Melbourne University and is a
Graduate of AICD.
Jennifer is also a Non-Executive Director of GUD Holdings Limited,
OptiComm Limited, Essential Energy, the St Kilda Football Club
and the Peter MacCallum Cancer Foundation.
David is a highly accomplished executive having worked across
a number of industries including financial services, retail,
technology and social media. David has had roles as
Managing Director, Board Director and Board Adviser
across large corporates, SMEs and early stage businesses,
including private equity.
David is also Non-Executive Chairman of Littlepay (an Australian
fintech company) and a Non-Executive Director of Tiger Pistol Pty
Ltd (a digital marketing agency).
Julia joined Hansen Technologies in 2007 and plays a
strategic role as General Counsel as well as Company
Secretary. Julia has significant legal experience in IT,
financial services and retail organisations. As Company
Secretary she is responsible for the Company’s corporate
and ASX obligations.
Mr David Howell
Non-Executive Director
Director since 2018
Member of the Audit
and Risk Committee
Chair of the Remuneration
Committee
Age 62
Ms Julia Chand
General Counsel and
Company Secretary
Company Secretary
since 2014
Age 50
On 19 December 2019, Ms Sarah Morgan resigned as Director of Hansen Technologies Limited. Sarah joined the Board in 2014 in a non-executive capacity.
Sarah was the Chair of the Audit and Risk Committee and a Member of the Remuneration Committee until her resignation. Sarah has extensive experience
in the finance industry, primarily as part of independent corporate advisory firm Grant Samuel. Sarah has been involved in public and private company mergers
and acquisitions, as well as equity and debt capital raisings. Sarah holds a degree in Engineering and a Masters of Business Administration from the University
of Melbourne, and is a Graduate of AICD. During her time in Hansen Technologies Limited, Sarah was also a Non-Executive Director of Intrepid Group, Whispir
Limited, Adslot Limited, Future Generation Global Investment Company Limited, the National Gallery of Victoria Foundation and Nitro Software Limited.
Unless stated, no Directors of Hansen Technologies Limited held any other Directorships of listed companies at any time during the three years prior
to 30 June 2020.
09
Hansen Technologies Ltd Annual Report 2020 DIRECTORS’ REPORT
The Directors present their report together with the Financial Report of the consolidated entity
(the Group), being Hansen Technologies Limited (the Company) and the entities it controlled
for the financial year ended 30 June 2020, and Auditor’s Report thereon. This Financial Report
has been prepared in accordance with Australian Accounting Standards.
Principal activities
The principal activities of the Group during the financial year were the development, integration and support of billing systems software
for the Energy and Communications sectors. Other activities undertaken by the Group include IT outsourcing services and the
development of other specific software applications.
Operating and financial review
Review of operations
The Group’s operating performance for the fiscal year compared to last year is as follows:
Operating revenue
Underlying EBITDA excluding AASB 16 impact1, 2
Underlying NPAT2
Underlying NPATA1,2
Basic Earnings Per Share (EPS)(cents)
Basic EPS based on underlying NPATA (EPSa)(cents)1
2020
A$ Million
301.4
2019
A$ Million
231.3
78.0
29.5
47.4
13.0
23.9
55.8
24.0
33.7
10.9
17.1
Variance
%
30.3%
39.8%
22.9%
40.7%
19.3%
39.8%
1. The Directors believe the information additional to IFRS measures included in the report is relevant and useful in measuring the financial performance of the Group.
These include: EBITDA, NPATA and EPSa. These measures have been defined in the Chairperson and Chief Executive Officer’s Joint Report on page 6.
2. On 1 July 2019, the Group adopted AASB 16 for the first time, resulting in an increase in EBITDA in the current financial year. Further details on the adoption
of AASB 16 are described in Note 13 to Financial Report on pages 63 to 67.
In 2020 the business continued to deliver strong results after the record 2019 year, and EBITDA exceeded the profit guidance provided in
August 2019. Further details on the Group’s results are outlined in the Chairperson and Chief Executive Officer Joint Report on page 4.
The Group’s revenue for the financial year was higher than the previous corresponding period as a result of the acquisition of Sigma
Systems business (Sigma) on 1 June 2019. This acquisition has resulted in the rebalancing of the Group’s market portfolio which,
post the acquisition of Enoro in FY18, was initially weighted towards the energy sector. With Sigma’s revenues concentrated in the
communications sector, the Group’s revenue portfolio is now rebalanced to ensure greater diversification across multiple industries,
regions and clients.
Continued investment in Sales and Marketing has increased Hansen’s profile in target markets and further reinforced the Group’s
long-term customer relationships.
Investment in our global infrastructure and products has continued throughout the period ensuring our business remains scalable and
appropriately poised for growth.
The Group has generated operating cash flows of $69.6 million, which has been used to retire net external debt of $27.8 million, fund
our ongoing product development program, and pay dividends of $10.1 million (net of dividend reinvestments). With the Group’s cash
generation capabilities, Hansen is well placed to continue to acquire mature, predictable businesses in the Energy and Communications
sectors, expanding its global reach.
10
Hansen Technologies Ltd Annual Report 2020 Billing segment
The Billing segment represents a major part of the Group’s business operations, delivering $291.6 million of revenue in 2020 (2019:
$218.4 million), which translates into a 33.5% increase. Segment profit before tax was $33.2 million in 2020 (2019: $33.1 million),
representing a 0.3% increase.
Other activities
Segment revenues from other activities was $9.7 million in 2020 (2019: $12.9 million), representing a 24.8% decrease for the year.
This 24.8% decrease in revenues resulted from an expected reduction in business activity associated with the Customer Care call
centre. Segment profit before tax was $0.7 million for 2020 (2019: $1.6 million), representing a 56.3% decrease for the year.
Significant changes in the state of affairs
There have been no significant changes in the Group’s state of affairs during the financial year.
Events after balance sheet date
No matters have arisen between the end of the financial year and the date of this report that have significantly affected or may significantly
affect the operations of the Group, the results of those operations or the state of affairs of the Group in future years. Refer to Note 30 in
the Financial Report for further information.
Opportunities and business risks
The business remains committed to increasing shareholder value and the recent acquisition of Sigma is aligned with this objective.
We believe the opportunities to grow the Group’s organic revenues and win new clients is enhanced with this acquisition.
The Energy and Communications markets are undergoing further change and are increasing in complexity. Regulation and other
changes such as solar provisioning, smart metering, energy market settlements and the introduction of next-generation 5G network
technology create greater demand for highly complex and sophisticated billing systems and enhanced functionality that can keep
abreast of market changes.
Organic and strategic growth opportunities within the business for above-trend performance include, but are not limited to:
• a higher than expected demand for services from customers from changing business needs;
• significant new customers due to increased marketing efforts and product innovation;
• greater take-up of product upgrades from existing customers; and
• a higher than expected conversion rate associated with targeted aggregation opportunities.
To ensure our goals are achieved, the Group continues to refer to the robust risk framework that is continually monitored, managed
and responded to. As the Group continues to grow, we continue to identify, control, plan, and co-ordinate effective responses to a wide
array of risks which include, but are not limited to the following:
• Security or data incidents: As a technology-focused business, managing security and taking care of customer data is essential.
To manage the risk of damaging security incidents, we have appropriate data management, security and compliance policies,
procedures and practices in place.
• Loss of customers: While loss of customers due to market competition is a risk to the business, we manage this risk by ensuring we
are focused on meeting our customers’ expectations for system performance and service delivery, and by having a globally diverse
customer base across various industry sectors.
• Decline in international market conditions: As a business with international operations, we have exposure to currency fluctuations,
which we monitor and manage.
• Investment opportunities: The Group has an active M&A program. Potential investments may carry execution and integration
risks, and this is managed via maintaining a highly experienced M&A team with a proven track record of business integration
and value generation.
We manage risks by monitoring our market-place and global conditions.
11
Hansen Technologies Ltd Annual Report 2020 DIRECTORS’ REPORT CONTINUED
Outlook and likely developments for FY21
Hansen will continue to pursue its operating strategy of providing billing and related data management solutions to our targeted
segments while assessing appropriate aggregation opportunities to enhance shareholder value.
Items of specific focus for 2021 include:
• investigate and develop cross-selling opportunities into the energy market and leverage our investment in Sigma’s intellectual
property; and
• leverage the Group’s network of low-cost development centres to improve both customer delivery and Hansen margins.
Environmental regulations and climate change
The Group’s operations are not subject to any significant environmental Commonwealth or state regulations or laws. The Group
is aware of the general risks associated with climate change and continues to be committed to operating sustainably. However,
the Group’s operations are not significantly impacted by any environmental factors.
Corporate governance statement
Hansen and the Board are committed to achieving and demonstrating the highest standards of corporate governance. Hansen
has reviewed its corporate governance practices against the Corporate Governance Principles and Recommendations (3rd edition)
published by the ASX Corporate Governance Council.
A description of the Group’s current corporate governance practices is set out in the Group’s corporate governance statement,
which can be viewed at https://hansencx.com/about/investor-relations.
Dividends paid, recommended and declared
A final dividend of 7 cents per share has been declared, partially franked to 0.70 cents per share, comprising a regular dividend
of 5 cents per share, together with a special dividend of 2 cents per share. The final dividend was announced to the market on
28 August 2020 with payment to be made on 25 September 2020.
The amount declared has not been recognised as a liability in the accounts of the Company as at 30 June 2020.
Dividends paid during the year, excluding dividends reinvested as part of the Company’s Dividend Reinvestment Program (DRP):
• 3 cents per share partially franked to 1.59 cents interim dividend paid 26 March 2020, totalling $5,211,064; and
• 3 cents per share partially franked to 2.60 cents final dividend paid 26 September 2019, totalling $4,903,630.
This is consistent with the Board’s capital management policy that balances growth through acquisitions against the payment of dividends.
Share options and performance rights
Options and performance rights over shares may be issued to Key Management Personnel (KMP) as an incentive for motivating and
rewarding performance as well as encouraging longevity of employment. The issuing of options and performance rights is intended
to enhance the alignment of KMP with the primary shareholder objective of increasing shareholder value.
Performance rights over unissued ordinary shares granted by the Company during the financial year to the KMP as part of their
remuneration for the year ended 30 June 2020 are as follows:
Grant Date
Executives
A Hansen
C Hunter
D Meade
G Taylor
N Fernando2
Total
Number of Rights Granted on 1 Sept 20191
STI
-
9,270
9,315
8,927
8,835
LTI
119,969
21,188
21,291
20,405
20,195
Total
119,969
30,458
30,606
29,332
29,030
36,347
203,048
239,395
1. The number of rights granted that will vest is conditional on achievement of targets under the LTI and Deferred STI plan. Refer to the Remuneration Report
for further details.
2. Niv Fernando resigned on 31 July 2020.
There were no rights or options over unissued ordinary shares granted by the Company since the end of the financial year to the KMP
as part of their remuneration.
All grants of options and rights are subject to the achievement of performance measurements. Further details regarding options and
rights granted as remuneration are provided in the Remuneration Report.
12
Hansen Technologies Ltd Annual Report 2020 Shares under options and performance rights
Unissued ordinary shares of the Company under options and rights at the date of this report are as follows:
Vesting Date
Expiry Date
Exercise Price
Number of
Options/Rights
at Date of Report
Instrument
Plan
Options
Options
Rights
Rights
Rights
Rights
LTI
LTI
LTI
LTI
STI
LTI
Grant Date
2 Jul 2015
2 Jul 2018
2 Apr 20211
22 Dec 2016
31 Aug 20192
22 Dec 2021
2 Jul 2017
2 Jul 2018
31 Aug 20202
31 Aug 20212
1 Sept 2019
30 Jun 2022
1 Sept 2019
30 Jun 2022
-
-
-
-
$2.67
$3.59
Nil
Nil
Nil
Nil
885,000
-3
345,4944
480,079
87,218
489,306
1. The original expiry date for this tranche of options was 2 July 2020. However, due to the COVID-19 pandemic’s impact on financial markets, the Board exercised
its discretion to extend the expiry date for the remaining options to 2 April 2021.
2. The vesting date for options granted on 22 December 2016, 2 July 2017 and 2 July 2018 is the date on which the Board notified or will notify the executive
that the options have vested, after the outcomes for the measurement period have been determined and satisfaction of the performance conditions have
been assessed.
3. Options issued on 22 December 2016 did not meet the required performance measurement hurdles for these options to vest and/or be exercisable.
4. Performance rights in relation to the EPSa CAGR measure exceeded the required performance measurement hurdles and will vest on an accelerated basis paying
150% of the entitlement on 31 August 2020. Performance rights associated with the TSR hurdle did not meet the market conditions.
If the Company makes a bonus issue of securities to ordinary shareholders, each unexercised option or performance right will, on
exercise, entitle its holder to receive the bonus securities as if the option or performance right had been exercised before the record
date for the bonus issue.
Option and performance rights holders do not have any right, by virtue of the option or performance right held, to participate in any
share issue of the Company. Options and performance rights will not give any right to participate in dividends or any voting rights until
shares are issued upon the exercise of vested options or performance rights.
Shares issued on exercise of options and performance rights
The following ordinary shares of the Company were issued during or since the end of the financial year as a result of the exercise
of an option:
Date Issued
1 July 2019
1 June 2020
Total
Number of Ordinary
Shares Issued
Amount Paid
Per Share
265,000
40,000
305,000
1.30
2.67
There are no amounts unpaid on shares issued on exercise of options. No shares were issued during or since the end of the financial
year on exercise of performance rights.
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 Group 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.
13
Hansen Technologies Ltd Annual Report 2020 DIRECTORS’ REPORT CONTINUED
Insurance
Since the end of the previous financial year, the Company has paid insurance premiums in respect of Directors’ and officers’ liability and
legal expenses and 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 disclosures are prohibited under the terms of the contract.
No insurance premium is paid in relation to the auditors.
Rounding of amounts
In accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, the amounts in the Financial
Report have been rounded to the nearest one thousand dollars, or in certain cases, to the nearest dollar (where indicated).
Directors’ meetings
The number of meetings of the Board of Directors and of each Board Committee held during the financial year and the numbers
of meetings attended by each Director were:
Director
Mr David Trude
Mr Bruce Adams
Mr Andrew Hansen
Ms Sarah Morgan1
Mr Don Rankin2
Mr David Osborne
Ms Jennifer Douglas
Mr David Howell
Board Meetings
Audit and Risk
Committee Meetings
Remuneration
Committee Meetings
Eligible
Attended
Eligible
Attended
Eligible
Attended
16
16
16
6
12
16
16
16
16
16
16
6
12
16
15
16
-
-
-
3
4
6
6
6
-
-
-
3
4
6
6
6
-
4
-
3
1
-
4
4
-
4
-
3
1
-
4
4
1. Sarah Morgan resigned on 19 December 2019.
2. Don Rankin was appointed as a Non-Executive Director on 21 November 2019.
Four additional Board meetings were held during the financial year to consider impacts of and response to the COVID-19 pandemic.
Directors’ interests in shares or options
Directors’ relevant interests in shares of the Company or options/rights over shares in the Company as at the date of this report are
detailed below:
Directors’ Relevant Interests in:
Mr David Trude
Mr Bruce Adams1,2
Mr Andrew Hansen1
Mr Don Rankin
Mr David Osborne1,2
Ms Jennifer Douglas
Mr David Howell
Ordinary Shares
of the Company
Options/Rights over
Shares in the Company
103,956
34,891,417
34,967,499
25,000
35,125,448
16,000
33,666
-
-
385,400
-
-
-
-
1. Each of Mr Bruce Adams, Mr Andrew Hansen and Mr David Osborne has a joint interest in a single parcel of 34,739,113 shares as at the date of this report.
2. For further details, please refer to the substantial shareholding notice lodged with the ASX dated 16 August 2019.
14
Hansen Technologies Ltd Annual Report 2020 Proceedings on behalf of the Company
No person applied for leave of Court to bring proceedings on behalf of the Company or any of its subsidiaries.
Directors’ interests in contracts
Directors’ interests in contracts with the Company are limited to the provision of leased premises on arm’s length terms and are
disclosed in Note 26 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 were provided by the auditors of the Group during the year, namely RSM Australia Partners, network firms of RSM
and other non-related audit firms as detailed below. The Directors are satisfied that the provision of the non-audit services during the
year by the auditors is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.
The nature and scope of each type of non-audit service provided means that auditor independence was not compromised.
Amounts paid and payable to RSM Australia Partners for non-audit services:
– taxation services
– compliance services
Amounts paid and payable to network firms of RSM Australia Partners for non-audit services:
– taxation services
– compliance services
Amounts paid and payable to non-related auditors of Group entities for non-audit services:
– taxation services
– compliance services
2020
$
2019
$
-
-
-
110,275
31,420
141,695
-
-
-
-
-
-
52,349
14,709
67,058
-
-
-
Total auditor’s remuneration for non-audit services
141,695
67,058
Auditor’s remuneration is disclosed in Note 27 of the Financial Report.
15
Hansen Technologies Ltd Annual Report 2020
REMUNERATION REPORT
Dear Shareholder,
On behalf of the Board of Directors, I am pleased to present the Remuneration Report of the Group, consisting of Hansen Technologies
Limited (the Company) and its controlled entities for the 2020 financial year.
The 2020 financial year is a year which can be characterised as unique. With the incidence of COVID-19, unprecedented challenges
have faced businesses across the globe. Our Company, as a global service provider, has had to respond to these challenges and the
complexities have been substantial. However, it is extremely pleasing that the Company has once again had a very successful year,
despite this complexity.
With the onset of COVID-19 in the second half of the year, all members of our Global Team have been working remotely to deliver to
our customers and shareholders. It is a great credit to the team that this delivery has ensured the Company met its profit performance
targets. Based on the Group’s performance, all of our target Short-Term Incentive (STI) cash-component payments were awarded
to our KMP against financial and non-financial KPIs set for the year. In line with the recommendations adopted by the Board last year,
25% of the STIs awarded this year will be paid as deferred equity, in the form of rights, with a vesting period of two years.
With the end of financial year 2020, the LTI Program implemented on 1st of July 2017 completed its measurement period of three years.
I am pleased to report that with the exceptional EPS growth achieved over the measurement period, this measure has qualified for
acceleration and will be paid out at a 150% of the entitlement. Unfortunately, the Ranked TSR measurement criteria did not meet
the required standard and will not be paid (refer to Performance outcomes against FY18 on page 26).
The Board is also conscious that with the world in the grip of a global pandemic, the structure of Executive Remuneration for the
coming year at least must focus on finding a balance between cost control and structuring remuneration to ensure we retain the
strong Executive Team and create an environment where we can attract the appropriate talent. A greater emphasis on the short term
is considered important by the Board to ensure the business manages the immediate impact of the pandemic, whilst being mindful
of the longer term to ensure the business is optimally placed for the recovery ahead. To that end, the Board has made the following
adjustments to the Remuneration Framework for FY21:
• Both Executive Remuneration and Board Fees have been frozen for a period of six months from 1 July 2020, at which time a further
assessment will be made.
• The Board has suspended the LTI Program for this year and has enhanced the STI Program for the coming year to reward the
Executive Team based on the short-term financial performance of the business and key non-financial criteria set by the Chief
Executive. Under the current STI framework, 25% of awarded STIs are paid in the form of a deferred equity component.
This component will be increased for the coming year to equate to the added value of the LTI, had the LTI been retained.
Details of the plan structure is found on pages 31 to 32 of this report.
The Board remains committed to the ongoing review and improvement of the Group’s Remuneration Framework to ensure it achieves
its objectives of incentivising and rewarding performance that optimises business and shareholder value and ensuring the Company
is well placed to attract, retain and motivate a talented Executive Team.
Yours sincerely,
David Howell
Chair of the Remuneration Committee
16
Hansen Technologies Ltd Annual Report 2020 Our detailed Remuneration Report (Audited)
The Remuneration Report for the year ended 30 June 2020 outlines key aspects of our Remuneration Framework and has been
prepared and audited in accordance with the Corporations Act 2001.
Our Remuneration Report contains the following sections:
1. Persons to whom this report applies
2. Our Remuneration Framework
3. How reward was linked to performance
4. Remuneration details: Executive KMP
5. FY21 Enhanced STI Plan
6. Contractual arrangements with Executive KMP
7. Remuneration details: Non-Executive KMP
8. Share-based remuneration disclosures
9. Other transactions with KMP
1. Persons to whom this report applies
The remuneration disclosures in the report cover the following persons who were classified as the Key Management Personnel (KMP)
of the Group during the 2020 financial year. KMP’s are those persons who, directly or indirectly, have authority and responsibility for
planning, directing and controlling the major activities of the Group:
Executives1
Andrew Hansen
Cameron Hunter
Darren Meade
Graeme Taylor
Niv Fernando
Non-Executive Directors
David Trude
Bruce Adams
Jennifer Douglas
David Howell
Sarah Morgan
Don Rankin
David Osborne
Managing Director and Chief Executive Officer (CEO)
Chief Operating Officer
Group Head of Delivery
Chief Financial Officer
Chief Strategy and Commercial Officer2 (resigned on 31 July 2020)
Chairperson and Independent Non-Executive Director
Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director (resigned on 19 December 2019)
Independent Non-Executive Director (appointed on 21 November 2019)
Non-Executive Director
1. These executives of the Group were classified as KMP during the 2020 financial year and unless stated otherwise were KMP for the entire year.
2. Effective 1 January 2020, Niv Fernando was appointed as CEO of the Utilities Division.
At the most recent Annual General Meeting (AGM), a resolution to adopt the prior year Remuneration Report was put to the vote and
at least 75% of ‘yes’ votes were cast for adoption of that report. No comments were made on the Remuneration Report considered
at the AGM.
17
Hansen Technologies Ltd Annual Report 2020 REMUNERATION REPORT CONTINUED
2. Our Remuneration Framework
People are at the heart of the Group’s success, enabling us to deliver on our vision and long-term goals. Our Remuneration Framework
focuses on providing competitive fixed pay and variable pay that rewards achievement of the Group’s annual objectives and long-term
growth in shareholder value.
Remuneration outcomes are aligned with both individual and Group performance, ensuring that employees are rewarded for overall
Group achievement as well as their individual contribution to the Group’s success. This aligns remuneration to both individual
performance and value creation for shareholders.
(a) Remuneration governance
The Board annually reviews the Group’s remuneration principles, practices, strategy and approach to ensure they support the Group’s
long-term business strategy and are appropriate for a listed company of our size and nature.
The Board has delegated to the Remuneration Committee the responsibility for reviewing and making recommendations to the Board
regarding compensation arrangements for the Directors, Executive KMP and the balance of the CEO’s direct reports. As at 30 June 2020,
the Remuneration Committee was made up of four Non-Executive Directors: David Howell (Chair of the Remuneration Committee),
Jennifer Douglas, Bruce Adams, and Don Rankin, the majority of whom are independent.
The CEO and other Directors attend meetings as required at the invitation of the Committee Chair.
The Remuneration Committee assesses the appropriateness of both the nature and amount of the remuneration of the Executive and
Non-Executive KMP on an annual basis by reference to market conditions and current remuneration practices, with the overall objective
of ensuring maximum Company performance and shareholder benefit including from the retention of a quality Board and Executive
Team. The Committee also engages professional support as required to ensure remuneration practices remain in step with the market
as well as the size and nature of the business.
(i) Executive KMP remuneration review process
CEO
REMUNERATION COMMITTEE
BOARD
Assesses each Senior Executive’s
current year performance based on
actual outcomes relative to agreed
targets, general performance and
market conditions.
Provides appropriate recommendations
to the Remuneration Committee on
incentive payments for the current year.
Provides appropriate recommendations
to the Remuneration Committee
of the amount of fixed remuneration,
appropriate STI targets and STI
payments for the future
measurement period.
Reviews the CEO’s recommendations
with respect to the Senior Executive
Team and provides appropriate
recommendations to the Board.
Assesses CEO’s current year
performance and remuneration
outcomes against agreed targets,
formulating a recommendation
to the Board.
Provides appropriate recommendations
to the Board of the amount of the CEO’s
fixed remuneration, and appropriate
STI and LTI targets for the future
measurement period, considering
general performance, market conditions
and other external factors.
Reviews the Remuneration
Committee’s recommendations.
Approves current year STI and LTI
payments.
Approves the remuneration and
remuneration structure for the future
measurement period, including STI
and LTI targets.
18
Hansen Technologies Ltd Annual Report 2020 (ii) Non-Executive Directors’ remuneration review process
Non-Executive Directors’ remuneration is governed by resolutions passed at a General Meeting of the Shareholders. During the most
recent AGM held on 21 November 2019, shareholders approved an increase to the Non-Executive Directors’ maximum remuneration
payable from $520,000 to $630,000. No increase in fees is sought for this financial year.
Non-Executive Directors are excluded from participation in the Company’s equity incentive plans.
