W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
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Enabling and
empowering the
world’s supply chains
Annual Report 2021
wisetechglobal.com
b
W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
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Contents
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A B O U T U S
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AT A G L A N C E
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F I N A N C I A L H I G H LI G H T S
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C H A I R ’ S LE T T E R
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C EO ’ S M ES SAG E
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O U R B U S I N ES S
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S U STA I N A B I LI T Y R E P O R T
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B OA R D O F D I R ECTO R S
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C O R P O R AT E G OV E R N A N C E STAT E M E N T
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O P E R AT I N G A N D F I N A N C I A L R E V I E W
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F I V E Y E A R F I N A N C I A L S U M M A RY
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R E M U N E R AT I O N R E P O R T
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D I R ECTO R S ’ R E P O R T
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LE A D AU D I TO R ’ S I N D E P E N D E N C E D EC L A R AT I O N
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R I S K M A N AG E M E N T
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F I N A N C I A L R E P O R T
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I N D E P E N D E N T AU D I TO R ’ S R E P O R T
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S H A R E H O LD E R I N FO R M AT I O N
1 55 G LO S SA RY
1 5 6 C O R P O R AT E D I R ECTO RY
In the spirit of reconciliation we acknowledge the Traditional Custodians of country
throughout Australia and their connections to land, sea and community. We pay our
respect to their Elders past and present and extend that respect to all Aboriginal
and Torres Strait Islander peoples today.
This annual report is a summary of WiseTech Global and its subsidiary companies’ operations, activities and financial
position as at 30 June 2021. References to “WiseTech”, “the Company”, “the Group”,“we”, “us” and “our” refer to
WiseTech Global Limited (ABN 41 065 894 724) unless otherwise stated. This document is dated 11 October 2021.
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About us
We are united in our mission
to create breakthrough products
that enable and empower those
that own and operate the supply
chains of the world.
We are a leading developer and provider of software
solutions to the logistics execution industry globally.
We have a long track record of innovating continuously
and successfully. Our flagship platform CargoWise
forms an integral link in the global supply chain.
CargoWise provides powerful productivity, extensive
functionality, comprehensive integration, deep
compliance capabilities and truly global reach to help
our customers run their businesses more efficiently
and profitably.
Our people are integral to the success of our business
and their innovations help the acceleration of our
long‑term strategy. We challenge the status quo,
think boldly and build world‑leading products.
At a glance
50
offices worldwide
as at 30 June 2021
33
product development
centres
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18k+
customers using
our software
72bn+
data transactions annually
5.3m+
development hours over
two decades
30
languages in our software
169
countries licensed to use
our software
1,096
product enhancements
in FY21
4
Financial highlights
A track record in strong
financial management
delivering global growth.
We have a strong track record of delivering top‑line
revenue growth through new customer sign‑ups and
increased usage by existing customers.
We are focused on continuing to invest in product
development that enhances and expands our
CargoWise offering and grows shareholder returns.
Our financial results for FY21 signify the step change
in operating leverage that we are achieving by growing
revenues whilst also extracting acquisition synergies
and implementing organisation-wide efficiencies.
S T R O N G
R E V E N U E G R O W T H
S O L I D
B A L A N C E S H E E T
Total $507.5m
18%
CargoWise $331.6m
26%
90% recurring revenue
(Group)
97% recurring revenue
(CargoWise)
$139.2m free cash
149%
flow
$315.0m in cash as
at 30 June 2021
$225m undrawn
bi‑lateral facility in
place (post FY21)
C O N T I N U E D
I N V E S T M E N T
I N I N N O V A T I O N
$167.1m innovation and
product development
spend
5%
33% of revenue invested
in R&D
53% of our people
focused on product
design and development
W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
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R E V E N U E ( A $ M )
E B I T D A ( A $ M )
N P A T / U N D E R LY I N G
N P A T 1 ( A $ M )
NPAT
Underlying NPAT
.
5
7
0
5
.
4
9
2
4
.
3
8
4
3
6
.
1
2
2
.
8
3
5
1
.
7
6
0
2
.
7
6
2
1
1
.
8
0
1
.
0
8
7
.
9
3
5
.
2
2
3
9
.
1
3
1
.
4
8 5
8
0
0
4
4
.
.
.
6
2
5
.
8
0
6
1
1
.
8
0
1
.
8
5
0
1
.
6
2
5
FY17
FY18
FY19
FY20
FY21
FY17
FY18
FY19
FY20
FY21
FY17
FY18
FY19
FY20
FY21
E B I T D A &
U N D E R L Y I N G
N P A T
I N C R E A S E D
O P E R A T I O N A L
L E V E R A G E
D I V I D E N D
G R O W T H
$206.7m
63%
41% EBITDA margin
( 11pp)
55% CargoWise
EBITDA margin ( 7pp)
Underlying NPAT
of $105.8m ( 101%)
Operating expenses
8pp as % of revenue
Total dividend
6.55 cents per share
Sales & marketing
expenses 10% of revenue
$22.0m gross FY21
cost reductions
98% on FY20
Fully franked
Payout ratio 20%
of Underlying NPAT
1 Underlying NPAT excludes fair value adjustments from changes to acquisition contingent consideration (FY21: $2.2 million, FY20: $111.0 million)
and contingent consideration interest unwind net of tax (FY21: nil, FY20: $2.9 million).
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Chair’s letter
WiseTech’s technology solutions have an important
role to play in solving the complex pain points of the
logistics industry and in enhancing productivity and
efficiencies for logistics providers.
Focused on our vision to be the operating
system for global logistics
I have the pleasure of presenting the 2021 WiseTech
Annual Report, my fourth as Chairman, and am delighted
to report a robust FY21 performance.
Of note this year have been the efforts of our employees
and customers in keeping global supply chains moving
across the world given the ongoing COVID‑19 pandemic.
We are particularly proud of our people who have
embraced our new hybrid working model and delivered
outstanding productivity, ongoing product innovation,
increased market penetration and an outstanding
financial performance.
Delivering a strong performance
Our business delivered Total Revenue of $507.5 million
for the year, representing 18% growth on FY20.
Importantly, our core CargoWise offering continued to
achieve strong growth, delivering FY21 revenue of $331.6
million, up 26% on FY20, reflecting increased usage by
existing customers and new customer signings.
Recurring revenue was strong comprising 90%
of our Total Revenue, up one basis point on FY20.
Our customer attrition rate remained below 1% for the
ninth consecutive year.
Our strategic acquisitions also contributed to our
revenue growth, with revenue attributable to acquisitions
up 6% in FY21 to $175.9 million. This included the
completion of one small strategic acquisition in Asia
during the year.
EBITDA in FY21 was $206.7 million, up 63% on the prior
year. Our EBITDA margin was strong at 41%, reflecting
increasing operating leverage as revenue grows and
cost reductions are achieved through organisation‑wide
efficiencies and the extraction of acquisition synergies.
Our statutory NPAT of $108.1 million was down 33% on
FY20, reflecting fair value adjustments in FY20 from
changes to acquisition contingent consideration.
FY21 underlying NPAT was up 101% on FY20
at $105.8 million.
Financial strength and dividends
Our financial position is robust, supported by a strong
balance sheet and strong cash flows.
Cash as at 30 June 2021 was $315.0 million, with no
outstanding debt excluding lease liabilities. We recently
completed a refinancing of our debt facility and now
have an unsecured four‑year $225 million bi‑lateral
facility in place, supported by six banks, providing a solid
financial foundation for future growth.
Our operating cash flow of $229.9 million was up 57% on
FY20 and free cash flow of $139.2 million was up 149% on
FY20, demonstrating the highly cash generative nature of
our business and the strength of WiseTech’s underlying
operating model.
The Board declared a fully franked final dividend of 3.85
cents per share (cps), representing a 141% increase on the
FY20 final dividend. The final FY21 dividend coupled with
the FY21 interim dividend of 2.70cps equates to a total
FY21 dividend of 6.55cps, representing a payout ratio of
20% of underlying NPAT.
We continue to offer a dividend reinvestment plan that
enables eligible shareholders to reinvest their dividends
to acquire additional WiseTech shares. Our ongoing
dividend policy is to target a dividend payout ratio of up
to 20% of our NPAT.
Outlook
Looking ahead, supply chain disruption, capacity
constraints, and the outbreak of new COVID‑19 strains
in key markets will likely continue to impact global trade
until there is widespread rollout of vaccines. This is
driving increased demand amongst large global logistics
service providers for our technology to drive efficiencies
and productivity improvements.
We remain focused on continuing our market penetration
momentum and evolving and expanding the CargoWise
ecosystem through strategic investment in innovation
and product development.
In terms of our guidance for FY22, subject to the
assumptions set out in detail in our FY21 Results
presentation and no material change in market
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Acknowledgements
On behalf of the Board, I would like to thank our CEO,
Richard White, for his inspiring leadership and vision, and
the skilful WiseTech Global teams for their commitment
and hard work.
Finally, we thank our shareholders, employees, customers
and the communities in which we operate for their
support and the continued trust they place in us.
We remain unwavering in our commitment to deliver on
our strategic objectives and vision, while driving
long‑term shareholder value.
Andrew Harrison
Chair
conditions, we expect FY22 revenue growth of 18% to
25% (representing revenue of $600 million–$635 million)
and EBITDA growth of 26% to 38% (representing $260
million–$285 million).
Board activities
As WiseTech continues to expand its technology
leadership, global reach and geographic footprint, we
are aligning the Board composition to support the needs
of our business. We have processes in place for Board
renewal and succession planning to ensure that the
Board’s skill mix reflects the evolving needs of WiseTech.
We are cognisant of ensuring that Board renewal
is undertaken in a seamless manner to ensure that
corporate history and knowledge is not lost.
With this in mind, we are continuing to work on our Board
evolution and commenced a search process in FY21
to recruit two additional independent Non‑Executive
Directors to support our business objectives and long‑
term growth strategy.
Environment, social and governance (ESG) –
Our people, communities, the environment
and marketplace
We are committed to making a positive contribution to
the communities that we are part of and recognise that
our social licence to operate is integral to our ability to
create long‑term value for our stakeholders.
Our people, the communities and marketplaces in which
we operate, and the environment are integral to our
strategy and our operating decisions. We are focused on
ensuring we prioritise accountability and that we have
robust governance frameworks in place.
WiseTech’s technology solutions have an important role
to play in solving the complex pain points of the logistics
industry and in enhancing productivity and efficiencies
for logistics providers. We have an outstanding team
of over 1,800 people globally, spanning more than 60
nationalities and ranging in age from 18 to 74. We are
proud of our highly diverse and inclusive workforce.
Approximately 31% of our employees and 43% of our
Board members are female and we remain committed to
encouraging and supporting more women to enter the
technology and logistics industries.
During FY21, WiseTech worked on consolidating our ESG
data and establishing a sustainability framework that is
broadly guided by and references the Global Reporting
Initiative (GRI) Sustainability Reporting Standards (Core
option) – an internationally recognised sustainability
reporting framework. We will continue to evolve and
enhance our ESG disclosures over time.
Details of our FY21 ESG performance are set out in our
Sustainability Report on pages 20 to 46.
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CEO’s message
We are ideally positioned for continued growth and
further market penetration. We have a well‑considered,
comprehensive plan to deliver on our strategic
objectives, and our strong balance sheet, strong cash
flows and robust liquidity mean we have significant
financial firepower to fund our growth.
Enabling and empowering those that own and
operate the supply chains of the world
I am pleased to report a strong FY21 performance as
we continue to deliver on our vision to be the operating
system for global logistics. Our mission is to deliver
breakthrough products that enable and empower those
that own and operate the supply chains of the world.
Our vision and mission drive everything that we do and
are at the core of our strategy.
Integral to our performance and our ability to deliver on
our strategy are our people. They exemplify our culture
of innovation, making me extremely proud to be part of
the WiseTech family. Our strong performance is a credit
to their hard work and commitment.
Strong financial performance
Total Revenue for the year was $507.5 million, up 18%,
equating to 24% growth excluding the impact of foreign
exchange (FX), on the prior year. Of this, 90% was
recurring revenue, providing a stable and predictable
long‑term revenue stream.
Of note in FY21 was our strong CargoWise revenue
growth, which at $331.6 million was up 26% on FY20,
equating to 31% growth excluding the impact of FX.
This growth demonstrates industry recognition of our
customer value proposition, in particular increasing
revenue contribution from our large global freight
forwarder rollouts over time, as rollouts progress and
as we secure new global customers. It also reflects the
ongoing expansion of the CargoWise ecosystem – as we
add new capabilities, modules, and geographies,
our existing customers have increased their usage
and we have secured new customer wins.
Our top line revenue growth, coupled with our
organisation-wide efficiencies and our extraction of
acquisition synergies, has enabled us to achieve a
marked step change in operating leverage which is
evident in our strong EBITDA performance. Our FY21
EBITDA was $206.7 million, representing growth of 63%
on FY20 and underlying NPAT of $105.8 million was up
101% on the prior year.
CargoWise revenue $331.6m
26% on FY20
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Structural changes accelerated by COVID-19
In terms of the prevailing market conditions, it is fair to
say that never have logistics and global supply chains
been more critical and visible in ensuring the movement
of goods around the world.
Throughout the year, we continued to see a ‘goods‑
led’ economic recovery leading to volume growth
in international trade, resulting in tighter capacity,
congestion, and higher freight rates in global logistics
channels1.
Whilst these conditions do not translate into immediate
revenue growth for WiseTech, we are benefitting from the
acceleration of the longer‑term structural changes that
they are driving.
We are seeing increasing consolidation within the
logistics sector and increased investment in replacing
legacy systems with integrated global technology, such
as CargoWise, that drives productivity and facilitates
planning, visualisation, and control of global operations.
Building the CargoWise ecosystem
– Our 3P’s: Product, Penetration and Profitability
1. Product
Our strategy of focusing on the ‘3Ps: Product;
Penetration; and Profitability’ is designed to leverage
structural changes and deliver our vision by building
our capabilities and, where appropriate, fast‑tracking
our technology development and know‑how through
acquisitions.
Having completed 39 acquisitions since our IPO in
2016, we have assembled significant resources and
development capabilities to fuel the CargoWise
technology pipeline. While we remain open to
strategically significant acquisition opportunities, we
have slowed our near‑term acquisition activity, in order
to focus on expanding the CargoWise ecosystem and
on extracting synergies from acquisitions to maximise
operational leverage and drive scalability.
Product development and innovation continued to
be a priority in FY21. We invested $167.1 million in R&D
(FY20: $159.1 million), equating to 33% of Total Revenue.
We made significant progress in continuing to align our
acquisition development teams to support WiseTech’s
development priorities.
CargoWise native customs
functionality accounts
for ~45% of global
manufactured trade flows
In addition, we established another centre of excellence
in Bangalore and recommenced recruitment of
technology and industry talent, following a short
slowdown in 2H20 at the outset of COVID‑19. Our broad
geographic footprint enabled us to recruit from the
global talent pool.
Our top development priority in FY21 was to accelerate
native customs and cross‑border compliance builds in
key markets. As of 30 June 2021, the CargoWise native
customs functionality was in ‘Production Release’2 across
jurisdictions accounting for ~45% of global manufactured
trade flows (up from ~35% in FY20).
1 Source: “Global Economic Prospects” (January 2021) A World Bank
Group Flagship Report.
2 CargoWise Customs is defined as in “Production Release” for a particular
country when the product module has been released into the main
CargoWise release build, available for production use by any customer,
and is able to be used for all major customs import/export procedures.
1 0
We also completed the product integration of global
rates functionalities (secured via the CargoSphere and
Cargoguide acquisitions) onto the CargoWise platform.
This integrated functionality is currently in production
with several major customers and work has commenced
on the native rewrite onto the CargoWise platform.
Additionally, 1,096 CargoWise new product features
and enhancements were delivered throughout the year
and solid progress was made in extending CargoWise
enterprise‑wide functionalities (such as automation and
tracking) from the adjacency businesses, with customer
integrations well advanced.
Also of strategic note in FY21 was the deployment of
the beta version of CargoWise Neo (Neo) to a select
group of beneficial cargo owners (BCOs) via existing
WiseTech customers and the commencement of work on
extending aspects of Neo for customer specific needs.
Neo is a longer‑term development priority that will
deliver a web‑based, integrated platform, enabling BCOs
to link directly with their logistics provider to plan, price,
book, track, trace and manage their freight.
2. Penetration
With the market penetration of fully digital and highly
automated global logistics solutions still in the early
stages, the opportunity for growth is vast. Our market
penetration approach is to target the Top 25 Global
Freight Forwarders1 and the top 200 global logistics
providers. This enables us to benefit from global rollouts
and consolidation within the logistics sector, as large
customers acquire other industry players and add them
to their rollout on the CargoWise platform.
6 new global rollouts secured
with large freight forwarders
In FY21, we secured, six new global rollouts2 and signed
FedEx post 30 June 2021. These new global rollouts are in
addition to the 30 global rollouts that WiseTech already
has in place.
Ten of the Top 25 Global Freight Forwarders have
rollouts on the CargoWise platform ‘In Production’3 or
are ‘Contracted and in Progress’4. Given these large
customers can take multiple years to roll out CargoWise
across their sites globally, usage and transaction
revenues are expected to continue to grow over time.
3. Profitability
In FY21, we commenced work on an organisation‑wide
efficiency and acquisition synergy extraction program
designed to streamline our processes and teams,
maximise operating leverage, and ensure appropriate
allocation of resources to support our strategic vision.
This program delivered a $13.8 million net benefit in FY21
(after recognising $8.2 million of restructuring costs),
exceeding our previously announced $10 million target.
These cost reductions have partially offset our increased
investment in product development and recruitment
of technology specialists to support ongoing growth.
We are on track to achieve a cost reduction run‑rate
of ~$40 million for FY22, exceeding our previous
$20 million–30 million target.
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Our vision and commitment
Our vision drives us and energises our people. There has
never been a greater need for the globally integrated
logistics technology and digitisation that CargoWise
provides.
We are ideally positioned for continued growth and
further market penetration. We have a well‑considered,
comprehensive plan to deliver on our strategic
objectives, and our strong balance sheet, strong cash
flows and robust liquidity mean we have significant
financial firepower to fund our growth.
Looking ahead, we remain focused on R&D that delivers
breakthrough products that enable and empower those
that own and operate the supply chains of the world.
Acknowledgments
On behalf of the WiseTech Global team, I want to
thank each of our shareholders for your investment
and support as we continue to build a world‑leading
organisation, with a clear mission to enable and
empower the world’s supply chains and a vision
to be the operating system for global logistics.
Richard White
Founder and CEO
“Our vision drives us and
energises our people.
There has never been
a greater need for the
globally integrated logistics
technology and digitisation
that CargoWise provides.”
1 Based on Armstrong & Associates, Inc. Top 25 Global Freight Forwarders List ranked by 2020 logistics gross revenue/turnover and freight
forwarding volumes (revenues are company reported or Armstrong & Associates estimates). Updated 10 August 2021.
2 deugro; a. hartrodt; CEVA Logistics; cargo‑partner; Seafrigo Group; Hankyu Hanshin Express.
3
In Production refers to CargoWise customers who are operationally live on CargoWise and using the platform on a production database
(rolled out in 10 or more countries and 400 or more registered users on CargoWise).
4 Contracted and in Progress refers to CargoWise customers who are contracted to grow to rolling out CargoWise in 10 or more countries
and for 400 or more registered users.
1 2
Our business
Our vision and strategy
We bring meaningful, continual improvement to the world’s supply chains. We replace ageing,
legacy, proprietary and domestic systems with efficient, highly automated and integrated
global capabilities.
Our breakthrough software solutions are renowned for their powerful productivity, extensive functionality,
comprehensive integration, deep compliance capabilities and truly global reach.
We are evolving rapidly. By expanding into more products, deeper functionality, more geographies and adjacencies,
we drive our long‑term growth and market position as the leading logistics execution platform.
Vision: to be the operating system for global logistics
Our strategy is designed to accelerate growth by leveraging structural changes
The need to replace
ageing legacy systems
Demand for integrated global software
solutions with increased visibility
Industry consolidation driven
by logistics providers
Our people focus on our 3Ps to deliver our vision
Product
Extend
technology lead
Penetration
Expand
market penetration
Profitability
Drive
operational efficiency
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Product
CargoWise
The importance of supply chain visibility
and resilience has never been clearer. Having
the data and technology to forecast and plan
is critical.
Our industry-leading flagship product, CargoWise,
is centralising logistics operations on a single global
database, delivering business continuity, scalability
and security.
Real‑time data visibility in CargoWise helps our
customers track the movement of goods, origin
to destination, enabling the efficient execution of
logistics processes. From freight forwarding, customs,
warehousing and shipping to tracking, land transport,
eCommerce and cross‑border compliance – CargoWise
offers truly global capabilities for a global industry.
The power of CargoWise
single global platform
extensive configuration tools
real‑time automation
streamlined processes
no rekeying of data
integrated data flows
T H E C A R G O W I S E N E T W O R K
We are building a global network of CargoWise
Partners, Certified Practitioners and industry
partners for freight forwarding. Our network of
technology and logistics experts work within
the logistics industry across our customers,
associations and logistics businesses – all helping
enable and empower the world’s supply chains.
384
partner agreements
to build our capability to support
our growing customer base around the world
16
CargoWise education partners
(such as universities, colleges, and vocational
institutions) who incorporate CargoWise learning
into their supply chain and logistics courses
17,000+
CargoWise Certified Practitioners
who use and promote the features
of our leading CargoWise platform
Watch these videos and more to learn
about the power of CargoWise:
www.cargowise.com/news/industry‑insights
Customs Product Manager, Glenn Lawson, explains how
we are building out the world’s customs and border
compliance platform.
Centralising logistics operations on a single global
database can help you move faster, more flexibly and at
greater scale.
CargoWise helps drive productivity and unlocks more
value for logistics businesses by managing operations
on one global database.
1 4
Our product development strategy
With over 5.3 million development hours invested
in building our CargoWise platform, we are at the
technological forefront in managing international
and cross‑border logistics, change in trade patterns
and evolving logistics regulations.
Our product development and capacity are fundamental
to our business and key to our competitiveness,
customer attraction and retention.
Over the past five years, we have invested more than
$560 million in research and development, delivering
more than 4,300 product features and expanding our
pipeline of commercialisable innovations. We are building
the operating system for global logistics.
The CargoWise ecosystem
$167.1m
invested in R&D in FY21
33
product development centres
F Y 0 8 – 1 3
Introduced
cloud‑based
solution
F Y 1 4 – 1 7
Launched
CargoWise &
signed DHL Global
Forwarding
F Y 1 8 – 2 0
Grew
34 acquisitions
& 7 global rollouts
F Y 2 1 – 2 3
Deliver
CargoWise
expansion &
penetration
F Y 2 4 +
Extend
Neo rollout
initiation &
Land Transport
>$560m invested in R&D since FY17 delivering 4,300+ product features
Neo (beta)
Global native
customs &
cross‑border
compliance
Global rates
engines
& ecosystem
eCommerce
International
eCommerce
Enterprise-wide
functionality
+ other modules
Landside
logistics
& land transport
Neo
Global integrated
platform for BCOs
Product development priorities accelerated by people & strategic acquisitions
– Foothold
acquisitions
– BorderWise
compliance
libraries
– Cypress
machine
learning
– Cargoguide
– CargoSphere
– X‑ware
– Pierbridge
– SmartFreight
– Foothold
acquisitions
– CCN
– Containerchain
– Microlistics
– Softship
– X‑ware
_ Foothold
acquisitions
– Containerchain
– Depot Systems
– CMS
– SaaS
Transportation
– Trinium
– TransLogic
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C A S E S T U D Y
DHL Global
Forwarding
CargoWise enables DHL Global Forwarding
to deliver end‑to‑end visibility
Part of the Deutsche
Post DHL Group
31,000 freight
forwarding experts
Operations across
190+ countries
Air, ocean and overland
freight forwarding
CargoWise’s visibility, real‑time data accessibility and
global transparency have enabled DHL Global Forwarding
to deliver consistent, quality service for their customers
across the globe, says Tim Scharwath, CEO DHL Global
Forwarding, Freight.
“Transparency is the name of the game in our business.
Our customers expect that we are able to ship
something from A to B, but they also expect us to be
transparent and to have detailed information about
the shipment, and CargoWise always gives us that
transparency,” says Mr Scharwath.
Since implementing CargoWise as their core transport
management system (TMS), initially rolling out across
ocean freight, DHL Global Forwarding has seen increased
productivity, and improved integration, automation and
communication across its global network.
“I can very happily say that we’ve rolled out CargoWise
to our entire ocean freight organisation. On the air freight
side, we are planning to complete the roll out in 2021.
Our main operations will then be managed uniformly via
one system, which I believe is probably the fastest rollout
of any freight forwarder of this size,” says Mr Scharwath.
When it came to the decision to outsource a solution
versus building their own TMS in‑house, it was
CargoWise’s deep integrations and broad functionality
that made it the most obvious solution for DHL
Global Forwarding.
