ANNUAL REPORT
2019
For personal use only RPMGlobal Holdings Limited
ABN 17 010 672 321
CONTENTS
Chairman’s Report ……………………………………………………………………………………………………………………..
Managing Director’s Report ……………………………………………………………………………………….………………
Directors' Report …………………………………………………………………………………………..…………………..…….…
Auditor’s Independence Declaration………………………………………………………..………………………………….
Consolidated Statement of Comprehensive Income …………………………………..……………………...………
Consolidated Statement of Financial Position ………………………………………………………………….…………
Consolidated Statement of Changes in Equity ……………………………………………………………...……………
Consolidated Statement of Cashflows …………………………………………………………………..……………………
Notes on the Financial Statements …..………………………………………………………………………………………..
Directors’ Declaration …………………………………………………………………………………..…..…..…………………..
Independent Auditor's Report …………………………………………………………………….…………………..…………
Corporate Governance Statement ……………………………………………………..……….…………………..…..……
Shareholder Information ……………………………………………………………………………………………………………
Corporate Directory ……………………………………………………………………………………………….…………….….…
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For personal use only CHAIRMAN’S REPORT
Dear Fellow Shareholders,
The past twelve months has seen our business
its strategy of
continue to execute on
developing and delivering world
class
technology solutions for the mining industry.
At the same time, we have not lost focus on the
value and strength of our Advisory and
GeoGAS businesses which both continue to
perform strongly.
Revenue from our Advisory division grew again
in 2019. Whilst pricing remained competitive
in the low to medium sized projects, clients
continue to recognise the value we can add in
complex multi-asset
transactional
projects.
and
The GeoGAS division had another strong year
with an increased contribution – a good result
considering the number of coal gas tests for
exploration reduced 19% year on year.
The Software division had a strong year in
terms of new customer’s acquiring RPM
software products for the first time. The
breadth and depth of our software offering,
innovative nature of our
along with the
solutions, resulted in 15 new customers signing
on to start to use our software for the first time
during 2019.
Financial Year 2019 was the first full year that
the Company offered a subscription licensing
alternative to our customers. We believe this
strategy will deliver great benefits to both our
customers and shareholders.
investment
Financial Year 2019 was again a year of above
industry average
in software
development as the Company rounded out its
scheduling product suite and completed the
development program for its financial product
suite. We expect to see our new software
development investment decrease to a level
more consistent with industry norms over the
next two years.
Whilst the management team
looked at
several potential acquisition opportunities
during the year, after careful consideration it
was determined
these
opportunities delivered the exposure to the
market we are looking for and on that basis the
potential acquisitions did not proceed beyond
the initial diligence stage.
that none of
On the 1 September 2018 Stewart Butel was
appointed to the RPM Board as a Non-
Executive Director. His appointment was
by
resoundingly
subsequently
shareholders at the AGM on 30 October 2018.
ratified
its
Stewart has a strong association with the
mining industry having sat on, or chaired,
several
include
industry boards. These
President of
the Queensland Resources
Council (QRC) and Chairman of the Australian
low emissions
Coal Association and
technology fund ACALET. Stewart was also
previously Chairman of the Minerals Council
Coal Forum and a Director with the Minerals
the Western
Council of Australia and
Australian Chamber of Mines and Energy.
Stewart is also current Non-Executive Director
of Gladstone Ports Corporation Limited and
Chairman of Stanmore Coal Limited. He has
over 40 years’ experience in the Australian
resources industry having formerly been the
Managing Director of Wesfarmers Resources
and its associated boards until he retired in
August 2016.
RPM maintains a strong balance sheet with
over $28 million of cash in the bank (as at 30
June 2019) and no debt.
During 2019, the Company paid out post
completion payments
iSolutions
acquisition ($2.1 million) and for the MinVu
($0.5 million) acquisition.
the
for
The Board has resolved not to pay a dividend
this financial year.
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CHAIRMAN’S REPORT
I would again like to acknowledge the effort
and commitment of our staff who continue to
perform especially well. The Board
is
particularly pleased with the ability of our
management and staff to execute on a clearly
defined strategy that we believe will result in
increased value for our shareholders.
The Board thanks its shareholders for their
ongoing support of the Company’s software
strategy and remains firmly of the opinion that
the software
investments made by the
Company will provide the growth engine for
the business in 2020 and beyond.
Allan Brackin
Chairman
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MANAGING DIRECTOR’S REPORT
Market Commentary
High Level Summary of Financial Results
Pleasingly for the industry, with the exception
of
Iron Ore, commodity prices remained
relatively stable during the 2019 Financial Year.
Total revenue for the year increased by $6.4
million (8.7%) to $80.1 million (2018: $73.7
million).
The Iron Ore price spiked markedly following
the Vale Brumadinho tailings dam disaster and
has remained at inflated levels since.
With commodity prices remaining strong,
mining companies are making healthy profits
and as a result have, generally speaking,
continued
to
shareholders through
impressive dividend
payouts rather than undertaking mergers and
acquisitions or investing heavily in Greenfield
projects or Brownfield expansions.
return excess
cash
to
Just recently, the major mining companies
have unsurprisingly started to talk about the
lost decade of exploration which has occurred
because
juniors who have
traditionally invested in exploration have had
little access to capital.
the mining
The cost of mining rose again during the year
as labour shortages combined with increasing
service provider costs flowed through to
operational costs. For yet another year capital
expenditure
constrained with
miners continuing to “sweat their assets”.
remained
Whilst we expect mining companies to remain
focused on keeping their operational costs as
low as possible, at some stage we expect they
will have to increase their capital expenditure
in order to maintain and replace production
capacity.
My comments in last year’s Annual Report that
“mining companies remain slow to embrace
technology” continues to ring true. There has
been little change in their “fast followers”
approach which means that in many cases,
miners want to effectively test drive new
innovative products before committing to
them which results in a higher cost of sale for
the technology vendors.
Financial Year 2019 was the first full year the
Company offered a subscription
licensing
alternative to our customers. During the year
we sold $10.3 million in total subscription
revenue up $8.6 million from the previous year
(2018: $1.7 million). Revenue from these
subscription licenses will be spread across the
committed
for each
contract duration
transaction which in most cases is three years.
in subscription
increase
This significant
licensing has, as expected, impacted on our
perpetual
license sales which decreased
slightly to $12.1 million down $1.5 million from
last year’s number of $13.6 million.
software
On a consolidated basis the total value of
contracted
and
perpetual licenses sold in 2019 was $22.4
million up $7.1 million (46%) over the previous
year (2018: $15.3 million).
subscriptions
Given $9.4 million of $10.3 million in total
subscription revenue sold during the year will
be spread across future years, we were
pleased to report a full year EBITDA of $5.9
million up $1.5 million on the previous year’s
result (2018: $4.4 million).
in
inherently results
Given the move to the subscription license
model, which
lower
revenue and earnings over the initial years
whilst the Company grows its total committed
annual recurring revenue, the Board has taken
a conservative approach to projections on
future taxable income to calculate deferred tax
assets relating to the Group’s tax losses in prior
years.
The write down of the deferred tax asset in
2019 by $6.4 million has resulted in a Loss after
Tax of $5.9 million (2018: Profit after Tax of
$0.2 million).
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MANAGING DIRECTOR’S REPORT
Software Division
Total software revenue increased 9.2% to
$48.8 million (2018: $44.7 million).
The Company sold $22.4 million of software
licences in 2019 of which $12.1 million were
perpetual licences (and are recognised as one-
off revenue during the financial year) and
$10.3 million in subscription licences (which
will be
the
committed term of each contract across
multiple financial reporting periods).
recognised monthly over
Of the $10.3 million in subscription licenses
sold, $0.9 million, was recognised as revenue
in the 2019 financial statements. The total
revenue from subscription licences reported in
2019 was $2.4 million a 200% increase on the
previous year (2018: $0.8 million).
The Annual Recurring Revenue (ARR) run rate
for subscription software licences (as at the
date of this report) is $7.1 million per annum.
The Company has already sold $6.1 million in
total contracted subscription revenue in 2020
financial year.
Annual recurring revenue
from software
maintenance finished the year at $21.8 million
(2018: $19.6 million) an 11% year on year
increase.
The 46% growth in perpetual and subscription
software licence sales has driven demand for
software consulting services which finished the
year at $12.5 million a $1.8 million (17%)
increase over 2018 ($10.7 million).
The Company started the 2019 financial year
with an annual Research and Development
expenses run rate of $14.4 million and finished
the year with an annual run rate of $13.1
million. The last quarters of the financial year
saw the completion of two six-year accelerated
development
next
programmes.
evolution
software
The resultant launch following the completion
of the development programmes of the mining
industry’s leading financial modelling software
— XERAS Enterprise 3.0 (XE3) and the second
instalment of XPAC Solutions Underground
Coal Solution marks two major milestones.
These important product releases not only
build upon the Company’s strong foundations
as the pre-eminent supplier of technical
software to the mining industry but also enable
RPM to kick off the 2020 financial year having
cleared a considerable backlog of complicated
new software development.
The highly anticipated release of XE3 marks the
completion of a work program that included
rebuilding the entire underlying architecture
within the product. As a result, RPM has taken
XERAS from a respected desktop product to a
that provides
true enterprise offering
complete standardisation and
integration
across mining operations and departments.
RPM’s advanced mine planning and scheduling
software is used extensively around the world.
The objective of
the XPAC Solutions
programme, when we
development
commenced the undertaking back in 2013, was
to deliver to the market mine planning
products that were built to be used for specific
types of commodities and mining methods.
The intention was to remove the need for
bespoke development at each mining
operation and
introduce a best practice
process driven application.
Since the programme commenced RPM has
released a total of ten commodity-based
solutions
(Open Pit Metals, Stratigraphic
Metals, Underground Metals, Oil Sands, Open
Pit Diamonds, Open Cut Coal, Steep Coal,
Quarry, Open Cut Phosphate and Underground
Coal). This financial year saw a 77% increase in
sales of these scheduling products over the
previous year.
During the year we announced that the
Company would release a new Intelligent
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MANAGING DIRECTOR’S REPORT
Design Product in the first half of 2020 financial
year.
Advisory Division
This product will apply the very
latest
parametric design capabilities and use the
most advanced software technology and
enterprise architecture. It will compete with
the currently available products in the market
which are based upon 30-year-old principles
and the same underlying code base which has
been adapted,
tailored and
reformed,
customised over the years.
and
across
applications
We had previously elected not to develop our
own mine design software and instead focused
on ‘open integration’ with other third-party
design applications. This approach was built
on the assumption that third party vendors
would embrace and allow the free flow of data
between
the
enterprise. The catalyst for building our own
design solution has been driven by the
realisation that other suppliers to the industry
have inherent limitations around enterprise
interoperability.
the
engineering process ‘starts with design’ a
comprehensive RPM
suite of planning
products needs to include Intelligent Design
solutions
round-out RPM’s
to
established suite of integrated solutions in the
areas of Mine Scheduling, Simulation, Finance,
Maintenance and Operations.
Furthermore, as
in order
The breadth and depth of our innovative
software offering has seen 15 new customers
sign up during 2019. While all these customers
have purchased software modules to address a
specific need, our hope is that over time they
will purchase and roll out more of our suite of
integrated products.
The move to subscription
licensing has
necessitated RPM establishing a dedicated
Cloud delivery team who are responsible for
installing and monitoring our customers’ Cloud
implementations. Over time we expect this
team to be cost neutral.
Demand for our mining advisory services
increased 8.4% during 2019 to $25.9 million
(2018: $23.9 million). This division continues to
positively contribute to the financial results of
the business.
There is no doubt that resisting the urge to
compete for lower and risker projects during
focusing on
the downturn and
delivering
services
the highest quality
(sometimes with little financial return), was
the right approach.
instead
reputation
Our advisory division’s
for
independent assessment and financier due
diligence roles remains second to none, which
positions us well for the larger and more
complex projects now on the horizon.
The Advisory team continues to provide advice
on the majority of the largest Mergers and
Acquisitions, most of which are sourced from
North Asian clients for assets right across the
globe.
The ability to leverage RPM’s technology in
is a key market
large studies globally
advantage resulting in the Advisory team
winning sizeable studies during 2019. This
our
supports
technology but also allows us to demonstrate
the real value clients can derive
from
combining our Advisory
industry
expertise and our leading technology products.
improvements
team’s
both
to
Our previously reported dispute with a Russian
mining company (which dates back to June
2015) has now been fully resolved and the
wash up with reimbursement from RPM’s
insurance is accounted for in these financial
statements.
GeoGAS Division
GeoGAS had another solid year with revenue
flat at $4.7 million (2016: $4.6 million).
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MANAGING DIRECTOR’S REPORT
has resulted in a more complete and richer set
of products than we had this time last year.
There is no doubt in my mind that our
simulation products will become the de-facto
for mobile mining equipment
standard
simulation for mining companies, consulting
companies and the global original equipment
manufacturers.
We are expecting great things from XECUTE,
our ultra-short-term scheduling product, in
2020 financial year with seven new customers
acquiring
last fourteen
months.
licenses over the
I, along with the rest of the team remain
enthusiastic about our software products and
expect to see strong growth across all of the
product suites in 2020.
Richard Mathews
Managing Director and Chief Executive Officer
The drop-off in testing volumes associated
with coal exploration was offset by an increase
in compliance testing.
Company Expenses
Operating expenses for the full year came in at
$67.3 million, $4.1 million more than 2018
($63.2 million).
This increase was mainly attributable to a 17%
increase in software consulting headcount
along with the resumption of annual salary
increases due to the market demand for skilled
employees. The Company also incurred $1.0
million in once off Merger and Acquisition
($0.1 million),
Litigation
($0.1 million),
Restructuring ($0.4 million) and Recruitment
($0.4 million) costs which were reported above
the line.
The Company was also required to increase its
provision for doubtful debts by $0.8 million
due to its growth in revenue.
Net cash inflows from operations for 2019 was
$7.3 million (2018: $7.0 million) and at 30 June
2019 the Company had $28.2 million cash in
the bank and no debt after paying $2.6 million
in acquisition earnouts.
Future Outlook
We expect to see continued growth in our
Advisory and Software divisions.
licensing
software
We anticipate that with the right economic
incentives customers will continue to move
from perpetual
to
subscription licensing. It feels to me like we are
one year through a two-to-three-year journey.
Having said that there are many customers
who will always prefer to purchase perpetual
licenses for many reasons (e.g. size, location,
capital structure etc.) and hence there will
always be a level of perpetual licenses sold.
The Company invested another $13.7 million
on its software products during the year which
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DIRECTORS’ REPORT
Your Directors present their report on RPMGlobal Holdings Limited (the “Company”) and its subsidiaries (referred
to hereafter as the “Group”) for the year ended 30 June 2019.
1.
Directors
The Directors of RPMGlobal Holdings Limited at any time during or since the end of the period were:
Non-executive
Allan Brackin – Chairman
Stewart Butel
Ross Walker
Executive
Richard Mathews – CEO and Managing Director
2.
Principal Activities
The Group’s principal activities during the financial year consisted of:
a)
b)
c)
Software licensing, consulting, implementation and maintenance;
Technical, advisory and training services to the resources industry; and
Laboratory gas testing.
There were no significant changes in the nature of the Group’s principal activities during the financial year.
3.
Dividends
No dividends were paid or declared during the financial year.
4.
Review and Results of Operations
Revenue in the 2019 financial year grew by 8.7% to $80.1 million (2018: $73.7 million). All divisions increased their
revenue, Software by 9.2%, Advisory by 8.4% and GeoGAS by 2.2%.
Software
- Licence Sales
- Licence subscriptions
- Maintenance
- Consulting
Total Software
Advisory
GeoGAS
Other Revenue
Total Revenue
Direct Costs
Net Revenue
2019
$m
12.1
2.4
21.8
12.5
48.8
25.9
4.7
0.7
80.1
(6.9)
73.2
2018
$m
13.6
0.8
19.6
10.7
44.7
23.9
4.6
0.5
73.7
(6.1)
67.6
Change
%
(11.0%)
200.0%
11.2%
16.8%
9.2%
8.4%
2.2%
40.0%
8.7%
13.1%
8.3%
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DIRECTORS’ REPORT
4.
Review and Results of Operations (Continued)
Reconciliation between IFRS and non-IFRS financial performance items used in the Directors Report is presented
below:
Net Revenue
Operating Expenses
EBITDA1
Depreciation and Amortisation
Russian Litigation
iSolutions Earn out Provision
Net Finance (costs)/income
Profit/(Loss) before income tax
Income tax expense
Profit/(Loss)
Earnings Per Share (cents per share)
2019
$m
73.2
(67.3)
5.9
(4.0)
(0.2)
(0.3)
0.3
1.7
(7.6)
(5.9)
(2.7)
2018
$m
67.6
(63.2)
4.4
(3.4)
(0.3)
(0.3)
0.2
0.6
(0.4)
0.2
0.11
Change
%
8.3%
6.5%
34.1%
17.7%
-
-
50.0%
183.3%
-
-
-
1 Earnings before Interest, Tax, Depreciation, Amortisation and Litigation is a non-IFRS disclosure. In the opinion of the
Directors, the Group’s EBITDA reflects the results generated from ongoing operating activities and is calculated in accordance
with AICD/Finsia principles. The non-operating adjustments outlined above are considered to be non-cash and/or non-
recurring in nature. These items are included in the Group’s consolidated statutory result but excluded from the underlying
result. EBITDA has not been audited or reviewed.
Other operating costs increased by $4.1m of which $3.5m related to employment costs including additional
software sales representatives ($0.7 million), software consulting headcount ($1.9 million), once-off restructuring
costs ($0.4 million). The Company also increased its provision for doubtful debts ($0.8 million) and spent more on
professional fees ($0.6 million) following commencement of litigation in China and South Africa to recover debts
owed to the Company.
As a result of this investment EBITDA (Earnings before Interest, Tax, Depreciation, Amortisation, Litigation)
increased by $1.5 million to $5.9 million (2018: $4.4 million).
The Group produced $7.3 million in net operating cashflow and had cash reserves of $28.2 million (2017: $23.3
million) and no bank debt at the end of the financial year.
During the year the Group paid out $2.6 million for software acquisitions and earn-out payments for prior
acquisitions.
Software Division
The Software division provides mine scheduling, financial costing/budgeting, simulation and asset management
software solutions to the mining industry. It also provides software consulting, implementation, training and
support for these products.
Net Software revenue increased by 9.2%. In 2019, the Company offered subscription licence alternative to its
perpetual licence offering. During the year the Group sold $10.3 million in subscription licences (2018: $1.7 million).
However, as the subscription revenue is recognised over the term of the subscription, the revenue recognised in
2019 from these subscription licenses was $0.9 million resulting in a total subscription revenue for the financial
year of $2.4 million (2018: $0.8 million).
With the increase in subscription license sales, revenue from perpetual licence sales decreased to $12.1 million
(2018: $13.6 million).
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DIRECTORS’ REPORT
4.
Review and Results of Operations (Continued)
The Annual Recurring Revenue (ARR) run rate for subscription software licences (as at the date of this report) is
$7.1 million per annum and the Company has sold $6.1 million in total subscription revenue already in the 2020
financial year.
The Group decreased its investment in R&D to $13.7 million following completion of its scheduling solutions
development programme of work.
The Company welcomed 15 new customers who purchased RPM software for the first time. We expect these
customers to expand their use of our software as they become more familiar with our suite of integrated products.