(iii) Independent advice
To support the review of the 2020 Remuneration Framework, the Remuneration Committee has adopted the independent information,
observations, and advice from PricewaterhouseCoopers (PwC) in relation to remuneration strategy, structure and market practice.
Potential conflicts of interest were considered by the Committee, and both the Committee and the Board are satisfied that the advice
provided by PwC was free from undue influence. Any advice provided by PwC was used as a guide only and was not a substitute for
detailed consideration of all the relevant issues by the Committee. No remuneration recommendations, as defined by the Corporations
Act 2001, were provided during the year.
(b) Remuneration structure (FY20 Plan)
OBJECTIVE
COMPONENT AND FORM
ASSESSMENT
Attract and retain employees
with the skills and experience
associated with the role
Total Fixed
Remuneration (TFR)
Cash +
non-cash
benefits
Fixed
Market data, individual
experience and
performance
Incentivise and reward
achievement of annual
performance objectives
and business outcomes
Align motivations
with shareholder
interests and creation
of long-term value
Short-Term
Incentives (STI)
Long-Term
Incentives (LTI)
CEO – Cash
Other KMP – Cash +
deferred performance
rights (2 years)
Performance rights
to shares
(3 years)
Variable
(‘at-risk’)
Annual performance
based on financial and
non-financial targets
Continuous
employment, relative
Total Shareholder
Returns (TSR) and
adjusted Earnings
Per Share
(i) Total Fixed Remuneration (TFR)
TFR typically includes base salary and superannuation contributions and may include, at the discretion of the Board, other benefits
such as a motor vehicle (aggregated with associated fringe benefits tax to represent the total employment cost to the Group). TFR
is determined with reference to available market data, the scope of an individual’s role and the qualifications and experience of the
individual, as well as geographic location. TFR is reviewed annually to account for market movements and individual performance
outcomes. See page 32 for a summary of Executive KMP contracts.
19
Hansen Technologies Ltd Annual Report 2020 REMUNERATION REPORT CONTINUED
(ii) FY20 Short-Term Incentive (STI) Plan
Objective
How is it paid?
To incentivise and align the rewards attainable by Executive KMP with the achievement of specific
annual objectives of the Group and the creation of shareholder value.
For the CEO, all incentives will be paid in cash. For all other KMP, 75% of the incentives will be paid
through annual cash entitlement on achievement of specific annual financial and non-financial KPIs
and 25% will be awarded as equity, subject to a two-year deferral period which recipients must remain
employed with the Company.
How much can
executives earn?
Target STI benefit is set at 40% of TFR for the CEO and 35% of TFR for other Executive KMP. These are
subject to the following minimum and target performance thresholds:
Financial KPIs
(70% total STI)
150%
125%
100%
75%
50%
25%
0%
% STI awarded
(financial component)
(97% to 103% achievement)
100% of financial
STI awarded
(93% to 97% achievement)
0% to 100% of financial
STI awarded on linear bases
(0% to 93% achievement)
No award
(103% to a maximum
110% achievement)
100% to 150% of
financial STI awarded
on linear bases
< 80%
85%
90%
95%
100%
105%
110%
115%
>120%
Financial KPI achievement
Non-financial KPIs
(30% total STI)
Non-financial KPIs outcome is assessed and awarded up to a maximum of
100% based on outcomes.
How is performance
measured?
Performance measures (KPIs) selected reflect financial, strategic and operational objectives relevant
to the level and function of the role that are central to achievement of the business plan and strategy
and building shareholder value. Financial measures selected are measures against which management
and the Board assess the short-term financial performance of the Group. Strategic and operational
objectives are assigned to each individual to drive specific outcomes considered to be of strategic
importance to the Group within that individual’s level of responsibility. These objectives are determined
by the CEO and the Board in accordance with the process set out on page 18.
The weightings for each performance measure that comprise the total STI opportunity are set out below:
The selection of non-financial
KPIs varies depending on each
KMP’s roles and responsibilities
within the Group. These may
include achievement of specific
strategic projects that drive
longer-term shareholder value.
Each KMP may have a number
of separate non-financial
KPIs. Achievement of each
individual’s non-financial KPIs
is determined by reference
to an assigned performance
rating determined by the CEO
and the Board at the end of the
financial year in accordance
with the process described
on page 18.
30%
70%
Financial KPIs
(budgeted revenues and EBITDA)
Non-financial KPIs
Achievement of financial KPIs
is determined by reference to
the Group’s audited accounts
for the year in question. No
payment is made in respect
of financial KPIs to any KMP
if the target amount is not
met for the Group (set at 93%
of budgeted revenue and
EBITDA).
The Board retains final discretion over STI payments to ensure outcomes appropriately reflect
performance and achieve objectives of the STI scheme.
20
Hansen Technologies Ltd Annual Report 2020 What happens if an
executive leaves?
Changes from the
FY19 STI Plan
If an eligible executive ceases employment with the Group during the performance period other than by
way of dismissal or resignation (e.g. death, total and permanent disablement, redundancy, retrenchment
or retirement with prior written consent of the Board), then the executive will be entitled to a pro-rata
cash payment based on assessment of performance according to the eligible period of time served
up until the termination date.
Where termination occurs by way of dismissal or resignation prior before the end of the financial year,
no STI is awarded for that year. Similarly, any deferred STI awards are forfeited, unless otherwise
determined by the Board.
If termination of employment occurs for serious misconduct all vested and unvested rights will be
forfeited and will lapse.
For all KMP other than the CEO (who is already a significant shareholder), a new deferred equity
component was introduced where 25% of all future awards under the STI Plan will be awarded as
equity, subject to a two-year deferral period, within which recipients must remain employed by the
Company. This facilitates quicker equity participation for executives encouraging ‘owner like’ behaviours
in the business. STI opportunity levels were increased as a fixed percentage of TFR by 10% to ensure
that the recipient will not be ‘worse off’ from a cash flow perspective. Malus and clawback provisions
were introduced for all equity components allowing the Board to adjust awards for risks which
materialised during and after the vesting periods.
(iii) FY20 Long-Term Incentive (LTI) – Executive Performance Rights Plan
Objective
To align the rewards attainable by Executive KMP with the achievement of particular long-term objectives
of the Group and achievement of increasing shareholder value. Eligibility to participate in the LTI scheme
is determined by the Board and is targeted at Senior Executives whose role contributes significantly to
the performance of the Group.
How much can
executives earn?
Performance rights are subject to the service and performance conditions. The target LTI benefit is set
as follows:
• CEO LTI: 50% of TFR delivered as performance rights subject to vesting conditions; and
• KMP LTI: 20% of TFR delivered as performance rights subject to vesting conditions.
The number of performance rights issued is based on each executive’s target LTI benefit divided by the
market value of the rights. The market value of rights granted is based on the volume-weighted average
price of the Company’s shares during the five-day period before grant date.
LTI benefits of up to 150% of target LTI is payable where performance criteria are exceeded.
How is it paid?
LTIs are awarded as performance rights on achievement of certain thresholds reflective of shareholder
value delivered.
Each performance right entitles the eligible executive to be issued with a share.
21
Hansen Technologies Ltd Annual Report 2020 REMUNERATION REPORT CONTINUED
How is performance
measured?
Vesting of the LTI awards are subject to the following criteria:
1. Three years of continuous employment with the Group from 1 July 2019 to 30 June 2022.
2. Achievement of the thresholds over the same three-year period as set out below:
50%
Relative Total Shareholder
Return (rTSR)
The percentage change in a
company’s share price, plus
the effect of any dividends
paid, over the measurement
period, relative on a ranked
percentile basis to a
comparative group (S&P/ASX
Small Ordinaries Industrials
Index).
Relative TSR is a measure
widely understood and
accepted by shareholders,
as it directly measures
shareholder value creation.
Adjusted Earnings
Per Share (EPSa)
Based on the basic EPS
compound average
growth rate (CAGR) over
the measurement period,
adjusted to exclude non-cash
tax-effected amortisation of
acquired intangibles.
EPSa growth is selected as
it is considered a relevant
indicator linking financial
performance with shareholder
value.
The Board may also
determine to ‘normalise’
EPSa to exclude one-off
amounts and therefore derive
an underlying EPSa for the
basis of the calculation.
50%
The proportion of rights that may vest based on relative TSR performance is determined based
on the following vesting schedule:
Relative TSR Performance
Percentage of Performance Rights That Will Vest
< 50th percentile
None
Between 50th to 75th percentile
100% to 150% on a linear basis
> 75th percentile
150%
The proportion of rights that may vest based on EPSa CAGR is determined based on the following
vesting schedule:
EPSa CAGR
< 6%
Between 6% to 10%
> 10%
Percentage of performance rights that will vest
None
100% to 150% on a pro-rata basis
150%
Performance rights will be forfeited if performance conditions are not met. However, the Board has
discretion to increase or reduce the amount awarded if the Board considers the outcome to be
misaligned given the circumstances that prevailed over the relevant measurement period and the
experience of shareholders.
22
Hansen Technologies Ltd Annual Report 2020 What happens if an
executive leaves?
If an eligible executive ceases employment with the Group during the performance period other than by
way of dismissal or resignation (e.g. death, total and permanent disablement, redundancy, retrenchment
or retirement with prior written consent of the Board), then the unvested performance rights will vest on
a pro-rata basis according to the eligible period of time served up until the termination date.
Where termination occurs by way of dismissal or resignation prior to the vesting of the performance
rights, unvested rights may vest on a pro-rata basis according to the eligible period of time served up
until the termination date at the Board’s discretion.
If termination of employment occurs for serious misconduct all vested and unvested rights will be
forfeited and will lapse.
What are the performance
rights entitlements?
Performance rights issued to executives are not able to be traded on the ASX. They do not qualify for
receipt of dividends or have any voting rights until they have been exercised immediately on vesting
date and converted to shares by the employee.
Are there any restrictions
attached to the
performance rights?
The Group prohibits Executive KMP from entering into arrangements to protect the value of unvested
equity awards. The prohibition includes entering into contracts to hedge their exposure to any awards
as part of their remuneration package.
Changes from the
FY19 LTI Plan
Performance rights cannot be transferred to, or vest in, any person or body corporate other than the
Executive KMP.
For all KMP other than the CEO, there was a decrease in LTI opportunity levels as a fixed percentage
of TFR by 5% to rebalance the increase in the STI opportunity. Malus and clawback provisions were
introduced for all equity components allowing the Board to adjust awards for risks which materialised
during and after the vesting periods.
3. How reward was linked to performance
(a) Performance against STI outcomes
A summary of key measurement criteria of the Group’s financial performance for the financial years ended over the last six years is below.
Operating Revenue ($m)
Underlying EBITDA* ($m)
350
300
250
200
150
100
50
0
5-year CAGR: 23%
301.4
230.8
231.3
174.7
149.0
106.3
2015
2016
2017
2018
2019
2020
100
80
60
40
20
0
5-year CAGR: 20% (EBITDA)
85.7
66.7
63.1
49.7
51.0
34.1
2015
2016
2017
2018
2019
2020
* EBITDA is a non-IFRS term that relates to Earnings before Interest, Tax, Depreciation and Amortisation. The new accounting standard AASB 16 Leases has been
applied to FY20 and historical performance has been adjusted to reflect an estimated impact of the adoption of this standard. Non-recurring items have been
excluded from each year, where applicable.
23
Hansen Technologies Ltd Annual Report 2020 REMUNERATION REPORT CONTINUED
For FY20, budget targets were established for Group Revenue and EBITDA, and the STI financial payment gate was set with respect to
these targets. Both the Group’s Revenue and EBITDA were within the budget thresholds this year and all non-financial goals were met
for the STIs to be awarded. Refer to the operational and financial review section of the Directors’ Report for further information about the
Group’s FY20 performance.
FY20
FY19
Total Opportunity
$
Awarded
70% Financial
Awarded
30% KPIs
Total
Opportunity $
Awarded
70% Financial
Awarded
30% KPIs
Andrew Hansen
Cameron Hunter
Darren Meade
Graeme Taylor
Niv Fernando1
371,423
143,496
144,196
138,191
136,769
1. Niv Fernando resigned on 31 July 2020.
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
364,140
100,488
100,979
96,772
95,776
100%
100%
100%
100%
100%
100%
50%
100%
100%
100%
(b) Performance against equity outcomes
Our legacy LTI plans will continue to be measured and reported through until the Group’s FY22 Remuneration Report. As a consequence
of legacy LTI plans and the current LTI framework, in FY20 we have three different years of awards that will be tested, and in due course,
will subsequently vest or lapse based on their differing terms and vesting conditions.
The following table sets out the different legacy awards that are currently in place as at the end of FY20, each with their specific grant
details and performance measures, including the STI deferral:
Grant date
Security Performance Measure/s
2 Jul 2015
Option
1st year revenue and EBITDA,
3-yr cont. employment
Sect.
3 Ref.
(b)(i)
Status
22 Dec 2016 Option
EPSa, rTSR, 3-yr cont. employment
(b)(ii)
2 Jul 2017
Right
EPSa, rTSR, 3-yr cont. employment
(b)(ii)
2 Jul 2018
Right
EPSa, rTSR, 3-yr cont. employment
(b)(ii)
1 Sept 2019
Right
2-yr cont. employment after achieving
FY20 STI measures1
(b)(ii)
1 Sept 2019
Right
EPSa, rTSR, 3-yr cont. employment
(b)(ii)
Measurement period
Fully vested
Yet to vest
Failed to vest
150% of EPSa-linked rights will vest and the rTSR-linked rights did not satisfy market conditions.
2017
and prior
2018
2019
2020
2021
2022
1. Applies to all KMP, except for the CEO.
For the Group’s legacy LTI plans where options will be awarded, once an option has vested, if the employee wishes to convert the options
to shares, the employee must pay in cash to the Company the exercise price multiplied by the number of options received, e.g. for 100,000
options with an exercise price of $3.00 per share, the employee will be required to pay $300,000 to convert the options to shares.
24
Hansen Technologies Ltd Annual Report 2020 (i) Performance against LTI plan measures (2015 LTI plans)
All KMP eligible for the legacy LTI plans remained with the Company during the measurement period and continue to be in office at the
end of FY20.
The Board exercised its discretion to extend the expiry of the exercise of options granted in the (FY16) 2015 LTI plans from 2 July 2020
to 2 April 2021 to address the impact of the COVID-19 pandemic on the financial markets.
(ii) Performance against LTI plan measures (2016 LTI plans and onwards)
A summary of key measurement criteria of the Group’s performance relevant for assessing shareholder value creation over the last five
financial years is shown below:
Underlying EPS (EPSa) (cents)
Dividends Paid* (cents per share)
30
25
20
15
10
5
0
16.6
15.6
19.8
17.1
23.9
2016
2017
2018
2019
2020
12
10
8
6
4
2
0
10.0
7.0
7.0
6.0
6.0
2016
2017
2018
2019
2020
* Amount of dividends paid represents the return on shareholder value. However, the amount of dividends paid is not in itself a performance measure included
in the FY20 LTI plan, but is included as part of the calculation of relative TSR.
Share price performance relative to the S&P/ASX Small Ordinaries Index for the previous five years:
400%
350%
300%
250%
200%
150%
100%
0%
July 2015
July 2016
July 2017
July 2018
July 2019
July 2020
S&P/ASX Small Ords
HSN.AX
25
Hansen Technologies Ltd Annual Report 2020
REMUNERATION REPORT CONTINUED
Performance outcomes against FY17 (2016) LTI plan measures
Options under the FY17 (2016) LTI plan did not meet the required performance measurement hurdles for the options to vest and/or
be exercisable.
The below table sets out the value of options under legacy LTI plans that were exercised during FY20 and FY19:
Andrew Hansen
Cameron Hunter
Darren Meade
Graeme Taylor
Niv Fernando1
FY20
Value exercised*
$
FY19
Value exercised*
$
-
-
-
-
-
-
-
-
-
225,000
1. Niv Fernando resigned on 31 July 2020.
* Represents the intrinsic value of options that were exercised during the financial years 2020 and 2019, which is the net dollar value of shares realised from the
exercise of profitable options. Intrinsic value is calculated as the difference between the exercise price and the underlying share price at the date of exercise.
For example, an option with an exercise price of $2.00 exercised when the underlying share price is $5.00 has an intrinsic value of $3.00.
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.
Performance outcomes against FY18 (2017) LTI plan measures
Performance rights under the FY18 (2017) LTI plan exceeded the required performance measurement hurdles in relation to the
EPSa CAGR measure and will vest on an accelerated basis paying 150% of the entitlement on 31 August 2020. Performance rights
associated with the TSR hurdle did not satisfy market conditions.
The below table sets out the LTI performance targets and outcomes under the FY18 (2017) LTI plan framework:
Measure
Minimum target Maximum target Actual outcome
Rights
granted
Market
conditions
not satisfied
Additional
rights that
will vest
Rights that will
vest and are
exercisable at
reporting date
Relative TSR
50th percentile
75th percentile
N/A1
108,717
108,717
EPSa CAGR
6% CAGR
10% CAGR
15.7% CAGR
108,718
-
Total rights
217,435
108,717
-
54,359
54,359
-
163,077
163,077
1. Hansen’s TSR must be positive to pass the gate for TSR exercise conditions.
Performance outcomes against FY19 (2018) LTI Plan and FY20 (2019) LTI Plan measures
Performance rights granted in FY19 (2018 plan) and FY20 (2019 plan) have performance conditions attached that will be measured
over three years. Assessment and vesting (where conditions are satisfied) will happen after the completion of FY21 for the 2018 plan
and FY22 for the 2019 plan. See section 4(c) for a summary of performance rights granted during FY20.
26
Hansen Technologies Ltd Annual Report 2020 The table below sets out the value of STI and LTI performance rights granted in FY20 and FY19:
STI
Cameron Hunter
Darren Meade
Graeme Taylor
Niv Fernando1
LTI
Andrew Hansen
Cameron Hunter
Darren Meade
Graeme Taylor
Niv Fernando1
FY20
Value granted*
$
28,829
28,970
27,763
27,478
339,511
59,962
60,255
57,745
57,151
FY19
$
-
-
-
-
446,862
98,653
99,134
95,005
94,026
* Represents the value of performance rights at grant date, calculated in accordance with AASB 2 Share-based Payment, granted during the year as part
of remuneration under the terms of the FY20 deferred STI and LTI Plans and FY19 LTI Plans.
1. Niv Fernando resigned on 31 July 2020.
(c) Total remuneration mix
The following diagrams set out the proportional mix of remuneration for the CEO and each KMP at both the target amount and the
actual remuneration achieved for FY20:
TARGET
ACTUAL1
26%
53%
21%
56%
CEO
21%
17%
KMPs
16%
Total Fixed Remuneration
Short-Term Incentive
Long-Term Incentive
23%
10%
Total Fixed Remuneration
22%
Short-Term Incentive
Long-Term Incentive
67%
68%
1. Target and actual remuneration mix is calculated based on the combination of each CEO and KMP’s Total Fixed Remuneration for FY20, total value of STIs
awarded in relation to actual performance outcomes for FY20, and the value of LTIs granted in FY20 under the terms of the FY20 LTI plan. The proportional
mix of remuneration for KMP is based on an average amount. The difference between the target and actual remuneration mix relates to the value of equity-
based incentives, of which the target was based on the share price, while the actual was based on the fair value of the performance rights at grant date using a
conventional Black Scholes option pricing model (BSOPM) for the STI rights and using a Monte Carlo simulation option pricing model and BSOPM for the LTI rights.
27
Hansen Technologies Ltd Annual Report 2020 REMUNERATION REPORT CONTINUED
4. Remuneration details: Executive KMP
(a) Statutory remuneration details
Details of Executive KMP remuneration for the 2019 and 2020 financial years are set out in the table below:
Fixed Remuneration
Variable Remuneration
Total
Cash
Salary
$
Super
$
Non-
monetary
Benefits
$
Annual
and Long
Service
Leave
$
STI1,2
Awarded
$
LTI2
Fair Value
$
Total
$
Perform-
ance
Related
%
Total
$
Executive KMP
Year
Andrew Hansen
Cameron Hunter
Darren Meade
Graeme Taylor
Niv Fernando3
Total
2020
860,926
25,000
34,848
72,785
993,559
371,423
410,874 1,775,856
2019
843,240
24,999
31,157
62,497
961,893
399,140
242,346 1,603,379
2020
392,398
25,000
11,504
14,952
443,854
136,451
95,321
675,626
2019
383,359
25,000
13,796
59,525
481,680
85,415
53,143
620,238
2020
395,749
25,000
2019
387,237
25,000
2020
381,264
25,000
2019
370,321
25,000
2020
377,115
25,000
2019
366,253
25,000
-
-
-
-
-
-
11,414
432,163
137,116
94,777
664,056
17,777
430,014
100,979
53,130
584,123
(15,988)
390,276
131,407
91,796
613,479
21,083
416,404
131,772
52,059
600,235
7,981
410,096
130,054
90,851
631,001
9,672
400,925
130,776
52,039
583,740
2020 2,407,452
125,000
46,352
91,144 2,669,948
906,451
783,619 4,360,018
2019 2,350,410
124,999
44,953
170,554 2,690,916
848,082
452,717 3,991,715
44%
40%
34%
22%
35%
26%
36%
31%
35%
31%
39%
33%
1. Represents STI awarded and accrued in relation to actual performance during the 2020 and 2019 financial years. This includes performance rights granted as
remuneration that are valued at grant date in accordance with AASB 2 Share-based Payment and amortised over vesting period. STI performance rights applies
to all KMP other than the CEO.
2. Performance rights granted as remuneration are valued at grant date in accordance with AASB 2 Share-based Payment and amortised over vesting period.
3. Niv Fernando resigned on 31 July 2020.
(b) Options awarded, vested and lapsed during the year
The terms and conditions of each grant of options affecting the remuneration in the current or future reporting period are as follows.
Grant Date
Vesting Date
Expiry Date
Exercise Price
2 Jul 2015
2 Jul 2018
2 April 20211
22 Dec 2016
31 Aug 20192
22 Dec 2021
$2.67
$3.59
Value Per
Option at
Grant Date
$0.56
$1.19
Performance
Achieved
100%
0%3
% Vested
100%
0%3
Number of
Options on
Issue at
30/6/2020
400,000
-
1. The original expiry date for this tranche of options was 2 July 2020. However, due to the COVID-19 pandemic impact on financial markets, the Board exercised its
discretion to extend the expiry date for the remaining options to 2 April 2021.
2. The vesting date for options granted on 22 December 2016 is the date on which the Board notified the executive that the options have vested, after the outcomes
for the measurement period have been determined and satisfaction of the performance conditions have been assessed.
3. Options granted on 22 December 2016 did not meet the required performance measurement hurdles for the options to vest and/or be exercisable.
The number of options over unissued ordinary shares in the Company provided as remuneration to Executive KMP is shown in the table
on the following page. The options carry no dividend or voting rights.
28
Hansen Technologies Ltd Annual Report 2020 Options granted to Executive KMP which remain unvested at 30 June 2020 and outstanding are detailed below:
Balance
30/6/2019
During Year Ended
30/6/2020
Balance
30/6/2020
Name and Grant Date
Opening
Balance
Exercise
Price
Market
Condition
Not
Satisfied
Forfeited
Exercised
Vested and
Exercisable
Vested
and Un-
exercisable
Unvested
Andrew Hansen
22 Dec 20161
Total
Cameron Hunter
22 Dec 20161
2 July 20152
Total
Darren Meade
22 Dec 20161
2 July 20152
Total
Graeme Taylor
22 Dec 20161
2 July 20152
Total
Niv Fernando
22 Dec 20161
2 July 20152
Total
535,714
535,714
121,746
100,000
221,746
115,220
100,000
215,220
108,718
100,000
208,718
102,603
100,000
202,603
$3.59
(267,857)
(267,857)
(267,857)
(267,857)
$3.59
$2.67
(60,873)
(60,873)
-
-
(60,873)
(60,873)
$3.59
$2.67
(57,610)
(57,610)
-
-
(57,610)
(57,610)
$3.59
$2.67
(54,359)
(54,359)
-
-
(54,359)
(54,359)
$3.59
$2.67
(51,302)
(51,301)
-
-
(51,302)
(51,301)
Grand total
1,384,001
(492,001)
(492,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100,000
100,000
-
100,000
100,000
-
100,000
100,000
-
100,000
100,000
400,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1. Based on the measurement period for the three years ended 30 June 2019, these options that are dependent on the EPSa hurdle did not vest on 31 August 2019,
and these options that are dependent on the relative TSR hurdle have not satisfied the market condition.
2. The original expiry date for this tranche of options was 2 July 2020. However, due to the COVID-19 pandemic impact on financial markets, the Board exercised
its discretion to extend the expiry date for the remaining options to 2 April 2021.
29
Hansen Technologies Ltd Annual Report 2020 REMUNERATION REPORT CONTINUED
(c) Performance rights awarded, vested and lapsed during the year
Performance rights issued under the Group’s 2019 (FY20) STI and LTI Plans during the year are subject to the service and performance
criteria as described on pages 19 to 23.