“We realised that we don’t have to do
everything ourselves, by ourselves, so
we looked for the best technical solution
out there. We also asked ourselves, what
drives our customers and what do we
need to do in the future to be better?
And with that in mind, we decided to
go with CargoWise as our core transport
management system.”
Tim Scharwath,
CEO, DHL Global Forwarding, Freight
“We deployed CargoWise in a controlled, but very well‑
established way to make sure that our organisation was
able to follow the change. It was really important for us
to ensure that our people were informed about why we
were implementing certain systems so that they could
embrace our transformation.”
Benefits
One global data entry point
Real‑time data accessibility & visibility
Global transparency for the business and customers
Watch the case study video featuring
Tim Scharwath on the WiseTech website.
www.wisetechglobal.com/news/customers
1 6
Penetration
Our customers
Our customers are the people who move
the world. They are integral links in the global
supply chain and use our software solutions
to operate more efficiently across borders,
regulatory bodies and freight modes.
Global logistics providers continue to face challenges
caused by the COVID-19 pandemic. This year saw the
continuation of a ‘goods-led’ recovery in global trade
which resulted in tighter capacity, congestion and higher
rates in global logistics channels.
Due to ongoing intense pressures such as increasing
regulation, margin pressure, geo-political tensions,
and demand for faster throughput, we are seeing an
acceleration of longer-term structural changes.
These changes include, consolidation within the sector
and increased investment in replacing legacy systems
with integrated global technology, such as CargoWise,
that drives productivity and facilitates planning,
visualisation and control of global operations.
Market penetration momentum
We have gained momentum in signing up global rollouts
for the world’s largest freight forwarders. In FY21, we
secured six large global freight forwarding customers
for a CargoWise global rollout.
Global rollouts – CargoWise Large Global Freight Forwarders
Global rollouts - CargoWise Large Global Freight Forwarders
Contracted and in progress of global rollout
Signed post 30 June 20211
In Production – globally rolled out through signing or organically
FEDEX
FRACHT
OIA
TRANSTAR
DSV
SEKO
TOLL
GEBRÜDER WEISS
SENATOR
XPO LOGISTICS
WACO/TIGERS
WTC IPO
PENTAGON FREIGHT
DHL
CROWLEY LOGISTICS
NOATUM
HANKYU HANSHIN
DEUGRO
SEAFRIGO
CARGO-PARTNER
A. HARTRODT
CEVA LOGISTICS
YUSEN
MAINFREIGHT
ROHLIG
GEODIS
AIT WORLDWIDE
LOGISTICS
JAS
GREEN CARRIER
LOGWIN
DE WELL
EFL
GEFCO
BOLLORÉ
ASIA
SHIPPING
HELLMANN
ARAMEX
CLASQUIN
Launch of
Cargowise
Prior
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
Customers have been categorised in the financial year that reflects the later of their CargoWise revenue cohort or global contract signing date (if applicable).
10 of the top 25
global freight forwarders have
signed up for CargoWise rollouts
6 new CargoWise
global rollouts
by large global freight
forwarders in FY21
1
Includes customer signings post-FY21 up to and including at 24 August 2021.
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C A S E S T U D Y
Aramex
CargoWise helps Aramex deliver
value from day one
Founded in 1982
Headquartered in the
United Arab Emirates
Operations across
65+ countries
~2,000+ freight
forwarding experts
Configurability, automation and real-time visibility across
global freight operations are some of the CargoWise
benefits that have enabled Aramex to deliver value
to their customers from day one in a changing global
environment.
“We really wanted to hit the market with a solution that
can deliver value on day one of the implementation. We
made our decision simply because of the best practices
that CargoWise offers and the out‑of‑the‑box solutions
and integrations that come with the platform,” says
Mohammed Sleeq, Chief Digital Officer, Aramex.
Aramex, a leading global provider of comprehensive
logistics and transportation solutions, implemented
the rollout of CargoWise across its global network,
representing an integral milestone in its digital
transformation strategy.
“We’d been really reshaping our strategy and looking at
solutions and technologies that deliver value without the
need for us to reinvent the wheel.
“Because this solution has been
vetted and tested with a lot of freight
forwarders in the market, including a
global network of partners and agents
that we work with, CargoWise was the
obvious choice for Aramex.”
Mohammed Sleeq,
Chief Digital officer, Aramex
Aramex’s unique ‘big bang’ approach saw CargoWise
implemented simultaneously across its worldwide
network of approximately 2,000 users spanning 62
countries, with the platform supporting its freight
forwarding and customs operations and enhancing the
overall user experience for its employees and customers.
“We knew the challenges that came with the
implementation, but we wanted to avoid the hassle of
integrating legacy and modern systems together. With
the ’big bang’ approach, we were able to achieve our
goals faster, and see the benefits and efficiencies very
early on in the program,” explains Mr Sleeq.
“We’ve been embracing more innovative technology,
empowering our customers, and delivering a future for
the organisation that is by far more agile and resilient.
“Since implementing CargoWise, we have shortened the
development cycle by years and avoided the landscape
of operating a mix of legacy and modernised systems.
I have never seen a time where Aramex as an
organisation has been more resilient,” says Mr Sleeq.
Benefits
Out‑of‑the‑box solution
Configurability, automation & visibility
Global transparency from day one
Watch the case study video featuring
Mohammed Sleeq on the WiseTech website
www.wisetechglobal.com/news/customers
1 8
Profitability
Supporting scalability
and delivery of our vision
Since our IPO, we have completed 39
acquisitions, building significant product and
market capabilities that allow us to build out
and optimise our technology pipeline and
leverage our expanded geographic footprint.
Our strategic global teams are providing key
development capacity to build out and enhance our
CargoWise platform.
In FY21, we progressed our organisation-wide efficiency
and acquisition synergy program, which is designed
to support the scalability and delivery of our strategic
vision, including:
Streamlined
processes
and teams
Maximised
WiseTech’s
operating leverage
Appropriately
allocated
resources
$13.8m
net cost reductions,
exceeding our $10m target
~$40m
cost reduction run‑rate for
FY22, exceeding our previous
$20m‑30m target
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1 9
C A S E S T U D Y
CEVA Logistics
CEVA Logistics, part of the CMA CGM Group,
a world leader in transport and logistics,
commenced the rollout of CargoWise in 2021.
With this strategic investment, CEVA Logistics will simplify
and standardise all 3PL operational processes across its
global network. CargoWise will be implemented over the
course of the next five years as part of a planned process,
replacing multiple legacy systems and delivering greater
efficiency within the business.
The switch to CargoWise will enable CEVA Logistics teams
around the globe to have real‑time visibility of freight
forwarding and customs actions on a single platform.
As a purpose‑built solution, CargoWise gives CEVA
Logistics employees access to the same information in
a single database across all functions, offices, countries
and languages, furthering the CEVA Logistics digital
transformation.
By the end of 2022, 50% of all CEVA Logistics locations
will be fully operational on the CargoWise platform, with
the whole project completed and deployed by 2025.
“By implementing CargoWise,
CEVA Logistics will further improve
productivity and efficiency as we
strive to lead the way in multi‑modal
forwarding and contract logistics
operations.”
Mathieu Friedberg,
CEO, CEVA Logistics
“Thanks to its experience across the transport and logistics
sector, CargoWise is the right choice to provide this new
digital platform. CEVA Logistics recently invested to
improve the customer journey and this implementation
allows us to develop a high‑level employee journey as well.”
Benefits
Real‑time visibility
Single global database
Automation of processes
2 0
Sustainability Report
Our vision
To be the operating system
for global logistics
“WiseTech was started over 25 years ago in my basement, with the clear objective of utilising technology
to solve the complex pain points of the logistics industry and to enhance productivity and efficiencies
for logistics providers.
Making a positive contribution to society is at the core of WiseTech’s DNA.
We think deeply about our impact on the planet and society, and are as committed to innovating and
advancing human potential today as we were in the early days of WiseTech.
Our people are the ‘heart and soul’ of WiseTech – they are our most valuable asset. We are all part of the
WiseTech family, and I am inspired by them every day. They are the key to our success and the driving force
delivering our strategy.
We believe we have a role to play in helping develop the next generation of technologists. Supporting
education and encouraging students to embrace technology careers is a founding principle of WiseTech.
We are proud of the fact that every day our technology solutions help over 18,000 customers across 169
countries reduce their environmental footprint and achieve efficiencies. We continue to encourage bold
ideas in order to unlock the unimaginable.
We also recognise that we can lead by example and are taking steps to continue to reduce our
environmental footprint, starting with a commitment to net‑zero emissions.
As the Founder of WiseTech, I recognise that we can continue to improve. That’s what this sustainability
report is about: it is an account of where we are, what we can do better, and where we are headed.”
Richard White, Founder & CEO,
WiseTech Global
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2 1
Our credo
“ Our culture is not by accident.
Our creativity is by design.
Our people define us.
We favour principles over policy, open and frank
communication over secrecy, agreement over control,
results over busywork. We realise that real creativity is
delicate and dies with processes, bureaucracy, chain of
command and centralised decision making.
Our work environment is flat and open, hierarchy rises
only when essential and recedes immediately. We know
that ‘little things are infinitely the most important’
and that ‘culture eats strategy for lunch’.
We actively embed our creativity, the seeds to our
success and the antidote to many problems, deep
within our people and culture.
We love to challenge the status quo and to think
of breakthrough ideas in order to build something
delightfully better. We cannibalise that which needs to
be superseded, improve that which is imperfect and add
that which is missing, and we have fun!
We think bold ideas and build bold products that people
don’t know they want… until they see them, and can’t live
without… because they come to love them.
We strive every day to build products that surprise and
delight our customers and empower their success, but
we also give incredible value to our customers so they
drive us to flourish and grow.
We are truly, deeply passionate about what we do and
we use all of our empathy, energy, focus, courage, talent,
drive and logic to confront the really big stuff that others
will not.
We surround ourselves with incredibly smart people with
diverse and eclectic experience, an abundance of talents
and motivation fuelled by purpose.
We care deeply, have real ownership, and a sense of
connection in every place and in every role. We belong.
We stand with humility on the shoulders of the many
that have led us here. We owe them our dedication,
our energy, and our results.
Corporate grind be damned! We’re doing something that
really matters, and it requires us to strive, learn, grow,
and flourish.
We will change the world: one innovation at a time.”
Richard White, Founder & CEO
2 2
Our Sustainability Pillars
WiseTech is built on over 25 years of commitment to making a positive contribution
to the communities in which we operate. Our people, customers and communities
are central to our vision and mission.
In developing our strategic approach to managing and reporting on Environmental, Social
and Governance (ESG) metrics, we have engaged with a number of our major stakeholders
and made an assessment of materiality to prioritise ESG opportunities.
Details of our stakeholder engagement and our process for assessing materiality and prioritising ESG opportunities
can be found on our corporate website under the Investors/Sustainability tab at www.wisetechglobal.com/investors.
Our approach to sustainability centres on four pillars, reflecting
the areas that are most material to our business and of greatest
relevance to our stakeholders:
E
L
P
E O
R P
U
O
C
O
M
M
U
N
I
T
Y
Creating breakthrough
products that enable &
empower those that own
& operate the supply
chains of the world
L
A
CE
V I R
N
E
M
A
R
K
E
T
P
T
N
E
M
N
O
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Scope
Additional information
This Sustainability Report covers the period 1 July
2020 to 30 June 2021 (FY21) unless otherwise stated
and covers the assets over which WiseTech has had
operational control for six months or more. This Report
does not extend to those assets in which WiseTech has
a financial interest but is not responsible for day-to-day
management.
It is noted that WiseTech has completed 39 acquisitions
since listing on the Australian Securities Exchange in
2016, and, as such, certain prior year ESG metrics may
not be directly comparable. All amounts in this report are
in Australian dollars unless otherwise specified.
We are at the beginning of our ESG reporting journey
and will continue to evolve and enhance our ESG
disclosures and initiatives over time. We have, as an
initial step, referred to the guidelines set out in The
Global Reporting Initiative (GRI) Sustainability Reporting
Standards (Core option), which have helped to broadly
guide our disclosures.
A reconciliation of disclosures in this Sustainability
Report against the GRI Reporting Standards can be
found on our corporate website under the Investors/
Sustainability tab at www.wisetechglobal.com/
investors. Also under this tab is additional sustainability
information.
Our FY21 sustainability disclosures should be read in
conjunction with the rest of the WiseTech 2021 Annual
Report, including our FY21 Corporate Governance
Statement and our FY21 Remuneration Report.
2 4
Highlights
Our People
Community
53%
of our people are focused
on product design &
development (+2pp on FY20)
7,100+
external course commencements
in WiseTech Academy
up 325% on FY20
Emerging
Leaders Program
launched in FY21
Inaugural
Sponsor
of Sydney Autistic Community Lions
Club’s Hackathon & Big Ideas initiatives
Amplifying our
Culture sessions
introduced bi‑weekly in FY21
University
Sponsorships
UTS
43%
female representation
on the Board
Titanium sponsor
of the Australian Computer Society
Society’s BiG Day In & BiG Day In Junior
95%+
of our global workforce has
transitioned to a hybrid working model
18th year
of free access to Médecins
Sans Frontières of our
Compliance Net training
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Environment
Marketplace
207.84kg
of used electronic
equipment recycled in FY21
72bn+
data transactions annually
Data centre
efficiencies
implemented in FY21 to reduce
energy consumption
GHG emissions
inventory
completed for the first time
169 countries
licensed to use our software
5.3m+
development hours over past 20 years
Commitment to
Net-zero
33%
of Total Revenue re‑invested in R&D
Logistics
optimisations
driven by CargoWise technology helps our
customers reduce their carbon emissions
4,300+
product features & enhancements
delivered over past 5 years
2 6
1. Our People
Our people are the heart & soul of WiseTech – they are the driving force of our strategy
Our people are key to the success of our
business and we place significant emphasis
on attracting and retaining talent, ensuring
our employees’ safety and wellbeing, and
providing ongoing training and development.
We are also cognisant of the fact that our
culture is integral to WiseTech’s success, as
is the diversity and inclusion of our people,
which allows innovation to thrive.
As of 30 June 2021, WiseTech employed 1,860 people
across 50 offices and 33 product development centres
globally. 49% of our Australia‑based employees are
covered by Modern Awards, which set out minimum
terms and conditions of employment such as working
hours, minimum wages and the provision of overtime
and mandated annual salary reviews. These terms and
conditions are in addition to the National Employment
Standards (NES).
Table 1: Total number of employees by
employment contract type (as at 30 June 2021)
Employment
contract
Permanent
Fixed‑term
contract
Director
Total
Full‑time
Part‑time
Full‑time
Part‑time
FY21
Total
1,673
87
89
9
2
% Total
90%
5%
5%
–
–
1,860
100%
1.1 Attracting and retaining talent
As a technology company, our ability to attract and
retain talent is crucial to our ongoing product innovation
and development. Approximately 53% of our FY21
global workforce was focused on ‘Product design &
development’ (up from 51% in FY20) and 20% was
focused on ‘Technical & product support’ (down from
21% in FY20).
Table 2: Employee totals by function (as at 30
June) and ratio over time
Category
FY21
Employee
total
FY21 %
Total
FY20 %
Total
FY19 %
Total
Product design
& development
Technical &
product support
General &
administration
Sales &
marketing
Total
995
53%
51%
47%
361
20%
21%
23%
333
18%
17%
18%
171
9%
11%
12%
1,860
100% 100% 100%
WiseTech has adopted a multi‑pronged approach
to attracting and retaining talent. Since listing, we
have completed 39 strategic acquisitions which have
delivered significant resources in terms of talent and
development capability. We have also built offshore
centres of excellence, utilising local talent to supplement
our growth.
Another area of focus has been on investing in longer
term education programs. These programs are designed
to continue to train and develop our people and to
encourage students in the broader community to pursue
a career in technology ‑ thereby supporting the pipeline
of future talent (refer to the ‘Community’ section of this
report). We also have Reward and Recognition programs
to incentivise and reward our people if they refer a new
employee or achieve years of service milestones.
Our remuneration framework (as outlined in our FY21
Remuneration Report) is designed to attract, motivate
and retain leaders and talented employees, by providing
a mix of cash and equity (in the form of fixed pay and
performance incentives) as well as other benefits which
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2 7
our commitment to providing a work
environment that is free from unlawful
behaviours, where everyone is given an
equal chance to use their talents and abilities.
Training and testing on our policies, including our Code
of Conduct, Respect and Dignity at Work Policy,
and Workplace Health and Safety Policy, is compulsory
for all our people and included in our new employee
onboarding program.
We offer our team members a suite of health and
wellbeing benefits that we regularly review and adapt to
address prevailing circumstances. This has particularly
been the case in FY20 and FY21, given the COVID‑19
pandemic restrictions. We have had to pause some of
our company funded benefits such as office deliveries
of daily fresh fruit, breakfast options and individually
packed lunches.
We replaced these benefits with our Ways of Working
Allowance, which was introduced in September 2020
and provides our people with a discretionary benefit
of up to $1,000 annually to help set‑up and maintain
remote working (e.g., internet costs, bespoke equipment
and personal wellbeing services).
We also introduced company‑funded private
transportation (via ride share and taxi operators) for
team members who needed to attend the office for
essential work, where no suitable alternative transport
was available.
are outlined in the ‘Employee safety and wellbeing’
section of this report.
Our goal (subject to local regulations) is for all of our
employees to be shareholders. More than 70% of our
global workforce owns WiseTech equity in the form of
shares and/or share rights. In addition to equity awards,
we introduced our ‘Invest As You Earn’ (“IAYE”) program in
2018. Our IAYE program allows our people to purchase
WiseTech shares via monthly deductions from their
salary. 361 employees were enrolled in our IAYE program
for calendar year 2021 across 21 countries.
Reward and recognition
Years of service award
Staff rewards program providing staff
discounts to selected retaiIers
End of year employee gift which in FY21
was a $500 cash payment (or equivalent
in non‑Australia‑based locations), given
to each of our people
Referral program reward
1.2 Health and wellbeing
95% of our global workforce
has transitioned to
a hybrid work model
The health, safety and wellbeing of our people is a
priority in our business. WiseTech has implemented a risk
management‑based approach to reducing the likelihood
of injury or harm in the workplace.
Our Workplace Health & Safety (“WHS”) policy is
designed to ensure compliance with WHS legislation
in the jurisdictions in which we operate, and includes
procedures to ensure hazards and risks are identified,
assessed and resolved in a timely manner.
No WHS incident occurred in FY21 resulting in injury
requiring WorkCover notification under Australian law.
Our overall absenteeism rate for sick leave in Australia
was 0.98% (FY20: 1.15%) .
As part of providing a safe work environment, WiseTech
has a Respect and Dignity at Work Policy in place
that sets out:
a code of conduct designed
to create a work environment free
from discrimination and harassment;
procedures to deal with workplace
complaints regarding discrimination,
harassment and bullying; and
2 8
Other wellbeing benefits offered to our people in FY21 included:
Work, life and family benefits
Health and wellbeing benefits
Global paid parental leave providing primary
care givers with four months of their full pay and
secondary caregivers with at least two weeks fully
paid leave. In FY21, 41 of our global employees took
parental leave (FY20: 17)
Social activities and team building initiatives
tailored to address COVID‑19 restrictions,
including virtual Friday afternoon Beer O’clock,
morning teas, access to an e‑library and
monthly virtual cake days
Flexible working in the form of a variety
of work arrangements including:
– Hybrid working from home/office;
– job share;
– part‑time work;
– compressed working week; and
– flexibility of working hours
Additional leave days and volunteer leave
Salary packaging for work related expenses
Flu vaccination reimbursement
Quit smoking program support
Daily fresh fruit and single serve food
in major office locations (subject to
COVID‑19 restrictions)
Employee Assistance Program for
employees and their immediate family,
offering confidential, independent
professional counselling for work and
personal issues, including:
– Work and career life changes
– Nutritional and lifestyle advice
– Stress management
– Legal assistance relating to wills, property
matters, family law and consumer rights
– Financial issues and money management
– Grief and loss support
– Sleep and fatigue advice
– Relationship advice (family and work
Staff discounts on retail expenses
relationships)
Equity and financial benefits
Employee equity programs
Salary sacrifice and IAYE
Income protection insurance as part
of our salary packaging
– Addiction counselling (gambling, drug, smoking
and alcohol issues)
– Anger and violence management, and
– support for emotional difficulties
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O U R N E W H Y B R I D W O R K I N G M O D E L
WiseTech is transitioning to a new hybrid working model in jurisdictions where local COVID‑19 guidance states
that it is safe and beneficial to do so. Our new hybrid working model involves an established pattern of remote
working and time with team members in offices.
As of 30 June 2021, over 95% of our global workforce has transitioned to a hybrid working model (subject to
local COVID‑19 conditions) and our team leaders engage with their teams in regular virtual social activities,
such as monthly cake days, Friday afternoon ‘Beer O’clock’ and morning teas.
3 0
1.3 Learning and development
We are committed to the ongoing learning and
development of our people. In FY21 we continued to
build out the depth of our Senior Management Team.
This has been achieved through a combination of
learning and development as well as via recruitment
of a number of senior leaders over the past two years
(including a new General Counsel, a new Head of People
and a new Head of Risk Management & Internal Audit).
We have a pipeline of talent being prepared for WiseTech
leadership roles and are committed to helping our
broader team to build the capabilities they need for
success in their current role and for future career
development.
Our people have access to a range of programs that help
them develop their skills and knowledge, including:
WiseTech Academy: our registered training
organisation provides nationally recognised
global supply chain logistics technology
online courses. These courses are available
to our employees as well as to members of
the broader community (refer to the section
titled ‘Community’ for further detail).
The WiseTech Mentoring program: our senior
leaders are part of our mentoring program,
which is designed to help develop our next
generation of product development team
leaders.
The WiseTech Emerging Leaders Program
(ELP): a leadership development program
which we launched in FY21. This program
is supported by three facilitators and
two executive sponsors, and provides a
combination of internally and externally
delivered courses on leadership, performance
management, business acumen, collaboration
and inclusiveness.
Our first cohort of ELP participants
commenced leadership development in
March 2021 and our second cohort will
commence the program toward the end
of calendar year 2021.
Higher education assistance: including
financial support and study leave.
Online learning programs: such as our
partnership with LinkedIn Learning™ which
provides our people with access to 10,000+
on‑demand career enhancing video tutorials.
Resilience Training programs: rolled out
globally and designed to enhance our peoples’
cognitive problem‑solving skills, their ability
to monitor their psychological reactions
during adversity and their capacity to address
setbacks more effectively.
‘On the job’ training and development:
through intern programs as well as our online
Q&A platform, Stack Overflow, which allows
our people to ask questions and share
knowledge with their colleagues globally.
The WiseTech rotation program: for new
software engineers and product managers.
This is a six‑month rotation program, which
helps accelerate development skills via three
rotations. In each rotation, our developers
learn about different areas of our business,
our culture, and our software development
practices. This program integrates training,
coaching, mentoring and regular feedback. In
FY21, 144 new software engineers and product
managers participated in this training program.
1.4 Culture
Our culture of innovation and productivity is integral
to our success. It enables us to tackle the complex
problems and challenges of the logistics technology
sector with a test first, fail quickly and improve
rapidly approach.
To reflect the importance of culture in our business
in FY21, our Remuneration Committee was renamed
as the “People & Remuneration Committee” and we
added people and culture to the Committee Charter.
Given that we have completed 39 acquisitions globally
since listing, we have continued to focus on ensuring
that our culture and values are adopted and embraced
by all of our people. To achieve this, we have facilitated
engagement sessions to embed our culture and mantras
across our workforce. Of note in FY21 was the launch
of our “Amplifying our culture” program, consisting
of bi‑weekly virtual sessions to discuss our culture,
values and mantras and how our teams can apply
these in their daily work.
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Our values
We continuously improve our
culture so that it empowers
and drives us.
We work hard to improve
ourselves, our teams, our
products and our business.
We have a clear purpose
and a shared vision for
everything we do.
We invent things our
customers cannot
live without.
We lead when we see the
need and inspire and support
each other always.
We focus on the deeper
needs of real customers
in our chosen markets.
We strive for excellence at
all times and in everything
we do.
We manage ourselves
and are always focused
on results.
Our mantras
T H E
F O U N D A T I O N
M A N T R A S
T H E
C R E A T I O N
M A N T R A S
T H E F O R C E
M U L T I P L I E R
M A N T R A S
These need to be in place to
enable all the other mantras.
These bring out the creative
spirit within us all.
These build and reinforce
our culture, our infinite fuel.
Slower today, faster
forever: Solving the
core conflict in all
human endeavour.
Lead with content:
Scale anything.
Anyone can talk to
anyone at anytime for
any reason: Open lines
of communication at
all times.
Find the root cause
and solve for that:
Dig deeper for the
best solution.
Creative abrasion
fuels collaboration:
Make any idea the
best idea.
Lead others, manage
yourself: Be the example
you want others
to follow.
Culture eats strategy
for lunch: Culture is
the fuel, strategy is
the direction.
Win‑win or no deal:
Productivity at the
Transform competing
wants into compelling
wins.
centre of everything:
This is how we FOCUS.