Advisory Division
The Advisory division provides independent consulting and advisory services which cover technical and economic
analysis and assessment of mining activities and resources on behalf of mining companies, financial institutions,
government agencies and suppliers to mining projects. The market for Advisory services is heavily reliant on
expansion, development, financing and transacting of mining assets and projects.
Revenue from Advisory services for the year grew by 8.4% to $25.9 million (2018: $23.9 million).
GeoGAS
The GeoGAS business provides mine gas consulting and laboratory testing services primarily to the coal industry on
the East Coast of Australia.
Revenue from the GeoGAS business increased by 2.2% to $4.7 million (2018: $4.6 million).
Operating Expenses
Total Operating expenses increased by 6.8% ($4.1 million) to $67.3 million during the year (2018: $63.2 million).
This increase was mainly attributable to an increase in employee benefits expenses as a result of an increase in
software consulting and sales headcount and annual salary increases for the Company’s advisory and technical
consulting divisions.
There was also $1.2 million in once-off costs incurred during the year.
Provision of doubtful debts increased by $0.8 million as a result of an increase in revenue.
5.
Likely Future Developments - Business Strategies and Prospects for Future Financial Years
As a Board and management team we remain fully invested in growing our suite of software products.
In 2019 we completed the last of our dedicated scheduling solutions. This brings to an end an eight year
development programme during which we will have developed and released 10 commodity based scheduling
solutions each one addressing a different mining method.
We also completed the final key functional requirement for XERAS Enterprise which also concludes a seven year
development programme.
It has now been twenty months since we started to offer subscription style agreements to customers who are
looking to purchase our software and we are really starting to see some traction in this area. We have already sold
$6.1 million of total software subscription license in 2020 financial year and expect to see that number continue to
grow.
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DIRECTORS’ REPORT
5.
Likely Future Developments - Business Strategies and Prospects for Future Financial Years (Continued)
The near term outlook for our Advisory business remains positive. We remain confident that our internationally
respected Advisory team is well placed to benefit from its increased market share and to continue to assist mining
companies as they focus on productivity improvements and any associated acquisition and divestiture activity. The
division continues to expand its service offerings to leverage the value provided by our existing and recently
acquired software products in order to assist its clients with operational advisory demand. We continue to see the
value of advisory as a great introducer to RPM’s software offerings.
With respect to our GeoGAS business, if coal prices remain firm, we are confident this division will have another
solid year.
6.
Information on Current Directors and Company Secretary
Directors
Allan
Brackin
Stewart
Butel
Ross
Walker
Experience
Chairman, Non-executive Director. Joined the Board in November 2011. Allan
has been involved in the technology industry for over 30 years at both executive
and non- executive level. Allan was formerly Director and Chief Executive
Officer of Volante Group Limited from 2000-2004. From 1986 – 2000 Allan
cofounded a number of IT companies which became part of the Volante Group.
Qualifications: Bachelor of Applied Science.
Other listed company directorships in last three years: Chairman of GBST
Holdings Limited since 2005, Chairman of OptiComm Limited since 2014,
Sensera Limited since 2018.
Stewart was appointed to the RPMGlobal Holdings Limited Board of Directors
on 1 September 2018.
Stewart is currently a non-executive director of Gladstone Ports Corporation
Limited and Chairman of Stanmore Coal Limited and has over 40 years’
experience in the Australian resources industry. Stewart was formerly
managing director of Wesfarmers Resources and its associated boards where he
retired in August 2016 following a 16-year tenure with the group having joined
Wesfarmers Limited in June 2000.
Qualifications: Bachelor of Science (University of Newcastle), Graduate Diploma
in Business Studies (University of New England) and is a graduate of AICD and
the Advanced Management Programme at Harvard Business School.
Other listed company directorships in last three years: Chairman and Director of
Stanmore Coal Limited since 2017, Director of Duet Group until 16 May 2018
Non–executive Director. Joined the Board in March 2007.
Joined Pitcher Partners Brisbane (previously Johnston Rorke) in 1985, Managing
Partner in 1992 – 2008 and again from 2014 to 2017. Predominantly involved in
corporate finance, auditing, valuations, capital raisings and mergers and
acquisitions for the past 20 years.
Qualifications: Bachelor of Commerce, FCA
Other listed company directorships in last three years: Wagners Holding
Company Limited since its IPO in December 2017
Special
responsibilities
Chairman
Member – HR
and
Remuneration
Committee
Member -Audit
and Risk
Committee
Non-executive
Director
Member and
Chairman –
Audit and Risk
Committee
Chairman – HR
and
Remuneration
Committee
Non-executive
Director
Member and
Chairman –
Audit and Risk
Committee
Member – HR
and
Remuneration
Committee
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DIRECTORS’ REPORT
5.
Information on Current Directors and Company Secretary (Continued)
Directors Experience
Richard
Mathews
Appointed Managing Director 28 August 2012.
Richard’s previous roles includes Senior Vice President, International at J D
Edwards, CEO of Mincom Ltd, Chief Executive Officer and then Non-
Executive Chairman of eServGlobal Limited.
Qualifications: Bachelor of Commerce, Bachelor of Science, ACA
Other listed company directorships in last three years: None in the last
three years. Richard is a director on the Telstra Health Pty Ltd Board and
also previously sat on the Board of METS Ignited.
Company Secretary
Special
responsibilities
Executive Managing
Director
Member – HR and
Remuneration
Committee
James O’Neill, Group General Counsel and Company Secretary, joined RPMGlobal Holdings Limited in December
2012. Qualifications: Bachelor of Laws and Bachelor of Information Technology from Queensland University of
Technology, Graduate Diploma in Applied Corporate Governance from the Governance Institute of Australia,
Solicitor and Member of the Queensland Law Society and Associate Member of the Governance Institute of
Australia (AGIA) and Chartered Institute of Secretaries (ACIS).
7.
Meetings of Directors
The number of meetings of the Company’s Board of Directors and of each Board Committee held during the year
ended 30 June 2019 and the number of meetings attended by each Director were:
Full meetings
of Board of Directors
Audit & Risk
Committee
HR & Remuneration
Committee
Attended
Held
Attended
Held
Attended
Held
Allan Brackin
Stewart Butel 1
Ross Walker
10
9
10
10
9
10
Richard Mathews
1 Stewart Butel commenced as Director on 1 September 2018
10
10
4
3
4
-
4
3
4
-
1
1
1
-
1
1
1
-
8.
Directors’ Interests
The relevant interest of each Director in the shares and options issued by the Company, as notified by the Directors
to the ASX in accordance with section 205G(1) of the Corporations Act 2001, at the date of this report is as follows:
A Brackin
S Butel
R Walker
R Mathews 1
RPMGlobal Holdings Limited
Ordinary
shares
1,098,311
100,000
958,333
8,220,138
Options over
ordinary shares
-
-
-
-
1 Includes 175,560 shares held by R Mathews as trustee under a bare trust arrangement for a third party.
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DIRECTORS’ REPORT
9.
Shares Under Option
Unissued ordinary shares of RPMGlobal Holdings Limited under option at the date of this report are as follows:
Date options granted
31/10/2014
03/03/20151
15/07/20151
08/09/20151
29/08/2016
29/11/2016
09/02/20171
08/06/2017
1/10/20171
15/03/2018
14/09/20181
14/12/20181
15/03/2019
7/06/2019
Expiry date
31/10/2019
03/03/2020
15/07/2020
08/09/2020
29/08/2021
29/11/2021
09/02/2022
08/06/2022
31/10/2022
15/03/2023
14/09/2023
14/12/2023
15/03/2024
07/06/2024
Issue price of shares
$0.61
$0.59
$0.57
$0.56
$0.49
$0.54
$0.59
$0.57
$0.77
$0.67
$0.61
$0.58
$0.58
$0.60
Number under option
100,000
3,681,000
100,000
2,995,000
125,000
500,000
2,396,666
290,000
2,654,999
420,000
3,405,166
893,000
1,280,000
300,000
19,140,831
1 Included in these options were options granted as remuneration to the five highest remunerated officers during the year. Details of options
granted to the five highest remunerated officers who are also key management personnel are disclosed in section 20E of the Remuneration
Report. There are no Officers in the Company who are not also identified as key management personnel.
No option holder has any right under the options to participate in any other share issue of the Company or any
other entity.
10.
Shares issued on the exercise of options
During the financial year the following shares were issued following exercise of previously issued share options:
Exercise Date
6/07/2018
27/08/2018
4/09/2018
3/10/2018
3/10/2018
24/01/2019
15/02/2019
12/03/2019
Option Grant Date
29/08/2016
8/09/2015
3/03/2015
3/03/2015
8/09/2015
29/11/2016
29/11/2016
8/09/2015
Number of shares issued
66,666
20,000
25,000
22,500
18,334
166,666
100,000
25,000
11.
Indemnity and Insurance of Officers
The Company has indemnified the Directors and Officers of the Company for costs incurred, in their capacity as a
Director or Officer, for which they may be personally liable, except where there is a lack of good faith.
During the financial year, the Company paid insurance premiums to insure the Directors and Officers of the
Company against certain risks associated with their activities as Officers of the Company. The terms of that policy
prohibit disclosure of the nature of liability covered, the limit of such liability and the premium paid.
12.
Environmental Legislation
RPMGlobal Holdings Limited and its controlled entities are not subject to any particular and significant
environmental regulation under a law of the Commonwealth or of a State or Territory.
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DIRECTORS’ REPORT
13.
Non-audit Services
Details of the amounts paid or payable to the Company’s auditor and related practices of the auditor for audit and
non-audit services provided during the year are set out below.
The Board has considered the position and in accordance with advice received from the Audit Committee, is
satisfied that the provision of non-audit services is compatible with the general standard of independence of
auditors imposed by the Corporations Act 2001.
BDO (QLD) Pty Ltd
2019
$
2018
$
Preparation of Income tax return and other taxation services
9,100
8,117
14.
Indemnity of Auditors
The Company has agreed to indemnify and hold harmless its auditors, BDO Audit Pty Ltd, against any and all losses,
claims, costs, expenses, actions, demands, damages, liabilities or any other proceedings whatsoever incurred by
the auditors in respect of any claim by a third party arising from or connected to any breach by the Company.
15.
Auditor’s Independence Declaration
In accordance with Section 307C of the Corporations Act 2001, a copy of the auditor’s independence declaration is
enclosed on page 23.
16.
Legal Proceedings on Behalf of the Group
No person has applied for leave of the Court to bring proceedings on behalf of the Group or intervene in any
proceedings to which the Group is a party for the purpose of taking responsibility on behalf of the Group for all or
any part of those proceedings.
17.
Significant Changes in the State of Affairs
There was no matter or circumstance during the financial year that has significantly affected the state of affairs of
the Group not otherwise disclosed.
18. Matters Subsequent to the End of the Financial Year
No matter or circumstance has arisen since 30 June 2019 that has significantly affected the Group’s operations,
results or state of affairs, or may do so in future years.
19.
Rounding of Amounts
The Company is a type of company referred to in ASIC Corporations (Rounding in Financial/Directors' Reports)
Instrument 2016/191 and therefore the amounts contained in this report and in the financial report have been
rounded to the nearest $1,000, or in certain cases, the nearest dollar.
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DIRECTORS’ REPORT
20.
Remuneration Report - Audited
The remuneration report is set out under the following main headings:
A.
B.
C.
D.
E.
F.
20A.
Principles used to determine the nature and amount of remuneration;
Service agreements;
Details of remuneration;
Bonus and share-based compensation benefits;
Equity instruments held by key management personnel; and
Other transactions with key management personnel.
Principles Used to Determine the Nature and Amount of Remuneration
Remuneration and compensation have the same meaning in this report.
This report discusses the Group’s policies in regard to compensation of key management personnel (KMP). The
identified KMP have authority and responsibility for planning, directing and controlling the activities of the Group.
In addition to the Directors, the Company assessed the Chief Financial Officer, Group General Counsel & Company
Secretary and the Executive General Manager of the Advisory Division as having authority and responsibility for
planning, directing and controlling all activities of the Group, directly or indirectly, during the 2019 financial year.
The Board has established a HR and Remuneration Committee to assist with remuneration and incentive policies
enabling the Group to attract and retain KMP and Directors who will create value for shareholders and support the
Group’s mission. The HR and Remuneration Committee obtains independent advice if required on the
appropriateness of compensation packages given trends in comparative companies. In the 2019 financial year the
Committee did not use a remuneration consultant. The Group’s Corporate Governance Statement provides further
information on the role of this Committee.
The compensation structures explained below are designed to attract suitably qualified candidates, reward the
achievement of strategic, operational objectives and achieve the broader outcome of creation of value for
shareholders.
Executive Director and other Key Management Personnel
The compensation structures take into account:
• The capability and experience of the KMP;
• Their ability to control the relevant segment’s performance; and
• The segment or Group earnings.
Compensation packages include a mix of fixed, short-term and long-term performance-based incentives. In
addition to their salaries, the Group also provides non-cash benefits to its KMP and contributes to a defined
contribution superannuation plan (or equivalent pension plan) on their behalf.
Fixed Compensation
Fixed compensation is calculated on a total cost basis and includes salary, allowances, non-cash benefits, employer
contributions to superannuation funds and any fringe benefits tax charges related to employee benefits, including
motor vehicles.
Compensation levels are reviewed using an individual approach, based on evaluation of the individual, and a
comparison to the market. A KMP’s compensation is also reviewed on promotion.
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DIRECTORS’ REPORT
20.
Remuneration Report - Audited (Continued)
20A.
Principles Used to Determine the Nature and Amount of Remuneration (Continued)
Performance Linked Compensation
Performance linked compensation includes both short-term and long-term incentives and is designed to reward
KMP for meeting and exceeding their Key Performance Objectives (KPOs). The Short-Term Incentive (STI) is an ‘at
risk’ incentive provided in the form of cash, while the Long-Term Incentive (LTI) is provided as options over ordinary
shares of the Company under the rules of the Employee Share Option Plan (ESOP) (see note 23 to the financial
statements). The current long-term performance incentive structure was first implemented in the 2013 year and
was most recently approved by shareholders at the 24 November 2016 Annual General Meeting.
The table below sets out the performance-based compensation paid to KMP together with earnings for the same
period. Performance based compensation consists of STI cash bonus and LTI share-based payments.
Performance based compensation
Year ended
30 June
2015
2016
2017
2018
2019
STI
$’000
1,072
112
968
-
217
LTI
$’000
90
230
70
46
119
Total
$’000
1,162
342
1,038
46
336
EBITDA1
$’000
2,600
(3,224)
4,582
4,369
5,877
EPS
cents
(3.9)
(5.3)
0.02
0.11
(2.7)
Share price
$
0.56
0.41
0.55
0.62
0.59
1 Earnings before Interest, Tax, Depreciation, Impairment and Restructuring costs (non-IFRS disclosure)
Short-term Incentive Bonus
Effective 1 July 2012, the Group implemented a variable pay structure, referred to as the Executive Incentive Plan
(EIP). Each of the identified KMP has a portion of their remuneration linked to the EIP. The key objective of the EIP
is to create clear alignment between individual and business performance and remuneration by providing a
performance-based reward to participants in line with their relative contribution to the Group. The EIP achieves
the alignment by focusing participants on achieving goals which contribute to sustainable shareholder value and
providing a clear link between performance and the Group financial result.
In 2019 R Mathews, M Kochanowski and J O’Neill had 100% of their STI based on the Company’s adjusted EBITDA
performance. P Baudry (Advisory) had 50% of his STI based on the Company’s adjusted EBITDA performance and
50% based on the adjusted EBITDA contribution of the Advisory division. Cash bonuses are paid, provided for or
forfeited in the year to which they relate.
The Board assessed performance of the KMP for the 2019 Financial Year as shown in the table below:
Fixed Compensation
R Mathews
M Kochanowski
J O’Neill
P Baudry
50%
83%
83%
50%
Variable
Compensation
50%
17%
17%
50%
STI awarded
STI forfeited
-
-
-
50%
100%
100%
100%
50%
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DIRECTORS’ REPORT
20.
Remuneration Report - Audited (Continued)
20A.
Principles Used to Determine the Nature and Amount of Remuneration (Continued)
Long-term Incentive
Options were issued in the 2014, 2015, 2016, 2017, 2018 and 2019 financial years under the Company’s Employee
Share Option Plan (ESOP) to KMP at the discretion of the Board. Consistent with the current ESOP plan terms last
approved by shareholders at the Company’s 2016 Annual General Meeting, the rules of the ESOP Plan enable the
Board to determine the applicable vesting criteria and to set a timetable for vesting of options in the Offer
Document, including vesting in tranches over a defined period. The Board has the discretion on whether or not to
set performance hurdles for vesting or to link vesting solely to a defined service period in order to drive key staff
retention and reward longevity of service. The options issued since November 2013 vest in tranches over a three
year period from the date of grant, have vesting conditions linked to the holder maintaining employment with the
Group over that period and are issued at an exercise price based on the volume weighted average price of the
Company’s shares in the five days prior to each grant.
The Board has a Margin Loan policy that restricts Directors and Executives of the Group from entering into financial
contracts secured by shares and other securities of the Company. This policy requires the approval of the Chairman
of the Board for any financial arrangements or facilities related to Company shares held by the Directors and
Executives.
Non-executive Directors
Fees and payments to Non-executive Directors reflect the demands which are made on, and the responsibilities of
the Directors. Non-executive Directors’ fees and payments are reviewed periodically by the Board and are
determined within an aggregate Directors’ fee pool limit, which is periodically recommended for approval by
shareholders. The pool currently stands at $500,000, unchanged since it was approved in the 2009 Annual General
Meeting.
20B.
Service Agreements
Non-executive Directors’ base remuneration was last reviewed with effect from 1 July 2018. Both the Chairman’s
and Non-executive Directors’ remuneration is inclusive of committee fees.
Details of contracts with Directors and KMP of the Group are set out below.
Termination benefit
Notice Period
Terms of agreement
A Brackin
S Butel
R Walker
R Mathews
M Kochanowski
J O’Neill
P Baudry 1
1 Australian dollar equivalent, salary of P Baudry is set and paid in Chinese Yuan and Russian Roubles.
Unlimited in term
Unlimited in term
Unlimited in term
Unlimited in term
Unlimited in term
Unlimited in term
Unlimited in term
Nil
Nil
Nil
6 months
3 months
3 months
3 months
Base salary including
superannuation
$100,000
$80,000
$80,000
$650,000
$306,600
$306,600
$434,000
Nil
Nil
Nil
6 months
3 months
3 months
3 months
The KMP are also entitled to receive upon termination of employment their statutory entitlements of accrued
annual and long service leave (where applicable), together with any superannuation benefits (where applicable).
Compensation levels are reviewed each year to meet the principles of the remuneration policy.
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DIRECTORS’ REPORT
20.
Remuneration Report - Audited (Continued)
20C. Details of Remuneration
Directors
Chairman (Non-executive)
Allan Brackin
Executive Directors
Richard Mathews – CEO and Managing Director
Non-executive Directors
Stewart Butel
Ross Walker
Other Key Management Personnel
In addition to executive Directors mentioned above, the following persons were assessed by the Company as the
executives who had the greatest authority and responsibility for planning, directing and controlling all activities of
the Group, directly or indirectly, during the 2019 financial year:
Name
Position
Michael Kochanowski
Chief Financial Officer
James O’Neill
Group General Counsel and Company Secretary
Philippe Baudry
Executive General Manager - Advisory Division
Details of remuneration of each Director of RPMGlobal Holdings Limited and each of the other KMP of the Group
are set out in the following tables.
