2019
ANNUAL
REPORT
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SERKO ANNUAL REPORT
ABOUT
SERKO
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SERKO ANNUAL REPORT OUR
PURPOSE
Our purpose is to transform the way businesses manage travel
and expenses. We do this by helping companies drive down the
cost of their travel program, using smart technology and
making the process of booking and managing travel and
reconciling expenses a positive experience for their people.
ABOUT
SERKO
Serko is a market-leading travel and expense technology
solution, used by over 6,000 corporate entities through 50+
Travel Management Companies that combined book more than
AUD $6 billion of travel a year through Serko’s platforms.
Zeno is Serko’s next generation travel management application,
using intelligent technology, predictive workflows and a global
travel marketplace to transform business travel across the
entire journey. Listed on the New Zealand Stock Exchange Main
Board (NZX:SKO), and Australian Securities Exchange
(ASX:SKO). Serko employs more than 170 people worldwide,
with its HQ in New Zealand and offices across Australia, China,
India and the United States (US).
Visit www.serko.com for more information.
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SERKO ANNUAL REPORT
$24.6m
Total Income
17%
Increase in booking transactions
$26m
Peak ATMR, 41% increase over
same month prior year
$1.6m
Net Profit After Tax
$2.6m
EBITDAF 19% increase over
prior year, margin of 11%
$15.7m
Cash balances increased from $5.2m
with net capital raise of $14.3m
28%
Operating Revenue Growth to $23.4m
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SERKO ANNUAL REPORT 28%
Operating Revenue Growth to $23.4m
$24.6m
Total Income
17%
Increase in booking transactions
$26m
Peak ATMR, 41% increase over
same month prior year
$1.6m
Net Profit After Tax
$2.6m
EBITDAF 19% increase over
prior year, margin of 11%
$15.7m
Cash balances increased from $5.2m
with net capital raise of $14.3m
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SERKO ANNUAL REPORT
BUILDING
FOUNDATIONS FOR
THE NEXT PHASE
OF GROWTH
This annual report is dated 22 May 2019 and is signed on behalf of the Board of Directors (Board) Serko Limited
by Simon Botherway, Chairman (Chair), and Darrin Grafton, Chief Executive Officer (CEO).
SIMON BOTHERWAY
CHAIRMAN
DARRIN GRAFTON
CHIEF EXECUTIVE OFFICER
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SERKO ANNUAL REPORT CEO AND CHAIRMAN’S LETTER
Dear Fellow Shareholders,
Serko has continued to deliver to strategy, with revenue
We remain well funded following the completion of an
growth and profitability at the upper end of guidance.
oversubscribed $15.0 million ($14.3 million net of costs)
We continued to enjoy strong growth in our maturing
capital raising in August 2018. Serko ended the financial year
Australasian business and made good progress laying the
with a net $15.7 million of cash on hand, having invested a
foundations for our next phase of development — growing into
net $3.8 million of our cash reserves primarily into system
new Northern Hemisphere markets.
development for international growth.
In the Australasian business we have benefited from growing
transactions and increasing Average Revenue per Booking
(ARPB) as we both gain new customers and more customers
transfer to our premium Zeno travel and expense management
solution.
In the new North American and United Kingdom (UK) markets
it is very pleasing to note the number, and market presence, of
those Travel Management Companies (TMCs) who have signed
agreements to roll out Zeno to their customers, including
Carlson Wagonlit Travel in the US, one of the world’s largest
TMC’s.
Operating Revenue up
28% to $23.4 million
EBITDAF up 19% to
$2.6 million
FINANCIAL RESULTS
Total Operating Revenue for the year to 31 March 2019 rose
28% to $23.4 million from $18.3 million in the same period
a year ago, a result that is at the upper end of guidance.
Recurring revenue rose 26% to $20.7 million from $16.4
million in the same period a year ago. Within this result there
is a three-month contribution ($0.9 million) from InterplX.
Peak fourth quarter ATMR (excluding the contribution from
InterplX), an indicator of future recurring product revenue,
rose 23% to $22.5 million from $18.4 million at the same
time a year ago. Including InterplX, peak ATMR rose 41% to
Demand for Zeno in North America has exceeded our in-house
$26.0 million.
capacity to deliver. In response, we have boosted our resourcing
and prioritised development as we configure Zeno to meet the
operational and marketing needs of these customers. This includes
integrating complex travel content and associated services, as well
as customised TMC integration work. Our expanded team and
the use of contractors will result in the progressive delivery of the
commercial Zeno roll out in the US commencing early in
the second half of the 2020 financial year.
Earnings before interest, tax, depreciation, amortisation
and fair value remeasurement of contingent consideration
(EBITDAF) was 19% up at $2.6 million compared to the prior
year at $2.2 million, ahead of guidance. Operating expenses
were up 32% reflecting the investment into personnel,
premises and development for global expansion as well as
one-off costs associated with Serko’s ASX foreign-exempt
listing completed in June 2018 and professional fees related
This investment will result in another year of cash burn, however
to the purchase of InterplX.
this is an extraordinary level of investment, which is subsequently
expected to normalise in the 2021 financial year. We expect to
accommodate this investment within our existing balance sheet
resources. We anticipate that the customer agreements we have
signed to date will generate strong revenue and EBITDAF growth
in years to come.
Meanwhile, we have improved our ability to service these
customers with the acquisition of InterplX effective
January 2019, which enhances our suite of expense
management solutions and gives us a US-based software
development capability close to our North American
TMC partners.
Serko transitioned from a research and discovery phase in the
Northern Hemisphere to development and delivery phase.
This required considerable Zeno development work, including
porting a broad range of new content (including rail) onto the
Zeno platform.
Reflecting this development work, we have capitalised more
development costs than we did in the 2018 financial year.
Total Research and Development (R&D) expenses were up
87% to $9.2 million, with $6.7 million capitalised compared
to the prior year of $0.4 million. While this is a considerable
investment, we are building to deliver on signed agreements
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SERKO ANNUAL REPORT
with Northern Hemisphere TMCs and there are a number of
With Tandem (Air New Zealand’s TMC) signing last year and
corporates we expect to take up Zeno once the development
now Orbit (House of Travel’s corporate travel arm) signing this
work is completed.
Net profit after tax (NPAT) at $1.6 million was marginally
down on the prior year’s $1.8 million affected by the
non-cash fair value remeasurement adjustment for the
year and choosing Zeno as their preferred booking tool, we
have gained blanket coverage of the Australasian corporate
travel and expense management market for all the medium
and large TMCs.
deferred consideration relating to the InterplX acquisition.
We migrated Tandem’s customers to our platform during
The result reflects Serko’s determination to deliver a positive
the first quarter of the financial year and have started to roll
bottom line result, while still investing to take advantage of
out our solutions to Orbit’s customers in New Zealand and
the significant growth opportunities it sees around the world.
Australia. In addition, Serko and Flight Centre have agreed a
GROWTH STRATEGY
The first thing we had to do in Europe and North America was
validate Zeno and we are delighted with the response we have
received over the last year. Zeno resonates in these markets
and the pipeline of customers continues to grow. The demand
for Zeno demonstrates that Serko is leading technological
four-year extension of services, which resulted in an uplift to
revenue from October 2018 onwards.
These agreements give us confidence that we can continue
to extend our share of what is now a maturing market in
Australasia and grow Average Revenue Per Booking, while
continuing to benefit from growth in the market as a whole.
innovation in the sector.
NORTH AMERICA AND EUROPE
Investment for these markets has seen our headcount increase
In the US we signed Flight Centre USA, CWT and Direct Travel
to 173 from 106 at the same time a year ago. We have made
as new TMC reseller partners for the Zeno platform, and we
new hires at all levels of the company to increase the speed
expect these TMCs to be able to progressively extend the
of development and ensure readiness for global deployment,
offering beyond ‘beta’ customers in the second half.
configuration and support.
The Board has been impressed by the resilience of our people
Encore Travel TMCs and we are working to complete content
in not only adapting to this fast rate of growth but also for
integration, language features and system optimisation for
In Canada we signed the Custom Travel Solutions and Voyages
their generosity in welcoming and integrating new people into
both clients.
the team. On behalf of shareholders we thank them for their
efforts.
We are currently in the development phase of Zeno as a
global platform for the future. We are evolving the product,
recognising the differing systems and processes used within
each new market and, of course, porting the relevant content
to Zeno. Over the 2020 year the benefits of that ongoing
investment will become apparent as we move from start-up
to scale-up in those markets.
AUSTRALASIA
We are delighted with
the response to Zeno
in Europe and North
America
In the UK, we integrated UK rail content to Zeno for these
customers, which is essential for UK corporates as they
compare travel itinerary alternatives.
Thanks largely to the Australasian market, where Serko enjoys
The intensive development program underway is key to setting
a sizable market share of all corporate travel bookings, we
the foundations for scale for both our TMCs’ operational needs
lifted recurring revenues in the 12 months to 31 March 2019.
and the corporations that will use our software.
This included a 20% lift in travel platform revenues and a 19%
increase in content revenues. Expense platform revenues rose
by 76%, including the contribution from InterplX.
In excess of 85% of our TMCs in the Australasian region have
signed agreements to make Zeno available to their customers
and are actively promoting the benefits of Zeno. We have seen
a steady migration of customers to Zeno from Serko Online.
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SERKO ANNUAL REPORT
TECHNOLOGICAL INNOVATION
OUTLOOK
Our efforts to grow average revenue per booking and
Serko is in an exciting transitionary phase as we invest in the
customer numbers have been supported by the third leg of our
development of our global travel and expense management
strategy: continued technological innovation.
platform for the future. Over the year we expect to make
We achieved a world first when Zeno received IATA
certification of its connection to the Qantas Distribution
significant progress in completing development and the
commercial rollout of Zeno for each new international market.
Platform (QDP). Qantas, via QDP, is among the first airlines
We expect Northern Hemisphere revenues to ramp up
making use of the New Distribution Capability (NDC) data
particulary in the second half of the 2020 financial year.
transmission standard, which allows Zeno customers to access
key Qantas travel-related content, such as frequent flyer
information and seat and meal select.
Internationalisation and the integration of new content
and services are critical to delivery of the three pillars of
our strategy – growing our customer base; making more
Similarly, we also connected Zeno to the NDC Exchange, a
revenue from each travel booking made through our platform;
distribution service developed by APTCO and SITA based on
and continuing to innovate and drive the development and
the NDC standard. Through this relationship, Zeno gained
adoption of our technology.
access to Air Canada and British Airways
travel-related content.
It is still too early to be definitive about the outcome for the
2020 financial year. However, at this stage we expect Total
NDC is becoming the new platform for distribution in the
Operating Revenue growth of between 20% and 40% in the
sector and we have demonstrated a market-leading capability
year to 31 March 2020. As we remain in the build phase and
to link to this content through NDC direct connections or via
have a significant development workload ahead of us, we
legacy platforms. These partnerships provide blueprints for
will prioritise delivery to the markets and customers that
how we can link with other airlines using the NDC standard
represent the best opportunity for Serko.
in the future and deliver new opportunities to grow travel
content-related revenues.
Zeno is also assisting our TMCs to stay ahead of competing
technological innovations in the sector. In the prior year we
assisted Flight Centre with its migration to the Sabre global
distribution system and this year developed and launched
Flight Centre’s Savi platform. We have also integrated ride
sharing service Uber with our expense management tools.
This allows trip information to be sent directly from an Uber
for Business account to a Zeno user’s expense report. Finally,
we have continued to invest in the resilience of the platform
to ensure it can accommodate the growing demands on our
infrastructure.
Further guidance will be provided at our Annual Shareholders
Meeting in August.
Signed Chair and CEO
SIMON BOTHERWAY
CHAIRMAN
DARRIN GRAFTON
CEO
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STRATEGIC
OVERVIEW
Grow ARPB by
offering increased
content and moving
customers to Zeno
Offer premium,
integrated global
solutions
Expand into new
territories through
strategic alliances and
reach the unserved SME
market
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SERKO ANNUAL REPORT Grow ARPB by
offering increased
content and moving
customers to Zeno
Offer premium,
integrated global
solutions
Expand into new
territories through
strategic alliances and
reach the unserved SME
market
TECHNOLOGY INNOVATION
Zeno grew from a concept to a complete product and was deployed globally
across hundreds of customers
What we achieved:
• Zeno was the first online travel and expense solution globally to be certified NDC* Level 3 by IATA, with NDC solutions
rolled out with ATPCO NDC Exchange and a strategic alliance with Qantas
• We built and launched SAVI, a unique solution customised for Flight Centre, and secured an ongoing technology
development fund for customing SAVI features
• We built and launched the AskZeno chatbot, rolled out a product integration and partnership with Uber for Business
and we scaled our product architecture globally
Our focus for FY20:
• Leverage opportunities in our software development and engineering practices to establish a competitive advantage in
performance and reliability globally
• Continue to develop usability and feature enhancements that extend our product leadership
• Build on our current products to launch a new generation of expense management solutions
GROW CUSTOMER BASE
We extended our market leadership in Australia & New Zealand and
established reseller partnerships in North America and Europe
What we achieved:
• Tandem Travel (Air New Zealand corporate travel management division) migrated its customer base to Zeno, and Orbit
Travel (House of Travel’s corporate travel arm) began to roll out Zeno to its customers across Australia and
New Zealand
•
In the US and Canada we signed reseller partnerships with CWT, Direct Travel, FCM USA, Vision, Voyages Encore
and Custom Travel Solutions
• ATPI deployed Zeno to it’s first customers in the UK
Our focus for FY20:
• Develop the content and systems integration with our reseller partners to enable large-scale deployment of Zeno in
North America
• Activate our reseller sales channels in North America to gain market share in their existing customer base
• Develop a best-in-class sales enablement program to support our partners globally to win and retain more
customers with Zeno
GROW ARPB
What we achieved:
The first resellers and customers began migrating to Zeno at a premium
transaction cost and we laid the foundations for more widespread adoption
• We signed ~85%** of our existing reseller partners to offer Zeno to their customer bases
• Existing customers, including Flight Centre and Queensland State Government, signed agreements to upgrade from our
legacy products to premium solutions, with associated transaction price uplift
• We expanded our content offerings with the option to book rail content in relevant markets and we added regional
airlines in Australia and New Zealand
Our focus for FY20:
• Commercialise our NDC-enabled solutions through airline and GDS partnerships globally
• Extend our Marketplace framework to incorporate content from suppliers in new categories of travel spend
• Capitalise on the opportunity to offer an integrated expense management offering into our existing travel customer base
*NDC (New Distribution Capability) is a travel-industry supported program launched by IATA for the development and market adoption of a new XML-based data
transmission standard that enhances the communications between airlines, travel agents and aggregators. Learn all about NDC at www.zeno.travel/NDC.
**As measured by share of transaction volume for FY19
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SERKO ANNUAL REPORT
OUR PRODUCTS
Serko’s core product, Zeno, is an integrated travel and expense solution that is revolutionising the world
of corporate travel and expense management in the Australasian, UK and North America markets.
OUR CUSTOMERS
The majority of Serko’s revenue comes from Travel Management Companies (TMCs) that act as
reseller partners, providing our solutions to their corporate customers as part of their overall
managed travel service.
Zeno Travel
TMCs
Example corporates
Serko generates revenue through corporate
customers paying a booking fee per
transaction and through supplier commission.
Zeno Travel is an Online Booking Tool (OBT) that corporate travellers
use to book flights, trains, hotels, rental cars and airport transfers in
line with their corporate travel policies.
This provides the oversight and control that travel managers need to
ensure spend is effectively managed, with the ease of use and
personalised experience that compels corporate travellers to use the
OBT and avoid travel program ‘leakage’.
Zeno does this with an intuitive interface that makes booking travel
super simple, intelligent technology that provides personalised
itinerary recommendations based on traveller preferences, and a global
marketplace that allows travellers to connect with preferred suppliers
at every stage of the journey.
The result is greater traveller satisfaction and increased compliance
and control over the entire travel program compared with legacy
corporate booking tools.
Zeno Expense
Zeno Expense automates the process of corporate card and
out-of-pocket expense submission, reconciliation and reimbursement.
Employees capture receipts via the mobile app, or email receipts
directly to Zeno, add a description or cost centre if needed and submit
for approval there and then. To make it even simpler, Zeno also offers
automated integrations with providers such as Uber for Business.
Zeno’s intelligent technology proactively identifies and manages
out-of-policy claims, preventing expense claim fraud and dramatically
streamlining the expense administration function.
Zeno also provides managers, approvers and finance teams with a full
suite of analysis tools that help them to run their Travel and expense
(T&E) budgets more effectively, identify problem areas and optimise
Serko earns revenue through corporate
customers paying a fee per active user or per
expense report submitted.
expense policies.
The result is less time wasted preparing, approving and processing
expense reports and less wastage on duplicate, out-of-policy or
fraudulent expense items.
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INDUSTRY RECOGNITION
BUSINESS TRAVEL2
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P E O P L E ’ S C H O I C E
SERKO ANNUAL REPORT OUR PRODUCTS
Serko’s core product, Zeno, is an integrated travel and expense solution that is revolutionising the world
of corporate travel and expense management in the Australasian, UK and North America markets.
OUR CUSTOMERS
The majority of Serko’s revenue comes from Travel Management Companies (TMCs) that act as
reseller partners, providing our solutions to their corporate customers as part of their overall
managed travel service.
Zeno Travel
TMCs
Example corporates
Zeno Travel is an Online Booking Tool (OBT) that corporate travellers
use to book flights, trains, hotels, rental cars and airport transfers in
line with their corporate travel policies.
This provides the oversight and control that travel managers need to
ensure spend is effectively managed, with the ease of use and
personalised experience that compels corporate travellers to use the
OBT and avoid travel program ‘leakage’.
Zeno does this with an intuitive interface that makes booking travel
super simple, intelligent technology that provides personalised
itinerary recommendations based on traveller preferences, and a global
marketplace that allows travellers to connect with preferred suppliers
at every stage of the journey.
The result is greater traveller satisfaction and increased compliance
and control over the entire travel program compared with legacy
Zeno Expense
Zeno Expense automates the process of corporate card and
out-of-pocket expense submission, reconciliation and reimbursement.
Employees capture receipts via the mobile app, or email receipts
directly to Zeno, add a description or cost centre if needed and submit
for approval there and then. To make it even simpler, Zeno also offers
automated integrations with providers such as Uber for Business.
Zeno’s intelligent technology proactively identifies and manages
out-of-policy claims, preventing expense claim fraud and dramatically
streamlining the expense administration function.
Zeno also provides managers, approvers and finance teams with a full
suite of analysis tools that help them to run their Travel and expense
(T&E) budgets more effectively, identify problem areas and optimise
The result is less time wasted preparing, approving and processing
expense reports and less wastage on duplicate, out-of-policy or
fraudulent expense items.
Serko generates revenue through corporate
customers paying a booking fee per
transaction and through supplier commission.
corporate booking tools.
Serko earns revenue through corporate
customers paying a fee per active user or per
expense report submitted.
expense policies.
INDUSTRY RECOGNITION
BUSINESS TRAVEL2
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SERKO ANNUAL REPORT
BOARD OF DIRECTORS
Simon Botherway
Independent Non-executive Chairman, New Zealand
Appointed 30 April 2014, re-elected August 2018
Simon is based in New Zealand. He holds a BCom, as well as the US-based Chartered Financial Analyst
(CFA) designation. Simon has extensive experience in corporate governance, banking and investment
management. In 2002 Simon co-founded Brook Asset Management and was Chairman from 2004 to
2008. He is also a past President of the CFA Society of New Zealand and was a member of the CFA
Asia-Pacific Advocacy Committee.
Simon was appointed as a member of the Securities Commission in 2009 and chaired the Financial
Markets Authority Establishment Board in 2010. Simon is currently a Director of Fidelity Life
Assurance and is a Guardian of the New Zealand Superannuation Fund.
Claudia Batten
Independent Non-executive Chairman, United States
Appointed 30 April 2014, re-elected August 2017
Claudia is based in the United States. She holds an LLB (Hons) and BCA from Victoria University
(Wellington). Claudia has been a founding member of two highly successful entrepreneurial
ventures. The first venture was Massive Incorporated, a network for advertising in video games,
she helped pioneer ‘digital’ as a media buy. Massive was sold to Microsoft in 2006. In 2009 she
co-founded Victors & Spoils (‘V&S’), the first advertising agency built on the principles of
crowd-sourcing. V&S was majority acquired by French holding company Havas Worldwide in
2011. Claudia is a strong supporter of the New Zealand start-up scene as an active mentor and
adviser. She is also the digital adviser to the Board of Westpac New Zealand.
Clyde McConaghy
Independent Non-executive Chairman, Australia
Appointed 30 April 2014, re-elected August 2017
Clyde is based in Australia. He holds a BBus, and an MBA from Cranfield University United Kingdom
(UK). Clyde is a Fellow of the Australian Institute of Company Directors and a Fellow of the Institute of
Directors UK. He is the founder of Optima Boards, providing independent director and advisory
services to public, private, family office and charitable entities around the world. Clyde has worked in
publishing, media, online and technology sectors, living in the UK, Germany, China and Australia. He is
a Director of ASX-listed technology company, Infomedia Limited and Chairman of the Board of
Chapman Eastway Pty Limited.
Darrin Grafton
Executive Director, Chief Executive Officer & Co-Founder
Appointed 5 April 2007
Darrin has more than 25 years' experience in travel technology and is highly experienced in
technology commercialisation. He previously held senior management positions with Gullivers Travel
Group (listed on the Australian and New Zealand Stock Exchanges 2004-2006) and Interactive
Technologies.