“As a person living with Tourette Syndrome, I feel passionately about diversity and inclusion.
People with Tourette Syndrome, or any affliction for that matter, should not be excluded because
they are different. Being different enables us to see things from a different perspective and
produce better‑quality outcomes. When I started at WiseTech, I suppressed the tics as much as
possible. However, I soon realised that people at WiseTech couldn’t care less if I ticced, as long as I
added value. For the first time, I felt completely comfortable to be me. It’s a place where everyone
supports each other in being the best versions of themselves.”
Anthony Woods, Quality and Operations Manager,
Joined the WiseTech team in 2016
3 2
1.5 Diversity and inclusion
Diversity and inclusion in the workplace is a fundamental
component of our sustainability program. We value the
contribution that people with different backgrounds,
experiences and perspectives bring to our business and
are committed to diversity and inclusion across all levels
of our organisation globally.
This commitment is evidenced through our Diversity
& Inclusion Principles, which are available on our
corporate website and are designed to ensure that our
employment practices (including recruitment, training,
development, remuneration, talent identification,
succession planning and flexible work arrangements)
support a diverse and inclusive workforce. To this end,
where we have engaged external recruiters for recent
senior hires, we have requested and received a diverse
range of candidates.
We have also implemented awareness training
developed by external provider Xceptional Services, to
provide team members with an understanding of how to
work with autistic individuals and create an inclusive
workspace.
“Working at WiseTech has been nothing short of a life transforming experience. I’ve been here eight
and a half years, and it’s enabled me to live an independent life and to be a productive member of
the community. What I really love about this place is that it looks for, hires and nurtures talent that
other companies might pass on, and I think this has made a major contribution towards its success.
I also love WiseTech’s intentional culture, which sets it apart from most other companies.”
Tomislav Bozic, Software Developer, joined the WiseTech team in 2012
As evidenced in the table below, in FY21 we maintained our levels of female representation in line with our FY20
objectives. We lodged our annual gender data and metrics with the Australian Workplace Gender Equality Agency
(WGEA) (this information is available at: www.wgea.gov.au).
Table 3: Female representation objectives and levels (% as at 30 June 2021)
Board
Senior management
Workforce
Objectives
FY21 female representation
30%+
20%+
30%+
43%
25%
31%
“At WiseTech, my greatest achievement has been pushing code to production and helping others
when I can. Being surrounded by highly intelligent, experienced people, it’s easy to get into a
mentality of thinking you don’t know anything or that you shouldn’t share your opinions because it
may sound silly. So being able to help others with a problem or answering a question has really built
my confidence and made me realise how much I’ve learnt.”
Rue Ching Teh, Software Engineer,
Joined the WiseTech team in 2021
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In FY21, we took further steps to promote diversity and inclusion in our workforce, including undertaking a pay equity
analysis as part of our remuneration review process. The pay review content addressed unconscious bias and the
tools provided visibility for people leaders on how their spend distributed across genders. Following this review,
we have invested in initiatives to further promote equal pay for equal performance in equivalent roles.
Set out in the table below is a breakdown of our employees, new hires and turnover by age groups, region and gender.
Table 4: Employee totals and new hires and turnover ratios by age, region and gender
(as at 30 June 2021)
Category
Under 30 years
30–45 years
>45 years
Unknown
Total
Asia Pacific
EMEA
Americas
Total
Female
Male
Other/Not specified
Total
Total
320
981
547
12
1,860
1,019
594
247
1,860
567
1,282
11
1,860
% Total
New hires as %
of Total
Turnover as %
of Total
17%
53%
29%
1%
100%
55%
32%
13%
100%
30%
69%
1%
100%
4%
4%
–
–
8%
7%
1%
–
8%
2%
6%
–
8%
4%
12%
6%
–
22%
10%
8%
4%
22%
8%
13%
–
22%
Table 5: Composition of Board and Senior Management Team (SMT) by age group & gender
(as at 30 June 2021)
Category
<30 years
30–45 years
>45 years
Total
Female
Male
Total
SMT headcount
SMT Composition (%)
Board headcount Board composition (%)
0
2
11
13
3
10
13
0%
15%
85%
100%
23%
77%
100%
0
0
7
7
3
4
7
0%
0%
100%
100%
43%
57%
100%
3 4
2. Supporting our communities
We are passionate about helping develop the next generation of technologists
Making a positive contribution to the
communities we are part of, is integral
to the sustainability of our business and our
social licence to operate.
We recognise that as a technology company our
business relies on technology and industry experts
and, as such, we have always been a strong supporter
and advocate of education and training in the broader
community by:
Investing in community skills development;
Supporting student scholarships, sponsorships
and training programs; and
Community outreach and volunteering.
2.1 Community skills development
– WiseTech Academy
~7,100 external course commenced
in WiseTech Academy in FY21
We established WiseTech Academy – an approved
Registered Training Organisation (RTO) in 2018 – as
a wholly owned subsidiary of WiseTech Global, to
offer accessible, affordable, online technology and
global supply chain logistics learning. The objective of
WiseTech Academy is to help improve the skills and
knowledge of professionals already working; and provide
a stepping‑stone for individuals looking to launch
their career in the world of technology and supply
chain logistics.
Courses offered are nationally recognised and industry
accredited and provide students with training for
a range of careers in logistics technology.
We provide WiseTech Academy courses free for our
employees. We also offer a range of free and very
competitively priced courses for industry participants,
customers and non‑employees.
In FY21, WiseTech Academy received approximately
7,100 external course commencements representing
a 325% increase on FY20 external course
commencements (FY20: 2,191).
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2.2 Student scholarships, sponsorships and training programs
WiseTech is a longstanding supporter of education and participates in a broad range of programs designed
to encourage careers in technology, global supply chain logistics and the study of Science, Technology,
Engineering and Maths (STEM) subjects.
Platinum sponsor of the National Computer Science School (NCSS)
run by The University of Sydney
WiseTech is a Platinum sponsor of the NCSS. The NCSS is run by The University of Sydney and
provides educational opportunities for Australian high school students to learn computer‑
programming skills. The NCSS runs multiple programs throughout the year including:
– a 10‑day summer school for year 11 and 12 students, which educates students about
programming‑related careers in engineering and computer science
– a five-week programming competition for school students
– a ‘Girl’s Programming Network’, supporting and inspiring female high school students
interested in technology.
University of Technology Sydney (UTS) Co-op Scholarships
UTS
In FY21, we continued to host students as part of the UTS Women in Engineering and IT and
Bachelor of Information Technology Co‑operative Scholarship programs. This includes a six‑month
internship program, where students are exposed to a range of technologies and business areas.
University of New South Wales (UNSW) Co-op Program
We continued to host students who are part of the Software Engineering and Computer Science
Co‑op program at UNSW. Our internships are six‑month programs delivered via a mix of virtual and
in office time, with students rotating across a number of WiseTech teams, with the assistance of
a WiseTech mentor in each rotation.
UNSW BITSA
Also of note in FY21 was our sponsorship of BITSA, a student body representing and supporting
Information Systems undergraduate students at UNSW by connecting them to UNSW alumni and
industry sponsors.
Titanium Sponsor of the Australian Computer Society Foundation’s
BiG Day In events
WiseTech is a titanium sponsor of the Australian Computer Society Foundation’s BiG Day In events.
The ‘BiG Day In’ and ‘BiG Day in Junior’ events are held at university campuses around Australia and
are aimed at senior secondary school and university students interested in careers in technology.
This year the BiG Day In event was held virtually.
Working in partnership with Explore Careers
WiseTech works with Explore Careers, which has since 2009 helped over 1.5 million students in
years 7–12 make informed decisions about their future career and education options by connecting
them to employers such as WiseTech.
3 6
International initiatives
In Turkey, our management team participated in the Tubider Informatics Industry Association volunteer
program, which organises mentors and scholarships for technology students.
In Sweden, our team participates in the International Business Logistics (Green Management)
Vocational Education program for schools. This program is focused on helping students gain relevant
logistics competency, with a focus on customs regulation and compliance, and assists students
in securing internships.
“What I’ve enjoyed most about my internship at
WiseTech is the support network that is created
for interns because it’s really nice to share the
experience with similar minded people. There’s a
real emphasis on working as a team, I didn’t feel
like an intern, I felt like the work I was doing was
valued and appreciated by everyone.”
Gabby Walker, Intern/Product Associate,
B. Engineering (Honours) – Software, UTS
“What I’ve enjoyed most about my placement at
WiseTech is working with industry professionals
because it really gives you a sense of what life’s
like after university. During my time at WiseTech
I’m most proud of the project I worked on in the
Data Science team because we’re working with
some really interesting and state‑of‑the‑art
machine learning technology, and I’ve been able
to contribute in a way which is really unique and I
think I’ve really had
some impact.”
Yash Parge, Intern/Software Engineer,
B. Information Technology at UTS
Some of our 2021 intern cohort in the WiseTech Sydney office.
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2.3 Community outreach and volunteer programs
Proactive community outreach and volunteering are also part of our culture and DNA. Our community outreach
and volunteer initiatives in FY21 included:
Sponsorship of the Sydney Autism Community Lions Club’s (SACLC)
Hackathon & Festival of Ideas
In FY21, WiseTech Global was a proud sponsor of the Sydney Autism Community Lions Club’s (SACLC)
Festival of Ideas. This sponsorship included the SACLC‘s Hackathon in May 2021, where five teams
presented potential technology solutions to challenges faced by autistic people, such as sensory
and communication issues. The event was organised by WiseTech Software Engineer Tomislav Bozic,
who is also autistic, and presentations were judged by a panel of industry experts.
Staff Volunteering
WiseTech provides Australian team members with up to 10 days per year of paid leave to participate in volunteering
programs to address emergencies or natural disasters within the community. In FY21, our global teams participated
in multiple local community outreach and volunteering programs including:
Australia
Our team provided Médecins Sans Frontières with free access to our ComplianceNet training for the 18th
consecutive year. WiseTech also supported the ‘Run for Good Project’, a charity that supports women
impacted by domestic violence, homelessness and people seeking asylum. As part of the project, pillows,
sheets, towels and cutlery were donated to Women’s and Girls emergency centres and the Wayside Chapel.
Brazil
Our team in Brazil contributed to a food program called “Banco de Alimentos”, where food items are
collected and distributed to families impacted by the COVID‑19 pandemic.
United States
Our team in the US donated to the Chatham Outreach Alliance (CORA) food pantry, a not-for-profit
organisation that provides meals to families in need.
Our US Team donating to the CORA food pantry.
Supporting the ‘Run for Good Project’.
3 8
3. Environment
Our products help our customers reduce their environmental footprint
WiseTech recognises the importance of
minimising the environmental impact of
our operations, as well as the opportunity
for our technology and products to help
our customers minimise the environmental
impacts of their operations. We are
committed to making a positive change by
encouraging environmental sustainability
practices within our operations and through
our software.
As a leading software solutions provider, WiseTech is
not directly involved in the manufacture or physical
transportation of goods. As a result, our environmental
footprint is relatively small across our global operations.
We are committed to taking ongoing steps to reduce
our environmental footprint and to innovate so that
our software solutions continue to enable our freight
forwarder and global logistics customers to reduce their
environmental impact by streamlining logistic processes
and identifying the most efficient global routes.
We have identified the following environmental matters
as areas of opportunity for our business:
Energy consumption;
GHG emissions;
Water consumption;
Waste management; and
Environmental compliance.
We have, as a starting point, focused in FY21 on data
collection and reporting of our energy consumption and
GHG emissions (Scope 1 and Scope 2 location‑based
Greenhouse Gas (GHG) emissions).
As we begin to formally measure this data, we will explore
how we can continue to reduce our impact in these areas
by designing WiseTech’s pathway to net‑zero.
3.1 Energy consumption
We are committed to reducing our energy consumption
across all of our facilities and to being as energy efficient
as possible. Over the years we have implemented
initiatives to help reduce our environmental footprint,
these include:
1. Air‑conditioning: Our self‑built, owned and operated
data centre in Australia is cobalt contained and
designed to use direct air optimisation cooling. This
applies external ambient air (when temperatures are
suitable) to directly cool the data centres, thereby
reducing usage of conventional computer room
air-conditioning and ensuring an energy efficient,
regulated environment;
2. Motion sensor lighting and air‑conditioning:
We have installed energy-efficient light emitting
diode (LED) lighting in our Australian head office and
occupancy detection sensors to reduce lighting and
air‑conditioning energy consumption. Our lighting
and air‑conditioning automatically switch off after 45
minutes in meeting rooms if no occupancy is detected
and in two hours if no motion is detected in the
workstation areas.
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3 9
Table 6: WiseTech’s Global energy
consumption FY21
Source
Indirect energy
Electricity
Direct energy
Natural Gas
Diesel
Gasoline
Total direct and indirect
energy consumption
MWh
12,997.97
12,997.97
117.95
88.83
4.17
24.95
13,115.92
%
99.10%
99.10%
0.90%
0.68%
0.03%
0.19%
100%
In addition to steps taken to reduce our own
environmental footprint we have also invested heavily
in R&D designed to deliver efficiencies that reduce the
environmental footprint of our customers.
These initiatives include:
1. Cloud based, centralised data centres: To support
customer cloud space optimisation whilst at the same
time helping to streamline and improve efficiency, we
offer our customers the ability to utilise our cloud‑
based centralised data centres. This has removed
inefficient self-hosted energy intensive environments
from hundreds of our customers’ premises.
2. Software updates: We continuously provide our
freight forwarder and global logistics customers with
CargoWise software updates that streamline their
logistics routes, helping to reduce their environmental
footprint.
3. Sleep mode for electronic office equipment:
Our laptops, monitors and other office equipment
such as photocopiers and printers in our offices have
sleep mode functionalities that enable us to reduce
energy consumption. For example, we set the default
on office monitors to switch off after 60 minutes of
inactivity during business hours and 15 minutes of
inactivity outside of business hours. Laptop screens
are set to turn off after 10 minutes of inactivity 24
hours, seven days a week.
FY21 energy consumption
In FY21 our total direct and indirect energy consumption
was 13,115.92 MWh. Over 99% of our energy consumption
comes from indirect energy sources for electricity
that power our offices and data centres. Over 50% of
our energy consumption can be attributed to our data
centres in Australia and the US, and our external data
centres in Europe.
In FY21, we implemented a number of energy efficiency
initiatives to work towards reducing our overall global
energy consumption. These initiatives include:
1. Centralised high density workloads: In FY21 we
increased our Australian, Europe and US based data
centre capacity by adopting a new efficient system
which has enabled our rack capacity to double
from 32 amps to 64 amps. This has meant that our
data centres can centralise high density computing
workloads, enabling them to run on a minimal number
of servers which reduces energy consumption. Our
high density, efficient cloud-based data centres also
identify and rectify inefficient memory usage further
reducing energy consumption.
2. Consolidation of facilities: In FY21 we continued
an organisation-wide efficiency and acquisition
synergy program designed to streamline our facilities.
This program involves centralising functions and
consolidating offices acquired as part of the 39
acquisitions we have completed since 2016. In
FY21, this consolidation process is attributed to the
reduction in our offices from 59 in FY20 to 55 in
FY21. This is resulting in a reduction in our physical
footprint which is enabling us to reduce our energy
consumption.
3. Hybrid working model: In FY21 we introduced a hybrid
working model in jurisdictions where local COVID‑19
guidance states that it is safe to do so. Our hybrid
model combines remote working with time in the
office. As of 30 June 2021, 95% of our people had
transitioned to our hybrid working mode.
By formally tracking and reporting our energy usage
going forward, we will be better able to identify areas
for further improvement.
4 0
3.2 GHG emissions
In FY21 we completed our first GHG emissions inventory
pursuant to the GHG Protocol Corporate Accounting and
Reporting Standard (or “GHG Protocol”), which provides
the requirements and guidance for organisations
preparing a GHG emissions inventory.
A solid GHG emissions inventory is the foundation
for developing, implementing and monitoring climate
change mitigation and reduction activities. Our initial
and on‑going commitment to this critical component of
climate action demonstrates an important step towards
developing a holistic approach for our sustainability and
business transparency efforts.
FY21 GHG emissions
In FY21, our emissions inventory included the following
and used the operational control consolidation approach:
– 55 WiseTech facilities that are leased (with the
Chicago office including a data centre)
– four residential facilities (up to March 2021)
– three additional data centres: one in our Sydney
Head Office and two operated out of a third-party
facility in Europe.
Five facilities were excluded from the inventory as they
were operational for less than six months in the reporting
year.
Table 7: WiseTech’s GHG emissions FY21
Source
Total Scope 2 location‑based emissions
Electricity
Total Scope 1 emissions
Natural Gas
Diesel
Gasoline
tCO2e
8,417.80
8,417.80
119.24
17.57
16.91
84.76
Global Warming Potentials (GWPs) were sourced from
the Fifth Assessment Report (AR5) of the United Nations
Intergovernmental Panel on Climate Change (IPCC).
Estimates and assumptions were made where energy
consumption data, such as utility bills, were unavailable.
In FY21, our gross global Scope 1 and Scope 2 location‑
based GHG emissions were 8,537.04 tCO2e. The majority
of our emissions come from Scope 2 location‑based
sources. Our data centres in Australia and the United
States and our external data centres in Europe account
for over 47% of our total GHG emissions.
Carbon neutrality and net-zero
WiseTech is committed to reducing its gross global
emissions and is currently evaluating best practice and
steps to develop a pathway to net‑zero. We recognise
that this process can take time, so as an interim measure
and in parallel with identifying and implementing
initiatives to reduce our emissions, we intend to procure
carbon offsets in FY22 which will enable us to work
towards becoming 100% carbon neutral.
Our path to net zero emissions
Our path to net‑zero emissions
(for illustrative purposes)
Mitigation Path implementing
energy efficiency initiatives
in our business
Begin carbon neutrality
journey in FY22 by purchasing
carbon offsets as an interim
measure
Net-zero
Total (Scope 1 and Scope 2) emissions
8,537.04
2011
2022
A consolidated list of the facilities included and excluded
from this inventory can be found on our corporate
website under the Investors/Sustainability tab. As part of
our inventory, we included CO2, N2O and CH4 and sourced
emissions factors from the latest available public facing
documents.
3.3 Water consumption
WiseTech recognises the importance of tracking our
water consumption and reducing our water‑related
impacts. We propose to complete an inventory of
our water use that includes inventory collation and
calculation. We will use this data to engage and work with
our landlords to identify opportunities to improve water
efficiency across our operations.
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3.4 Waste management
207.84kg of used electronic
equipment recycled
Our waste footprint is relatively low as we do not
produce any goods or materials. We recognise however
and understand the importance of tracking our waste
generation. Our offices currently have recycling facilities
for general office waste, and we also have a program for
recycling used hardware. We propose to complete an
inventory of our waste generation to enable us to
continue to identify areas of potential improvement. We
will also continue to invest heavily in R&D designed to
deliver efficiencies and streamline processes that enable
our customers to reduce their waste generation for
example through the reduction in paper consumption.
E - W A S T E R E C Y C L I N G
Since 2018, WiseTech has partnered with SIMS
E‑Recycling (SIMS) for the disposal and recycling
of our e‑waste. WiseTech works with SIMS to
recover and collect used electronic equipment
such as desktops, laptops, servers, headsets,
keyboards, mice, docking stations and monitors.
Once collected, SIMS conducts detailed tests and
inspections to ascertain its condition. If approved,
assets with commercial value are re‑sold via
local, global and retail channels. Any devices
that are determined to have no commercial
value are processed through an in‑country
industrial shredder, ready to be recycled. In FY21,
in partnership with SIMS, WiseTech recycled
207.84kg of used electronic equipment.
3.5 Environmental compliance
WiseTech is committed to operating in an
environmentally responsible manner and we work
to understand and manage any existing or emerging
risks to the environment that our business activities
may pose. We are subject to federal, state and local
regulations and laws globally and we have procedures in
place to ensure that we are compliant to all applicable
environmental regulations in the jurisdictions in which
we operate. During the reporting period, there were no
incidents of non‑compliance that resulted in regulatory
or legal action or fines and penalties, with respect to
environmental laws and regulations.
4 2
4. Marketplace
We create breakthrough products that enable & empower the world’s supply chains
WiseTech contributes to the broader
marketplace by:
supporting global logistics and supply chains
through R&D and innovation; and
participating in industry associations.
4.1 Supporting global logistics
and supply chains
$167.1 m invested in
R&D in FY21
WiseTech has been operating in the global logistics
service provider software market since 1994. Our
CargoWise offering provides a cloud‑based, supply
chain and logistics execution software solution, enabling
our customers to manage their involvement in logistics
and the global supply chain in areas such as freight
forwarding, customs clearance, tracking, warehousing,
cross‑border compliance and transport by air, sea,
rail and road.
Our customers are global supply chain logistics providers
and large freight forwarders that are facing challenges in
the form of increasing supply chain complexity, greater
regulation, compliance hurdles and cost pressures.
Recent events such as the COVID‑19 pandemic, Brexit
and trade tensions are dramatically increasing the
volume, complexity and compliance requirements
of import and export customs entries.
As a result, we have an important role to play in
facilitating global trade by delivering on our vision to be
the operating system for global logistics. Our mission
is to deliver breakthrough products that enable and
empower those that own and operate the supply chains
of the world. Our technology facilitates global trade and
the movement of essential goods. It delivers efficiencies
and enhances productivity, transparency, visibility and
control of the operations of large freight forwarders and
global logistics providers, enabling them to mitigate risk
and reduce their environmental footprint.
We remain relentless in our commitment to invest
in R&D and product innovation to ensure we remain
at the forefront of addressing the evolving needs of
participants in the global supply chain and
logistics sector.
We create breakthrough products that enable & empower the world’s supply chains
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H A N K Y U H A N S H I N E X P R E S S
Japanese multinational logistics service provider,
Hankyu Hanshin Express, signed up to roll out
CargoWise across its logistics network in FY21. It will
rollout CargoWise globally across 25 countries with
over 2,000 users. Implementation started in 2021,
with completion expected by 2024.
“The implementation of CargoWise across our
global network will support our move to one
integrated system. We expect that it will enable
our people, improve productivity and, more
importantly, build and strengthen our ability
to support our customers with exceptional,
value‑added services.
CargoWise’s single database, one file system is
unrivalled in its flexibility and usability and will give
us visibility across our operations that will support
our growth for years to come.”
Kazuhiro Tanimura,
President & Chief Operating Officer,
Hankyu Hanshin Express
4.2 Industry Associations
WiseTech is a member of 20 industry associations
globally, a list of which is set out on our corporate
website under the Investors/Sustainability tab.
We participate both through these associations and
directly with policy makers in the development and
advocacy of public policy positions. Given industry
associations represent a range of members with diverse
interests, the policy positions adopted by an industry
association should not be assumed to represent the
views of WiseTech.
In FY21, WiseTech made a submission to the Australian
Select Committee on Financial Technology and
Regulatory Technology. Our submission advocated
for action research being explicitly encouraged and
legislated to support R&D activities in Australia, and
assist the technology sector to drive economic growth
in Australia.
4 4
Governance
WiseTech recognises that reputation
is integral to protecting and enhancing
shareholder value, which is why the Board
oversees our approach to governance,
corporate responsibility and sustainability.
Corporate governance
WiseTech’s Board and management are committed to
high corporate governance standards and to actively
managing our risks and opportunities. We embed
sustainability into our operations and culture. Our
corporate governance materials, including key principles,
policies, codes of conduct and Board committee
charters, can be found in the corporate governance
section of our website.
For the financial year ended 30 June 2021, we issued
a Corporate Governance Statement, which is set out
in this Annual Report and on our corporate website
(www.wisetechglobal.com/Investors/
CorporateGovernance/Corporate Governance
Statement).
Our Corporate Governance Statement sets out our main
corporate governance practices for the financial year,
including an explanation of practices which demonstrate
compliance with the ASX Corporate Governance
Council’s Corporate Governance Principles and
Recommendations.
Information on our Board of Directors and our Board
Charter can be found at:
www.wisetechglobal.com/Investors/Board of Directors
www.wisetechglobal.com/Investors/Corporate
Governance/Board Charter
Code of conduct
WiseTech recognises the importance of ethical conduct
by all its directors, management and employees. We
have a Code of Conduct, which sets out our commitment
to maintaining high levels of integrity, legal, moral and
ethical standards in our business practices.
All of our team members commit to our Code of
Conduct. This contains key information our people
must understand in order to comply with applicable
laws, employ a consistent approach to key integrity
issues and conduct ourselves appropriately in our
interactions with stakeholders, including customers,
suppliers, team members and local communities. We are
committed to continuous improvement, transparency
and accountability. We do not tolerate workplace
misconduct.