Short-term benefits
Cash salary
and fees
Movement
in leave
entitle-
ments
STI
cash bonus
Non –
monetary
benefits 1
Post -
employ
ment
benefits
Share-
based
payment
(options)
Total
Proportion
of remun-
eration
perform-
ance
related
$
$
$
$
$
$
$
%
91,324
60,883
80,000
644,000
876,207
-
-
-
(50,673)
(50,673)
-
-
-
-
-
-
- 11,055
- 11,055
8,676
5,784
-
6,000
20,460
-
-
-
-
-
100,000
66,667
80,000
610,382
857,049
-
-
-
-
-
2019
Directors
A Brackin
S Butel2
R Walker
R Mathews
Other Key Management Personnel
M Kochanowski
J O’Neill
P Baudry
273,927
273,927
438,254
986,108
1,862,315
21,049
31,413
32,991
85,453
34,780
-
-
217,000
217,000
217,000
Total
1 Includes car park and health insurance
11,055
11,055
11,448
33,558
44,613
26,023
26,023
-
52,046
72,506
43,777
43,582
31,563
375,831
386,000
731,256
118,922 1,493,087
118,922 2,350,136
12%
11%
34%
22%
14%
2 Stewart Butel started 1 September 2018.
Value of
options
as
propor-
tion of
remun-
eration
%
-
-
-
-
-
12%
11%
4%
8%
6%
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DIRECTORS’ REPORT
20.
Remuneration Report - Audited (Continued)
20C. Details of Remuneration (Continued)
Short-term benefits
Cash salary
and fees
Movement
in leave
entitle-
ments
STI
cash bonus
Non –
monetary
benefits 1
Post -
employ
ment
benefits
Share-
based
payment
(options)
Total
Proportion
of remun-
eration
perform-
ance
related
$
$
$
$
$
$
$
%
Value of
options
as
propor-
tion of
remun-
eration
%
2018
Directors
A Brackin
Dr I Runge 2
R Walker
R Mathews
91,324
80,000
70,000
639,167
880,491
-
-
-
19,935
19,935
-
-
-
-
-
-
- 10,608
- 10,608
8,676
-
-
10,833
19,509
-
-
-
-
-
100,000
80,000
70,000
680,543
930,543
-
-
-
-
-
Other Key Management Personnel
M Kochanowski
J O’Neill
P Baudry
255,708
255,708
361,336
872,752
1,753,242
Total
13,464
19,717
15,734
48,914
68,850
- 10,608
- 10,608
- 11,587
- 32,803
- 43,410
1 Includes car park and health insurance
20D.
Bonuses and Share-based Compensation Benefits
24,292
24,292
-
48,584
68,094
18,165
322,236
18,054
328,379
398,893
10,236
46,455 1,049,508
46,455 1,980,051
2 Dr Ian Runge who was a non-executive director for
Financial Year 2018 retired effective 30 June 2018.
6%
5%
3%
4%
2%
-
-
-
-
-
6%
5%
3%
4%
2%
All options refer to options over ordinary shares of RPMGlobal Holdings Limited, which are exercised on a one-for-
one basis under the ESOP Plan.
The assessed fair value at grant date of options granted to the individuals is allocated equally over the period from
grant date to vesting date, based on an estimate of the number of options likely to vest, and the amount is included
in the remuneration tables above. Fair values at grant date are determined using Trinominal Lattice model that
take into account the exercise price, the term of the option, the share price at grant date and expected price
volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the
option. Model inputs for options granted during the year are disclosed in note 23 in the financial report.
Details of options over ordinary shares in the Company provided as remuneration to each Director and each of the
KMP and the Group are set out below. When exercisable, each option is convertible into one ordinary share of
RPMGlobal Holdings Limited. Further information on the options is set out in note 23 to the financial statements.
Options granted under the ESOP plan carry no dividend or voting rights until the options vest, are exercised and
converted to ordinary shares whereupon those ordinary shares carry dividend and voting rights consistent with all
other ordinary shares of the Company.
The assessed fair value at grant date of options granted to the individuals is allocated equally over the period from
grant date to vesting date, and the amount is included in the remuneration tables above.
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DIRECTORS’ REPORT
20.
Remuneration Report - Audited (Continued)
20D.
Bonuses and Share-based Compensation Benefits (Continued)
A Brackin
S Butel 3
R Walker
R Mathews
M Kochanowski
J O’Neill
P Baudry
Number of options granted
during the year
-
-
-
-
300,000
300,000
300,000
Value of options at
grant date 1
$
-
-
-
-
59,488
59,488
59,488
Number of options vested
during the year 2
-
-
-
-
166,668
158,334
133,334
1 The value at grant date calculated in accordance with AASB 2 Share-based Payment of options granted during the year as part of
remuneration.
2 The third tranche of options granted in September 2015 vested in September 2018 with an exercise price of $0.56 cents expiring in
September 2020 and to-date no options in this grant have been exercised by the KMP. The second tranche of options granted in February
2017 vested in February 2019 with an exercise price of $0.59 cents expiring in February 2022 and to-date no options in this grant have
been exercised by the KMP. The first tranche of options granted in October 2017 vested in October 2018 with an exercise price of $0.77
cents expiring in October 2022 and to-date no options in this grant have been exercised by the KMP. The Options granted on 13 September
2018 with an exercise price of $0.61 cents expiring in September 2023 and the options granted on 14 December 2018 with an exercise
price of $0.58 cents expiring in December 2023 have yet to vest.
3 S Butel commenced as a Director on 1 September 2018.
Details of options over ordinary shares in the Company provided as remuneration to key management personnel
are shown in the table on the following page. The vesting conditions are set out in Section 20A. The table also
shows the percentages of the options granted that vested and were forfeited during the year.
Further information on the options including valuation inputs and assumptions are set out in note 23 to the
financial statements.
The terms and conditions of each grant of options affecting remuneration of a KMP in the current or a future
reporting period are as follows:
Grant date
03/03/2015
03/03/2015
03/03/2015
8/09/2015
8/09/2015
8/09/2015
09/02/2017
09/02/2017
09/02/2017
26/10/2017
26/10/2017
26/10/2017
Vesting and exercise
date
03/03/2016
03/03/2017
03/03/2018
8/09/2016
8/09/2017
8/09/2018
09/02/2018
09/02/2019
09/02/2020
26/10/2018
26/10/2019
26/10/2020
Expiry date
03/03/2020
03/03/2020
03/03/2020
8/09/2020
8/09/2020
8/09/2020
09/02/2022
09/02/2022
09/02/2022
26/10/2022
26/10/2022
26/10/2022
Exercise
Price, $
Value per
option at grant date
0.59
0.59
0.59
0.56
0.56
0.56
0.59
0.59
0.59
0.77
0.77
0.77
$0.19
$0.23
$0.25
$0.17
$0.19
$0.21
$0.17
$0.21
$0.23
$0.19
$0.23
$0.26
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DIRECTORS’ REPORT
20.
Remuneration Report - Audited (Continued)
20D.
Bonuses and Share-based Compensation Benefits (Continued)
Grant date
13/09/2018
13/09/2018
13/09/2018
14/12/2018
14/12/2018
14/12/2018
Vesting and exercise
date
13/09/2019
13/09/2020
13/09/2021
14/12/2019
14/12/2020
14/12/2021
Expiry date
13/09/2023
13/09/2023
13/09/2023
14/12/2023
14/12/2023
14/12/2023
Exercise
Price, $
Value per
option at grant date
0.61
0.61
0.61
0.58
0.58
0.58
$0.17
$0.20
$0.23
$0.14
$0.17
$0.19
Year
(FY) of
grant
Years in
which
option may
vest
Number of
options
granted
Value of
option at
grant date 1
A Brackin
S Butel
R Walker
R Mathews
M Kochanowski
J O’Neill
P Baudry
-
-
-
-
2014
2015
2016
2017
2018
2019
2014
2015
2016
2017
2018
2019
2014
2015
2016
2017
2019
-
-
-
-
2015-2017
2016-2018
2017-2019
2018-2020
2019-2021
2020-2023
2015-2017
2016-2018
2017-2019
2018-2020
2019-2021
2020-2023
2015-2017
2016-2018
2017-2019
2018-2020
2020-2023
-
-
-
-
50,000
200,000
200,000
150,000
150,000
300,000
50,000
225,000
175,000
150,000
150,000
300,000
50,000
550,000
250,000
150,000
300,000
-
-
-
-
$0.21 - $0.25
$0.19 - $0.25
$0.17 – $0.21
$0.17 – $0.23
$0.19 – $0.26
$0.14 – $0.23
$0.21 - $0.25
$0.19 - $0.25
$0.17 – $0.21
$0.17 – $0.23
$0.19 – $0.26
$0.14 – $0.23
$0.21 - $0.25
$0.19 - $0.25
$0.17 – $0.21
$0.17 – $0.23
$0.14 – $0.23
Number
of
options
vested
during
the year
-
-
-
-
-
-
66,668
50,000
50,000
-
-
-
58,333
50,000
50,000
-
-
-
83,333
50,000
-
Number
of
options
forfeited
during
the year
-
-
-
-
50,000
-
-
-
-
-
50,000
-
-
-
-
-
50,000
-
-
-
-
Vested
%
-
-
-
-
-
-
33%
33%
33%
-
-
-
33%
33%
33%
-
-
-
33%
33%
-
Value at
date of
forfeiture 2
Forfeited
%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100%
-
-
-
-
-
100%
-
-
-
-
-
100%
-
-
-
-
1 The value at grant date calculated in accordance with AASB 2 Share-based Payment of options granted during the year as part of
remuneration
2 The value of the options that were granted as part of remuneration and that were forfeited (lapsed) during the year because a vesting
condition was not satisfied was determined at the time of lapsing, but assuming the condition was satisfied.
Remuneration Report - Audited (Continued)
20E.
Equity Instruments held by Key Management Personnel
No shares were granted as compensation in 2019 (2018: nil). The number of shares and options over shares in
the Company held during the financial year by each Director of RPMGlobal Holdings Limited and each of the
other key management personnel of the Group, including their personally-related entities, is set out below:
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
|20
For personal use only
DIRECTORS’ REPORT
20.
Remuneration Report - Audited (Continued)
20E.
Equity Instruments held by Key Management Personnel
(i)
Options
Name
Balance at the
start of the year
Granted as
compensation
Forfeited,
exercised and
expired
Balance at the
end of the year
Vested and
exercisable
A Brackin
S Butel
R Walker
R Mathews
M Kochanowski
J O’Neill
P Baudry
(ii)
Ordinary Shares
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
750,000
750,000
1,000,000
300,000
300,000
300,000
(50,000)
(50,000)
(50,000)
1,000,000
1,000,000
1,250,000
550,000
550,000
900,000
Balance at the
start of the year
Sold during
the year
Exercise of
Options
Acquired during the
year (on market)
Balance at the end of
the year
Directors
A Brackin
S Butel 1
R Walker
R Mathews 2
1,098,311
-
958,333
8,220,138
Other key management personnel of the Group
M Kochanowski
183,333
J O’Neill
P Baudry
40,000
307,241
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100,000
-
-
-
-
-
1,098,311
100,000
958,333
8,220,138
183,333
40,000
307,241
1 S Butel started 1 September 2018.
2 Includes 175,560 shares held by R Mathews as trustee under a bare trust arrangement for a third party.
No options were exercised during the 2019 year by the KMP.
20F.
Loans and Other Transactions with Key Management Personnel and their related parties
There were no transactions or loans with Key Management Personnel and their related parties during the 2019
financial year.
20J. 2018 Annual General Meeting (AGM)
The Company’s 2018 remuneration report was unanimously adopted by show of hands at 2018 AGM. The Company
did not receive any specific feedback at the AGM or throughout the year on its remuneration practices.
Remuneration report - End
This report is made in accordance with a resolution of the Directors.
Allan Brackin
Chairman
Dated: 23 August 2019
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
|21
For personal use only Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
DECLARATION OF INDEPENDENCE BY T R MANN TO THE DIRECTORS OF RPMGLOBAL HOLDINGS
LIMITED
As lead auditor of RPMGlobal Holdings Limited for the year ended 30 June 2019, I declare that, to the
best of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of RPMGlobal Holdings Limited and the entities it controlled during the
period.
T R Mann
Director
BDO Audit Pty Ltd
Brisbane, 23 August 2019
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd
ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd,
a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme
approved under Professional Standards Legislation.
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
|22
For personal use only CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2019
Notes
2019
$’000
2018
$’000
Revenue from contracts with customers
Services
Licence sales
Software maintenance
Software subscription
Total revenue from contracts with customers
Other revenue
Rechargeable expenses
Net Revenue
Expenses
Amortisation
Depreciation
Employee benefits expense
Commissions and incentives
Other employee costs
Office expenses
Professional services
Professional services – Russian litigation
Rent
Travel expenses
Other expenses
Profit/(Loss) before finance costs and income tax
Finance income
Finance costs
Fair value adjustments
Net finance costs
Profit/(Loss) before income tax
Income tax expense
Profit/(Loss) after income tax
43,114
12,061
21,807
2,390
79,372
721
(6,889)
73,204
(3,143)
(877)
(49,797)
(3,242)
(994)
(2,512)
(1,839)
(185)
(3,426)
(2,842)
(2,675)
(71,532)
1,672
363
(18)
(272)
73
1,745
(7,598)
(5,853)
39,158
13,605
19,606
778
73,147
557
(6,136)
67,568
(2,659)
(739)
(46,921)
(3,960)
(775)
(2,632)
(1,396)
(273)
(3,418)
(2,537)
(1,560)
(66,870)
698
272
(32)
(314)
(74)
624
(380)
244
11
10
21(d)
4
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
|23
For personal use only
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2019
Notes
2019
$’000
2018
$’000
(5,853)
244
Profit/(Loss)
Other comprehensive income
Items that will not be classified subsequently to profit or loss:
Re-measurements of defined benefit obligations
Items that may be classified subsequently to profit or loss:
Foreign currency translation differences
Other comprehensive income / (loss), net of tax
Total comprehensive income
Earnings per share
Basic earnings per share (cents)
Diluted earnings per share (cents)
22
22
3
(257)
(254)
(6,107)
(2.7)
(2.7)
11
(166)
(155)
89
0.11
0.11
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
|24
For personal use only
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2019
Notes
2019
$’000
2018
$’000
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Current tax receivable
Other assets
Total current assets
Non-current assets
Trade and other receivables
Property, plant and equipment
Deferred tax assets
Intangible assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Provisions
Current tax liabilities
Other Liabilities
Total current liabilities
Non-current liabilities
Provisions
Deferred tax liabilities
Other Liabilities
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Reserves
Accumulated losses
Total equity
6
7
8
9
7
10
5
11
12
13
14
13
5
14
15
16
28,207
20,785
3,062
208
2,414
54,676
196
1,675
2,729
34,245
38,845
93,521
7,864
4,543
370
19,634
32,411
1,291
-
142
1,433
33,844
59,677
23,319
21,388
3,065
328
1,281
49,381
233
1,876
9,145
37,140
48,394
97,775
7,521
4,650
129
16,486
28,786
1,416
16
2,258
3,690
32,476
65,299
87,936
(1,788)
(26,471)
59,677
87,708
(2,284)
(20,125)
65,299
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
|25
For personal use only
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2019
Contributed
equity
Reserves
Accumulated
losses
Total equity
Balance at 30 June 2018
Adoption of AASB 9 (note 2(a))
Balance at 1 July 2018
Loss for the year
Other comprehensive income/(expense)
Total comprehensive income
$'000
87,708
-
87,708
-
-
$'000
(2,284)
-
(2,284)
-
(208)
(208)
Transactions with owners in their capacity as owners
Contributions of equity, net of transaction costs
228
-
Employee share options
Balance at 30 June 2019
Balance at 1 July 2017
Profit for the year
Other comprehensive income/(expense)
Total comprehensive income
-
228
87,936
704
704
(1,788)
(26,471)
59,677
85,175
(2,995)
(20,380)
61,800
-
-
-
-
(166)
(166)
Transactions with owners in their capacity as owners
Contributions of equity, net of transaction costs
2,533
-
Employee share options
Balance at 30 June 2018
-
2,533
87,708
877
877
(2,284)
(20,125)
$'000
$'000
(20,125)
(496)
(20,621)
(5,853)
3
(5,850)
-
-
-
65,299
(496)
64,803
(5,853)
(205)
(6,058)
228
704
932
244
11
255
-
-
-
244
(155)
89
2,533
877
3,410
65,299
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
|26
For personal use only
CONSOLIDATED STATEMENT OF CASHFLOWS
FOR THE YEAR ENDED 30 JUNE 2019
Notes
2019
$'000
2018
$'000
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Finance costs
Onerous leases payments
Income taxes paid
Net cash (outflow) / inflow from operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Proceeds from sale of property, plant and equipment
Payments for acquisitions of subsidiaries net of cash acquired
Payments for contingent consideration
Payments for intangible assets
Net cash outflow from investing activities
Cash flows from financing activities
Share buyback
Contributions of equity
Transaction costs
Net cash inflow/(outflow) from financing activities
20
10
21(d)
11
15
15
Net increase/(decrease) in cash and cash equivalents held
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of the financial year
6
87,216
(79,069)
8,147
363
(47)
(293)
(839)
7,331
(670)
31
-
(2,644)
(251)
(3,534)
-
241
(13)
228
4,025
23,319
863
28,207
81,433
(73,700)
7,733
272
(32)
(147)
(793)
7,033
(512)
-
(828)
(2,262)
(1,005)
(4,607)
(9)
312
(20)
283
2,709
20,278
332
23,319
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
|27
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
1.
Summary of Significant Accounting Policies
The principal accounting policies adopted in the preparation of the financial report are set out below. These
policies have been consistently applied to all the years presented, unless otherwise stated.
RPMGlobal Holdings Limited is a listed public company, incorporated and domiciled in Australia.
The financial report comprises the consolidated entity (“Group”) consisting of RPMGlobal Holdings Limited and
its subsidiaries.
The financial report was authorised for issue on 23 August 2019.
(a)
Basis of Preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting
Standards and interpretations issued by the Australian Accounting Standards Board and the Corporations Act
2001 (Cth). RPMGlobal Holdings Limited is a for-profit entity for the purposes of preparing the financial
statements.
Compliance with IFRS
The consolidated financial statements of RPMGlobal Holdings Limited also comply with International Financial
Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
Historical cost convention
These financial statements have been prepared under the historical cost convention.
(b)
Principles of Consolidation
The consolidated financial statements incorporate the assets and liabilities of all entities controlled by RPMGlobal
Holdings Limited as at 30 June 2019 and the results of all controlled entities for the year then ended. RPMGlobal
Holdings Limited and its controlled entities together are referred to in this financial report as the “consolidated
entity” or the “Group”.
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls
an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and
has the ability to affect those returns through its power to direct the activities of the entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-
consolidated from the date that control ceases.
The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Group (refer to
note 1(l)).
Intercompany transactions, balances and unrealised gains on transactions between Group companies are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of
the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group.
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
|28
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
1.
(c)
Summary of Significant Accounting Policies (Continued)
Income Tax
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based
on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and to unused tax losses.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However,
the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a
transaction other than a business combination that at the time of the transaction affects neither accounting nor
taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or
substantially enacted by the reporting date and are expected to apply when the related deferred income tax asset
is realised or the deferred income tax liability is settled.
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 in the tax
jurisdiction in which they arose.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and
tax bases of investments in controlled entities where the parent entity is able to control the timing of the reversal
of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and
tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a
net basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in
other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive
income or directly in equity, respectively.
Tax consolidation legislation
RPMGlobal Holdings Limited and its wholly owned Australian controlled entities have implemented the tax
consolidation legislation.