Robert (Bob) Shaw
Executive Director, Chief Strategy Officer & Co-Founder
Appointed 5 April 2007, re-elected August 2018
Bob has more than 25 years' experience creating and commercialising technology for the travel
industry. He has held a number of directorships and senior management positions in various
high-profile ventures, including Gullivers Travel Group (listed on the Australian and New Zealand
Stock Exchanges between 2004 and 2006) and Interactive Technologies.
14
Charlie Nowaczek
Chief Operating Officer (COO)
Charlie has over 25 years’ experience as an operations executive and management adviser,
specialising in business transformation and operational excellence. Over the last decade he has been
COO for a number of technology start-ups in the US and Canada.
Susan Putt
Chief Financial Officer (CFO)
Susan has over 25 years’ experience working in New Zealand and has also worked in Australia and
Canada. She is a Chartered Accountant and Chartered Member of the Institute of Directors. Susan
has worked as CFO, Head of Strategy, and Director for a number of New Zealand businesses and
specialises in working with high-growth companies.
John Challis
Head of Business Development
John has 18 years' experience in the corporate travel technology sector across operations,
implementations and sales. John has been with Serko for 11 years and was until recently responsible
for managing the Australasian sales team, however, as part of Serko's global expansion plans John is
now responsible for growth in new markets with a heavy focus on the Northern Hemisphere.
Murray Warner
Head of Australasian Market
Murray has 20 years’ experience working with cloud software technology building new sales and
revenue operations. He has previously held several senior management positions with Concur
Technologies, an SAP company, across Asia-Pacific, Europe and North America.
Tony D’Astolfo
Senior Vice President, NORAM
Tony is a 35-year travel industry veteran, with rich expertise in travel and technology and a passion
for moving the industry forward. His career includes senior leadership positions at Deem,
Phocuswright, GroundLink, Sabre/GetThere and United Airlines. Tony is a long-time member of GBTA
and ACTE, and a former member of the Board of Directors of both ACTE and WINiT for Women.
Darrin Grafton and Bob Shaw are also part of the executive team, see facing page for their details
SERKO ANNUAL REPORT Simon Botherway
Independent Non-executive Chairman, New Zealand
Appointed 30 April 2014, re-elected August 2018
Simon is based in New Zealand. He holds a BCom, as well as the US-based Chartered Financial Analyst
(CFA) designation. Simon has extensive experience in corporate governance, banking and investment
management. In 2002 Simon co-founded Brook Asset Management and was Chairman from 2004 to
2008. He is also a past President of the CFA Society of New Zealand and was a member of the CFA
Asia-Pacific Advocacy Committee.
Simon was appointed as a member of the Securities Commission in 2009 and chaired the Financial
Markets Authority Establishment Board in 2010. Simon is currently a Director of Fidelity Life
Assurance and is a Guardian of the New Zealand Superannuation Fund.
Claudia Batten
Independent Non-executive Chairman, United States
Appointed 30 April 2014, re-elected August 2017
Claudia is based in the United States. She holds an LLB (Hons) and BCA from Victoria University
(Wellington). Claudia has been a founding member of two highly successful entrepreneurial
ventures. The first venture was Massive Incorporated, a network for advertising in video games,
she helped pioneer ‘digital’ as a media buy. Massive was sold to Microsoft in 2006. In 2009 she
co-founded Victors & Spoils (‘V&S’), the first advertising agency built on the principles of
crowd-sourcing. V&S was majority acquired by French holding company Havas Worldwide in
2011. Claudia is a strong supporter of the New Zealand start-up scene as an active mentor and
adviser. She is also the digital adviser to the Board of Westpac New Zealand.
Clyde McConaghy
Independent Non-executive Chairman, Australia
Appointed 30 April 2014, re-elected August 2017
Clyde is based in Australia. He holds a BBus, and an MBA from Cranfield University United Kingdom
(UK). Clyde is a Fellow of the Australian Institute of Company Directors and a Fellow of the Institute of
Directors UK. He is the founder of Optima Boards, providing independent director and advisory
services to public, private, family office and charitable entities around the world. Clyde has worked in
publishing, media, online and technology sectors, living in the UK, Germany, China and Australia. He is
a Director of ASX-listed technology company, Infomedia Limited and Chairman of the Board of
Chapman Eastway Pty Limited.
Darrin Grafton
Executive Director, Chief Executive Officer & Co-Founder
Appointed 5 April 2007
Darrin has more than 25 years' experience in travel technology and is highly experienced in
technology commercialisation. He previously held senior management positions with Gullivers Travel
Group (listed on the Australian and New Zealand Stock Exchanges 2004-2006) and Interactive
Technologies.
Robert (Bob) Shaw
Executive Director, Chief Strategy Officer & Co-Founder
Appointed 5 April 2007, re-elected August 2018
Bob has more than 25 years' experience creating and commercialising technology for the travel
industry. He has held a number of directorships and senior management positions in various
high-profile ventures, including Gullivers Travel Group (listed on the Australian and New Zealand
Stock Exchanges between 2004 and 2006) and Interactive Technologies.
MANAGEMENT TEAM
Charlie Nowaczek
Chief Operating Officer (COO)
Charlie has over 25 years’ experience as an operations executive and management adviser,
specialising in business transformation and operational excellence. Over the last decade he has been
COO for a number of technology start-ups in the US and Canada.
Susan Putt
Chief Financial Officer (CFO)
Susan has over 25 years’ experience working in New Zealand and has also worked in Australia and
Canada. She is a Chartered Accountant and Chartered Member of the Institute of Directors. Susan
has worked as CFO, Head of Strategy, and Director for a number of New Zealand businesses and
specialises in working with high-growth companies.
John Challis
Head of Business Development
John has 18 years' experience in the corporate travel technology sector across operations,
implementations and sales. John has been with Serko for 11 years and was until recently responsible
for managing the Australasian sales team, however, as part of Serko's global expansion plans John is
now responsible for growth in new markets with a heavy focus on the Northern Hemisphere.
Murray Warner
Head of Australasian Market
Murray has 20 years’ experience working with cloud software technology building new sales and
revenue operations. He has previously held several senior management positions with Concur
Technologies, an SAP company, across Asia-Pacific, Europe and North America.
Tony D’Astolfo
Senior Vice President, NORAM
Tony is a 35-year travel industry veteran, with rich expertise in travel and technology and a passion
for moving the industry forward. His career includes senior leadership positions at Deem,
Phocuswright, GroundLink, Sabre/GetThere and United Airlines. Tony is a long-time member of GBTA
and ACTE, and a former member of the Board of Directors of both ACTE and WINiT for Women.
Darrin Grafton and Bob Shaw are also part of the executive team, see facing page for their details
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SERKO ANNUAL REPORT
CORPORATE
RESPONSIBILITY
Serko aims to be a successful growth company. To
realise this ambition we must do the right thing by our
people, customers, community and our shareholders.
We aim to achieve this through:
1) Focusing on long-term growth and business
sustainability;
2) Applying best practice governance and risk
management procedures;
3) Cultivating an inclusive workplace of diverse
and engaged staff; and
4) Enabling environmentally sustainable choices
through technology.
Serko is committed to developing long-term value
creation and making positive improvements in social,
economic and environmental outcomes. Serko’s first
Environmental Social and Governance (ESG) Report was
produced in 2018. The United Nations (UN) Sustainable
Development Goals (SDGs) have been adopted for
Serko’s ESG initiatives to be reported against.
Further information and our full ESG report can be
found online at www.serko.com/investor-centre/.
Serko’s ESG framework remains under development
and will continue to be progressed over time.
The Sustainable Development Goals (SDGs) are a
set of global initiatives set by the United Nations
for everyone to contribute to. For Serko, the SDGs
are a way to see which areas of sustainability we
are directly contributing to and how our community
initiatives relate to a larger vision for positive change.
The UN SDGs relevant to Serko and our actions are
as follows:
People:
Good health and well-being
Health and safety policies
Quality education
Training and intern programmes
Gender equality
Diversity and inclusion policies
Decent work and economic
growth
Remuneration policies
Reduced inequalities
Diversity and inclusion policies
Customers:
Industry, innovation and
infrastructure
Industry recognition for innovation
Responsible consumption
and production
Privacy and security policies
Community:
Sustainable cities and
communities
Sponsorships and donations
Climate action
Environmental practices
16
SERKO ANNUAL REPORT People:
Good health and well-being
Health and safety policies
Quality education
Training and intern programmes
Gender equality
Diversity and inclusion policies
Decent work and economic
growth
Remuneration policies
Reduced inequalities
Diversity and inclusion policies
Customers:
Industry, innovation and
infrastructure
Industry recognition for innovation
Responsible consumption
and production
Privacy and security policies
Community:
Sustainable cities and
communities
Sponsorships and donations
Climate action
Environmental practices
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SERKO ANNUAL REPORT
MANAGEMENT
COMMENTARY
Please read the following commentary with the financial statements and the related notes in this report. Some parts of this
commentary include information regarding the plans and strategy for the business and include forward-looking statements that
involve risks and uncertainties.
Actual results and the timing of certain events may differ materially from future results expressed or implied by the forward-
looking statements contained in the following commentary. All amounts are presented in New Zealand dollars (NZD), except where
indicated. All references to a year are the financial year ended 31 March, unless otherwise stated.
Non-GAAP (generally accepted accounting practices) measures have been included, as we believe they provide useful information
for readers to assist in understanding Serko’s financial performance. Non-GAAP financial measures do not have standardised
meanings and should not be viewed in isolation or considered as substitutes for measures reported in accordance with New
Zealand Equivalents to International Financial Reporting Standards (NZ IFRS). These measures have not been independently
audited or reviewed.
18
SERKO ANNUAL REPORT $1.6m
NET PROFIT
AFTER TAX
$2.6m
EBITDAF
19%
INCREASE
BUSINESS RESULTS
Year ended 31 March
Revenue
Other income
Total income
Operating expenses
Percentage of operating revenue
Net finance income
Net profit before tax
Percentage of operating revenue
Income tax benefit (expense)
Net profit after tax
Percentage of operating revenue
2019
2018
$ (000)
$ (000)
23,361
1,215
24,576
18,279
994
19,273
Change
$ (000)
5,082
221
5,303
%
28%
22%
28%
(23,320)
(17,684)
(5,636)
-32%
-100%
290
1,546
7%
87
1,633
7%
-97%
414
2,003
11%
(171)
1,832
10%
(124)
-30%
(457)
-23%
258
151%
(199)
-11%
Operating revenue excludes other income, which is primarily grants.
Serko remained profitable in the financial year with a net profit after tax of $1.6 million
against prior year $1.8 million. The result included increased non-cash elements which
affected net profit after tax. Refer below for EBITDAF analysis which excludes these non-cash
elements.
Annual total operating revenue grew by $5.1 million (28%) to $23.4 million from $18.3 million
in the prior year, driven by strong recurring revenue growth across all revenue categories
predominantly from our Australasian operations. The company recognised $1.2 million in
grants from Callaghan Innovation and New Zealand Trade and Enterprise (NZTE) within other
income, leading to total income for the year of $24.6 million up 28% from $19.3 million for
the prior year.
Total operating expenses increased by $5.6 million to $23.3 million from $17.7 million in the
prior year with the planned expansion into Northern Hemisphere markets.
EARNINGS BEFORE INTEREST, TAX, DEPRECIATION, AMORTISATION AND FAIR VALUE
(EBITDAF)
Year ended 31 March
Net profit after tax
Add back /(deduct): income tax
Deduct: net finance income
Add back: depreciation and amortisation
Add back: Fair value remeasurement of
contingent consideration
EBITDAF profit
EBITDAF margin
2019
2018
$ (000)
$ (000)
Change
$ (000)
%
1,633
(87)
(290)
1,048
287
2,591
11%
1,832
171
(414)
597
-
2,186
12%
(199)
-11%
(258)
-151%
124
451
287
405
30%
76%
n/a
19%
EBITDAF is a Non-GAAP measure representing Earnings Before the deduction of costs relating to Interest,
Taxation, Depreciation, Amortisation and Fair value remeasurement of contingent consideration. Serko uses this
as a useful indicator of cash profitability.
EBITDAF improved by $0.4 million (19%) from $2.2 million to $2.6 million. This was
driven by an increase in total income of $5.3 million offset by an increase in operating
costs (excluding depreciation, amortisation and fair value remeasurement of contingent
consideration) of $4.9 million.
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SERKO ANNUAL REPORT
28%
INCREASE
TOTAL
REVENUE
28%
INCREASE
TOTAL
INCOME
INCOME
Year ended 31 March
2019
2018
$ (000)
$ (000)
Change
$ (000)
Travel platform booking revenue
15,948
13,283
Expense platform revenue
Supplier commissions revenue
Other revenues
Recurring product revenue
Percentage of total revenue
Services revenue
Total revenue
Other income
Total income
2,710
1,538
467
20,663
89%
1,539
1,288
334
16,444
90%
2,698
1,835
23,361
18,279
1,215
994
24,576
19,273
2,665
1,171
250
133
4,219
863
5,082
221
5,303
%
20%
76%
19%
40%
26%
47%
28%
22%
28%
Recurring product revenue (a Non-GAAP measure) is the revenue derived from transactions and usage of Serko
products by contracted customers. It excludes services revenue.
Total revenue is operating revenue excluding grants and finance income, while total income includes grants.
Recurring product revenue was up 26% to $20.7 million from $16.4 million on the prior
year. Recurring revenue as a percentage of total revenue remains comparable to the prior
year at 89%. Unfavourable exchange rate movements in the second half negatively impacted
revenue by approximately -1%. Total revenue and Total Income including grants was up 28%.
Travel platform revenue grew by 20% for the year and was primarily related to a 17%
increase in booking numbers. The difference between transaction growth and booking
volume growth is owing to minimum volume commitments recognised over the period of the
contract term, as well as an increase in average revenue per booking (ARPB).
Minimum volume commitments contribute to revenue when actual volumes transacted are
less than the stated contractual commitments. Revenue from these sources in FY19 was
$0.7 million and is comparable to $0.6 million in the prior year. The anticipated transactional
business related to these minimums is expected to be onboarded onto the Serko platform
over FY20.
ARPB increased marginally by 3% for the year owing to increased Zeno pricing. With
further uptake of Zeno expected in FY20, ARPB is expected to increase.
Serko launched its premium travel booking tool called Zeno during 2018 and now 85%* of
Australasian TMCs have signed contracts and can offer Zeno to their customers. Tandem,
Air New Zealand’s TMC, fully onboarded during FY19. New Zealand’s largest corporate
travel TMC, Orbit, is now commencing onboarding its customers. In the UK, ATPI has
completed beta testing and has onboarded initial customers. Development is under way for
NORAM markets, and beta trials continue with wider customer launches expected
during FY20.
*As measured by FY19 booking volumes
20
SERKO ANNUAL REPORT Expense platform revenue grew 76% to $2.7 million. This includes three months of revenue from the InterplX acquisition of $0.9
million. Without the acquisition, growth of Serko Expense was 19% for the year.
Supplier commissions revenue grew by 19% to $1.5 million. The number of bookings that Serko earned additional commission
revenue over the travel platform booking fee increased by 25%. The average attachment rate of commission bookings versus
total bookings for the year was 6.2% up from 5.4% for the prior year.
Other revenues grew by 40%.
Total services revenue was up 47% over the prior period. This primarily reflects revenue associated with customising Serko’s
travel platform as white-label solutions for its TMCs, as well as payments from content suppliers for the integration of their
content to our travel platform. These developments will add to recurring revenue increases for FY20.
HOW SERKO MAKES MONEY
How Serko makes money
Corporate traveller makes
a booking via Serko
Online/Zeno
Corporate books a hotel,
car or taxi via Serko
Online/Zeno
Traveller downloads and
uses Serko Mobile
Traveller submits receipts
using Serko Expense/Zeno
Booking &
other fees
Supplier
commissions
Mobile
subscriptions
Monthly
user fee
Serko’s main source of revenue is Travel platform revenue from Serko Online and Zeno, launched in 2018 in Australasia. Zeno is
currently being tailored for Northern Hemisphere markets. It launched exclusively with ATPI in the UK in December 2018.
It is now being developed to suit North America and is being trialed with beta customers for launch in the second half of FY20.
Travel platform revenue is made up of transaction fees, ancillary service fees and contracted minimum payments (where
applicable) and is stated net of volume-related rebates and discounts.
The serko.travel platform for small and medium enterprises is a free booking service and Serko earns commission income on those
bookings direct from suppliers, therefore income from this platform is included in supplier commissions.
Serko also earns income from its expense management platform Serko Expense, which allows registered users of corporate
customers to process travel and expense claims for accounting and reimbursement. Revenues are derived from a combination
of fees for active users, registered users and reports processed. During the year Serko acquired US based InterplX, which has an
expense management solution called Expensenet.
Supplier commission revenue is earned when corporates opt to book Serko-sourced hotel and other traveller-related services.
Serko is paid directly from the suppliers of those services. Other income includes income from Serko Mobile licence fees and other
miscellaneous revenues.
Services revenue is derived from installation service and customised software development undertaken on behalf of the TMCs.
It also includes the fees charged to develop connections to third party systems wanting to integrate with Serko’s platforms. The
basis of charging can vary depending on the contractual terms with the customer, which may specify time and materials, capped
or fixed pricing.
Other income is primarily government grants for research and development projects, and international growth grants.
21
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R
K
O
A
B
O
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04
I
H
G
H
L
I
G
H
T
S
06
L
E
T
T
E
R
10
O
V
E
R
V
I
E
W
S
T
R
A
T
E
G
C
I
12
P
R
O
D
U
C
T
S
14
L
E
A
D
E
R
S
H
P
I
16
C
O
R
P
O
R
A
T
E
R
E
S
P
O
N
S
I
B
I
L
I
T
Y
18
M
A
N
A
G
E
M
E
N
T
C
O
M
M
E
N
T
A
R
Y
28
F
I
N
A
N
C
A
L
I
S
T
A
T
E
M
E
N
T
S
70
D
I
S
C
L
O
S
U
R
E
S
G
O
V
E
R
N
A
N
C
E
&
83
I
D
R
E
C
T
O
R
Y
SERKO ANNUAL REPORT
Revenue by
Geography
Year ended 31 March
2019
2018
Australia
New Zealand
North America
Other
Revenue
$ (000)
$ (000)
18,238
16,599
3,440
1,471
212
1,038
457
185
23,361
18,279
5,082
Change
$ (000)
1,639
2,402
1,014
27
%
10%
231%
222%
15%
28%
Serko currently earns 78% (FY18 : 91%) of revenue from Australia and
15% (FY18 : 6%) from New Zealand sources, with New Zealand sourced income up
231% over the prior year. The portion of income from New Zealand has increased
with the onboarding of Tandem customers during the year. New Zealand-sourced
income will continue to grow with the continued onboarding of Orbit signed in
July 2018 and commenced in October 2018.
The portion of North America income has grown however, this currently relates to
content income and Expense income from the InterplX acquisition. Serko is currently
undertaking the development required to localise content and integrate its systems
with North American markets and expects these regions to grow during FY20.
Income related to the UK is included in Other. ATPI UK was in trial phase for most of
the year and completed approximately 5,000 bookings during FY19. It is expected
that the volumes for this market will increase with the introduction of integrated rail,
expected to go live in the first quarter of FY20, and the continued roll out to its UK
customer base.
22
SERKO ANNUAL REPORT Revenue Trend
Travel platform
Expense platform
Supplier commissions & other
Services
Booking Trend1
Travel platform booking trend
over the last 7 years
Online bookings
Other and custom bookings
Peak ATMR2
Year-on-year movement
$20m
$15m
$10m
$5m
4m
3m
2m
1m
$30m
$20m
$10m
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY13
FY14
FY15
FY16
FY17
FY18
FY19
41%
23%
$26m
After aquisition
$22.5m
Before aquisition
$18.4m
24%
$18.4m
$14.8m
2018
2019
1 Peak ATMR is a Non-GAAP measure representing Annualised Transactional Monthly Revenue. Serko uses this as a useful indicator of future recurring
revenues from Serko products. It is based on the monthly transactions and average revenue per booking (for its travel platform revenue) and monthly active
user charges (for its expense platform revenue) annualised on a constant currency basis. Peak ATMR was February for both 2018 and 2019.
2 Booking volumes are total volumes and include Offline and and Custom Bookings, which can be either bundled into a price per Online booking or at a
reduced rate, as these are primarily automated bookings but processed through the booking tool.
23
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10
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I
12
P
R
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S
14
L
E
A
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E
R
S
H
P
I
16
C
O
R
P
O
R
A
T
E
R
E
S
P
O
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S
I
B
I
L
I
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Y
18
M
A
N
A
G
E
M
E
N
T
C
O
M
M
E
N
T
A
R
Y
28
F
I
N
A
N
C
A
L
I
S
T
A
T
E
M
E
N
T
S
70
D
I
S
C
L
O
S
U
R
E
S
G
O
V
E
R
N
A
N
C
E
&
83
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SERKO ANNUAL REPORT-
17%
INCREASE
TRAVEL PLATFORM
BOOKINGS
41%
INCREASE
PEAK
ATMR
ACTIVITY
Travel platform bookings increased 17% over the prior year, while expense transaction
volumes also grew strongly, driven mainly by growth in our core Australasian markets.
Total travel bookings during FY19 were 4.14 million, representing 58% of an estimated
addressable market of 7.2 million corporate travel bookings in Australia and New Zealand.
Total travel bookings include 0.4 million offline bookings (system automated bookings) which
don’t contribute significantly to revenue or are bundled into the ‘Online’ booking rate. Online
bookings for the year were 3.74 million and were also up 17% over the prior year.