The WiseTech Senior Management Team, chaired by
the Chief Executive Officer, provides management
oversight of the effectiveness of our Code of
Conduct and policies. Our Code of conduct can
be found at: www.wisetechglobal.com/Investors/
CorporateGovernance/CodeofConduct
Also available on our corporate website are the following
policies, which set out further standards of behaviour
that we expect of our people:
– Anti‑bribery and Corruption Policy
– Securities Trading Policy
– Market Disclosure and Communications Principles
– Diversity and Inclusion Principles
– Human Rights Principles
– Modern Slavery Statement
– Whistle‑blower Protection Principles
Sustainability governance
We have established a Sustainability working group,
with representatives from various functions across
our business (such as Risk, Legal, Human Resources,
Operations, Investor Relations, Corporate Affairs,
Customer Relations, IT and Finance), that collates our
ESG data and was involved in the preparation of this
Sustainability Report.
The Sustainability working group reports to members
of the Senior Management Team including the CEO, who
is also a Director on the WiseTech Board. This structure
ensures that sustainability matters are reported through
to the most senior executives in our organisation and to
the WiseTech Board.
The Board oversees the management of sustainability‑
related risks and opportunities. The Senior Management
Team is responsible for reporting and leading external
engagement and advocacy.
Managing ESG risks
WiseTech is a geographically dispersed, long‑term
focused, high‑growth business. Our continued growth
and success depend on our ability to understand
and respond to the challenges of an uncertain and
changing world. This uncertainty creates both risks and
opportunities. We consider these from a sustainable,
long‑term value creation perspective.
Information about our approach to risk management is
set out on our corporate website in our Risk Management
Principles and in our Corporate Governance Statement.
W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
4 5
Covering people, processes and technology, we are
also mapping our security initiatives to the five pillars
of the NIST framework. We regard our people as our first
line of defence and have created security awareness
training hosted on WiseTech Academy, which all staff
are required to undertake annually.
This training is tested by targeted phishing campaigns
to monitor and track learning over time. There is also
a requirement for all staff to complete privacy and
data protection training and more specific training in
relation to the European Union’s General Data Protection
Regulations (GDPR).
In terms of data privacy, we have adopted the most
stringent standards across our business. We have
established a robust vulnerability management
program with ongoing, automated scanning to uncover
security vulnerabilities or misconfigurations across our
infrastructure. We combine this with regular manual
penetration testing; with in‑house capabilities and
trusted external third parties performing regular tests.
In relation to ransomware and other attacks currently
facing businesses globally, we regularly review the news,
underground websites, threat intelligence feeds and
the dark web to understand the different threat actors
which are currently operating and may be targeting
the logistics industry. Our controls are built around
specifically detecting or preventing ransomware.
Data protection and cyber security
WiseTech places data and cyber security at the
forefront of its development process. We have adopted
a structured, pro‑active approach to managing
information security risks, using a strong internal set
of controls related to data protection.
We have previously completed SSAE16/ Security
Operations Centre (SOC) 1, 2 and 3 Audits with global
firm KPMG and obtained certification. Information
security risk management is embedded into all of our
critical processes, and information security risks are
identified and managed in a consistent, proactive way.
Similarly, after events occur, systematic processes
are used to learn from successes and failures, thus
driving continuous improvements. Assurance of good
governance and sustainability is achieved through the
regular measurement, reporting and communication
of information security risk management performance.
No material breaches of CargoWise Cloud data security
were identified in FY21.
Looking ahead, we will be adopting ISO 31000
‑ Risk management ‑ Principles and guidelines
and building upon the strong foundation we have
achieved with SOC compliance by aligning with ISO
27001 and the National Institute of Standards and
Technology (NIST). Cyber security frameworks. Taking
a risk‑based approach, utilising industry frameworks
and best practices, allows us to build our strategy
with appropriate governance at a Board and Senior
Management level. This enables us to effect the change
required to ensure our ongoing security.
4 6
Minimising the risk of modern slavery
In FY21, we demonstrated our ongoing commitment
towards mitigating the risk of modern slavery in our
supply chain by undertaking a number of measures
including comprehensive supplier due diligence and
widespread training of our employees.
Further details about our initiatives against modern
slavery will be published in our 2021 Modern Slavery
statement which will be produced by 31 December 2021
Political donations
WiseTech participates in policy development and
advocacy in a manner that is open, transparent and
compliant with all relevant laws. We do so in a non‑
partisan manner. WiseTech does not make political
donations except through attendance at events,
functions and forums organised by parliamentarians and
political parties. This is overseen by the Chief Executive
Officer and the General Counsel in accordance with
applicable electoral laws.
Related party transactions
As outlined in our FY21 Corporate Governance Statement,
WiseTech established a Related Party Committee of
the Board in July 2017 to review proposed transactions
between the Company and its related parties, including
the pre‑existing, long‑standing related party transactions
between the Company and its founders. Steps have
been taken by the founder to unwind these historical
transactions, including the sale of the property that
WiseTech leases as its headquarters (74 O’Riordan Street,
Alexandria NSW Australia) to an unrelated third party in
FY21. There is currently only one related party transaction
in place, which relates to office property owned by
the founder and leased in Chicago, USA. This lease has
a term ending September 2024 with an annual rent of
approximately US$0.6 million. The terms of this lease were
determined in accordance with advice from independent
property valuers and made at normal market rates and
approved by the Related Party Committee.
W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
4 7
4 8
Board of Directors
Andrew Harrison, Independent Chair and Non-Executive Director
Andrew joined the Board in 2015 and was appointed Chair in September 2018.
Andrew is an experienced company director and corporate adviser.
Andrew has previously held executive roles and non‑executive directorships with both public
and private companies. He was the CFO of Seven Group Holdings and group finance director
of Landis+Gyr, and has been a director of ASX‑listed companies Estia Health Limited (November
2014 to October 2018), IVE Group Limited (November 2015 to November 2018), Xenith IP Limited
(October 2015 to September 2018), Bapcor Limited (March 2014 to February 2021), as well as of
Alesco Limited, Moorebank Intermodal Company Ltd and Vend Ltd. Andrew was a senior manager
at Ernst & Young (Sydney and London) and Gresham Partners Limited, and an associate at Chase
Manhattan Bank (New York).
Andrew holds a Bachelor of Economics from The University of Sydney and a Master of Business
Administration from the Wharton School at the University of Pennsylvania. He is a Chartered
Accountant.
Richard White, Executive Director, Founder and CEO
Richard has been CEO and an executive director of WiseTech Global since founding
the company in 1994.
Richard has more than 30 years of experience in software development, embedded systems and
business management and over 20 years of freight and logistics industry experience. Prior to
founding WiseTech Global, Richard was the managing director of Real Tech Systems Integration
(a provider of computer consulting and systems integrations services) and CEO of Clear Group
(a distributor of computer related equipment).
Richard holds a Master of Business in Information Technology Management from the University
of Technology, Sydney (UTS). Richard is a UTS Luminary and a Fellow of UTS.
Teresa Engelhard, Independent Non-Executive Director
Teresa joined the Board in 2018 and is Chair of the Nomination Committee and the People &
Remuneration Committee. Teresa has more than 20 years’ international experience as a director,
executive and venture capitalist in the technology, software and energy sectors. Teresa is
currently the CEO and Founder of stealth‑stage startup StickyTek Pty Ltd and a non‑executive
director of non-profit organisation LaunchVic. She is also a former director of ASX-listed
Redbubble Limited (August 2011 to October 2017) and Origin Energy Limited (May 2017
to October 2020).
Teresa holds a Bachelor of Science (Hons) from the California Institute of Technology (Caltech)
and a Master of Business Administration from Stanford University. She is a graduate of the
Australian Institute of Company Directors.
Charles Gibbon, Independent Non-Executive Director
Charles joined the Board in 2006, served as Chair from 2006 to 2018, and has been a shareholder
since 2005. Charles is a director of Shearwater Capital Pty Ltd and has previously been a director
of Monbeef Pty Ltd, Photolibrary Pty Ltd and the former ASX‑listed Health Communication
Network Limited. Charles has more than 20 years of experience in institutional funds
management. He was a member of the Investment Committee of Quadrant Capital Funds I, II and
III for Quadrant Private Equity, and has held roles as the CEO of Russell Private Equity, CEO of Risk
Averse Money Managers Pty Ltd, a director of Morgan Grenfell Australia and an associate director
of Schroders Australia.
Charles holds a Bachelor of Science in Mathematics from Otago University and a Master
of Commerce (Hons) from the University of Canterbury.
W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
4 9
Michael Gregg, Independent Non-Executive Director
Michael joined the Board in 2006 and has been a shareholder since 2005. Michael is also Chair of
the Related Party Committee. Michael is a non‑executive director of Emudent Technologies Pty
Ltd, Shearwater Capital Pty Ltd and Community Connections Australia. Previously, Michael was
the managing director of the former ASX‑listed Health Communication Network Limited. Michael
has also held executive positions in the telecommunications, transport and retail industries.
He holds a Bachelor of Science from The University of Sydney, a Master of Business Administration
from the Australian Graduate School of Management, and is a Graduate of the Australian Institute
of Company Directors.
Maree Isaacs, Executive Director, Co-founder and Head of Licence Management
Maree co‑founded WiseTech Global with Richard White in 1994 and has been an Executive
Director since 1996. Maree is focused on licence management, group operations, quality control
and administration. Maree is also a Company Secretary of WiseTech Global. Prior to co‑founding
WiseTech Global, Maree worked at Real Tech Systems Integration and Clear Group.
Arlene Tansey, Independent Non-Executive Director
Arlene joined the Board in June 2020 and is Chair of the Audit & Risk Committee. Arlene is an
Australian‑based professional director with more than 30 years’ international experience in
financial services and investment banking. Arlene is currently a non-executive director of ASX-
listed Aristocrat Leisure Limited (since July 2016) and TPG Telecom Ltd (since July 2020). She is
a former non‑executive director of Adelaide Brighton Limited (April 2011 to October 2019) and
Healius Limited (August 2012 to October 2020).
Arlene has a Juris Doctor from the University of Southern California Law Center and an MBA
Finance and International Business from New York University. She is a Fellow of the Australian
Institute of Company Directors and a member of Chief Executive Women and the International
Women’s Forum Australia.
Director attendance at meetings in FY21
The number of Directors’ meetings and meetings of committees of Directors held during the
financial year and the number of meetings attended by each Director are set out below. The table
reflects the number of meetings held during the time the Director held office, or was a member of
the committee, during the year. Directors also frequently attend meetings of committees of which
they are not members.
Board
Audit & Risk
Committee
Nomination
Committee
People &
Remuneration
Committee
Related Party
Committee
Held
Attended
Held
Attended
Held
Attended
Held
Attended
Held
Attended
Andrew Harrison
Richard White
Teresa Engelhard
Charles Gibbon
Michael Gregg
Maree Isaacs
Arlene Tansey
13
13
13
13
13
13
13
13
13
13
13
13
13
13
6
–
–
6
6
–
4
6
–
–
6
6
–
4
3
3
3
–
–
–
–
3
3
3
–
–
–
–
–
–
5
5
5
–
–
–
–
5
5
5
–
–
1
–
–
1
1
–
–
1
–
–
1
1
–
–
5 0
Corporate Governance Statement
A governance framework has been
established to support our business and help
us to deliver on our strategy. This framework
provides the structure through which our
strategy and business objectives are set, our
performance is monitored, and the risks we
face are managed.
We are committed to excellence in corporate
governance, transparency and accountability. We
regularly review our governance arrangements and
practices to reflect changes in our business and in
market practices, expectations, and regulation.
This statement explains how the Board oversees the
management and corporate governance of WiseTech
Global. The main principles and policies adopted by us
are summarised below. Details of our key principles and
policies and the charters for the Board and each of its
Committees are available on our website at:
www.wisetechglobal.com/investors/corporate‑governance
This statement is as at 11 October 2021 and has been
approved by the Board of WiseTech Global.
ASX Recommendations
The ASX Corporate Governance Council has developed
corporate governance principles and recommendations
for ASX‑listed entities (“ASX Recommendations”) in
order to promote investor confidence and to assist
entities in meeting stakeholder expectations. The ASX
Recommendations are not prescriptive, but guidelines.
Under the ASX Listing Rules, we are required to provide
the statements below disclosing the extent to which we
have followed the ASX Recommendations.
This Corporate Governance Statement benchmarks
our corporate governance practices against the 4th
edition of the ASX Recommendations, released in
February 2019. WiseTech Global followed all of the ASX
Recommendations throughout FY21.
WiseTech Global intends to follow all of the ASX
Recommendations for the financial year commencing
1 July 2021.
Our FY21 governance framework
S H A R E H O L D E R S
W I S E T E C H G L O B A L L I M I T E D B O A R D
Oversees management on behalf of shareholders
A U D I T & R I S K
C O M M I T T E E
N O M I N A T I O N
C O M M I T T E E
Oversees financial
reporting and risk
management
Considers Board
composition and
succession planning
P E O P L E &
R E M U N E R A T I O N
C O M M I T T E E
Oversees people
practices and strategies
and our remuneration
and incentive framework
R E L A T E D P A R T Y
C O M M I T T E E
Reviews proposed
transactions between
the Company and
its related parties
C E O
Responsible for the day‑to‑day management of WiseTech Global and the implementation of our strategy
S E N I O R M A N A G E M E N T T E A M
Responsible for running the business and delivering on our strategic objectives
Board composition
Our Board currently comprises a total of seven Directors
— five independent Non-Executive Directors (including
our Chair) and two Executive Directors.
Biographies of the Board members, including details
of their qualifications, tenure and experience, can be
found on pages 48 and 49, and on our website at:
www.wisetechglobal.com/investors/board‑of‑directors
Board Committees
The Board may, from time to time, establish appropriate
committees to assist in performing its responsibilities.
Four Committees operated throughout FY21:
the Audit & Risk Committee;
the Nomination Committee;
the People & Remuneration Committee; and
the Related Party Committee.
Please refer to page 49 for further information regarding
the Committee meetings (including the number of times
each Committee met throughout the reporting period
and the individual attendances of the members at those
meetings).
Corporate governance principles and policies
We have implemented a principles‑based governance
model whereby practical sets of principles are provided
to guide behaviour. These principles are designed to give
direction on our approach to business conduct. More
structured policies are implemented where appropriate.
You can find copies of our corporate policies
and principles on our website at:
www.wisetechglobal.com/investors/corporate‑governance
W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
5 1
Principle 1: Lay solid foundations
for management and oversight
Responsibilities of the Board
The Board is responsible for our overall corporate
governance, including establishing and monitoring key
performance goals, and is committed to maximising
performance, generating appropriate levels of
shareholder value and financial returns, and sustaining
our long‑term growth and success. In accordance with
these objectives, the Board seeks to ensure that we are
properly managed to protect and enhance shareholder
interests, and that we and our Directors, officers and
staff, operate in an appropriate environment of corporate
governance. Accordingly, the Board has created a
framework for managing WiseTech Global, including
relevant internal controls, risk management processes
and corporate governance principles, policies and
practices – that is designed to promote the responsible
management and conduct of WiseTech Global.
The Board has approved a Board Charter, which governs
the operations of the Board, its role and responsibilities,
composition, structure and membership requirements.
The Board’s role is to:
– represent and serve the interests of shareholders by
overseeing and appraising our strategies, policies and
performance;
– optimise our performance and build sustainable value
for shareholders;
– set, review and ensure compliance with our values and
governance framework (including establishing and
observing high ethical standards); and
– ensure that shareholders are kept informed of our
performance and major developments.
Matters which are specifically reserved for the Board or
its Committees include:
– approving the Group’s strategy, business plans and
policies and monitoring the Group’s performance,
strategic direction and portfolio of activities and the
associated risks;
– appointing the Chief Executive Officer (CEO), and
approving the remuneration of, and overseeing the
performance review of, the CEO;
– reviewing and approving succession plans for the CEO
and the Company’s executive team;
– reviewing, approving and monitoring the Group’s risk
appetite within which the Board expects management
to operate and the financial and non-financial risk
management systems, including internal compliance
and control mechanisms;
– approving the annual report and financial statements
5 2
(including the directors’ report and remuneration
report) and any other published periodic reporting
required by law, or under the ASX Listing Rules, to be
adopted by the Board;
– approving and monitoring the progress of major
capital expenditure, capital management and capital
raising initiatives and acquisitions and divestments;
– approving the dividend policy of the Company and
payment of dividends;
– overseeing the Group’s accounting and corporate
reporting systems and appointing, re‑appointing
or removing the Company’s external auditors and
approving the auditor’s remuneration;
– approving and monitoring the effectiveness of the
Group’s system of corporate governance, including
reviewing corporate policies and principles and
monitoring their effectiveness;
– approving the Company’s values, monitoring
corporate culture and management’s promotion of
the Company’s values;
– approving the overall remuneration policy, including
non‑executive director remuneration, executive
director and senior executive remuneration and any
executive incentive plans;
– determining the size, composition and structure of
the Board and its Committees, and the process for
evaluating its performance;
– overseeing the management of the Company’s
interactions and communications with shareholders
and the broader community; and
– reviewing the division of functions and responsibilities
between the Board, CEO and the Company’s executive
team.
The CEO is responsible for running the day‑to‑day
business of WiseTech Global under delegated authority
from the Board and to implement the strategies and
policies approved by the Board.
In carrying out management responsibilities, the CEO
must report to the Board in a timely and clear manner
and ensure all reports to the Board present a true and
fair view of our financial condition and operational
results. The role of management is to support the CEO
and implement the running of the general operations and
financial business of WiseTech Global in accordance with
the delegated authority of the Board.
Appointment of Directors
Prior to the appointment of any new Non‑Executive
Director, appropriate checks are conducted to determine
whether the candidate has the capabilities needed,
and is fit and proper, to undertake the responsibilities
of the role. On appointment, each Director receives a
formal letter, outlining the key terms, conditions and
expectations of their appointment. All new Directors,
other than the CEO, must stand for election by
shareholders at the first Annual General Meeting (“AGM”)
after their appointment and all Directors, other than the
CEO, must stand for re‑election no later than the third
AGM after their previous election or re‑election.
Before each AGM, the Board reviews the performance
of each Director standing for election or re‑election
and advises shareholders whether it recommends their
election or re‑election.
Andrew Harrison, Teresa Engelhard and Charles Gibbon
are retiring by rotation and intend to stand for
re‑election at the 2021 AGM. The Notice of AGM will
provide information on each Director’s background,
skills and experience. The Board considers that each
candidate continues to make a valuable contribution
to the Board.
CEO and senior executives
The CEO and senior executives have clearly understood
goals, accountabilities and employment contracts
setting out their terms of employment, duties, rights
and responsibilities, and entitlements on termination
of employment. Appropriate background checks are
undertaken prior to appointing senior executives.
Company secretaries
WiseTech Global has two company secretaries,
appointed by the Board. The company secretaries are
directly accountable to the Board, through the Chair, on
all matters related to the proper functioning of the Board.
This includes advising the Board and its Committees on
governance matters and procedures, coordinating Board
business (including preparing and maintaining Board and
Committee papers) and providing a point of reference
for dealings between the Board and management.
Diversity and Inclusion Principles
We value a strong and diverse workforce and are
committed to diversity and inclusion in our workplace.
We have implemented Diversity and Inclusion Principles,
designed to foster a culture that values and achieves
diversity in our workforce and on our Board. The main
objectives are to ensure that we:
– promote the principles of merit and fairness when
making decisions about recruitment, development,
promotion, remuneration and flexible work
arrangements;
– recruit from a diverse pool of qualified candidates,
making efforts to identify prospective employees
who have diverse attributes, and seeking to ensure
diversity of those involved in selection processes
when selecting and appointing new employees and
Board members;
W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
5 3
– embed the importance of diversity within our culture
by encouraging and fostering a commitment to
diversity by people at all levels of our global business;
– leverage our employees’ unique skills, values,
backgrounds and experiences, which will assist with
understanding our customer needs across our global
business; and
– develop an inclusive work environment that enables
all employees to show their full potential, regardless
of their background, gender, age, work status, marital
status, religious or cultural identity.
We also invest in developing the potential for qualified
females to enter our industry. We believe this broader
technology industry challenge requires comprehensive
and multi‑faceted efforts at the early education stage
to encourage greater industry participation across
genders. Our initiatives include programs to encourage
girls and young women to pursue technology careers,
with a longer‑term aim of increasing the female talent
pool available. For more information on our diversity
and inclusion practices and our student scholarships,
sponsorships and training programs, please see pages
32 to 36.
Our Diversity and Inclusion Principles include a
requirement for the Board to set measurable objectives
for achieving gender diversity and to assess annually
both the objectives and the Company’s progress in
achieving them. A copy of our Diversity and Inclusion
Principles is available on our website at:
www.wisetechglobal.com/investors/corporate‑governance
We pride ourselves on our highly diverse and strongly
inclusive workforce. We remain committed to diversity
and inclusion. Diversity refers to all the characteristics
that make individuals different from each other. They
include attributes or characteristics such as religion,
race, ethnicity, language, gender, sexual orientation,
disability, age and any other ground for potential unlawful
discrimination. Diversity is about our commitment to
treating individuals equally and with respect.
The percentages of women at Board and senior
management levels and across our organisation as at
30 June 2021, and at 30 June 2020, were:
Board
Senior
management1
All employees
2021
43%
25%
31%
2020
43%
22%
33%
While there is more work for us to do, we believe our
current levels of female representation compare well to
other technology companies and are relatively positive
in the context of both the logistics industry and
technology for business‑to‑business software. In the
short term, our objective is to broadly maintain levels
of female representation in our business at, or above,
the following levels:
20% of senior managers; and
30% of our workforce.
As an S&P/ASX 300 company, our measurable objective
for achieving gender diversity in the composition of our
Board is to continue to have not less than 30% of our
Directors of each gender.
Review of Board, Committee and Director
performance
The Board has agreed that it will conduct periodic
performance evaluations of itself, its Committees and
of each Director. Generally, the evaluation process will
involve the Chair holding one‑to‑one interviews with
Directors on their own performance, the performance
of the Board as a whole and the performance of the
Committees and other Directors. The performance
of the Chair will be evaluated by one of the other
Non‑Executive Directors in a one‑to‑one interview
with the Chair, incorporating feedback from the other
Directors. The Board will then review and discuss the
collated results of those interviews to determine ways to
enhance the effectiveness and efficiency of the Board.
In FY21, the Board enlisted an independent external
adviser to assist with the conduct of the annual
performance review, with a focus on assessing
WiseTech’s fit-for-the-future scalability. The assessment
included consideration of the current performance of
the Board and the Directors. In addition, the Audit & Risk
Committee, the Nomination Committee and the People
and Remuneration Committee each conducted a review
of committee performance.
Review of CEO and senior executives’
performance
The Board reviews the performance of the CEO annually
against performance measures and other agreed
goals, in accordance with the business requirements
of the Company. The CEO reviews the performance
of the senior executives regularly, but no less than
annually, based on their agreed performance measures.
Performance reviews in accordance with these
processes were conducted in respect of FY21 for the
CEO and senior executives shortly after the end of the
reporting period.
1 Senior management is determined by assessing the role, scope and
responsibilities of managers with reporting levels CEO‑1 and CEO‑2.
5 4
Principle 2: Structure the board
to be effective and add value
– Risk strategy: Senior executive experience in strategic
risk frameworks including assessment, control and
management at a global level;
Nomination Committee
The Nomination Committee’s role is to assist and advise
the Board in relation to the following matters:
– the process for nomination and selection of Directors;
– the Board skills matrix setting out the mix of skills,
expertise and experience that the Board currently
has or is looking to achieve in its membership;
– the size and composition of the Board,
including reviewing Board succession plans;
– the process to review Director contributions and
the performance of the Board, Board Committees
and individual Directors; and
– Financial acumen and accounting: Financial literacy
or accounting qualifications and/or experience in the
area of financial reporting integrity;
– Human capital management: People management
and human resources expertise in the area of talent
management and organisational change;
– Governance and board: Knowledge and experience in
the area of executing a prudent corporate governance
framework;
– Entrepreneurship/change: Board or senior executive
experience in the area of entrepreneurial enterprises
and rapidly changing business environments; and
– Mergers and acquisitions: Board or executive
– Director induction and professional development
experience with M&A and business integration.
programs, and their effectiveness.
The Nomination Committee Charter sets out the role,
responsibilities and composition of the Committee and
provides that the Committee must comprise a majority
of independent Directors, an independent Chair and a
minimum of three members. A copy of the charter is
available on our website at: www.wisetechglobal.com/
investors/corporate‑governance
The Board believes that all areas in the skills matrix are
currently well represented on the Board. The Board will
continually review and, if appropriate, update the matrix
to reflect the needs of the business.
Capability
Number of Directors
with the capability
The Nomination Committee comprised these Directors
throughout FY21:
Executive and
international leadership
Teresa Engelhard, Chair;
Andrew Harrison; and
Richard White.
Board skills matrix
The Board is responsible for Board succession planning,
the appointment of new directors and continuing
professional development of directors. In doing so, it
has regard to the balance of skills, diversity, experience,
independence and expertise on the Board. The Board
uses a skills matrix which identifies the skills and
experience needed to support WiseTech in achieving
its strategy and meeting its regulatory and legal
requirements.