The head entity, RPMGlobal Holdings Limited, and the controlled entities in the tax consolidated group account
for their own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax
consolidated group continues to be a standalone taxpayer in its own right.
In addition to its own current and deferred tax amounts, RPMGlobal Holdings Limited also recognises the current
tax liabilities or assets and the deferred tax assets arising from the unused tax losses and unused tax credits
assumed from controlled entities in the tax consolidated group.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as
amounts receivable or payable to other entities in the Group. Details about the tax funding agreements are
disclosed in note 4.
Any difference between the amounts assumed and amounts receivable or payable under the tax funding
agreement are recognised as a contribution to (or distribution from) wholly-owned tax consolidated entities.
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
|29
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
1.
(d)
Summary of Significant Accounting Policies (Continued)
Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operational decision maker. The chief operating decision maker, who is responsible for allocating resources and
assessing performance of the operating segments, has been identified as the Managing Director.
The assets and liabilities of the Group are regularly reviewed on a consolidated basis but are not regularly
reported to the chief operating decision maker at a segment level. As such this information has not been included
in the Operating Segment note 3.
(e)
i)
Foreign Currency Translation
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency
of the primary economic environment in which the entity operates (‘the functional currency’). The
consolidated financial statements are presented in Australian dollars, which is RPMGlobal Holdings
Limited’s functional and presentation currency.
ii)
Transactions and balances
Foreign currency transactions are initially translated into the functional currency using the exchange
rates prevailing at the date of the transaction. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year end exchange rates of monetary assets
and liabilities denominated in foreign currencies are recognised in profit or loss, except when they are
deferred in equity as qualifying cash flow hedges and qualifying net investment hedges or are attributable
to part of the net investment in a foreign operation.
Non-monetary items that are measured at fair value in a foreign currency are translated using the
exchange rates at the date when the fair value was determined. Translation differences on assets and
liabilities carried at fair value are reported as part of the fair value gain or loss. For example, translation
differences on non-monetary assets and liabilities such as equities held at fair value through profit or loss
are recognised in profit or loss as part of the fair value gain or loss and translation differences on non-
monetary assets such as equities whose changes in the fair value are presented in other comprehensive
income are recognized in other comprehensive income.
iii)
Group entities
The results and financial position of all the Group entities (none of which has the currency of a
hyperinflationary economy) that have a functional currency different from the presentation currency are
translated into the presentation currency as follows:
•
•
•
assets and liabilities on consolidation are translated at the closing rate at the reporting date;
income and expenses are translated at the exchange rates prevailing at the dates of the
transaction; and
all resulting exchange differences are recognised in other comprehensive income.
In disposal of a foreign operation, the component of other comprehensive income relating to that
particular foreign operation is recognised in profit or loss.
Fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of
the foreign entities and translated at the closing rate.
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
|30
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
1.
(f)
i)
Summary of Significant Accounting Policies (Continued)
Revenue Recognition from 1 July 2018
Sale of licences
Revenue from the sale of perpetual licences is recognised at a point in time when the customer gains
access and thus control of the software and where the licences are considered distinct from other services
provided to the customer.
ii)
Software subscription
Revenue from the sale of term (subscription) licences is recognised over time on a straight line basis over
the subscription term.
iii)
Consulting
Revenue from the provision of consulting services is recognised typically over time as the Group has an
enforceable right to payment for its performance completed to date.
iv)
Software maintenance
Revenue for software maintenance is recognised over time on a straight line basis over the service period
as performance obligations require the Company to respond to requests made by customers to provide
technical product support and unspecified updates, upgrades and enhancements on a when-available
and if-available basis.
v)
Laboratory testing revenue
Revenue from sample testing is recognised at a point in time when the laboratory completes testing and
the customer receives testing results for their samples.
vi)
Customer contract with multiple performance obligations
The Group frequently enters into multiple contracts with the same customer and where that occurs the
Company treats those arrangements as one contract if the contracts are entered into at or near the same
time and are commercially interrelated. The Group does not consider contracts closed more than three
months apart as a single contract.
The Group’s subscription contracts are combining an obligation to receive a licence and software support
services obligations. The provision of services and sale of licences is treated as a single performance
obligation.
In all other cases, the total transaction price for a customer contract is allocated amongst the distinct
performance obligations based on their relative stand-alone selling prices. Where the stand-alone prices
are highly variable the Group applies a residual approach.
vii)
Incremental Costs of obtaining Customer Contracts
Commissions on software subscriptions are capitalised and amortised over the term, where the term is
greater than 12 months.
viii)
Trade Receivables and Contract Assets
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary
course of business. They are generally due for settlement within 30 days and therefore are all classified
as current. Trade receivables are recognised initially at the amount of consideration that is unconditional
unless they contain significant financing components, when they are recognised at fair value. The Group
holds the trade receivables with the objective to collect the contractual cash flows and therefore
measures them subsequently at amortised cost using the effective interest method.
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
|31
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
1.
(f)
Summary of Significant Accounting Policies (Continued)
Revenue Recognition (Continued)
A contract asset is the right to consideration in exchange for goods or services transferred to the
customer. If the Group performs by transferring goods or services to a customer before the customer
pays consideration or before payment is due, a contract asset is recognised for the earned consideration
that is conditional.
ix)
Contract liability
A contract liability is the obligation to transfer goods or services to a customer for which the Group has
received consideration (or an amount of consideration is due) from the customer. If a customer pays
consideration before the Group transfers goods or services to the customer, a contract liability is
recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities
are recognised as revenue when the Group performs under the contract.
x)
Financing components
The Group does not recognise adjustments to transition prices or Contract balances where the period
between the transfer of promised goods or services to the customer and payment by customer does not
exceed one year.
The Group reviewed its prior year contracts and did not identify material adjustments in timing and
amounts recognised as revenue in prior years.
xi)
Interest income
Revenue is recognised as interest accrues using the effective interest method. This is a method of
calculating the amortised cost of a financial asset and allocating the interest income over the relevant
period using the effective interest rate, which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset to the net carrying amount of the financial asset.
xii)
Significant Estimates
In 2017 the Group completed a transaction for the sale of $6,295,000 of perpetual licenses to a customer.
The transaction included multiple elements and required management judgement on allocation of the
value to the different revenue components as well as assessing whether the Group has transferred to the
buyer the significant risks and rewards of ownership due to the inclusion of a reconfiguration right
(between licences and maintenance) that was then only exercisable in limited specified circumstances.
The Group was confident that these rights could be reliably estimated and the significant risks and
rewards had transferred to the customer as at 30 June 2017. As a result, in 2017 the Group deferred
revenue of $2,833,000 against the rights to future upgrades and reliably measured reconfiguration and
recognized revenue of $3,462,000. The price allocation to these contract components or timing of
revenue recognition under the AASB15 did not change.
During year ended 30 June 2019 the customer agreed to amend and remove the reconfiguration right
and as a result the Group has recognised a further $1,856,000 from this deferred revenue leaving the
balance unrecognised at $230,000. The remaining deferred revenue will be recognised as revenue when
it satisfies the Group’s revenue recognition policies.
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
|32
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
1.
(g)
Summary of Significant Accounting Policies (Continued)
Trade Receivables – up to 30 June 2018
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method, less provision for impairment. Trade receivables are generally due for settlement
within 30 days. They are presented as current assets unless collection is not expected for more than 12 months
after the reporting date.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible
are written off by reducing the carrying amount directly. An allowance for impairment of trade receivables is
established when there is objective evidence that the Group will not be able to collect all amounts due according
to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor
will enter bankruptcy or financial reorganisation and default or delinquency in payments are considered
indicators that the trade receivable may be impaired.
The amount of the provision is the difference between the asset’s carrying amount and the present value of
estimated future cash flows, discounted at the original effective interest rate. Cash flows relating to short-term
receivables are not discounted if the effect of discounting is immaterial.
The amount of the allowance is recognised in other expenses in profit or loss. Subsequent recoveries of amounts
previously written off are credited against other expenses in profit or loss.
(h) Work in Progress – up to 30 June 2018
Work in progress represents costs incurred and profit recognised on client assignments and services that are in
progress at balance date. Work in progress is valued at net realisable value after providing for any foreseeable
losses.
(i)
Investments and Other Financial Assets
Classification
From 1 July 2018, the Group classifies its financial assets in the following measurement categories:
•
•
those to be measured subsequently at fair value (either through OCI, or through profit or loss); and
those to be measured at amortised cost.
The classification depends on the Group’s business model for managing the financial assets and the contractual
terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments
in equity instruments that are not held for trading, this will depend on whether the Group has made an irrevocable
election at the time of initial recognition to account for the equity investment at fair value through other
comprehensive income (FVOCI).
The Group reclassifies debt investments when and only when its business model for managing those assets
changes.
Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not
at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the
financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.
Financial assets with embedded derivatives are considered in their entirety when determining whether their cash
flows are solely payment of principal and interest.
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
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NOTES ON THE FINANCIAL STATEMENTS
1.
(i)
Summary of Significant Accounting Policies (Continued)
Investments and Other Financial Assets (Continued)
Debt instruments
Subsequent measurement of debt instruments depends on the Group’s business model for managing the asset
and the cash flow characteristics of the asset. There are three measurement categories into which the Group
classifies its debt instruments:
• Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows
represent solely payments of principal and interest are measured at amortised cost. Interest income from
these financial assets is included in finance income using the effective interest rate method. Any gain or
loss arising on derecognition is recognised directly in profit or loss and presented in other gains/(losses),
together with foreign exchange gains and losses. Impairment losses are presented as separate line item
in the statement of profit or loss.
• FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets,
where the assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI.
Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains
or losses, interest revenue and foreign exchange gains and losses which are recognised in profit or loss.
When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is
reclassified from equity to profit or loss and recognised in other gains/(losses). Interest income from these
financial assets is included in finance income using the effective interest rate method. Foreign exchange
gains and losses are presented in other gains/(losses) and impairment expenses are presented as
separate line item in the statement of profit or loss.
• FVPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. Again or
loss on a debt investment that is subsequently measured at FVPL is recognised in profit or loss and
presented net within other gains/(losses) in the period in which it arises.
Impairment
From 1 July 2018, the Group assesses on a forward looking basis the expected credit losses associated with its
debt instruments carried at amortised cost and FVOCI. The impairment methodology applied depends on whether
there has been a significant increase in credit risk.
For trade receivables, the Group applies the simplified approach permitted by AASB 9, which requires expected
lifetime losses to be recognised from initial recognition of the receivables.
(j)
Cash and Cash Equivalents
For statement of cashflows presentation purposes, cash and cash equivalents include cash on hand, deposits held
at call with financial institutions, other short-term, highly liquid investments with original maturities of three
months or less that are readily converted to known amounts of cash and which are subject to an insignificant risk
of changes in value and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on
the consolidated statement of financial position.
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
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NOTES ON THE FINANCIAL STATEMENTS
1.
(k)
Summary of Significant Accounting Policies (Continued)
Leases
Leases of property, plant and equipment, where the Group as lessee has substantially all the risks and rewards of
ownership, are classified as finance leases. Finance leases are capitalised at the lease’s inception at the fair value
of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental
obligations, net of finance charges, are included in other short-term and long-term borrowings. Each lease
payment is allocated between the liability and finance cost.
The finance cost is charged to the profit or loss over the lease period so as to produce a constant periodic rate of
interest on the remaining balance of the liability for each period. The property, plant and equipment acquired
under finance leases is depreciated over the shorter of the asset’s useful life and the lease term.
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Group as
lessee are classified as operating leases. Payments made under operating leases (net of any incentives received
from the lessor) are charged to the profit or loss on a straight line basis over the period of the lease.
Lease income from operating leases where the Group is a lessor is recognised in income on a straight line basis
over the lease term.
(l)
Business Combinations
The acquisition method of accounting is used to account for all business combinations, including business
combinations involving entities or businesses under common control, regardless of whether equity instruments
or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the fair
values of the assets transferred, the liabilities incurred and the equity interests issued by the Group.
The consideration transferred also includes the fair value of any contingent consideration arrangement and the
fair value of any pre-existing equity interest in the subsidiary.
Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values
at the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest
in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net
identifiable assets.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the
acquisition date fair value of any previous equity interest in the acquiree over the fair value of the Group’s share
of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the
net identifiable assets of the subsidiary acquired and the measurement of all amounts has been reviewed, the
difference is recognised directly in profit or loss as a bargain purchase.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted
to their present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing
rate, being the rate at which a similar borrowing could be obtained from an independent financier under
comparable terms and conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial
liability are subsequently remeasured to fair value with changes in fair value recognised in profit or loss.
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NOTES ON THE FINANCIAL STATEMENTS
1.
Summary of Significant Accounting Policies (Continued)
(m)
Impairment of Non-Financial Assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested
annually for impairment, or more frequently if events or changes in circumstances indicate that they might be
impaired. Other assets are reviewed for impairment whenever events or changes in circumstances indicate that
the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the
asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair
value less costs of disposal and value in use.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets
(cash generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for
possible reversal of the impairment at each reporting date.
(n)
Property, Plant and Equipment
Property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure
that is directly attributable to the acquisition of the items. Depreciation is calculated on a straight line basis to
write off the net cost of each item of property, plant and equipment over its estimated useful life to the
consolidated entity, or in case of lease hold improvements, the shorter lease term. Estimates of remaining useful
lives are made on a regular basis for all assets.
The estimated useful lives for plant and equipment is ranging between 2 and 20 years. Gains and losses on
disposals are determined by comparing proceeds with the carrying amount of the assets. These are included in
profit or loss.
(o)
i)
Intangible Assets
Software developed or acquired for sales and licensing
Research expenditure is recognised as an expense as incurred. Costs incurred on development projects
(relating to the design and testing of new areas of products) are recognised as intangible assets when it
is probable that the project will, after considering its commercial and technical feasibility, be completed
and generate future economic benefits and its costs can be measured reliably. The expenditure
capitalised comprises all directly attributable costs, including costs of materials, services, direct labour
and an appropriate proportion of overheads. Other development expenditures that do not meet these
criteria are recognised as an expense as incurred. Development costs previously recognised as an
expense are not recognised as an asset in a subsequent period. Capitalised development costs and
acquired software are recorded as intangible assets and amortised from the point at which the asset is
ready for use on a straight line basis over its useful life, which varies from three to five years.
ii)
Software – internal management systems
Software licences used in internal management systems, whether acquired or internally developed are
stated at cost less amortisation. They are amortised on a straight line basis over the useful life from 2.5
to 5 years.
iii)
Patents and trademarks
Costs associated with patents and trademarks are expensed as incurred.
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NOTES ON THE FINANCIAL STATEMENTS
1.
Summary of Significant Accounting Policies (Continued)
(o)
iv)
Intangible Assets (Continued)
Customer Contracts and Relationships
The net assets acquired as a result of a business combination may include intangible assets other than
goodwill. Any such intangible assets are amortised in a straight line over their expected future lives. The
estimated useful lives of customer contracts is 5 years.
v)
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of
the net identifiable assets of the acquired subsidiary/business at the date of acquisition. Goodwill on
acquisition is included in intangible assets. Goodwill is not amortised. Instead, goodwill is tested for
impairment annually or more frequently if events or circumstances indicate that it might be impaired and
is carried at cost less accumulated impairment losses.
Goodwill is allocated to cash generating units for the purposes of impairment testing. The allocation is
made to those cash generating units or groups of cash generating units that are expected to benefit from
business combination in which goodwill arose, identified according to operating segments or
components of operating assets (note 3).
(p)
Trade and Other Payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial
year and which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.
(q)
Borrowing Costs
Borrowing costs incurred for the construction of any qualifying asset are capitalised during the period of time that
is required to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed.
(r)
i)
Employee Benefits
Short term obligations
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave
expected to be settled within 12 months after the end of the period in which the employees render the
related service are recognised in respect of employees' services up to the end of the reporting period and
are measured at the amounts expected to be paid when the liabilities are settled. The liability for annual
leave and long service leave is recognised in the provision for employee benefits.
Other long-term employee benefit obligations
The liability for long service leave and other benefits which is not expected to be settled within 12 months
after the end of the period in which the employees render the related service is recognised in the provision
for employee benefits and measured as the present value of expected future payments to be made in
respect of services provided by employees up to the end of the reporting period using the projected unit
credit method. Consideration is given to expected future wage and salary levels, experience of employee
departures and periods of service. Expected future payments are discounted using market yields at the
end of the reporting period on national government bonds with terms to maturity and currency that match,
as closely as possible, the estimated future cash outflows.
The obligations are presented as current liabilities in the consolidated statement of financial position if the
entity does not have an unconditional right to defer settlement for at least twelve months after the
reporting period, regardless of when the actual settlement is expected to occur.
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NOTES ON THE FINANCIAL STATEMENTS
1.
(r)
ii)
Summary of Significant Accounting Policies (Continued)
Employee Benefits (Continued)
Bonus plans
The Group recognises a liability and an expense for bonuses and profit-sharing based on a formula that
takes into consideration the profit attributable to the Company’s shareholders after certain adjustments.
The Group recognises a provision where contractually obliged or where there is a past practice that has
created a constructive obligation.
Liabilities for bonus plans are expected to be settled within 12 months and are measured at the amounts
expected to be paid when they are settled.
iii)
Superannuation
The Group has a defined contribution superannuation plan for its eligible employees. Contributions to the
defined contribution fund are recognised as an expense as they become payable. Prepaid contributions
are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.
iv)
Share-based payments
Share-based compensation benefits are provided to employees via the RPMGlobal Holdings Limited
employee share option plan (ESOP) and an employee share purchase plan. Information relating to these
schemes is set out in note 23.
The fair value of options granted under the ESOP is recognised as an employee benefit expense with a
corresponding increase in equity. The total amount to be expensed is determined by reference to the fair
value of the options granted, which includes any market performance conditions, but excludes the impact
of any service and non-market performance vesting conditions. Non-market vesting conditions are
included in assumptions about the number of options that are expected to vest. The total expense is
recognised over the vesting period, which is the period over which all of the specified vesting conditions
are to be satisfied. At the end of each period, the entity revises its estimates of the number of options that
are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision
to original estimates, if any, in profit or loss, with a corresponding adjustment to equity.
(s)
Value Added Taxes (Including Goods and Services Tax)
Revenues, expenses and assets are recognised net of the amount of Value Added Tax (VAT), except where the
amount of VAT is not recoverable from the relevant tax authority. In these circumstances the VAT is recognised
as part of the cost of acquisition of the asset or as part of the item as expense.
Receivables and payables are stated with the amount of VAT included. The net amount of VAT recoverable from,
or payable to, the relevant tax authority is included as a current asset or liability in the consolidated statement of
financial position.
Cash flows are presented on a gross basis. The VAT components of the cash flows arising from investing and
financing activities which are recoverable from, or payable to, the relevant tax authority are classified as operating
cash flows.
(t)
Contributed Equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax, from the proceeds.
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NOTES ON THE FINANCIAL STATEMENTS
1.
(u)
i)
Summary of Significant Accounting Policies (Continued)
Earnings per Share
Basic earnings per share
Basic earnings per share is calculated by dividing:
•
•
the profit attributable to owners of the Company, excluding any costs of servicing equity other than
ordinary shares
by the weighted average number of ordinary shares outstanding during the financial year.
ii)
Diluted earnings per share
Dilutive earnings per share adjusts the figures used in determination of basic earnings per share to take into
account:
•
•
the after income tax effect of interest and other financing costs associated with dilutive potential
ordinary shares
the weighted average number of additional ordinary shares that would have been outstanding
assuming the conversion of all dilutive potential ordinary shares.