Serko is currently expanding into Northern Hemisphere markets, however, these regions
did not make a significant contribution to volumes in 2019 owing to being in development
and trial stages.
Serko Expense transactions increased by 33% to 273,000 for FY19 from 206,000 in
the prior year.
ARPB for travel-related revenue (travel platform and supplier commissions) increased
marginally during the year by 3% to $4.67 based on Online bookings and was largely related
to increases in pricing for the Zeno platform. However, additional content revenue at $1.5
million is contributing significantly to Serko’s profit with a 19% uplift over the prior year.
Peak ATMR, an indicative measure of forward revenue from currently transacting customers,
rose 23% before the InterplX acquisition for the year to $22.5 million, lifted by increases
in ARPB, total bookings and the number of users of our Expense platform. Actual recurring
product revenue of $20.7 million for 2019 was ahead of the 2018 Peak ATMR of $18.4 million.
ATMR, including InterplX, is $26 million (41% increase).
Serko’s TMC partners have indicated they expect additional Australasian corporate
customers, that are not currently using an online booking tool, to transition to Serko products
over the next year. Therefore, we expect transaction growth in Australia and New Zealand
to continue. In addition, Serko is expanding into Northern Hemisphere territories and this
segment is also expected to grow over the next financial year.
While transaction growth is difficult to forecast, Serko is expecting total operating revenue to
grow between 20% and 40% for the 2020 financial year.
Continued transition to Zeno at a price uplift and onboarding of new corporates within the
Australasian market as well as Northern Hemisphere markets, will contribute to expected
revenue uplifts for FY20. Also, with a healthy pipeline of Serko Expense management
customers and a full year of InterplX revenue, we expect Expense revenue will also grow.
Serko uses Online bookings, Annualised Transactional Monthly Revenue (ATMR) and Average Revenue per Booking
(ARPB) as indicators of strategic achievement.
24
SERKO ANNUAL REPORT 32%
INCREASE
OPERATING
EXPENSES
OPERATING EXPENSES
Year ended 31 March
2019
2018
$ (000)
$ (000)
Change
$ (000)
Remuneration and benefits
13,135
11,667
Selling and marketing expenses
Administration expenses
Other expenses
Total operating expenses
Percentage of operating revenue
1,691
6,563
1,931
23,320
100%
1,258
3,692
1,067
17,684
97%
1,468
433
2,871
864
5,636
%
13%
34%
78%
81%
32%
Remuneration and benefits are the total costs of employees and contractors engaged within the business during the
financial year, including gross salary, additional payroll taxes, superannuation and KiwiSaver, bonuses, commissions
and the value of any share-based remuneration or awards.
Selling and marketing expenses comprise all the direct costs of sales that are not people or salary related.
Administration expenses are other general overheads and operating costs, including depreciation and amortisation
charges.
Other expenses comprise direct technology costs, including hosting.
Total operating expenses were up 32% or $5.6 million from the prior year to $23.3 million,
owing to increases across all categories of expenses as Serko expands its operations.
Remuneration and benefits (R&B) increased owing to the increased head count from 106 FTE
to 173 FTE as at 31 March. Included in R&B was $2.0 million related to employee share-based
payments and options (long-term incentives) and short-term incentive performance payments
for 2019, compared to $1.3 million in the prior year.
As Serko continues to expand in the Northern Hemisphere, R&B costs will increase, as
additional resources are hired to support growth into new territories. This will be offset
partially by capitalisation of internal staff time spent on development of revenue-earning
modules for the Serko platforms.
Selling and marketing expenses increased as expected with the launch of Zeno in Australasia,
as well as into Northern Hemisphere markets, which will drive revenue growth in 2020 by
supporting the successful acquisition and onboarding of new customers to the product.
Administration costs were higher than the prior year owing mainly to recruitment fees for
increased head count and professional fees for advice to support international growth.
Administration costs also included non-cash costs as well as one-off costs related to
capital activities. For 2019, depreciation and amortisation at $1.0 million was $0.5 million
higher than the prior year. During the year Serko listed on the ASX as a foreign-exempt
listing and acquired InterplX. The one-off cash costs included in net profit related to these
items amounted to $0.4 million. The fair value measurement adjustment on contingent
consideration (non-cash), related to the InterplX acquisition, included a fair value
remeasurement charge of $0.3 million.
The InterplX acquisition consideration was by way of issuance of Serko shares, half of which is
deferred and contingent on InterplX achieving key milestones. As a result, the liability for the
deferred component of this acquisition will vary according to the trading price of the shares at
balance date and up until the shares are issued. An increase in the Serko price therfore results
in an accounting entry that reduces Serko’s profit and increases the contingent consideration
liability which is then extinguished on share issue. The final number of shares issued is subject
to InterplX meeting the revenue targets as set out in the purchase agreement.
Other expenses are primarily hosting costs. Hosting costs increased with the volume
increases and set-up costs associated with new data centres for new territories.
25
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04
I
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06
L
E
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T
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R
10
O
V
E
R
V
I
E
W
S
T
R
A
T
E
G
C
I
12
P
R
O
D
U
C
T
S
14
L
E
A
D
E
R
S
H
P
I
16
C
O
R
P
O
R
A
T
E
R
E
S
P
O
N
S
I
B
I
L
I
T
Y
18
M
A
N
A
G
E
M
E
N
T
C
O
M
M
E
N
T
A
R
Y
28
F
I
N
A
N
C
A
L
I
S
T
A
T
E
M
E
N
T
S
70
D
I
S
C
L
O
S
U
R
E
S
G
O
V
E
R
N
A
N
C
E
&
83
I
D
R
E
C
T
O
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Y
SERKO ANNUAL REPORT
RESEARCH AND DEVELOPMENT (R&D) COSTS
Year ended 31 March
2019
2018
Change
%
87%
INCREASE
R&D COSTS
Percentage of operating revenue
Total R&D cost (including amounts capitalised)
$ (000)
$ (000)
$ (000)
9,165
39%
4,906
27%
4,259
87%
Less: capitalised product development costs
(6,740)
(383)
(6,357)
1660%
Percentage R&D costs
74%
8%
Research costs (excluding amortisation of
amounts previously capitalised)
2,425
4,523
(2,098)
-46%
Less: Government grants
(876)
(956)
80
8%
Add: Amortisation of capitalised
development costs
Net product development costs
Percentage of operating revenue
754
412
342
83%
2,303
10%
3,979
(1,676)
-42%
22%
Research & Development (R&D) cost is a Non-GAAP measure representing the internal and external costs related to
R&D that have been included in operating costs and capitalised as computer software development during the period.
Research expenditure includes all reasonable expenditure associated with R&D activities that does not give rise to
an intangible asset. R&D expenses include employee and contractor remuneration related to these activities. It also
covers research expenditure defined by NZ IAS 38.
Serko has capitalised more development costs for FY19 than in FY18.
During 2018 we undertook a research and market discovery and trial programme and
established what was required for Zeno to be successful in these new markets. Accordingly,
we capitalised only a small proportion of development costs and recorded higher
research-related expenditure.
By contrast, 2019 was a year of development to add content and enhance the functionality
and features of Zeno to address these markets. We also signed new Zeno contracts with large
TMCs. As such a portion of employee development costs have been capitalised during the
year and this resulted in additions of $6.7 million to intangible assets related to internally
produced software. We remain in the build phase and have a significant development
workload ahead of us as we prioritise development to deliver to those markets and customers
that represent the best opportunity for Serko. We are confident that this investment will
generate strong revenue growth in years to come.
26
SERKO ANNUAL REPORT 63%
INCREASE
FTE
201%
INCREASE
CASH
BALANCES
EMPLOYEES AND AVERAGE REVENUE FTE
Year ended 31 March
2019
2018
Change
%
Product development and maintenance
Sales and marketing
Customer support
Administration
Total employee numbers at end of year (FTE)
Average revenue per FTE (NZD $000)
100
16
40
17
173
167
54
12
27
13
106
170
46
4
13
4
67
85%
33%
48%
31%
63%
-3
-2%
Serko’s staff head count increased during the year, moving to 173 from 106 full-time
equivalent (FTE) staff at the end of 2018. Head count was 176 with 87 staff based in New
Zealand, 24 in Australia, 38 in China, 26 in the US and one based in India. The increase in staff
is primarily in product development and reflects the investment Serko is making in its product
to service the Northern Hemisphere. The acquisition of expense management company
InterplX in December 2018 added 21 staff to the US operations.
Average revenue per FTE decreased by $3,000 to $167,000, reflecting the investment into
additional staff as Serko expands.
CASH FLOWS
Year ended 31 March
2019
2018
Change
%
$(000)
$(000)
$(000)
Receipts from customers
Grant income receipts
21,855
17,754
4,101
1,264
915
349
23%
38%
Other operating cash flows
(19,472)
(17,253)
(2,219)
-13%
Total cash flows from operating activities
3,647
1,416
2,231
158%
Investing cash flows
Financing cash flows
Total net cash flows
Net foreign exchange differences
(7,279)
14,220
10,588
(88)
(519)
(6,760)
1303%
(46)
851
(70)
14,266
n/a
9,737
1144%
(18)
-26%
Closing cash balances
15,732
5,232
10,500
201%
Receipts from customers increased by 23% over the year from $17.8 million to $21.9 million.
Other operating cash outflows increased by $2.2 million to $19.5 million. Positive operating
cash flows for the year of $3.6 million were up 158% over the prior year’s $1.4 million.
Cash outflows for property, plant and equipment and intangibles, reflecting capitalised
internal development, were $7.3 million. A capital raise to fund expansion and related
acquisitions resulted in a net $14.3 million contribution to cash balances.
Cash balances increased by 201% as at 31 March 2019, from $5.2 million to $15.7 million.
27
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06
L
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T
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10
O
V
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R
V
I
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W
S
T
R
A
T
E
G
C
I
12
P
R
O
D
U
C
T
S
14
L
E
A
D
E
R
S
H
P
I
16
C
O
R
P
O
R
A
T
E
R
E
S
P
O
N
S
I
B
I
L
I
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Y
18
M
A
N
A
G
E
M
E
N
T
C
O
M
M
E
N
T
A
R
Y
28
F
I
N
A
N
C
A
L
I
S
T
A
T
E
M
E
N
T
S
70
D
I
S
C
L
O
S
U
R
E
S
G
O
V
E
R
N
A
N
C
E
&
83
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O
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Y
SERKO ANNUAL REPORT
FINANCIAL
STATEMENTS
28
SERKO ANNUAL REPORT The directors of Serko Limited are pleased to present the
financial statements for Serko Limited and its subsidiaries (the
group) for the year ended 31 March 2019 to shareholders.
The directors are responsible for presenting financial
statements in accordance with New Zealand law and generally
accepted accounting practice, which fairly present the
financial position of the group as at 31 March 2019 and the
results of its operations and cash flows for the year ended on
that date.
The directors consider the financial statements of the group
have been prepared using accounting policies that have been
consistently applied and supported by reasonable judgements
and estimates and that all relevant financial reporting and
accounting standards have been followed.
The directors believe that proper accounting records have been
kept that enable, with reasonable accuracy, the determination
of the financial position of the group and facilitate compliance
of the financial statements with the Companies Act 1993, NZX
Main Board Listing Rules, Financial Reporting Act 2013 and the
Financial Markets Conduct Act 2013.
The directors consider they have taken adequate steps to
safeguard the assets of the group and to prevent and detect fraud
and other irregularities. Internal control procedures are also
considered to be sufficient to provide a reasonable assurance as
to the integrity and reliability of the financial statements.
The financial statements are signed on behalf of the Board of
Directors 22 May 2019 by:
SIMON BOTHERWAY
CHAIRMAN
DARRIN GRAFTON
CHIEF EXECUTIVE OFFICER
CONTENTS
Consolidated statement of comprehensive
income
Consolidated statement of changes in equity
Consolidated statement of financial position
Consolidated statement of cash flows
Notes to the financial statements
Independent auditor’s report
30
31
32
33
34-65
66-69
29
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06
L
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10
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12
P
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O
D
U
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14
L
E
A
D
E
R
S
H
P
I
16
C
O
R
P
O
R
A
T
E
R
E
S
P
O
N
S
I
B
I
L
I
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Y
18
M
A
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A
G
E
M
E
N
T
C
O
M
M
E
N
T
A
R
Y
28
F
I
N
A
N
C
A
L
I
S
T
A
T
E
M
E
N
T
S
70
D
I
S
C
L
O
S
U
R
E
S
G
O
V
E
R
N
A
N
C
E
&
83
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Y
SERKO ANNUAL REPORT
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 March 2019
Notes
2019
2018
$ (000)
23,361
1,215
24,576
(1,691)
(13,135)
(6,563)
(1,931)
(23,320)
360
(70)
1,546
87
1,633
(126)
1,507
$0.02
$0.02
$ (000)
18,279
994
19,273
(1,258)
(11,667)
(3,692)
(1,067)
(17,684)
475
(61)
2,003
(171)
1,832
(52)
1,780
$0.03
$0.02
Revenue
Other income
Total revenue and other income
Operating Expenses
Selling and marketing expenses
Remuneration and benefits
Administration expenses
Other expenses
Total operating expenses
Finance income
Finance expenses
Profit before income tax
Income tax benefit/(expense)
Net profit attributable to the shareholders of the company
Movement in foreign currency reserve
Total comprehensive income for the year
Earnings per share
Basic profit per share
Diluted profit per share
The accompanying notes form part of these financial statements.
4
4
5
5
5
6
17
17
30
SERKO ANNUAL REPORT CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2019
Notes
Share
Capital
Share-based
Payment
Reserve
Foreign
Currency
Reserve
Accumulated
Losses
Total
$ (000)
$ (000)
$ (000)
$ (000)
$ (000)
Balance as at 1 April 2018
Net profit for the year
Other comprehensive income/(loss)*
Total comprehensive income for the year
Transactions with owners
Issue of share capital
Cost of equity issued
Shares allocated to employees
Shares forfeited from employees
Share-based payments — employee share options
Shares issued in respect of InterplX acquisition
Balance as at 31 March 2019
Balance as at 1 April 2017
Net profit for the year
Other comprehensive income/(loss)*
Total comprehensive income for the year
Transactions with owners
Shares allocated to employees
Shares allocated to employees
Shares forfeited from employees
16
16
16
16
16
16
16
16
16
25,185
1,309
(85)
(18,065)
-
-
-
15,048
(778)
-
-
-
1,538
40,993
-
-
-
-
-
406
(24)
194
-
-
1,633
(126)
(126)
-
1,633
-
-
-
-
-
-
-
-
-
-
-
-
8,344
1,633
(126)
1,507
15,048
(778)
406
(24)
194
1,538
1,885
(211)
(16,432)
26,235
25,185
1,021
(33)
(19,897)
-
-
-
-
-
-
-
-
-
252
(23)
59
-
1,832
(52)
(52)
-
1,832
-
-
-
-
-
-
6,276
1,832
(52)
1,780
252
(23)
59
Balance as at 31 March 2018
25,185
1,309
(85)
(18,065)
8,344
*Items in other comprehensive income may be reclassified to the income statement and are shown net of tax.
The accompanying notes form part of these financial statements.
31
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P
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O
D
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S
14
L
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A
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E
R
S
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16
C
O
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P
O
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A
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R
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S
P
O
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I
B
I
L
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18
M
A
N
A
G
E
M
E
N
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C
O
M
M
E
N
T
A
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Y
28
F
I
N
A
N
C
A
L
I
S
T
A
T
E
M
E
N
T
S
70
D
I
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C
L
O
S
U
R
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S
G
O
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E
R
N
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&
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SERKO ANNUAL REPORT
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 March 2019
Current assets
Cash at bank and on hand
Receivables
Derivative financial instruments
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Deferred tax asset
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Contingent consideration
Income tax payable
Interest-bearing loans and borrowings
Total current liabilities
Non-current liabilities
Trade and other payables
Interest-bearing loans and borrowings
Total non-current liabilities
Total liabilities
Equity
Share capital
Share-based payment reserve
Foreign currency reserve
Accumulated losses
Total equity
Total equity and liabilities
Notes
11
7
8
9
10
6
12
13
15
12
15
16
16
2019
$ (000)
15,732
5,493
421
21,646
1,129
10,553
84
11,766
33,412
4,791
1,825
224
54
6,894
134
149
283
2018
$ (000)
5,232
3,831
288
9,351
893
1,574
155
2,622
11,973
2,793
-
98
351
3,242
183
204
387
7,177
3,629
40,993
1,885
(211)
(16,432)
26,235
33,412
25,185
1,309
(85)
(18,065)
8,344
11,973
For and on behalf of the Board of Directors, who authorise these financial statements for issue on 22 May 2019.
SIMON BOTHERWAY
CHAIRMAN
DARRIN GRAFTON
CHIEF EXECUTIVE OFFICER
The accompanying notes form part of these financial statements.
32
SERKO ANNUAL REPORT CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 March 2019
Cash flows from operating activities
Receipts from customers
Interest received
Receipts from grants
Taxation (paid)/refund received
Payments to suppliers and employees
Interest payments
Net GST refunded (paid)
Net cash flows from operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Capitalised development costs and other intangible assets
Net cash flows (used in) investing activities
Cash flows from financing activities
Issue of ordinary shares
Cost of new share issue
Net repayment of loans
Net cash flows from/(used in)financing activities
Net increase (decrease) in total cash
Net foreign exchange difference
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
Cash and cash equivalents comprises the following:
Cash at bank and on hand
Notes
21
16
16
11
2019
$ (000)
21,855
304
1,264
(142)
2017
$ (000)
17,754
93
915
(262)
(19,395)
(17,065)
(20)
(219)
3,647
(466)
(6,813)
(7,279)
15,048
(778)
(50)
14,220
10,588
(88)
5,232
15,732
15,732
15,732
(22)
3
1,416
(192)
(327)
(519)
-
-
(46)
(46)
851
(70)
4,451
5,232
5,232
5,232
The accompanying notes form part of these financial statements.
33
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14
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C
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18
M
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28
F
I
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A
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A
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A
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M
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70
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SERKO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2019
1 CORPORATE INFORMATION
In reaching their conclusion the directors have considered
The financial statements of Serko Limited (‘the company’)
and subsidiaries (‘the group’) were authorised for issue in
accordance with a resolution of directors.
The company is a limited liability company domiciled and
incorporated in New Zealand under the Companies Act 1993
and is listed on the New Zealand Stock Exchange (NZX) and
the Australian Securities Exchange (ASX). Its registered
office is at Unit 14d, 125 The Strand, Parnell, Auckland.
The group is involved in the provision of computer
software solutions for corporate travel. The group is
headquartered in Auckland, New Zealand.
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies applied in the
preparation of these consolidated financial statements
are set out below and within this notes section. These
policies have been consistently applied to all the years
presented, unless otherwise stated.
a) Basis of preparation
The financial statements have been prepared in
accordance with generally accepted accounting practice
in New Zealand (NZ GAAP) and the requirements of
the Financial Markets Conduct Act 2013. The financial
statements have been prepared on a historical cost basis,
modified by the revaluation of certain assets and liabilities
as identified in specific accounting policies.
The financial statements are presented in New Zealand
dollars and all values are rounded to the nearest thousand
dollars unless stated otherwise.
the following factors:
• Cash reserves at 31 March 2019 of $15.7 million
provides a sufficient level of headroom to help support
the business for at least the next twelve months; and
• The directors have made due enquiry into the
appropriateness of the assumptions underlying the
budgetary forecasts.
c) Statement of compliance
The financial statements have been prepared in
accordance with NZ GAAP. They comply with New
Zealand equivalents to International Financial Reporting
Standards (NZ IFRS) and International Financial Reporting
Standards, as appropriate for profit-oriented entities.
d) Adoption of new accounting standards and
interpretations
New accounting standards adopted by Serko Group:
A number of new or amended standards become
applicable for the current reporting period and Serko
has had to change its accounting policies as a result of
adopting the following standards:
• NZ IFRS 15 Revenue from Contracts with Customers
• NZ IFRS 9 Financial Instruments
The impact of the adoption of these new standards is
disclosed below.
NZ IFRS 15 Revenue from Contracts with Customers
Impact of adoption
The financial statements provide comparative information
with Customers from 1 April 2018, which resulted in
in respect of the previous period.
changes in accounting policies relating to the recognition
The group adopted NZ IFRS 15 Revenue from Contracts
b) Going concern
The directors have carefully considered the ability of the
group to continue to operate as a going concern for at least
the next 12 months from the date the financial statements are
authorised for issue. It is the conclusion of the directors that
the group will continue to operate as a going concern and the
financial statements have been prepared on that basis.
of revenue.
Following a detailed review of the group’s portfolio
of contracts, management concluded that the
implementation of NZ IFRS 15 had no material impact on
the way Serko recognises revenue for opening balances.
Therefore, there is no requirement to restate revenue
reported in prior periods. The details of the review
34
SERKO ANNUAL REPORT process, including current year impact of the adoption of
accounting policies or adjustments to the amounts
NZ IFRS 15, are outlined below. Accounting policies have
recognised in the financial statements.
been amended to ensure that the five-step method, as
outlined in NZ IFRS 15, is applied consistently to revenue
recognition processes across the group.
Process and policy
To quantify the impact of NZ IFRS 15 contracts across the
travel platform were assessed and compared to revenue
recognition under IAS 18. An assessment was made on
each contract to evaluate the service benefits over time,
which requires allocations to be made to each service
obligation. As the revenue is usage based (depending
on the volume of travel bookings), fixed and variable
consideration was allocated over the performance period
Serko does not currently hold any complex financial
instruments. Cash is either held on call or on term deposit
and forward contracts (hedging item) held are recognised
at fair value through Profit and Loss. Trade receivables are
assessed for impairment and an expected credit loss (ECL)
provision made based on ‘lifetime expected credit losses’.