Technology
Logistics industry
Risk strategy
Financial acumen and accounting
Human capital management
Governance and board
The key skills and experience that comprise the matrix
include:
Entrepreneurship/change
– Executive and international leadership: Experience in a
senior executive role in the area of global organisation,
operations and strategy;
Mergers and acquisitions
– Technology: Experience in a senior executive role in
Legend
the area of b2b information technology;
High level of skills or experience
– Logistics industry: Experience and expertise or formal
Relevant skills or experience
qualifications in the area of global logistics;
W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
5 5
Board tenure and diversity
As at 30 June 2021, these were:
Tenure
Tenure
Diversity
Diversity
0-3 years
3-6 years
12+ years
0-3 years
14%
29%
3-6 years
57%
12+ years
14%
29%
57%
Male
Female
57%
Male
43%
Female
Independence of Directors
The Board considers an independent Director to be a
Non‑Executive Director who is not a member of our
management team and who is free of any business or
other relationship that might influence or reasonably
be perceived to influence in a material respect the
unfettered and independent exercise of their judgement.
The Board considers a range of factors relevant to
assessing the independence of Directors in accordance
with the ASX Recommendations. The Board considers
quantitative and qualitative principles of materiality for
the purposes of determining ‘independence’ on a case‑
by‑case basis.
The Board considers that Andrew Harrison (the Chair
of the Board), Teresa Engelhard (Chair of the People &
Remuneration and Nomination Committees), Charles
Gibbon, Michael Gregg (Chair of the Related Party
Committees) and Arlene Tansey (Chair of the Audit
& Risk Committee) are independent Directors, free
from any business or any other relationship that could
materially interfere with, or reasonably be perceived
to interfere with, the independent exercise of the
Director’s judgment and each is able to fulfil the role of
an independent Director for the purposes of the ASX
Recommendations. On this basis, the Board consists
of a majority of independent Directors.
Charles Gibbon held approximately 5.3% of the
Company’s issued share capital as at 30 June 2021
and joined the Board in 2006. The Board (absent
Charles Gibbon) has taken into account Charles’
substantial shareholding and tenure when considering
whether Charles Gibbon should be considered to
be independent. The Board does not consider those
factors to be sufficiently dominant or influential in the
circumstances so as to conclude he is not independent
or that his interests will be different to those of
shareholders with smaller stakes. In particular, the Board
had regard to Charles Gibbon’s conduct to date on the
Board, his significant experience and deep understanding
of WiseTech’s business and history, the existence of
Richard White’s voting control over approximately 44%
of the Company’s issued share capital as at 30 June
2021 and the lack of other factors referred to in the ASX
Recommendations and Board Charter which might lead
the Board to query his independence. The Board also
noted that much of Charles Gibbon’s tenure as a Director
occurred prior to WiseTech’s listing on the ASX in 2016.
He has been a Director of WiseTech as a listed company
for just over five years.
43%
57%
Michael Gregg joined the Board in 2006. The Board
(absent Michael Gregg) has taken into account his
tenure when considering whether Michael Gregg should
be considered to be independent. The Board does
not consider this factor to be sufficiently dominant or
influential in the circumstances so as to conclude he
is not independent. In particular, the Board had regard
to Michael Gregg’s conduct to date on the Board, his
significant experience and deep understanding of
WiseTech’s business and history and the lack of other
factors referred to in the ASX Recommendations and
Board Charter which might lead the Board to query
his independence. The Board also noted that much of
Michael Gregg’s tenure as a Director occurred prior to
WiseTech’s listing on the ASX in 2016. He has been a
Director of WiseTech as a listed company for just over
5 years.
5 6
Richard White and Maree Isaacs, as members of
management, are not considered by the Board to fulfil
the role of independent Directors.
Principle 3: Instil a culture of acting
lawfully, ethically and responsibly
The Board regularly reviews the independence of each
Director in light of interests disclosed to the Board and
will disclose any change to the ASX, as required by the
ASX Listing Rules.
Our values
Our credo, mantras and values give us focus and
purpose. Our values are disclosed on our website at:
www.wisetechglobal.com/who‑we‑are/our‑values
Director orientation, education and access
to advice
Code of Conduct
An orientation program is tailored to meet the needs of
each new Director, including briefings on our strategy,
financial, operational and risk management matters and
our governance framework.
As part of the Board meeting cycle, the Directors receive
regular briefings on the business and key developments
in areas such as governance, regulatory and accounting
matters. Director performance reviews periodically
consider whether there is a need for certain Directors
to undertake professional development to maintain the
skills and knowledge needed to perform their roles as
a Director effectively.
Our Code of Conduct outlines the ethical standards
expected of all our Directors, senior executives and
employees. WiseTech Global is committed to maintaining
ethical standards in how we conduct our business
activities and stakeholder relationships. WiseTech
Global’s reputation as an ethical business organisation
is important to our ongoing success. Our Audit & Risk
Committee is informed of any material breaches of our
Code of Conduct.
A copy of the Code of Conduct is available
on our website at:
www.wisetechglobal.com/investors/corporate‑governance
Whistleblower Protection Principles
Our Whistleblower Protection Principles establish
mechanisms and procedures for employees to report
suspected unethical or illegal conduct in a manner which
protects the whistleblower and gathers the necessary
information for us to investigate such reports and act
appropriately.
Our Whistleblower Protection Principles apply to all
staff globally. These principles may be supplemented by
additional policies to meet local requirements (including
in Australia). The Board is informed of any material
incidents reported under the Principles.
Our global Whistleblower Protection Principles are
available on our website at:
www.wisetechglobal.com/investors/corporate‑governance
Anti-Bribery and Corruption Policy
We are committed to conducting our business activities
in an ethical, lawful and socially responsible manner,
and in accordance with the laws and regulations of the
countries in which we operate. The Anti‑Bribery and
Corruption Policy supports the Group’s Code of Conduct
and, in particular, the Group’s firm commitment to
operating an ethical business organisation.
Our Anti‑Bribery and Corruption Policy is available
on our website at:
www.wisetechglobal.com/investors/corporate‑governance
The Board is informed of any material breaches of our
Anti‑Bribery and Corruption Policy.
W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
5 7
Principle 4: Safeguard the integrity
of corporate reporting
Audit & Risk Committee
The Audit & Risk Committee assists the Board in fulfilling
its corporate governance and oversight responsibilities
in relation to our financial reports, financial reporting
process and internal control structure, management
of risks (other than technology‑related risks, which
are considered by the Board) and the external audit
processes.
This Committee was previously the Audit Committee.
The Committee charter was updated in January 2021
to include additional responsibilities in relation to
management of risks.
The Committee’s primary function is to assist the Board
to carry out its responsibilities to :
– review and monitor the integrity of the Company’s
consolidated financial reports and statements;
– review and oversee systems of risk management,
internal control and regulatory compliance within
the Company and its controlled entities, including
overseeing the process for implementing appropriate
and adequate control, monitoring and reporting
mechanisms;
meetings of the Audit & Risk Committee by invitation
of the Committee Chair.
Related Party Committee
Taking into account existing, long‑standing related party
transactions for property and data centres between
WiseTech Global and its co‑founders, and the potential
for future transactions, the Board established a Related
Party Committee comprising independent Directors to
consider and review transactions.
The Related Party Committee’s role is to support the
Company’s compliance with related party rules and
disclosure obligations. The Related Party Committee
Charter sets out the role, responsibilities and
composition of the Committee and provides that the
Committee must comprise only independent Directors,
an independent Chair who is not Chair of the Board, and
a minimum of three members. A copy of the charter is
available on our website at:
www.wisetechglobal.com/investors/corporate‑governance
The composition of the Committee during FY21 is set
out below:
Michael Gregg, Chair;
Charles Gibbon; and
Andrew Harrison.
– review the adequacy of the Company’s corporate
CEO and Chief Financial Officer assurance
reporting processes; and
– liaise with and monitor the performance and
independence of the external auditor.
The Audit & Risk Committee Charter sets out the role,
responsibilities and composition of the Committee
and provides that the Committee must comprise only
Non‑Executive Directors, a majority of independent
Directors, an independent Chair who is not Chair of the
Board, and a minimum of three members. In accordance
with its charter, it is intended that all members of the
Committee should have familiarity with general financial
and accounting practices, and at least one member
must have accounting or related financial management
expertise. A copy of the charter is available on our
website at:
wwww.wisetechglobal.com/investors/corporate‑
governance
The composition of the Committee during FY21 is set
out below:
Arlene Tansey, joined the Committee as Chair
with effect from October 2020;
Charles Gibbon;
Michael Gregg, Chair until October 2020; and
Andrew Harrison.
Non‑Committee members, including members of
management and our external auditor, may attend
The Board receives regular reports about the operational
results and financial condition of the WiseTech Global
group. The Board has received and considered a
declaration from each of the CEO and the Chief Financial
Officer in relation to the financial statements, prior to
approving the financial results, in accordance with ASX
Recommendation 4.2. The declaration states that, in their
opinion, the financial records of WiseTech Global have
been properly maintained, that the financial statements
comply with the appropriate accounting standards and
give a true and fair view of the financial position and
performance of the Company, and that the opinion has
been formed on the basis of a sound system of risk
management and internal control which
is operating effectively.
Periodic corporate reports
Any periodic corporate reports that have not been
audited or reviewed by an external auditor are subject
to internal verification processes before being released
to the market. All content is either verified by the Finance
team against source data or data that has been audited
or reviewed by the external auditor or is reviewed and
signed‑off by relevant subject matter experts from
within the business. Equivalent procedures are also
used to verify other materials such as presentations
to investors.
5 8
Principle 5: Make timely
and balanced disclosure
Market Disclosure and Communications
Principles
Our Market Disclosure and Communications Principles
establish procedures to help ensure that:
– we comply with our continuous disclosure
obligations contained in the ASX Listing Rules
and the Corporations Act 2001; and
– all our stakeholders have equal and timely access
to information we make available.
A copy of the principles is available on our website at:
www.wisetechglobal.com/investors/corporate‑
governance/
Market announcements
We provide copies of all material market announcements
to Directors promptly after they have been released to
the market.
In accordance with best practice guidelines, we release
any investor presentation materials that contain
new and substantive information to the ASX Market
Announcement Platform ahead of the presentation to
investors and/or analysts.
Principle 6: Respect the rights
of security holders
Investor relations
The Company also has an investor relations program
to facilitate effective communication with investors –
primarily through our AGMs, our investor website and
a detailed program of interactions with institutional
investors, retail investor groups, sell‑side and buy‑side
analysts, proxy advisers and the financial media.
AGM
Our AGM is an excellent opportunity for the Company
to provide information to shareholders and to receive
feedback from shareholders (including the opportunity
for shareholders to ask questions about the business
operations and management of the Company). Our AGM
is typically held in November in Sydney.
Our 2021 AGM will be held as a virtual online meeting.
Shareholders and proxyholders will be able to participate
online, ask questions and vote in real time during the
AGM by logging on to the online platform at:
https://agmlive.link/WTC21
Since WiseTech’s listing on the ASX in 2016, all resolutions
at meetings of security holders have been decided on a
poll. The Board intends to continue this practice.
Investor website
Our website includes a separate ‘Investors’ section,
where shareholders and other stakeholders can access
information about WiseTech Global, including annual
reports and presentations, ASX announcements and
share price information.
Shareholders can elect to receive their annual reports,
notices of meeting and dividend statements online or in
print. In addition, shareholders are able to communicate
electronically with us and our share registry, Link Market
Services, including being able to lodge proxy forms
online.
Principle 7: Recognise
and manage risk
Risk Management Principles
We view risk management as a continual process,
integral to achieving our corporate objectives that
is managing our assets effectively and creating and
maintaining shareholder value.
Our Board is responsible for overseeing the risk
management framework and has reviewed specific
risks in FY21, such as technology risk, operational
risks, succession planning and M&A transactions and
integration risks. Risk management is also delegated to
a group of senior executives (with the CEO maintaining
overall responsibility), who oversee a system of internal
controls and risk management and monitor and manage
those risks. These executives hold regular meetings with
the CEO, during which risks are discussed and analysed,
and any necessary actions are determined. Material
exceptions or issues are reported to the Audit & Risk
Committee and/or the Board. In FY21, the Audit & Risk
Committee reviewed the financial risks of the business
and the controls and mitigations in place to address
those financial risks. A review of the risk management
framework was completed during FY21.
Our 2021 annual report includes a summary of the main
risks affecting WiseTech Global.
Internal audit
During the latter part of FY21, as a consequence of the
growth of the Group and the increasingly complex risk
environment, a risk management and internal audit
function was established. The Head of Risk Management
and Internal Audit reports to the Chair of the Audit
& Risk Committee. The role of the Risk Management
and Internal Audit function is to provide independent
assurance to executive management and the Board
that an appropriate enterprise risk framework has been
established, and that key controls are in place and
operating effectively. The internal audit function has
a global role and is assisted with resources from
a co‑sourced specialist provider.
W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
5 9
Securities Trading Policy
Our Securities Trading Policy outlines the rules for
Directors and employees trading in WiseTech Global
securities. The purpose of the policy is to assist Directors
and employees to comply with their obligations under
the insider trading provisions of the Corporations Act
2001 and to protect the reputation of the Company,
its Directors and employees.
Our policy establishes staff trading windows and
prohibits the use of hedges or derivatives which operate
to limit the economic risk of unvested, or vested but
subject to disposal restrictions, WiseTech Global
securities, including securities issued in connection
with equity‑based remuneration schemes.
Prior to the establishment of an internal audit function,
the Board and the Audit & Risk Committee reviewed
internal controls and risk management processes in
conjunction with the oversight provided by senior
management, including the CEO and the Chief Financial
Officer.
Principle 8: Remunerate fairly
and responsibly
People & Remuneration Committee
The People & Remuneration Committee’s role is to assist
and advise the Board in relation to:
– people and culture practices and strategies that
support the development of WiseTech’s desired
culture and alignment with our values;
– our remuneration policy and incentive framework
for all our staff;
– the process for overseeing performance
accountability and effective monitoring of
management, including setting and evaluating
performance against goals and targets;
– recruitment, retention and termination strategies;
– achievement against diversity objectives in relation
to remuneration; and
– the annual Remuneration Report to shareholders.
The People & Remuneration Committee Charter sets
out the role, responsibilities and composition of the
committee and provides that the committee must
comprise a majority of independent Directors,
an independent Chair who is not Chair of the Board,
and a minimum of three members. A copy of the
charter is available on our website at:
www.wisetechglobal.com/investors/corporate‑
governance/
The Remuneration Committee Charter was updated
in June 2021 to incorporate the review and oversight
of people culture and practices. At the same time,
the Committee was renamed the People & Remuneration
Committee.
The People & Remuneration Committee comprised
these Directors throughout FY21:
Teresa Engelhard, Chair;
Charles Gibbon; and
Michael Gregg.
Remuneration Report
Our Remuneration Report describes the policies and
practices regarding the remuneration of Non‑Executive
Directors and the remuneration of Executive Directors
and senior executives.
6 0
Review of operations
Principal activities
We are a leading provider of software solutions to the logistics industry globally. We develop, sell and implement software solutions
that enable and empower logistics service providers to facilitate the movement and storage of goods and information, domestically
and internationally. We provide our solutions to more than 18,000 customers in over 165 countries.
Our industry-leading flagship technology, CargoWise, is a deeply integrated, global software platform for logistics service providers.
Our software enables and empowers logistics service providers to execute highly complex logistics transactions and manage their
operations on one global database across multiple users, functions, offices, corporations, currencies, countries and languages.
Our main data centres in Australia, Europe and the US deliver our CargoWise platform principally through the cloud, which
customers access as needed and pay for usage as they execute on our platform.
Our customers range from small and mid‑sized domestic and regional logistics providers to large multi‑national and global logistics
providers, including 24 of the Top 25 Global Freight Forwarders 1 and 41 of the Top 50 Global Third‑Party Logistics Providers (3PLs) 2.
Our software solutions are designed to assist our customers to efficiently navigate the complexities of the logistics industry and
can dramatically increase productivity, reduce costs and mitigate risks for our customers.
Innovation and productivity remain key areas of focus for the business. We invest significantly in product development and
continue to deliver hundreds of new product features and enhancements each year. This drives greater usage of our CargoWise
platform, enabling the business to achieve sustainable, profitable growth. Our strategy of focusing on the ‘3Ps’ – Product;
Penetration; and Profitability – is designed to deliver our vision to be the operating system for global logistics. We are building our
capabilities and, where appropriate, fast‑tracking our technology development and know‑how through acquisitions. This allows
us to deliver a comprehensive global logistics execution solution for our customers, from the first-mile road movement, connecting
to long‑haul air, sea, rail and road, crossing international borders ‑ all while navigating complex regulatory frameworks with improved
compliance, safety, visibility, predictability, manageability and productivity.
We have now secured a strong foundation for future technology development and geographic expansion, with 33 product
development centres, including centres of excellence in Bangalore and Nanjing, and a headcount of over 1,800 people globally
across 33 countries.
1 Based on Armstrong & Associates Inc. Top 25 Global Freight Forwarders List ranked by 2020 logistics gross revenue/turnover and freight
forwarding volumes ‑ Updated 10 August 2021.
2 Based on Armstrong & Associates Inc: Top 50 Global Third Party Logistics Providers List ranked by 2020 logistics gross revenue/turnover
– Updated 28 June 2021.
Operating and financial reviewfor the full-year ended 30 June 2021 W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
6 1
Summary of statutory financial performance
During the twelve months to 30 June 2021, we delivered solid revenue growth, driven mainly by increased market penetration,
customer usage and adoption of our technology, as well as price changes to CargoWise that reflected increased investment
in product research and development (R&D), data centre hardware and cyber security. We continued our significant investment
in innovation and development and made considerable progress with our cost reduction initiatives to drive operational efficiencies
and acquisition synergies across the business.
Revenue increased 18% to $507.5m (FY20: $429.4m)
Operating profit increased 86% to $149.8m (FY20: $80.5m)
Net profit after tax decreased 33% to $108.1m (FY20: $160.8m)
Underlying net profit after tax increased 101% to $105.8m (FY20: $52.6m)
Basic earnings per share decreased 34% to 33.3 cents (FY20: 50.3 cents)
Summary financial results 1
Recurring On‑Demand revenue
Recurring One‑Time Licence (“OTL”) maintenance revenue
OTL and support services
Revenue
Cost of revenues
Gross profit
Product design and development 2
Sales and marketing
General and administration
Total operating expenses
Operating profit
Net finance costs
Fair value gain on contingent consideration
Profit before income tax
Tax expense
Net profit after tax
Underlying net profit after tax 3
Key financial metrics
Recurring revenue %
Gross profit margin %
Product design and development as % total revenue 2
Sales and marketing as % total revenue
General and administration as % total revenue
Capitalised development investment ($m) 4
R&D as a % of total revenue 5
FY21
$M
383.0
75.1
49.4
507.5
(85.6)
421.9
(128.9)
(50.3)
(92.9)
(272.1)
149.8
(4.1)
2.2
147.9
(39.9)
108.1
105.8
FY21
90%
83%
25%
10%
18%
78.3
33%
FY20
$M
309.2
72.8
47.4
429.4
(83.5)
345.9
(115.4)
(62.3)
(87.7)
(265.4)
80.5
(9.8)
111.0
181.8
(21.0)
160.8
52.6
Change
$M
Change
%
73.7
2.3
2.1
78.1
(2.1)
76.0
(13.5)
12.1
(5.3)
(6.7)
69.3
(5.7)
(108.8)
(33.9)
(18.9)
(52.7)
53.3
24%
3%
4%
18%
2%
22%
12%
(19)%
6%
3%
86%
(58)%
(98)%
(19)%
90%
(33)%
101%
FY20
Change
FY21 6
89%
81%
27%
15%
20%
74.2
37%
1pp
2pp
(2)pp
(5)pp
(2)pp
4.1
(4)pp
97%
90%
21%
8%
18%
60.0
30%
1 Differences in tables are due to rounding, see page 100 Rounding of amounts.
2 Product design and development includes $40.1m (FY20: $30.5m) depreciation and amortisation but excludes capitalised
development investment.
3 Underlying net profit after tax excludes fair value adjustments from changes to acquisition contingent consideration (FY21: $2.2m,
FY20: $111.0m) and contingent consideration interest unwind net of tax (FY21: nil, FY20: $2.9m).
Includes patents and purchased external software licences used in our products.
4
5 R&D is total investment in product design and development expense, excluding depreciation and amortisation, but including capitalised
development investment.
6 Excluding acquisitions; acquisitions are those businesses acquired since 2012 and not embedded into the CargoWise platform.
Operating and financial reviewfor the full-year ended 30 June 2021 6 2
Revenue
Total revenue grew 18% to $507.5m (FY20: $429.4m). Increased revenue growth came from:
– increased usage by existing customers (through the addition of transactions, seats and new sites, utilisation of additional
products and modules, and growth from industry consolidation);
– new CargoWise customers won in the period and growth from customers won in FY20;
– a price change in FY21 to offset increased product investment in R&D, data centre hardware and cyber security;
– growth in revenue from strategic assets (primarily the full period impact of FY20 acquisitions);
– partially offset by $23.4m of unfavourable foreign exchange movements (FY20: $12.1m foreign exchange benefit).
Revenues from our existing and new CargoWise customers increased by $68.6m, a 26% growth on FY20, with $52.2m (FY20: $31.0m)
from existing customers and $16.4m (FY20: $12.4m) from new customers. Part of the growth includes a price change to offset
increased product investment in R&D, data centre hardware and cyber security, designed to deliver a highly efficient platform for
our customers and ensure a return on these significant investments. Growth was mainly driven by increased usage of the CargoWise
platform from existing customers adding transactions, seats and new sites, utilising additional modules, as well as growth from
industry consolidation and growth from Large Global Freight Forwarder1 rollouts.
Existing and new CargoWise customer revenue growth was partially offset by $13.6m of unfavourable foreign exchange movements
(FY20: $11.4m foreign exchange benefit).
In FY21, revenue growth for CargoWise was achieved across all existing customer cohorts (from FY06 & prior through to FY21).
Revenue from customers on acquired platforms increased by $9.5m, driven mostly by the $10.5m full period impact of five
acquisitions completed in FY20, partially offset by a $1.4m reduction in revenue attributable to FY19 and prior acquisitions,
as expected. During FY21, we completed a small foothold acquisition in Japan. Revenue from acquired platforms included $9.7m
of unfavourable foreign exchange movements (FY20: $0.6m foreign exchange benefit).
Revenue from OTL and support services increased to $49.4m (FY20: $47.4m), reflecting increased revenue from CargoWise paid
product enhancements and the contribution from acquired businesses as they typically have higher levels of OTL and/or support
services revenue. These revenues may be flat or reduce as we transition the businesses to the CargoWise commercial model.
Recurring revenue 97% of our CargoWise revenue is recurring revenue, which is unchanged from FY20. Recurring revenue for the
Group increased from 89% in FY20 to 90% in FY21, reflecting higher growth in recurring revenues.
Customer attrition The attrition rate for the CargoWise platform continued to be extremely low, at under 1%, as it has been for the
nine years since we started measuring2. Our customers stay and grow their transaction usage due to the productivity and deep
capabilities of our platform.
Licensing and transition Overall, including acquisitions, the percentage of On‑Demand revenue is 75% of total revenue (FY20: 72%),
reflecting the higher growth rates of On-Demand licensing versus other licence types.
Foreign exchange Our revenue is invoiced in a range of currencies, reflecting the global nature of our customer base and, as a result,
may be positively or negatively impacted by movements in foreign currency exchange rates.
Gross profit and gross profit margin
Gross profit increased by $76.0m, up 22%, to $421.9m (FY20: $345.9m). Gross profit growth was driven mainly by CargoWise
revenue growth, cost reduction initiatives and the full period revenue impact of the FY20 acquisitions.
Gross profit margin increased to 83% (FY20: 81%), reflecting revenue growth from the CargoWise platform and the benefit from
cost reduction initiatives. CargoWise gross profit margin was 90% (FY20: 91%). The acquired businesses have, on average, higher
product and service support costs and lower cost leverage due to their smaller size and commercial/licence model maturity, which
means they typically have a lower gross profit margin than CargoWise. Our cost reduction initiatives have lead to improvements
in acquisition gross margin, reducing the dilutive impact on overall gross margin.
1 A Large Global Freight Forwarder is a CargoWise customer contracted to grow or who has grown either organically or contractually
to 10 or more countries and 400 or more registered users on CargoWise.
2 Annual attrition rate is a customer attrition measurement relating to the CargoWise platform (excluding any customers on acquired
platforms). A customer’s users are included in the customer attrition calculation upon leaving i.e. having not used the product for
at least four months.
Operating and financial reviewfor the full-year ended 30 June 2021 W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
6 3
Operating expenses
An organisation-wide efficiency and acquisition synergy program has been undertaken to extract efficiencies by streamlining
processes and teams and ensuring that resources are appropriately allocated to support scalability, growth and delivery
of WiseTech’s strategic vision. In FY21 the program delivered a $13.8m net benefit (gross cost reductions of $22.0m offset
by $8.2m of restructuring costs), which exceeded the previously announced $10m target.