(v)
Financial Guarantee Contracts
Financial guarantee contracts are recognised as a financial liability at the time the guarantee is issued. The liability
is initially measured at fair value and subsequently at the higher of the loss allowance and the amount initially
recognised less cumulative amortisation, where appropriate.
(w)
Rounding of Amounts
The parent entity has applied the relief available to it under ASIC Corporations (Rounding in Financial/Directors
Reports) Instrument 2016/191 and accordingly, amounts in the financial statements and directors’ report have
been rounded off to the nearest $1,000, or in certain cases, the nearest dollar.
(x)
Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
(y)
Critical Accounting Estimates and Significant Judgments
The preparation of the financial report in conformity with Australian Accounting Standards requires the use of
certain critical accounting estimates. It also requires management to exercise judgment in the process of applying
the accounting policies. The notes in the financial statements set out areas involving a higher degree of judgment
or complexity, or areas where assumptions are significant to the financial report such as:
•
•
•
•
•
intangible assets, including goodwill (note 11),
impairment of receivables (note 7, 21(a),note 1(g) and note 1(f) (viii))),
deferred tax assets (note 5),
contingent consideration (note 21(d)),
revenue recognition (note 1(f)).
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
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NOTES ON THE FINANCIAL STATEMENTS
1.
Summary of Significant Accounting Policies (Continued)
(y)
Critical Accounting Estimates and Significant Judgments (Continued)
Estimates and judgments are continually evaluated and are based on historical experience and other factors,
including reasonable expectations of future events. Management believes the estimates used in preparation of
the financial report are reasonable.
(z)
Parent Entity Financial Information
The financial information for the parent entity, RPMGlobal Holdings Limited, disclosed in note 24 has been prepared
on the same basis as the consolidated financial statements, except as set out below:
(i)
Investments in subsidiaries
Investment in subsidiaries are accounted for at cost in the financial statements of RPMGlobal Holdings
Limited.
(aa)
New Accounting Standards and Interpretations Not Yet Adopted
As at 30 June 2019, certain new relevant accounting standards and interpretations that will become mandatory
in future periods have recently been issued or amended but are not yet effective and have not been adopted
for the annual reporting period ended 30 June 2019. These are as follows:
(i)
AASB16 Leases
This standard and its consequential amendments are currently applicable to annual reporting period of the Group
beginning on 1 July 2019. When effective, this standard will replace the current accounting requirements
applicable to leases in AASB117 Leases and related interpretations. AASB16 introduces a single lessee accounting
model that eliminates the requirement for leases to be classified as operating or finance leases. This means that
for all leases, a right-of-use asset and a liability will be recognised, with the right-to-use asset being depreciated
and the liability being unwound in principal and interest components over the life of the lease.
Under the standard key non-IFRS metrics of earnings before tax, depreciation and amortization (EBITDA) will be
affected as well as lease payments will be represented in the financing activities of the cash flow statement. As
at the reporting date, the Group has non-cancellable operating lease commitments of $5,457,000.
The Group will apply the standard from its mandatory adoption date of 1 July 2019. The Group intends to apply
the simplified transition approach and will not restate comparative amounts for the year prior to first adoption.
Right-of-use assets for property leases will be measured on transition as if the new rules had always been applied.
All other right-of-use assets will be measured at the amount of the lease liability on adoption (adjusted for any
prepaid or accrued lease expenses).
At this stage the Group has substantially completed its assessment of impact of the new standard, which will
result in recognition of Right-of-use asset of $4.1 million and liability of $4.6 million on 1 July 2019 and $0.5 million
in accumulated losses.
The impact of the new standard for 2019 year if the new standard was applied from 1 July 2018 is as follows:
Decrease of Rent expense by $2.8 million, Increase of deprecation by $2.5 million and increase of interest by $0.2
million.
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
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NOTES ON THE FINANCIAL STATEMENTS
1.
Summary of Significant Accounting Policies (Continued)
(bb)
New and amended standards adopted by the Group
A number of new or amended standards became applicable for the current reporting period and the group had
to change its accounting policies and make retrospective adjustments as a result of adopting the following
standards:
• AASB 9 Financial Instruments, and
• AASB 15 Revenue from Contracts with Customers.
The impact of the adoption of these standards and the new accounting policies are disclosed in note 2 below. The
other standards did not have any impact on the group’s accounting policies and did not require retrospective
adjustments. The effect of adoption of these standards are disclosed in note 2.
Early adoption of standards
The Group has not elected to apply any pronouncements before their operative date.
2.
Changes in Accounting Policies
2 (a).
AASB 9 Financial instruments
AASB 9 replaces the provisions of AASB 139 that relate to the recognition, classification and measurement of
financial assets and financial liabilities, derecognition of financial instruments, impairment of financial assets and
hedge accounting.
The adoption of AASB 9 Financial Instruments from 1 July 2018 resulted in changes in accounting policies and
adjustments to the amounts recognised in the financial statements as detailed below.
(i) Impairment of financial assets
The group has two types of financial assets that are subject to AASB 9’s new expected credit loss model:
• Trade receivables; and
• Contract assets.
The group was required to revise its impairment methodology under AASB 9 for each of these classes of assets.
While cash and cash equivalents are also subject to the impairment requirements of AASB 9, there was no
material impairment loss identified.
The impact of the change in impairment methodology on the group’s retained earnings and equity is disclosed
below.
Impairment of Trade receivables and Contract assets
The Group applies simplified impairment approach using a provision matrix for all trade receivables and contract
assets to recognise lifetime expected credit losses. In this credit loss matrix all customers are segregated into
different risk classes mainly based on their country of origin and days past due. Determining credit losses
allowance involves significant judgement, where the Group considers historical experience with credit losses in a
particular country, success of recovery as well as current and historical data on overdue receivables.
Receivables balances are written off either partially or in full where the Group estimates the likelihood of recovery
to be remote.
In accordance with the transitional provisions in AASB 9 (7.2.15) and (7.2.26), comparative figures have not been
restated. The adjustments arising from the new impairment rules are therefore recognised in the opening
accumulated losses on 1 July 2018.
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NOTES ON THE FINANCIAL STATEMENTS
2. Changes in Accounting Policies (Continued)
2 (a).
AASB 9 Financial instruments (continued)
On that basis, the loss allowance as at 1 July 2018 was determined as follows for both trade receivables and
contract assets:
1 July 2018
Expected loss rate
Gross carrying amount - trade receivables
Gross carrying amount – contract assets
Loss Allowance
Current
1 - 30 days
past due
0.37%
12,484
3,065
57
0.44%
3,623
-
16
30 - 90
days past
due
More than
90 days
past due
1.26%
2,416
-
31
30.84%
3,596
-
1,109
TOTAL
22,119
3,065
1,213
The loss allowances for trade receivables and contract assets as at 30 June 2018 reconcile to the opening loss
allowances on 1 July 2018 as follows:
At 30 June 2018 – calculated under AASB 139
Amounts restated through opening accumulated losses
Opening loss allowance as at 1 July 2018 – calculated under AASB 9
Contract assets
$'000
Trade
Receivables
$'000
-
21
21
717
475
1,192
As a result trade receivables and contract assets and opened accumulated losses are lower by $496,000, which
resulted from the application of the expected credit loss model, based on historical collection results mainly from
the Advisory Division.
3.
Operating Segments
Operating segments are reported in a manner consistent with the internal reporting provided to the CEO in order
to make decisions about resource allocations and to assess performance of the Group. The reports are split into
functional divisions: Software Division, Advisory Division and GeoGAS.
Software Division provides all of the Group’s Software offerings, including support (maintenance), training and
implementation services to mining companies.
Advisory Division provides consulting and advisory services which cover technical and economic analysis and
assessment of mining activities and resources on behalf of mining companies, financial institutions, customers
of mining companies (e.g. coal fired electricity generators), lessors and potential lessors of mineral rights to
mining companies, government departments and agencies and suppliers to mining companies and projects.
GeoGAS provides services to coal mining clients in respect of gas content testing and relevant consulting
services.
Segment revenue, expenses and results include transfers between segments. Such transfers are priced on an
“arms-length” basis and are eliminated on consolidation.
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
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NOTES ON THE FINANCIAL STATEMENTS
3.
Operating Segments (Continued)
(a) Information about reportable segments
2019
2018
Software
Division
Advisory
Division
GeoGAS
Total
Software
Division
Advisory
Division
GeoGAS
Total
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
48,826
25,899
4,683
79,408
44,671
23,885
4,613
73,169
523
292
319
1,134
734
156
83
973
49,349
26,191
5,002
80,542
45,405
24,041
4,696
74,142
(231)
(843)
(60)
(1,134)
(156)
(817)
-
(973)
(2,055)
(4,659)
(175)
(6,889)
(2,956)
(3,062)
(118)
(6,136)
47,063
20,689
4,767
72,519
42,293
20,162
4,578
67,033
(24,717)
(17,689)
(2,318)
(44,724)
(20,936)
(17,245)
(2,475)
(40,656)
Revenue
External Sales
Inter-segment sales
Total Revenue
Inter-segment expenses
Rechargeable expenses
Net revenue
Total Expenses
Software Development
(13,662)
-
-
(13,662)
(14,011)
-
-
(14,011)
Segment profit/(loss)
8,684
3,000
2,449
14,133
7,346
2,917
2,103
12,366
(b) Disaggregation of revenue from contracts with customers
2019
2018
Software
Division
Advisory
Division
GeoGAS
Total
Software
Division
Advisory
Division
GeoGAS
Total
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
49,349
26,191
5,002
80,542
45,405
24,041
4,696
74,142
-
-
(36)
(36)
(523)
(292)
(319)
(1,134)
(12)
(734)
-
(156)
(10)
(83)
(22)
(973)
Revenue
Segment Revenue
Leases and asset disposal
Inter-segment revenue
Revenue from external customers
48,826
25,899
4,647
79,372
44,659
23,885
4,603
73,147
Timing of revenue recognition
At a point in time
Over time
12,061
-
36,765
25,899
3,320
1,327
15,381
13,605
-
63,991
31,054
23,885
3,271
1,332
16,876
56,271
Revenue from external customers
48,826
25,899
4,647
79,372
44,659
23,885
4,603
73,147
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
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NOTES ON THE FINANCIAL STATEMENTS
3.
Operating Segments (Continued)
(c) Geographical Information
Segment revenue is based on the geographical location of customers and segment assets are based on the
geographical location of the assets.
2019
2018
Revenues
$’000
Non-current
assets1
$’000
Revenues
$’000
Non-current
assets1
$’000
27,480
13,531
22,259
16,138
79,408
685
80,093
35,543
172
309
92
36,116
-
-
27,976
13,208
20,041
11,944
73,169
535
73,704
38,775
189
196
90
39,250
-
-
Australia
Asia
Americas
Africa & Europe
Operating Segment
Unallocated Revenue
Total Revenue
1 Excludes financial instruments and deferred tax assets
(d) Reconciliation of segment profit to reported net profit:
Segment result
Adjustments:
Foreign exchange gains/(losses)
Employment benefits – corporate and IT
Other unallocated costs – corporate and IT
Depreciation and amortisation
Professional services – Russian Litigation
Net finance costs
Unallocated income
Profit/(Loss) before income tax
Income tax benefit
Net Profit/(Loss)
2019
$'000
2018
$'000
14,133
12,366
550
(5,084)
(3,856)
(4,020)
(185)
73
134
1,745
(7,598)
(5,853)
267
(4,941)
(3,588)
(3,398)
(273)
(74)
265
624
(380)
244
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NOTES ON THE FINANCIAL STATEMENTS
4.
Income Tax Expense
Tax Recognised in profit or loss
Income tax benefit/(expense)
Current tax
Deferred tax
Adjustments to prior periods
Income tax expense
Numerical reconciliation of income tax expense to prima facie tax
Profit/(Loss) before income tax
Tax at the Australian tax rate of 30% (2018: 30%)
Tax effect of amounts which are not taxable/(deductible)
in calculating taxable income:
Non-deductible expense/non-assessable income
Research and development deduction
Unutilised foreign tax credits
Derecognised deferred tax assets
Unrecognised deferred tax assets
Difference in overseas tax rates
Foreign Exchange movements
Over/(under) provision in prior years
Income tax benefit / (expense)
2019
$'000
2018
$'000
(977)
(6,375)
(246)
(7,598)
1,745
(524)
(373)
-
(4)
(2,329)
(4,344)
(7,574)
230
(17)
(237)
(7,598)
(221)
71
(230)
(380)
624
(187)
(488)
510
(8)
-
(163)
(336)
189
(3)
(230)
(380)
RPMGlobal Holdings Limited and its wholly-owned Australian controlled entities implemented the tax
consolidation regime. Under the tax consolidation legislation, the entities in the tax consolidated Group entered
into a tax sharing agreement which, in the opinion of the Directors, limits the joint and several liabilities of the
wholly-owned entities in the case of a default by the head entity, RPMGlobal Holdings Limited. The entities have
also entered into a tax funding agreement under which the wholly-owned entities fully compensate RPMGlobal
Holdings Limited for any current tax payable assumed and are compensated for any current tax receivable and
deferred tax assets relating to unused tax losses or unused tax credits that are transferred to RPMGlobal Holdings
Limited under the tax consolidated legislation. The funding amounts are determined by reference to the amounts
recognised in the wholly-owned entities’ financial statements.
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NOTES ON THE FINANCIAL STATEMENTS
Deferred Tax Assets and Liabilities
5.
Deferred tax assets and liabilities are attributable to the following:
Provision for impairment of receivables
Employee benefits provision
Lease incentive liabilities
Tax loss
Contract liability
Accrued expenses
Share capital raising costs
Intangibles
Contract asset
Property, plant and equipment
Prepayments
Unrealised foreign exchange
Other deferred tax liabilities
Deferred tax assets
Deferred tax liabilities
Net Deferred tax assets
Movements
Balance at 1 July
Recognised in profit or loss
Recognised in other comprehensive income
Recognised in equity
Over/(under) provision in prior years
Balance at 30 June
Unrecognised deferred tax assets
Foreign tax credits
Tax losses
Capital losses
Deductible temporary differences
Unrecognised deferred tax assets
Unrecognised gross temporary differences
2019
$'000
2018
$'000
254
135
2,089
2,411
235
335
2,335
4,664
937
41
115
(2,051)
(4)
(28)
(435)
(757)
(2)
2,729
-
2,729
9,129
(6,375)
18
-
(43)
2,729
1,172
34
162
1,102
(76)
(27)
(274)
(481)
(28)
9,145
(16)
9,129
9,165
71
2
-
(109)
9,129
691
660
13,451
6,705
493
493
4,117
3,621
18,752
65,337
11,479
40,567
The group has not recognised deferred tax assets for a portion of tax losses in the parent entity and its subsidiaries
located in China, Russia, Chile, Brazil, and USA because it is not probable that sufficient future taxable profit will be
available. Capital losses do not expire, however, it is not probable that the Group would generate capital gains to utilise
the benefit. Deductible temporary differences in subsidiaries located in China, Russia, Chile, Brazil, Kazakhstan, Turkey
and USA have not been recognised because it is not probable that sufficient future taxable profit will be available.
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
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NOTES ON THE FINANCIAL STATEMENTS
5.
Deferred Tax Assets and Liabilities (Continued)
Significant Estimates – Deferred Tax Assets
The recognition of the deferred tax asset of $2,729,000 is dependent on future taxable profits in excess of the
profits arising from the reversal of existing taxable temporary differences. Included in this value are tax losses
of $2,335,000 that relate to the Australian tax consolidated group which has incurred a tax loss in the 2019
financial year. The Group has completed an assessment of the recoverability of the net deferred tax assets. As
at 30 June 2019 the Group is forecasting that the tax losses recognised in the deferred tax assets will be utilised
within three years from balance date. At each reporting period, the recoverability of the net deferred tax assets
will be reassessed. This may lead to the recognition of this unrecognized tax benefit in future reporting periods
or the derecognition of deferred tax assets that are currently recognised on the consolidated statement of
financial position.
6.
Cash and Cash Equivalents
Cash at bank
Short-term bank deposits
7.
Trade and Other Receivables
Current
Trade receivables
Loss allowance
Other receivables
Non-current
Other receivables and deposits
8.
Contract assets
Work in progress
Loss allowance
Contract assets
9.
Other Assets
Inventory
Asset recognised from costs incurred to fulfil a contract
Prepayments
2019
$'000
14,798
13,409
28,207
22,670
(1,885)
20,785
-
20,785
196
196
3,343
(281)
3,062
214
581
1,619
2,414
2018
$'000
11,953
11,366
23,319
22,096
(717)
21,379
9
21,388
233
233
3,065
-
3,065
68
-
1,213
1,281
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
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NOTES ON THE FINANCIAL STATEMENTS
9.
Other Assets (Continued)
Asset recognised from costs incurred to fulfil a contract
In adopting AASB 15, the group recognised an asset in relation to sales commissions and 3rd party royalty costs.
These costs had been expensed as incurred in 2018. The asset is amortised on a straight-line basis over the term
of the specific subscription contract it relates to, consistent with the pattern of recognition of the associated
revenue.
10.
Property, Plant and Equipment
Plant and equipment - at cost
Less: accumulated depreciation
Balance at 1 July
Exchange differences
Additions
Disposals
Depreciation
Balance at 30 June
Intangible Assets
Software developed and acquired for sale and licensing – at cost
Less: accumulated amortisation
Software internal management systems – at cost
Less: accumulated amortisation
Customer contracts and relationships – at cost
Less: accumulated amortisation
Goodwill – at cost
Less: impairment losses
2019
$'000
8,339
(6,664)
1,675
2018
$'000
7,633
(5,757)
1,876
1,876
2,096
15
670
(9)
(877)
1,675
17,546
(10,129)
7,417
4,958
(4,820)
138
333
(176)
157
37,006
(10,473)
26,533
34,245
7
512
-
(739)
1,876
17,400
(7,123)
10,277
4,805
(4,699)
106
333
(109)
224
36,897
(10,364)
26,533
37,140
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NOTES ON THE FINANCIAL STATEMENTS
11.
Intangible Assets (Continued)
Customer
relationships
$'000
Software For
Sales to
Customers 1
$'000
Software For
Internal Use
Goodwill
$'000
$'000
Total
$'000
224
-
-
(67)
157
206
-
76
(58)
224
10,277
146
-
(3,006)
7,417
7,058
983
4,733
(2,497)
10,277
106
105
(3)
(70)
138
188
22
-
(104)
106
26,533
37,140
-
-
-
26,533
26,533
-
-
-
26,533
251
(3)
(3,143)
34,245
33,985
1,005
4,809
(2,659)
37,140
Balance at 1 July 2018
Additions
Exchange differences
Amortisation
Balance at 30 June 2019
Balance at 1 July 2017
Additions
Acquisition of subsidiaries
Amortisation
Balance at 30 June 2018
1 Software also includes capitalised development costs.
(a)
Impairment Tests for Goodwill
Goodwill is allocated to the Group's cash generating units (CGUs) according to business unit. A segment level
summary of the goodwill is presented below.