The following table sets out details of performance rights granted to executives during the financial year:
Executive KMP
STI3
Grant
Date
Rights
Granted
Balance
30/6/20201
Fair Value
Per Right2
Vesting
Date
$ Value of Rights
at Grant Date1
Cameron Hunter
1 Sept 2019
Darren Meade
1 Sept 2019
Graeme Taylor
1 Sept 2019
Niv Fernando
1 Sept 2019
LTI
9,270
9,315
8,927
8,835
9,270
9,315
8,927
8,835
Andrew Hansen*
1 Sept 2019
119,969
119,969
Cameron Hunter
1 Sept 2019
Darren Meade
1 Sept 2019
Graeme Taylor
1 Sept 2019
Niv Fernando4
1 Sept 2019
21,188
21,291
20,405
20,195
21,188
21,291
20,405
20,195
$3.11
$3.11
$3.11
$3.11
$2.83
$2.83
$2.83
$2.83
$2.83
30 Jun 2022
30 Jun 2022
30 Jun 2022
30 Jun 2022
30 Jun 2022
30 Jun 2022
30 Jun 2022
30 Jun 2022
30 Jun 2022
28,829
28,970
27,763
27,478
339,511
59,962
60,255
57,745
57,151
* The Board has resolved to issue 119,969 rights to Andrew Hansen, the Chief Executive Officer, as part of the 2019 LTI plan issued in FY20. The issue of these
rights was approved by shareholders at the Company’s Annual General Meeting on 21 November 2019. Any differences in the fair value of the performance rights
between the original grant date by the Board and the date of shareholder approval is not material to remuneration awarded.
1. No performance rights were vested or forfeited during the year. Rights do not expire as shares are issued to KMP upon vesting.
2. The fair value of the rights at grant date has been determined by an independent external valuation expert in accordance with Australian Accounting Standards.
The fair value of the STI rights was based fully on Black Scholes option pricing model (BSOPM) while the fair value of the LTI rights was based on Monte Carlo
simulation option pricing model for the TSR component and BSOPM for the EPSa component. Note 17 to the Group’s financial statements outlines the valuation
methodology and key inputs and assumptions to the valuation in greater detail.
3. STI performance rights represent the 25% of the total short-term incentives awarded to the KMP on achievement of specific annual financial and non-financial
KPIs. This applies to all KMP except for the CEO.
4. Niv Fernando resigned on 31 July 2020.
The terms and conditions of each grant of rights affecting the remuneration in the current or future reporting period are as follows.
Vesting Date
Type
Value Per Right
at Grant Date
Performance
Achieved
Grant Date
2 Jul 2017
2 Jul 2018
31 Aug 20201
31 Aug 20211
1 Sept 2019
30 Jun 2022
1 Sept 2019
30 Jun 2022
LTI
LTI
STI
LTI
$3.82
$3.01
$3.11
$2.83
75%2
-
-
-
Number of Rights
on Issue at
30/06/2020
% Vested
-
-
-
-
217,435
276,970
36,347
203,048
1. The vesting date for performance rights granted on 2 July 2017 and 2 July 2018 is the date on which the Board notifies the executive that the options and rights
have vested, after the outcomes for the measurement period have been determined and satisfaction of the performance conditions have been assessed. This is
likely to be the dates as stated in the table.
2. Performance rights in relation to the EPSa CAGR measure exceeded the required performance measurement hurdles and will vest on an accelerated basis paying
150% of the entitlement on 31 August 2020. Performance rights associated with the TSR hurdle did not satisfy market conditions.
30
Hansen Technologies Ltd Annual Report 2020 5. FY21 Enhanced STI Plan
Objective
How is it paid?
To incentivise and align the rewards attainable by Executive KMP with the achievement of specific
annual objectives of the Group and the creation of shareholder value.
On achievement of specific annual financial and non-financial KPIs, 40% of TFR for the CEO and 25%
of TFR for other Executive KMP will be paid through annual cash entitlements. In addition, 50% of TFR
for the CEO and 25% of TFR for other Executive KMP will be awarded as equity, subject to a two-year
deferral period during which recipients must remain employed by the Company.
How much can
executives earn?
Target benefit is set at 90% of TFR for the CEO and 50% of TFR for other Executive KMP. These are
subject to the following minimum and target performance thresholds:
Financial KPIs
(70% total STI)
150%
125%
100%
75%
50%
25%
0%
% STI awarded
(financial component)
(97% to 103% achievement)
100% of financial
STI awarded
(93% to 97% achievement)
0% to 100% of financial
STI awarded on linear bases
(0% to 93% achievement)
No award
(103% to a maximum
110% achievement)
100% to 150% of
financial STI awarded
on linear bases
< 80%
85%
90%
95%
100%
105%
110%
115%
>120%
Financial KPI achievement
How is performance
measured?
Non-financial KPIs
(30% total STI)
Non-financial KPIs outcome is assessed and awarded up to a maximum of
100% based on outcomes.
Performance measures (KPIs) selected reflect financial, strategic and operational objectives relevant to
the level and function of the role that are central to achievement of delivering the best possible outcome
over the next 12 months given the current economic environment. Financial measures selected are
measures against which management and the Board assess the short-term financial performance
of the Group. Strategic and operational objectives are assigned to each individual to drive specific
outcomes considered to be of strategic importance to the Group within that individual’s level of
responsibility. These objectives are determined by the CEO and the Board in accordance with the
process set out on page 18.
The weightings for each performance measure that comprise the total STI opportunity are set out below:
The selection of non-financial
KPIs varies depending on each
KMP’s roles and responsibilities
within the Group. These may
include achievement of specific
strategic projects that drive
the best possible outcome
over the next 12 months. Each
KMP may have a number
of separate non-financial
KPIs. Achievement of each
individual’s non-financial KPIs
is determined by reference
to an assigned performance
rating determined by the CEO
and the Board at the end of the
financial year in accordance
with the process described
on page 18.
30%
70%
Financial KPIs
(budgeted revenues and EBITDA)
Non-financial KPIs
Achievement of financial KPIs
is determined by reference to
the Group’s audited accounts
for the year in question. No
payment is made in respect
of financial KPIs to any KMP
if the target amount is not
met for the Group (set at 93%
of budgeted revenue and
EBITDA).
The Board retains final discretion over incentive payments to ensure outcomes appropriately reflect
performance and achieve objectives of the executive incentive scheme.
31
Hansen Technologies Ltd Annual Report 2020 REMUNERATION REPORT CONTINUED
What happens if an
executive leaves?
Changes from the
FY20 STI and LTI Plans
If an eligible executive ceases employment with the Group during the performance period other than by
way of dismissal or resignation (e.g. death, total and permanent disablement, redundancy, retrenchment
or retirement with prior written consent of the Board), then the cash entitlements and the equity
incentives will be awarded on a pro-rata basis according to the eligible period of time served up until
the termination date.
Where termination occurs by way of dismissal or resignation prior to the end of the measurement
period, the cash component may be paid on a pro-rata basis. All equity entitlements are lost, unless
otherwise determined by the Board.
If termination of employment occurs for serious misconduct all vested and unvested rights will be
forfeited and will lapse.
The LTI Program has been suspended and an enhanced STI Program to reward the Executive Team
based on specific annual financial and non-financial KPIs has been put in place. For all KMP other than
the CEO, there has been a reduction of 5% of TFR. The resulting 50% will be paid 50% in cash and
50% in equity, subject to a two-year deferral. For the CEO, 40% of the entitlement will be paid in cash
with 50% in equity, subject to a two-year deferral.
KPIs are structured in a way that the Company will be in the best position to manage the impact of the
current environment, whilst being mindful of the longer term to ensure the business is optimally placed
for the recovery ahead.
6. Contractual arrangements with Executive KMP
Remuneration and other conditions of employment are set out in each executive’s employment contract. The key elements of these
employment contracts are summarised below:
Component
Approach for CEO
Total Fixed Remuneration
Contract duration
$920,774
Ongoing
Notice by individual/Company
6 months
Approach for other Executive KMP
Range between $390,000 and $415,000
Ongoing
1 month
Termination of employment
(without cause)
The Board has discretion to allow some or all STI entitlements to be paid out on a pro-rata basis
aligned to time, where termination occurs by way of resignation or dismissal.
In other forms of without cause terminations, the STI will be reduced proportionately to reflect
the portion of the measurement period, but there is no other impact to the executive’s entitlement.
The Board has discretion to allow unvested LTIs to vest on a pro-rate basis aligned to time.
Where this discretion is not exercised, such unvested options or rights will lapse.
Termination of employment
(with cause)
STI is forfeited.
All unvested LTIs and vested but unexercised LTIs are forfeited.
32
Hansen Technologies Ltd Annual Report 2020 7. Remuneration details: Non-Executive KMP
Non-Executive Directors enter into service agreements through a letter of appointment. Non-Executive Director fees are determined
with reference to market levels and the need to attract high-quality Directors.
Non-Executive Directors do not receive any variable or performance-based remuneration.
The Non-Executive Director fee pool currently has a maximum value of $630,000 per annum, as approved by shareholders at the
2019 AGM.
The annual fees provided to Non-Executive Directors, inclusive of superannuation, are shown below:
Board fees
Chairman
Other Non-Executive Directors
Committee fees
Audit and Risk Committee – chair
Audit and Risk Committee – member
Remuneration Committee – chair
Remuneration Committee – member
Non-Executive Director
David Trude
Bruce Adams
Jennifer Douglas
Sarah Morgan1
Don Rankin2
David Osborne
David Howell
Total
2020
$
127,541
72,000
9,000
5,000
9,000
5,000
Fixed Remuneration
Non-monetary
Benefits
-
-
-
-
-
-
-
Salary
and Fees
$
116,476
104,868
69,293
63,950
73,098
68,592
35,333
68,592
44,236
69,293
63,950
76,918
91,347
484,647
461,299
Year
2020
2019
2020
2019
2020
2019
2020
2019
2020
2020
2019
2020
2019
2020
2019
Super
11,065
9,962
6,582
6,075
6,944
6,516
3,356
6,516
4,914
6,582
6,075
7,307
8,678
46,750
43,822
1. Sarah Morgan resigned on 19 December 2019.
2. Don Rankin was appointed as a Non-Executive Director on 21 November 2019.
2019
$
114,830
70,025
5,083
-
5,083
-
Total
127,541
114,830
75,875
70,025
80,042
75,108
38,689
75,108
49,150
75,875
70,025
84,225
100,025
531,397
505,121
33
Hansen Technologies Ltd Annual Report 2020 REMUNERATION REPORT CONTINUED
8. Share-based remuneration disclosures
(a) Shareholdings of KMP
The number of shares in the Company held by each Non-Executive Director and Executive KMP during the year, including their related
parties, is summarised below:
Balance
30 June 2019
Received during
the year on
exercise of options
Other changes
during the year
Balance
30 June 2020
Non-Executive Directors
David Trude
Bruce Adams1
Jennifer Douglas
Don Rankin2
Sarah Morgan3
David Osborne1
David Howell
Executive KMP
Andrew Hansen1
Cameron Hunter
Darren Meade
Graeme Taylor
Niv Fernando4
Joint interest1
Total
102,113
152,304
16,000
-
21,351
386,335
26,218
34,963,449
1,105,882
79,783
132,841
76,079
-
37,062,355
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,843
103,956
34,739,113
34,891,417
-
25,000
(21,351)
16,000
25,000
-
34,739,113
35,125,448
7,448
33,666
4,050
34,967,499
-
-
2,399
-
1,105,882
79,783
135,240
76,079
(69,478,226)
(69,478,226)
19,389
37,081,744
1. Each of Bruce Adams, David Osborne and Andrew Hansen has a joint interest in a single parcel of 34,739,113 shares as at the date of this report.
2. Don Rankin was appointed as a Non-Executive Director on 21 November 2019.
3. Sarah Morgan resigned on 19 December 2019 and as such is no longer a KMP as at 30 June 2020.
4. Niv Fernando resigned on 31 July 2020.
(b) Shares issued on exercise of options and performance rights
There were no shares issued on exercise of options and performance rights and therefore, there were no amounts unpaid on shares
issued on exercise of options or performance rights during the year.
9. Other transactions with KMP
Rental agreements with the CEO and other KMP
The Group leases its Melbourne head office and its York Street (South Melbourne) office from an entity in which the CEO is a Director.
The terms and conditions of the lease and other property arrangements are no more favourable than those available, or which might
reasonably be expected to be available, from others on an arm’s length basis. In addition, the Group rents an apartment in New York
City, USA, on an as-required basis at a rate favourable to the Group. The apartment is owned by the CEO.
The total lease and rental payments during the 2020 financial year related to these arrangements were $1,534,415.
Bruce Adams and David Osborne have a joint indirect interest in the entity that is a lessor to the Melbourne and South Melbourne
arrangements as described above. The terms and conditions of the lease arrangements have not changed in the current financial year.
Signed in accordance with a resolution of the Directors.
David Trude
Director
Melbourne
28 August 2020
Andrew Hansen
Director
34
Hansen Technologies Ltd Annual Report 2020
AUDITOR’S INDEPENDENCE DECLARATION
RSM Australia Partners
Level 21, 55 Collins Street Melbourne VIC 3000
PO Box 248 Collins Street West VIC 8007
T +61 (0) 3 9286 8000
F +61 (0) 3 9286 8199
www.rsm.com.au
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Hansen Technologies Limited and its controlled entities for
the year ended 30 June 2020, I declare that, to the best of my knowledge and belief, there have been no
contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
M PARAMESWARAN
Partner
Dated: 28 August 2020
Melbourne, Victoria
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network
is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
28
35
Hansen Technologies Ltd Annual Report 2020 FINANCIAL REPORT
37 Consolidated Statement of Comprehensive Income
38 Consolidated Statement of Financial Position
39 Consolidated Statement of Changes in Equity
40 Consolidated Statement of Cash Flows
69 Section D: People
69 16. Employee benefits
71 17. Share-based payments
75 Section E: Capital and Financial Risk Management
75 18. Financial risk management
41 Section A: Basis of Preparation
41 1. Basis of preparation
43 Section B: Performance
43 2. Segment information
47 3. Revenue and other income
50 4. Separately disclosed items
51 5. Profit from continuing operations
52 6. Income tax
55 7. Earnings Per Share
56 Section C: Working Capital and Operating Assets
56 8. Cash and cash equivalents
57 9. Receivables
58 10. Other assets
59 11. Plant, equipment and leasehold improvements
60 12. Intangible assets
63 13. Leases
68 14. Payables
68 15. Other operating provisions
78 19. Borrowings
80 20. Contributed capital
81 21. Dividends
82 22. Reserves and retained earnings
82 23. Commitments and contingencies
83 Section F: Group Structure
83 24. Parent entity information
84 25. Business combinations
87 Section G: Other Disclosures
87 26. Related party disclosures
89 27. Auditor’s remuneration
90 28. Deed of cross guarantee
92 29. New and amended accounting standards
and interpretations
93 30. Subsequent events
36
Hansen Technologies Ltd Annual Report 2020
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2020
Operating revenue
Other income
Total revenue and other income
Employee benefit expenses
Depreciation expense
Amortisation expense
Property and operating rental expenses
Contractor and consultant expenses
Software licence expenses
Hardware and software expenses
Travel expenses
Communication expenses
Professional expenses
Finance costs on borrowings
Finance costs on lease liabilities
Foreign exchange gains/(losses)
Other expenses
Total expenses
Profit before income tax expense
Income tax expense
Net profit after income tax expense
Other comprehensive (expense)/income
Items that may be reclassified subsequently to profit and loss
Net (loss)/gain on hedges of net investments
Exchange differences on translation of foreign entities, net of tax
Note
3
3
5
5
5
5
5
5
5
2020
$’000
301,369
2,320
303,689
2019
$’000
231,324
1,634
232,958
(168,193)
(128,027)
(11,307)
(31,028)
(4,324)
(9,405)
(2,962)
(15,559)
(6,823)
(3,325)
(2,827)
(8,087)
(1,193)
744
(9,559)
(3,806)
(18,950)
(10,394)
(5,339)
(2,108)
(11,352)
(5,773)
(3,805)
(1,891)
(2,058)
(9)
(527)
(11,142)
(273,848)
(205,181)
6(a)
29,841
(4,084)
25,757
27,777
(6,312)
21,465
22(a)
22(a)
(802)
(13,141)
43
6,558
Other comprehensive (expense)/income for the year, net of tax
(13,943)
6,601
Total comprehensive income for the year
11,814
28,066
Basic earnings (cents) per share attributable to ordinary equity holders
of the Company
Diluted earnings (cents) per share attributable to ordinary equity holders
of the Company
7
7
13.0
12.9
10.9
10.8
The consolidated statement of comprehensive income is to be read in conjunction with the notes to the financial statements set out
on pages 41 to 93.
37
Hansen Technologies Ltd Annual Report 2020 CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2020
Current assets
Cash and cash equivalents
Receivables
Accrued revenue
Other current assets
Total current assets
Non-current assets
Plant, equipment and leasehold improvements
Intangible assets
Right-of-use assets
Deferred tax assets
Other non-current assets
Total non-current assets
Total assets
Current liabilities
Payables
Borrowings
Lease liabilities
Current tax payable
Provisions
Unearned revenue
Total current liabilities
Non-current liabilities
Deferred tax liabilities
Borrowings
Lease liabilities
Provisions
Unearned revenue
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Foreign currency translation reserve
Share-based payments reserve
Retained earnings
Total equity
Note
8
9
3(a)(iii)
10
11
12
13(a)
6(b)
10
14
19
13(b)
15, 16
3(a)(iii)
6(b)
19
13(b)
16
3(a)(iii)
20
22(a)
22(b)
22(c)
2020
$’000
44,492
47,916
21,945
8,357
20191
$’000
38,288
49,475
25,796
7,267
122,710
120,826
11,414
377,660
20,087
9,971
3,681
422,813
545,523
24,223
591
5,661
5,632
15,555
24,471
76,133
43,443
157,852
15,384
170
47
216,896
293,029
252,494
10,986
408,693
-
4,601
3,123
427,403
548,229
24,606
134
92
1,756
15,313
27,305
69,206
44,290
185,674
-
189
-
230,153
299,359
248,870
140,952
138,746
9,397
5,404
96,741
23,340
3,931
82,853
252,494
248,870
1. Certain balances have been restated in accordance with the accounting for business combination following the finalisation of the acquisition accounting
associated with Sigma Systems (refer to Note 25). There has also been a reclassification between other current assets and borrowings associated with
prepaid borrowing costs. Refer to Notes 10 and 19, respectively.
The consolidated statement of financial position is to be read in conjunction with the notes to the financial statements set out
on pages 41 to 93.
38
Hansen Technologies Ltd Annual Report 2020 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2020
Balance as at 1 July 2019
Profit after income tax expense for the year
Net loss on hedges of net investments
Exchange differences on translation of foreign entities,
net of tax
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Employee share options exercised
Share-based payment expense – performance rights
Equity issued under Dividend Reinvestment Plan
Dividends declared
Total transactions with owners in their capacity
as owners
Balance as at 30 June 2020
Balance as at 1 July 2018
Effect of adoption of new accounting standards
Balance as at 1 July 2018 (restated)
Profit after income tax expense for the year
Net gain on hedges of net investments
Exchange differences on translation of foreign entities,
net of tax
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Shares issued under Employee Share Plan
Employee share options exercised
Share-based payment expense – performance rights
Share-based payment expense – share options
Equity issued under Dividend Reinvestment Plan
Dividends declared
Total transactions with owners in their capacity
as owners
Contributed
Equity
$’000
Reserves
$’000
138,746
27,271
Retained
Earnings
$’000
82,853
25,757
-
-
Total
Equity
$’000
248,870
25,757
(802)
(13,141)
-
(802)
(13,141)
(13,943)
25,757
11,814
-
1,473
-
-
-
-
-
452
1,473
1,754
(11,869)
(11,869)
-
-
-
-
452
-
1,754
-
Note
22(c)
22(a)
22(a)
20(b)
17(e)
20(b)
22(c)
20, 22
2,206
140,952
1,473
14,801
(11,869)
(8,190)
96,741
252,494
Contributed
Equity
$’000
Reserves
$’000
136,896
19,841
-
-
136,896
19,841
-
-
-
-
170
535
-
-
1,145
-
-
43
6,558
6,601
-
-
965
(137)
-
-
Note
3(a)(i)
22(c)
22(a)
22(a)
20(b)
20(b)
17(e)
17(e)
20(b)
22(c)
Retained
Earnings
$’000
73,186
1,984
75,170
21,465
-
-
21,465
-
-
-
-
-
Total
Equity
$’000
229,923
1,984
231,907
21,465
43
6,558
28,066
170
535
965
(137)
1,145
(13,782)
(13,782)
1,850
829
(13,782)
(11,103)
Balance as at 30 June 2019
20, 22
138,746
27,271
82,853
248,870
The consolidated statement of changes in equity is to be read in conjunction with the notes to the financial statements set out
on pages 41 to 93.
39
Hansen Technologies Ltd Annual Report 2020 CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2020
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Finance costs on borrowings
Finance costs on lease liabilities
Transaction costs relating to the acquisition of a subsidiary
Payments for deferred remuneration
Income tax paid
Net cash provided by operating activities
Cash flows from investing activities
Proceeds from sale of plant, equipment and leasehold improvements
Payment for acquisition of business net of cash assumed
Payments for plant, equipment and leasehold improvements
Payments for capitalised software development costs
Net cash used in investing activities
Cash flows from financing activities
Proceeds from options exercised
Proceeds from borrowings
Repayment of borrowings
Repayment of lease liabilities
Dividends paid, net of dividend reinvestment
Net cash (used in)/provided by financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at end of the year
Note
2020
$’000
2019
$’000
327,443
(243,713)
54
(6,760)
(1,193)
-
-
(6,202)
69,629
616
-
(5,041)
(14,021)
(18,446)
452
4,900
(32,733)
(6,982)
(10,115)
(44,478)
6,705
38,288
(501)
44,492
248,646
(197,030)
84
(1,049)
(9)
(2,063)
(2,235)
(6,694)
39,650
4
(159,391)
(2,980)
(10,892)
(173,259)
535
188,398
(27,455)
(110)
(12,637)
148,731
15,122
23,245
(79)
38,288
3
5
5, 13(b)
25(i)
25(iii)
8(a)
25
11
12
20(b)
19(b)
19(b)
13(d)
21
8
The consolidated statement of cash flows is to be read in conjunction with the notes to the financial statements set out on
pages 41 to 93.
40
Hansen Technologies Ltd Annual Report 2020 NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2020
Section A: Basis of Preparation
This section describes the basis in which the Group’s financial statements are prepared. Specific
accounting policies are described in the note to which they relate. The accounting policies have
been consistently applied, unless otherwise stated.
1. Basis of preparation
(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 applicable authoritative pronouncements of the Australian Accounting Standards Board
and the Corporations Act 2001.
The Financial Report covers the Group, being Hansen Technologies Limited (the Company) and its controlled entities as a consolidated
entity. The Company is a company limited by shares, incorporated and domiciled in Australia. The address of the Company’s registered
office and principal place of business is 2 Frederick St, Doncaster Victoria 3108 Australia. The Company is a for-profit entity for the
purposes of preparing the Group’s financial statements.
This Financial Report was authorised for issue by the Directors on 28 August 2020.
The Group’s consolidated financial statements have been presented in a streamlined manner to simplify the information disclosed and
to make it more relevant for users. Similar notes have been grouped into sections with relevant accounting policies and judgements
and estimate disclosures incorporated within the notes to which they relate.
Compliance with IFRS
The Group’s consolidated financial statements also comply with the International Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board (IASB).
Historical cost convention
The Financial Report has been prepared under the historical cost convention, as modified by revaluations to fair value for certain classes
of assets and liabilities as described in the accounting policies.
Significant accounting estimates and judgements
The preparation of the Financial Report requires the use of certain estimates and judgements in applying the Group’s accounting policies.
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 in each of the affected notes.
Those estimates and judgements significant to the Financial Report are disclosed in the following notes:
Significant accounting estimate and judgement
Provision for expected credit losses of trade receivables
Capitalisation of research and development costs
Impairment of goodwill
Impairment of non-financial assets other than goodwill
Determining the lease term of contracts with renewal and termination options – Group as a lessee
Estimating the incremental borrowing rate
Share-based payments
Business combinations
Note
Page Reference
9
12
12
12
13
13
17
25
58
61
62
62
67
67
74
86
41
Hansen Technologies Ltd Annual Report 2020 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
30 JUNE 2020
1. Basis of preparation continued
(b) Principles of consolidation
The consolidated financial statements are those of the consolidated Group, comprising the financial statements of the parent Company,
and of all entities which the parent controls. The Group controls an entity when it is exposed, or has rights, to variable returns from its
involvement with the entity and has the ability to affect those returns through its power over the entity.