An ECL provision of $7,000 has been assessed based on
an ECL model that considers various aspects of credit risk
within a risk matrix, considering history of debtor write
off, ageing of invoices, country, market and product risk.
The low ECL allowance reflects the low levels of bad debt
write off and low value of aged invoices.
depending on contract minimum volume requirements and
e) Standards on issue not yet adopted
estimates of variable volume. For each contract the
five-step method was applied to assess the impact on
revenue recognition.
The five-step method for recognising revenue from contracts
with customers involves consideration of the following:
• Identifying the contract with the customer;
• Identifying performance obligations;
• Determining the transaction price;
• Allocating the transaction price to distinct
performance obligations; and
• Recognising revenue
NZ IFRS 16 Leases
Impact of adoption
NZ IFRS 16 Leases, effective for accounting periods
beginning on or after 1 January 2019. Serko has elected
not to apply the standard early.
Under NZ IFRS 16 a contract contains a lease if the
contract conveys the right to control the use of an
identified asset for a period of time in exchange for
consideration. Adopting NZ IFRS 16 will require Serko
to recognise a lease liability reflecting the future
lease payments and a ‘right-of-use’, asset which will
During the current period, a number of new contracts were
be depreciated over the lease term. The statement of
signed with contracted minimum revenue commitments,
comprehensive income will be impacted by the recognition
resulting in a $477,000 increase to revenue based on NZ IFRS
of an interest expense and a depreciation expense with
15 treatment. The current recognition of non-travel platform
premise rental expense removed altogether.
Until the project is completed and decisions are made,
such as the transition method to apply and applicable
discount rate to calculate the lease obligation, it is not
practicable to quantify the effect of the standard.
The standard will not have any effect on the total amount
of cash flows reported but it is expected to have an effect
on the presentation of cash flows. This is because applying
NZ IAS 17 Leases, cash flows relating to operating leases
are presented as cash flows from operating activities while
applying NZ IFRS 16 will result in the presentation within
financial activities of cash flows relating to the repayment
of principal on lease liabilities. Existing operating lease
commitments are set out in note 19.
revenue is consistent with NZ IFRS 15 treatment, as it relates
to revenue recognised ‘as invoiced’, such as customisation
work. Under certain contracts, transaction fees are bundled
to include the ‘changes post ticketing’ where some revenue
may need to be deferred until subsequent changes occur. This
is consistent with the prior year where management have
determined this adjustement to be immaterial.
NZ IFRS 9 Financial Instruments
Impact of adoption
NZ IFRS 9 Financial Instruments includes a revised
model for classification and measurement of financial
instruments, including a new expected credit loss model
for the calculation of impairment on financial assets and
changes to general hedge accounting requirements.
The adoption of NZ IFRS 9 Financial Instruments from
1 January 2018 resulted in no significant changes in
35
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28
F
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f) Basis of consolidation
The consolidated financial statements comprise the
financial statements of Serko Limited and its subsidiaries as
at and for the year ended 31 March each year.
Control is achieved when the group is exposed, or has
rights, to variable returns from its involvement with the
investee and has the ability to affect those returns through
its power over the investee. Specifically, the group controls
an investee if and only if the group has:
• Power over the investee (i.e. existing rights that give it the
current ability to direct the relevant activities of the investee);
• Exposure, or rights, to variable returns from its
involvement with the investee; and
• The ability to use its power over the investee to affect
its returns.
When the group has less than a majority of the voting
or similar rights of an investee, the group considers all
relevant facts and circumstances in assessing whether it
has power over an investee, including:
• The contractual arrangement with the other vote holders
of the investee;
• Reclassifies the parent’s share of components
previously recognised in other comprehensive income
to profit or loss or retained earnings, as appropriate,
as would be required if the group had directly
disposed of the related assets or liabilities.
The acquisition of subsidiaries is accounted for using
the acquisition method of accounting. The acquisition
method of accounting involves recognising at acquisition
date, separately from goodwill, the identifiable assets
acquired, liabilities assumed and any non-controlling
interest in the acquiree. The identifiable assets acquired
and liabilities assumed are measured at their acquisition
date fair values. Acquisition-related costs are expensed as
incurred and recognised in profit or loss.
The difference between the above items and the fair value
of the consideration is recorded as either goodwill or gain
on bargain purchase. After initial recognition goodwill is
measured at cost less any accumulated impairment losses.
For the purpose of impairment testing, goodwill acquired
in a business combination is, from the acquisition date,
allocated to each of the group’s cash-generating units
expected to benefit from the combination, irrespective
of whether other assets or liabilities of the acquiree are
• Rights arising from other contractual arrangements; and
assigned to those units.
• The group’s voting rights and potential voting rights.
The group reassesses whether or not it controls an
Goodwill is tested annually for impairment, or
immediately if events or changes in circumstances
investee if facts and circumstances indicate there are
indicate that it might be impaired, and carried at cost less
changes to one or more of the three elements of control.
Consolidation of a subsidiary begins when the group
obtains control over the subsidiary and ceases when the
group loses control of the subsidiary. Assets, liabilities,
income and expenses of a subsidiary acquired or disposed
of during the year are included in the financial statements
from the date the group gains control until the date the
group ceases to control the subsidiary.
A change in the ownership interest of a subsidiary, without
a loss of control, is accounted for as an equity transaction.
If the group loses control over a subsidiary, it:
• Derecognises the assets (including goodwill) and
liabilities of the subsidiary;
• Derecognises the carrying amount of any non-
controlling interests;
accumulated impairment losses. Impairment losses on
goodwill are not reversed.
Any gain on bargain purchase is recognised immediately
on acquisition to profit and loss.
Inter-company transactions, balances and unrealised
gains and losses on transactions between group
companies are eliminated.
Non-controlling interests are allocated their share of
comprehensive income after tax in the statement of
comprehensive income and are presented within equity
in the consolidated statement of financial position,
separately from the equity of the owners of the parent.
g) Foreign currency translation
• Derecognises the cumulative translation differences
i) Functional and presentation currency
recorded in equity;
• Recognises the fair value of the consideration received;
• Recognises the fair value of any investment retained;
• Recognises any surplus or deficit in profit or loss; and
Items included in these 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’). These financial statements are
presented in New Zealand dollars, which is the group’s
presentation currency and the parent’s functional currency.
36
SERKO ANNUAL REPORT ii) Transactions and balances
Transactions in foreign currencies are initially recorded
in the functional currency by applying the exchange rates
ruling at the date of the transaction. Monetary assets
and liabilities denominated in foreign currencies are
retranslated at the rate of exchange ruling at balance
date. Non-monetary items measured in terms of
historical cost in a foreign currency are translated using
the exchange rate as at the date of the initial transaction.
Non-monetary items measured at fair value in a foreign
currency are translated using the exchange rates at the
date when the fair value was determined.
Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation
at year end of exchange rates for monetary assets
and liabilities denominated in foreign currencies are
recognised in profit or loss.
iii) Foreign Currency Translation Reserve
For the purposes of presenting these consolidated
financial statements, the assets and liabilities of the
group’s foreign operations are translated into currency
units using exchange rates prevailing at the end of
each reporting period. Income and expense items are
translated at the average exchange rates for the period,
unless exchange rates fluctuate significantly during that
period, in which case the exchange rates at the dates of
the transactions are used. Exchange differences arising,
if any, are recognised in other comprehensive income and
accumulated in the foreign currency translation reserve.
h) Financial instruments
Cash at bank and on hand and receivables are financial
assets measured at amortised cost. When financial assets
are recognised initially they are measured at fair value
plus directly attributable transaction costs. The group
determines the classification of its financial assets on
initial recognition and, when allowed and appropriate,
re-evaluates this designation at each financial year end.
Derivative financial instruments are recognised at fair
value through profit or loss.
i) Amortised cost
Financial assets measured at amortised cost are those
held within a business model whose objective is to hold
financial assets in order to collect contractual cash flows
and the contractual terms of the financial asset give rise
on specified dates to cash flows that are solely payments
37
of principal and interest on the principal amount
outstanding. They arise when the group provides money,
goods or services directly to a debtor with no intention
of selling the receivable. Such assets are subsequently
carried at amortised cost using the effective interest
method. Gains and losses are recognised in profit or loss
when the contract assets and liabilities are derecognised
or impaired, as well as through the amortisation process.
ii) Financial liabilities
Financial liabilities are classified as ‘other financial
liabilities’. Other financial liabilities, including
interest-bearing loans and borrowings, are initially
measured at fair value, net of transaction costs. Other
financial liabilities are subsequently measured at
amortised cost using the effective interest method.
The effective interest method calculates the amortised
cost of a financial liability and allocates the interest
expense over the relevant period. The effective interest
rate is the rate that exactly discounts estimated future
cash payments through the expected life of the financial
liability or, where appropriate, a shorter period to the net
carrying amount of the liability.
Financial liabilities are classified as current liabilities
unless the group has an unconditional right to defer
settlement of the liability for at least 12 months after
balance date.
iii) Impairment of financial assets
The Group recognises a loss allowance for expected
credit losses on investments in debt instruments that
are measured at amortised cost or at FVTOCI, lease
receivables, trade receivables and contract assets, as
well as on financial guarantee contracts. The amount of
expected credit losses is updated at each reporting date
to reflect changes in credit risk since initial recognition of
the respective financial instrument.
The Group always recognises lifetime ECL for trade
receivables, contract assets and lease receivables. The
expected credit losses on these financial assets are
estimated using a provision matrix based on the Group’s
historical credit loss experience, adjusted for factors that
are specific to the debtors, general economic conditions
and an assessment of both the current as well as the
forecast direction of conditions at the reporting date,
including time value of money where appropriate.
For all other financial instruments, the Group recognises
lifetime ECL when there has been a significant increase
in credit risk since initial recognition. However, if the
credit risk on the financial instrument has not increased
significantly since initial recognition, the Group measures
the loss allowance for that financial instrument at an
amount equal to 12-month ECL.
02
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M
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28
F
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A
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E
M
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N
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70
D
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Lifetime ECL represents the expected credit losses
that will result from all possible default events over
the expected life of a financial instrument. In contrast,
12-month ECL represents the portion of lifetime ECL that
is expected to result from default events on a financial
instrument that are possible within 12 months after the
reporting date.
The Group writes off a financial asset when there is
information indicating that the debtor is in severe
financial difficulty and there is no realistic prospect of
recovery, e.g. when the debtor has been placed under
liquidation or has entered into bankruptcy proceedings,
or in the case of trade receivables, when the amounts are
over two years past due, whichever occurs sooner.
3 SIGNIFICANT ACCOUNTING JUDGEMENTS,
ESTIMATES AND ASSUMPTIONS
The preparation of the group’s consolidated financial
statements requires management to make judgements,
estimates and assumptions that affect the reported
amounts of revenues, expenses, assets and liabilities, and
the accompanying disclosures.
Significant judgements and estimates
In the process of applying the group’s accounting policies,
management has made the following judgements,
which have an effect on the amounts recognised in the
consolidated financial statements.
i) Borrowing costs
Share-based payments
Borrowing costs directly attributable to the acquisition,
construction or production of a qualifying asset are
capitalised as part of the cost of that asset. A qualifying
asset is one that takes 12 months or longer to prepare
for its intended use or sale. Other borrowing costs are
expensed when incurred.
The fair value applied to shares granted under the restricted
share plan is the volume weighted average price (VWAP) of
shares traded in the previous 20 trading days preceding the
date of grant. Vesting of the shares is reviewed periodically
to determine that the assumptions around vesting dates and
employee churn rate are still valid (refer note 18).
j) Other taxes
Development costs
Revenues, expenses and assets are recognised net of the
amount of goods and services tax (GST) except where the
GST incurred on a purchase of goods and services is not
recoverable from the taxation authority, in which case the
GST is recognised as part of the cost of acquisition of the
asset or as part of the expense item as applicable.
All receivables and payables are stated GST inclusive.
The net amount of GST recoverable from, or payable to,
the taxation authority is included as part of receivables or
payables in the statement of financial position.
Commitments and contingencies are disclosed net of
the amount of GST recoverable from, or payable to, the
taxation authority.
Development costs of a project are capitalised
in accordance with the accounting policy. Initial
capitalisation of costs is based on management’s
judgement that technological and economic feasibility
is confirmed, usually when a product development
project has reached a defined milestone according
to an established project management model. In
determining the amounts to be capitalised, management
makes assumptions regarding the expected future cash
generation of the project and the expected period of
benefits (refer note 10).
38
SERKO ANNUAL REPORT
Functional currency
The group periodically reviews the functional currency
for reporting purposes. The group believes that there
are sufficient justifications for the continued use of NZD
as the functional currency. The key factors behind this
conclusion are:
• Serko is NZX listed and has raised capital in NZD;
• Research and development grant funding is in NZD;
• NZD is the main currency for labour, operating cost
and capital expenditure; and
• The group also generates certain revenues in NZD.
Impairment of intangible or non-financial assets
Management reviews the carrying value of intangible
and non-financial assets on an annual basis, in particular,
computer software and development work in progress.
Consideration is placed on a number of factors, depending
on the specific asset in question, which may include
discounted cash flow forecasts, the ability to continue
to generate discrete cash flow and returns, any changes
or anticipated changes in the business or product
circumstances and the nature of the events that originally
gave rise to the recognition of any non-financial assets
(refer note 10).
Revenue recognition
Serko has customer agreements that contain annual
minimum transaction volume commitments that span
financial reporting periods. Based on this management
needs to make a judgement about estimated future
transaction volumes to determine related revenue for the
specific financial reporting period (refer note 4).
39
02
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E
R
K
O
A
B
O
U
T
04
I
H
G
H
L
I
G
H
T
S
06
L
E
T
T
E
R
10
O
V
E
R
V
I
E
W
S
T
R
A
T
E
G
C
I
12
P
R
O
D
U
C
T
S
14
L
E
A
D
E
R
S
H
P
I
16
C
O
R
P
O
R
A
T
E
R
E
S
P
O
N
S
I
B
I
L
I
T
Y
18
M
A
N
A
G
E
M
E
N
T
C
O
M
M
E
N
T
A
R
Y
28
F
I
N
A
N
C
A
L
I
S
T
A
T
E
M
E
N
T
S
70
D
I
S
C
L
O
S
U
R
E
S
G
O
V
E
R
N
A
N
C
E
&
83
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SERKO ANNUAL REPORT
4 REVENUE & OTHER INCOME
Revenue from services
Revenue is recognised and measured at the fair value of
Revenue from a contract to provide installation services
the consideration received or receivable to the extent it
is recognised by reference to the completion of the
is probable that the entity will collect the consideration
contract or services delivered at balance date. If services
to which it will be entitled in exchange for the goods or
relate to one-off chargeable work orders, these can
services that will be transferred to the customer. Revenue
be invoiced as and when the performance obligation is
is disclosed net of credit notes, rebates and discounts.
satisfied. Revenue is recognised at a point in time by
a) Revenue from transaction and usage fees
applying the ‘as invoiced’ practical expedient. If these
relate to customised set up or installation, the revenues
are recognised over the contract term.
Revenue from transaction and usage fees is recorded at the
time travel or expense transactions are processed through
Serko’s platforms. Contracts that have fixed minimum
b) Contract assets
booking volume arrangements are recognised over the
Contract assets relate to accrued revenue for contractual
period of volume commitment. For contracts without fixed
minimum guarantees (refer note 7).
consideration we have applied the ‘as invoiced’ practical
expedient. Expense revenue is invoiced monthly on an
active user basis and revenue recognised at a point in
time. Supplier commission revenue, predominantly from
hotel bookings, is recognised at a point in time, once the
performance obligation is fulfilled.
c) Government grants
When the grant relates to an expense item, it is recognised
as income over the periods necessary to match the grant on
a systematic basis to the costs it is intended to compensate.
Revenue is reognised once the criteria of the grant
Revenue – transaction and usage fees:
Travel platform booking revenue
Expense platform booking revenue
Supplier commissions revenue
Services revenue
Other revenue
Total revenue
Government grants
Sundry income
Total other income
application is met.
Notes
14
2019
$ (000)
15,948
2,710
1,538
2,698
467
23,361
1,208
7
1,215
2018
$ (000)
13,283
1,539
1,288
1,835
334
18,279
956
38
994
Total revenue and other income
24,576
19,273
Geographic information
Australia
New Zealand
US
Other
Total revenue
2019
$ (000)
18,238
3,440
1,471
212
23,361
2018
$ (000)
16,599
1,038
457
185
18,279
40
SERKO ANNUAL REPORT 5 EXPENSES
Operating profit before taxation includes the following expenses:
Auditor remuneration and other assurance fees
Expected credit loss allowance on receivables
Amortisation of intangibles
Depreciation
Fair value remeasurement of contingent consideration
Rental and operating lease expenses
Employee remuneration
Contributions to pension plans
Share-based payment expenses
Marketing expenses
Hosting expenses
Other operating expenses
Expenses from ordinary activities
Notes
2019
$ (000)
2018
$ (000)
7
10
9
16
86
(7)
754
294
287
804
79
-
412
185
-
729
11,924
10,764
433
576
1,171
1,931
5,067
23,320
480
288
410
1,067
3,270
17,684
Research expenses (excluding capitalised development costs)
2,425
4,523
Research & Development (R&D) cost is a Non-GAAP measure representing the internal and external costs related to R&D that
have been included in operating costs and capitalised as computer software development during the period.
Research expenditure includes all reasonable expenditure associated with R&D activities that does not give rise to an
intangible asset. R&D expenses include employee and contractor remuneration related to these activities. It also covers
research expenditure defined by NZ IAS 38.
Notes
2019
$ (000)
2018
$ (000)
305
1
54
360
(20)
(50)
(70)
290
111
-
364
475
(43)
(18)
(61)
414
Finance income and expenses includes:
Finance income
Interest received
Dividends received
Foreign exchange gains – net
Total finance income
Finance expenses
Interest expense
Other finance expenses
Total finance expenses
Total finance income and expenses
41
02
S
E
R
K
O
A
B
O
U
T
04
I
H
G
H
L
I
G
H
T
S
06
L
E
T
T
E
R
10
O
V
E
R
V
I
E
W
S
T
R
A
T
E
G
C
I
12
P
R
O
D
U
C
T
S
14
L
E
A
D
E
R
S
H
P
I
16
C
O
R
P
O
R
A
T
E
R
E
S
P
O
N
S
I
B
I
L
I
T
Y
18
M
A
N
A
G
E
M
E
N
T
C
O
M
M
E
N
T
A
R
Y
28
F
I
N
A
N
C
A
L
I
S
T
A
T
E
M
E
N
T
S
70
D
I
S
C
L
O
S
U
R
E
S
G
O
V
E
R
N
A
N
C
E
&
83
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SERKO ANNUAL REPORT
Auditor remuneration
The directors of Serko Limited appointed Deloitte Limited as the auditor of the group from the year ended 31 March 2018.
Amounts received or due and receivable by:
Audit of financial statements – Deloitte Limited
Other assurance-related services (a)
Total audit fees
Notes
2019
$ (000)
2018
$ (000)
79
7
86
79
-
79
(a) Other assurance-related services include services for research and development assurance procedures.
42
SERKO ANNUAL REPORT
6
INCOME TAX
Current tax assets and liabilities for the current period are
Deferred income tax assets are recognised for all
deductible temporary differences and unused tax losses,
to the extent that it is probable that taxable profit will
be available against which the deductible temporary
differences can be utilised. The carry forward of unused
tax losses can be utilised except where the deferred
income tax asset relating to the deductible temporary
difference arises from the initial recognition of an asset or
liability in a transaction that is not a business combination
and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss.
The carrying amount of deferred income tax assets is
reviewed at each balance date and reduced to the extent
that it is no longer probable that sufficient taxable profit
will be available to allow all or part of the deferred income
tax asset to be utilised.
Deferred income tax assets and liabilities are measured
at the tax rates that are expected to apply to the year
when the asset is realised or the liability is settled, based
on tax rates (and tax laws) relevant to the appropriate
tax jurisdiction, that have been enacted or substantively
enacted at the balance date.
measured at the amount expected to be recovered from
or paid to the taxation authorities based on the current
period’s taxable income. The tax rates and tax laws used
to compute the amount are those that are enacted or
substantively enacted in the jurisdictions on which the
group operates at the reporting date.
Current income tax relating to items recognised directly
in equity is recognised in equity and not in the statement
of comprehensive income. Management periodically
evaluates positions taken in the tax returns, with respect
to situations in which applicable tax regulations are
subject to interpretation, and establishes provisions
where appropriate.
Deferred income tax is provided on all temporary
differences at the balance sheet date between the tax
bases of assets and liabilities and their carrying amounts
for financial reporting purposes.
Deferred income tax liabilities are recognised for all
taxable temporary differences except:
• For a deferred income tax liability arising from the
initial recognition of goodwill; and
• Where the deferred income tax liability arises from
the initial recognition of an asset or liability in a
transaction that is not a business combination and,
at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss.