Total R&D investment: In FY21, we continued our significant investment in product innovation to further develop our software
platform and to build our innovation pipeline. Our research and development investment for the period increased 5% to $167.1m
(FY20: $159.1m), representing 33% of total revenue (FY20: 37%). Throughout FY21 our top development priorities were to accelerate
native customs and cross border compliance builds in key markets. As of 30 June 2021, the CargoWise native customs functionality
was in Production Release 1 across jurisdictions accounting for ~45% of global manufactured trade flows (up from ~35% in FY20).
Product design and development expense increased by 12% to $128.9m (FY20: $115.4m), reflecting:
– our significant ongoing investment in the development and maintenance of CargoWise;
– increased investment in expanding and retaining our skilled development workforce;
– increased amortisation, primarily due to continued capitalised development investment; and
– the effect of cost reductions in acquired businesses.
Capitalised development investment increased 6% to $78.3m (FY20: $74.2m), driven mainly by an increase in the investment in native
customs, border and country compliance development. Costs related to development activity that is not commercialisable and
maintenance costs are expensed.
Sales and marketing expense During FY21, we invested 10% of revenue (FY20: 15%), or $50.3m (FY20: $62.3m), in sales and marketing.
The decrease mainly reflects cost reductions in acquisitions, a more targeted sales and marketing focus on Top 25 Global Freight
Forwarders and Top 200 Global Logistics Providers, and benefits from lower costs due to COVID-19.
General and administration expense We increased our investment in supporting and growing our business globally to $92.9m
(FY20: $87.7m), representing 18% of total revenue (FY20: 20%). The increase (which was partially offset by cost reductions) was
driven by:
– $8.2m of restructuring costs as a result of cost reduction initiatives; and
– increased corporate governance costs.
Our general and administration expense, excluding restructuring costs, was 17% of revenue in FY21.
Throughout FY21, and consistent with FY20, we did not receive any material benefit from any COVID-19 government support
programs globally.
Net finance costs
Fair value gain on contingent consideration reflects the impact of contingent consideration liability settlement and reassessment
which, in FY21, resulted in a net reduction of the contingent consideration liability and a corresponding non‑cash (not taxed) fair
value gain of $2.2m (FY20: $111.0m).
Other net finance costs Net finance costs in FY21 of $4.1m (FY20: $9.8m) included $5.5m of finance costs, comprising interest
expenses and debt facility fees. Finance income of $1.4m (FY20: $3.1m) reflected a reduction in interest rates globally.
1 CargoWise Customs is defined as in “production release” for a particular country when the product module has been released into
the main CargoWise release build, available for production use by any customer, and is able to be used for all major customs import/
export procedures.
Operating and financial reviewfor the full-year ended 30 June 2021 6 4
Cash flow
We continued to generate strong positive operating cash flows demonstrating the highly cash-generative nature of the business,
with $229.9m of operating cash flow, up 57% on FY20. FY21 net cash flows from operating activities were $211.6m (FY20: $129.9m).
Free cash flow of $139.2m was up 149% on FY20. FY21 cash flows include $8.6m of payments for restructuring activities.
Investing activities in long‑term assets to fund future growth included:
– $5.8m for a new acquisition, and contingent payments for prior year acquisitions (FY20: $57.0m);
– $74.5m in intangible assets as we further developed and expanded our commercialisable technology, resulting in capitalised
development investment for both commercialised products and those yet to be launched (FY20: $70.4m); and
– $16.3m in assets mostly related to data centres and IT infrastructure investments to enhance scalability, reliability and security
providing increase capacity for future growth (FY20: $20.1m).
Dividends of $13.2m (FY20: $11.1m) were paid in cash during FY21, with shareholders choosing to reinvest an additional $0.7m of their
dividends via the dividend reinvestment plan.
Our closing cash balance of $315.0m, with no outstanding debt other than lease liabilities, provides significant financial headroom.
In addition, we have recently (post 30 June 2021) completed a refinancing of our debt facility. A new unsecured four-year, $225m
bi-lateral debt facility supported by six banks is now in place, providing a solid financial foundation for future growth.
Product strategy and integration progress
WiseTech’s vision is be the operating system for global logistics. To achieve this, we have invested significantly in our product,
particularly in‑house R&D, building expertise through the recruitment of technology and industry experts, and strategic
acquisitions that bring additional skills and resources as well as access to synergistic intellectual property.
We have completed a number of strategic acquisitions since listing on the ASX in 2016. We consider our strategic investments
holistically, rather than individually in isolation. They are interconnected and designed to drive improved product capability, greater
market penetration and sustainable profit growth. The focus now is on ongoing CargoWise product development. We are utilising
the skills and expertise of acquired resources to continue to expand the functionality, extend the scope and increase the value
of our industry‑leading technology to deliver the operating system for global logistics, as well as a strong base to further accelerate
our growth.
In FY21, we accelerated geographic expansion of native customs and cross border compliance functionality, covering ~45%
(FY20: ~35%) of global manufactured trade flows (Production Release of France, Italy, Spain and Puerto Rico were completed in
FY21). We also completed the product integration of the global rates functionalities (secured via the CargoSphere and Cargoguide
acquisitions) onto the CargoWise platform. This integrated functionality is currently in production with several major customers and
work has commenced on the native rewrite onto the CargoWise platform. Also, of strategic note in FY21, was the deployment of the
beta version of CargoWise Neo (Neo) to a select group of beneficial cargo owners (BCOs) via existing WiseTech customers and the
commencement of work on extending aspects of Neo for customer-specific needs.
Operating and financial reviewfor the full-year ended 30 June 2021 W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
6 5
FY21 strategic highlights
We are focused on our vision to be the operating system for global logistics by creating breakthrough products that enable
and empower those that own and operate the supply chains of the world. We are extending the reach of the global CargoWise
integrated platform, expanding technology to increase market penetration and new addressable markets, growing our commercial
foundation to new geographies, and investing in transforming our content architectures, channels and brand, while also growing our
R&D capacity. Throughout FY21, we made significant progress with our organisation-wide efficiency program to maximise operating
leverage and allocate resources to support ongoing growth.
– We have 36 Large Global Freight Forwarders with global rollouts “Contracted and in Progress” 1 or “In Production” 2, including
10 of the Top 25 Global Freight Forwarders. In FY21 we have secured six new global rollout contracts (previously disclosed
CEVA Logistics, a hartrodt, cargo‑partner, Seafrigo Group, deugro, Hankyu Hanshin Express) and, post 30 June 2021, we have
signed FedEx.
– Throughout FY21, we continued our extensive product development program, investing $167.1m and 53% of our people in product
development, delivering 1,096 product upgrades and enhancements to the CargoWise platform.
– In FY21, we completed one small acquisition in Japan covering customs and country compliance. Having completed 39
acquisitions since our IPO in 2016, we have now assembled the significant resources and development capability to fuel our
CargoWise technology. While the Company remains open to strategically significant acquisition opportunities, it has slowed
its near‑term acquisition activity in order to focus on expanding the CargoWise ecosystem and extracting synergies from
acquisitions to maximise operational leverage and drive scalability.
Post balance date events
– On 28 July 2021, a new unsecured four‑year bi‑lateral debt facility was executed with six banks and the previous facility was
retired. The new facility has a total commitment of $225m.
– Since period end, the Directors have declared a fully-franked final dividend of 3.85 cents per share, payable on 8 October 2021.
The dividend will be recognised in subsequent period financial statements.
Outlook for 2022
WiseTech provides the following guidance on the basis that market conditions do not materially change, noting in particular
uncertainty around future economic and industrial production growth and pandemic stimulus measures may lead to alternative
outcomes. Prevailing uncertainties relating to sovereign and geopolitical risk may also reduce assumed growth rates.
Based on, and subject to, the underlying assumptions set out in the WiseTech FY21 Results Investor Presentation, the Company
currently anticipates FY22 revenue growth in the range of 18% to 25% (representing revenue of $600m to $635m) and EBITDA
growth of 26% to 38% (representing $260m to $285m).
1 Contracted and in Progress refers to CargoWise customers who are contracted and in progress to grow to rolling out CargoWise
2
in 10 or more countries and for 400 or more registered users.
In Production refers to customers who are operationally live on CargoWise and are using the platform on a production database,
having rolled out in 10 or more countries and 400 or more registered users on CargoWise.
Operating and financial reviewfor the full-year ended 30 June 2021 6 6
Recurring On‑Demand revenue
Recurring OTL maintenance revenue
OTL and support services
Revenue
Cost of revenues
Gross profit
Operating expenses
Product design and development 2
Sales and marketing
General and administration
Total operating expenses
Operating profit
Finance income
Finance costs
Fair value gain on contingent consideration
Share of profit/(loss) of equity accounted investees
Profit before income tax
Tax expense
Net profit after tax
Net profit after tax attributable to:
Equity holders of the parent
Non‑controlling interests
Net profit after tax
Key financial metrics
Recurring revenue %
Gross profit margin %
Product design and development as % of total revenue 2
Sales and marketing as % of total revenue
General and administration as % of total revenue
Capitalised development investment ($m) 3
Total R&D as a % of total revenue 4
FY17
$M
127.3
15.1
11.4
153.8
(26.1)
127.7
(35.6)
(16.7)
(33.9)
(86.2)
41.5
4.6
(1.9)
–
(0.1)
44.2
(12.0)
32.2
31.9
0.3
32.2
93%
83%
23%
11%
22%
22.0
33%
FY18
$M
171.0
27.7
22.9
221.6
(38.7)
182.9
(53.4)
(24.6)
(46.6)
(124.6)
58.4
1.4
(2.7)
–
0.0
57.2
(16.4)
40.8
40.8
0.0
40.8
90%
83%
24%
11%
21%
35.3
34%
FY19
$M
249.8
57.8
40.7
348.3
(66.7)
281.6
(84.2)
(47.7)
(69.5)
(201.3)
80.2
1.9
(7.3)
1.6
–
76.4
(22.3)
54.1
54.1
–
54.1
88%
81%
24%
14%
20%
46.9
32%
FY20
$M
309.2
72.8
47.4
429.4
(83.5)
345.9
(115.4)
(62.3)
(87.7)
(265.4)
80.5
3.1
(12.9)
111.0
–
181.8
(21.0)
160.8
160.8
–
160.8
89%
81%
27%
15%
20%
74.2
37%
FY21
$M
383.0
75.1
49.4
507.5
(85.6)
421.9
(128.9)
(50.3)
(92.9)
(272.1)
149.8
1.4
(5.5)
2.2
–
147.9
(39.9)
108.1
108.1
–
108.1
90%
83%
25%
10%
18%
78.3
33%
1 Differences in tables are due to rounding, refer to Rounding of amounts in note 2 to the financial statements included in this report.
2 Product design and development includes $40.1m (FY20: $30.5m, FY19: $18.1m, FY18: $12.2m and FY17: $7.2m) depreciation and
amortisation but excludes capitalised development investment.
Includes patents and purchased external software licences used in our products.
3
4 R&D is total investment in product design and development expense, excluding depreciation and amortisation, but including capitalised
development investment.
Five year financial summary 1 W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
6 7
Letter from the People & Remuneration Committee
In light of WiseTech’s strong long-term financial performance
since its public listing in 2016, no significant changes to
our remuneration structure are planned for FY22. The PRC
believes our remuneration structure remains fit-for-purpose.
Our Founder and CEO, Richard White, continues to receive
fixed remuneration with no performance-based incentives,
due to his substantial shareholding of more than 40% of
WiseTech’s issued share capital. The CEO leads the setting
of annual financial KPIs for the company, as well as KPIs
focused on operational drivers of long‑term value creation
and individual performance. He recommends incentive
awards to the Board for the non-financial KPIs. The PRC views
this agile approach as aligned to shareholder interests and
as a proven method for WiseTech. Importantly, and by design,
more than 70% of our global workforce owns WiseTech equity
in the form of shares and/or share rights.
Our substantial investment in product development priorities
and scalability, coupled with our organisation-wide efficiency
program, will allow us to achieve our strategic vision of being
the operating system for global logistics. We are delighted
that our customers, global workforce and shareholders may
benefit well beyond FY21 from these achievements.
We invite you to read the Remuneration Report and welcome
your feedback
Sincerely,
Teresa Engelhard, Charles Gibbon and Michael Gregg
People & Remuneration Committee
Dear Shareholders,
The People & Remuneration Committee (“PRC”) is pleased
to introduce WiseTech’s Remuneration Report for the year
and to share some of our people and culture highlights.
As always, the health and well‑being of our staff are paramount.
Since the start of the pandemic in early 2020, our team has
rallied together, looking after each other and our customers,
while continuing to deliver strong results. We have shifted
almost all of our staff to remote working, starting in the early
days of the pandemic and continuing through this financial
year. We did not receive any material benefit from any
COVID‑19 government support programs globally.
We continued to realise benefits from our acquired entities
across the globe, setting new internal targets to reward
the implementation of tighter cross‑global reporting lines;
increased alignment and globalisation of core product teams;
and the restructuring of regional offices to further centralise
core functions.
Two new strategic and financial KPIs were introduced in FY21:
extracting synergies from acquired entities and free cash flow.
WiseTech has enjoyed an outstanding year, exceeding targets
in many areas, including strong results against the following
KPIs set by the Board:
– 18% growth in revenue, towards the top end of guidance
of 9% to 19% growth
– $13.8m of net cost savings, exceeding our $10m target
– Free cash flow of $139.2m, up 149% on FY20
In light of these (and other) accomplishments, the PRC
believes the remuneration outcomes for the financial
year reflect an appropriate alignment between pay and
performance, and are fair in terms of the markets and global
context in which we operate.
Several steps were also taken to further strengthen our
people, culture and organisation, including:
– Increasing the quality and depth of the management team
by adding a new Head of Risk Management & Internal
Audit, building on the addition of a new General Counsel
and Head of People in FY20;
– The development of an emerging leaders’ program in the
R&D function, to produce a greater depth of leadership
in our product delivery teams and to support continued
growth and scalability;
– The introduction of regular cultural deep dive sessions
to amplify and embed cultural norms and expectations
across our workforce.
Remuneration Report 6 8
This Remuneration Report for the twelve months ended 30 June 2021 has been prepared
in accordance with the requirements of section 300A of the Corporations Act 2001, and
has been audited as required by section 308(3C) of the Corporations Act 2001.
People & Remuneration Committee and governance
The Board is responsible for ensuring that WiseTech’s remuneration strategy and framework support the Group’s performance and
that executives and Non‑Executive Directors are rewarded fairly and responsibly with regard to legal and corporate governance
requirements. The People & Remuneration Committee (“PRC”) oversees remuneration matters and, where appropriate, makes
recommendations to the Board. The Committee comprises three independent Non‑Executive Directors: Teresa Engelhard (Chair),
Charles Gibbon and Michael Gregg. Further information on the PRC’s responsibilities is set out in the PRC Charter available at:
www.wisetechglobal.com/investors/corporate‑governance/
Annual remuneration review
The PRC and the Board review remuneration annually to ensure that there is an appropriate balance between fixed and at-risk
performance-related pay and that it reflects both short-term and long-term performance objectives linked to WiseTech’s strategy.
WiseTech’s people and culture are the source of our industry leading products and attracting and retaining the best talent in our
sector is a core driver of company performance. To ensure we continue to remunerate our people appropriately, WiseTech brought
forward our FY21 remuneration review to April 2021 (from July 2021) and expects to conclude an additional global remuneration
review in early 2022 before resuming the annual cycle in July 2022.
Independent remuneration consultants
WiseTech Global has protocols in place to ensure that external advice is provided in an appropriate manner and is free from undue
influence by management. To inform remuneration policy reviews, during FY21, the PRC engaged external consultants to advise on
market practices, as well as the establishment of the Non-Executive Director Fee Sacrifice Share Acquisition Plan. For the purposes
of section 206L of the Corporations Act 2001, no independent advice was provided on remuneration recommendations in relation
to KMP.
Key management personnel (“KMP”) covered by this
Remuneration Report
WiseTech’s KMP comprises all Directors and those executives who have specific authority and responsibility for planning,
directing and controlling the activities of the Group. In this report, the term “Executive KMP” refers to the KMP excluding
Non‑Executive Directors.
Name
Title
Executive Director KMP
Term as KMP in FY21
Richard White (“RW”)
Executive Director, Founder and Chief Executive Officer (“CEO”)
Full year
Maree Isaacs (“MI”)
Executive Director, Co‑founder and Head of Licence Management (“HLM”)
Full year
Other Executive KMP
Andrew Cartledge (“AC”)
Chief Financial Officer (“CFO”)
Brett Shearer (“BS”)
Chief Technology Officer (“CTO”)
Non-Executive Director KMP
Andrew Harrison
Teresa Engelhard
Charles Gibbon
Michael Gregg
Arlene Tansey
Chair and Non‑Executive Director
Non‑Executive Director
Non‑Executive Director
Non‑Executive Director
Non‑Executive Director
Full year
Full year
Full year
Full year
Full year
Full year
Full year
Remuneration Report W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
6 9
Our remuneration strategy and framework
WiseTech’s future growth and innovation rely on the talent, motivation and enthusiasm of our people across the world. We aim
to reward our high‑performance global workforce with a remuneration and incentive program aligned to our business strategy,
specialised operations, and aspirations for sustained growth.
Our remuneration framework includes cash and equity components that reward our workforce for achieving operational and
strategic priorities and for creating long‑term sustainable value for WiseTech and its shareholders.
Our remuneration principles and philosophy
Drive
innovation
People
powered
Performance
culture
Equitable
Market
competitive
Relentlessly
innovate to deliver
world‑leading
products that
drive success
for our customers
Attract, develop,
motivate and
retain an
exceptional global
team focused on
market leadership
and product
excellence
Drive a high
performance,
global culture
aligned with
long‑term strategy
Retain a
consistent
approach to
reward decisions,
promoting
diversity and
freedom from
bias
Deliver market
competitive fixed
remuneration and
long‑term value
growth through
equity ownership
Remuneration Report 7 0
The elements of our global remuneration structure and how
they link to performance
Component
Structure
Strategic objective/performance link
Fixed annual remuneration
Cash and deferred equity
(Remuneration equity: granted during
the financial year with deferred vesting
over the following three years)
Total fixed remuneration set at competitive levels
to attract and retain talent who can support
growth, execute strategy, deliver economic
outcomes and build shareholder value
Performance equity incentives
Optional post‑tax investment
program: Invest As You Earn
(“IAYE”)
Minimum equity holding
requirement
Deferred equity with a one‑year
performance period and vesting over the
following three years
Performance measures:
– financial and operational targets
weighted to individual areas of control;
and
– development team pool bonuses
related to specific innovation pipeline
achievements
Invest up to 20% of post‑tax salary monthly
with potential to receive one free share right
for every five shares purchased – the share
rights have an 18 month vesting period
Available for all employees (subject to local
regulations)
Executive KMP must maintain 100% of fixed
remuneration in WiseTech equity (in the
form of shares or share rights)
Based on:
– role and responsibility;
– capability, competencies and contribution; and
– internal and external relativities
Deferred remuneration equity aligns with
long‑term shareholder interests and supports
staff retention
Performance measures reward execution of and
accountability for actions, direct outcomes and
lead measures aligned to long‑term strategy and
annual priorities
Lag outcomes ultimately reflected in long-term
growth in revenue, earnings and Total Shareholder
Return (“TSR”)
Deferred equity ensures strong link with creation
of shareholder value and supports staff retention
Builds further alignment with long‑term
shareholder interests
Ensures ownership mindset and alignment with
long‑term shareholder interests
As a priority, we build multi-year deferred equity components into fixed base remuneration across our global workforce to align
employees’ interests with those of shareholders, encourage value‑creating behaviours and support staff retention within the Group.
This equity is typically granted at the start of the financial year and vests in four equal annual tranches.
During FY21, WiseTech has continued to increase the proportion of total remuneration that is delivered as a multi‑year deferred
equity component across our global team members. Where appropriate, deferred equity is also used to deliver a component
of sales incentives and for sign‑on or retention awards for key team members. Development team bonus pool incentives
related to specific innovation achievements that require extra discretionary effort from team members are also delivered
as deferred equity.
In the event that an employee (including an Executive KMP) ceases employment, unvested share rights (whether related to
performance incentives or remuneration equity) will typically lapse. However, in exceptional circumstances (including genuine
retirement), the Board retains discretion to determine that some, or all, of the unvested share rights will not lapse.
Our Invest As You Earn (“IAYE) equity investment program enables employees to acquire WiseTech shares by investing up
to 20% of their post-tax salary, with an annual incentive of one free share right for each five shares acquired during the calendar
year. The free share rights vest on the date which is 18 months after the end of the calendar year. Approximately 22% of eligible
employees across 21 countries have chosen to participate and invest in WiseTech shares via IAYE 2021.
Remuneration Report W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
7 1
FY21 Remuneration framework for our executive team
Remuneration for our executive team, including Executive KMP and other senior managers, is delivered through a cash element
of fixed remuneration, deferred equity element of fixed remuneration and performance equity incentives. The graphic below
illustrates the delivery timing of each remuneration component and includes the interim remuneration review in April 2021 to keep
pace with the global technology talent market.
1 July
2020
30 June
2021
1 July
2021
1 July
2022
3 July
2023
1 July
2024
1 July
2025
Fixed remuneration: FY21 cash
Fixed remuneration: FY21
remuneration equity (25%)
Fixed remuneration: FY21 remuneration equity (25%)
Fixed remuneration: FY21 remuneration equity (25%)
Fixed remuneration: FY21 remuneration equity (25%)
April-June 2021 Global
remuneration review
Fixed remuneration:
FY21 cash increase
Fixed remuneration:
FY21 remuneration equity increase (25%)
Fixed remuneration: FY21 remuneration equity increase (25%)
Performance period for FY21 incentives
Fixed remuneration: FY21 remuneration equity increase (25%)
Fixed remuneration: FY21 remuneration equity increase (25%)
FY21 performance equity
incentives (25%)
FY21 performance equity
incentives (25%)
FY21 performance equity incentives (25%)
FY21 performance equity incentives (25%)
Grant of share rights
Vesting of share rights
Our executive team’s performance incentive framework is focused on annual financial targets and operational key performance
indicators (“KPIs”) that are lead measures for long-term strategic outcomes. In any year, our financial outcomes reflect the
successful execution of deliverables over many prior years. Conversely, the operational and strategic actions undertaken this
year are expected to deliver shareholder value for many years into the future. Product development deliverables are examples
of operational KPIs designed to support long-term strategy and deliver sustainable, long-term financial value.
To ensure alignment with shareholders’ interests, we aim for 100% of performance incentives to be paid in deferred equity (other
than for Executive Director Maree Isaacs, due to the size of her co-founder equity holding). Our view is that this approach – fixed
remuneration equity vesting over four years, combined with performance equity incentives vesting over three years – removes
the need for a separate long‑term incentive.
Performance equity incentives for Executive KMP and senior managers are delivered as multi-year deferred equity, with a grant
date in July/August 2021, and vesting in four equal instalments, immediately on grant and then in July 2022, 2023 and 2024.
The number of share rights granted was determined using an average WiseTech share price at the end of the annual performance
period in June 2021.
The performance of Executive KMP is assessed by the Board against key indicators. Performance incentives outcomes for senior
managers, including the Executive KMP, are determined by the CEO, with input and review by the PRC and approval by the Board.
Remuneration Report 7 2
FY21 Executive KMP remuneration
Remuneration structure for FY21
The remuneration components for each Executive KMP are expressed as a percentage of total remuneration, with the performance
incentives varied to reflect the target and maximum performance. The following diagrams set out the remuneration mix for
Executive KMP, excluding Richard White, who was remunerated solely with fixed pay as we believe that his significant equity holding
provides adequate alignment with other shareholders. Maree Isaacs also owns a significant amount of WiseTech equity, thus her
performance incentive is paid in cash.
A global remuneration review was completed in April 2021. This covered all colleagues, including Executive KMP. No change was
made to the CEO package. The HLM and CFO packages were increased in line with Australian market wage inflation over the period
since prior review.
The CTO total package was increased (by 7.9%), to more closely reflect local market norms following benchmarking with other
ASX-listed technology firms. In addition, the Board determined that the CTO would be eligible for an overachievement in performance
incentive outcome for FY21.
Maree Isaacs
Target and maximum
Andrew Cartledge
Target
Maximum
Brett Shearer
Target
Maximum
67%
51%
8%
43%
7%
57%
19%
51%
17%
33%
41%
51%
24%
32%
Fixed remuneration (cash)
Performance incentives (cash)
Fixed remuneration (Remuneration equity)
Performance incentives (equity)
Remuneration Report W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
7 3
Remuneration outcomes for FY21 and the link to WiseTech performance
The tables below summarise the performance of WiseTech shares for the five years from FY17 to FY21 and for FY21, and our financial
performance for the five years from FY17 to FY21. The information was considered in conjunction with an assessment of individual
performance of senior managers by the CEO, and reviewed by the PRC, when determining Executive KMP remuneration.