The financial statements of subsidiaries are prepared for the same reporting period as the parent entity, using consistent accounting
policies. Adjustments are made to bring into line any dissimilar accounting policies, which may exist.
All inter-company balances and transactions, including any unrealised profits or losses, have been eliminated on consolidation.
Subsidiaries are consolidated from the date that control is established.
(c) Comparatives
Where necessary, comparative information has been reclassified and repositioned for consistency with current year disclosures.
(d) Rounding amounts
The parent Company and the consolidated Group have applied the relief available under ASIC Corporations (Rounding in Financial/
Directors’ Reports) Instrument 2016/191 and, accordingly the amounts in the consolidated financial statements and in the Directors’
Report have been rounded to the nearest thousand dollars, or in certain cases to the nearest dollar.
(e) Going concern
The Financial Report has been prepared on a going concern basis.
42
Hansen Technologies Ltd Annual Report 2020 Section B: Performance
This section explains the operating results of the Group for the year and provides insights into the
Group’s results, including results by operating segment, separately disclosed items during the year that
affected the Group’s results, components of income and expenses, income tax and Earnings Per Share.
2. Segment information
(a) Description of segments
Management has determined the Group’s operating segments based on the reports reviewed by the CEO (the Chief Operating
Decision Maker).
The operating segments are identified based on the types of services provided to the Group’s customers and the type of customer
the services are provided to. Discrete financial information about each of these operating businesses is reported to the executive
management team on at least a monthly basis.
Where operating segments meet the aggregation criteria, these are aggregated into reported segments. Operating segments are
aggregated based on similar products and services provided to the same type of customers using the same distribution method.
Segment profits, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on
a reasonable basis. Inter-segment pricing is determined on an arm’s length basis and are eliminated on consolidation. There are
no significant transactions between segments.
The Group has identified only one reportable segment as described in the table below. No operating segments have been aggregated to
form the below reportable operating segment. The ‘other’ category includes business units that do not qualify as an operating segment,
as well as the operating segments which do not meet the disclosure requirements of a reportable segment, including IT Outsourcing
and Customer Care services.
Reportable Segment
Description of Segment
Billing
Sale of billing applications and the provision of consulting services related to billing systems.
During the financial year ended 30 June 2020, Management has determined that certain costs, borrowings and their related finance
costs are directly attributable to the Billing segment. In addition, retrospective adjustments affecting certain asset and liability accounts
were also recognised in the accounting for the business combination (Note 25). Prior year segment information has been restated
to reflect these.
(b) Segment information
2020
Segment revenue
Total segment revenue
Revenue from external customers
Segment profit
Total segment profit
Segment profit from core operations
Items included within the segment profit:
Depreciation expense
Amortisation expense
Total segment assets
Additions to non-current assets
Total segment liabilities
Billing
$’000
291,642
291,642
33,191
33,191
10,693
30,779
482,160
19,062
287,009
Other
$’000
9,727
9,727
666
666
138
5
14,284
-
4,938
Total
$’000
301,369
301,369
33,857
33,857
10,831
30,784
496,444
19,062
291,947
43
Hansen Technologies Ltd Annual Report 2020 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
30 JUNE 2020
2. Segment information continued
(b) Segment information continued
2019
Segment revenue
Total segment revenue
Revenue from external customers
Segment profit
Total segment profit
Segment profit from core operations
Items included within the segment profit:
Depreciation expense
Amortisation expense
Total segment assets
Additions to non-current assets
Total segment liabilities
Billing
$’000
218,383
218,383
33,071
33,071
2,538
18,434
489,187
13,871
294,144
Other
$’000
12,941
12,941
1,607
1,607
200
11
18,785
-
4,846
(i) Reconciliation of segment revenue to the consolidated statement of comprehensive income
Segment revenue
Total operating revenue
2020
$’000
301,369
301,369
Total
$’000
231,324
231,324
34,678
34,678
2,738
18,445
507,972
13,871
298,990
2019
$’000
231,324
231,324
Geographical segments
In presenting information based on geographical segments, segment revenue is based on the geographical location of customers.
Segment assets are based on the geographical location of the assets.
The Group’s business segments operate geographically as follows:
Geographical segment
Regions covered
APAC
Americas
EMEA
Australia, New Zealand and Asia
North America, Central America and Latin America
Europe, Middle East and Africa
Product segments
In presenting information based on product segments, the Group’s business segments provide the following types of products and
services as follows:
Product
Licence, support
and maintenance
Services
Description of product
Recurring billing application licence, support and maintenance services delivered as part of a total
billing system solution.
Provision of various professional services in relation to customer billing systems and IT outsourced
services covering facilities management, systems and operations support, network services and
business continuity support.
Hardware and software sales
Provision of other third-party hardware and software licences to customers of the Group’s billing
system solutions.
Other
44
Includes reimbursed expenses incurred for servicing the customer contract.
Hansen Technologies Ltd Annual Report 2020 (ii) Disaggregation of revenue from contracts with customers by segment
Set out below is the disaggregation of the Group’s revenue from contracts with customers:
2020
Products
Licence, support and maintenance
Services
Hardware and software sales
Other revenue
Total revenue from contracts with customers
Revenue by market vertical
Energy
Communications
Other
Total revenue from contracts with customers
Revenue by geographic segment
APAC
Americas
EMEA
Total revenue from contracts with customers
Timing of revenue recognition
Goods and services transferred at a point in time
Services transferred over time
Total revenue from contracts with customers
2019
Products
Licence, support and maintenance
Services
Hardware and software sales
Other revenue
Billing
$’000
Other
$’000
Total
$’000
155,257
134,894
835
656
291,642
174,354
117,288
-
291,642
49,269
80,639
161,734
291,642
32,001
259,641
291,642
Billing
$’000
138,202
78,042
1,038
1,101
4,871
4,447
295
114
9,727
4,438
-
5,289
9,727
5,307
4,420
-
9,727
295
9,432
9,727
Other
$’000
6,884
5,799
-
258
160,128
139,341
1,130
770
301,369
178,792
117,288
5,289
301,369
54,576
85,059
161,734
301,369
32,296
269,073
301,369
Total
$’000
145,086
83,841
1,038
1,359
Total revenue from contracts with customers
218,383
12,941
231,324
Revenue by market vertical
Energy
Communications
Other
Total revenue from contracts with customers
Revenue by geographic segment
APAC
Americas
EMEA
Total revenue from contracts with customers
Timing of revenue recognition
Goods and services transferred at a point in time
Services transferred over time
Total revenue from contracts with customers
144,816
73,567
-
218,383
42,723
50,213
125,447
218,383
2,530
215,853
218,383
5,898
-
7,043
12,941
7,043
5,898
-
12,941
258
12,683
12,941
150,714
73,567
7,043
231,324
49,766
56,111
125,447
231,324
2,788
228,536
231,324
45
Hansen Technologies Ltd Annual Report 2020 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
30 JUNE 2020
2. Segment information continued
(b) Segment information continued
(iii) Reconciliation of segment profit from core operations to the consolidated statement
of comprehensive income
Segment profit from core operations
Interest income
Unallocated depreciation and amortisation
Separately disclosed items impacting profit
Other expense
Profit before income tax
Note
3
4
2020
$’000
33,857
54
(720)
440
(3,790)
29,841
2019
$’000
34,678
84
(668)
(2,794)
(3,523)
27,777
In the current financial year, $440,000 of income relating to the profit from the sale of a premises in Norway have not been allocated to
the Billing segment as it is not directly attributable to the segment. In the prior financial year, the entire separately disclosed items were
not directly attributable.
(iv) Reconciliation of segment assets to the consolidated statement of financial position
Segment assets
Unallocated assets
– Cash
– Other
Total unallocated assets
Total assets
2020
$’000
496,444
44,343
4,736
49,079
2019
$’000
507,972
37,260
2,997
40,257
545,523
548,229
Total non-current assets attributed to individual geographies is detailed as follows. Unallocated assets include deferred tax assets,
which are not allocated to a specific location as they are managed on a group basis:
APAC
Americas
EMEA
Unallocated assets
Total non-current assets
2020
$’000
55,640
226,847
139,939
387
2019
$’000
40,752
234,224
152,082
345
422,813
427,403
(v) Reconciliation of segment liabilities to the consolidated statement of financial position
Segment liabilities
Unallocated liabilities
– Other
Total unallocated liabilities
Total liabilities
46
2020
$’000
291,947
1,082
1,082
2019
$’000
298,990
369
369
293,029
299,359
Hansen Technologies Ltd Annual Report 2020 3. Revenue and other income
Operating revenue
Revenue from contracts with customers
Total operating revenue
Other income
From operating activities
Interest income
Profit from sale of plant, equipment and leasehold improvements
Other income
Total other income
Total revenue and other income
Note
2(b)
2(b)(iii)
2(b)(iii), 8(a)
2020
$’000
301,369
301,369
54
440
1,826
2,320
2019
$’000
231,324
231,324
84
-
1,550
1,634
303,689
232,958
(a) AASB 15 Revenue from Contracts with Customers
(i) Adoption of AASB 15
In the previous financial year, the Group adopted AASB 15 using the modified retrospective method of adoption, where the cumulative
effect of initially applying the standard is recognised as an adjustment to the opening balance of retained earnings on 1 July 2018.
The total impact to retained earnings at transition date was $1,984,000.
(ii) Performance obligations
The transaction price allocated to remaining performance obligations represents contracted revenue that has not yet been recognised.
They include amounts recognised as unearned revenue and amounts that are contracted but not yet billed or performed.
The transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied as at 30 June 2020 is
$122,710,000 (2019: $121,449,000). This amount mostly comprises obligations in our long-term contracts to provide software or
‘software-as-a-service’ (SaaS) support and maintenance, open long-term professional services contracts as well as licences contracted
but not yet earned as the licence has not yet been deployed. Most of this amount is expected to be recognised as revenue beyond
the next 12 months following the respective balance sheet date. This estimation is judgemental, as it needs to consider estimates
of possible future contract modifications. The amount of transaction price allocated to the remaining performance obligations, and
changes in this amount over time, are impacted by, among others, currency fluctuations and the remaining contract period of our
billing solution agreements (which, in some cases, are contracted until five years after balance sheet date).
(iii) Contract balances
Trade receivables
Accrued revenue1
Unearned revenue – (current and non-current)1
Note
9
2020
$’000
48,336
21,945
24,518
2019
$’000
47,510
25,796
27,305
1. The comparative amount of accrued revenue has been reduced by $2,021,000 while unearned revenue has been increased by $236,000 in accordance with the
accounting for business combination. Refer to Note 25 for further details.
Accrued revenue mainly relates to software licences deployed on contract inception but have yet to be billed to the customer.
Revenue recognised in the current reporting period that was included in unearned revenue at the beginning of the reporting period
was $25,681,000 (2019: $22,251,000), representing support and maintenance performed during the period.
(b) Government grants
Included in ‘Other income’ during the financial year is $461,000 (2019: $nil) related to government subsidies received in Canada, and
$514,000 (2019: $309,000) government grants to compensate for eligible employee expenditure related to research activities performed
in Norway and in the United Kingdom. There were no unfulfilled conditions or contingencies attached to these grants.
47
Hansen Technologies Ltd Annual Report 2020 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
30 JUNE 2020
3. Revenue and other income continued
Significant accounting policies
Revenue
The Group derives revenues from customer contracts associated with the provision of billing solutions. A typical contract
may include various deliverables in consideration for fees. Such deliverables in our contracts include, but are not limited to,
the provision of a software licence, support and maintenance services, as well as professional implementation and
customisation services.
The nature of fee structures within the contracts vary by customer. The timing and frequency of invoicing depends on the terms
and conditions of each contract. Invoices are billed to the customer either in advance or in arrears on normal commercial terms.
Where the contract requires invoicing in advance, revenue is initially deferred as unearned revenue until the Group fulfils its
performance obligations. Where the contract requires invoicing in arrears, revenue recognised on fulfilment of a performance
obligation is brought to account as accrued revenue, until the Group’s right to consideration becomes unconditional and the
accrued revenue is then presented as a receivable.
The Group’s accounting policies with respect to each of the individual deliverables in the Group’s customer contracts is outlined
in sub-sections (i) onwards.
(i) Licence, support and maintenance revenue
The Group’s contracts for billing solutions regularly include software licences associated with the relevant billing solution provided
to the customer. The nature of the licence varies by customer and billing solution. As part of the licence agreement, various
support and maintenance services are available to support the customer’s use of the billing solution. This includes the provision
of various bug fixes, updates and helpdesk support.
Generally, the provision of the software licence is a distinct performance obligation. However, where there are associated
implementation, customisation or other professional services in the contract that significantly modify, customise or are highly
interrelated with the licence, the software licence and implementation services are combined into a single performance obligation.
The determination of whether the licence should be combined with the services is a matter of judgement, depending on the
nature of the implementation of the services provided and the licence specifications in the customer contract.
How the licence performance obligation is fulfilled depends on the nature of the licence and how the Group provides the licence
to the customer, irrespective of whether the licence is provided in perpetuity or for a specified contractual term:
• Where the licence is installed and delivered on customer premises, the customer can derive substantial benefits from the
licence on its own. Therefore, the performance obligation is fulfilled (and revenue recognised) at the point in time the licence
goes live, typically when customer acceptance has been obtained and the licence meets the agreed-upon specifications.
• Where the licence is hosted by the Group (for example, in some of our SaaS applications), the customer is dependent on our
continual hosting of the licence platform in order to derive and receive substantial benefits from the licence. Therefore, the
performance obligation is fulfilled (and revenue recognised) over time, which is typically evenly over the contracted period
in which access to the licence is made available to the customer.
Licence fees in some pay-TV and telecommunications contracts are dependent on the subsequent usage of the licence by
the customer, which is determined by customer-defined metrics such as subscriber counts or end-user numbers. For these
contracts, the Group uses the sales/usage-based royalty exception and recognises revenue when the subsequent usage is
known, which is typically at the end of each billing period.
Support and maintenance services are generally considered a distinct single performance obligation, separately identifiable to
the software licence, as all the individual activities that comprise of support and maintenance are highly interrelated with each
other. Revenue related to the provision of support and maintenance is recognised evenly over the contracted term in which the
customer is entitled to receive support and maintenance.
(ii) Services revenue
The Group provides various configuration, implementation, customisation and other professional services that the customer is
contracted to receive. This may be a part of the overall billing solution, or discrete projects separately agreed with the customer.
The various individual activities that form the professional services provided to the customer are highly interrelated with each other
and therefore is treated as a single performance obligation. Revenue from these professional services are recognised over time
by reference to the stage of completion of the contracts. Stage of completion is measured by reference to labour hours incurred
to date as a percentage of total estimated labour hours for each contract, and by reference to any contracted milestones
achieved such as customer acceptance of the final specification.
As described above in ‘Licence, support and maintenance revenue’ certain professional services might be combined with
the provision of the software licence depending on the nature of the licence and the professional services provided.
48
Hansen Technologies Ltd Annual Report 2020 (iii) Hardware/software sales revenue
Some of the Group’s subsidiaries on-sells certain third-party hardware and software products. Revenue is recognised when
control over the software has transferred to the customer. Determination of when control has passed depends on whether
the customer has legal title over the products, whether the customer has obtained possession of the products or whether
the Group has present right to payment.
The Group is considered principal in the sales transaction as the Group has procured the products from its various vendors
and the Group bears the risk and responsibility for selling those products to the customer.
(iv) Other revenue
Other revenue consists of reimbursed expenses incurred for servicing the customer contract. Revenue is recognised when the
Group has legal enforceability under the contract to have the relevant expenses reimbursed from the customer.
(v) Financing components
The Group does not expect to have any contracts where the period between the transfer of the promised goods or services to
the customer represents a financing component. Therefore, the Group does not adjust any of the transaction prices for the time
value of money.
(vi) Presentation and disclosure
In Note 2(b) of the financial statements, the Group has disaggregated revenue recognised from contracts with customers into
the following categories:
• the types of goods and services we provide our customers in our contracts;
• the primary market vertical that our customers operate in. ‘Energy’ includes our electricity, gas and water customers,
while ‘Communications’ includes our telecommunications and pay-TV customers; and
• the key geographic regions where our customers are located, which is consistent with the geographic segments identified
for our segment reporting.
We believe these categories best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected
by economic factors.
AASB 15 uses the terms ‘contract asset’ and ‘contract liability’. To maintain consistency in presentation with prior periods,
the Group has retained the use of ‘accrued revenue’ and ‘unearned revenue’, respectively.
In disclosing the amount of the transaction price allocated to unsatisfied or partially satisfied performance obligations, the Group
has elected to use the practical expedient available in AASB 15 and disclose only the amounts allocated to performance
obligations expected to be satisfied after the next 12 months.
Other income
Interest income is recognised when it becomes receivable on a proportional basis, taking into account the interest rates
applicable to the financial assets.
Sales tax (including GST and VAT)
Revenues, expenses and assets are recognised net of the amount of sales tax, except where the amount of sales tax incurred is
not recoverable from the Tax Office. In these circumstances the sales tax is recognised as part of the acquisition of the asset or as
part of an item of the expense. Receivables and payables in the consolidated statement of financial position are shown inclusive
of sales tax.
Cash flows are presented in the consolidated statement of cash flows on a gross basis, except for the sales tax component
of investing and financing activities, which are disclosed as operating cash flows.
Government grants
Government grants are recognised at their fair value where there is reasonable assurance that the grant will be received, and all
attached conditions will be complied with. Government grants relating to costs are deferred and recognised in the consolidated
statement of comprehensive income over the period necessary to match them with the costs that they are intended to
compensate. Government grants received for which there are no future related costs are recognised in the statement
of comprehensive income immediately.
49
Hansen Technologies Ltd Annual Report 2020 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
30 JUNE 2020
4. Separately disclosed items
The Group has disclosed underlying EBITDA and underlying profit after tax, referring to the Group’s trading results adjusted for certain
transactions during the year that are not representative of the Group’s regular business activities. The Group considers that these
transactions are of such significance to understanding the ongoing results of the Group that the Group has elected to separately identify
these transactions to determine an ongoing result to enable a ‘like-for-like’ comparison. These items are described as ‘separately
disclosed items’ throughout this Financial Report.
Increase to profit before tax
Non-recurring income
Profit from sale of an office premises
Other income
Decrease to profit before tax
Restructuring and one-off costs incurred
Note
2(b)(iii)
Transaction costs related to the acquisition of Sigma Systems
25(i)
Onerous lease provision
Total separately disclosed items
2020
$’000
2019
$’000
440
679
(6,153)
-
-
(5,034)
-
-
(72)
(2,063)
(659)
(2,794)
Non-recurring income
The Group has separately identified income that is considered not in the normal course of business activities. Included In this is the
income from the sale of an office premises in Norway for $440,000. These amounts are included within the ‘Other income’ account
in the Group’s consolidated statement of comprehensive income.
Restructuring and one-off costs incurred
The Group recognised restructuring and one-off costs for the current financial year relating to redundancy and retention payments of
staff amounting to $6,153,000 (2019: $72,000). These costs are part of the Group’s strategy to better integrate the business and align
staffing according to customer demand. These costs are included within ‘Employee benefit expenses’ and ‘Other expenses’ in the
Group’s consolidated statement of comprehensive income.
Transaction costs related to the acquisition of Sigma Systems
In the previous financial year, transaction costs of $2,063,000 were incurred in relation to the acquisition of the Sigma Systems group
of entities (Sigma). These include costs associated with vendor due diligence, legal and other administrative matters, as well as related
travel costs incurred to meet representatives of Sigma’s management. These costs were included with ‘Travel expenses’ and ‘Other
expenses’ in the Group’s consolidated statement of comprehensive income.
Further details of the acquisition of Sigma are described in Note 25.
Onerous lease provision
In the previous financial year, a provision for future lease payments for one of the Group’s offices in the Americas was recognised,
as the non-cancellable future payments in the lease contract were expected to exceed the benefits from keeping the office over
the remainder of the lease term. The Group has separately identified these costs because it is not in the normal course of business
activities. These costs were included within the ‘Property and operating rental expenses’ in the comparative Group’s consolidated
statement of comprehensive income.
50
Hansen Technologies Ltd Annual Report 2020 (a) Reconciliation with Group statutory measures
Underlying EBITDA excluding AASB 16 impact
Less separately disclosed items
Add impact of adoption of AASB 16
EBITDA1
Underlying profit after tax
Less separately disclosed items
Tax effect of separately disclosed items
Net profit after tax
Note
13(e)(ii)
2020
$’000
77,998
(5,034)
7,694
80,658
29,479
(5,034)
1,312
25,757
2019
$’000
55,837
(2,794)
-
53,043
24,011
(2,794)
248
21,465
1. EBITDA is a non-IFRS term, defined as earnings before interest, tax, depreciation and amortisation, and excluding net foreign exchange gains (losses).
5. Profit from continuing operations
Profit from continuing operations before income tax has been determined after the following specific significant expenses:
Employee benefit expenses
Wages and salaries
Superannuation costs
Share-based payments and Employee Share Plan expensed
Total employee benefit expenses
Depreciation expense
Plant, equipment and leasehold improvements
Right-of-use assets
Total depreciation of non-current assets
Amortisation of non-current assets
Technology and other intangibles
Software development costs
Total amortisation of non-current assets
Property and operating rental expenses
Minimum lease payments recognised as an operating lease expense
Other property-related expenses
Total property and operating rental expenses
Finance costs
Finance costs on borrowings
Prepaid borrowing costs
Net finance costs on borrowings
Finance costs on lease liabilities
Total finance costs
Net foreign exchange (gains)/losses
Realised foreign exchange (gains)/losses
Unrealised foreign exchange (gains)/losses
Total net foreign exchange (gains)/losses
Note
8(a)
8(a), 11
8(a),13(a)
8(a), 12
8(a), 12
8(a),19(b)
13(b)
8(a)
2020
$’000
2019
$’000
157,695
118,052
9,025
1,473
9,006
969
168,193
128,027
4,354
6,953
11,307
22,394
8,634
31,028
-
4,324
4,324
1,327
6,760
1,193
9,280
(599)
(145)
(744)
3,806
-
3,806
12,054
6,896
18,950
7,214
3,180
10,394
1,009
1,049
9
2,067
-
527
527
51
Hansen Technologies Ltd Annual Report 2020
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
30 JUNE 2020
6. Income tax
(a) Components of income tax expense
Current tax expense
Deferred tax (income)/expense
Over provision in prior years
Total income tax expense
2020
$’000
11,087
(6,217)
(786)
4,084
2019
$’000
6,238
841
(767)
6,312
The prima facie tax payable on profit before income tax reconciled to the income tax expense
is as follows:
Prima facie income tax payable on profit before income tax at 30%
8,953
8,333
Add/(less) tax effect of:
Impact of tax rates on foreign subsidiaries
Research and development allowances
Non-deductible share-based payments
Over provision in prior years
Utilisation of prior year tax losses not brought to account
Amortisation of acquired intangibles
Other non-allowable items
Income tax expense attributable to profit
(b) Deferred tax
Deferred tax asset
Deferred tax liability
Net deferred tax
(i) Deferred tax asset
The deferred tax asset balance comprises of the following items:
Difference in depreciation and amortisation of plant and equipment for accounting and income
tax purposes
Other payables
Employee benefits
Temporary difference relating to lease accounting (adoption of AASB 16)
Accruals
(2,059)
(1,506)
(105)
300
(786)
(1,054)
(315)
(850)
4,084
2020
$’000
9,971
(43,443)
(33,472)
2020
$’000
(367)
1,983
2,309
5,190
856
9,971
(86)
151
(767)
(474)
(2,076)
2,737
6,312
2019
$’000
4,601
(44,290)
(39,689)
2019
$’000
1,208
-
2,378
-
1,015
4,601
52
Hansen Technologies Ltd Annual Report 2020 (ii) Deferred tax liability
The deferred tax liability balance comprises of the following items:
Research and development expenditure
Difference in depreciation and amortisation of plant, equipment and intangibles for accounting
and income tax purposes
Other payables
Temporary difference relating to lease accounting (adoption of AASB 16)
Revenue not yet assessable
(iii) Reconciliation of net deferred tax balances
Opening balance – net deferred tax liability
Deferred tax income/(expense) recognised in profit or loss
Increase due to acquisition
Closing balance – net deferred tax liability
Note
25
(iv) Deferred tax assets not brought to account (available tax losses)
Gross capital losses
Gross operating losses
2020
$’000
(6,529)
2019
$’000
(5,540)
(30,012)
(35,503)
(60)
(4,957)
(1,885)
(43,443)
2020
$’000
(39,689)
6,217
-
(33,472)
2020
$’000
847
771
1,618
(947)
-
(2,300)
(44,290)
2019
$’000
(12,098)
(841)
(26,750)
(39,689)
2019
$’000
847
1,430
2,277
Deferred tax assets have not been recognised in respect of these losses. Realisation of the unrecognised tax losses, temporary
differences and offsets is dependent on the future production of sufficient taxable profits in the relevant jurisdictions as well as continued
compliance with regulatory requirements for availability.