Current income tax
Current income tax charge
Adjustments in respect of previous years
Deferred income tax
Origination and reversal of temporary differences
Income tax (benefit)/expense reported in the statement of comprehensive income
2019
$ (000)
2018
$ (000)
493
(225)
268
(355)
(87)
225
(12)
213
(42)
171
43
02
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E
R
K
O
A
B
O
U
T
04
I
H
G
H
L
I
G
H
T
S
06
L
E
T
T
E
R
10
O
V
E
R
V
I
E
W
S
T
R
A
T
E
G
C
I
12
P
R
O
D
U
C
T
S
14
L
E
A
D
E
R
S
H
P
I
16
C
O
R
P
O
R
A
T
E
R
E
S
P
O
N
S
I
B
I
L
I
T
Y
18
M
A
N
A
G
E
M
E
N
T
C
O
M
M
E
N
T
A
R
Y
28
F
I
N
A
N
C
A
L
I
S
T
A
T
E
M
E
N
T
S
70
D
I
S
C
L
O
S
U
R
E
S
G
O
V
E
R
N
A
N
C
E
&
83
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SERKO ANNUAL REPORT
The prima facie tax payable on profit before income tax is reconciled to the income tax expense as follows:
Accounting profit (loss) before income tax
At the statutory income tax rate of 28% (2017:28%)
Non-deductible items
Adjustments in respect of current income tax of previous years
Chinese branch tax
Share-based payments
Tax losses recognised
Effect of tax on overseas subsidiaries at different rate
Income tax (benefit)/expense
At effective income tax rate of:
Deferred income tax at 31 March relates to the following:
Notes
2019
$ (000)
1,546
433
143
(225)
18
170
(545)
(81)
(87)
-5.6%
2018
$ (000)
2,003
561
7
(12)
98
81
(570)
6
171
8.5%
Deferred income tax liabilities recognised
Intangibles
Unrealised foreign exchange
Deferred income tax asset recognised
Intangibles and non-current assets
Allowance for impairment
Employee entitlements
Bonus provision
Leasehold liabilities
Net deferred tax asset recognised
Deferred income tax asset not recognised
Employee entitlements
Bonus provision
Allowance for impairment
Leasehold liabilities
Tax losses available to be carried forward and offset
against future income
Total deferred tax asset not recognised
2019
2018
Statement
of financial
position
Statement of
comprehensive
income
Statement
of financial
position
Statement of
comprehensive
income
$ (000)
$ (000)
$ (000)
$ (000)
20
22
(13)
2
169
172
(17)
355
(112)
(195)
-
11
(296)
-
-
-
(10)
85
-
80
-
-
155
112
195
-
(11)
296
3,785
4,081
-
41
(2)
-
3
-
-
42
5
103
(2)
9
115
-
-
(406)
13
72
2
248
172
(17)
84
-
-
-
-
-
3,240
3,240
44
SERKO ANNUAL REPORT 7 RECEIVABLES
Receivables are recognised initially at fair value and
provision made based on lifetime expected credit losses.
subsequently measured at amortised cost using the
The ECL model considers various aspects of credit risk
effective interest method, less provision for impairment.
within a risk matrix, considering history of debtor write
Collectibility of receivables is reviewed on an ongoing
basis. Debts that are known to be uncollectible are
The impairment, and any subsequent movement,
written off when identified. Trade receivables are
including recovery, is recognised in the statement of
assessed for impairment and an expected credit loss (ECL)
comprehensive income.
off, ageing of invoices, country, market and product risk.
Notes
15
Trade receivables
Expected credit loss provision
Trade receivables (net)
Loan receivable
Allowance for impairment
Other receivables (net)
GST receivable
Sundry debtors
Contract assets
Prepayments
Funds held in trust
Total receivables
Foreign currency risk
The carrying amounts of the group’s receivables are denominated in the following currencies:
New Zealand dollars
Australian dollars
US dollars
British pounds
Indian rupees
2019
$ (000)
3,040
(7)
3,033
-
-
-
229
58
1,593
551
29
5,493
2,981
1,841
666
5
-
2018
$ (000)
2,247
-
2,247
326
(25)
301
30
21
777
454
-
3,831
1,918
1,846
52
-
15
5,493
3,831
45
02
S
E
R
K
O
A
B
O
U
T
04
I
H
G
H
L
I
G
H
T
S
06
L
E
T
T
E
R
10
O
V
E
R
V
I
E
W
S
T
R
A
T
E
G
C
I
12
P
R
O
D
U
C
T
S
14
L
E
A
D
E
R
S
H
P
I
16
C
O
R
P
O
R
A
T
E
R
E
S
P
O
N
S
I
B
I
L
I
T
Y
18
M
A
N
A
G
E
M
E
N
T
C
O
M
M
E
N
T
A
R
Y
28
F
I
N
A
N
C
A
L
I
S
T
A
T
E
M
E
N
T
S
70
D
I
S
C
L
O
S
U
R
E
S
G
O
V
E
R
N
A
N
C
E
&
83
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SERKO ANNUAL REPORT
7 RECEIVABLES (CONTINUED)
Total
0-30 days
31-60 days
61-90 days
91+ days
$ (000)
$ (000)
$ (000)
$ (000)
$ (000)
At 31 March the ageing analysis of receivables was as follows:
2019
Trade receivables
3,040
2,252
630
2018
Trade receivables
Other receivables
Allowance for impairment loss
i) Trade receivables
2,247
326
2,124
-
15
-
48
46
-
110
62
326
Group trade receivables over 60 days were $158,153 (2018: $108,099). This balance of $158,153 is not considered impaired
as amounts outstanding are in accordance with agreed payment plans and payment record of the customers concerned.
Trade receivables are non-interest bearing and are generally on 30 - 60-day terms. Serko has historically low levels of
impairment on trade receivables. A general ECL provision of $7,000 (2018: $nil) has been made as required under NZ IFRS 9.
8 FINANCIAL INSTRUMENTS
Derivative financial instruments
The group uses derivatives in the form of forward exchange contracts (FECs) to reduce the risk that movements in the
exchange rate will affect the group’s New Zealand dollar cash flows. Such derivative financial instruments are initially
recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair
value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value
is negative.
The following table presents the group’s foreign currency forward exchange contracts measured at fair value:
Notes
2019
$ (000)
2018
$ (000)
Current:
Foreign currency forward exchange contracts
421
288
Contractual amounts of forward exchange contracts outstanding were as follows:
Foreign currency forward exchange contracts
11,016
10,763
Derivative financial instruments have been determined to be within level 2 of the fair value hierarchy. Foreign currency
forward exchange contracts have been fair valued using published market foreign exchange rates and contract forward rates
discounted at a rate that reflects the credit risk of the counterparties.
46
SERKO ANNUAL REPORT 9 PROPERTY, PLANT AND EQUIPMENT
a) Impairment
All items of property, plant and equipment are recorded
The carrying values of property, plant and equipment
at cost less accumulated depreciation and impairment.
are reviewed for impairment when events or changes in
Initial cost includes purchase consideration and those
circumstances indicate the carrying value may not
costs attributable to bringing the asset to the location and
be recoverable.
condition necessary for its intended use. Where an item is
self-constructed, its construction cost includes the cost of
materials, direct labour and an appropriate proportion of
production overheads.
If any such indication exists and where the carrying values
exceed the estimated recoverable amount, the assets are
written down to their recoverable amounts.
Subsequent expenditure relating to an item of property,
b) Disposal
plant and equipment is added to its gross carrying
amount when such expenditure either increases the
future economic benefits beyond its existing service
potential or is necessarily incurred to enable future
economic benefits to be obtained and if that expenditure
would have been included in the initial cost of the item
An item of property, plant and equipment is derecognised
upon disposal or when no further future economic benefits
are expected from its use or disposal. Any gain or loss
arising on derecognition of the asset (calculated as the
difference between the net disposal proceeds and the
had it been incurred at that time. The carrying amount of
carrying amount of the asset) is included in profit or loss in
any replaced part is derecognised.
the year the asset is derecognised.
All other repairs and maintenance expenditure is
recognised in profit or loss as incurred.
Depreciation is calculated on a straight-line basis over
the estimated useful life of the asset. The residual value
of assets is reviewed and adjusted, if appropriate, at each
balance date.
The following estimates have been used:
• Leasehold improvements 7%
• Furniture and fittings 6 - 36%
• Computer equipment 17.5 - 48%
47
02
S
E
R
K
O
A
B
O
U
T
04
I
H
G
H
L
I
G
H
T
S
06
L
E
T
T
E
R
10
O
V
E
R
V
I
E
W
S
T
R
A
T
E
G
C
I
12
P
R
O
D
U
C
T
S
14
L
E
A
D
E
R
S
H
P
I
16
C
O
R
P
O
R
A
T
E
R
E
S
P
O
N
S
I
B
I
L
I
T
Y
18
M
A
N
A
G
E
M
E
N
T
C
O
M
M
E
N
T
A
R
Y
28
F
I
N
A
N
C
A
L
I
S
T
A
T
E
M
E
N
T
S
70
D
I
S
C
L
O
S
U
R
E
S
G
O
V
E
R
N
A
N
C
E
&
83
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SERKO ANNUAL REPORT
9 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Notes
Leasehold
improvement
Furniture &
fittings
Computer
equipment
Total
$ (000)
$ (000)
$ (000)
$ (000)
2019
Cost or valuation
Balance at 1 April 2018
Additions
Acquisition through business combinations
13
Currency translation
Balance at 31 March 2019
Depreciation
Balance at 1 April 2018
Depreciation expense
Balance at 31 March 2019
Net carrying amount
2018
Cost or valuation
Balance at 1 April 2017
Additions
Currency translation
Balance at 31 March 2018
Depreciation
Balance at 1 April 2017
Depreciation expense
Balance at 31 March 2018
Net carrying amount
367
166
24
(1)
556
175
48
223
333
354
13
-
367
139
36
175
192
574
270
30
(1)
873
421
135
556
317
398
176
-
574
378
43
421
153
1,711
464
68
(2)
2,241
818
294
1,112
1,129
1,519
193
(1)
1,711
633
185
818
893
770
28
14
-
812
222
111
333
479
767
4
(1)
770
116
106
222
548
48
SERKO ANNUAL REPORT 10 INTANGIBLES
Intangible assets acquired separately or in a business
Research and development
combination are initially measured at cost. The cost of
an intangible asset acquired in a business combination
is its fair value as at the date of acquisition. Following
initial recognition, intangible assets are carried at cost
less any accumulated amortisation and any accumulated
impairment losses. Costs related to internally generated
intangible assets, excluding capitalised development costs,
are not capitalised and expenditure is recognised in profit
or loss in the year in which the expenditure is incurred.
Research and maintenance costs are expensed as
incurred. An intangible asset arising from development
expenditure on an internal project is recognised only when
the group can demonstrate the technical feasibility of
completing the intangible asset so that it will be available
for use or sale, its intention to complete and its ability
to use or sell the asset. Also how the asset will generate
future economic benefits, the availability of resources
to complete the development and the ability to reliably
The useful lives of intangible assets are assessed to be
measure the expenditure attributable to the intangible
either finite or indefinite. Intangible assets with finite
asset during its development. Following initial recognition
lives are amortised over the useful lives and tested for
of the development expenditure, the cost model is
impairment whenever there is an indication that the
applied requiring the asset to be carried at cost less any
intangible asset may be impaired. The amortisation period
accumulated amortisation and impairment losses. Any
and the amortisation method for an intangible asset with a
expenditure capitalised is amortised over the period of
finite useful life is reviewed at least at each financial year
expected benefit from the related project.
end. Changes in the expected useful life or the expected
pattern of consumption of future economic benefits
embodied in the asset are accounted for prospectively
by changing the amortisation period or method, as
appropriate, which is a change in accounting estimate.
The amortisation expense on intangible assets with finite
lives is recognised in profit or loss.
Intangible assets with indefinite useful lives are tested
for impairment annually either individually or at the
cash-generating unit level. Such intangibles are not
amortised. An intangible asset with an indefinite useful life
is reviewed each reporting period to determine whether
indefinite life assessment continues to be supportable.
If not, the change in the useful life assessment from
indefinite to finite is accounted for as a change in an
accounting estimate and is thus accounted for on a
prospective basis.
Gains or losses arising from derecognition of an
intangible asset are measured as the difference between
the net disposal proceeds and the carrying amount of the
asset and are recognised in profit or loss when the asset
is derecognised.
Intangible assets under development at balance date are
recorded as capital work in progress and are not subject
to amortisation.
Impairment of non-financial assets
Intangible assets that have a indefinite useful lives or are
not yet completed 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 tested for impairment
whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable.
In undertaking an impairment review of non-financial
assets that have definite useful lives the following
assumptions were used in the impairment model;
• Cash flow projections across a five-year forecast
period;
• Discount rate of between 11.5% to 15.0% (FY18:
15.0%);
• Discount factor applied using a mid-year convention;
A summary of the policies applied to the group’s intangible
and
assets is as follows:
• Computer Software
(finite, amortised on a straight-line basis 40 - 60%);
and
• Capitalised software development costs
(finite, amortised on 5 years straight-line basis).
• Terminal growth rates of between 0% to 2.4%.
49
02
S
E
R
K
O
A
B
O
U
T
04
I
H
G
H
L
I
G
H
T
S
06
L
E
T
T
E
R
10
O
V
E
R
V
I
E
W
S
T
R
A
T
E
G
C
I
12
P
R
O
D
U
C
T
S
14
L
E
A
D
E
R
S
H
P
I
16
C
O
R
P
O
R
A
T
E
R
E
S
P
O
N
S
I
B
I
L
I
T
Y
18
M
A
N
A
G
E
M
E
N
T
C
O
M
M
E
N
T
A
R
Y
28
F
I
N
A
N
C
A
L
I
S
T
A
T
E
M
E
N
T
S
70
D
I
S
C
L
O
S
U
R
E
S
G
O
V
E
R
N
A
N
C
E
&
83
I
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E
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SERKO ANNUAL REPORT
10 INTANGIBLES (CONTINUED)
An impairment loss is recognised for the amount
under one reporting segment. InterplX has been assessed
by which the asset’s carrying amount exceeds its
as a seperate CGU and an impairment assessment has
recoverable amount. Recoverable amount is the higher of
been performed for goodwill and indefinite intangible
an asset’s fair value less costs to sell, and value in use. For
assets.
the purposes of assessing impairment, assets are grouped
at the lowest levels for which there are separately
identifiable cash inflows that are largely independent of
the cash inflows from other assets or groups of assets
(cash-generating units (‘CGU’s’). Non-financial assets,
including development work in progress and computer
software are assessed for impairment at a group level
Non-financial assets, other than goodwill that suffered
impairment, are tested for possible reversal of the
impairment whenever events or changes in circumstances
indicate that the impairment may have reversed.
Goodwill
Intellectual
property
Key employee
retention
Customer
contracts
Other
intangible
assets
Development
work in
progress
Computer
software
Total
$ (000)
$ (000)
$ (000)
$ (000)
$ (000)
$ (000)
$ (000)
$ (000)
2019
Cost
Balance at 1 April 2018
Additions
220
-
Assets no longer in use
(220)
Transfer of cost
-
-
-
-
-
Acquisition through
business combinations
(refer note 13)
Currency translation
Balance at 31 March 2019
1,444
1,523
(39)
1,405
(46)
1,477
Amortisation and impairment
Balance at 1 April 2018
Amortisation
220
-
Assets no longer in use
(220)
Balance at 31 March 2019
-
-
76
-
76
Net carrying amount
1,405
1,401
2018
Cost
Balance at 1 April 2017
220
Additions
Transfer of cost
-
-
Balance at 31 March 2018
220
Amortisation and impairment
Balance at 1 April 2017
Amortisation
Balance at 31 March 2018
Net carrying amount
220
-
220
-
-
-
-
-
-
-
-
-
78
-
443
-
(78)
(443)
-
-
-
-
78
-
-
-
-
-
443
-
(78)
(443)
-
-
78
-
-
78
78
-
78
-
-
-
443
-
-
443
443
-
443
-
50
-
73
-
-
-
-
73
-
-
-
-
49
2,915
6,740
-
(2,023)
-
-
-
(201)
2,023
39
(1)
3,705
6,813
(942)
-
3,006
(86)
4,766
4,775
12,496
-
-
-
-
1,390
678
(201)
1,867
2,908
2,131
754
(942)
1,943
10,553
73
4,766
-
-
-
-
-
-
-
-
205
328
(484)
2,376
55
484
3,322
383
-
49
2,915
3,705
-
-
-
49
978
412
1,390
1,525
1,719
412
2,131
1,574
SERKO ANNUAL REPORT 11 CASH AT BANK AND ON HAND
Cash and short-term deposits in the statement of financial position comprise cash at bank, and on hand, short-term highly
liquid investments with an original maturity of three months or less.
Cash at bank – New Zealand dollar balances
Cash at bank – foreign currency balances
2019
$ (000)
8,945
6,787
15,732
The carrying amounts of the group’s cash at bank and on hand are denominated in the following currencies:
New Zealand dollars
Australian dollars
Chinese Yuan
US dollars
Indian rupees
12 TRADE AND OTHER PAYABLES
8,945
6,356
290
119
22
15,732
2018
$ (000)
4,529
703
5,232
4,529
532
-
171
-
5,232
Employee benefits
Trade and other payables
Liabilities for wages and salaries, including non-monetary
Trade payables and other payables are carried at
benefits, long service leave and annual leave expected
amortised cost and represent liabilities for goods and
to be settled within 12 months of the reporting date
services provided to the group prior to the end of the
are recognised in respect of employees’ services up to
financial year that are unpaid and arise when the group
the reporting date. They are measured at the amounts
becomes obliged to make future payments in respect of
expected to be paid when the liabilities are settled.
the purchase of these goods and services.
Liabilities for wages and salaries that are not expected to
be settled within 12 months are measured at the present
value of the estimated future cash outflows to be made by
the group in respect of services provided by employees up
to the reporting date.
Post-employment benefits
Contributions made on behalf of eligible employees
to defined contribution funds are recognised in the
period they are incurred. The defined contribution
funds receive fixed contributions from the group whose
legal or constructive obligation is limited to these
contributions only.
51
02
S
E
R
K
O
A
B
O
U
T
04
I
H
G
H
L
I
G
H
T
S
06
L
E
T
T
E
R
10
O
V
E
R
V
I
E
W
S
T
R
A
T
E
G
C
I
12
P
R
O
D
U
C
T
S
14
L
E
A
D
E
R
S
H
P
I
16
C
O
R
P
O
R
A
T
E
R
E
S
P
O
N
S
I
B
I
L
I
T
Y
18
M
A
N
A
G
E
M
E
N
T
C
O
M
M
E
N
T
A
R
Y
28
F
I
N
A
N
C
A
L
I
S
T
A
T
E
M
E
N
T
S
70
D
I
S
C
L
O
S
U
R
E
S
G
O
V
E
R
N
A
N
C
E
&
83
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SERKO ANNUAL REPORT
12 TRADE AND OTHER PAYABLES (CONTINUED)
Trade payables
Accrued expenses
Lease incentive
Annual leave accrual
GST payable
Total trade and other payables
Disclosed as:
Current
Non-current
The average credit period on trade payables is approximately 30 days.
13 BUSINESS COMBINATIONS — INTERPLX INC.
Transaction description
2019
$ (000)
1,144
2,701
193
887
-
4,925
4,791
134
4,925
2018
$ (000)
428
1,640
223
665
20
2,976
2,793
183
2,976
On 20 December 2018 Serko announced the acquisition of 100% shareholding in InterplX Inc. (InterplX) based in Minneapolis,
US for consideration totalling USD$2,500,000 (in exchange for Serko Limited shares). InterplX is a provider of SaaS expense
software in the United States. The company provides business expense management solutions, including expense audit,
payment processing and receipt processing to a range of organisations, including Fortune 500 clients.
Serko Limited has a 100% shareholding in InterplX and on that basis has achieved control. Serko has consolidated InterplX
from 1 January 2019 and included it as a separate cash-generating unit for management reporting purposes.
52
SERKO ANNUAL REPORT 13 BUSINESS COMBINATIONS — INTERPLX INC. (CONTINUED)
Details of the purchase consideration, the net assets acquired and goodwill are as follows:
Shares — Serko Limited
Contingent consideration
Total purchase consideration
Fair value assets and liabilities recognised as a result of the acquisition are as follows:
Property, plant and equipment
Intangible assets
Cash on hand
Trade and other receivables
Other assets
Trade and other payables
Other liabilities
Intellectual property
Deferred tax
Net identifiable assets acquired
Goodwill
Total purchase consideration
Consideration
Notes
9
10
10
10
2019
$ (000)
1,538
1,538
3,076
68
39
20
628
56
(236)
(40)
1,523
(426)
1,632
1,444
3,076
Consideration for the acquisition was part-settled in shares at the market price on 20 December 2018, with the purchase
agreement including contingent consideration to be issued in further Serko shares, to be issued 31 January 2020. Contingent
consideration is calculated based on achievement of InterplX revenue performance over the period 1 January 2019 to
31 December 2019. For the purposes of quantifying the amount payable, an estimate has been made based on the expected
performance of InterplX in 2019 and the fair value of the shares to be issued.
Contingent consideration is measured at fair value at each reporting date and remeasurement changes are reognised in profit
and loss (fair value at reporting date was $1,825,000).
Intangible assets
The fair value attributable to intellectual property (IP) is calculated using a royalty valuation method (15% royalty rate) which
represents the ‘arms length’ cost to license or sell the IP from a third party.
Goodwill
Goodwill is attributable to the strength of InterplX business experience and capability in the US market.
Serko has recognised revenue included in the statement of comprehensive income from 1 January 2019 to 31 March 2019 of
$883,000. InterplX contributed net loss after tax of $59,000 for the same period. Had InterplX been consolidated from 1 April
2018 the impact on the statement of comprehensive income for the full year period ended 31 March 2019 would have been an
increase in revenue of $3,678,000 and decrease in net profit after tax of $525,000.