Period
Period start
Share price
at start
of period
Share price
30 June 2021
Change in
share price
Change in
ASX 200
WTC
performance
v ASX 200
Dividends
paid per
share
WTC TSR 1
FY17–FY21
1 July 2016
FY21
1 July 2020
$4.43
$19.35
$31.93
$31.93
620.8%
65.0%
39.7%
24.0%
+581.0%
$0.1435
627.0%
+41.0%
$0.0430
65.0%
1 Total shareholder return with dividends reinvested.
Revenue ($m)
Revenue growth over prior year
EBITDA ($m)
NPAT 1 ($m)
NPATA 2 ($m)
Earnings per share (cents)
Dividends 3 per share (cents)
Change in share price during the year 4
FY17
153.8
50%
53.9
31.9
33.6
10.9
2.20
56%
FY18
221.6
44%
78.0
40.8
44.8
13.9
2.70
126%
FY19
348.3
57%
108.1
54.1
63.0
17.7
3.45
77%
FY20
429.4
23%
126.7
160.8
64.6
50.3
3.30
‑30%
FY21
507.5
18%
206.7
108.1
113.6
33.3
6.55
65%
1 NPAT is net profit after tax.
2 NPATA is net profit after tax before acquired amortisation and contingent consideration interest unwind (net of tax) and before
contingent consideration fair value changes. NPATA is a non‑statutory measure and is a primary measure used for the purpose
of assessing the performance of the Group. It is derived from audited financial statements.
3 Dividends declared in respect of the financial year.
4 Percentage change in the closing share price on the last business day in the current year over that on the last business day in the
prior year.
Board assessment of WiseTech’s FY21 performance against key indicators
In using WiseTech’s FY21 results to help determine performance incentives for Executive KMP, the Board considers the market
conditions and short‑term performance in the context of WiseTech’s longer‑term strategy. In FY21, key indicators rebounded
strongly as WiseTech made considerable strides toward aligning and integrating our acquired entities around the globe.
Our business and our people have had an outstanding year, exceeding targets in many areas, including strong results against
the KPIs set by the Board.
While many of the challenges and extra demands arising from the COVID‑19 pandemic continued, the Board again found the
performance of the executive team and global workforce to be exemplary, in particular their timely and effective efforts to:
– continue to deliver key product development outcomes and innovations;
– generate customer sales and support the acceleration of global rollouts by large customers;
– accelerate integration and alignment plans with acquired entities while executing cost reduction and cash bolstering
initiatives; and
– implement a hybrid working model with sustainable productivity across our workforce.
Remuneration Report 7 4
In light of this outstanding executive performance in the face of the COVID‑19 pandemic, the Board determined that a number
of stretch (above target) performance bonuses would be awarded across the executive team. For the 12‑member senior
management team reporting to the CEO, 122% of the total target performance incentive pool was distributed for FY21 (90%
of stretch). For Executive KMP, the specific KPIs and performance assessments which underpin the FY21 performance incentive
awards, and the Board’s assessment of the performance of the CEO, are detailed below.
Key performance
indicator
Performance outcome
Board assessment
Executive KMP
Revenue growth
18% growth in revenue to $507.5m vs $470m to $510m target
Target achieved
CEO, HLM, CFO
EBITDA
63% growth in EBITDA to $206.7m vs $155m to $180m target
Target exceeded
CEO, HLM, CFO
Recurring revenue
20% growth in recurring revenue to $458m
Recurring revenue 97% of CargoWise revenue and 90%
of total revenue
Target exceeded
CEO, HLM
M&A integration and
capture of synergies
$13.8m net benefit and ~$40m net cost reduction run-rate
for FY22
Target exceeded
CEO, CFO
Operational efficiency
G&A expense/G&A % of Revenue excluding restructuring costs
of $80.9m/16%
Target Exceeded
CEO, CFO
Cash flow
Operating cash flow/Operating cash flow conversion
$229.9m/111%, and
Free cash flow/Free cash flow conversion $139.2m/67%
Target exceeded
CEO, HLM, CFO
Product development
outcomes
Optimisation of CargoWise Cloud code base to increase
performance
Target exceeded
CEO, CTO
Performance against the relevant financial and operational criteria above makes up at least 70% of each Executive’s performance
incentive opportunity. The remainder relates to strategic outcomes particular to each Executive’s role in the organisation
as described below:
– Maree Isaacs: customer contract management, pricing, licensing, and legacy business model transition;
– Andrew Cartledge: integration of acquired businesses, cash flow, and financial risk management; and
– Brett Shearer: improvements in development efficiency, increased monitoring of datacentres/CargoWise Cloud/eHub and
improved reliability resilience of CargoWise Cloud and tier 1 customers’ CargoWise private clouds.
FY21 performance incentives outcome
The remuneration awarded to the Executive KMP in relation to performance during FY21 is set out in the table below, including the
performance incentives resulting from the assessment of KPI outcomes described above. The table also shows the performance
outcome for each Executive KMP as a percentage of target opportunity and of maximum opportunity.
In light of specific product development achievements in FY20 and FY21, and a review of market CTO pay, the Board determined that
discretion was warranted to award the CTO an overachievement of the maximum performance incentive opportunity for FY21.
FY21
performance
incentive
awarded
Target
opportunity
% of target
incentive
awarded
% of target
incentive
forgone
Maximum
opportunity
% of maximum
incentive
awarded
% of maximum
incentive
forgone
Maree Isaacs
$200,000
$200,000
Andrew Cartledge
$750,000
$500,000
Brett Shearer
$350,000
$200,000
100%
150%
175%
0%
0%
0%
$200,000
$750,000
$300,000
100%
100%
117%
0%
0%
0%
Remuneration Report W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
7 5
Actual remuneration received in FY21
Current year’s
remuneration
Prior years’
remuneration
Total
Fixed cash 1
Cash
incentive
FY21
Remune-
ration
equity
FY21
Perfor-
mance
Equity
Remune-
ration
equity
vested
Perfor-
mance
equity
vested
Remune-
ration
received
Equity
growth
Total
including
equity
growth
Richard White
$1,000,000
–
Maree Isaacs
$405,000 $200,000
Andrew Cartledge
$631,250
Brett Shearer
$475,000
–
–
–
–
–
–
–
–
–
–
–
–
$1,000,000
– $1,000,000
$605,000
–
$605,000
$187,500
$24,988
$336,750 2
$1,180,488
($88,424) $1,092,064
$87,500
$37,482
$185,299
$785,282
($52,363)
$732,919
1 Fixed cash includes superannuation but excludes any allowances or non-monetary benefits. In particular, the amounts do not include
the value related to annual and long service leave entitlements. FY21 fixed cash included cash increase effective from 1 April 2021.
2 Andrew Cartledge’s performance equity vested includes the vesting of 16 IAYE Share Rights in January 2021.
In the above table, Executive KMP remuneration received in FY21 is separated into remuneration received for employment in FY21
and deferred equity from previous years that vested during FY21.
Current year’s remuneration
FY21 fixed cash remuneration, plus any FY21 performance incentive payments paid in cash, or equity which vested immediately
on grant in August 2021. As remuneration equity is granted at the beginning of the year and earned throughout the year, with the
first tranche to vest on the 1st business day of the following financial year, no FY21 remuneration equity was received in FY21.
Prior years’ remuneration
Any deferred equity awards from prior periods that vested during FY21. This includes remuneration equity and performance equity
incentives from prior years, excluding the value of any vested performance equity incentive for FY20 disclosed as ‘Current year’s
remuneration’ in the corresponding table in the FY20 Remuneration Report.
Equity growth
The value of the vested equity shown in the table is the face value at date of original award (under the headings Remuneration
equity vested and Performance equity vested). Equity growth is the value contribution from the change in share price between
the award and vesting dates.
For share rights that do not automatically convert to ordinary shares at vesting but are instead exercisable at the discretion of the
Executive KMP, the values in the table reflect the market value at the vesting date, regardless of whether the share rights have
been exercised.
Please note the actual remuneration outcomes in the tables above differ from the required statutory disclosures on page 84,
which are prepared in accordance with the relevant accounting standards and represent a blend of actual amounts and accounting
accruals. We believe that the information presented above provides shareholders with greater clarity of Executive KMP remuneration.
Vesting of previous performance equity incentives
Vesting of deferred equity components of Executive KMP performance incentives each year is subject to consideration by the
Board. The Board determined that the relevant tranches of FY18, FY19 and FY20 performance equity incentives would vest fully
in July 2021.
Remuneration Report 7 6
FY22 remuneration
The Board considers that the existing remuneration approach and framework is working effectively. As such, no substantive
changes are planned for FY22.
Executive Directors
As co-founders of WiseTech Global, Richard White and Maree Isaacs, each have significant equity interests and, as such, their
motivations and interests are firmly aligned with those of other shareholders. Therefore, their FY22 remuneration will contain
no deferred equity components.
Richard White will continue to receive fixed remuneration of $1 million per annum in FY22. Maree Isaacs will receive fixed
remuneration of $420,000 per annum and a performance incentive opportunity of up to 50% of fixed remuneration annually,
based on achievement of multi‑year strategic goals related to operational delivery on contract management, legacy conversion
and pricing. In view of Maree Isaacs’ significant existing ownership of WiseTech equity, the Board determined this performance
incentive will continued to be cash‑based.
Non‑director Executive KMP
Our non-director Executive KMP remuneration structure features:
Fixed remuneration consisting of cash base salary, superannuation and remuneration equity
Fixed remuneration comprising both cash and deferred equity is designed to encourage long‑term sustainable decision‑making
and alignment of interests with those of shareholders. Remuneration equity for FY22 was granted after the April global remuneration
review and priced in April 2021; it will vest in four equal annual tranches in July 2022, 2023, 2024 and 2025.
A performance equity incentive opportunity set as a percentage of fixed remuneration
Performance criteria will include Company financial outcomes and the achievement of strategic goals and project outcomes related
to each Executive KMP role. The performance incentives will be in the form of deferred equity over three years, normally delivered
as share rights with vesting after the end of the performance period in four equal tranches: immediately on grant in August 2022,
July 2023, 2024 and 2025. Prior to vesting in any given year, the Board retains broad discretion to cancel the vesting of that tranche
due to a range of factors, including conduct. The number of share rights to be granted will be determined using an average WiseTech
share price at the end of the annual performance period in June 2022.
Remuneration Report W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
7 7
Executive KMP FY22 remuneration
A$
Founder and CEO
Richard White
Co‑founder and
Head of Licence
Management
Maree Isaacs
Chief Financial
Officer
Andrew Cartledge
Chief Technology
Officer
Brett Shearer
Fixed remuneration – cash
$1,000,000
$420,000
Fixed remuneration – remuneration equity
–
–
Total fixed remuneration
$1,000,000
$420,000
Target performance incentives
(% of fixed remuneration)
Maximum performance incentives
(% of fixed remuneration)
Form of performance incentives
N/A
N/A
N/A
$210,000
(50%)
$210,000
(50%)
cash
$650,000
$110,000
$760,000
$525,000
(69%)
$787,500
(104%)
$475,000
$200,000
$675,000
$215,000
(32%)
$322,500
(48%)
3‑year deferred
equity
3‑year deferred
equity
Performance criteria applicable
to performance incentives
– at least 70% financial, operational and strategic measures as per the FY21 KPI and
performance outcome table on page 74
– up to 30% for individual outcomes, as selectively applied to individual roles with
incentive outcomes determined by the CEO with approval by the Board
As in prior years, the Board (on the recommendation of the CEO) may use discretion to grant an additional reward to individual
Executive KMP for substantial outperformance, usually capped at an additional 50% of the target performance incentive.
Remuneration Report
7 8
FY22 Remuneration framework for executive team
Remuneration for our executive team, including Executive KMP and senior managers, is delivered through a cash element of fixed
remuneration, deferred equity element of fixed remuneration and performance equity incentive. The graphic below gives a simple
illustration of the delivery timing for each remuneration component.
April-June
2021
1 July
2021
30 June
2022
1 July
2022
3 July
2023
1 July
2024
1 July
2025
1 July
2026
Fixed remuneration:
FY22 cash
Fixed remuneration: FY22
remuneration equity (25%)
Fixed remuneration: FY22 remuneration equity (25%)
Fixed remuneration: FY22 remuneration equity (25%)
Fixed remuneration: FY22 remuneration equity (25%)
Performance period for
FY22 incentives
FY22 performance
equity incentives (25%)
FY22 performance
equity incentives (25%)
FY22 performance equity incentives (25%)
FY22 performance equity incentives (25%)
Grant of share rights
Vesting of share rights
Remuneration Report W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
7 9
Remuneration governance
The following graphic describes the roles of the Board, the PRC and Management in ensuring that WiseTech’s remuneration
governance processes are robust and defendable.
W I S E T E C H G L O B A L L I M I T E D B O A R D
– Approves the overall remuneration policy, including
Non‑Executive Director remuneration, Executive
Director and senior executive remuneration and
any executive incentive plans.
– Appoints the CEO, and approves the remuneration
of, and oversees the performance review of,
the CEO.
P E O P L E & R E M U N E R A T I O N C O M M I T T E E
Responsible for reviewing the following matters and bringing items of significance to the attention
of the Board:
– The processes for overseeing performance
accountability and monitoring of the senior
management team, including setting and
evaluating performance against goals and targets.
– Our remuneration structure and its effectiveness.
– Recruitment, retention and termination strategies.
– The Remuneration Report.
– Other relevant matters identified or requested
by the Board from time to time.
I N D E P E N D E N T R E M U N E R A T I O N A D V I S O R S
M A N A G E M E N T
– Provide independent advice to the PRC and/or Management
on remuneration market data and market practice.
– WiseTech has protocols in place to ensure that any external
advice is provided in an appropriate manner.
– Makes recommendations to the
PRC on WiseTech’s remuneration
strategy and framework.
– Provides relevant information
to support decision‑making.
Remuneration Report 8 0
Overview of Non-Executive Director remuneration
The Board sets Non‑Executive Director remuneration at a level that enables the Group to attract and retain Directors with the
appropriate mix of skills and experience. The remuneration of the Non‑Executive Directors is determined by the Board, on advice
from the PRC.
Non‑Executive Directors receive a base fee inclusive of statutory superannuation contributions. Non‑Executive Directors do not
receive any performance‑based remuneration.
Non‑Executive Director fee pool and structure
The total amount of fees that can be paid to Non‑Executive Directors is capped by a pool approved by shareholders. The current
fee pool is $1,500,000 per annum, approved by shareholders at the 2018 Annual General Meeting.
Market practice and survey data are considered when determining the appropriate level of fees for Non‑Executive Directors.
During FY21, the PRC benchmarked the Non‑Executive Director fee levels against those of comparable companies in two
comparator groups, the ASX200 and ASX technology peers (based on market capitalisation). The Board approved an increase
in Non-Executive Director fees for FY22 to ensure that our fee levels continue to reflect the workload and responsibilities
of Directors and do not hamper the recruitment of additional Non‑Executive Directors.
The table below outlines the Board and committee fees, inclusive of superannuation, effective for FY21 and for FY22.
Board
Audit & Risk Committee
Nomination Committee
People & Remuneration Committee
Related Party Committee
FY21
FY22
Chair fee
Member fee
Chair fee
Member fee
$271,003
$21,900
$10,950
$10,950
–
$164,250
$10,950
–
–
–
$330,000
$33,000
$16,500
$16,500
–
$165,000
$19,250
–
$9,625
–
Non-Executive Director Fee Sacrifice Share Acquisition Plan
The Non-Executive Director Fee Sacrifice Share Acquisition Plan (“NED Share Plan”), introduced in October 2020, provides
a mechanism for the Non‑Executive Directors to build their equity holding in the Company using their pre‑tax Director fees. Under
the NED Share Plan, Non-Executive Directors can elect to voluntarily sacrifice all, or a portion, of their pre-tax Director fees over the
relevant financial year to receive a grant of share rights. Each share right is a conditional entitlement to acquire one ordinary share
in the Company.
The following table details the NED Share Plan participation in FY21, including the number of share rights granted and the
vesting schedule.
Andrew Harrison
Tranche 1
Tranche 2
Teresa Engelhard
Tranche 1
Michael Gregg
Arlene Tansey
Tranche 2
Tranche 1
Tranche 2
Tranche 1
Tranche 2
Fees sacrificed
for share rights
Number of
rights granted 1
Fair value
at grant date 2
Vesting date 3
$18,796
$18,796
$12,412
$12,412
$11,680
$11,680
$31,024
$31,024
609
609
402
402
378
378
1,005
1,005
$18,739
$18,739
$12,370
$12,370
$11,631
$11,631
$30,924
$30,924
Feb 2021
Aug 2021
Feb 2021
Aug 2021
Feb 2021
Aug 2021
Feb 2021
Aug 2021
1 The number of share rights granted was calculated using an allocation price based on the 5‑day VWAP for the period immediately
following the Company’s AGM in November 2020.
2 Fair value at grant was determined based on $30.77, the closing share price on the grant date.
3 Share rights vest (convert to shares) in two equal tranches on the days following the release of the half‑year and full‑year results.
Remuneration Report
W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
8 1
Non‑Executive Director remuneration
The following table details Non‑Executive Directors’ remuneration for FY21 and FY20.
Andrew Harrison
Teresa Engelhard
Charles Gibbon
Michael Gregg
Arlene Tansey 1
Christine Holman 2
Total
Board and
committee fees
– cash
Fees sacrificed
under the NED Share
Plan
Superannuation
FY21
FY20
FY21
FY20
FY21
FY20
FY21
FY20
FY21
FY20
FY21
FY20
FY21
FY20
$222,667
$260,475
$145,176
$170,000
$160,000
$160,000
$139,140
$163,768
$111,027
$12,500
–
$56,667
$778,010
$823,410,
$37,592
–
$24,824
–
–
–
$23,360
–
$62,048
–
–
–
$147,824
–
$21,694
$21,003
$16,150
$16,150
$15,200
$15,200
$15,438
$15,558
$7,600
$1,188
–
$5,383
$76,082
$74,481
Total
$281,953
$281,478
$186,150
$186,150
$175,200
$75,200
$177,938
$179,326
$180,675
$13,688
–
$62,050
$1,001,915
$897,891
1 Arlene Tansey was appointed on 1 June 2020.
2 Christine Holman resigned on 18 October 2019.
Remuneration Report 8 2
Trading in WiseTech securities and equity ownership
Trading in WiseTech securities
All KMP must comply with WiseTech’s Securities Trading Policy, which includes a requirement that Directors and employees can
only trade WiseTech securities during specified trading windows. The policy also prohibits the purchase or creation of hedge
or derivative arrangements which operate to limit the economic risk of WiseTech securities under employee share plans.
Executive KMP equity ownership
The following tables provide details of WiseTech Global Limited ordinary shares and share rights (being rights to acquire ordinary
shares) held directly, indirectly or beneficially by each Executive KMP and their related parties:
Richard White
Maree Isaacs
Andrew Cartledge
Brett Shearer
Shares held on
30 June 2020
Shares acquired
as part of
remuneration 1
Other shares
acquired
Shares
disposed
Shares held on
30 June 2021
140,049,173
11,424,165
183,791
479,882
–
–
24,095
11,632
–
–
41 2
–
(8,057,437)
131,991,736 3
(234,568)
11,189,597 3
(30,246)
(38,987)
177,681
452,527
1 Shares acquired from vesting or exercise of share rights granted as part of remuneration.
2
3 Number of shares held on 30 June 2021 and as at the date of this report.
Including 25 IAYE Shares acquired and 16 shares converted from IAYE Share Rights.
Richard White 2
Maree Isaacs 2
Andrew Cartledge
Brett Shearer
Share rights
held on
30 June 2020
–
–
43,882
24,170
Awarded
–
–
20,661
23,794
Vested and
converted
or exercised
–
–
(24,111)
(11,632)
Share rights
held on
30 June 2021
Including share
rights vested
but not yet
exercised 1
Lapsed
–
–
–
–
–
–
40,432
36,332
–
–
–
–
1 Depending on the terms of a grant, on vesting, share rights may automatically convert to ordinary shares, or become exercisable.
The Executive KMP can choose when to convert the exercisable share rights to ordinary shares. Share rights are converted to ordinary
shares at nil cost to the Executive KMP.
2 Richard White and Maree Isaacs have not been awarded any share rights as at the date of this report.
Executive KMP equity ownership policy
Executive KMP are required to maintain a minimum WiseTech equity holding, including shares and share rights, equal to 100%
of fixed remuneration within five years of appointment. Each Executive KMP satisfied this objective as at 30 June 2021.
Shares held
on 30 June 2021
Share rights
held on
30 June 2021
Total equity
held on
30 June 2021
Value of equity
holding on
30 June 2021 1
Minimum
equity holding
guideline 2
Richard White
Maree Isaacs
Andrew Cartledge
Brett Shearer
131,991,736
11,189,597
177,681
452,527
–
–
40,432
36,332
131,991,736
$4,214,496,130
$1,000,000
11,189,597
$357,283,832
218,113
$6,964,348
488,859
$15,609,268
$420,000
$760,000
$675,000
1 Value of shareholding was calculated based on $31.93, the closing share price on 30 June 2021.
2 Minimum equity holding guideline is the annualised fixed remuneration as at 30 June 2021.
Status
Meets
Meets
Meets
Meets
Remuneration Report W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
8 3
Non-Executive Director share ownership policy and equity holdings
The Board has established a policy that all Non‑Executive Directors should accumulate and hold WiseTech shares equivalent to the
value of their base Director’s fees within three years of their appointment to the Board. All Non-Executive Directors satisfied this
objective as at 30 June 2021. Arlene Tansey was only appointed to the Board effective 1 June 2020.
The following tables provide details of WiseTech Global Limited ordinary shares and share rights (being rights to acquire ordinary
shares) held directly, indirectly or beneficially by each Non-Executive Director and their related parties.
Shares held
on 30 June
2020
Shares
received on
vesting of
share rights
Shares
issued
under DRP
Other
shares
acquired
Shares
disposed
Shares held
on 30 June
2021 1
Value of
shareholding
on 30 June
2021 2
Minimum
shareholding
guideline 3
Andrew Harrison
40,567
Teresa Engelhard
42,894
Charles Gibbon
17,349,014
Michael Gregg
13,864,842
609
402
–
378
–
–
–
–
–
–
–
–
–
41,176
$1,314,750
$281,953
43,296
$1,382,441
$186,150
17,349,014 $553,954,017
$175,200
11,758
– (400,000)
13,476,978 $430,319,908
$175,200
Status
Meets
Meets
Meets
Meets
Arlene Tansey
1,000
1,005
–
3,000
–
5,005
$159,810
$186,150 On track
1 Number of shares held on 30 June 2021 and at the date of this report.
2 Value of shareholding was calculated based on $31.93, the closing share price on 30 June 2021.
3 Minimum shareholding guideline is the annualised Non‑Executive Director fee as at 30 June 2021.
Andrew Harrison
Teresa Engelhard
Charles Gibbon
Michael Gregg
Arlene Tansey
Shares rights
held on
30 June 2020
Awarded
Vested and
converted
Lapsed
Shares rights
held on
30 June 2021
–
–
–
–
–
1,218
804
–
756
2,010
(609)
(402)
–
(378)
(1,005)
–
–
–
–
–
609
402
–
378
1,005
Remuneration Report 8 4
Other disclosures
Key terms of Executive KMP employment contracts
The following table outlines the key terms of the Executives’ latest employment contracts as at the date of this report:
Richard White
Maree Isaacs
Andrew Cartledge
Brett Shearer
Fixed remuneration – cash
1,000,000
420,000
Fixed remuneration – remuneration equity
–
–
1,000,000
420,000
15 April 2019
1 July 2017
22 September 2017
1 July 2020
12 months
3 months
6 months
3 months
650,000
110,000
760,000
475,000
200,000
675,000
Total fixed remuneration
Commencement date
Notice period
The employment contracts do not contain contractual termination benefits.
Other statutory disclosures – Executive KMP remuneration
The following table of Executive KMP remuneration has been prepared in accordance with accounting standards and the
Corporations Act 2001 requirements, for the period from 1 July 2020 to 30 June 2021 and the prior period:
Short-term
benefits
Cash
incentive
Post
employment
Share-based
payments
Long-term
benefits
Total
Super-
annuation
Share rights
Other 2
Performance
-related
Richard
White
Maree
Issacs
Andrew
Cartledge
Brett
Shearer
Base salary
and benefits 1
$978,306
$978,997
–
–
$383,306
$100,000
$378,997
$150,000
$611,116
$605,557
$454,746
$355,687
–
–
–
–
FY21
FY20
FY21
FY20
FY21
FY20
FY21
FY20
$21,694
$21,003
$21,694
$21,003
$21,694
$21,003
$21,694
$21,003
–
–
–
–
$744,126
$678,728
$477,487
$385,752
$41,762
$1,041,762
$61,557
$1,061,557
$42,006
$547,006
$33,678
$583,678
$42,690
$1,419,626
$16,720
$1,322,008
$65,608
$1,019,535
$26,159
$788,601
Total
FY21
$2,427,474
$100,000
$86,776
$1,221,613
$192,066
$4,027,929
FY20
$2,319,239
$150,000
$84,010
$1,064,481
$138,114
$3,755,844
1 Base salary and benefits included remuneration increases effective from 1 April 2021.
2 Other long-term benefits relates to annual and long service leave. The comparatives have been amended to a consistent basis with
the current year, being the movement in the balance, rather than disclosing the annual and long service leave balance.