53
Hansen Technologies Ltd Annual Report 2020 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
30 JUNE 2020
6. Income tax continued
Significant accounting policies
Income tax
Current income tax expense 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. The tax rates and tax laws used to compute the amount are those that
are enacted or substantively enacted at the reporting date.
Deferred tax balances
Deferred tax assets and liabilities are recognised for temporary differences at the applicable tax rates when the assets are
expected to be recovered or liabilities settled. No deferred tax asset or liability is recognised in relation to temporary differences
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 deductible temporary differences and unused tax losses only if it is probable that future
taxable amounts will be available to utilise those temporary differences and losses.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised
deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that
future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against
current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
Tax consolidation
The Group is subject to income taxes in Australia and jurisdictions in which it has foreign operations. In some of these
jurisdictions, namely Australia and the United States, the immediate parent entity and entities it controls have formed local
income tax consolidated groups that are taxed as a single entity in their relevant jurisdiction. The head entity of the Australian
tax consolidated group is Hansen Technologies Limited. Each tax consolidated group has entered a tax funding agreement
whereby each entity in the tax consolidated group recognises the assets, liabilities, expenses and revenues in relation to
its own transactions, events and balances only. This means that:
• the parent entity recognises all current and deferred tax amounts relating to its own transactions, events and balances only;
• the subsidiaries recognise current or deferred tax amounts arising in respect of their own transactions, events and balances;
and
• the current tax liabilities and deferred tax assets arising in respect of tax losses are transferred from the subsidiary to the head
entity as inter-company payables or receivables.
Each tax consolidated group also has a tax sharing agreement in place to limit the liability of subsidiaries in the tax consolidated
group arising under the joint and several liability requirements of the tax consolidation system in the event of default by the parent
entity to meet its payment obligations. This means that under the tax sharing agreement, the subsidiaries are legally liable to the
income tax payable in proportion to their contribution to the net profit before tax of the tax consolidated group.
54
Hansen Technologies Ltd Annual Report 2020 7. 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 Earnings Per Share:
Number for basic Earnings Per Share – ordinary shares
Number for diluted Earnings Per Share – ordinary shares
Basic earnings (cents) per share
Diluted earnings (cents) per share
2020
$’000
25,757
25,757
2019
$’000
21,465
21,465
2020
No. of Shares
2019
No. of Shares
197,960,854
197,017,215
199,177,904
198,632,621
2020
Cents Per Share
2019
Cents Per Share
13.0
12.9
10.9
10.8
Classification of securities as potential ordinary shares
The securities that have been classified as potential ordinary shares and included in diluted Earnings Per Share are only options
and rights outstanding under the Employee Performance Rights Plan and the Employee Share Option Plan.
Significant accounting policies
Earnings Per Share (EPS)
Basic EPS is calculated by dividing the profit for the year attributable to ordinary equity holders of the Company by the weighted
average number of ordinary shares outstanding during the year.
Diluted EPS is calculated by dividing the profit attributable to ordinary equity holders of the Company by the weighted average
number of ordinary shares outstanding during the year, plus the weighted average number of ordinary shares that would be
issued on conversion of all the dilutive potential ordinary shares into ordinary shares.
55
Hansen Technologies Ltd Annual Report 2020 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
30 JUNE 2020
Section C: Working Capital and Operating Assets
This section describes the different components of our working capital supporting the operating liquidity of
the Group, as well as the long-term tangible and intangible assets supporting the Group’s performance.
8. Cash and cash equivalents
Cash at bank and on hand
Interest bearing deposits
Total cash and cash equivalents
2020
$’000
44,492
-
44,492
2019
$’000
36,677
1,611
38,288
(a) Reconciliation of the net profit after tax to net cash flows from operating activities
Net profit after tax
Add/(less) items classified as investing/financing activities:
Net (profit)/loss on sale of non-current assets
Add/(less) non-cash items:
Depreciation and amortisation
Share-based payments
Unrealised foreign exchange
Recovery of previously charged expected credit loss
Expected credit loss charged
Amortisation of prepaid borrowing costs
Employee Share Plan expense
Net cash provided by operating activities before change in assets
and liabilities
Changes in assets and liabilities adjusted for effects of purchase
of controlled entities during the year:
(Increase)/decrease in receivables
Decrease/(increase) in sundry debtors and other assets
Increase in trade payables
Decrease in other creditors and accruals
Increase in bank overdraft
Increase in operating and employee benefits provision
(Decrease)/increase in deferred taxes
Increase/(decrease) in current tax payable
(Decrease)/increase in unearned revenue
Net cash provided by operating activities
Note
5
5, 17(e)
5
9
9
5
2020
$’000
25,757
2019
$’000
21,465
(440)
17
42,335
1,473
(145)
(44)
735
1,327
-
22,756
829
527
(62)
114
1,009
140
70,998
46,795
(2,364)
5,212
14,102
(15,086)
457
1,322
(6,217)
4,100
(2,895)
3,631
(8,445)
4,592
(12,233)
134
1,403
841
(1,223)
4,155
69,629
39,650
Significant accounting policies
Cash and cash equivalents
Cash and cash equivalents include cash on hand and at banks, short-term deposits with an original maturity of six months or less
held at call with financial institutions and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the
consolidated statement of financial position.
56
Hansen Technologies Ltd Annual Report 2020 9. Receivables
Current
Trade receivables
Less: provision for expected credit losses
Sundry receivables
Total trade and other receivables
2020
$’000
48,336
(604)
47,732
184
47,916
2019
$’000
47,510
(221)
47,289
2,186
49,475
As at 30 June 2020, trade receivables of $14,668,000 (2019: $15,273,000) were past due but not impaired. These relate to a number
of independent customers for whom there is no recent history of default. The ageing analysis of the trade receivables is as follows:
Trade receivables ageing analysis at 30 June:
Not past due
Past due 1– 30 days
Past due 31– 60 days
Past due more than 61 days
Gross
2020
$’000
33,064
4,852
4,468
5,952
48,336
Provided
2020
$’000
-
-
-
(604)
(604)
Gross
2019
$’000
32,016
4,425
4,086
6,983
47,510
Provided
2019
$’000
-
-
(23)
(198)
(221)
The sundry receivables do not contain impaired assets and are not past due. Based on the credit history of these receivables, it is
expected that these amounts will be received when due and thus no provision for impairment has been recorded. The Group does
not hold any collateral in relation to these receivables.
Movements in provision for expected credit loss:
Opening balance at 1 July
Acquisition of Sigma Systems
Expected credit loss charged
Recovery of previously charged expected credit loss
Amounts written off
Closing balance at 30 June
Note
8(a)
8(a)
221
-
735
(44)
(308)
604
2020
$’000
2019
$’000
Significant accounting policies
Trade receivables
Trade receivables represent amounts owed by our customers and are recognised initially at the amount of consideration where
the right to payment is conditional only on the passage of time. The Group holds the trade receivables with the objective of
collecting contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest
method, less a provision for expected credit loss. Trade receivables are generally due for settlement between 30 and 60 days.
The Group recognises a provision for impairment by calculating lifetime expected credit losses (ECLs). In determining the
appropriate amount of lifetime ECLs, the Group has established a provision matrix that is based on its historical credit loss
experience, adjusted for forward-looking factors specific to the debtors and the economic environment.
Individual debts which are known to be uncollectible are written off by reducing the carrying amount directly. Expected credit
losses are recognised in the consolidated statement of comprehensive income within ‘Professional expenses’ account. When
a trade receivable for which a provision for expected credit loss had been recognised becomes uncollectible in a subsequent
period, it is written off against the allowance account.
82
169
114
(62)
(82)
221
57
Hansen Technologies Ltd Annual Report 2020 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
30 JUNE 2020
9. Receivables continued
Critical accounting estimate and judgement
Provision for expected credit losses of trade receivables
The Group uses a provision matrix to calculate ECLs for trade receivables. The provision rates are based on days past due
for groupings of various customer segments that have similar loss patterns (i.e. by geography, product type, customer type
and rating, and coverage by letters of credit and other forms of credit insurance).
The provision matrix is initially based on the Group’s historical observed default rates. The Group will calibrate the matrix to adjust
the historical credit loss experience with forward-looking information. For instance, if forecast economic conditions (i.e. gross
domestic product) are expected to deteriorate over the next year, which can lead to an increased number of defaults in the energy
sector, the historical default rates are adjusted. At every reporting date, the historical observed default rates are updated and
changes in the forward-looking estimates are analysed.
The assessment of the correlation between historical observed default rates, forecast economic conditions and ECLs is
a significant estimate. The amount of ECLs is sensitive to changes in circumstances and of forecast economic conditions.
The Group’s historical credit loss experience and forecast of economic conditions may also not be representative of customer’s
actual default in the future.
During the year, the Group has considered the impact of the COVID-19 pandemic on the amount of ECLs and has determined
from its assessment that there has been no significant change to the recovery of the customers’ debts.
10. Other assets
Prepayments – current1
Other assets – current
Total other current assets
Prepayments – non-current
Other assets – non-current
Total other non-current assets
Note
25(iii)
25(iii)
2020
$’000
6,441
1,916
8,357
2,292
1,389
3,681
2019
$’000
7,160
107
7,267
888
2,235
3,123
1. Comparative amount for ‘Prepayments – current’ account been restated to reflect a reclassification of $653,000 to ‘Term facility – prepaid borrowing costs’
account. Refer to Note 19.
58
Hansen Technologies Ltd Annual Report 2020 11. Plant, equipment and leasehold improvements
Cost
At 1 July
Additions
Increase due to acquisition of a subsidiary
Disposals
Net foreign currency movements arising from operations
At 30 June
Accumulated depreciation
At 1 July
Depreciation charge
Disposals
Net foreign currency movements arising from operations
At 30 June
Net carrying amount at 30 June
Note
5
2020
$’000
42,571
5,041
-
(737)
(225)
2019
$’000
38,309
2,980
970
(168)
480
46,650
42,571
(31,585)
(4,354)
561
142
(27,755)
(3,806)
146
(170)
(35,236)
(31,585)
11,414
10,986
Significant accounting policies
Plant, equipment and leasehold improvements
Cost and valuation
All classes of plant, equipment and leasehold improvements are stated at cost less depreciation and any accumulated
impairment losses.
Depreciation
The depreciable amounts of all fixed assets are depreciated on a straight-line basis over their estimated useful lives commencing
from the time the asset is held ready for use. 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 and leasehold improvements
2020
2019
3 to 15 years
3 to 15 years
An item of plant, equipment and leasehold improvements initially recognised is derecognised upon disposal. Any gain or loss
arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount
of the asset) is included in profit or loss when the asset is derecognised.
The residual values, useful lives and methods of depreciation of plant, equipment and leasehold improvements are reviewed
at each financial year end and are adjusted prospectively, if appropriate.
59
Hansen Technologies Ltd Annual Report 2020 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
30 JUNE 2020
12. Intangible assets
Cost
At 1 July 2019, as restated
Additions
Net foreign currency movements arising from
foreign operations
At 30 June 2020
Note
Goodwill
$’000
Technology and
Other Intangibles
at Cost
$’000
Software
Development
at Cost
$’000
229,458
196,264
-
-
(8,170)
(7,679)
221,288
188,585
65,583
14,021
816
80,420
Total
$’000
491,305
14,021
(15,033)
490,293
Accumulated amortisation and impairment
At 1 July 2019
Amortisation charge
Net foreign currency movements arising from
foreign operations
At 30 June 2020
5
(1,595)
-
2
(1,593)
(41,466)
(22,394)
1,617
(62,243)
(39,551)
(8,634)
(82,612)
(31,028)
(612)
1,007
(48,797)
(112,633)
Carrying amount at 30 June 2020
219,695
126,342
31,623
377,660
Note
Goodwill
$’000
Technology and
Other Intangibles
at Cost
$’000
Software
Development
at Cost
$’000
Cost
At 1 July 2018
Additions
Net foreign currency movements arising from
foreign operations
At 30 June 2019, as previously stated
Adjustment to goodwill
25(d)
At 30 June 2019, as restated
Accumulated amortisation and impairment
At 1 July 2018
Amortisation charge
Net foreign currency movements arising from
foreign operations
At 30 June 2019
5
152,565
66,662
4,320
223,547
5,911
229,458
(1,573)
-
(22)
(1,595)
99,415
93,188
3,661
196,264
-
196,264
(28,196)
(12,054)
(1,216)
(41,466)
53,382
10,892
1,309
65,583
-
65,583
(32,153)
(6,896)
(502)
(39,551)
Total
$’000
305,362
170,742
9,290
485,394
5,911
491,305
(61,922)
(18,950)
(1,740)
(82,612)
Carrying amount at 30 June 2019,
as previously stated
Carrying amount at 30 June 2019, as restated
221,952
227,863
154,798
154,798
26,032
26,032
402,782
408,693
60
Hansen Technologies Ltd Annual Report 2020 Significant accounting policies
Goodwill
Goodwill represents the future economic benefits arising from other assets acquired in a business combination that are not
individually identifiable or separately recognised. Refer to Note 25 for a description of how goodwill arising from a business
combination is initially measured.
Technology and other intangibles
Other intangibles consist of trademarks, brand names, customer relationships and non-compete clauses.
Technology and other intangibles are recognised at cost and are amortised over their estimated useful lives, which is generally
the term of the contract for customer contracts and five to 10 years for technology and other intangibles. Technology and other
intangibles 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.
Development costs are capitalised when the entity can demonstrate all of the following: the technical feasibility of completing
the asset so that it will be available for use or sale; the intention to complete the asset and use or sell it; the ability to use or sell
the asset; how the asset will generate probable future economic benefits; the availability of adequate technical, financial and
other resources to complete the development and to use or sell the asset; and the ability to measure reliably the expenditure
attributable to the asset during its development.
Capitalised development expenditure is carried at cost less any accumulated amortisation and any accumulated impairment
losses. Amortisation is calculated using a straight-line method to allocate the cost of the intangible asset over its estimated
useful life, which is generally five years. Amortisation commences when the intangible asset is available for use.
Other development expenditure is recognised as an expense when incurred.
Impairment of non-financial assets
Assets with an indefinite useful life are not amortised but are tested at least annually for impairment in accordance with AASB 136
Impairment of Assets. 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 of disposal and value in use.
Critical accounting estimate and judgement
Capitalisation of research and development costs
Development costs incurred are assessed for each research and development project and a percentage of the expenditure is
capitalised when technical feasibility studies demonstrate that the project will deliver future economic benefits and those benefits
can be measured reliably.
There has been investment in research and development expenditure incurred in relation to the various billing software platforms
in the 2020 financial year. Returns are expected to be derived from this investment over the coming year(s).
The assets’ residual values, useful lives and amortisation methods are reviewed and adjusted if appropriate at each financial year
end. The estimation of useful lives of assets has been based on historical experience and expected product lifecycle, which could
change significantly as a result of technological innovation.
(a) Impairment test for goodwill
For impairment testing, the Group views that its past business combinations giving rise to goodwill on acquisition relate to synergistic
opportunities for its billing solutions. Therefore, goodwill is allocated entirely to the Billing CGU, which is also an operating and
reportable segment.
The recoverable amount of the Billing CGU has been determined based on a value-in-use calculation using cash flow projections over
a five-year period. Cash flows beyond the five-year forecast period are extrapolated using the estimated terminal growth rates.
61
Hansen Technologies Ltd Annual Report 2020 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
30 JUNE 2020
12. Intangible assets continued
(a) Impairment test for goodwill continued
Key assumptions used for value-in-use calculations
The key assumptions for the Billing CGU supporting the disclosed recoverable value is as follows:
• EBITDA for the first year based on financial budgets approved by senior management;
• beyond the first year, profit before tax annual growth rate of 1.5% (2019: 1.8%);
• a post-tax discount rate of 6.7% (2019: 7.2%); and
• terminal growth rate of 1.0% (2019: 1.8%) at the end of the forecast period.
Both the EBITDA growth rate beyond FY20 and the terminal growth rate ranges are derived from management’s best estimate of
revenue and operating expenditure growth, taking into account changes in the industry, customer market prospects, future product
developments and technological innovation. Profit before income tax expense is then adjusted for amounts related to tax. Owing to
the current global environment, management has chosen to be conservative and has reduced the annual and terminal growth rates
to compensate for a fall in the overall risk-free rate.
The discount rate is based on the Group’s weighted average cost of capital.
Results of impairment testing and sensitivity to changes in assumptions
The current year’s calculation of the estimated recoverable amount of the CGU has not moved materially when compared to the prior
year’s estimated recoverable amount of the CGU, as changes in annual and terminal growth rates have been offset by a decrease in
the risk-free rate, and expected future cash generation has not changed materially from the previous corresponding period.
The following table sets out key parameters that need to change for there to be no headroom available when comparing the calculation
of the estimated recoverable amount of the CGU against the carrying value of the CGU at 30 June 2020:
Change required for carrying amount to equal recoverable amount
Discount rate
Budgeted EBITDA growth rate
2020
3.09%
(18.78%)
Critical accounting estimate and judgement
Impairment of goodwill
The Group tests whether goodwill has been impaired on an annual basis. Management’s judgement is applied to identify the
cash generating units (CGU). The recoverable amount of a CGU is determined based on value-in-use calculations, which require
the use of assumptions and discounting of future cash flows. These assumptions are based on best estimates at the time of
performing the valuation. Cash flow projections do not include restructuring activities that the Group is not yet committed to
or significant future investments that will enhance the performance of the assets of the CGU being tested.
Goodwill is monitored by management at the level of operating segments identified in Note 2.
Impairment of non-financial assets other than goodwill
All assets are assessed for impairment at each reporting date by evaluating whether indicators of impairment exist in relation
to the continued use of the asset by the consolidated entity. Impairment triggers include declining product or manufacturing
performance, technology changes, adverse changes in the economic or political environment or future product expectations.
If an indicator of impairment exists, the recoverable amount of the asset is determined.
62
Hansen Technologies Ltd Annual Report 2020 13. Leases
(a) Right-of-use assets
Cost
Accumulated depreciation
Net carrying amount at 30 June
2020
$’000
26,509
(6,422)
20,087
2019
$’000
-
-
-
Movements in cost and accumulated depreciation during the year are inclusive of any net foreign currency movements arising from
foreign operations.
The Group has identified the following classes of right-of-use (ROU) assets: properties, vehicles, office and IT equipment. The largest
class of asset recognised is the Group’s property leases, consisting of office buildings, as well as rental apartments for its employees
undertaking short-term assignments overseas. Leases of properties generally have lease terms between six months and five years,
while leases of office equipment, vehicles and IT equipment generally have terms between one and three years. The Group usually has
rights to renew the lease arrangement that are reasonably certain to be exercised and therefore may have long, effective lease terms.
The rental payments associated with each lease varies according to the amount of space rented and the location of the lease. However,
in most cases the amount of rental payments is indexed annually in line with the relevant national consumer pricing index.
Reconciliation of the carrying amounts of ROU assets at the beginning and end of the current financial year by class of asset is
shown below:
ROU
Properties
$’000
ROU Office
Equipment
$’000
ROU Vehicles
$’000
ROU IT
Equipment
$’000
Note
Cost
Balance as at 1 July 2019
Adoption of new accounting standards
13(e)(i)
Additions
Remeasurement
Disposals
13(b)
13(b)
Exchange differences from foreign operations
-
25,933
3,268
(2,148)
(585)
(271)
-
114
-
-
-
-
Balance as at 30 June 2020
26,197
114
Accumulated depreciation
Balance as at 1 July 2019
-
Depreciation charge for the period
5, 13(c)
(6,741)
Disposals
Exchange differences from foreign operations
Balance as at 30 June 2020
Net book value as at 30 June 2020
51
352
(6,338)
19,859
-
(38)
-
-
(38)
76
-
82
142
-
(30)
1
195
-
(77)
30
2
(45)
150
-
149
-
-
(142)
(4)
3
-
(97)
95
1
(1)
2
Total
$’000
-
26,278
3,410
(2,148)
(757)
(274)
26,509
-
(6,953)
176
355
(6,422)
20,087
Remeasurement of the gross value of ROU assets results mainly from the reassessment of the estimation of the lease term of various
properties within the Group.
In the financial year ended 30 June 2020, the cost of variable lease payments amounted to $3,000. These variable lease payments
do not depend on an index or a rate. These are included within ‘Other expenses’ account in the consolidated statement of
comprehensive income.
63
Hansen Technologies Ltd Annual Report 2020 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
30 JUNE 2020
13. Leases continued
(b) Lease liabilities
Current
Non-current
2020
$’000
5,661
15,384
21,045
Reconciliation of the carrying amounts of lease liabilities and the movements during the financial year is shown below:
Balance as at 1 July
Adoption of new accounting standards
Additions
Remeasurement
Accretion of finance costs
Payments
Exchange differences from foreign operations
Balance as at 30 June
(c) Impact to profit or loss
The following are the amounts recognised in the profit or loss:
Depreciation expense of ROU assets
Finance costs on lease liabilities
Variable lease payments
Income from sub-leasing of ROU assets
Total amount recognised in profit or loss
Note
2020
$’000
92
13(e)(i)
26,628
13(a)
13(a)
5
Note
5, 13(a)
5
3,410
(2,148)
1,193
(8,175)
45
21,045
2020
$’000
6,953
1,193
3
(1)
8,148
2019
$’000
92
-
92
2019
$’000
202
-
-
-
9
(119)
-
92
2019
$’000
-
9
-
-
9
(d) Impact to cash flows
Following the adoption of AASB 16, the Group had total cash outflows for leases of $8,175,000 for the year ended 30 June 2020
(30 June 2019: $119,000 under AASB 117 Leases). Out of the $8,175,000 cash outflows, $6,982,000 relates to cash outflows from
investing activities (principal payments), while the remaining balance relates to cash outflows from operating activities (finance costs
on lease liabilities). As a result of adopting AASB 16, the Group also had non-cash additions to ROU assets of $29,688,000 and
lease liabilities of $30,038,000 during the financial year. The future cash outflows relating to leases that have not yet commenced
are disclosed in Note 23.
64
Hansen Technologies Ltd Annual Report 2020 (e) AASB 16 Leases
AASB 16 supersedes all previous lease accounting requirements under Australian Accounting Standards. The main impact on the Group
is that AASB 16 introduces a single lessee accounting model and requires a lessee to recognise assets and liabilities for most leases.
(i) Impact on adoption
The Group adopted AASB 16 using the modified retrospective method of adoption, where the cumulative effect of initially applying the
standard is recognised as an adjustment to opening balances on 1 July 2019 (the transition date). Therefore, comparative figures for
prior reporting periods are not restated.
In adopting AASB 16, the Group has also taken advantage of the following practical expedients:
• For each class of ROU lease asset, the Group uses a single discount rate to a portfolio of leases that have the same lease term,
same currency and located in the same jurisdiction.
• The Group will rely on its assessments under the previous accounting standards to determine whether a ROU asset is impaired.
Accordingly, the Group has adjusted the ROU asset at transition date by the amount of any provisions for onerous leases previously
recognised.
• The Group has excluded initial direct costs from the measurement of the ROU asset on transition date.
• The Group has used hindsight and assumed all previous options to extend the lease have been exercised in determining the lease
term on transition date.
The Group has chosen not to apply the practical expedients for short-term leases and leases for which the assets are of low value.
The weighted average incremental borrowing rate applied to lease liabilities recognised at transition date was 4.7%.
The effect of adopting AASB 16 is as follows:
Assets
Non-current assets
Right-of-use assets
Total assets impact
Liabilities
Current liabilities
Lease liabilities
Provisions
Non-current liabilities
Lease liabilities
Total liabilities impact
Net assets impact
Total equity impact
Note
13(a)
13(b)
13(b)
1 July 2019
Transition
Adjustment
$’000
26,278
26,278
5,731
(350)
20,897
26,278
-
-
65
Hansen Technologies Ltd Annual Report 2020
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
30 JUNE 2020
13. Leases continued
(e) AASB 16 Leases continued
(ii) Impact in FY20
Had AASB 16 not been applied and the financial statements were still produced under previous guidance and accounting standards,
the Financial Report for the year ended 30 June 2020 would have recorded a higher net profit after tax of $437,000 and a higher net
assets and equity of $465,000.