Software Division
GeoGAS
2019
$'000
21,612
4,921
26,533
2018
$'000
21,612
4,921
26,533
(b)
Key assumptions used for value-in-use calculations
In the current and prior years the recoverable amount of the CGUs has been determined by value-in-use
calculations. These calculations were based on the following key assumptions:
Margin1
Growth Rate2
Discount Rate3
Software Division
GeoGAS
2019
47%
48%
2018
53%
50%
2019
2.5%
1.5%
2018
2.5%
1.5%
2019
12.0%
12.0%
2018
12.0%
12.0%
1 Budgeted gross margin
2 Weighted average growth rate used to extrapolate cash flows beyond the budget period
3 In performing the value-in-use calculations for each CGU, the group has applied post-tax discount rates to discount the
forecast future attributable post-tax cash flows. The equivalent pre-tax discount rates are disclosed above
These assumptions have been used for the analysis of each CGU. Cash flows were projected based on financial
budgets and management projections over a five year period. Management determined budgeted gross margin
based on past performance and its expectations for the future. The weighted average growth rates used are
consistent with forecasts included in industry reports. The discount rates used reflect specific risks relating to the
relevant segments.
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
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NOTES ON THE FINANCIAL STATEMENTS
11.
(c)
Intangible Assets (Continued)
Impact of possible changes in key assumptions
20% changes to any of the key assumptions do not indicate impairment for GeoGAS and Software Goodwill.
12. Trade and Other Payables
Current
Trade payables
Other payables and accruals
Provisions
13.
Current
Onerous sublease contracts
Make good obligations
Russian Litigation
Employee benefits
Non-current
Make good obligations
Onerous sublease contracts
Employee benefits
2019
$'000
2018
$'000
3,132
4,732
7,864
93
206
-
4,244
4,543
279
-
1,012
1,291
2,374
5,147
7,521
300
-
273
4,077
4,650
375
93
948
1,416
The group also operates defined contribution plans in Australia, Canada and USA which receive fixed
contributions from group companies. The group’s legal or constructive obligation for these plans is limited to the
contributions. The expense recognised in the current period in relation to these contributions was $3,022,000
(2018: $2,872,000).
14.
Other Liabilities
Current
Contract liabilities - software maintenance and licences
Contract liabilities - consulting and other
Contingent consideration – at fair value
Property lease incentives and straightlining
Non-current
Contingent consideration – at fair value
Property lease incentives and straightlining
12,343
4,709
2,425
157
19,634
-
142
142
10,669
2,878
2,744
195
16,486
2,082
176
2,258
Contract liabilities consist of unearned income for software maintenance, subscriptions, licences and consulting
and advisory services. These have increased in line with revenue growth compared to 2018.
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
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NOTES ON THE FINANCIAL STATEMENTS
14.
Other liabilities (Continued)
From the opening contract liability balances of $13,547,000 the group has recognised $12,794,000 in the
current reporting period. The group expects to recognise approximately all contract liabilities in its 2020
revenues.
15.
Contributed Equity
Share capital
2019
Number
2018
Number
2019
$'000
2018
$'000
Ordinary shares
- fully paid
216,369,197
215,925,031
87,936
87,708
Ordinary Shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in
proportion to the number of and amounts paid on the shares held. On a showing of hands every holder of
ordinary shares present at a meeting, in person or by proxy, is entitled to one vote and upon a poll each share is
entitled to one vote. Ordinary shares have no par value and the Company does not have a limited amount of
authorised capital.
Options
Information relating to the RPMGlobal Holdings Limited Employee Share Option Plan (ESOP), including details of
options issued, exercised and lapsed during the financial year and options outstanding at the end of financial year,
is set out in note 23.
Capital Risk Management
The Group’s objectives when managing capital include safeguarding the ability to continue as a going concern, so
they continue to provide returns for shareholders and benefits for other stakeholders and to 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 or sell assets to reduce debt. The Group does not
have any externally imposed capital requirements.
Consistent with the industry practice, the Group monitors capital on the basis of the gearing ratio. This ratio is
calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including ‘borrowings’
and ‘trade and other payables’ as shown in the consolidated statement of financial position) less cash and cash
equivalents. Total capital is calculated as ‘equity’ as shown in the statement of financial position plus net debt.
As the Group does not have any debt, the gearing ratios at 30 June 2019 and 30 June 2018 were not applicable:
Total borrowings, trade and other payables
Less: cash and cash equivalents
Net (cash) / debt
Total equity
Total capital
Notes
6
2019
$'000
2018
$'000
10,289
(28,207)
(17,918)
59,677
41,759
12,347
(23,319)
(10,972)
65,299
54,327
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
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NOTES ON THE FINANCIAL STATEMENTS
15.
Contributed Equity (Continued)
Movements in Share Capital:
Date
30/06/2017
Buyback of shares
Exercise of Options at $0.59 per share
Costs of issue
Exercise of Options at $0.56 per share
Costs of issue
Exercise of Options at $0.39 per share
Costs of issue
Shares issued for acquisition of Minvu
Costs of issue
30/06/2018
Balance
Exercise of Options at $0.49 per share
Costs of issue
Exercise of Options at $0.56 per share
Costs of issue
Exercise of Options at $0.59 per share
Costs of issue
Exercise of Options at $0.56 per share
Costs of issue
Exercise of Options at $0.54 per share
Costs of issue
Exercise of Options at $0.54 per share
Costs of issue
Exercise of Options at $0.58 per share
Costs of issue
Ordinary shares
Number
$’000
212,368,012
(14,811)
293,498
178,332
100,000
3,000,000
215,925,031
66,666
20,000
25,000
40,834
166,666
100,000
25,000
85,175
(9)
173
(5)
100
(4)
39
(2)
2,250
(9)
87,708
33
(2)
11
(2)
15
(2)
24
(2)
90
(2)
54
(2)
14
(1)
30/06/2019 Balance
216,369,197
87,936
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
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NOTES ON THE FINANCIAL STATEMENTS
16.
Reserves
Share-based payments (i)
Foreign currency translation (ii)
Financial assets revaluation reserve (iii)
Revaluation surplus
Reserve arising from an equity transaction (iv)
Nature and Purpose of Reserves
(i)
Share-based payments
2019
$'000
2018
$'000
4,352
(3,004)
(1,601)
18
(1,553)
(1,788)
3,647
(2,796)
(1,601)
18
(1,552)
(2,284)
The fair value of options issued to employees is recognised as an employment cost during the option vesting
period with corresponding increase in equity recognised in this reserve.
(ii)
Foreign currency translation
Exchange differences arising on translation of the foreign controlled entities are taken to the foreign currency
translation reserve, as described in accounting policy note 1(e).
(iii) Financial assets revaluation reserve
Changes in the fair value of investments are recognised in equity securities in other comprehensive income. These
changes are accumulated in a separate reserve within equity. The entity has a policy on transferring amounts
from this reserve to an asset realization reserve.
(iv) Reserve arising from an equity transaction
Arose from the acquisition of an additional interest in the controlled entity, RPMGlobal Africa (Pty) Ltd.
Movement in Reserves
Balance at 1 July
Options expensed
Foreign currency translation
Balance at 30 June
Share-based payments
2019
$'000
2018
$'000
3,647
705
-
4,352
2,770
877
-
3,647
Foreign Currency
Translation
2019
$'000
(2,796)
-
(208)
(3,004)
2018
$'000
(2,630)
-
(166)
(2,796)
There were no other movements in reserves in 2019 and 2018.
17.
Dividends
Fully paid ordinary shares
Cents per share
Total
2019
Cents
2018
Cents
2019
$'000
2018
$'000
-
-
-
-
No dividend was declared in respect of the current financial year. Parent’s franking account balance is nil (2018:
nil).
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
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NOTES ON THE FINANCIAL STATEMENTS
18.
Remuneration of Auditors
During the year the following fees were paid or payable for services provided by the auditors of the Group, its
related entities, its network forms and unrelated firms.
Audit services - Audit and review of the financial reports:
2019
2018
Auditor of the parent entity:
BDO Audit Pty Ltd
Auditors of subsidiaries:
BDO South Africa (network firm)
BDO Hong Kong (network firm)
BDO Indonesia (network firm)
$
$
179,830
184,448
37,462
23,113
25,630
40,249
19,693
13,310
266,035
257,700
During the year the Company related to the Auditor of the parent entity BDO (QLD) Pty Ltd provided the following
services and received the following fees:
Preparation of Income tax return and other taxation services
9,100
8,117
19.
(a)
Commitments
Non-cancellable Operating Leases
The Group leases various offices under non-cancellable operating leases expiring within one to seven years. The
leases have varying terms, escalation clauses and renewal rights. On renewal the terms of the lease are generally
renegotiated. Excess office space is sub-let to third parties also under non-cancellable operating leases.
Commitments for minimum lease payments in relation to non-cancellable operating leases are payable:
Within one year
Later than one year but not later than 5 years
Later than 5 years
Commitments not recognised in the financial statements
Rental expense relating to operating leases
Minimum lease payments
(b)
Sublease payments
2019
$'000
2018
$'000
(2,640)
(2,817)
-
(5,457)
(2,356)
(3,138)
-
(5,494)
3,178
3,219
Future minimum lease payments to be received in relation to non-cancellable sub-leases of operating leases:
Within one year
Later than one year but not later than 5 years
Commitments not recognised in the financial statements
40
-
40
118
40
158
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
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NOTES ON THE FINANCIAL STATEMENTS
19.
(c)
Commitments (Continued)
Software Subscription payments
The Group sold its software under non-cancellable software subscription agreements expiring within one to
five years. The agreements have varying terms and renewal rights. On renewal the terms of the subscriptions
lease are generally renegotiated.
Future minimum payments to be received in relation to non-cancellable software subscriptions:
2019
$'000
2018
$'000
Within one year
Later than one year but not later than 5 years
Commitments not recognised in the financial statements
3,235
5,650
8,885
20.
Reconciliation of Net Profit to Net Cash Inflow / (outflow) from Operating Activities
Net profit/(loss)
Depreciation and amortisation
Net (gain)/ loss on sale of property, plant and equipment
Impairments and fair value movements
Net exchange differences
Employee share options
Change in operating assets and liabilities
Decrease / (increase) in trade and other receivables
Decrease / (increase) in current tax asset
Decrease / (increase) in deferred tax asset
Decrease / (increase) in contract asset
Decrease / (increase) in other assets
Increase / (decrease) in trade and other payables
Increase / (decrease) in other liabilities
Increase / (decrease) in current tax liabilities
Increase / (decrease) in deferred tax liability
Increase / (decrease) in provisions
Net cash inflow / (outflow) from operating activities
Non-cash Investing and Financing Activities
(5,853)
4,020
(31)
(195)
(910)
704
425
120
6,416
(424)
(987)
343
3,710
241
(16)
(232)
7,331
359
687
1,046
244
3,398
-
(314)
118
877
3,775
(31)
50
(1,349)
394
(907)
432
(407)
(14)
767
7,033
Options issued to employees under for no cash consideration are shown in note 23.
21.
Financial Risk Management
The Group has exposure to the following risks from its use of financial instruments:
•
•
•
credit risk;
liquidity risk; and
market risk.
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
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NOTES ON THE FINANCIAL STATEMENTS
21.
Financial Risk Management (Continued)
This note presents information about the Group’s exposure to each of the above risks, the objectives, policies
and processes for measuring and managing risk.
The Board of Directors is ultimately responsible for reviewing, ratifying and monitoring systems of internal
controls and risk management. The Board has established an Audit and Risk Committee, which is responsible for
overseeing risk management systems. The Group’s overall risk management program focuses on the
unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance
of the Group. The Group’s finance division is responsible for development and maintenance of policies which
deal with each type of risk related to use of financial instruments.
The Group holds the following financial instruments:
Financial assets
Cash and cash equivalents
Trade and other receivables 1
Financial liabilities
Trade and other payables 1
Contingent consideration 2
1 At amortised cost
2 At fair value
(a)
Credit Risk
2019
$'000
2018
$'000
28,207
20,785
48,992
7,864
2,425
10,289
23,319
21,388
44,707
7,521
4,826
12,347
Credit risk is the risk of financial loss to the Group if a customer or a counter party to a financial instrument fails
to meet its contractual obligations and arises principally from the Group’s cash and cash equivalents and its
receivables from customers.
The Group does not require guarantees or collateral of its trade and other receivables. In some foreign regions
the Group works on a prepayment basis to avoid credit risk.
The Group has established an allowance for impairment that represents an estimate of incurred losses in respect
of trade receivables. This allowance is determined based on the specific information regarding conditions of a
particular individual debt. The information regarding the receivables ageing is monitored by both finance and
operations management.
The maximum credit risk exposure of financial assets of the Group is represented by the carrying amounts of
financial assets set out above. The Group had no significant concentrations of credit risk with any single
counterparty or group of counterparties, other than banks or financial institutions. The Group holds its cash with
AA and A-rated banks, except for the banks located in Brazil (B), Kazakhstan (B), Mongolia (B), Turkey (BB) and
South Africa (BB).
The group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime
expected loss allowance for all trade receivables and contract assets (work in progress).
To measure the expected credit losses, trade receivables and contract assets have been grouped based on shared
credit risk characteristics and the days past due. The contract assets relate to unbilled work in progress and have
substantially the same risk characteristics as the trade receivables for the same types of contracts.
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
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NOTES ON THE FINANCIAL STATEMENTS
21.
(a)
Financial Risk Management (Continued)
Credit Risk (Continued)
The group has therefore concluded that the expected loss rates for trade receivables are a reasonable
approximation of the loss rates for the contract assets.
The expected loss rates are based on the payment profiles of sales over a period of 60 months before 30 June
2019 and 1 July 2018 and the corresponding historical credit losses experienced within this period. The historical
loss rates are adjusted to reflect current and forward looking information on macroeconomic factors affecting
the ability of the customers to settle the receivables.
On that basis the loss allowance as at 30 June 2019 and 1 July 2018 on adoption of AASB9 (Note 2a) was
determined as follows:
30 June 2019
Current
1 - 30 days
past due
30 - 90
days past
due
Expected loss rate
Gross carrying amount - trade receivables
Gross carrying amount – contract asset
Loss Allowance
2.25%
10,627
3,343
315
0.47%
4,749
0.78%
2,387
- -
19
22
More than
90 days
past due
36.88%
4,907
-
1,810
TOTAL
22,670
3,343
2,166
1 July 2018
Expected loss rate
Gross carrying amount - trade receivables
Gross carrying amount – contract asset
Loss Allowance
Current
1 - 30 days
past due
0.37%
12,484
3,065
57
0.44%
3,623
-
16
30 - 90
days past
due
1.26%
2,416
-
31
More than
90 days
past due
30.84%
3,596
-
1,109
TOTAL
22,119
3,065
1,213
The closing loss allowances for trade receivables and contract assets as at 30 June 2019 reconcile to the opening
loss allowances as follows:
30 June - Calculated under AASB 139
Amounts restated through opening accumulated losses
Opening loss allowance as at 1 July 2018 - Calculated under AASB 9
Increase in loss allowance recognised in profit or loss during the period
Effects of foreign exchange
Unearned income moved to provision
Unused amount reversed
At 30 June 2019
2019
$'000
2018
$'000
717
496
1,213
889
(23)
147
(60)
2,166
1,014
-
1,014
149
13
-
(459)
717
Of the above impairment losses, $889,000 (2018 - $149,000) relate to receivables arising from contracts with
customers.
(b)
Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The
Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity
to meet its liabilities when due without incurring unacceptable losses or risking damage to the Group’s reputation.
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
|57
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
21.
(b)
Financial Risk Management (Continued)
Liquidity Risk (Continued)
The Group regularly reviews cashflow forecasts and maintains sufficient cash on demand.
Contractual maturities of the Group’s financial liabilities, including interest thereon, are as follows:
2019
Carrying
amount
Contractual
cash flows
6 mths or
less
6-12 mths
1-2 years
2-5 years
$'000
$'000
$'000
$'000
$'000
$'000
Trade and other payables
Contingent consideration
7,864
2,425
7,864
2,454
Total
2018
10,289
10,318
Trade and other payables
Contingent consideration
7,521
4,826
7,521
4,947
Total
12,347
12,468
7,864
1,758
9,622
7,521
2,088
9,609
-
696
696
-
671
671
-
-
-
-
2,188
2,188
-
-
-
-
-
-
More
than 5
years
$'000
-
-
-
-
-
-
(c) Market Risk
Currency Risk
The current policy is not to take any forward positions. At 30 June 2019 and 30 June 2018 the Group had not
entered into any derivative contracts to hedge these exposures. The Group does not engage in any significant
transactions which are speculative in nature.
As a multinational corporation, the Group maintains operations in foreign countries and as a result of these
activities, the Group is exposed to changes in exchange rates which affect its results of operations and cash flows.
The Group’s exposure to foreign currency risk at reporting date expressed in Australian Dollars was as follows:
2019
Cash and deposits
Trade and other receivables
Trade and other payables
Net exposure
2018
Cash and deposits
Trade and other receivables
Trade and other payables
Net exposure
USD
$’000
CAD
$’000
ZAR
$’000
Other
$’000
Total
$’000
8,359
9,720
(1,186)
16,893
8,105
10,472
(570)
18,007
1,818
561
(226)
2,153
1,491
481
(64)
1,908
5,857
3,519
(543)
8,833
3,769
1,709
(511)
4,967
2,812
1,130
(429)
3,513
2,041
1,557
(560)
3,038
18,846
14,930
(2,384)
31,392
15,406
14,219
(1,705)
27,920
A 10 percent strengthening of the Australian dollar against the above currencies at 30 June 2019 based on assets
and liabilities at 30 June 2019 would have increased/(decreased) equity and profit or loss by the amounts shown
in the table on the next page. This analysis assumes that all other variables, in particular interest rates, remain
constant. The analysis is performed on the same basis for 2018.
The Group manages its exposure to interest rate and foreign currency fluctuations through a policy approved by
the Board of Directors. There are no other significant market risks affecting the Group.
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
|58
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
21.
(c)
Financial Risk Management (Continued)
Market Risk (Continued)
2019
2018
Equity
$'000
Profit/(Loss)
$'000
Equity
$'000
Profit/(Loss)
$'000
(2,260)
(665)
(2,002)
(774)
A 10 percent weakening of the Australian dollar against the above currencies at 30 June 2019 would have had
equal but opposite effect on the above currencies to the amounts shown above.
Interest rate risk
Details of the Group’s borrowing facilities are presented below.
Borrowing
facilities
Other facilities
Bank guarantee
Bank guarantee
Bank guarantee
Currency
Nominal
interest
rate
2019
2018
Maturity
Facility
$’000
Utilised
$’000
Facility
$’000
Utilised
$’000
AUD
AUD
EUR
1.95%
1.30%
2.50%
n/a
n/a
n/a
1,050
1,038
45
67
45
67
1,000
145
70
870
145
70
In both 2019 and 2018 financial years bank guarantees were secured by the Group’s term deposits.
(d)
Fair Value of financial instruments
Fair value hierarchy
AASB 13 Fair Value Measurement requires disclosure of fair value measurements by level in the fair value
measurement hierarchy as follows:
- Level 1 - the instrument has quoted prices (unadjusted) in active markets for identical assets or liabilities
- Level 2 - a valuation technique is used using inputs other than quoted prices within level 1 that are
observable for the financial instrument, either directly (i.e. as prices), or indirectly (i.e. derived from prices)
- Level 3 - a valuation technique is used using inputs that are not observable based on observable market
data (unobservable inputs).
Recurring fair value measurements
The following financial instruments are subject to recurring fair value measurements:
Contingent consideration – level 3
2019
$'000
2018
$'000
2,425
4,826
Contingent consideration has been recognised on the acquisition of the MinVu Group and the acquisition of
iSolutions in the prior year. The fair value of the contingent consideration of $2,425,000 has been estimated by
calculating the present value of the future expected cash outflows for the annuity of $2,453,000 based on a
discount rate of 4%. Should the businesses exceed the forecast results the liability may increase.