53
02
S
E
R
K
O
A
B
O
U
T
04
I
H
G
H
L
I
G
H
T
S
06
L
E
T
T
E
R
10
O
V
E
R
V
I
E
W
S
T
R
A
T
E
G
C
I
12
P
R
O
D
U
C
T
S
14
L
E
A
D
E
R
S
H
P
I
16
C
O
R
P
O
R
A
T
E
R
E
S
P
O
N
S
I
B
I
L
I
T
Y
18
M
A
N
A
G
E
M
E
N
T
C
O
M
M
E
N
T
A
R
Y
28
F
I
N
A
N
C
A
L
I
S
T
A
T
E
M
E
N
T
S
70
D
I
S
C
L
O
S
U
R
E
S
G
O
V
E
R
N
A
N
C
E
&
83
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Y
SERKO ANNUAL REPORT
14 GOVERNMENT GRANTS
Government grants are received for direct reimbursement of expenses to assist with research and development of software
solutions to improve service delivery and develop new enhancements to existing platforms.
There are no unfulfilled conditions or contingencies attached to these grants.
15 INTEREST-BEARING LOANS AND BORROWINGS
Current
Loan payable
Leasehold fitout loan
Non-current
Leasehold fitout loan
Notes
20
2019
$ (000)
2018
$ (000)
-
54
54
149
149
301
50
351
204
204
In 2018, an interest bearing receivable from nuTravel Technology was reassigned back to Financial Equities Limited (FEL),
reversing the original assignment to Serko Limited in 2014. FEL is a company associated with directors Bob Shaw and
Darrin Grafton.
54
SERKO ANNUAL REPORT 16 EQUITY
Ordinary share capital is recognised at the fair value of the consideration received. Transaction costs relating to the listing
of new ordinary shares and the simultaneous sale and listing of existing shares are allocated to those transactions on a
proportional basis.
Transaction costs relating to the sale and listing of existing shares are not considered costs of an equity instrument as no equity
instrument is issued and, consequently, costs are recognised as an expense in the statement of comprehensive income when
incurred. Transaction costs relating to the issue of new share capital are recognised directly in equity as a reduction of the
share proceeds received.
In the current year the group issued no shares (2018: 2,000,000) under the Restricted Share Plan (RSP). In respect of the RSP
230,050 restricted shares (2018: 710,313) had been allocated to key management personnel and 116,107 (2018: 228,519)
allocated to other Serko employees. Unallocated shares are 1,592,299 (2018: 1,819,732) (refer to note 18).
2019
2018
2019
2018
Number of
shares
Number of
shares
$ (000)
$ (000)
(000)
(000)
Ordinary shares
Share capital at beginning of year
Issue of shares pursuant to institutional capital placement
Transaction costs for issue of new shares
Shares issued in respect of InterplX acquisition
25,185
15,048
(778)
1,538
25,185
-
-
-
74,894
5,455
-
574
74,894
-
-
-
Share capital at 31 March
40,993
25,185
80,923
74,894
Share-based payment reserve
Balance at 1 April
Shares allocated to employees via Restricted Share Plan
Shares forfeited from employees via Restricted Share Plan
Share options to non-exec directors
Share-based payments — employee share options
1,309
1,021
406
(24)
-
194
252
(23)
59
-
Share-based payment reserve at 31 March
1,885
1,309
-
-
-
-
-
-
-
-
-
-
-
-
55
02
S
E
R
K
O
A
B
O
U
T
04
I
H
G
H
L
I
G
H
T
S
06
L
E
T
T
E
R
10
O
V
E
R
V
I
E
W
S
T
R
A
T
E
G
C
I
12
P
R
O
D
U
C
T
S
14
L
E
A
D
E
R
S
H
P
I
16
C
O
R
P
O
R
A
T
E
R
E
S
P
O
N
S
I
B
I
L
I
T
Y
18
M
A
N
A
G
E
M
E
N
T
C
O
M
M
E
N
T
A
R
Y
28
F
I
N
A
N
C
A
L
I
S
T
A
T
E
M
E
N
T
S
70
D
I
S
C
L
O
S
U
R
E
S
G
O
V
E
R
N
A
N
C
E
&
83
I
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Y
SERKO ANNUAL REPORT
17 EARNINGS PER SHARE (EPS)
Basic EPS amounts are calculated by dividing the profit for the year, attributable to ordinary equity holders of the parent, by
the weighted average number of ordinary shares outstanding during the year.
Diluted EPS amounts are calculated by dividing the profit attributable to ordinary equity holders of the parent by the weighted
average number of ordinary shares outstanding during the year, plus the weighted average number of shares that would be
issued on conversion of all of the dilutive potential ordinary shares into ordinary shares.
The following reflects the income and share data used in the basic and diluted EPS computations:
Profit attributable to ordinary equity holders of the parent
Continuing operations
Basic earnings per share
Issued ordinary shares (refer note 16)
Adjusted for employee restricted share plan shares
Weighted average of issued ordinary shares
Basic earnings per share (dollars)
Diluted earnings per share
Weighted average of issued ordinary shares
Weighted average of issued ordinary shares for diluted earnings per share
Diluted earnings per share (dollars)
Notes
Notes
16
2019
$ (000)
1,633
1,633
2018
$ (000)
1,832
1,832
2019
Number
2018
Number
80,923
(2,769)
78,154
0.02
77,584
77,584
0.02
74,894
(2,991)
71,903
0.03
74,894
74,894
0.02
There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and
the date of authorisation of these financial statements.
Net tangible assets per security
Notes
2019
Cents
19.38
2018
Cents
9.04
56
SERKO ANNUAL REPORT 18 SHARE-BASED PAYMENTS
Employees of the group receive remuneration at the
Board’s discretion in the form of share-based payment
transactions, where services are provided as consideration
for the receipt of equity instruments.
The cost of share-based payment transactions are
recognised, together with a corresponding increase in
equity, over the period in which the service conditions are
fulfilled. The cumulative expense recognised for share-
based transactions at each reporting date, until the vesting
date, reflects the extent to which the vesting period has
expired and the group’s best estimate of the number
of equity instruments that will ultimately vest. The
expense or credit for a period represents the movement in
cumulative expenses recognised at the beginning and end
of that period.
No expense is recognised for awards that do not
ultimately vest except where vesting is conditional upon a
market condition.
Employee Restricted Share Plan
The Serko Limited Employee Restricted Share Plan (RSP)
was introduced for selected executives and employees of
the group. Under the RSP ordinary shares in Serko Limited
are issued to a trustee, Serko Trustee Limited, a wholly-
owned subsidiary, and allocated to participants, on grant
date, using funds lent to them by the company.
The price for each share vested during the year under the
RSP is the higher of the market price of the share on the
date on which the shares are allocated or the grant price.
Under the RSP shares are beneficially owned by the
participants. The length of retention period before
the shares vest is between one and three years. If the
individual is still employed by the group at the end of this
specific period, the employee is awarded a cash bonus
that must be used to repay the loan and shares are then
transferred to the employee. The number of shares
awarded is determined by the Remuneration Committee
of the Board. The weighted average grant date fair
value of restricted shares issued during the year was
$2.96 (2018: $0.49) and was determined by the volume
weighted average price (VWAP) of shares traded in the
previous 20 trading days preceding the date of grant.
The group has no legal or constructive obligation to
repurchase the shares or settle the RSP for cash.
Unvested shares at 1 April
Granted
Forfeited
Vested
Unvested shares at 31 March — allocated to employees
Ageing of unvested shares
Vest within one year
Vest within two to five years
Ageing of unvested shares at 31 March — allocated to employees
2019
2018
Number of shares
Number of shares
1,398,707
345,890
(22,219)
(222,435)
1,499,943
842,911
657,032
1,499,943
1,359,226
356,066
(128,633)
(187,952)
1,398,707
183,810
1,214,897
1,398,707
Unallocated shares – held by trustee
1,268,628
1,592,299
57
02
S
E
R
K
O
A
B
O
U
T
04
I
H
G
H
L
I
G
H
T
S
06
L
E
T
T
E
R
10
O
V
E
R
V
I
E
W
S
T
R
A
T
E
G
C
I
12
P
R
O
D
U
C
T
S
14
L
E
A
D
E
R
S
H
P
I
16
C
O
R
P
O
R
A
T
E
R
E
S
P
O
N
S
I
B
I
L
I
T
Y
18
M
A
N
A
G
E
M
E
N
T
C
O
M
M
E
N
T
A
R
Y
28
F
I
N
A
N
C
A
L
I
S
T
A
T
E
M
E
N
T
S
70
D
I
S
C
L
O
S
U
R
E
S
G
O
V
E
R
N
A
N
C
E
&
83
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SERKO ANNUAL REPORT
18 SHARE-BASED PAYMENTS (CONTINUED)
Employee share options scheme
Options are granted to selected employees. The exercise price of the granted options is equal to the volume weighted average
share price of Serko Limited shares for the 20 trading days preceding the grant date.
Options are conditional on the completion of the necessary years of service (the vesting period) as appropriate to that tranche.
The options’ tranches vest over two to five years from the grant date. No options can be exercised later than five years from
grant date. There were 14 holders of options at 31 March 2019 (2018: nil)
The group has no legal or constructive obligation to repurchase or settle the options in cash.
Movements in the number of options outstanding and their related weighted average exercise prices are as follows:
Outstanding at 1 April
Granted
Outstanding at 31 March
2019 Weighted
average
exercise price
2019 Options
2018 Weighted
average
exercise price
2018 Options
($)
-
2.90
2.90
(000)
($)
(000)
-
287
287
-
-
-
-
-
-
Options outstanding at the end of the year have the following expiry dates and exercise prices:
Granted
2018-19
2018-19
2018-19
2018-19
2018-19
2018-19
2018-19
2018-19
Expiry date
Grant price
2019 Options
2018 Options
$
(000)
(000)
2020-21
2021-22
2022-23
2023-24
2023-24
2023-24
2023-24
2023-24
2.68
2.68
2.68
2.68
2.97
2.84
3.32
3.19
29
15
15
15
199
4
2
8
287
-
-
-
-
-
-
-
-
-
The weighted average fair value of options granted during the year, determined using the Black-Scholes valuation model,
was $1.64 per option (2018: nil).
The significant inputs into the model were the market share price at grant date, the grant price as shown above, expected
annualised volatility of between 55% and 66% (FY18: nil), a dividend yield of 0%, an expected option life of between two and
five years (FY18: nil) and an annual risk-free interest rate of 3%.
The volatility input measured is the standard deviation of continuously compounded share returns and is based on a statistical
analysis of daily share prices in the past one to five years.
Non-executive director shares
The group’s non-executive directors were granted shares in 2014 and are to be settled by way of a non-recourse loan. The non-
recourse loan is due for repayment 30 June 2020, following an extension to the previous loan due 30 June 2017. These were
valued using Black-Scholes model at the time of loan extention. No change of value recognised for the current year.
58
SERKO ANNUAL REPORT 19 LEASE COMMITMENTS
a) Operating leases
The determination of whether an arrangement is,
Operating lease payments are recognised as an expense in
or contains, a lease is based on the substance of the
profit or loss on a straight-line basis over the lease term.
arrangement and requires an assessment of whether the
Operating lease incentives are recognised as a liability
fulfillment of the arrangement is dependent on the use of
when received and subsequently reduced by allocating
a specific asset or assets and the arrangement conveys a
lease payments between rental expense and reduction
right to use the asset.
of the liability (refer note 12). These lease commitments
primarily relate to property leases.
A distinction is made between finance leases, which
effectively transfer from the lessor to the lessee
substantially all the risks and benefits incidental to
ownership, and operating leases under which the lessor
effectively retains substantially all such risks and benefits.
Operating lease commitments
No later than one year
Later than one year and not later than five years
2019
$ (000)
601
1,087
1,688
2018
$ (000)
562
1,365
1,927
59
02
S
E
R
K
O
A
B
O
U
T
04
I
H
G
H
L
I
G
H
T
S
06
L
E
T
T
E
R
10
O
V
E
R
V
I
E
W
S
T
R
A
T
E
G
C
I
12
P
R
O
D
U
C
T
S
14
L
E
A
D
E
R
S
H
P
I
16
C
O
R
P
O
R
A
T
E
R
E
S
P
O
N
S
I
B
I
L
I
T
Y
18
M
A
N
A
G
E
M
E
N
T
C
O
M
M
E
N
T
A
R
Y
28
F
I
N
A
N
C
A
L
I
S
T
A
T
E
M
E
N
T
S
70
D
I
S
C
L
O
S
U
R
E
S
G
O
V
E
R
N
A
N
C
E
&
83
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O
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SERKO ANNUAL REPORT
20 RELATED PARTIES
a) Subsidiaries
The consolidated financial statements include the financial statements of Serko Limited and subsidiaries as listed in the
following table:
Name
Balance date
2019
2018
2019
2018
% Equity interest
Investment $(000)
Serko Australia Pty Limited
Serko Trustee Limited
Serko India Private Limited
Serko Investments Limited
Foshan Sige Information Technology Limited
Serko Inc
InterplX Inc
31 March
31 March
31 March
31 March
31 March
31 March
31 December
100%
100%
99%
100%
100%
100%
100%
100%
100%
99%
100%
100%
100%
0%
1
-
2
-
-
-
3,076
3,079
1
-
2
-
-
-
-
3
Serko Australia Pty Limited’s principal business is the marketing and support of travel booking software solutions supplied
by Serko Limited.
Serko Trustee Limited was incorporated on 4 June 2014 to hold the shares issued to key management and staff in the
Restricted Share Scheme in trust until vesting.
Serko India Private Limited was incorporated on 18 February 2015 as a subsidiary for the India-based operations.
Serko Investments Limited was incorporated on 5 November 2014 as a holding company. It holds 1% of the shares in Serko
India Private Limited.
Foshan Sige Information Technology Limited was incorporated on 7 August 2017 as a subsidiary for the China-based operations.
Serko Inc was incorporated on 30 October 2017 as a subsidiary for the US-based operations.
InterplX Inc was acquired on 20 December 2018 as a subsidiary of the group. InterplX Inc is an Expense solution based in the
US. The current balance date for InterplX is 31 December however, this will be changed to align with the balance date of the
group.
60
SERKO ANNUAL REPORT 20 RELATED PARTIES (CONTINUED)
b) Transactions with related parties
The following table provides the total amount of transactions that have been entered into with related parties, excluding key
management and executive director remuneration.
Notes
Purchases from
related parties
Interest to
related parties
Amounts owed
to related
parties
Amounts owed
by related
parties
$ (000)
$ (000)
$ (000)
$ (000)
Other related parties
Financial Equities Limited
Simon Botherway – Chairman
15
Clyde McConaghy – Non-executive Director
Claudia Batten – Non-executive Director
Total
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
-
-
108
80
83
74
83
74
274
228
-
21
-
-
-
-
-
-
-
-
301
-
-
-
-
-
-
-
21
301
-
-
-
-
-
-
-
-
-
-
Non-executive directors provide services to Serko in their capacity as non-executive directors and have service agreements
with specified amounts of fees payable per annum. The non-executive directors also hold share options with related non-
recourse loans (refer note 18).
c) Key management remuneration
Short-term benefits employees (*)
Share-based payments
Post-employment benefits
Total compensation
2019
$ (000)
3,800
427
121
4,348
2018
$ (000)
3,294
162
72
3,528
d) Terms and conditions of transactions with related parties.
Outstanding balances at year end are unsecured and settlement occurs in cash.
For the year ended 31 March 2019, the group has not made any allowance for impairment loss relating to amounts owed by
related parties (2018: $nil). An impairment assessment is undertaken each financial year by examining the financial position
of the related party and the market in which the related party operates to determine whether there is objective evidence
that a related party receivable is impaired. When such objective evidence exists, the group recognises an allowance for the
impairment loss.
* Key management personnel includes the executive directors in their capacity as Chief Executive Officer and Chief Strategy Officer, the executive management
team and their direct reports.
61
02
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K
O
A
B
O
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T
04
I
H
G
H
L
I
G
H
T
S
06
L
E
T
T
E
R
10
O
V
E
R
V
I
E
W
S
T
R
A
T
E
G
C
I
12
P
R
O
D
U
C
T
S
14
L
E
A
D
E
R
S
H
P
I
16
C
O
R
P
O
R
A
T
E
R
E
S
P
O
N
S
I
B
I
L
I
T
Y
18
M
A
N
A
G
E
M
E
N
T
C
O
M
M
E
N
T
A
R
Y
28
F
I
N
A
N
C
A
L
I
S
T
A
T
E
M
E
N
T
S
70
D
I
S
C
L
O
S
U
R
E
S
G
O
V
E
R
N
A
N
C
E
&
83
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SERKO ANNUAL REPORT
21 RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING ACTIVITIES
Net profit after tax
Add non-cash items
Amortisation
Depreciation
Fair value remeasurement of contingent consideration
Increase/(decrease) in deferred tax
Loss/(gain) on foreign exchange transactions
Share-based compensation
Add/(less) movements in working capital items
(Increase)/decrease in receivables excluding loans
Increase/(decrease) in trade and other payables
Increase/(decrease) in income tax payable
Net cash flow from operating activities
2019
$ (000)
1,633
754
294
287
(72)
(153)
576
3,319
(1,795)
1,998
125
328
3,647
2018
$ (000)
1,832
412
185
-
(42)
(556)
288
2,119
(764)
123
(62)
(703)
1,416
22 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The group’s principal financial instruments comprise cash at bank, derivatives, receivables, payables and loans.
The group manages its exposure to key financial risks, including currency risk, in accordance with the group’s financial risk
management policy. The objective of the policy is to support the delivery of the group’s financial targets whilst protecting
future financial security.
Group capital consists of share capital and retained earnings. To maintain or adjust the capital structure, the group may adjust
amounts of dividends paid to shareholders, return capital to shareholders, issue new shares or amend capital spending plans.
The main risks arising from the group’s financial instruments are foreign currency, interest, credit and liquidity risk. The
group uses different methods to measure and manage different types of risks to which it is exposed. These include monitoring
levels of exposure to foreign exchange risk, and assessments of market forecasts for foreign exchange. Ageing analyses
and monitoring of specific credit allowances are undertaken to manage credit risk. Liquidity risk is monitored through the
development of future rolling cash flow forecasts.
The Board reviews and agrees policies for managing each of these risks as summarised below.
62
SERKO ANNUAL REPORT 22 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
a) Risk exposures and responses
i) Interest rate risk
The group has exposure to interest rate risk to the extent it borrows funds at fixed and floating interest rates. The risk
specifically relates to the variability of interest rates and the impact this will have on the group’s financial results. The group
manages its cost of borrowing by placing limits on the proportion of borrowings at floating rate and the proportion of fixed
rate borrowing repriced in any year.
At balance date this year and prior year, the group did not have any financial liabilities exposed to variable interest rate risk.
ii) Liquidity and interest rate risk
Liquidity risk represents the group’s ability to meet its financial obligations on time. In terms of managing its liquidity risk, the
group generates sufficient cash flows from its operating activities and holds sufficient cash reserves to meet its obligations
arising from its financial liabilities and has credit lines in place to cover potential shortfalls.
The following table sets out the contractual cash flows for all non-derivative financial liabilities settled on a gross cash flow basis.
Weighted
average effective
interest rate %
Contractual
cash flows
6 months
or less
6-12 months
1-2 years
2-5 years
More than
5 years
$ (000)
$ (000)
$ (000)
$ (000)
$ (000)
$ (000)
0%
8%
0%
6%
8%
4,732
233
4,965
4,732
34
4,766
2,754
2,754
301
302
301
34
3,357
3,089
-
34
34
-
-
34
34
-
68
68
-
-
68
68
-
97
97
-
-
166
166
-
-
-
-
-
-
-
Group — 2019
Accounts payable
Leasehold fitout loan
Group — 2018
Accounts payable
Related party loans
Leasehold fitout loan
b) Currency risk
The group has exposure to foreign exchange risk as a result of transactions denominated in foreign companies. The risk
specifically relates to the variability of foreign exchange rates for the currencies the group trades in and the impact this has
on the group’s financial results. The majority of the group’s trading activities occur in New Zealand dollars, however, sales to
overseas customers are transacted in United States and Australian dollars.
Refer to notes 7 (receivables), 11 (cash at bank and on hand), 12 (trade and other payables) and 13 (business combinations) for
further details on the group’s foreign currency denominated accounts receivable and cash balances.
63
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O
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04
I
H
G
H
L
I
G
H
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S
06
L
E
T
T
E
R
10
O
V
E
R
V
I
E
W
S
T
R
A
T
E
G
C
I
12
P
R
O
D
U
C
T
S
14
L
E
A
D
E
R
S
H
P
I
16
C
O
R
P
O
R
A
T
E
R
E
S
P
O
N
S
I
B
I
L
I
T
Y
18
M
A
N
A
G
E
M
E
N
T
C
O
M
M
E
N
T
A
R
Y
28
F
I
N
A
N
C
A
L
I
S
T
A
T
E
M
E
N
T
S
70
D
I
S
C
L
O
S
U
R
E
S
G
O
V
E
R
N
A
N
C
E
&
83
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SERKO ANNUAL REPORT
22 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
The following table summarises the sensitivity to foreign currency exchange rate movements. A sensitivity of +/- 15% (2018:
+/- 15%) has been selected owing to exchange rate volatility observed.