Consolidated statement of comprehensive income
Property and operating rental expenses
Depreciation expense
Finance costs on lease liabilities1
Impact on statement of comprehensive income for the year ended 30 June 2020
Consolidated statement of financial position
Right-of-use assets
Deferred tax asset
Provisions
Lease liabilities – current
Lease liabilities – non-current
Impact on net assets in the statement of financial position as at 30 June 2020
Consolidated statement of changes in equity
Reserves
Retained earnings
Impact on equity in the statement of financial position as at 30 June 2020
Note
$’000
4a
5, 13(a)
5, 13(b)
(7,694)
6,953
1,178
437
13(a)
(20,087)
13(b)
13(b)
(233)
(260)
5,661
15,384
465
28
437
465
1. Finance costs on lease liabilities on the above table excludes a balance of $15,000 relating to an IT equipment lease previously classified as a finance lease under
the old leasing standards i.e. AASB 117 Leases. Adoption of AASB 16 did not impact the amount of finance costs to be recognised for this ROU asset.
(iii) Reconciliation with prior period operating lease commitments disclosure
Total future minimum rentals payable at the end of the prior period 30 June 2019
Transition assessment adjustments
Effect of discounting to present value
Total lease liabilities at the date of initial application
$’000
29,888
1,640
(4,900)
26,628
Adjustments were identified during the Group’s transition assessment exercise to account for the revised definition of a lease under
AASB 16 including, amongst other considerations, whether there is a reasonable probability that the Group will exercise renewal
or early termination options in its lease contracts.
66
Hansen Technologies Ltd Annual Report 2020 Significant accounting policies
Leases
The determination of whether an arrangement is (or contains) a lease depends on whether the arrangement conveys the right
to control the use of an identified asset for a period of time in exchange for consideration. Control over the use of an identified
asset exists when the arrangement involves the use of an identified asset, when the Group obtains substantially all the economic
benefits from the use of the asset, and when the Group has the right to direct the use of the asset.
The lease term is first determined with reference to the non-cancellable period of the lease contract, adjusted for any periods
covered by options to extend the lease and/or to early terminate the lease if the Group is reasonably certain to exercise the
options. Judgement is applied by the Group in determining whether the Group is reasonably certain to exercise the options.
Lease liabilities are initially recognised and measured based on the total value of fixed and variable contractual lease payments
over the lease term, including payments to extend or terminate the lease if the Group is reasonably certain to exercise the option
to extend or terminate the lease respectively. The lease payments are discounted to present value based on the incremental
borrowing rate implicit in the lease.
Lease payments on properties exclude service fees for maintenance, cleaning and other costs as these costs are separated as
non-lease components. However, the Group has elected not to separate lease and non-lease components for leases of vehicles,
office and IT equipment.
Leased assets are capitalised at the commencement date of the lease and comprise of the initial lease liability amount, initial direct
costs incurred when entering the lease, less any lease incentives received.
Leased assets are depreciated on a straight-line basis over the earlier of the end of the useful life of the right-of-use asset or
the end of the lease term. Estimated useful lives of right-of-use assets are determined on the same basis as those of plant and
equipment. The right-of-use asset is also periodically assessed for impairment losses and adjusted for certain remeasurements
of the lease liability.
(i) Presentation and disclosure
Depreciation on right-of-use assets is included as part of ‘Depreciation expense’ account in the consolidated statement
of comprehensive income, and interest expense on lease liabilities is included as part of ‘Finance costs on lease liabilities’
account in the consolidated statement of comprehensive income.
Right-of-use assets are disclosed separately on the consolidated statement of financial position, with Note 13(a) disaggregating
the lease assets by class of asset. Lease liabilities are presented as current and non-current in the consolidated statement
of financial position depending on the timing of the settlement of contractual cash outflows.
The repayment of the principal portion of lease payments is presented as part of financing activities in the consolidated statement
of cash flows, and the interest portion is presented as part of operating activities.
Critical accounting estimate and judgement
Determining the lease term of contracts with renewal and termination options – Group as a lessee
The Group determines the lease term as the non-cancellable term of the lease together with any periods covered by an option
to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease,
if it is reasonably certain not to be exercised.
The Group has several lease contracts that include extension and termination options. The Group applies judgement in evaluating
whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all
relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement
date, the Group reassesses the lease term if there is a significant event or change in circumstances that is within its control
and affects its ability to exercise or not to exercise the option to renew or to terminate (e.g. construction of significant leasehold
improvements or significant customisation to the leased asset).
Estimating the incremental borrowing rate
The Group cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR)
to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and
with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic
environment. The IBR therefore reflects what the Group ‘would have to pay’, which requires estimation when no observable rates
are available (such as for subsidiaries that do not enter into financing transactions) or when they need to be adjusted to reflect the
terms and conditions of the lease (for example, when leases are not in the subsidiary’s functional currency). The Group estimates
the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific
estimates (such as the subsidiary’s stand-alone credit rating).
67
Hansen Technologies Ltd Annual Report 2020 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
30 JUNE 2020
14. Payables
Trade payables
Other payables1
Total payables
2020
$’000
4,794
19,429
24,223
2019
$’000
10,349
14,257
24,606
1. Comparative amount of ‘Other payables’ account has been restated and has increased by $3,411,000 in accordance with the accounting for business
combination. Refer to Note 25(b) and Note 25(e).
Significant accounting policies
Trade payables
Trade payables are initially recognised at their fair value and subsequently carried at amortised cost and are not discounted.
These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which are
unpaid. The amounts are unsecured and are paid in accordance with vendor terms, which are usually within 30 to 60 days of
recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the
reporting period.
15. Other operating provisions
Current
Lease and rental provisions
Onerous contract provisions
Restructuring provisions
Other
Reconciliation of other operating provisions
Carrying amount at beginning of year
Net (payments)/provisions made during the year
Carrying amount at end of year
2020
$’000
-
417
484
280
1,181
1,211
(30)
1,181
2019
$’000
1,051
-
-
160
1,211
471
740
1,211
The movement in operating provisions during the year was largely driven by an onerous contract and restructuring provisions offset by
the reversal of the onerous lease provisions. The restructuring provisions have been included as part of the transactions classified as
separately disclosed items in understanding the Group’s results. Refer to Note 4 for further information.
Significant accounting policies
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.
68
Hansen Technologies Ltd Annual Report 2020 Section D: People
This section provides information about our employee benefit obligations, including annual leave,
long service leave and post-employment benefits. It also includes details about our share plans
and the compensation paid to Key Management Personnel.
16. Employee benefits
Current employee benefits1,3
Non-current employee benefits2
Total employee benefits liability
2020
$’000
14,374
170
14,544
2019
$’000
14,102
189
14,291
1. Included within current provisions in the consolidated statement of financial position.
2. Included within non-current provisions in the consolidated statement of financial position.
3. Comparative amount of ‘Current employee benefits’ liability has been restated and has increased by $243,000 in accordance with the accounting for business
combination. Refer to Note 25.
Employee benefits liability
Employee benefits liability represents amounts provided for annual leave and long service leave. The current portion for this provision
includes the total amount accrued for annual leave entitlements and the amounts accrued for long service leave entitlements that have
vested due to employees having completed the required period of service.
Based on past experience, the Group does not expect the full amount of annual leave or long service leave balances classified as
current liabilities to be settled within the next 12 months. These amounts are presented as current liabilities since the Group does
not have an unconditional right to defer the settlement of these amounts in the event employees wish to use their leave entitlement.
The following amounts reflect leave that is not expected to be taken or paid within the next 12 months:
Current leave obligations expected to be settled after 12 months
2020
$’000
2,212
2019
$’000
2,074
In calculating the present value of future cash flows in respect of long service leave, the probability of long service leave being taken is
based on historical data.
(a) Directors’ and executives’ compensation
Short-term employment benefits
Post-employment benefits
Share-based payments
Detailed remuneration disclosures are provided in the Remuneration Report on pages 16 to 34.
2020
$
2019
$
3,823,007
3,875,298
171,750
896,658
168,821
452,717
4,891,415
4,496,836
69
Hansen Technologies Ltd Annual Report 2020 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
30 JUNE 2020
16. Employee benefits continued
Significant accounting policies
Short-term employee benefit obligations
Liabilities arising in respect of wages and salaries, annual leave, long service leave and any other employee benefits expected to
be settled within 12 months of the reporting date are measured at the amounts based on remuneration rates that are expected
to be paid when the liability is settled. The expected cost of short-term employee benefits in the form of compensated absences
such as annual leave and long service leave is recognised in the provision for employee benefits. All other short-term employee
benefit obligations are presented as payables.
Other long-term employee benefit obligations
The provision for other long-term employee benefits, including obligations for long service leave and annual leave, which are not
expected to be settled wholly before 12 months after the end of the reporting period, are measured at the present value of the
estimated future cash outflow to be made in respect of the services provided by employees up to the reporting date. Expected
further payments incorporate anticipated future wage and salary levels, durations of service and employee turnover, and are
discounted at rates determined by reference to market yields at the end of the reporting period on high-quality corporate bonds
that have maturity dates that approximate the terms of the obligations. Any remeasurements for changes in assumptions of
obligations for other long-term employee benefits are recognised in profit or loss in the periods in which the change occurs.
Other long-term employee benefit obligations are presented as current liabilities in the balance sheet if the entity does not have
an unconditional right to defer settlement for at least 12 months after the reporting date, regardless of when the actual settlement
is expected to occur. All other long-term employee benefit obligations are presented as non-current liabilities in the consolidated
statement of financial position.
Retirement benefit obligations
The consolidated entity makes superannuation and pension contributions to the employee’s defined contribution plan of
choice in respect of employee services rendered during the year. These contributions are recognised as an expense in the
same period when the related employee services are received. The Group’s obligation with respect to employees’ defined
contributions entitlements is limited to its obligation for any unpaid superannuation and pension guarantee contributions at the
end of the reporting period. All obligations for unpaid superannuation and pension guarantee contributions are measured at
the (undiscounted) amounts expected to be paid when the obligation is settled and are presented as current liabilities in the
consolidated statement of financial position.
Bonus plan
The consolidated entity recognises a provision when a bonus is payable in accordance with the employee’s contract of
employment or review letter and the amount can be reliably measured.
Termination benefits
The Group recognises an obligation and expense for termination benefits at the earlier of: (a) the date when the Group can no
longer withdraw the offer for termination benefits; and (b) when the Group recognises costs for restructuring and the costs include
termination benefits. In either case, the obligation and expense for termination benefits is measured on the basis of the best
estimate of the number of employees expected to be affected. Termination benefits that are expected to be settled wholly before
12 months after the annual reporting period in which the benefits are recognised are measured at the (undiscounted) amounts
expected to be paid and are presented as current liabilities in the consolidated statement of financial position. All other termination
benefits are accounted for on the same basis as other long-term employee benefits and are presented as non-current liabilities in
the consolidated statement of financial position.
70
Hansen Technologies Ltd Annual Report 2020 17. Share-based payments
(a) Employee Share Plan
The Employee Share Plan (ESP) is available to all eligible employees each year to acquire ordinary shares in the Company from future
remuneration (before tax). Shares to be issued or transferred under the ESP will be valued at the volume-weighted average price of the
Company’s shares traded on the Australian Securities Exchange during the five business days immediately preceding the day the shares
are issued or transferred. Shares issued under the ESP are not allowed to be sold, transferred or otherwise disposed of until the earlier
of the end of an initial three-year period, or the participant ceasing continuing employment with the Company.
Details of the movement in employee shares under the ESP are as follows:
Number of shares at beginning of year
Number of shares distributed to employees
Number of shares transferred to main share registry and/or disposed of
Number of shares at year end
2020
No. of Shares
2019
No. of Shares
115,792
-
(56,932)
58,860
114,758
45,560
(44,526)
115,792
The value of shares issued under the ESP that was recognised during the year, and any amounts of consideration provided by eligible
participants at balance sheet date were:
Issued ordinary share capital
2020
$’000
-
2019
$’000
170
The market value of the Company’s ordinary shares closed at $2.91 on 30 June 2020 ($3.93 on 30 June 2019).
There were no shares issued under the ESP for the current financial year.
(b) Employee Performance Rights Plan
The Employee Performance Rights Plan (the Rights Plan) was approved by shareholders at the Company’s AGM on 23 November
2017. Under the Plan, awards are made to eligible executives and other management personnel who have an impact on the Group’s
performance. Plan awards for long-term incentives are granted in the form of performance rights over shares, which vest over
a period of three years subject to meeting performance measures and continuous employment with the Company. During the year,
a new deferred equity component for short-term incentives was introduced where 25% of the award is in the form of performance rights.
These rights are subject to a two-year deferral period where recipients must retain employment with the Company. Each performance
right is to subscribe for one ordinary share upon vesting and, when issued, the shares will rank equally with other shares.
Performance rights issued under the Employee Performance Rights Plan are valued on the same basis as those issued to KMP,
which is described in Note 17(d).
Performance rights issued and outstanding as at 30 June 2020
Grant date
2 Jul 2017
2 Jul 2018
1 Sep 2019
1 Sep 2019
Total
Vesting date
31 Aug 20201,2
31 Aug 20211
30 Jun 2022
30 Jun 2022
Type
LTI
LTI
STI
LTI
Fair value per
right $
Rights granted
No. of rights at
30/06/2020
3.815
3.01
3.11
2.83
355,316
530,652
95,451
540,007
345,494
480,079
87,218
489,306
1,521,426
1,402,097
1. The vesting date for rights granted on 2 July 2017 and 2 July 2018 is the date on which the Board notifies the executive that the rights have vested, after the
outcomes for the measurement period have been determined and satisfaction of performance conditions have been assessed. This is likely to be 31 August 2020
and 31 August 2021, respectively.
2. Performance rights in relation to EPSa CAGR measure exceeded the required performance measurement hurdles and will vest on an accelerated basis paying
150% of the entitlement on 31 August 2020. Performance rights associated with the TSR hurdle did not meet the market conditions.
71
Hansen Technologies Ltd Annual Report 2020 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
30 JUNE 2020
17. Share-based payments continued
(b) Employee Performance Rights Plan continued
Performance rights issued and outstanding as at 30 June 2019
Grant Date
2 Jul 2017
2 Jul 2018
Total
Vesting Date
31 Aug 20201
31 Aug 20211
Type
LTI
LTI
Fair Value
Per Right $
3.815
3.01
Rights Granted
No. of Rights at
30/06/2019
355,316
530,652
885,968
355,316
530,652
885,968
1. The vesting date for rights granted on 2 July 2017 and 2 July 2018 is the date on which the Board notifies the executive that the rights have vested, after the
outcomes for the measurement period have been determined and satisfaction of performance conditions have been assessed. This is likely to be 31 August 2020
and 31 August 2021, respectively.
There were no performance rights vested or lapsed during the financial year.
The weighted average contractual life of outstanding performance rights at the end of the financial year is 1.26 years (2019: 1.77 years).
(c) Employee Share Option Plan
The Employee Share Option Plan (the Option Plan) was approved by shareholders at the Company’s AGM on 9 November 2001 and
reaffirmed at the AGM on 24 November 2011. Under the Option Plan, awards are made to eligible executives and other management
personnel who have an impact on the Group’s performance. Option Plan awards are delivered in the form of options over shares which
vest over a period of three years subject to meeting performance measures and continuous employment with the Company. Each
option is to subscribe for one ordinary share when the option is exercised and, when issued, the shares will rank equally with other shares.
Unless the terms on which an option was offered specified otherwise, an option may be exercised at any time after the vesting date
on satisfaction of the relevant performance criteria.
Options issued under the Employee Share Option Plan are valued on the same basis as those issued to KMP, which is described
in Note 17(d).
There were no new options issued under the Option Plan during the 30 June 2020 and 30 June 2019 financial years, as the Option Plan
was replaced with the Rights Plan as described in Note 17(b).
Movement of options during the year ended 30 June 2020:
Grant Date
2 Jul 2014
2 Jul 2015
Vesting Date
Expiry Date
2 Jul 2017
2 Jul 2018
2 Jul 2019
2 Apr 20212
22 Dec 2016
31 Aug 2019
22 Dec 2021
Total
Weighted average exercise price
1. 265,000 options were exercised on 1 July 2019.
Exercise Price
$
No. of Options
at Beg. of Year
Options
Exercised,
Lapsed or Other
No. of Options
at End of Year
1.30
2.67
3.59
265,000
925,000
(265,000) 1
(40,000) 3
1,323,730
(1,323,730) 4
2,513,730
(1,628,730)
$1.48
-
885,000
-
885,000
$2.05
2. The original expiry date for this tranche of options was 2 July 2020. However, due to the COVID-19 pandemic impact on financial markets, the Board exercised
its discretion to extend the expiry date for the remaining options to 2 April 2021.
3. 40,000 options were exercised on 1 June 2020.
4. Options issued on 22 December 2016 did not meet the required performance measurement hurdles for the options to vest and/or be exercisable.
72
Hansen Technologies Ltd Annual Report 2020 Movement of options during the year ended 30 June 2019:
Grant Date
2 Jul 2013
2 Jul 2014
2 Jul 2015
Vesting Date
Expiry Date
2 Jul 2016
2 Jul 2017
2 Jul 2018
30 Sept 2018
2 Jul 2019
2 July 2020
22 Dec 2016
31 Aug 2019
22 Dec 2021
Total
Weighted average exercise price
Exercise Price
$
No. of Options
at Beg. of Year
0.92
1.30
2.67
3.59
75,000
470,000
1,000,000
1,323,730
2,868,730
Options
Exercised or
Lapsed
(75,000)
(205,000)
(75,000)
No. of Options
at End of Year
-
265,000
925,000
-
1,323,730
(355,000)
2,513,730
$1.51
$3.01
The weighted average fair value of options granted during the year was nil (2019: nil) as there were none issued during the year.
The weighted average share price for share options exercised during the financial year was $3.86 (2019: $3.57).
The weighted average remaining contractual life for share options outstanding at the end of the financial year was 0.58 years
(2019: 1.68 years).
(d) Fair value of performance rights granted
The fair value of Total Shareholder Return (TSR) performance rights at grant date is independently determined using an adjusted
form of the Black Scholes Model, which includes a Monte Carlo simulation model that takes into account the term of the performance
rights, the impact of dilution (where material), the share price at grant date and expected price volatility of the underlying share,
the expected dividend yield, the risk-free interest rate for the term of the performance rights and the correlations and volatilities
of the peer group companies.
The fair value of Earnings Per Share (EPS) performance rights at grant date is independently determined using a conventional Black
Scholes Model.
Details of the assessed fair value of the performance rights as well as the model inputs for rights granted, during the year ended
30 June 2020 and for the prior year 30 June 2019, are presented below:
Grant date
Expected vesting date
Measurement period
Fair value of performance rights granted – EPS rights
Fair value of performance rights granted – TSR rights
Share price at grant date
Expected price volatility of the Company’s shares
Expected dividend yield
Risk-free interest rate
2020
2 September 2019
2019
2 July 2018
30 June 2022
31 August 2021
1 July 2019 to 30 June 2022
2 July 2018 to 30 June 2021
$3.11
$2.55
$3.28
35%
1.88%
0.69%
$2.99
$3.03
$3.15
35%
1.75%
2.06%
The expected price volatility is based on the historic volatility (based on the life of the performance rights), adjusted for any expected
changes to future volatility due to publicly available information.
(e) Expenses arising from share-based payment transactions
Options issued under employee option plan FY17
Rights issued under Employee Performance Rights Plan FY18
Rights issued under Employee Performance Rights Plan FY19
Rights issued under Employee Performance Rights Plan FY20
Note
2020
$
-
431,479
476,301
564,820
2019
$
(136,785)
451,844
513,524
-
8(a), 22(b)
1,472,600
828,583
73
Hansen Technologies Ltd Annual Report 2020 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
30 JUNE 2020
17. Share-based payments continued
Significant accounting policies
Share-based payments
The Group operates equity-settled share-based payment employee share, options and rights schemes. The fair value of the
equity 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, ending on the date on which the relevant employees become fully entitled to
the award (the vesting date). The fair value of shares is measured at the market bid price at grant date. In respect of share-based
payments that are dependent on the satisfaction of performance conditions, the number of options and rights expected to vest
is reviewed and adjusted at each reporting date. The amount recognised for services received as consideration for these equity
instruments granted is adjusted to reflect the best estimate of the number of equity instruments that eventually vest.
Share-based payments are subject to two different forms of measurement:
• Market-based
• Non-market-based
These measurement criteria are subject to different accounting treatments under AASB 2 Share-based Payment.
Market-based measurement
Any awards subject to market conditions will vest irrespective of the condition being met. Where a condition is not met,
the expense associated with the award will continue to be recognised over the vesting period.
Non-market-based measurement
For any non-market-based awards where the condition is not satisfied, the expense incurred to date is reversed and no further
charge is recognised over the remaining period.
Critical accounting estimate and judgement
Share-based payments
The fair value of options and rights is estimated on the grant date using an adjusted form of the Black Scholes Model and Monte
Carlo simulation model. Estimating fair value for share-based payments requires significant assumptions such as determining the
most appropriate inputs to the valuation model, including the expected life of the share option or performance right, volatility in
the share price and dividend yield.
74
Hansen Technologies Ltd Annual Report 2020 Section E: Capital and Financial Risk Management
This section explains our policies and procedures applied to manage our financing and capital
structure, and the associated risks that we are exposed to. The Group manages its financial
and capital structure to maximise shareholder return, maintain an optimal cost of capital and
provide flexibility for strategic investments.
18. Financial risk management
The Group is exposed to a variety of financial risks, principally related to credit, liquidity, interest rate and foreign currency risk.
The Group’s risk management framework is aligned with best practices and designed to reduce volatility on our financial performance
and to support the delivery of our business objectives. The Board has overall responsibility for identifying and monitoring operational
and financial risks.
(a) Credit risk
Nature of risk
The risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligations. Credit risk arises principally from the Group’s receivables from customers and our
investments in debt securities.
Exposure to the risk The Group’s maximum exposure to credit risk at balance date is the carrying amount of financial assets,
net of any provisions for impairment and excluding the value of any collateral or other security.
The gross trade receivables balance as at 30 June 2020 was $48,336,000 (2019: $47,510,000). The ageing
analysis of trade and other receivables is provided in Note 9. As the Group undertakes transactions with a large
number of customers and regularly monitors payment in accordance with credit terms, the financial assets that
are past due but not impaired are expected to be received.
The Group’s exposure to credit risk is affected by the regions and industries our customers operate in.
Set out below shows the concentration of our trade receivables balances by the industry they operate in.
FY20
2%
FY19
3%
42%
Communication
Energy
Other
41%
56%
56%
How is the risk
managed?
Receivables are managed on an ongoing basis. The Group does not have any material credit risk exposure
to any single debtor or group of debtors. Ageing analysis and ongoing collectability reviews are performed
and, where appropriate, an expected credit loss provision is raised. Historically, the Group has not had any
significant write-offs in our trade receivables.
The Group minimises concentrations of credit risk in relation to trade receivables by undertaking transactions
with a large number of customers. Credit quality of a customer is assessed based on a variety of factors,
including their credit ratings and financial position.
75
Hansen Technologies Ltd Annual Report 2020 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
30 JUNE 2020
18. Financial risk management continued
(b) Liquidity risk
Nature of risk
The risk that the Group will encounter difficulty in meeting its financial obligations as they fall due.
Exposure to the risk The table below categorises the Group’s financial liabilities into their relevant contractual maturities. Amounts
included represent undiscounted cash flows.
Note 19 provides additional details on the Group’s borrowing arrangements.
How is the risk
managed?
The Group’s approach is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities
when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking
damage to the Group’s reputation.
The Group reviews its minimum levels of cash and cash equivalents on an ongoing basis, and closely monitors
rolling cash flow forecasts based on its view on the nature and timing of expected receipts and payments. The
Group has historically been able to generate and retain strong positive cash flows. Additionally, multi-currency
borrowing facilities have been arranged with the Group’s financiers to provide increased capacity for strategic
growth objectives.
Contractual maturities of financial liabilities:
The table below summarises the maturity profile of the Group’s financial liabilities based on contractual undiscounted payments.
Financial Liabilities
Note
Less than
6 Months 6-12 Months
1-2 Years
2-3 Years
> 3 Years
Total Carrying
Amount
Contractual Cash Flows $’000
2020
Trade and other payables
Bank overdraft
Lease liabilities
Secured borrowings
2019
Trade and other payables1
Bank overdraft
Lease liabilities
Secured borrowings1
14
19
19
14
19
19
24,223
591
3,266
-
-
-
-
-
2,745
5,200
-
160,394
28,080
2,745
165,594
24,606
-
112
-
24,718
-
134
-
-
134
-
-
-
-
-
-
-
4,646
-
4,646
-
-
-
189,543
189,543
-
-
24,223
591
6,959
22,816
-
160,394
6,959
208,024
-
-
-
-
-
24,606
134
112
189,543
214,395
1. Comparative amounts have changed due to the reclassifications as described in Notes 10 and 19 and retrospective adjustments for business combination
as described in Note 25.
76
Hansen Technologies Ltd Annual Report 2020 (c) Interest rate risk
Nature of risk
The risk that the fair value or the future cash flows of a financial instrument will fluctuate as a result of changes
in market interest rates.