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
|59
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
21.
(d)
Financial Risk Management (Continued)
Fair Value of financial instruments (Continued)
Changes to discount rate by 100 basis points would result in a change of the contingent consideration by $7,000.
Changes to the annuity revenue by 10% would result in change of the contingent consideration by $311,000.
Reconciliation of level 3 movements
The following table sets out the movements in level 3 fair values for contingent consideration payable.
Opening balance 1 July
Recognised on business combination
Payments of contingent consideration
Purchase price adjustments
Fair value adjustments
Closing balance 30 June
Valuation processes for level 3 fair values
2019
$'000
2018
$'000
4,826
-
(2,644)
(29)
272
2,425
5,481
1,293
(2,262)
-
314
4,826
Valuations are performed every six months to ensure that they are current for the half-year and annual financial
statements.
22.
Earnings Per Share
Basic earnings per share
Diluted earnings per share
Earnings used in Calculating Earnings Per Share
Profit / (loss) attributable to the ordinary equity holders used in calculating
earnings per share
Weighted average number of ordinary shares used as the
denominator in calculating basic earnings per share
Dilutive options
Weighted average number of ordinary shares used as the
denominator in calculating diluted earnings per share
2019
Cents
(2.7)
(2.7)
2019
$’000
2018
Cents
0.11
0.11
2018
$’000
(5,853)
244
216,174,318
214,012,921
-
2,625,709
216,174,318
216,638,630
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
|60
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
23.
Share Based Payments
Tax Exempt Share Plan
The Employee Share Scheme enables the Board to issue up to $1,000 of shares tax free per employee of the
Group each year. There were no shares issued under the $1,000 Share Purchase Plan in 2019 or 2018.
Eligibility for the tax exempt share plan is approved by the board having regard to individual circumstances and
performance. No directors or key management personnel are eligible for the Tax Exempt Share Plan.
Employee Share Option Plan (ESOP)
The Employee Share Option Plan (ESOP) was approved by the Board of Directors on 5 February 2008, amended
on 7 October 2009, 28 October 2011, 29 October 2013 and most recently on 24 November 2016 following
approval of shareholders at the Company’s 2016 Annual General Meeting.
Eligible participants of the ESOP include any person who is employed by, or is a director, officer or executive (or
their approved permitted nominee), of the Group and whom the Board or its nominee determines is eligible to
participate in the Option Plan. A permitted nominee includes a company controlled by the employee, a trust in
which the employee has, or may have entitlements or such other entity as approved by the Board. Options are
granted at the discretion of the Board of Directors.
All options under the ESOP are to be offered to eligible employees for no consideration. The offer to the eligible
participant must be in writing and specify amongst other things, the number of options for which the eligible
employee may apply, the period within which the options may be exercised, any conditions to be satisfied before
exercise, the option expiry date and the exercise price of the options, as determined by the Board. The Board can
impose any restrictions on the exercise of options as it considers fit.
The rules of the ESOP plan enable the Board to determine the applicable vesting criteria and to set a timetable
for vesting of options in the offer document, including vesting in tranches over a defined period. The Board has
the discretion on whether or not to set performance hurdles for vesting or to link vesting solely to a defined
service period in order to drive key staff retention and reward longevity of service.
The options may be exercised, in part or full, subject to the employee continuing to be employed at the relevant
vesting dates, by the participant giving a signed notice to the Company and paying the exercise price in full. The
Company will apply for official quotation of any Shares issued on exercise of any options.
The rules of the plan allow the Board to set the exercise price per Option in the offer document.
Subject to the accelerated expiry terms set out in the ESOP plan (explained further below), options will expire five
years after the date of grant subject to the option holder remaining employed by the Group. Unexercised options
will automatically lapse upon expiry. Unless determined otherwise by the Board, in the event of stated events
detailed in the plan, including termination of employment or resignation, redundancy, death or disablement or
in the event of a change of control of an employee’s permitted nominee, unvested options shall lapse and the
expiry date of any vested options will be adjusted in accordance with the accelerated timetables set out in the
ESOP plan rules (subject to the Board’s discretion to extend the term of exercise in restricted cases).
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
|61
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
23.
Share Based Payments (Continued)
Once shares are allotted upon exercise of the options the participant will hold the shares free of restrictions. The
shares will rank equally for dividends declared on or after the date of issue but will carry no right to receive any
dividend before the date of issue. Should the Company undergo a reorganisation or reconstruction of capital or
any other such change, the terms of the options (including number or exercise price or both) will be
correspondingly changed to the extent necessary to comply with the Listing Rules. With this exception, the terms
for the exercise of each Option remains unchanged. In the event of a change of control of the Company, all options
will vest immediately and may be exercised by the employee (regardless of whether the vesting conditions have
been satisfied). A holder of options is not entitled to participate in dividends, a new or bonus issue of Shares or
other securities made by the Company to Shareholders merely because he or she holds options.
The Options are not transferable, assignable or able to be encumbered, without Board consent and the options
will immediately lapse upon any assignment, transfer or encumbrance, with the exception of certain dealings in
the event of death of the option holder.
The ESOP plan will be administered by the Board which has an absolute discretion to determine appropriate
procedures for its administration and resolve questions of fact or interpretation and formulate terms and
conditions (subject to the Listing Rules) in addition to those set out in the ESOP plan.
The ESOP plan may be terminated or suspended at any time by the Board. The ESOP plan may be amended or
modified at any time by the Board except where the amendment reduces the rights of the holders of options,
unless required by the Corporations Act or the Listing Rules, to correct any manifest error or mistake or for which
the option holder consents. The Board may waive or vary the application of the ESOP plan rules in relation to any
eligible employee at any time.
Employee Benefits expense
Share-based payment expense recognised during the financial year
Options issued under employee option plan
2019
$’000
2018
$’000
704
704
877
877
The vesting conditions attached to the options are set out in the Remuneration Report (20A) of the Directors’
Report.
Grant
Vesting
Expiry
Exercise
Number Granted
Forfeited
Exercised Share Number
date
date
date
Price
2019
Options granted to management
29/11/13 30/11/14 29/11/18
29/11/13 30/11/15 29/11/18
29/11/13 30/11/16 29/11/18
31/03/14 31/03/15 31/03/19
31/03/14 31/03/16 31/03/19
31/03/14 31/03/17 31/03/19
31/10/14 31/10/15 31/10/19
31/10/14 31/10/16 31/10/19
31/10/14 31/10/17 31/10/19
$
0.68
0.68
0.68
0.73
0.73
0.73
0.61
0.61
0.61
beginning
of year
297,658
297,670
297,672
83,333
83,333
83,334
33,332
33,334
33,334
Price
at end
$ 1
of year
-
-
-
-
-
-
-
-
-
(297,658)
-
-
(297,670)
-
-
(297,672)
-
-
(83,333)
-
-
(83,333)
-
-
(83,334)
-
-
-
-
-
-
-
-
- -
-
- -
-
- -
-
33,332
33,334
33,334
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
|62
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
23.
Share Based Payments (Continued)
Grant
Vesting
Expiry
Exercise
Number Granted
Forfeited
Exercised Share Number
date
date
date
Price
2019
Options granted to management (cont.)
$
beginning
of year
3/03/15
3/03/16
3/03/20
0.59 1,323,980
3/03/15
3/03/17
3/03/20
0.59 1,323,980
3/03/15
3/03/18
3/03/20
0.59 1,295,540
15/07/15 15/07/16 15/07/20
15/07/15 15/07/17 15/07/20
15/07/15 15/07/18 15/07/20
0.57
0.57
0.57
83,333
83,333
83,334
8/09/15
8/09/16
8/09/20
0.56 1,066,646
8/09/15
8/09/17
8/09/20
0.56 1,066,646
8/09/15
8/09/18
8/09/20
0.56 1,091,708
31/10/15 31/10/16 31/10/20
31/10/15 31/10/17 31/10/20
31/10/15 31/10/18 31/10/20
3/03/16
3/03/17
3/03/21
3/03/16
3/03/18
3/03/21
3/03/16
3/03/19
3/03/21
29/08/16 29/08/17 29/08/21
29/08/16 29/08/18 29/08/21
29/08/16 29/08/19 29/08/21
29/11/16 29/11/17 29/11/21
29/11/16 29/11/18 29/11/21
29/11/16 29/11/19 29/11/21
9/02/17
9/02/18
9/02/22
9/02/17
9/02/19
9/02/22
9/02/17
9/02/20
9/02/22
8/06/18
8/06/18
8/06/22
8/06/18
8/06/19
8/06/22
8/06/18
8/06/20
8/06/22
19/09/17 19/09/18 19/09/22
19/09/17 19/09/19 19/09/22
19/09/17 19/09/20 19/09/22
0.54
0.54
0.54
0.39
0.39
0.39
0.49
0.49
0.49
0.54
0.54
0.54
0.59
0.59
0.59
0.57
0.57
0.57
0.67
0.67
0.67
16,666
16,667
16,667
-
-
-
108,332
41,667
41,667
299,998
299,998
300,004
949,986
949,986
950,028
96,665
96,665
96,670
66,666
66,667
66,667
31/10/17 31/10/18 31/10/22
0.77 1,189,989
31/10/17 31/10/19 31/10/22
0.77 1,189,998
31/10/17 31/10/20 31/10/22
0.77 1,190,013
15/03/18 15/03/19 15/03/23
15/03/18 15/03/20 15/03/23
15/03/18 15/03/21 15/03/23
0.67
0.67
0.67
206,670
206,670
206,660
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Price
at end
$
of year
(71,665)
(8,333)
0.65 1,243,982
(71,665)
(22,665)
0.65 1,229,650
(71,670)
(16,502)
0.65 1,207,368
(50,000)
-
-
(50,000)
-
-
(50,000)
-
-
(53,331)
(21,666)
(53,331)
(21,666)
0.60
0.60
33,333
33,333
33,334
991,649
991,649
(60,004)
(20,002)
0.62 1,011,702
(16,666)
-
-
(16,667)
-
-
(16,667)
- -
-
-
-
-
-
-
-
-
- -
- -
- -
(66,666)
0.60
- -
- -
(133,333)
(133,333)
0.55
0.58
-
-
-
-
-
-
41,666
41,667
41,667
166,665
166,665
(133,334)
- -
166,670
(139,997)
- -
809,989
(139,997)
- -
809,989
(173,340)
- -
776,688
-
-
-
- -
- -
- -
96,665
96,665
96,670
(66,666)
- -
(66,667)
- -
(66,667)
- -
-
-
-
(238,331)
- -
951,658
(338,333)
- -
851,665
(338,337)
- -
851,676
(66,667)
- -
140,003
(66,667)
- -
140,003
(66,666)
- -
139,994
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
|63
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
23.
Share Based Payments (Continued)
Grant
date
Vesting
Expiry
Exercise
Number
Granted
Forfeited
Exercised Share
Number
date
date
Price
beginning
$
of year
Price
$
at end
of year
2019
Options granted to management (cont.)
13/09/18 13/09/19 13/09/23
13/09/18 13/09/20 13/09/23
13/09/18 13/09/21 13/09/23
14/12/19 14/12/18 14/12/23
14/12/20 14/12/18 14/12/23
14/12/21 14/12/18 14/12/23
15/03/19 15/03/20 15/03/24
15/03/19 15/03/21 15/03/24
15/03/19 15/03/22 15/03/24
7/06/19
7/06/22
7/06/24
7/06/19
7/06/21
7/06/24
7/06/19
7/06/22
7/06/24
0.61
0.61
0.61
0.58
0.58
0.58
0.58
0.58
0.58
0.6
0.6
0.6
-
-
-
-
-
-
-
-
-
-
-
-
1,285,036
(149,998)
- -
1,135,038
1,285,036
(149,998)
- -
1,135,038
1,285,094
(150,004)
- -
1,135,090
314,325
314,336
314,339
459,996
460,000
460,004
100,000
(16,666)
- -
(16,667)
- -
(16,667)
- -
(33,333)
- -
(33,333)
- -
(33,334)
- -
-
- -
100,000
-
- -
100,000
-
- -
297,659
297,669
297,672
426,663
426,667
426,670
100,000
100,000
100,000
TOTAL
17,333,166 6,478,166
(4,226,335)
(444,166)
0.58 19,140,831
Weighted average exercise price, $
0.63
0.60
0.66
0.54
0.61
2018
Options granted to management
29/11/13 30/11/14 29/11/18
29/11/13 30/11/15 29/11/18
29/11/13 30/11/16 29/11/18
31/03/14 31/03/15 31/03/19
31/03/14 31/03/16 31/03/19
31/03/14 31/03/17 31/03/19
31/10/14 31/10/15 31/10/19
31/10/14 31/10/16 31/10/19
31/10/14 31/10/17 31/10/19
3/03/15
3/03/16
3/03/20
3/03/15
3/03/17
3/03/20
3/03/15
3/03/18
3/03/20
15/07/15 15/07/16 15/07/20
15/07/15 15/07/17 15/07/20
15/07/15 15/07/18 15/07/20
8/09/15
8/09/16
8/09/20
8/09/15
8/09/17
8/09/20
8/09/15
8/09/18
8/09/20
31/10/15 31/10/16 31/10/20
31/10/15 31/10/17 31/10/20
0.68
0.68
0.68
0.73
0.73
0.73
0.61
0.61
0.61
0.59
0.59
0.59
0.57
0.57
0.57
0.56
0.56
0.56
0.54
0.54
305,991
306,003
306,006
83,333
83,333
83,334
33,332
33,334
33,334
1,460,645
1,460,645
1,460,710
83,333
83,333
83,334
1,206,644
1,211,644
1,211,712
16,666
16,667
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(8,333)
(8,333)
(8,334)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
297,658
297,670
297,672
83,333
83,333
83,334
33,332
33,334
33,334
(6,666)
(129,999)
(6,666)
(129,999)
(131,670)
(33,500)
0.72
0.72
0.64
1,323,980
1,323,980
1,295,540
-
-
-
-
-
-
83,333
83,333
83,334
(16,999)
(122,999)
0.68
1,066,646
(89,665)
(55,333)
0.7
1,066,646
(120,004)
-
-
-
-
-
-
1,091,708
16,666
16,667
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
|64
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
23. Share Based Payments (Continued)
Vesting
Expiry
Exercise
Number
Granted
Forfeited
Exercised Share
Number
Grant
date
2018
date
date
Price
beginning
$
of year
Price
$
at end
of year
-
-
16,667
Options granted to management (cont.)
31/10/15 31/10/18 31/10/20
3/03/16
3/03/17
3/03/21
3/03/16
3/03/18
3/03/21
3/03/16
3/03/19
3/03/21
29/08/16 29/08/17 29/08/21
29/08/16 29/08/18 29/08/21
29/08/16 29/08/19 29/08/21
29/11/16 29/11/17 29/11/21
29/11/16 29/11/18 29/11/21
29/11/16 29/11/19 29/11/21
9/02/17
9/02/18
9/02/22
9/02/17
9/02/19
9/02/22
9/02/17
9/02/20
9/02/22
8/06/17
8/06/18
8/06/22
8/06/17
8/06/19
8/06/22
8/06/17
8/06/20
8/06/22
19/09/17 19/09/18 19/09/22
19/09/17 19/09/19 19/09/22
19/09/17 19/09/20 19/09/22
31/10/17 31/10/18 31/10/22
31/10/17 31/10/19 31/10/22
31/10/17 31/10/20 31/10/22
15/03/18 15/03/19 15/03/23
15/03/18 15/03/20 15/03/23
15/03/18 15/03/21 15/03/23
0.54
0.39
0.39
0.39
0.49
0.49
0.49
0.54
0.54
0.54
0.59
0.59
0.59
0.57
0.57
0.57
0.67
0.67
0.67
0.77
0.77
0.77
0.67
0.67
0.67
16,667
100,000
100,000
100,000
108,332
108,334
108,334
399,997
399,997
400,006
999,985
999,985
1,000,030
113,331
113,331
113,338
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
191,666
191,667
191,667
1,189,989
1,189,998
1,190,013
206,670
206,670
206,660
-
-
(100,000)
(100,000)
-
(66,667)
(66,667)
(99,999)
(99,999)
(100,002)
(49,999)
(49,999)
(50,002)
(16,666)
(16,666)
(16,668)
(125,000)
(125,000)
(125,000)
-
-
-
-
-
-
(100,000)
0.72
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
TOTAL
14,745,000 4,765,000
(1,605,004)
(571,830)
Weighted average exercise price, $
1 Weighted average share price at the exercise date
0.58
0.74
0.56
0.55
-
-
-
108,332
41,667
41,667
299,998
299,998
300,004
949,986
949,986
950,028
96,665
96,665
96,670
66,666
66,667
66,667
1,189,989
1,189,998
1,190,013
206,670
206,670
206,660
17,333,166
0.63
0.70
The weighted average remaining contractual life of share options outstanding at the end of the period was 2.7
years (2018: 2.8 years).
The fair values at grant date for the options were estimated using a Trinomial Lattice model which defines the
conditions under which employees are expected to exercise their options after vesting in terms of the stock
price reaching a specified multiple of the exercise price.
The model inputs for options granted during the 2019, 2018, 2017, 2016, 2015, 2014 financial years included:
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
|65
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
23.
Share Based Payments (Continued)
Grant
date
Vesting
date
Share
price
29/11/13 30/11/14
29/11/13 30/11/15
29/11/13 30/11/16
31/03/14 31/03/15
31/03/14 31/03/16
31/03/14 31/03/17
31/10/14 31/10/15
3/03/16
3/03/15
3/03/17
3/03/15
3/03/15
3/03/18
15/07/15 15/07/16
15/07/15 15/07/17
15/07/15 15/07/18
8/09/16
8/09/15
8/09/17
8/09/15
8/09/15
8/09/18
31/10/15 31/10/16
31/10/15 31/10/17
31/10/15 31/10/18
3/03/17
3/03/16
3/03/18
3/03/16
3/03/16
3/03/19
29/08/16 29/08/17
29/08/16 29/08/18
29/08/16 29/08/19
29/11/16 29/11/17
29/11/16 29/11/18
29/11/16 29/11/19
9/02/18
9/02/17
9/02/19
9/02/17
9/02/20
9/02/17
8/06/18
8/06/17
8/06/19
8/06/17
8/06/17
8/06/20
19/09/17 19/09/18
19/09/17 19/09/19
19/09/17 19/09/20
31/10/17 31/10/18
31/10/17 31/10/19
31/10/17 31/10/20
15/03/18 15/03/19
15/03/18 15/03/20
15/03/18 15/03/21
13/09/18 13/09/19
13/09/18 13/09/20
13/09/18 13/09/21
$
0.68
0.68
0.68
0.72
0.72
0.72
0.60
0.56
0.56
0.56
0.57
0.57
0.57
0.55
0.55
0.55
0.53
0.53
0.53
0.36
0.36
0.36
0.51
0.51
0.51
0.50
0.50
0.50
0.63
0.63
0.63
0.54
0.54
0.54
0.67
0.67
0.67
0.77
0.77
0.77
0.67
0.67
0.67
0.65
0.65
0.65
Exercise
Expected Weighted
Expected
Risk-free
Fair value
price
volatility
average
dividends
$
0.68
0.68
0.68
0.73
0.73
0.73
0.61
0.59
0.59
0.59
0.57
0.57
0.57
0.56
0.56
0.56
0.54
0.54
0.54
0.39
0.39
0.39
0.49
0.49
0.49
0.54
0.54
0.54
0.59
0.59
0.59
0.57
0.57
0.57
0.67
0.67
0.67
0.77
0.77
0.77
0.67
0.67
0.67
0.61
0.61
0.61
%
40
40
40
50
50
50
55
55
55
55
46
46
46
46
46
46
46
46
46
46
46
46
43
43
43
43
43
43
43
43
43
43
43
43
42
42
42
42
42
42
42
42
42
41
41
41
life, years
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
%
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
interest
rate1,%
3.44
3.44
3.44
3.44
3.44
3.44
2.81
1.84
1.84
1.84
2.29
2.29
2.29
2.04
2.04
2.04
2.04
2.04
2.04
2.08
2.08
2.08
1.57
1.57
1.57
2.16
2.16
2.16
2.12
2.12
2.12
1.95
1.95
1.95
2.39
2.39
2.39
2.24
2.24
2.24
2.30
2.30
2.30
2.22
2.22
2.22
at grant
Date, $
0.21
0.23
0.25
0.24
0.27
0.30
0.21
0.19
0.23
0.25
0.18
0.20
0.22
0.17
0.19
0.21
0.17
0.19
0.20
0.10
0.10
0.09
0.13
0.16
0.18
0.11
0.14
0.16
0.17
0.21
0.23
0.12
0.15
0.17
0.17
0.20
0.23
0.19
0.23
0.26
0.17
0.20
0.23
0.17
0.21
0.23
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
|66
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
23.