Foreign currency risk
-15%
+15%
Carrying amount
Post-tax profit
Equity
Post-tax profit
$ (000)
$ (000)
$ (000)
$ (000)
Equity
$ (000)
6,787
2,507
(173)
9,121
703
1,913
(110)
2,506
862
315
(22)
862
315
(22)
1,155
1,155
89
243
(14)
318
89
243
(14)
318
(637)
(239)
16
(860)
(66)
(180)
10
(236)
(637)
(239)
16
(860)
(66)
(180)
10
(236)
2019
Foreign exchange balances
Cash at bank
Trade receivables
Trade payables
Net exposure
2018
Foreign exchange balances
Cash at bank
Trade receivables
Trade payables
Net exposure
c) Credit risk
Credit risk arises from the financial assets of the group, which comprise cash and cash equivalents, receivables and contract
assets. The group’s exposure to credit risk arises from potential default of the counterparty, with a maximum exposure equal
to the carrying amount of these instruments. Exposure at balance date is addressed in each applicable note.
The group does not hold any credit derivatives to offset its credit exposure.
The expected credit loss provision is monitored on an ongoing basis with the result that the group’s exposure to bad debts is
not significant.
At reporting date 99% (2017: 100%) of the group’s cash and cash equivalents were with one bank. The group has no other
concentrations of credit risk.
d) Fair value
The directors consider that the carrying amounts of financial assets and financial liabilities recognised in the consolidated
financial statements approximate their fair value.
64
SERKO ANNUAL REPORT
23 SEGMENT INFORMATION
The Board and senior management team monitors the results of the group’s operations as a whole for the purpose of
making decisions about resource allocation and performance assessment and therefore the Board has determined the
group is a single reportable operating segment.
This reporting segment is predominantly made up of revenue generated from Travel platform booking and Expense revenue.
Revenues have been disaggregated at note 4.
As required under NZ IFRS 8 Serko is required to report on major customers making up more than 10% of the revenue for the
year. Under this disclosure Serko advises that two customers had revenue more than 10% of the revenue for the group.
These customers accounted for $10,721,614 of the revenue for the year ended 31 March 2019 (2018: $9,219,226).
24 EVENTS AFTER BALANCE SHEET DATE
There have been no events subsquent to 31 March 2019 which materially impact the results reported (2018: nil).
25 CONTINGENT LIABILITIES
There were no contingent liabilities at balance date (2018: $nil).
65
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04
I
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06
L
E
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T
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R
10
O
V
E
R
V
I
E
W
S
T
R
A
T
E
G
C
I
12
P
R
O
D
U
C
T
S
14
L
E
A
D
E
R
S
H
P
I
16
C
O
R
P
O
R
A
T
E
R
E
S
P
O
N
S
I
B
I
L
I
T
Y
18
M
A
N
A
G
E
M
E
N
T
C
O
M
M
E
N
T
A
R
Y
28
F
I
N
A
N
C
A
L
I
S
T
A
T
E
M
E
N
T
S
70
D
I
S
C
L
O
S
U
R
E
S
G
O
V
E
R
N
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E
&
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SERKO ANNUAL REPORT
INDEPENDENT AUDITOR’S REPORT
To the Shareholders of Serko Limited
OPINION
We have audited the consolidated financial statements
of Serko Limited and its subsidiaries (the ‘Group’), which
comprise the consolidated statement of financial position
as at 31 March 2019, and the consolidated statement of
comprehensive income, statement of changes in equity and
statement of cash flows for the year then ended, and notes to
the consolidated financial statements, including a summary of
Other than in our capacity as auditor and the provision of
assurance services, we have no relationship with or interests
in the Company or any of its subsidiaries, except that partners
and employees of our firm deal with the Company and its
subsidiaries on normal terms within the ordinary course
of trading activities of the business of the Company and its
subsidiaries.
significant accounting policies.
AUDIT MATERIALITY
In our opinion, the accompanying consolidated financial
We consider materiality primarily in terms of the magnitude
statements, on pages 30 to 65, present fairly, in all material
of misstatement in the financial statements of the Group that
respects, the consolidated financial position of the Group as
in our judgement would make it probable that the economic
at 31 March 2019, and its consolidated financial performance
decisions of a reasonably knowledgeable person would be
and cash flows for the year then ended in accordance with
changed or influenced (the ‘quantitative’ materiality). In
New Zealand Equivalents to International Financial Reporting
addition, we also assess whether other matters that come to
Standards (‘NZ IFRS’) and International Financial Reporting
our attention during the audit would in our judgement change
Standards (‘IFRS’).
BASIS FOR OPINION
We conducted our audit in accordance with International
Standards on Auditing (‘ISAs’) and International Standards
on Auditing (New Zealand) (‘ISAs (NZ)’). Our responsibilities
or influence the decisions of such a person (the ‘qualitative’
materiality). We use materiality both in planning the scope of
our audit work and in evaluating the results of our work.
We determined materiality for the Group financial statements
as a whole to be $260,000
under those standards are further described in the Auditor’s
KEY AUDIT MATTERS
Responsibilities for the Audit of the Consolidated Financial
Statements section of our report.
We believe that the audit evidence we have obtained is
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the
consolidated financial statements of the current period. These
sufficient and appropriate to provide a basis for our opinion.
matters were addressed in the context of our audit of the
We are independent of the Group in accordance with
Professional and Ethical Standard 1 (Revised) Code of Ethics
for Assurance Practitioners issued by the New Zealand
Auditing and Assurance Standards Board and the International
Ethics Standards Board for Accountants’ Code of Ethics for
Professional Accountants, and we have fulfilled our other
ethical responsibilities in accordance with these requirements.
consolidated financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion
on these matters.
66
SERKO ANNUAL REPORT Key audit matter
How our audit addressed the key audit matter
Revenue recognition
The Group has reported revenue of $23.4 million, as set out in
note 4 ‘Revenue and other income’.
Revenue is based on multiple customer contracts that contain
different pricing schedules and varying revenue recognition
triggers. Complexity exists because of the specific nature of each
customer contract, which can include transactional and usage fees,
establishment and installation fees, and chargeable work orders.
Management judgment is required to estimate revenue
recognition where cash flows do not align to contract performance
obligations, in particular when minimum transaction volume
We considered the application of NZ IFRS 15:
Revenue from Contracts with Customers to Serko’s
key revenue streams, and challenged the Group’s
transition assessments.
We performed walkthroughs of the major
revenue processes and evaluated the design and
implementation of key controls.
We tested a sample of transactions by agreeing
invoices to signed customer contracts in order to
validate pricing inputs and assess whether revenue
has been recorded in the correct period.
commitments have period end dates that do not align to the
We used data analytic tools to:
financial year end.
The recognition of revenue is a key audit matter due to the
•
identify outlying revenue transactions and ensure
they were supported by contractual arrangements
significance of revenue to the financial statements and the specific
or trasactional data
nature of individual customer contracts. This is also the year of
adopting the new revenue standard NZ IFRS 15: Revenue from
Contracts with Customers’.
Acquisition of InterplX Business Combination
As discussed in note 13, at 20 December 2018, Serko acquired
InterplX Inc (‘InterplX’) for a total fair value consideration of
NZ$3.1m, of which NZ$1.5m has been deferred as contingent
consideration based on the achievement of InterplX’s future
revenue performance.
On acquisition, the Group is required to identify the assets and
liabilities acquired in a business combination, including intangible
assets, and to measure them at fair value at the date of acquisition.
Goodwill arising is the excess of consideration paid over the fair
value of the assets and liabilities acquired.
Intellectual property totaling $1.5m has been valued using the
relief from royalty method. The key assumptions applied in this
model were forecast sales volumes and profitability and the
royalty rate.
The acquisition of InterplX is included as a key audit matter due
to the size of the acquisition and because significant judgement
is required to determine the fair value of assets and liabilities
acquired, especially in relation to the fair value of intangible assets
acquired representing intellectual property.
67
• agree travel booking transactions recorded in IT
systems to the financial ledger
• test samples of manual journal entries recorded
outside of normal business processes by profiling
for outlying revenue impacting journals.
We assessed key judgements adopted by the Group
in recognising revenue including the timing and
disclosure of revenue net of credit notes, rebates
and discounts.
We read the sale and purchase agreement (the
‘agreement and plan of merger’) and other key
documents related to the acquisition in order to
identify whether all identifiable intangible assets
were recognised.
We worked with our internal valuation specialists to
challenge the fair value measurement of contingent
consideration.
We challenged key assumptions used in the royalties
from relief valuation model, including:
• revenue and expense growth rates;
• comparing forecast sales and profitability
to Board approved forecasts; and
• utilised our internal valuation specialists to
conclude on the appropriateness of the use
of the relief from royalty valuation model and
rates applied.
02
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P
R
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14
L
E
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16
C
O
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P
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I
B
I
L
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18
M
A
N
A
G
E
M
E
N
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O
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M
E
N
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A
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Y
28
F
I
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A
N
C
A
L
I
S
T
A
T
E
M
E
N
T
S
70
D
I
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E
&
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SERKO ANNUAL REPORT
Key audit matter
How our audit addressed the key audit matter
Capitalisation and impairment considerations of
software development
The Group capitalised $6.7 million in relation to software
For each product, we have understood the nature of
development, as set out in note 10 ‘Intangibles’, of which $4.8
expenditure, the stage of product development, and
million relates to development work in progress at balance
how the group distinguishes expenditure between
date.
research, development and maintenance costs.
As a Software as a Service (‘SaaS’) provider, the Group incurs
We performed audit procedures over development
significant expenditure in developing new software products.
costs capitalised as computer software, by testing a
Judgement is required to determine if the recognition criteria
under NZ IAS 38 Intangible Assets have been met in order to
sample of additions and evaluating if the recognition
criteria under NZ IAS 38 have been met.
capitalise the applicable costs of development, which include
For development work in progress, we used our
technical feasibility, likelihood of generating future economic
internal valuation specialists to assist in evaluating
benefits and sufficient funding for completion.
the assumptions used in the Group’s discounted
The Group must also assess each period whether there are any
indications that the software development assets are impaired
and must perform impairment testing on any capitalised
development costs for which there are indicators of impairment
cash flow model, specifically the discount rate and
terminal growth rates used, to support the carrying
value as at 31 March 2019 of computer software
including that which is in development.
or which relate to software that is not yet available for use.
We assessed key judgements adopted by
We have included capitalisation and impairment considerations
of software development as a key audit matter due to the level of
judgement required for management to determine whether:
•
internal staff time incurred meet the criteria
to be capitalised; and
•
information exists as at year end that would
indicate the need to impair an intangible asset.
management to determine whether indicators
for impairment exist. In particular we considered
existing software for technical obsolescence, by
ensuring appropriate revenues exist for those
products and corroborating with management
whether features or product enhancements
previously capitalised are still in use.
68
SERKO ANNUAL REPORT
OTHER INFORMATION
The directors are responsible on behalf of the Group for
the other information. The other information comprises
A further description of our responsibilities for the audit of the
consolidated financial statements is located on the External
the information in the Annual Report that accompanies the
Reporting Board’s website at: :
consolidated financial statements and the audit report.
https://www.xrb.govt.nz/standards-for-assurance-
Our opinion on the consolidated financial statements does not
practitioners/auditors-responsibilities/audit-report-1
cover the other information and we do not express any form of
assurance conclusion thereon.
This description forms part of our auditor’s report.
RESTRICTION ON USE
This report is made solely to the Company’s shareholders, as a
body. Our audit has been undertaken so that we might state to
the Company’s shareholders those matters we are required to
state to them in an auditor’s report and for no other purpose.
To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company’s
shareholders as a body, for our audit work, for this report, or
for the opinions we have formed.
Bryce Henderson, Partner for Deloitte Limited
Auckland, New Zealand
22 May 2019
Our responsibility is to read the other information and
consider whether it is materially inconsistent with the
consolidated financial statements or our knowledge obtained
in the audit or otherwise appears to be materially misstated.
If so, we are required to report that fact. We have nothing to
report in this regard.
DIRECTORS’ RESPONSIBILITIES FOR THE
CONSOLIDATED FINANCIAL STATEMENTS
The directors are responsible on behalf of the Group for the
preparation and fair presentation of the consolidated financial
statements in accordance with NZ IFRS and IFRS, and for such
internal control as the directors determine is necessary to
enable the preparation of consolidated financial statements
that are free from material misstatement, whether due to
fraud or error.
In preparing the consolidated financial statements, the
directors are responsible on behalf of the Group for assessing
the Group’s ability to continue as a going concern, disclosing,
as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either
intend to liquidate the Group or to cease operations, or have
no realistic alternative but to do so.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE
CONSOLIDATED FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about
whether the consolidated financial statements as a whole
are 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
ISAs and ISAs (NZ) 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 these consolidated
financial statements.
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SERKO ANNUAL REPORT
CORPORATE GOVERNANCE & DISCLOSURES
For the year ended 31 March 2019
INTRODUCTION
OVERVIEW OF SERKO’S GOVERNANCE STRUCTURE
The Board and management of Serko Limited (Serko or
The Serko Board has been appointed by shareholders to
the company) are very committed to ensuring that Serko
protect and enhance the long-term value of Serko and to act
maintains corporate governance practices that are in line
in the best interests of Serko and its shareholders. The Board
with or, where possible, exceed best practice and that Serko
is the ultimate decision-making body of the company and is
adheres to the highest ethical standards.
responsible for the corporate governance of the company. The
The Board has considered the NZX Listing Rules and a number
of corporate governance recommendations when establishing
its governance framework, including the revised NZX
role and responsibilities of the Board are set out in the Board
Charter, which can be found on the investor centre of the
company’s website.
Corporate Governance Code 1 January 2019 (NZX Code) and
The Board currently comprises an independent non-executive
the Third Edition of the Australian Securities Exchange (ASX)
Chair, two independent non-executive directors and two
Corporate Governance Council Principles
executive directors, as detailed on page 14 of this Annual
and Recommendations.
Report. These directors held office through out the financial
The NZX Listing Rules require Serko to formally report
year ended 31 March 2019.
its compliance against the recommendations contained
The Board has established two standing Board Committees to
in the NZX Code. How Serko has implemented these
assist in the execution of the Board’s responsibilities:
recommendations is set out in Serko’s Corporate Governance
Statement, which is included in its ESG Report and can be
found on the investor centre of the company’s website. Go
to: www.serko.com/investor-centre/. The Board considers
that Serko’s corporate governance structures, practices and
processes have followed all of the recommendations in the
NZX Code during the financial year ended 31 March 2019.
Serko’s Corporate Governance Statement and governance
charters and policies can be found on the investor centre
of the company’s website. Go to: www.serko.com/investor-
centre/. Serko’s corporate governance charters and policies
have been approved by the Board and are regularly reviewed
by the Board and amended (as appropriate) to reflect
developments in corporate governance practices.
• Audit and Risk Committee – The current members
of the Committee are Clyde McConaghy (Chair),
Simon Botherway and Claudia Batten. All members
are independent, non-executive directors. Their
qualifications and experience is set out under Board
of Directors in this Annual Report; and
• Remuneration and Nominations Committee – The
current members of the Committee are Claudia
Batten (Chair), Simon Botherway and Clyde
McConaghy. All members are independent, non-
executive directors. Their qualifications and
experience is set out under Board of Directors in this
Annual Report.
STOCK EXCHANGE LISTINGS
Serko is listed on the New Zealand Stock Exchange (NZX Main
Board) and on the Australian Securities Exchange (ASX) as an
ASX Foreign Exempt Listing. As an ASX Foreign Exempt Listing,
Serko needs to comply with the NZX Listing Rules (other than
as waived by NZX) but does not need to comply with the vast
majority of the ASX Listing Rule obligations.
Serko is incorporated in New Zealand.
DIRECTOR REMUNERATION
Serko’s shareholders have approved a total cap of $350,000
per annum for non-executive directors’ fees for the purposes
of the NZX Listing Rules. This annual fee pool has not been
increased since it was approved by shareholders in 2014 but
will be reviewed this calendar year with a view to providing
flexibility for Serko to appoint an additional non-executive
director in the future. Serko currently pays directors’ fees
that, in aggregate, amount to AUD$300,0001 per annum. More
information about remuneration payable to directors is set out
in Serko’s Corporate Governance Statement, which is located
on the investor centre of the company’s website.
1 Approximately NZ$320,000 subject to exchange rate fluctuations
70
SERKO ANNUAL REPORT The Board has agreed that the following fixed annual fees will apply to all non-executive directors for the year ending 31 March
2020:
Position
Fees per annum
Board of Directors
Chair
Audit & Risk Committee
Non-executive directors
Committee Chair
Committee Member
Remuneration & Nominations Committee
Committee Chair
Committee Member
AUD$120,000
AUD$75,0001
AUD$15,000
-
AUD$15,000
-
Non-executive directors received the following directors’ fees, remuneration and other benefits from the company in the year
ended 31 March 2019:
Name of director
Non-executive
Audit & Risk
directors’ Board fees2
Committee fees
Remuneration
& Nominations
Committee fees
Shares and other
payments or benefits3
Total remuneration
Remuneration and value of other benefits received1
Simon Botherway
$57,829
(Chair)
Clyde McConaghy
$70,3984
-
$13,037
(Chair)
Claudia Batten
$20,398
-
TOTAL
$148,625
$13,037
-
-
$13,037
(Chair)
$13,037
$50,000
$107,829
-
$83,435
$50,000
$83,435
$100,000
$274,699
1 The figures shown are gross amounts, which have been converted into NZD and exclude GST (where applicable).
2 Board fees includes the amount of base fees payable to Mr Botherway and Ms Batten, which are used to acquire shares in the company under the Non-executive
Director Fixed Trading Plan (refer to the Corporate Governance Statement on the investor centre of Serko’s website for more information on the Plan).
3
In addition to directors’ fees, Serko meets costs incurred by non-executive directors that are incidental to the performance of their duties. This includes paying the
costs of directors’ travel. As these costs are incurred by Serko to enable directors to perform their duties, no value is attributable to them as benefits to directors for
the purposes of the above table.
4
Includes Australian superannuation payable.
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SERKO ANNUAL REPORT
The executive directors, Darrin Grafton and Bob Shaw, receive remuneration and other benefits in their respective executive roles
as Chief Executive Officer and Chief Strategy Officer and, accordingly, do not receive directors’ fees.
The table below (and accompanying notes) sets out the total remuneration and value of other benefits earned by, or paid to, each
executive director of Serko during, and in respect of, the financial period ended 31 March 2019:
Base salary1
Taxable
benefits2
Subtotal
Pay for performance
Total remuneration
STI
LTI5
Subtotal
Darrin Grafton
$350,334
$30,000
$380,334
$50,4003
Bob Shaw
$254,229
$30,000
$284,229
$21,6004
$200,000 in the
form of 43,252
restricted shares
$125,000 in the
form of 24,921
restricted shares
$250,400
$630,734
$146,600
$430,829
1 Base salary includes employer contributions towards KiwiSaver at 3%.
2 Taxable benefits include a car allowance, carpark and medical insurance.
3 The short-term incentive stated was earned in FY19 and will be paid in FY20. Darrin Grafton’s potential short-term incentive payment for FY19 was $140,000. During
the financial period Darrin Grafton also received a short-term incentive of $85,000, which was earned in FY18 and paid in FY19.
4 The short-term incentive stated was earned in FY19 and will be paid in FY20. During the financial period Bob Shaw also received a short-term incentive of $50,000,
which was earned in FY18 and paid in FY19.
5 The FY19 long-term incentive was granted in July 2018, following partial achievement of pre-grant performance targets based on FY18 performance. The restricted
shares will vest three years after the allocation date. The value stated is the gross amount earned.
72
SERKO ANNUAL REPORT EMPLOYEE REMUNERATION
DIVERSITY
The table below shows the number of employees and former
The respective numbers and proportions of men and women at
employees of Serko and its subsidiaries, not being directors
various levels within the Serko workforce as at 31 March 2018
of Serko, who, in their capacity as employees, received
and 31 March 2019 are set out in the table below:
remuneration and other benefits during the period ended 31
March 2019 totalling at least NZ$100,000.
The remuneration of those employees paid outside of New
Zealand has been converted into New Zealand dollars. No
employee appointed as a director of a subsidiary company of
Serko receives any remuneration or other benefits for acting
in that capacity.
Female
All directors
Non-executive directors
Remuneration range (NZD)
Total number of
employees
Officers1
Senior employees2
2019
2018
no.
%
no.
%
1
1
1
4
20%
33%
14%
29%
1
1
1
4
20%
33%
20%
33%
$100,000 - $110,000
$110,001 - $120,000
$120,001 - $130,000
$130,001 - $140,000
$140,001 - $150,000
$150,001 - $160,000
$170,001 - $180,000
$190,001 - $200,000
$200,001 - $210,000
$210,001 - $220,000
$220,001 - $230,000
$230,001 - $240,000
$250,001 - $260,000
$270,001 - $280,000
$290,001 - $300,000
$300,001 - $310,000
$320,001 - $330,000
$350,001 - $360,000
$430,001 - $440,000
Remaining workforce
61
39%
35
39%
Male
All directors
Non-executive directors
Officers1
Senior employees2
Remaining workforce
2019
2018
no.
%
no.
%
4
2
6
10
94
80%
66%
86%
71%
4
2
4
8
80%
66%
80%
67%
61%
54
61%
1 Officers are considered to be the Chief Executive Officer and his direct
reports (the Executive Team). Note that Chief Executive Officer, Darrin
Grafton and Chief of Strategy, Bob Shaw, are included in both the number of
directors and officers reported.
2 Direct reports to the Executive Team with managerial responsibilities.
7
5
9
3
7
2
2
2
2
1
2
1
1
1
1
1
2
1
1
Total number of employees and
former employees
51
The Board’s assessment of Serko’s performance against its
Diversity and Inclusion Policy is set out in the latest ESG
report, which can be found on the investor centre of the
company’s website.