Exposure to the risk The Group’s main exposure to interest rate risk arises from its lease liabilities, borrowings and cash and cash
equivalents. No other financial assets or liabilities are expected to be exposed to interest rate risk.
The weighted average variable interest rate across all our borrowings at 30 June 2020 is 3.46% (2019: 4.52%).
If the interest rate were to increase or decrease by 1%, with all other variables held constant, the impact to pre-
tax profit is $2,064,000 (2019: $354,000) and the impact to post-tax equity1 is $1,482,000 (2019: $251,000).
This impact is based on a higher level of borrowings during most of this financial year compared to the prior
year and the recognition of lease liabilities upon adoption of AASB 16.
1. Post-tax equity is calculated as the net of the blended effective tax rate on pre-tax profit based on where the interest-bearing
debt is located (i.e. Australia and Canada) and the prevailing corporate tax rate in each of those jurisdictions (i.e. 30% and 26.5%
respectively).
How is the risk
managed?
The Group ensures it has access to diverse sources of funding, including access to foreign currency debt.
The Group closely monitors its debt ratios to reduce its risk exposure to uncertainty in the global markets
if interest rates will fall or rise. Management is comfortable with the risk associated with using variable interest
rates due to the current level of borrowings.
(d) Foreign currency risk
Nature of risk
The risk that the fair value or future cash flows of a financial instrument or forecasted transaction will fluctuate
because of changes in foreign exchange rates.
Exposure to the risk The Group operates internationally and as such has exposure to foreign currency movements. The Group has
expanded its international operations substantially in recent years to the extent that in excess of 85% of its
revenue is now earned in foreign currency designated transactions. The Group has a number of offices located
internationally and more than 88% of its work force is located overseas and paid in foreign currencies.
Changes in foreign currency exchange rates would be limited to the revaluation of foreign currency-denominated
borrowings, intercompany financing arrangements denominated in foreign currencies, and foreign currency
bank balances in the Group at market rates at balance sheet date.
The Group’s primary foreign currency exposure relates to the movement in US Dollar (USD), British Pound
(GBP), Canadian Dollar (CAD) and Euro (EUR) exchange rates. At the reporting date, cash and cash equivalents
included $38.4 million (2019: $34.3 million) denominated in foreign currencies.
If the foreign currency exchange rate for our primary foreign currencies (being USD, GBP, CAD and EUR) were
to move by 10%, with all other variables held constant, the impact to our foreign currency translation reserves
(classified as equity in the consolidated statement of financial position) on translation of our foreign currency-
denominated cash and cash equivalents is as follows:
USD
GBP
CAD
EUR
Increase/(Decrease) $’000
+10%
-10%
2020
1,679
2019
1,141
(1,679)
(1,141)
2020
531
(531)
2019
339
(339)
2020
2019
-
-
78
(78)
2020
700
(700)
2019
694
(694)
The Group’s exposure to foreign currency changes for all other currencies and other financial statement items is
not material, as the Group has natural hedging and designated hedging relationships in place (refer to ‘How is
the risk managed?’ for further discussion).
77
Hansen Technologies Ltd Annual Report 2020 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
30 JUNE 2020
18. Financial risk management continued
(d) Foreign currency risk continued
How is the risk
managed?
The Group manages its foreign currency risk by evaluating its exposure to fluctuations on an ongoing basis.
The Group’s overseas subsidiaries transact in different functional currencies. The effects of any exchange
rate movements in respect of the net assets of our foreign subsidiaries are recognised in the foreign currency
translation reserve in equity. Accordingly, the Group has an inbuilt natural hedge against major currency
fluctuations and, except for significant sudden change, is protected in part by its corporate structure against
currency movements so that the impact is largely limited to the margin.
In addition, the Group holds foreign currency borrowings as part of the syndicated facility agreement as
disclosed in Note 19, which have been designated as hedging instruments of the net assets of some of the
Group’s principal overseas subsidiaries in order to offset our risk exposure arising from the translation of these
subsidiaries into Australian dollars. There is no impact to the profit or loss on the translation of the Group’s
overseas subsidiaries or foreign currency borrowings to the Australian dollar.
The Group’s subsidiaries also enter into various financing and transactional arrangements with each other in
accordance with local regulatory requirements. The Group regularly reviews these arrangements to minimise
its exposure on the translation of outstanding foreign currency-denominated intercompany balances to the
Australian dollar, which impact profit.
Significant accounting policies
Functional and presentation currency
The financial statements of each entity within the consolidated Group are measured using the currency of the primary economic
environment in which that entity operates. The consolidated financial statements of the Group are presented in Australian dollars,
which is the Group’s functional and presentation currency.
Foreign currency transactions and balances
Transactions in foreign currencies of entities within the consolidated Group are translated into its 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.
All resulting exchange differences arising on settlement or restatement are recognised in profit or loss and presented in the
consolidated statement of comprehensive income for the financial year.
(e) Fair value measurements
Due to their short-term nature, the fair value of receivables and payables approximates their carrying amounts as disclosed in the
consolidated statement of financial position and notes to the consolidated financial statements. At 30 June 2020 and 30 June 2019,
there are no assets or liabilities carried at fair value on a recurring basis.
19. Borrowings
Current
Secured
Bank overdraft
Non-current
Secured
Term facility – gross borrowings
Term facility – net prepaid borrowing costs1
2020
$’000
2019
$’000
591
591
134
134
160,394
(2,542)
157,852
189,543
(3,869)
185,674
1. Comparative amount for ‘Term facility – net prepaid borrowing costs’ account have been restated to reflect a reclassification of $653,000 from ‘Prepayments –
current’ account. Refer to Note 10.
78
Hansen Technologies Ltd Annual Report 2020 (a) Loan facilities
Loan facility
Repayments of non-withdrawable facility
Amount utilised
Unused loan facility
2020
$’000
225,000
(8,000)
(160,394)
56,606
2019
$’000
225,000
-
(189,543)
35,457
On 1 May 2019, the Group entered into a secured $225,000,000 syndicated multi-currency facility with its external financiers to fund
the acquisition of Sigma Systems (refer Note 25) and to provide additional funding for general corporate and working capital purposes.
This facility expires on 30 April 2022 and will be subject to renewal upon negotiation with its external financiers. The facility is secured
by 75% of Group assets. As at 30 June 2020, the remaining unutilised portion of the facility is $56,606,000.
On 27 July 2020, the Group voluntarily cancelled $40,000,000 of the facility effective from 30 July 2020. After this, the unutilised portion
of the facility is $16,606,000.
(b) Changes in liabilities arising from financing activities
Note
2020
$’000
185,808
2019
$’000
27,031
(27,833)
160,943
-
457
1,327
(1,316)
(4,878)
134
1,009
1,569
158,443
185,808
Opening balance at 1 July
Cash flows from financing activities
Net (repayment of)/proceeds from borrowings
Cash flows from non-financing activities
Prepaid borrowing costs
Draw-down of overdraft facility
Non-cash changes
Amortisation of prepaid borrowing costs
5
Effect of foreign exchange
Closing balance at 30 June1
1. Represents long-term facility borrowings of $157,852,000 (2019: $185,674,000) and bank overdraft facility of $591,000 (2019: $134,000).
(c) Hedge of net investments in foreign operations
Included in the ‘Borrowings’ account as at 30 June 2020 are two borrowings of US$12,000,000 and GB£13,000,000 drawn down
as part of the syndicated multi-currency facility in the prior year. Repayments have been made during the year and as at 30 June 2020,
carrying amount of these borrowings are US$4,500,000 and GB£8,500,000.
Both these foreign currency-denominated borrowings have been designated as a hedge of the net investments in the Group’s
subsidiaries in the United States and the United Kingdom. The borrowings are being used to hedge the Group’s exposure to the US$
and GB£ foreign exchange risk on these investments. Gains or losses on the retranslation of the borrowings are transferred to other
comprehensive income to offset any gains or losses on translation of the net investments in the subsidiaries.
The Group’s hedging relationship remains unchanged from the prior year for its foreign currency-denominated borrowings.
79
Hansen Technologies Ltd Annual Report 2020
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
30 JUNE 2020
19. Borrowings continued
(c) Hedge of net investments in foreign operations continued
The effects of the foreign currency related hedging instruments on the Group’s financial position and performance are as follows:
Syndicated Debt Facility
’000
Note
USD Loan
GBP Loan
Carrying amount of the loan – 30 June 2020 (AUD)
Carrying amount of the loan – 30 June 2020 (nominated currency)
Hedge ratio1
Change in the carrying amount of loan as a result of foreign
currency movements since 1 July 2019, recognised in OCI ($)
22(a)
Change in the value of the hedged item used to determine hedge
effectiveness ($)
Average hedged rate for the year (local currency:1 AUD)
6,543
4,500
1:1
672
(672)
0.671
15,240
8,500
1:1
130
(130)
0.532
Total
21,783
802
(802)
21,783
1. The draw-down loans under the syndicated debt facilities are denominated in the same currency and critical terms as the value of the net investment in the foreign
subsidiaries that are being hedged. Therefore, the hedge ratio this year is 1:1 (2019: 1:1).
The impact to the foreign currency translation reserve on translation of the Group’s net investment in foreign subsidiaries that are being
hedged by the Group’s borrowings was a decrease of $802,000 (2019: increase of $43,000). The hedging loss recognised in ‘OCI’
(Other Comprehensive Income) before tax is equal to the change in fair value used for measuring effectiveness. There is no ineffectiveness
in the years ended 30 June 2020 and 2019.
Significant accounting policies
Loans and borrowings
Interest-bearing loans and borrowings are initially recognised as financial liabilities at fair value net of directly attributable
transaction costs. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised
cost using the effective interest rate (EIR) method. Gains and losses are recognised in profit or loss when the liabilities are
derecognised as well as through the EIR amortisation process.
Borrowings are classified as non-current liabilities except for those that mature in less than 12 months from the reporting date,
which are classified as current liabilities.
Borrowing costs
Borrowing costs can include interest expense calculated using the effective interest method and finance charges in respect
of finance leases. Borrowing costs are expensed as incurred except for borrowing costs incurred as part of the construction
of a qualifying asset, in which case the costs are capitalised until the asset is ready for its intended use or sale.
20. Contributed capital
(a) Issued and paid up capital
Ordinary shares, fully paid
The ordinary shares have no par value in accordance with the Corporations Act 2001.
2020
$’000
2019
$’000
140,952
138,746
80
Hansen Technologies Ltd Annual Report 2020 (b) Movements in shares on issue
2020
No. of Shares
2020
$’000
2019
No. of Shares
Balance at beginning of the financial year
197,399,653
138,746
196,648,230
Shares issued under the Dividend Reinvestment Program
527,423
Shares issued under the Employee Share Plan
Options exercised under the Executive LTI Plan
-
305,000
1,754
-
452
350,863
45,560
355,000
2019
$’000
136,896
1,145
170
535
Balance at end of the financial year
198,232,076
140,952
197,399,653
138,746
(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) Capital risk management
The Group’s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can continue
to provide returns for shareholders and benefits for other stakeholders and maintain an optimal capital structure to reduce the cost of
capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return
capital to shareholders, issue new shares, increase debt, sell assets to reduce debt or a combination of these activities.
The capital risk management policy remains unchanged from the 30 June 2019 Financial Report.
21. Dividends
A final dividend of 7 cents per share has been declared. This final dividend of 7 cents per share, partially franked to 0.70 cents per
share, comprising of a regular dividend of 5 cents per share, together with a special dividend of 2 cents per share, was announced to
the market on 28 August 2020. The amount declared has not been recognised as a liability in the accounts of Hansen Technologies
Limited as at 30 June 2020.
Dividends paid during the year (net of dividend reinvestment)
3 cents per share final dividend paid 26 September 2019 – partially franked1
4 cents per share final dividend paid 27 September 2018 – fully franked2
3 cents per share interim dividend paid 26 March 2020 – partially franked3
3 cents per share interim dividend paid 29 March 2019 – fully franked4
Proposed dividend not recognised at the end of the year
Dividends franking account
30% franking credits, on a tax paid basis, are available to shareholders
of Hansen Technologies Ltd for subsequent financial years
2020
$’000
2019
$’000
4,904
-
5,211
-
10,115
13,876
-
7,319
-
5,318
12,637
5,922
27
1,586
1. The final dividend paid of 3 cents per share franked to 2.6 cents, comprised of a regular dividend of 3 cents per share.
2. The final dividend paid of 4 cents per share, franked to 4 cents, comprised of a regular dividend of 3 cents per share, together with a special dividend
of 1 cent per share.
3. The interim dividend of 3 cents per share franked to 1.59 cents, comprised of a regular dividend of 3 cents per share.
4. The interim dividend of 3 cents per share, franked to 3 cents, comprised of a regular dividend of 3 cents per share.
The above available amounts are based on the balance of the dividend franking account at year end adjusted for:
• franking credits that will arise from the payment of any current tax liability;
• franking debits that will arise from the payment of any dividends recognised as a liability at year end;
• franking credits that will arise from the receipt of any dividends recognised as receivables at year end; and
• franking credits that the entity may be prevented from distributing in subsequent years.
81
Hansen Technologies Ltd Annual Report 2020 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
30 JUNE 2020
22. Reserves and retained earnings
Foreign currency translation reserve
Share-based payments reserve
Retained earnings
Note
22(a)
22(b)
22(c)
(a) Foreign currency translation reserve
This reserve is used to record the exchange differences arising on translation of a foreign entity.
Movements in reserve
Balance at 1 July
Net (loss)/gain on hedges of a net investment
Exchange differences on translation of foreign operations
Balance at 30 June
Note
19(c)
2020
$’000
9,397
5,404
96,741
2020
$’000
23,340
(802)
(13,141)
9,397
2019
$’000
23,340
3,931
82,853
2019
$’000
16,739
43
6,558
23,340
(b) Share-based payments reserve
This reserve is used to record the fair value of options and performance rights issued to employees as part of their remuneration.
Movements in reserve
Balance at 1 July
Share-based payments expensed during the year
Balance at 30 June
(c) Retained earnings
Movements in retained earnings
Balance at 1 July
Effect of adoption of new accounting standards
Dividends declared during the year (before dividend reinvestment)
Net profit after income tax expense
Balance at 30 June
Note
17(e)
Note
3(a)(i)
28(c)
2020
$’000
3,931
1,473
5,404
2020
$’000
82,853
-
(11,869)
25,757
96,741
2019
$’000
3,102
829
3,931
2019
$’000
73,186
1,984
(13,782)
21,465
82,853
23. Commitments and contingencies
Commitments on leases not yet commenced
The Group has one lease contract that has not yet commenced as at 30 June 2020. The future lease payments for this non-cancellable
lease contract is $42,000 and is payable within one year.
Contingent assets and liabilities
There have been various indemnity and warranty claims made to the vendors of the acquired business, Sigma Systems (refer to Note 25).
The outcome of these claims cannot be reliably measured as at the date of signing of the annual Financial Report and are contingent on
further negotiations.
At 30 June 2020 and 2019, the Group does not have any other contingent assets and liabilities.
82
Hansen Technologies Ltd Annual Report 2020 Section F: Group Structure
This section provides information about our structure and how this impacts the Group’s results as
a whole, including parent entity information and any business acquisitions that impacted the Group’s
financial position and performance.
24. Parent entity information
Presented below are the summary financial statements of the parent Company, Hansen Technologies Limited:
(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
Accumulated profits
Share-based payments reserve
Foreign currency translation reserve
Total equity
(b) Summarised statement of comprehensive income
Profit after income tax expense
Total comprehensive income for the year
Parent Entity
2020
$’000
188
232,030
232,218
876
52,044
52,920
2019
$’000
1,028
243,841
244,869
2,350
77,796
80,146
179,298
164,723
140,951
34,712
5,404
(1,769)
138,746
22,962
3,931
(916)
179,298
164,723
Parent Entity
2020
$’000
23,616
22,763
2019
$’000
27,464
27,538
Dividends of $26,183,000 (2019: $29,000,000) were paid from Hansen Corporation Pty Limited to Hansen Technologies Limited during
the financial year.
(c) Parent entity guarantees
Hansen Technologies Limited, being the parent entity, has entered into a syndicated debt facility (refer to Note 19) of which Hansen
Corporation Pty Limited and other subsidiaries of the Company are joint guarantors to that facility agreement. In addition, there are
cross guarantees given by Hansen Technologies Limited and Hansen Corporation Pty Limited as described in Note 28. No deficiencies
of assets exist in any of these companies.
On 7 July 2020, a Deed of Parent Guarantee and Indemnity has been executed between the parent entity and Sigma Systems Canada
LP, a wholly-owned subsidiary, in favour of a financing company based in Canada to secure a credit card facility.
83
Hansen Technologies Ltd Annual Report 2020 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
30 JUNE 2020
24. Parent entity information continued
Significant accounting policies
The financial information for the parent Company has been prepared on the same basis as the Group consolidated financial
statements, except as set out below:
Investments in subsidiaries
Investments in subsidiaries are accounted at cost. Dividends received from subsidiaries are recognised in the parent entity’s
statement of comprehensive income when its right to receive the dividend is established.
Where the parent Company has provided financial guarantees in relation to loans and payables of subsidiaries for no
compensation, the fair value of these guarantees is accounted for as contributions and recognised as part of the cost of the
investment.
25. Business combinations
Acquisition of Sigma Systems
On 1 June 2019, the Company’s subsidiary, Hansen Technologies Canada Inc., acquired 100% of the partnership units of Sigma
Systems GP and the shares of Sigma Systems Canada Inc., both of which wholly own and control the partnership units of Sigma
Systems LP and its controlled entities (collectively known as ‘Sigma’). Sigma is a leading global provider of catalogue-driven software
products for telecommunications, media and technology companies. Sigma is based in Toronto, Canada, but has customers operating
across all regions of the world. The acquisition significantly expands the Group’s scale and scope in the communications sector, builds
on the Group’s global presence and provides opportunities for cross-selling products into the Group’s existing market verticals.
The fair values of the identifiable assets and liabilities acquired as at the date of acquisition were previously reported at their provisional
amounts in light of the timing of the transaction. At 30 June 2020, provisional fair value of assets and liabilities acquired have been
finalised, including the corresponding goodwill and purchase price consideration, as detailed below:
Assets acquired:
Cash
Receivables
Accrued revenue
Prepayments and other current assets
Plant and equipment
Current tax receivable
Customer contracts
Technology
Brand name
Total assets acquired
Liabilities acquired:
Payables
Accruals and provisions
Unearned revenue
Deferred tax liability
Total liabilities acquired
Net identifiable assets acquired
Goodwill arising on acquisition
Total purchase consideration
84
Provisional
Fair Value
$’000
Adjustments
$’000
Finalised
Fair Value
$’000
4,439
13,163
19,137
5,294
970
741
65,898
17,727
9,563
-
-
(2,021)
(a)
-
-
-
-
-
-
4,439
13,163
17,116
5,294
970
741
65,898
17,727
9,563
136,932
(2,021)
134,911
2,377
3,121
7,516
26,750
39,764
97,168
66,662
163,830
(b)
(c)
-
2,575
236
-
2,811
(4,832)
5,911
1,079
(d)
(e)
2,377
5,696
7,752
26,750
42,575
92,336
72,573
164,909
Note
3(a)(iii)
14, 16
3(a)(iii)
6(b)(iii)
12
14
Hansen Technologies Ltd Annual Report 2020 The Group has made retrospective adjustments to the accounting for the business combination in the comparative amounts for the
financial year ended 30 June 2019 as follows:
(a) Accrued revenue
Information obtained during the measurement period provided that the provisional amount of accrued revenue included revenue
accruals for a licence and professional services contract that did not meet certain revenue recognition criteria amounting to
$2,021,000. An adjustment was recognised to reflect the fair value of accrued revenue acquired at acquisition date.
(b) Accruals and provisions
There were certain liabilities upon acquisition amounting to $2,575,000 that were previously not recorded. Adjustment to increase the
‘Other payables’ account by $2,332,000 and ‘Provisions’ account by $243,000 were recognised to reflect the fair value of accruals
and provisions acquired at acquisition date.
(c) Unearned revenue
An accounting error for $236,000 was identified as part of the unearned revenue balance provisionally acquired. An adjustment was
recognised to reflect the fair value of unearned revenue assumed at acquisition date.
(d) Goodwill
The adjustments to the fair value of assets and the purchase price consideration has affected the fair value of the goodwill at
acquisition date. The overall increase in goodwill at acquisition date is $5,911,000.
(e) Total purchase consideration
In accordance with the agreement with the vendors of Sigma, the total purchase price consideration is to be adjusted for any
pre-tax closing refund received by the Company and the position in net working capital in accordance with the hurdle agreed upon.
The net amount payable to the vendors of Sigma after considering the pre-tax closing refund and working capital adjustment
amounts to $1,079,000. This amount is included under ‘Other payables’ account. Refer to Note 14.
Goodwill arose on the acquisition of Sigma due to the combination of the consideration paid for the business and the net assets
acquired, less values attributed to other intangibles in the form of customer contracts, trade names and technology. The value of
goodwill represents the strong positioning of Sigma in the communications market, and includes the future benefit arising from
the expected future earnings, synergies with the Group’s products and operations and personnel assumed via the acquisition.
None of the goodwill is expected to be deductible for tax purposes.
The fair value of trade receivables approximates the gross contractual amount of trade receivables, due to the short-term nature
and maturity of the trade receivables.
(i) Transaction costs
There were no transaction costs (2019: $2,063,000) incurred during the period in relation to the acquisition. Transaction costs were
identified as a separately disclosed item. Refer to Note 4 for further information.
(ii) Contribution since acquisition
During the year, Sigma has contributed total revenue of $68,343,000 (2019: $4,968,000) and an underlying EBITDA of $14,136,000
(2019: loss of $317,000), which is included within the Group’s consolidated results.
(iii) Deferred remuneration
Separate to the business combination in accordance with the accounting standards, in the previous financial year an amount of
$2,235,000 has been paid and held in escrow as deferred remuneration for certain executives of Sigma. In the current financial year,
$164,000 of this amount has been released. Release of the amounts from escrow are contingent on continuous employment with the
combined Group. At 30 June 2020, the balance of this amount is $2,060,000 of which $1,132,000 and $928,000 are included as part
of ‘Other assets – current’ and ‘Other assets – non-current’, accounts in Note 10, respectively.
Analysis of cash flows on acquisition
Outflow of cash to acquire subsidiary, net of cash acquired
Cash consideration
Less: Cash balance acquired
Net cash outflow – investing activities
2020
$’000
-
-
-
2019
$’000
163,830
(4,439)
159,391
85
Hansen Technologies Ltd Annual Report 2020 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
30 JUNE 2020
25. Business combinations continued
Significant accounting policies
Business combinations
A business combination is a transaction or other event in which an acquirer obtains control of one or more businesses and
results in the consolidation of the assets and liabilities acquired. Business combinations are accounted for by applying the
acquisition method.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments issued,
or liabilities incurred by the acquirer to former owners of the acquiree. Deferred consideration payable is measured at its
acquisition date fair value. At each reporting date subsequent to the acquisition, contingent consideration payable is measured
at its fair value with any changes in the fair value recognised in profit or loss unless the contingent consideration is classified
as equity, in which case the contingent consideration is carried at the acquisition-date fair value.
Goodwill is recognised initially at the excess of: (a) the aggregate of the consideration transferred, the fair value of the
non-controlling interests and the acquisition date fair value of the acquirers previously held equity interest; over (b) the
net fair value of the identifiable assets acquired and liabilities assumed.
Acquisition-related costs are expensed as incurred.
Critical accounting estimate and judgement
Business combinations
The Group is required to determine the acquisition date and fair value of the identifiable net assets acquired, including intangible
assets such as brands, customer relationships, software and liabilities assumed. The estimated useful lives of the acquired
amortisable assets, the identification of intangibles and the determination of the indefinite or finite useful lives of intangible assets
acquired are assessed based on management’s judgement. The Group reassesses the fair value of net assets acquired a year
after the acquisition date and judgement is required to ensure that any adjustments made reflect new information obtained
about facts and circumstances that existed as of the acquisition date. The adjustments made to fair value of net assets are
retrospective in nature and have an impact on goodwill recognised on acquisition.
86
Hansen Technologies Ltd Annual Report 2020 Section G: Other Disclosures
This section includes other disclosures not included in the other sections, for example the Group’s
auditor’s remuneration, related parties, impact of new accounting standards not yet effective and
subsequent events.
26. Related party disclosures
(a) List of Controlled Entities
The Group’s consolidated financial statements include the financial statements of Hansen Technologies Limited and the controlled
entities below:
Country of
Incorporation
Note
Ordinary Share
Entity Interest
2020
%
2019
%
Name
Parent entity
Hansen Technologies Limited
Subsidiaries of Hansen Technologies Limited
Hansen Corporation Pty Limited
Hansen Corporation Investments Pty Limited
Hansen Holdings (Asia) Pty Limited
Utilisoft Pty Limited
Hansen Technologies (Shanghai) Company Limited
Hansen Technologies Denmark A/S
Hansen Technologies CIS Finland Oy (fka. Enoro CIS Finland Oy)
Hansen Technologies Finland Oy (fka. Enoro Oy)
PEP Finland Oy
Enercube Oy Finland Filial
Hansen Customer Support India Private Limited
Enoro B.V.