Share Based Payments (Continued)
Grant
date
Vesting
date
Share
price
$
0.58
0.58
0.58
0.55
0.55
0.55
0.59
0.59
0.59
Exercise
price
$
0.58
0.58
0.58
0.58
0.58
0.58
0.60
0.60
0.60
Expected Weighted
average
volatility
life, years
%
5.0
41
5.0
41
5.0
41
5.0
41
5.0
41
5.0
41
5.0
41
5.0
41
5.0
41
Expected
dividends
%
nil
nil
nil
nil
nil
nil
nil
nil
nil
Risk-free
interest
rate1,%
2.14
2.14
2.14
1.60
1.60
1.60
1.14
1.14
1.14
Fair value
at grant
Date, $
0.14
0.17
0.19
0.12
0.15
0.17
0.14
0.16
0.19
14/12/18 14/12/19
14/12/18 14/12/20
14/12/18 14/12/21
15/03/19 15/03/20
15/03/19 15/03/21
15/03/19 15/03/22
7/06/20
7/06/19
7/06/21
7/06/19
7/06/22
7/06/19
1 based on government bonds
The expected price volatility is based on the historic volatility compared to that of similar listed companies and
the remaining life of the options.
24.
Parent Entity Disclosures
As at and throughout the financial year ending 30 June 2019 the parent entity of the Group was RPMGlobal
Holdings Limited.
Summary financial information
The individual financial statements for the parent entity show the following aggregation:
Result of parent entity
Profit/(loss)
Other comprehensive income
Total comprehensive income
Financial position of parent entity at year end
Current assets
Total assets
Current liabilities
Total liabilities
Total equity of the parent entity comprising of:
Issued capital
Share-based Payments Reserve
Revaluation Surplus Reserve
Reserve Arising From an Equity Transaction
Accumulated losses
Total equity
Contingent liabilities
Contractual commitments for the acquisition or property, plant or equipment
2019
$000
2018
$000
2,611
(1,628)
-
-
2,611
(1,628)
50,526
77,389
9,662
10,311
87,936
4,352
18
(600)
(32,628)
59,078
-
-
44,223
75,071
10,614
11,536
87,708
3,648
18
(600)
(27,239)
63,535
-
-
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
|67
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
24.
Parent Entity Disclosures (Continued)
The parent entity has provided guarantees to third parties in relation to the performance and obligations of its
subsidiary, GeoGAS Pty Ltd in respect of property lease rentals. The guarantees are for the terms of the leases
and total $92,445 (2018: $37,125). The periods covered by the guarantees range from two to three years.
No deficiency of net assets existed in the controlled entities covered by guarantees at 30 June 2019 or 30 June
2018. No liability was recognised by the parent entity in relation to these guarantees, as the fair value of the
guarantee is immaterial.
25. Interests in other entities
(a) Material subsidiaries
The Group’s principal subsidiaries at 30 June 2019 are set out below. All subsidiaries have share capital consisting
solely of ordinary shares that are 100% (2018: 100%) held directly by the Group, and the proportions of ownership
interests held equals the voting rights held by the Group. The country of incorporation or registration is also their
principal place of business.
Name of entity
Place of business/
incorporation
GeoGAS Pty Ltd
RPM Software Pty Ltd
RPM Advisory Services Pty Ltd
RPM Software International Pty Ltd
RPMGlobal USA, Inc.
RPM Software USA, Inc.
RPMGlobal Canada Ltd
PT RungePincockMinarco
RPMGlobal Asia Limited
RPMGlobal China Limited
RPMGlobal LLC
CJSC Runge
RPMGlobal LLC
RPMGlobal Africa (Pty) Ltd
RPMGlobal Chile Limitada
RPMGlobal Software Do Brasil Ltda
iSolutions International Pty Ltd
iSolutions Holdings Pty Ltd
MineOptima Holdings Pty Ltd
MineOptima Operations Pty Ltd
Minvu Pty Ltd
Minvu Holdings Pty Ltd
Kurilpa Investments Pty Ltd
RPM Global Turkey Danışmanlık Hizmetleri ve Ticaret A.Ş.
Australia
Australia
Australia
Australia
USA
USA
Canada
Indonesia
Hong Kong
China
Mongolia
Russia
Russia
Principal Activities
Laboratory Services
Software Sales and Services
Advisory Services
Software Sales and Services
Advisory Services
Software Sales and Services
Software Sales and Services
Advisory Services
Advisory Services
Advisory Services
Advisory Services
Software and Advisory Services
Software Sales and Services
South Africa
Software Sales and Services
Chile
Brazil
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Turkey
Software Sales and Services
Software Sales and Services
Software Sales and Services
Software Sales and Services
Software Sales and Services
Software Sales and Services
Software Sales and Services
Software Sales and Services
Software Sales and Services
Advisory Services
RPMGlobal Kazakhstan LLP
RPMGlobal Colombia SAS
Kazakhstan
Colombia
Software Sales and Services
Software Sales and Services
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
|68
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
25.
Interests in other entities (Continued)
All entities other than GeoGAS Pty Ltd trade as RPM and RPMGlobal.
(b) Significant Restrictions
Cash and Short term deposits held in Chile, Brazil, South Africa, China, Indonesia, Mongolia and Russia are subject
to local exchange control regulations. These regulations provide restrictions on exporting capital from those
countries other than through normal trading transactions or dividends.
The carrying amount of cash included within the consolidated financial statements to which these restrictions
apply is $10,574,000 (2018: $8,826,000).
26.
Key Management Personnel Disclosures
(a) Compensation
Short term employee benefits
Post-employment benefits
Share-based payments
2019
$
2018
$
2,158,708
1,865,502
72,506
118,922
68,094
46,455
2,350,136
1,980,051
No other transactions with Key Management personal occurred during the year.
27.
Events occurring after the reporting period
No matter or circumstance has arisen since 30 June 2019 that has significantly affected the Group’s operations,
results or state of affairs, or may do so in the future years.
28.
Contingent liabilities and contingent assets
There are no contingent liabilities or contingent assets that require disclosure in the financial report.
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
|69
For personal use only
DIRECTORS’ DECLARATION
In the directors' opinion:
•
•
•
•
•
the attached financial statements and notes thereto comply with the Corporations Act 2001, the
Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting
requirements;
the attached financial statements and notes thereto comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board as described in note 1 (a) to the
financial statements;
the attached financial statements and notes thereto give a true and fair view of the consolidated entity's
financial position as at 30 June 2019 and of its performance for the financial year ended on that date;
the remuneration disclosures included in pages 14 to 21 of the Directors’ report (as part of audited
Remuneration Report), for the year ended 30 June 2019, comply with section 300A of the Corporations
Act 2001; and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of Directors
Allan Brackin,
Chairman
Dated this 23 day of August 2019
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
|70
For personal use only Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of RPMGlobal Holdings Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of RPMGlobal Holdings Limited (the Company) and its subsidiaries
(the Group), which comprises the consolidated statement of financial position as at 30 June 2019, 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 report,
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 2019 and of its
financial performance for the year ended on that date; 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 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.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050
110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited
by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional
Standards Legislation.
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
|71
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050
110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited
by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional
For personal use only
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.
Revenue Recognition
Key audit matter
How the matter was addressed in our audit
The group generates revenue from multiple streams
Our audit procedures included:
including software sales & maintenance services.
Assessing the revenue recognition policy for
The Group’s disclosures about revenue recognition are
compliance with AASB 15 Revenue from
included in Note 1 (f), which details the accounting
Contracts with Customers
policies applied following the implementation of AASB
15 Revenue from Contracts with Customers.
Selecting a sample of license sales,
maintenance services and consulting fees
The assessment of revenue recognition was significant
recognised as revenue in the general ledger
to our audit due to the significance of revenue to the
and agreeing to supporting invoices, signed
financial report and the complex nature of accounting
customer contracts and proof of delivery
for the appropriate timing of revenue related to the
where applicable
sale of software and related maintenance services
following adoption of AASB 15 Revenue from Contracts
with Customers.
Obtaining and evaluating credit notes issued
post year end and the first and last invoices
issued post and pre year end, to ensure an
appropriate cut-off was achieved at balance
date
Analytical review procedures on all
significant revenue streams on a
disaggregated basis and against expected
trends and prior year
Selecting a sample of receipts and
maintenance invoices from the clients’
income in advance schedule and
recalculating the appropriate deferred
portion of maintenance revenue.
Assessing the adequacy of the Group's
disclosures within the financial statements
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050
110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited
by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional
Standards Legislation.
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019 |72
For personal use only Carrying Value of Goodwill – Impairment Assessment
Key audit matter
How the matter was addressed in our audit
The Group’s disclosures about goodwill impairment are
Our audit procedures included, amongst others:
included in Note 11, which details the allocation of
goodwill to the groups various Cash Generating Units
(CGU’s), sets out the key assumptions for value-in-use
calculations and the impact of possible changes in
these assumptions.
This annual impairment test was significant to our
audit because the balance of goodwill as of 30 June
2019 is material to the financial statements.
In addition, management’s assessment process is
complex and highly judgmental and is based on
assumptions, specifically forecast future cash flows,
growth rate, and discount rate, which are affected by
expected future market or economic conditions.
Obtaining an understanding of the 'Value in
Use' models and critically evaluating
management's methodologies and their key
assumptions
Assessing management’s allocation of
goodwill and assets and liabilities, including
corporate assets to CGU's
Evaluating the inputs used in the value in use
calculation including the growth rates,
discount rates and underlying cash flows
applied by management
Involving our internal specialists to assess the
discount rates and terminal growth rates
against comparable market information
Assessing the disclosures related to the
goodwill and the impairment assessment by
comparing these disclosures to our
understanding of the matter and the
applicable accounting standards.
Recognition of Deferred Tax Assets
Key audit matter
How the matter was addressed in our audit
Refer to Note 5.
Our audit procedures included:
The Group’s recognised a material net deferred tax
Evaluating managements forecast of future
asset which includes temporary differences and
taxable profits and assessing whether it is
brought forward tax losses.
Australian Accounting Standards require deferred tax
assets to be recognised only to the extent that it is
probable that there will be sufficient future
profits to utilise the deferred tax assets
recognised
probable that sufficient future taxable profits will be
Assessing the key assumptions used in the
generated in order for the benefits of the deferred tax
forecast period including revenue,
assets to be realised. These benefits are realised by
expenditure and growth rates applied against
reducing tax payable in future taxable profits.
actual results achieved
In the current year, the Group has derecognised a
Comparing the taxable income generated for
portion of previously recognised tax losses and not
the year ended 30 June 2019 with the
recognised any additional tax losses generated in the
forecast taxable income provided during the
2019 year.
30 June 2018 audit
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050
110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited
by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional
Standards Legislation.
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019 |73
For personal use only Key audit matter
How the matter was addressed in our audit
This was a key audit matter as the assessment of the
Assessing the disclosures related to the
future taxable profits involves judgement by
recognition of the deferred tax assets and
management.
unrecognised deferred tax assets.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2019, 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 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 has 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 (http://www.auasb.gov.au/Home.aspx) at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf
This description forms part of our auditor’s report.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050
110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited
by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional
Standards Legislation.
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019 |74
For personal use only Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included on pages 14 to 21 of the directors’ report for the
year ended 30 June 2019.
In our opinion, the Remuneration Report of RPMGlobal Holdings Limited, for the year 30 June 2019,
complies with section 300A of the Corporations Act 2001.
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.
BDO Audit Pty Ltd
T R Mann
Director
Brisbane, 23 August 2019
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050
110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited
by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional
Standards Legislation.
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019 |75
For personal use only CORPORATE GOVERNANCE STATEMENT
Corporate Governance Statement – Year Ended 30 June 2019
The Board and Management consider that it is crucial to the Group’s long term performance and sustainability
and to protect and enhance the interests of the Company’s shareholders and other stakeholders, that it adopts
an appropriate corporate governance framework pursuant to which the Company and its related companies
globally will conduct its operations in Australia and internationally with integrity, accountability and in a
transparent and open manner.
The Company regularly reviews its governance arrangements as well as developments in market practice,
expectations and regulation.
The Company’s Corporate Governance Statement has been approved by the Board of RPMGlobal Holdings
Limited and explains how the Group addresses the requirements of the Corporations Act 2001, the ASX Listing
‘Corporate Governance Principles and
Rules 2001 and the ASX Corporate Governance Council’s
Recommendations - 3rd Edition’ (the ‘ASX Principles and Recommendations’) and is current as at 30 June 2019.
Whilst the Board has elected not to formally early-adopt the 4th Edition of the ASX Principles and
Recommendations, the Board has reviewed and updated a number of its governance policies and procedures and
has made a number of updates in readiness of full alignment with the 4th Edition from 1 July 2020, including:
•
•
•
•
•
updating the RPM Board Charter to reflect the Board’s involvement in ‘defining, approving and then
instilling and continually reinforcing RPM’s culture, values of acting lawfully’ and to oversee that on an
ongoing basis;
adopting and implementing a new standalone Whistleblower Policy including an express requirement that
material incidents be reported to the Board should they arise;
adopting and implementing a new standalone Anti-Bribery and Corruption Policy including an express
requirement that material incidents be reported to the Board should they arise;
adopting and implementing a new Anti-Modern Slavery Policy;
updating RPM’s existing Code of Conduct to include RPM’s existing Core Values and referencing the
updated Whistleblower, Anti-Bribery and Corruption and Anti-Modern Slavery Policies and implement a
new Code of Conduct specifically applying to suppliers to RPM.
The Company’s ASX Appendix 4G, which is a checklist cross-referencing the ASX Principles and Recommendations
to the relevant disclosures in the statement Corporate Governance Statement, the Company’s 2019 Annual
Report and other relevance governance documents and materials on the Company’s website, are provided in the
corporate governance section of the Company’s website at https://www.rpmglobal.com/investor-centre/. The
Company’s Corporate Governance Statement together with the ASX Appendix 4G and this Annual Report, were
also lodged with the ASX on 23 August 2019.
The Board of the Company strives to meet the highest standards of Corporate Governance, but recognises that it
is also crucial that the Company’s governance framework appropriately reflects the current size, operations and
industry in which the Company operates.
The Company has complied with the majority of recommendations of the ASX Principles and Recommendations
with the exception of a few. The Board believes the areas of non-conformance, which are explained in the
Corporate Governance Statement and the ASX Appendix 4G do not materially impact on the Company’s ability to
achieve the highest standards of Corporate Governance, whilst at the same time ensuring the Company is able to
achieve the expectations of its shareholders and other stakeholders.
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 20 19 76
For personal use only SHAREHOLDER INFORMATION
The shareholder information set out below was applicable as at 9 August 2019.
A.
Distribution of Equity Securities
Analysis of number of equity security holders by size of holding:
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
Ordinary Shares
Options
170
440
315
525
132
1582
-
-
-
48
38
86
The number of shareholdings held in less than marketable parcels of 870 shares is 121 (Close Price 9 August 2019
$0.575).
B.
Equity Security Holders
The names of the twenty largest holders of quoted equity securities (as at 9 August 2019) are listed below:
Name
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
RUNGE INTERNATIONAL PTY LTD
BNP PARIBAS NOMINEES PTY LTD
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMS PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
PAUA PTY LTD
BOND STREET CUSTODIANS LIMITED
BNP PARIBAS NOMINEES PTY LTD
MR STEPHEN JOHN BALDWIN + MRS ANDREA MAREE BALDWIN
MR JOHN CRAIG HALLIDAY
FEYDER INVESTMENTS PTY LTD
THE RIDGE NZ PTY LTD
J & M DONOHUE SUPER PTY LTD
TODD GLOBAL INVESTMENTS PTY LTD
MR MICHAEL ANTHONY TAYLOR + MS JAN MARGARET JACKSON-MARTIN
BOND STREET CUSTODIANS LIMITED
MRS DONNA MARGARET LUXTON
MRS GOOLESTAN DINSHAW KATRAK
Number held
Percentage
of issued
shares
52,043,358
23,767,320
13,591,450
13,578,073
11,260,361
7,535,479
7,439,265
6,795,753
6,025,277
2,830,006
2,642,511
2,247,653
1,889,333
1,424,385
1,398,461
1,385,676
1,358,461
1,161,804
1,026,009
1,000,000
160,400,635
24.05
10.98
6.28
6.28
5.20
3.48
3.44
3.14
2.78
1.31
1.22
1.04
0.87
0.66
0.65
0.64
0.63
0.54
0.47
0.46
74.13
Unquoted equity securities
19,440,832 options over unissued shares (as at the date of this report): for further details see note 23.
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 20 19 77
For personal use only SHAREHOLDER INFORMATION
C.
Substantial Holders
The names of the substantial shareholders listed in the holding register as at 30 June 2019 are:
Estimated beneficial holdings as at 30 June 2019
IOOF Holdings Limited (Perennial Value Management)
Ruffer LLP
Colonial First State – Growth
Runge International Pty Ltd (Ian Runge)
D.
Voting Rights
Refer to note 15 for voting rights attached to ordinary shares.
Number held
Percentage
32,423,996
26,766,010
15,903,836
14,149,878
14.99
12.57
7.35
6.54
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 20 19 78
For personal use only
CORPORATE DIRECTORY
Directors
Allan Brackin
Chairman
Richard Mathews
Managing Director
Ross Walker
Non-executive Director
Stewart Butel
Non-executive Director
Company Secretary
Registered Office
Level 2, 295 Ann Street
Brisbane QLD 4000
Ph:
+61 7 3100 7200
Fax: +61 7 3100 7297
Web: www.rpmglobal.com
Auditor
BDO Audit Pty Ltd
Level 10, 12 Creek St
Brisbane QLD 4000
Share Registry
Computershare Investor Services Pty Limited
117 Victoria Street
West End QLD 4101
James O’Neill
Group General Counsel and Company Secretary
Stock Exchange Listing
The Company is listed on the Australian Securities
Exchange Limited (ASX: RUL)
RPMGlobal Holdings Limited
ABN 17 010 672 321
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 20 19 |79
For personal use only Level 2, 295 Ann St, Brisbane QLD 4000
P: +61 7 3100 7200 F: +61 7 3100 7297
www.rpmglobal.com
RPMGLOBAL HOLDINGS LIMITED // ANNUAL REPORT 2019
For personal use only