The table above includes base salaries, short-term incentives
and vested or exercised long-term incentives. The table does
not include long-term incentives that have been granted
and have not yet vested. Where the individual is a KiwiSaver
member, contributions of 3% of gross earnings towards that
individual’s KiwiSaver scheme are included in the above table.
Where the individual works in Australia, contributions of 9.5%
of gross earnings towards Australian Superannuation are
included in the above table.
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28
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SERKO ANNUAL REPORT
BOARD AND COMMITTEE ATTENDANCE
The table below shows the Board and Committee meeting attendance during the year ended 31 March 2019:
Director attendance
Board
Special meetings
Sub-committee
Audit & Risk
meetings
Committee
Remuneration
& Nominations
Committee
Darrin Grafton
Bob Shaw
Simon Botherway
Clyde McConaghy
Claudia Batten
12/12
11/12
12/12
11/12
12/12
6/8
6/8
8/8
6/8
7/8
3/3
-
3/3
1/1
-
*
*
5/5
5/5
5/5
*
*
4/4
3/4
4/4
*Indicates the director is not a member of the Committee (although they were in attendance for these meetings).
DIRECTOR INDEPENDENCE
The Board currently comprises five directors – being the two co-founders and executive directors, Darrin Grafton and Bob Shaw,
and three non-executive directors – Claudia Batten, Simon Botherway and Clyde McConaghy.
The Board has determined, based on information provided by directors regarding their interests, which has been evaluated against
the criteria in the Board Charter, that as at 31 March 2019 and the date of this Annual Report, Simon Botherway, Claudia Batten
and Clyde McConaghy are independent directors. The Board has also determined that Darrin Grafton and Bob Shaw are not
independent directors owing to also being executives and major shareholders in Serko.
DIRECTOR INTEREST DISCLOSURES
Directors have given notices disclosing interests pursuant to section 140(1) of the Companies Act 1993. Those interests (and any
changes to interests) notified and recorded in Serko’s Interests Register during the financial year ended 31 March 2019 are set out
below:
Date of disclosure
Director
Entity
8 May 2018
Darrin Grafton
Gave notice to the Board that Financial Equities Limited, in which they are
shareholders and directors, is interested in an Assignment Agreement to be
entered into between Serko Limited and Financial Equities Limited in respect of
a loan to nuTravel Technology Solutions.
74
SERKO ANNUAL REPORT Directors have given general notices disclosing interests pursuant to section 140(2) of the Companies Act 1993. All of those
interests, and any changes to interests notified and recorded in Serko’s Interests Register during the financial year ended 31 March
2019 and subsequently, are set out below:
Director
Entity
Relationship
Claudia Batten
Simon Botherway
Darrin Grafton
AIDER International Limited
Broadli Inc
New Zealand Trade & Enterprises
Serko Inc1
Westpac New Zealand Limited
Arrow Trust
Callaghan Innovation Board
EBT Capital Limited
Fidelity Life Insurance
Guardians of NZ Super Fund
Landcorp Board
MSH Trustee (Arrow Limited)
Financial Equities Limited
Grafton-Howe No.2 Trust
InterplX Inc.1
Serko Australia Pty Limited1
Serko Inc1
Serko India Private Limited1
Serko Investments Limited1
Travelog World for Windows Pty. Limited
Appointed Adviser
Director
Ceased to be Regional Director
Director
Board Adviser
Trustee
Ceased to be a Board member2
Ceased to be Director
Director
Appointed Guardian
Ceased to be Board Adviser
Trustee
Director
Trustee
Appointed Director
Director
Director
Director
Director
Director
Clyde McConaghy
Chapman Eastway Pty Limited
Infomedia Limited
Optima Boards
Chairman (Advisory Board)
Director
Director
Bob Shaw
Financial Equities Limited
Ripon Trust
Serko Australia Pty Limited1
Serko India Private Limited1
Serko Investments Limited1
Travelog World for Windows Pty. Limited
Director
Trustee
Director
Director
Director
Director
1 Serko subsidiary as detailed on page 81.
2 Simon Botherway ceased to hold this position from 9 May 2019
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SERKO ANNUAL REPORT
In accordance with Section 148(2) of the Companies Act 1993, directors disclosed the following acquisitions or disposals of
relevant interests in Serko ordinary shares during the financial year ended 31 March 2019:
Name
Nature of relevant interest
Claudia Batten
On-market acquisition of beneficial
interest in ordinary shares (held in
custody for Claudia Batten pursuant to
Non-executive Director Fixed Trading
Plan)1
Simon Botherway
On-market acquisition of beneficial
interest in ordinary shares (held in
custody for Simon Botherway pursuant
to Non-executive Director Fixed Trading
Plan)1
Darrin Grafton
Beneficial interest in ordinary shares with
restrictive conditions allocated pursuant
to the Serko Limited Employee Restricted
Share Plan, held in trust until vesting.
Indirect interest in restricted shares
allocated pursuant to the Serko Limited
Employee Restricted Share Plan to Ms
Bailey, by virtue of a personal relationship
with Ms Bailey.
Date of
acquisition/
(disposal)
10-Apr-18
7-May-18
5-Jun-18
5-Jul-18
6-Aug-18
5-Sep-18
5-Oct-18
14-Nov-18
4-Dec-18
8-Jan-19
5-Feb-19
5-Mar-19
10-Apr-18
7-May-18
5-Jun-18
5-Jul-18
6-Aug-18
5-Sep-18
5-Oct-18
14-Nov-18
4-Dec-18
8-Jan-19
5-Feb-19
5-Mar-19
Number of shares
acquired/(disposed)
Consideration
paid/received5
1,668.42 ordinary shares
1,339.29 ordinary shares
1,370.43 ordinary shares
1,367.66 ordinary shares
1,452.46 ordinary shares
1,422.41 ordinary shares
1,166.71 ordinary shares
1,195.29 ordinary shares
1,328.57 ordinary shares
1,482.97 ordinary shares
1,246.50 ordinary shares
1,201.13 ordinary shares
1,668.42 ordinary shares
1,339.29 ordinary shares
1,370.43 ordinary shares
1,367.66 ordinary shares
1,452.46 ordinary shares
1,422.41 ordinary shares
1,166.71 ordinary shares
1,195.29 ordinary shares
1,328.57 ordinary shares
1,482.97 ordinary shares
1,246.39 ordinary shares
1,201.03 ordinary shares
$4,104.98
$4,125.00
$4,125.00
$4,062.58
$4,125.00
$4,125.00
$4,000.86
$3,871.58
$4,038.85
$4,078.17
$4,016.94
$4,035.79
$4,104.98
$4,125.00
$4,125.00
$4,062.58
$4,125.00
$4,125.00
$4,000.87
$3,871.58
$4,038.85
$4,078.17
$4,016.58
$4,035.46
6-Jul-18
43,252 restricted shares2
$128,000.004
6-Jul-18
1,125 restricted shares2, 3
$3,328.004
76
SERKO ANNUAL REPORT Bob Shaw
Change in nature of relevant interest by
virtue of a change in the registered holder
(via change of trustee) of shares in which
Mr Shaw holds a beneficial interest.
Beneficial interest in ordinary shares with
restrictive conditions allocated pursuant
to the Serko Limited Employee Restricted
Share Plan, held in trust until vesting.
13-Apr-18
-
-
6-Jul-18
24,921 restricted shares2
$73,750.004
1 Shares are acquired automatically, on a monthly basis, by an independent broker pursuant to the Non-executive Director Fixed Trading Plan. For more details refer to
Serko’s Corporate Governance Statement on the investor centre of Serko’s website. These shares may not be disposed of while the holder remains a director of Serko
and, in any event, for three years from the commencement of the Plan.
2 These shares are subject to a deed restricting exercise of voting rights attached to the shares.
3 By virtue of Darrin Grafton’s personal relationship, he is implied to have the power to exercise, or to control the exercise of, a right to vote attached to these shares
by virtue of a personal relationship with the beneficial holder of these shares. These shares are subject to a deed restricting exercise of voting rights attached to the
shares.
4 Paid in the form of services to Serko.
5 The consideration for on-market trades is stated as the market price paid, excluding fees and taxes.
In accordance with the NZX Listing Rules, as at 31 March 2019, directors had a relevant interest (as defined in the Financial
Markets Conduct Act 2013) in Serko ordinary shares as follows:
Name
Darrin Grafton1
Bob Shaw2
Simon Botherway3
Claudia Batten4
Clyde McConaghy5
Relevant interest
Percentage
14,032,868
12,943,426
2,339,350.84
202,169.25
181,818
17.341%
15.995%
2.891%
0.250%
0.225%
1 12,667,629 shares are held via a trust in which the director is a trustee and beneficiary. This includes an indirect interest in (and by virtue of the indirect interest
is considered to have the power to exercise, or to control the exercise of, a right to vote attached to) 1,221,404 shares and 6,611 restricted shares by virtue of a
personal relationship with the legal and beneficial holder of these shares. This includes beneficial interest in 137,224 restricted shares allocated pursuant to the
Serko Employee Restricted Share Plan and held on trust until vesting.
2 12,884,296 shares are held via a trust in which the director is a trustee and beneficiary. This includes beneficial interest in 59,130 restricted shares allocated
pursuant to the Serko Employee Restricted Share Plan and held on trust until vesting.
3 2,034,091 shares are held via a trust in which the director is a trustee and beneficiary. 284,909 shares are held directly. 20,350.84 ordinary shares are held in custody
pursuant to the Serko Non-executive Director Fixed Trading Plan.
4 20,351.25 ordinary shares are held in custody pursuant to the Serko Non-executive Director Fixed Trading Plan.
5 Held via a trust in which the director is a trustee and beneficiary.
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SERKO ANNUAL REPORT
For the purposes of section 161 of the Companies Act 1993, the following entries were made in the Interests Register in relation to
the payment of remuneration and other benefits to directors:
Date
Director
Particulars of Board authorisation
6 Jul 18
Bob Shaw
Darrin Grafton
The payment of remuneration and the provision of other benefits by the company
and making of the loan by the company under the Restricted Share Plan on the
terms set out in the resolution dated 6 July 2018 and in accordance with the
terms of the Serko Employee Restricted Share Plan documentation.
23 Oct 18
Simon Botherway
Claudia Batten
Clyde McConaghy
The payment of increased directors’ fees and the provision of other benefits by
the company to the non-executive directors on the terms detailed in the Board
minutes dated 23 October 2018 and on the grounds set out in the corresponding
directors’ certificate.
For the purposes of section 162 of the Companies Act 1993, an entry was made in the Interests Register in relation to insurance
effected for directors and officers of Serko in relation to any act or omission in their capacity as directors.
There were no entries made in the subsidiary company Interests Register during the financial reporting period.
SHAREHOLDING INFORMATION
As at 30 April 2019 there were 80,922,809 Serko ordinary shares on issue, each conferring on the registered holder the right to
vote on any resolution at a meeting of shareholders, held as follows:
Size of shareholding
Number of holders1
%
Number of
ordinary shares
%
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
TOTAL
659
700
256
255
50
1,920
34.32
36.46
13.33
13.28
2.60
100
377,228
0.47
1,990,790
2.46
2,012,546
2.49
6,892,091
8.52
69,650,154
86.07
80,922,809
100
1
Includes 2,768,571 ordinary shares with restrictive conditions held by Serko Trustee Limited on behalf of 42 beneficial holders (with 1,268,628 of those ordinary
shares allocated) pursuant to the Serko Restricted Share Plan. Restricted shares have voting rights attached, which are exercised on behalf of a beneficial holder by
the Trustee at the direction of the beneficial holder.
78
SERKO ANNUAL REPORT As at 30 April 2019 there were 42 beneficial holders holding a total of 1,499,943 ordinary shares with restrictive conditions
pursuant to the Serko Restricted Share Plan and 14 participants holding a total of 286,901 options pursuant to the Serko US Share
Incentive Plan. Further information on these incentive plans is contained in note 18 to the financial statements and in Serko’s ESG
Report, which can be found on the investor centre of the company’s website. Go to: www.serko.com/investor-centre/.
Set out below are details of the 20 largest shareholders of Serko as at 30 April 2019:
Shareholder1
Number of ordinary shares held
%
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Robert James Shaw & Geoffrey Robertson Ashley Hosking
12,884,296
Darrin Grafton & Geoffrey Robertson Ashley Hosking
12,667,629
National Nominees New Zealand Limited
TEA Custodians Limited
Serko Trustee Limited
HSBC Nominees (New Zealand) Limited
Citibank Nominees (NZ) Ltd
8,168,404
2,827,274
2,768,571
2,702,878
2,298,076
Simon John Botherway & MSH Trustee (Arrow) Limited
2,034,091
Philip Rodger Ball
JPMORGAN Chase Bank
Donna Bailey
Joanne Maree Phipps
Sherie Robyn Hammond
Public Trust Forte Nominees Limited
Cogent Nominees Limited
Robert Alan Hawker & Elizabeth Anne Hawker
Accident Compensation Corporation
Michael John Thorburn
John S Challis & AH Trustees (Challis Holdings) Ltd
J P Morgan Nominees Australia Pty Limited
1,476,411
1,379,882
1,221,404
1,219,031
1,193,512
1,073,406
987,166
957,100
930,000
760,897
665,762
635,281
15.92
15.65
10.09
3.49
3.42
3.34
2.84
2.51
1.82
1.71
1.51
1.51
1.47
1.33
1.22
1.18
1.15
0.94
0.82
0.79
1 The shareholding of New Zealand Central Securities Depository Limited (custodian for members trading through NZClear) has been re-allocated to the
applicable members.
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SERKO ANNUAL REPORT
According to notices given to Serko under the Financial Markets Conduct Act 2013 (and Securities Markets Act 1978), the
following persons were substantial product holders as at 31 March 2019. As at the balance date (31 March 2019) there were
80,922,809 Serko ordinary shares on issue:
Substantial product holder
Geoffrey Hosking
Darrin Grafton
Robert Shaw
First NZ Capital Group Limited1
Milford Asset Management Limited
Number of ordinary shares in
% of class held at date of last
which relevant interest is held2
notice3
25,573,925
14,032,868
12,943,426
7,475,876
6,095,817
31.603%
17.341%
15.995%
9.238%
7.533%
1 First NZ Capital Group Limited files substantial product holder notices on behalf of First NZ Capital Group Limited’s and Harbour Asset Management Limited’s
aggregated relevant interests. As at 31 March 2019 First NZ Group Limited held an interest in 10,688 ordinary shares (0.013% of class at the date of last notice filed)
and Harbour Asset Management Limited held an interest in 7,465,188 (9.291% of the class at the date of the last notice filed).
2 Based on last substantial product holder notice filed.
3 Based on issued share capital of 80,922,809 as at 31 March 2019.
80
SERKO ANNUAL REPORT SUBSIDIARY COMPANY DIRECTORS
Directors of Serko’s subsidiaries do not receive any remuneration or other benefits in respect of their appointments. The
remuneration and other benefits of any such directors who are employees of the group totalling $100,000 or more during the year
ended 31 March 2019 are included in the relevant bandings for remuneration disclosed on page 73 of this Annual Report.
The following persons held office as directors of subsidiary companies as at 31 March 2019:
Subsidiary
Serko Australia Pty Limited (Australia)
Serko Investments Limited (New Zealand)
Serko India Private Limited (India)
Serko Inc (US)
Serko Trustee Limited (New Zealand)
Foshan Sige Information Technology Limited (China)2
InterplX Inc. (US)3
Directors1
Darrin Grafton
Bob Shaw
John Challis
Darrin Grafton
Bob Shaw
Darrin Grafton
Bob Shaw
Yogita Chadha
Darrin Grafton
Claudia Batten
Susan Putt
Fiona Rockel
Gerard Neilsen
Darrin Grafton4
Tony D’Astolfo4
1 No subsidiary directors retired during the financial year, other than Chuck Buckner on the acquisition of InterplX Inc.3.
2 Serko also has a representative office in China.
3
InterplX Inc. was acquired on 20 December 2018.
4 Appointed during the year.
REGULATORY MATTERS
On 22 July 2015, NZX regulation granted Serko a waiver from NZX Listing Rule 7.6.4(b)(iii) to the extent required to allow Serko
to provide financial assistance to executive directors, and an associated person of one of the executive directors, to enable them to
participate in Serko’s Restricted Share Plan. The full waiver is available on Serko’s website. Go to: www.serko.com/investor-centre/.
DONATIONS
Serko did not make any donations during the financial year.
CREDIT RATING
Serko does not presently have an external credit rating status.
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SERKO ANNUAL REPORT
GLOSSARY
ARPB
Average Revenue Per Booking
Asia Pacific
ASX
ATMR
Vietnam, Thailand, Taiwan, Sri Lanka,
South Korea, South Africa, Singapore,
Philippines, Pakistan, New Zealand,
Malaysia, Japan, Indonesia, India, Hong
Kong, China, Bangladesh and Australia
for the purposes of this Annual Report
ASX Limited, also known as the
Australian Securities Exchange
ATMR (Annualised Transactional
Monthly Revenue) is a Non-GAAP
measure. Serko uses this as a useful
indicator of recurring revenue
from Serko products based on the
monthly transaction
AUD or A$
Australian dollars
Australasia
New Zealand and Australia for the
purposes of this Annual Report
Board or Board
of Directors
Cloud or cloud-
based
The board of directors of Serko
Cloud computing is when the software
and associated data is hosted outside
the customer’s premises and delivered
over a network or the Internet as a
service, which allows immediate access
to the software
Company or
Serko
Serko Limited, a New Zealand
incorporated company
EBITDA
(refer page 19)
ESG
FTE
FX
FY
GST
IFRS
EBITDA is a Non-GAAP measure
representing Earnings Before the
deduction of costs relating to Interest,
Taxation, Depreciation and Amortisation
Environmental Social Governance
Full-time equivalent
Foreign exchange
Financial year ended, or ending, on
31 March (unless otherwise stated)
Goods and Services Tax
International Financial Reporting
Standards
Independent
Directors
Simon Botherway, Claudia Batten and
Clyde McConaghy
IPO
Initial Public Offering
Listing
The date Serko shares started trading on
the NZX Main Board, 24 June 2014
NZ
New Zealand
NZD or NZ$
New Zealand dollars
NZ GAAP or
GAAP
New Zealand Generally Accepted
Accounting Practice
NZ IAS
New Zealand equivalents to International
Accounting Standards
NZ IFRS or IFRS New Zealand equivalents to International
Financial Reporting Standards
NZX
NZX Limited, also known as the New
Zealand Stock Exchange
NZX Listing
Rules or Listing
Rules
The Listing Rules applying to the NZX
Main Board as amended from time
to time
NZX Main Board The New Zealand main board equity
security market operated by NZX
R&D
SAAS
Research and Development expenditure
Software-as-a-service
Serko Expense
Management
business
Serko’s online expense management
solution that enables the capture and
processing of corporate credit cards and
out-of-pocket claims
Serko Mobile
Serko’s mobile app for iPhones and
Android devices that gives users access
to information and travel booking
functionality on their mobile devices
Serko Online
Serko’s cloud-based online travel booking
solution for large organisations
serko.travel
Serko’s cloud-based online travel
booking solution for small to medium
enterprises (SMEs)
SME
Small and medium enterprise
TMC, Travel
Agency or Travel
Management
Company
A travel management company that
provides specialised travel-related
services to corporate customers
USD or US$
United States dollars
Zeno
$
Serko’s premium cloud-based online
travel booking solution
All figures are in New Zealand dollars,
unless otherwise stated
82
SERKO ANNUAL REPORT COMPANY DIRECTORY
Serko is a company incorporated with limited liability under the New Zealand Companies Act 1993
New Zealand Companies Office registration number 1927488
Australian Registered Body Number (ARBN) 611 613 980
For investor relations queries contact: InvestorRelations@serko.com
REGISTERED OFFICE
PRINCIPAL
SHARE REGISTRAR
New Zealand
Saatchi Building
Unit 14D
125 The Strand
Parnell, 1010
+64 9 309 4754
ADMINISTRATION
OFFICE
New Zealand
Saatchi Building
Unit 14D
125 The Strand
Parnell, 1010
+64 9 309 4754
New Zealand
Link Market Services Limited
Level 11, Deloitte House
80 Queen Street
Auckland 1140, New Zealand
+64 9 375 5998
serko@linkmarketservices.co.nz
Australia
Australia
Australia
c/- Sly & Russell Legal
Nominees Pty Ltd
Level 18
225 George Street
Sydney 2000
NSW, Australia
Level 8
75 Elizabeth Street
Sydney 2000
NSW, Australia
+61 2 9435 0380
Link Market Services Limited
Level 12
680 George Street
Sydney 2000
NSW, Australia
+61 1300 554 474
DIRECTORS
AUDITOR
Simon Botherway (Chairman)
Claudia Batten
Robert (Clyde) McConaghy
Darrin Grafton
Robert (Bob) Shaw
Deloitte Limited
Deloitte Centre
80 Queen Street
Auckland 1040, New Zealand
+64 9 303 0700
KEY DATES
21 AUGUST 2019
Annual Shareholders’
Meeting
30 SEPTEMBER 2019
Half-year End
20 NOVEMBER 2019
Half-year Results
Announced
31 MARCH 2020
Financial-year End
Serko’s ESG Report, which includes its Corporate Governance Statement, can be found at www.serko.com/investor-centre.
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SERKO ANNUAL REPORT
Serko Limited Annual Report 2019
www.serko.com
84
SERKO ANNUAL REPORT