Hansen New Zealand Limited
Hansen Technologies Holdings AS (fka. Enoro Holding AS)
Hansen Technologies Norway AS (fka. Enoro AS)
Australia
Australia
Australia
Australia
Australia
China
Denmark
Finland
Finland
Finland
Finland
India
Netherlands
New Zealand
Norway
Norway
Hantech Singapore Pte Limited
1
Singapore
Hansen Technologies Sweden AB (fka. Enoro AB)
Enoro AG
Hansen Corporation Europe Limited
Hansen Holdings Europe Limited
Hansen Billing Solutions Limited
Hansen Solutions LLC
Hansen Technologies North America, Inc.
Hansen ICC, LLC
Hansen Banner, LLC
Peace Software Inc.
Hansen Technologies Vietnam LLC
Hansen Technologies Canada, Inc.
Sweden
Switzerland
United Kingdom
United Kingdom
United Kingdom
United States
United States
United States
United States
United States
Vietnam
Canada
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
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
87
Hansen Technologies Ltd Annual Report 2020 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
30 JUNE 2020
26. Related party disclosures continued
(a) List of controlled entities continued
Name
Subsidiaries of Hansen Technologies Limited continued
Country of
Incorporation
Note
Sigma Systems Canada Inc.
Sigma Systems Canada LP
Sigma Canada Holdings Inc.
Sigma Systems GP Inc.
Sigma OSS Systems India Private Limited
Sigma Systems Japan K.K.
Sigma Systems (U.K.) Limited
Sigma Systems (Wales) Limited
Sigma Systems Group (USA) Inc.
Canada
Canada
Canada
Canada
India
Japan
United Kingdom
United Kingdom
United States
Ordinary Share
Entity Interest
2020
%
2019
%
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
1. Hantech Singapore Pte Limited was dissolved on 2 June 2020 and was deemed to be dissolved upon this date in accordance with Section 308(5) of the
Companies Act of the Republic of Singapore.
Significant accounting policies
Foreign subsidiaries
Subsidiaries that have a functional currency different to the presentation currency of the Group 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 arising on translation of foreign operations are transferred directly to the Group’s foreign
currency translation reserve as a separate component of equity in the balance sheet.
Exchange differences arising on the reduction of a foreign subsidiary’s equity continues to be recognised in the Group’s foreign
currency translation reserve until such time that the foreign subsidiary is disposed of.
(b) 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 in respect of leased premises
for the relevant financial year:
A related party to the Directors1 – rental payments
A related party to Andrew Hansen – rental payments
2020
$
1,511,495
2019
$
-
22,920
1,633,450
1,534,415
1,633,450
1. Andrew Hansen, Bruce Adams and David Osborne have joint interest to the Melbourne and South Melbourne properties of which the Group pays monthly rental
payments. This interest was held solely by Andrew Hansen in the previous financial year.
88
Hansen Technologies Ltd Annual Report 2020 27. Auditor’s remuneration
The auditor of the Group for the year ended 30 June 2020 is RSM Australia Partners.
(a) Amounts paid and payable to RSM Australia Partners for:
(i) Audit and other assurance services
–
an audit and/or review of the Financial Report of the entity and any other
entity in the consolidated entity
298,200
279,000
2020
$
2019
$
(ii) Other non-audit services
–
taxation services
– compliance services
-
-
-
-
-
-
Total remuneration of RSM Australia Partners
298,200
279,000
(b) Amounts paid and payable to related practices of RSM Australia Partners for:
(i) Audit and other assurance services
–
an audit and/or review of the Financial Report of the overseas entities
in the consolidated entity1
(ii) Other non-audit services
–
taxation services
– compliance services
Total remuneration of network firms of the auditor
(c) Amounts paid and payable to non-related auditors for:
(i) Audit and other assurance services
–
an audit and/or review of the Financial Report of the entity and any other entities
in the consolidated entity
(ii) Other non-audit services
–
taxation services
– compliance services
Total remuneration of non-related auditors
Total auditors’ remuneration
597,478
365,023
110,275
31,420
141,695
739,173
52,349
14,709
67,058
432,081
-
-
-
-
-
-
-
-
-
-
1,037,373
711,081
1. For the financial year ended 30 June 2020, the amount includes fees associated to the audit of the acquisition of the Sigma Group.
89
Hansen Technologies Ltd Annual Report 2020
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
30 JUNE 2020
28. Deed of cross guarantee
Hansen Technologies Limited and Hansen Corporation Pty Limited are parties to a deed of cross guarantee under which each company
guarantees the debts of the other. By entering into the deed, the wholly-owned entities have been relieved from the requirement to
prepare a financial report and directors’ report under ASIC Corporations (Wholly-owned Companies) Instrument 2016/785 issued
by the Australian Securities and Investments Commission.
The above companies represent a ‘closed group’ for the purposes of the Class Order, and as there are no other parties to the deed
of cross guarantee that are controlled by Hansen Technologies Limited, they also represent the ‘extended closed group’.
(a) Consolidated statement of comprehensive income
Set out below is a consolidated statement of comprehensive income for the year ended 30 June 2020 of the closed group consisting
of Hansen Technologies Limited and Hansen Corporation Pty Limited (the Closed Group).
Revenue
Other income
Total revenue and other income
Employee benefit expenses
Depreciation expense
Amortisation expense
Property and operating rental expenses
Contractor and consultant expenses
Software licence expenses
Hardware and software expenses
Travel expenses
Communication expenses
Professional expenses
Finance costs on borrowings
Finance costs on lease liabilities
Foreign currency gains/(losses)
Other expenses
Total expenses
Profit before income tax expense
Income tax expense
Profit after income tax expense
Other comprehensive (expense)/income
Items that may be reclassified subsequently to profit and loss
Net (loss)/gain on hedges of net investments
Exchange differences on translation of foreign entities, net of tax
Other comprehensive (expense)/income for the year
Note
2020
$’000
43,934
32,834
76,768
2019
$’000
49,380
17,951
67,331
(26,446)
(27,429)
(2,095)
(3,110)
(1,645)
(27)
(1,740)
(4,347)
(846)
(487)
(628)
(4,022)
(169)
(414)
(1,263)
(47,239)
29,529
(1,750)
27,779
(802)
(801)
(1,603)
(1,219)
(2,691)
(2,698)
(142)
(1,216)
(3,916)
(1,187)
(618)
(370)
(1,677)
-
(200)
(2,408)
(45,771)
21,560
(3,631)
17,929
43
20
63
28(c)
Total comprehensive income for the year
26,176
17,992
90
Hansen Technologies Ltd Annual Report 2020 (b) Consolidated statement of financial position
Set out below is a consolidated statement of financial position as at 30 June 2020 of the Closed Group:
Current assets
Cash and cash equivalents
Receivables
Accrued revenue
Current tax asset
Other current assets
Total current assets
Non-current assets
Plant, equipment and leasehold improvements
Intangible assets
Right-of-use assets
Other non-current assets
Deferred tax assets
Total non-current assets
Total assets
Current liabilities
Payables
Lease liabilities
Current tax payable
Provisions
Unearned income
Total current liabilities
Non-current liabilities
Deferred tax liabilities
Borrowings
Lease liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Foreign currency translation reserve
Share-based payments reserve
Retained earnings
Total equity
2020
$’000
2,829
5,522
1,283
530
2,528
12,692
2,993
25,686
3,826
214,393
4,148
251,046
263,738
3,839
784
-
5,776
5,637
16,036
4,803
51,842
3,173
170
59,988
76,024
187,714
2019
$’000
5,371
7,913
1,956
-
1,154
16,394
2,858
23,871
-
221,303
2,968
251,000
267,394
6,401
-
130
6,067
4,469
17,067
3,011
77,399
-
189
80,599
97,666
169,728
140,951
138,746
(2,554)
1,927
47,390
187,714
(953)
455
31,480
169,728
91
Hansen Technologies Ltd Annual Report 2020 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
30 JUNE 2020
28. Deed of cross guarantee continued
(c) Summary of movements in consolidated retained earnings of the Closed Group
Retained earnings at the beginning of the year
Profit for the year
Dividends declared
Retained earnings at the end of the year
Note
28(a)
22(c)
2020
$’000
31,480
27,779
(11,869)
47,390
2019
$’000
27,333
17,929
(13,782)
31,480
29. New and amended accounting standards and interpretations
(a) Adoption of new and amended accounting standards that are first operative
at 30 June 2020
The Group has adopted the following new and amended accounting standards, applicable and effective for the financial year beginning
1 July 2019:
• AASB 16 Leases
• AASB Interpretation 23 Uncertainty over Income Tax Treatments
• AASB 9 Prepayment Features with Negative Compensation (Amendments to AASB 9)
• AASB 128 Long-term Interests in Associates and Joint Ventures (Amendments to AASB 128)
• Annual Improvements to AASB 2015-2017 Cycle
• Plan Amendment, Curtailment or Settlement (Amendments to AASB 119)
Except for AASB 16, these Standards and amendments do not have a significant impact on the Financial Report and therefore the
disclosures have not been made. Note 13(e) discloses and describes the impact from the adoption of AASB 16.
The Group has not early adopted any other Standard, interpretation or amendment that has been issued but is not yet effective.
Where necessary, comparative information has been reclassified and repositioned for consistency with current year disclosures.
(b) Accounting standards and interpretations issued but not operative at 30 June 2020
The following new and revised accounting standards and interpretations have been issued by the Australian Accounting Standards
Board at the reporting date, which are considered relevant to the Group but are not yet effective. The Directors’ assessment of the
impact of these standards and interpretations is set out below:
(i) AASB 2018-6 Amendments to Australian Accounting Standards: Definition of a Business
These amendments revise the definition of a business in AASB 3 Business Combinations. The amendments clarify the minimum
requirements for a business, remove the assessment of whether market participants are capable of replacing missing elements,
add guidance to help entities assess whether an acquired process is substantive, narrow the definitions of a business and of outputs,
and introduce an optional fair value concentration test.
Group’s assessment performed to date
Since the amendments apply prospectively to transactions or other events that occur on or after the date of first application, the Group
will not be affected by these amendments on the first date of transition.
(ii) Amendments to the Conceptual Framework
The IASB has issued amendments to the Conceptual Framework to apply the new definition and recognition criteria to assets
and liabilities, and introduces new concepts regarding the measurement, presentation and disclosure and derecognition of assets
and liabilities.
Group’s assessment performed to date
The amendments to the Conceptual Framework are not expected to have a significant impact on the Group’s consolidated
financial statements.
92
Hansen Technologies Ltd Annual Report 2020 (iii) Amendments to AASB 101 and AASB 108: Definition of Material
These amendments align the definition of ‘material’ across the standards and clarify certain aspects of the definition. The new definition
states, that ‘Information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that
the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial
information about a specific reporting entity’.
Group’s assessment performed to date
The amendments to the definition of material are not expected to have a significant impact on the Group’s consolidated
financial statements.
30. Subsequent events
The Group has voluntarily cancelled $40.0 million of the syndicated multi-currency facility effective from 30 July 2020 (Note 19).
The Directors resolved to pay a final dividend of 7 cents per share (franked to 0.70 cents), comprising of a regular dividend of 5 cents
per share together with a special dividend of 2 cents per share to be paid on 25 September 2020 (Note 21).
Hansen Technologies Limited and Sigma Systems Canada LP executed a deed of parent guarantee and indemnity on 7 July 2020
in favour of a financing company based in Canada to secure a credit card facility (Note 24).
Apart from the above, there has been no other matter or circumstance, which has arisen since 30 June 2020 that has significantly
affected or may significantly affect:
(i)
the operations, in financial years subsequent to 30 June 2020, of the Group; or
(ii) the results of those operations; or
(iii) the state of affairs, in financial years subsequent to 30 June 2020, of the Group.
93
Hansen Technologies Ltd Annual Report 2020 DIRECTORS’ DECLARATION
The Directors declare that the financial statements and notes set out on pages 41 to 93, in accordance with the Corporations Act 2001:
(a) comply with Accounting Standards and the Corporations Regulations 2001, and other mandatory professional reporting requirements;
(b) as stated in Note 1(a), the consolidated financial statements of the Group 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 2020 and of its performance for the year
ended on that date.
In the Directors’ opinion there are reasonable grounds to believe that Hansen Technologies Limited will be able to pay its debts as and
when they become due and payable.
At the date of this declaration, there are reasonable grounds to believe that the members of the extended closed group identified
in Note 28 will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross
guarantee described in Note 28.
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 ended 30 June 2020.
This declaration is made in accordance with a resolution of the Directors.
David Trude
Director
Melbourne
28 August 2020
Andrew Hansen
Director
94
Hansen Technologies Ltd Annual Report 2020 INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF HANSEN TECHNOLOGIES LTD
RSM Australia Partners
Level 21, 55 Collins Street Melbourne VIC 3000
PO Box 248 Collins Street West VIC 8007
T +61 (0) 3 9286 8000
F +61 (0) 3 9286 8199
www.rsm.com.au
INDEPENDENT AUDITOR’S REPORT
To the Members of Hansen Technologies Limited
Opinion
We have audited the financial report of Hansen Technologies Limited (the Company) and its controlled entities
(the Group), which comprises the consolidated statement of financial position as at 30 June 2020, the
consolidated statement of comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a
summary of significant accounting policies, and the directors' declaration.
In our opinion the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i) giving a true and fair view of the Group's financial position as at 30 June 2020 and of its financial
performance for the year then ended; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards
Board's APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the
RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
90
95
Hansen Technologies Ltd Annual Report 2020 INDEPENDENT AUDITOR’S REPORT CONTINUED
TO THE MEMBERS OF HANSEN TECHNOLOGIES LTD
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter
How our audit addressed this matter
Recognition of Revenue
Refer to Note 3 in the financial statements
Revenue recognition was considered a key audit matter, as
it
involves significant management
judgements.
is complex and
The Group’s revenue is primarily derived from the provision
of billing solution services to customers, maintenance and
support , and licences. Revenue determined for some of the
service contracts
is based on stage of completion,
calculated on the proportion of total costs incurred at the
reporting date compared to management’s estimation of the
total costs of the contract.
Our audit procedures in relation to the recognition of revenue
included:
Assessing whether
recognition policies were
Australian Accounting Standards;
the Group’s
revenue
in compliance with
Evaluating and testing the operating effectiveness
of management’s controls related to revenue
recognition;
sample of
transactions,
For a
substantiating
to
supporting documentation, including contracts with
customers;
revenue
transactions by agreeing
For a sample of revenue transactions that were
recognised on a percentage of completion basis,
our testing included:
–
Agreeing the contract price and variations to
customer contracts;
Assessing management’s estimate of costs to
complete; and
Assessing whether the project was within
budgeted margin.
–
–
Reviewing sales transactions before and after
year-end to ensure that revenue was recognised in
the correct period; and
Reviewing large or unusual transactions during the
financial year.
96
91
Hansen Technologies Ltd Annual Report 2020 Key Audit Matters (continued)
Impairment of Intangible Assets
Refer to Note 12 in the financial statements
the goodwill balance, and because
The Group has net book value goodwill of $220 million in
respect of acquisitions of subsidiaries as at 30 June 2020.
We identified this area as a Key Audit Matter due to the size
of
the directors’
assessment of the ‘value in use’ of the cash generating unit
(“CGU”) involves significant judgements about the future
underlying cash flows of the business, discount rates and
terminal growth applied.
For the year ended 30 June 2020 management have
performed an impairment assessment over the goodwill
balance by:
expenses
(revenues,
calculating the value in use for the CGU using a
discounted cash flow model. The model used cash
flows
capital
expenditure) for the CGU for 5 years, with a
terminal growth rate applied to the 5th year. The
cash flows were then discounted to net present
value using the Company’s weighted average cost
of capital (WACC); and
and
comparing the resulting value in use of the CGU to
its respective book value.
Management also performed a sensitivity analysis over the
value in use calculations, by varying the WACC and other
assumptions.
Our audit procedures
to management’s
impairment assessment involved the assistance of our
Corporate Finance team where required, and included:
relation
in
Assessing management’s determination that the
goodwill should be allocated to a single CGU based
on the nature of the Group’s business and the
in which results are monitored and
manner
reported;
Assessing the valuation methodology used;
the
reasonableness
Challenging
key
assumptions, including the cash flow projections,
exchange rates, discount rates, and sensitivities
used; and
of
Checking the mathematical accuracy of the cash
flow model, and reconciling input data to supporting
evidence, such as approved budgets and
considering the reasonableness of these budgets.
92
97
Hansen Technologies Ltd Annual Report 2020 INDEPENDENT AUDITOR’S REPORT CONTINUED
TO THE MEMBERS OF HANSEN TECHNOLOGIES LTD
Key Audit Matters (continued)
Key Audit Matter
How our audit addressed this matter
Adoption of AASB 16 Leases
Refer to Note 13 in the financial statements
The Group adopted AASB 16 Leases ("AASB 16") on 1 July
2019, using the modified retrospective method, which has
resulted in changes to accounting policies.
The Group has elected not
to restate comparative
information as permitted by the transitional provisions of
AASB 16.
At 30 June 2020, the Group recognised in the Statement of
Financial Position a Right of Use asset of $20.1 million and
an associated lease liability of $21.1 million.
We determined the adoption of this standard to be a key
audit matter because of:
the complexity of the standard and the significance
of the differences to the previous standard;
the degree of manual involvement required in
identifying lease contracts and contract terms;
the extent of judgment required in determining the
inputs into the calculations of the lease liability and
right of use asset, including the applicable discount
rate and the likelihood of exercise of options to
extend or terminate early a lease; and
the length and complexity of disclosures required
including those required on initial adoption.
Acquisition of Sigma Systems
Refer to Note 25 in the financial statements
The accounting for the acquisition of Sigma Systems, which
was disclosed as provisional in the 30 June 2019 financial
statements has been finalised during the year.
This was considered a key audit matter as there is a risk that
the
final acquisition accounting adjustments may be
materially misstated and related disclosures may be
materially inaccurate in the financial report.
98
Our audit procedures in relation to the application of AASB
16 included:
Obtaining an understanding of the processes
undertaken and controls implemented in adopting
the standard, including the transitional decisions
made;
Obtaining the Group’s leasing model used by the
Group for lease management, and, on a sample
basis:
– Reviewing the contracts of the selected leases,
lease and non-lease
identified
that
have
been
and ensuring
components
appropriately;
– Corroborating key
the
inception date, commencement date, and initial
contractual expense
lease
documentation ;
to underlying
including
inputs,
– Evaluating the key assumptions made in the
judgmental inputs of the valuation model,
including the likelihood of exercise of options to
extend and
for
calculation of the lease liability;
the discount
rate used
– Verifying the mathematical accuracy of the
underlying model by recalculating the resulting
lease liability and right of use asset initially
recognised, and the interest and depreciation
charges recognised in the statement of profit
and loss for the year; and
reviewing
the
disclosures in the financial statements
the adequacy of
relevant
–
Our audit procedures in relation to the acquisition of Sigma
included:
Discussing with management the measurement
period adjustments which have taken place;
calculations
supporting
Reviewing
documentation associated with any measurement
period adjustments;
and
Assessing whether there have been any indicators
for impairment of goodwill as a result of Sigma’s
results being lower than budget.
Assessing the adequacy of the Group’s disclosures
in respect of business acquisitions.
93
Hansen Technologies Ltd Annual Report 2020 Other Information
The directors are responsible for the other information. The other information comprises the information included
in the Group's annual report for the year ended 30 June 2020, but does not include the financial report and the
auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf.
This description forms part of our auditor's report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors' report for the year ended 30 June 2020.
In our opinion, the Remuneration Report of Hansen Technologies Ltd, for the year ended 30 June 2020, complies
with section 300A of the Corporations Act 2001.
94
99
Hansen Technologies Ltd Annual Report 2020 INDEPENDENT AUDITOR’S REPORT CONTINUED
TO THE MEMBERS OF HANSEN TECHNOLOGIES LTD
Report on the Remuneration Report (continued)
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
RSM AUSTRALIA PARTNERS
M PARAMESWARAN
Partner
Dated: 28 August 2020
Melbourne, Victoria
100
95
Hansen Technologies Ltd Annual Report 2020 AUSTRALIAN SECURITIES EXCHANGE (ASX)
SHAREHOLDER INFORMATION
The shareholder information set out below was applicable as at 2 September 2020, disclosed pursuant to ASX official listing
requirements.
Distribution of shares
The following table summarises the distribution of our listed shares as at 2 September 2020:
Size of Holding (Range)
100,001 and Over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
Number of
Holders
Number of
Shares Held
% of Issued
Capital
71
148,811,817
1,277
1,278
3,175
2,358
8,159
30,741,263
9,425,260
8,477,873
1,109,985
198,566,198
100.00
74.94
15.48
4.75
4.27
0.56
The number of shareholders holding less than a marketable parcel of ordinary shares is 374 holding 6,629 shares (as at the closing
market price on 2 September 2020).
Twenty largest shareholders
The following table sets out the top 20 holders of our shares:
Rank Name of Shareholder
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
OTHONNA PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMS PTY LTD
NATIONAL NOMINEES LIMITED
NEWECONOMY COM AU NOMINEES PTY LIMITED
MORGAN STANLEY AUSTRALIA SECURITIES (NOMINEE) PTY LIMITED
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
MR CAMERON HUNTER
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED-GSCO ECA
CS FOURTH NOMINEES PTY LIMITED
MR JAMES LUCAS & MS LESLEY DORMER
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED – A/C 2
BNP PARIBAS NOMINEES PTY LTD
MRS LILIAN REICHENBERG
SCOTT WEIR
PACIFIC CUSTODIANS PTY LIMITED
Total
Total other investors
Grand total
Number of
Shares Held
52,046,066
34,739,113
27,807,974
% of Issued
Capital
26.21
17.49
14.00
6,102,444
4,121,551
2,091,450
1,459,404
1,263,839
1,147,254
1,123,059
1,018,000
978,258
889,691
800,940
766,357
733,200
604,267
546,953
481,080
426,074
3.07
2.08
1.05
0.73
0.64
0.58
0.57
0.51
0.49
0.45
0.40
0.39
0.37
0.30
0.28
0.24
0.21
139,146,974
59,419,224
198,566,198
70.08
29.92
100.00
101
Hansen Technologies Ltd Annual Report 2020 AUSTRALIAN SECURITIES EXCHANGE (ASX)
SHAREHOLDER INFORMATION CONTINUED
Substantial shareholdings
The following table shows holdings of substantial voting rights in the Company’s shares as notified to the Company under the
Corporations Act 2001 as at 2 September 2020:
Holder
Mr David Osborne*
Mr Andrew Hansen*
Mr Bruce Adams*
Long Path Partners
Royce & Associates
Number of
Shares Held
% of Total Voting
Rights
35,125,448
35,055,228
34,891,417
17,679,679
9,200,643
17.69%
17.65%
17.57%
8.90%
4.63%
* Each of these named persons has a joint interest in a single parcel of 34,739,113 shares as at the date of this report. For further details, please refer to the
substantial shareholding notices lodged with the ASX dated 16 August 2019.
Voting rights
Refer to Note 20(c) of the financial statements.
Unquoted equity securities
Unquoted equity securities issued pursuant to the Hansen Technologies Limited Employee Performance Rights Plan and Employee Share Option plan:
Unquoted Equity Securities
Options over ordinary shares exercisable at various prices
Performance rights
Number of
Employees
Participating
11
29
Number of
Securities
810,000
1,056,603
102
Hansen Technologies Ltd Annual Report 2020 CORPORATE DIRECTORY
Directors
David Trude, Chairman
Andrew Hansen, Managing Director and CEO
Bruce Adams, Non-Executive
Jennifer Douglas, Non-Executive
Don Rankin, Non-Executive
David Osborne, Non-Executive
David Howell, Non-Executive
Company secretary
Julia Chand
Principal registered office
2 Frederick Street, Doncaster Victoria 3108
T (03) 9840 3000
F (03) 9840 3099
Share registry
Link Market Services Limited
Tower 4
727 Collins Street
Melbourne Victoria 3008
T 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
RSM Australia Partners
Level 21, 55 Collins Street
Melbourne Victoria 3000
Solicitors
GrilloHiggins
Level 20, 31 Queen Street
Melbourne Victoria 3000
Other information
Hansen Technologies Ltd ABN 90 090 996 455,
incorporated and domiciled in Australia,
is a publicly listed company limited by shares.
Hansen Technologies Ltd Annual Report 2020
103
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