–
–
18%
26%
46%
46%
32%
34%
N/A
N/A
Remuneration Report W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
8 5
Executive KMP share rights and conditions
– Share rights are rights to acquire ordinary shares at no cost to the participant.
– There are no further performance conditions after grant but share rights generally lapse on ceasing employment. No share rights
under the grants below have lapsed.
– Except for IAYE Share Rights that automatically convert to shares on vesting, all other grants become exercisable on vesting and
expire 10 years after grant date.
– Participants in the IAYE program receive 1 free share right for every 5 IAYE shares purchased and held. The face value of the free
share rights in the tables below were calculated based on fair value at grant date.
– The plan rules grant the Board clawback powers. If, in the opinion of the Board, a participant acts fraudulently or dishonestly
or is in breach of his or her obligations to any Group company, the Board may deem any award of share rights held by the
participant to be forfeited. No clawbacks occurred in FY21.
– No dividends or dividend equivalents are paid on share rights.
Details of share rights granted in FY21
Andrew Cartledge
Brett Shearer
Grant
FY21 Remuneration
Equity
FY20 Performance
Equity Incentives
2020 IAYE Share
Rights
FY22 Remuneration
Equity 1
FY21 Remuneration
Equity
FY20 Performance
Equity Incentives
FY22 Remuneration
Equity 1
Share rights
granted
Grant date
Fair value at
grant date
Face value
of grant
Vesting schedule
4,890
1‑Jul‑20
$18.55
$100,001
12,225
17‑Aug‑20
$19.48
$250,001
4 annual tranches
commencing 1‑Jul‑21
4 annual tranches
commencing 17‑Aug‑20
10
1‑Feb‑21
$31.20
$312
2 years after grant
3,536
7‑Jun‑21
$29.43
$112,480
7,335
1‑Jul‑20
$18.55
$150,001
9,780
17‑Aug‑20
$19.48
$200,001
6,679
7‑Jun‑21
$29.43
$212,459
4 annual tranches
commencing 1‑Jul‑22
4 annual tranches
commencing 1‑Jul‑21
4 annual tranches
commencing 17‑Aug‑20
4 annual tranches
commencing 1‑Jul‑22
1 FY22 remuneration equity includes the increase of FY21 remuneration equity effective from 1 April 2021 and FY22 remuneration equity.
Remuneration Report 8 6
Details of share rights affecting current and future remuneration
Andrew Cartledge
Share
rights
granted
Fair
value
at grant
date
Fair
value of
grant
Grant
date
Share
rights
vested
prior
years
Vesting
date in
FY21
Share
rights
vested
in FY21
% of
total
grant
vested
Value of
share
rights
vested
Unvested
rights at
30 June
2021
Future vesting
schedule
28‑Sep‑18
22,479
$22.09 $496,561
(7,493)
1‑Jul‑20 (7,493)
67% 356,292
7,493 Vesting on 1‑Jul 21
25‑Jan‑19
16
$20.30
$325
– 15‑Jan‑21
16
100%
444
– –
30‑Aug‑19
25,319
$36.93 $935,031
(6,329)
1‑Jul‑20 (6,329)
50%
351,133
30‑Aug‑19
3,553
$36.93
$131,212
24‑Jan‑20
8
$24.74
$198
1‑Jul‑20
4,890
$18.55
$90,710
–
–
–
1‑Jul‑20
(888)
25%
16,472
–
–
–
–
–
–
–
–
17‑Aug‑20
12,225
$19.48 $238,143
– 17‑Aug‑20 (3,056)
25%
59,531
1‑Feb‑21
10
$31.20
$312
7‑Jun‑21
3,536
$29.43 $104,064
–
–
–
–
–
–
–
–
–
–
12,661 2 annual tranches
from 1‑Jul‑21
2,665 3 annual tranches
from 1‑Jul‑21
8 Vesting on
24‑Jan‑22
4,890 4 annual tranches
from 1‑Jul‑21
9,169 3 annual tranches
from 1‑Jul‑21
10 Vesting on
1‑Feb‑23
3,536 4 annual tranches
from 1‑Jul‑22
Grant
date
Share
rights
granted
Fair
value
at grant
date
Fair
value of
grant
Share
rights
vested
prior
years
Vesting
date in
FY21
Share
rights
vested
in FY21
% of
total
grant
vested
Value of
share
rights
vested
Unvested
rights at
30 June
2021
Future vesting
schedule
28‑Sep‑18
14,197
$22.09
313,612
(4,732)
1‑Jul‑20
(4,732)
67% 225,007
4,733 Vesting on
01‑May‑19
1,787
$22.64
40,458
(446)
1‑Jul‑20
(446)
50%
21,207
30‑Aug‑19
51
$36.93
1,883
(12)
1‑Jul‑20
(12)
47%
666
30‑Aug‑19
10,660
$36.93
393,674
(2,665)
1‑Jul‑20
(2,665)
50%
147,854
30‑Aug‑19
5,330
$36.93
196,837
01‑Jul‑20
7,335
$18.55
136,064
–
–
1‑Jul‑20
(1,332)
25%
24,709
–
–
–
–
17‑Aug‑20
9,780
$19.48
190,514
– 17‑Aug‑20
(2,445)
25%
47,629
1‑Jul‑21
895 2 annual tranches
from 1‑Jul‑21
27 2 annual tranches
from 1‑Jul‑21
5,330 2 annual tranches
from 1‑Jul‑21
3,998 3 annual tranches
from 1‑Jul‑21
7,335 4 annual tranches
from 1‑Jul‑21
7,335 3 annual tranches
from 1‑Jul‑21
07‑Jun‑21
6,679
$29.43
196,563
–
–
–
–
–
6,679 4 annual tranches
from 1‑Jul‑22
Award
FY18 Performance
Equity Incentives
2018 IAYE Share
Rights
FY19 Performance
Equity Incentives
FY20 Remuneration
Equity
2019 IAYE Share
Rights
FY21 Remuneration
Equity
FY20 Performance
Equity Incentives
2020 IAYE Share
Rights
FY22 Remuneration
Equity
Brett Shearer
Award
FY18 Performance
Equity Incentives
FY19 Special Project
Bonus
FY19 Special Project
Bonus
FY19 Performance
Equity Incentives
FY20 Remuneration
Equity
FY21 Remuneration
Equity
FY20 Performance
Equity Incentives
FY22 Remuneration
Equity
Related party transactions
During FY21, the Group was party to ongoing arrangements with entities associated with Executive Director, Founder and CEO,
Richard White. These transactions were negotiated and agreed on arms‑length terms no more favourable than those it is
reasonable to expect the entity would have adopted if dealing with an unrelated person at arm’s length. Further details of these
arrangements are disclosed in note 20 to the financial statements included in this report.
Remuneration Report W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
8 7
Directors present their report together with the consolidated financial statements of the Group, comprising WiseTech Global
Limited and its controlled entities, for the financial year ended 30 June 2021 and the auditor’s report thereon. Information in the
Financial Report referred to in this report, including the Operating and Financial Review and the Remuneration Report, or contained
in a note to the financial statements referred to in this report, forms part of, and is to be read as part of, this report.
Directors
The names and details of the Company’s Directors in office during the financial year and until the date of this report are set out
below. Directors were in office for this entire period.
– Andrew Charles Harrison (Chair);
– Richard John White (Founder & CEO);
– Teresa Engelhard;
– Charles Llewelyn Gibbon;
– Michael John Gregg;
– Maree McDonald Isaacs; and
– Arlene Mary Tansey.
The qualifications, experience and special responsibilities of the Directors, including details of other listed company directorships
held during the last three years, are detailed on pages 48 and 49 of this report.
Directors’ meetings and their attendance at those meetings for FY21 (including meetings of committees of Directors) are detailed
on page 49 of this report.
Company Secretaries
David Rippon, Corporate Governance Executive & Company Secretary
BSc (Hons) Mathematics
As Company Secretary, David is responsible for company secretarial and corporate governance support for WiseTech Global
Limited and the WiseTech Group. After an initial career in the UK as an actuary, David held senior corporate office roles at AMP
Limited and Henderson Group (now Janus Henderson Group plc) in Australia, before joining WiseTech Global as Corporate
Governance Executive & Company Secretary in 2017.
Maree Isaacs
Details of Maree’s qualifications and experience are disclosed on page 49 of this report.
Review of operations
Information on the principal activities, operations and financial position of the Group and its business strategies and prospects
is set out in the Operating and Financial Review on pages 60 to 65 of this report.
Dividends
Details of dividends paid during FY21 and the prior period are disclosed in note 6 to the financial statements included in this report.
Significant changes in the state of affairs
There have been no significant changes in the state of affairs of the Group during the year.
Directors’ Report 8 8
Events subsequent to balance date
On 28 July 2021, a new unsecured four‑year bi‑lateral debt facility was executed with six banks and the previous facility was retired.
The new facility has a total commitment of $225.0m.
Since the period end, the Directors have declared a fully franked final dividend of 3.85 cents per share, payable on 8 October 2021.
The dividend will be recognised in subsequent period financial statements.
Other than the matters discussed above, there has not arisen in the interval between the end of the financial year and the date
of this report any item, transaction or event of a material and unusual nature, likely, in the opinion of the Directors of the Company,
to affect significantly the operations of the Group, the results of those operations or the state of affairs of the Group in future
financial years.
Likely developments and expected results
For further information about likely developments in the operations of the Group, refer to the Operating and Financial Review
on pages 60 to 65 of this report.
Environmental regulation and performance
The operations of the Group are not subject to any particular or significant environmental regulations under a Commonwealth,
State or Territory law of Australia.
Indemnification and insurance of Directors and other officers
WiseTech’s constitution provides that every person who is, or has been, a Director or Company Secretary of the Company
or a subsidiary of the Company is indemnified by the Company to the maximum extent permitted by law. The indemnity covers
liabilities and legal costs incurred by the person as a director or company secretary.
In accordance with the Company’s constitution, the Company has entered into deeds with each of the Directors providing
indemnity, insurance and access. No Director has received benefits under an indemnity from the Company during or since the end
of the financial year.
During FY21, the Company paid a premium under a contract insuring certain current and former officers of the Group (including the
Directors) against liability that they may incur as an officer of the Company. Disclosure of the nature of the liability and the amount
of the premium is prohibited by the confidentiality clause of the contract of insurance.
Share rights
At the date of this report, WiseTech had 2,411,754 share rights outstanding across 1,228 holders. The share rights relate to grants of
deferred equity to employees under the Equity Incentives Plan and have a range of vesting dates through to July 2025. The share
rights are not subject to further performance conditions, but are subject to employment conditions. On vesting, the holder is
entitled to receive one ordinary share at no cost to the holder. 599,252 share rights were converted to ordinary shares during the
financial year.
To meet the Company’s obligations when share rights vest, the Board prefers to issue new shares (to a maximum of 1% of issued
share capital in any 12‑month period) while reserving the right to buy shares on‑market and off‑market where appropriate. During
FY21, 55,661 shares were purchased on‑market for the purpose of employee incentive schemes, at an average price of $28.59 per
share, primarily on behalf of participants in the Invest As You Earn program.
Proceedings on behalf of the Group
Under section 237 of the Corporations Act 2001, no application has been made in respect of the Group and no proceedings have
been brought or intervened in or on behalf of the Group under that section.
Directors’ Report W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
8 9
Remuneration Report
Information on WiseTech’s remuneration framework and the FY21 outcomes for key management personnel, as well as the proposed
framework for FY22, is included in the Remuneration Report on pages 68 to 86 of this report.
Corporate governance
Our Corporate Governance Statement for FY20 is available from our website: www.wisetechglobal.com/investors/corporate‑governance/
Our FY21 statement is expected to be published in October 2021.
Non-audit services
During the year, KPMG, the Company’s auditor, performed certain other services in addition to the audit and review of the financial
statements. Details of the amounts paid to the auditor of the Group, KPMG, and its network firms for audit and non-audit services
are provided in note 21 to the financial statements included in this report.
The Board has considered the non‑audit services provided during FY21 by the auditor and, in accordance with written advice
provided by resolution of the Audit & Risk Committee, is satisfied that the provision of those non-audit services during FY21 by the
auditor is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act 2001 for the
following reasons:
– all non‑audit services were subject to the corporate governance procedures adopted by the Group and have been reviewed
by the Audit & Risk Committee to ensure they do not impact the integrity and objectivity of the auditor; and
– the non‑audit services provided did not undermine the general principles relating to auditor independence as set out in
APES 110 Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the auditor’s own work,
acting in a management or decision‑making capacity for the Company, acting as an advocate for the Group or jointly sharing
risks and rewards.
Lead auditor’s independence declaration
The lead auditor’s independence declaration is set out on page 90 of this report and forms part of the Directors’ Report for the
financial year ended 30 June 2021.
Signed in accordance with a resolution of the Directors.
Andrew Harrison
Chair
25 August 2021
Richard White
Executive Director, Founder and CEO
25 August 2021
Directors’ Report 9 0
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of WiseTech Global Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of WiseTech Global Limited
for the financial year ended 30 June 2021 there have been:
i.
ii.
no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
Caoimhe Toouli
Partner
Sydney
25 August 2021
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member
firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights
reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the
KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation.
28
Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001
W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
9 1
We recognise and manage a variety of business risks that could affect our operations and financial results. The main risks affecting
WiseTech Global, and the steps we take to manage or mitigate these risks, are described below.
Ability to attract and retain key personnel
Our success depends on attracting and retaining key personnel, in particular our Founder and CEO, Richard White, and members
of the senior management and product development teams. In addition, we need to attract and retain highly skilled software
development engineers.
The loss of key personnel, or delay in their replacement, could adversely impact our ability to operate our business and increase
the potential loss of business process knowledge.
To mitigate this risk, we invested significantly both in our workforce and in processes and systems to ensure knowledge and skills
are maintained within the Group. This enables its continued and stable growth. Our remuneration framework also delivers flexible
components designed to support the recruitment, motivation and retention of our staff.
Execution of integration of acquired businesses
In recent years, we have completed a number of strategic acquisitions, the integration of which can include product development
and transitioning of customers to our CargoWise platform. There is a risk that customers do not transition (or require more financial
and management resources or time than planned) or that the acquisitions fail to generate the expected benefits or adequate
returns on investment.
We have adopted an integration framework characterised by a three‑phased approach to:
– integrate the target: operations and workforce;
– develop the product capability and commercial foundation; and
– grow revenue from new capabilities and conversion of the acquired customer base.
This process is designed to be delivered through a combination of self‑integration toolkits and the utilisation of our internal
architectures and engines. We also engage the talented teams in our 33 product development centres and 50 offices worldwide.
When considering a target for potential acquisition, we also assess the capabilities of the business to support the integration and
product development phases mentioned above.
Regulatory and compliance complexities
Our acquisition and growth strategy has and is still expanding our presence in new international jurisdictions, with exposure
to greater risk of political, legal and economic instability, as well as different compliance and regulatory requirements.
To mitigate these risks, we tailor our acquisition and integration approach to address geographic and political risk in the region
in which each acquisition business is based.
We continually monitor the regulatory requirements in our global network to aim for full compliance. Our Code of Conduct
reinforces our commitment to comply with all laws and regulations relating to our business and operations. We are committed
to maintaining ethical standards in how we conduct our business activities and stakeholder relationships. WiseTech Global’s
reputation as an ethical organisation is important to our ongoing success. We expect our people to meet these standards.
WiseTech Global operates in a competitive industry
We compete against other commercial logistics service software providers and within the marketplace face the risk that:
– competitors could increase their competitive position through product innovation or expansion, aggressive marketing
campaigns, price discounting or acquisitions;
– our software products may fail to meet our customers’ expectations;
– we may fail to anticipate and respond to technology changes as quickly as our competitors;
– logistics service providers may continue to operate in‑house developed systems in preference to commercial logistics software; and
– new competitors could emerge and develop products (including cloud‑based software) which compete with our products.
We believe that our deeply integrated, open-access platform, which provides an efficient platform for global rollouts and a valuable
consolidation tool for large 3PLs, and our commitment to relentlessly invest in product development, are the most effective mitigants
to this risk. We continue to invest significantly in product development and innovation, investing over $560m in the past five years.
In FY21, we reinvested 33% of our revenues in product development and innovation and delivered 1,096 product features and
enhancements to the platform. We also continue to acquire smaller software vendors in key geographic regions and technology
adjacencies, enlarging our global footprint and technology capacity and capability.
Risk management 9 2
Failure to retain existing customers and attract new customers
Our business success depends on our ability to retain and grow usage by our existing customers, as well as our ability to attract
further business from new customers. There is a risk that our customers reduce their use of our software, in terms of the users and
volume of transactions, or that they cease to use our software altogether. There is a risk that if customers reduce their usage of our
software, our revenue could decrease.
We mitigate this risk by:
– providing our customers with open access to our platform to new sites/geographies;
– continuing to innovate and add more modules and functionality, which drive productivity benefits for our customers and
respond to industry and regulatory changes faced by customers; and
– providing a platform which enables rapid onboarding of users without additional contract negotiations.
Our success in managing this risk is characterised by the high level (97%) of recurring revenue for our CargoWise platform in FY21
and our low level (<1%) of annual customer attrition (by CargoWise customers) every year for the past nine years.
Decline in trade volumes and economic conditions
Our customers are logistics service providers whose business operations depend on regional and global logistics activities, which
are closely linked to regional and global trade volumes. A decline in regional and global trade volumes and recessionary economic
conditions including, but not limited to, the effects of the COVID‑19 pandemic, geopolitical events and the impacts of climate
change, may adversely affect our financial performance.
Our software provides an integrated logistics execution solution which increases productivity and drives efficiency in a complex,
highly regulated and competitive industry. We believe that risks associated with a reduction in trade volumes and economic
conditions would be offset by the opportunities which present themselves from changes in trade routes, regulation, trade patterns
and increased competition amongst our customers.
Impact of foreign currency on financial results
As a global business, the majority of our revenue (FY21: 73%) is invoiced in currencies other than Australian dollars. Therefore, our financial
results are influenced by movements in the foreign exchange rates of currencies including the US dollar, pound sterling and euro.
This risk is partially offset by natural hedges where we also incur operational costs in the same foreign currency. Where appropriate,
we seek to denominate new customer contracts in Australian dollars and may also utilise foreign exchange contracts to hedge the
currency risks on a portion of forecast exposures.
Disruption or failure of technology systems
The performance, reliability and availability of our technology platform, data centre and global communication systems (including
servers, the internet, hosting services and the cloud environment in which we provide our products) are critical to our business.
There is a risk that these systems may be adversely affected by disruption, failure, service outages or data corruption.
Prolonged disruption to our IT platform, or operational or business delays, could damage our reputation and potentially lead
to a loss of customers, legal claims by customers, and an inability to attract new customers.
We mitigate this risk by operating: separate data centres in three distinct regions around the world to reduce reliance on any
individual data centre; a global network of support centres providing 24/7 365 support internally; and automated replication
of data as well as disaster recovery planning and testing. Our technology framework provides for segregation of data, backups
stored on independent infrastructures and critical access monitoring.
Security breach and data privacy
Our products involve the storage and transmission of our customers’ confidential and proprietary information and our risks
include security breaches of our customers’ data and information by unauthorised access, theft, destruction, loss of information,
or misappropriation or release of confidential customer data.
To mitigate these risks, we have adopted a layered approach to protecting customer data that includes physical security, system
security, policy, governance, logging and auditing. We have completed an independent Service Organization Control audit of our
key WiseCloud systems. We perform penetration testing on our key business systems (including our acquired businesses) and
remediate any potential issues identified by the testing.
We are in the process of further managing and documenting these controls through the implementation of the ISO 27001
Information Technology standard.
WiseTech Global and its subsidiaries recognise the importance of data privacy and comply with relevant data privacy regulations,
including the EU General Data Protection Regulation, to safeguard the security and privacy of all customer data.
Risk management W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
9 3
Financial Report contents
for the year ended 30 June 2021
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the financial statements
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
Corporate information
Basis of preparation
Revenue
Income tax
Earnings per share
Dividends
Intangible assets
Property, plant and equipment
Cash and cash equivalents
Trade receivables
Other assets
Trade and other payables
Deferred revenue
Other liabilities
Borrowings
Lease liabilities
Share capital and reserves
Business combinations and acquisition of non‑controlling interests
Employee benefits
Key management personnel transactions
Auditor's remuneration
Reconciliation of net cash flows from operating activities
Segment information
Financial instruments
Group information
Deed of Cross Guarantee
Parent entity information
Other policies and disclosures
Directors’ declaration
Independent Auditor’s Report
94
95
96
98
99
99
101
103
106
106
107
110
111
111
113
114
114
115
115
116
118
119
122
123
125
126
127
128
136
139
141
142
144
145
9 4
Revenue
Cost of revenues
Gross profit
Product design and development
Sales and marketing
General and administration 1
Total operating expenses
Operating profit
Finance income
Finance costs
Fair value gain on contingent consideration
Net finance (costs)/income
Profit before income tax
Income tax expense
Net profit for the year
Other comprehensive income
Items that are/or may be reclassified to profit or loss
Cash flow hedges – effective portion of changes in fair value, net of tax
Exchange differences on translation of foreign operations
Other comprehensive loss for the year, net of tax
Notes
3
24
24
4
2021
$M
507.5
(85.6)
421.9
(128.9)
(50.3)
(92.9)
(272.1)
149.8
1.4
(5.5)
2.2
(1.9)
147.9
(39.9)
108.1
(5.7)
(23.0)
(28.8)
2020
$M
429.4
(83.5)
345.9
(115.4)
(62.3)
(87.7)
(265.4)
80.5
3.1
(12.9)
111.0
101.3
181.8
(21.0)
160.8
3.2
(19.2)
(16.0)
Total comprehensive income for the year, net of tax
79.3
144.7
Earnings per share
Basic earnings per share (cents)
Diluted earnings per share (cents)
5
5
33.3
33.2
50.3
50.3
1 For the year ended 30 June 2021 $8.2m of restructuring expenses are included in general and administration expenses (2020: nil).
These Consolidated financial statements should be read in conjunction with accompanying notes.
Consolidated statement of profit or loss and other comprehensive incomefor the year ended 30 June 2021 W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
9 5
Notes
2021
$M
2020
$M
9
10
24
11
7
8
4
24
11
12
15
16
13
19
24
14
16
19
4
24
14
17
315.0
74.1
2.9
–
22.6
414.6
223.7
59.6
3.7
3.6
18.7
309.3
904.5
885.0
64.1
11.0
0.4
5.1
985.2
1,399.8
59.3
–
9.8
25.8
20.7
7.5
2.1
62.8
188.0
25.2
2.1
58.3
4.3
16.0
105.9
293.9
70.0
10.4
0.9
1.3
967.6
1,276.9
47.9
–
10.4
22.7
18.2
5.8
–
52.2
157.2
35.4
1.8
47.1
–
32.0
116.4
273.5
1,106.0
1,003.4
827.8
(67.7)
345.8
1,106.0
779.8
(37.5)
261.2
1,003.4
Assets
Current assets
Cash and cash equivalents
Trade receivables
Derivative financial instruments
Current tax receivables
Other current assets
Total current assets
Non-current assets
Intangible assets
Property, plant and equipment
Deferred tax assets
Derivative financial instruments
Other non‑current assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Borrowings
Lease liabilities
Deferred revenue
Employee benefits
Current tax liabilities
Derivative financial instruments
Other current liabilities
Total current liabilities
Non-current liabilities
Lease liabilities
Employee benefits
Deferred tax liabilities
Derivative financial instruments
Other non‑current liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Reserves
Retained earnings
Total equity
These Consolidated financial statements should be read in conjunction with accompanying notes.
Consolidated statement of financial positionas at 30 June 2021 9 6
Share
capital
$M
Treasury
share
reserve
$M
Acquisition
reserve
$M
Cash flow
hedge
reserve
$M
Notes
Share-
based
payment
reserve
$M
Foreign
currency
translation
reserve
$M
Balance as at 1 July 2019
668.5
(25.9)
(19.0)
17
17
6
17
17
19
Initial application
of AASB 16 Leases
As at 1 July 2019
Net profit for the year
Other comprehensive
(loss)/income
Total comprehensive
(loss)/income
Transactions with owners
Issue of share capital
Shares issued under
acquisition
Dividends declared
and paid
Shares issued under DRP
Transaction costs
(net of tax)
Vesting of share rights
Equity settled
share‑based payment
Tax benefit from
equity remuneration
– current year
Tax benefit from equity
remuneration
Revaluation by subsidiary
due to hyperinflationary
economy
Total contributions
and distributions
Changes in ownership
interest
Acquisition of
non‑controlling interest
without a change in control
Balance as at
30 June 2020
–
–
–
668.5
(25.9)
(19.0)
–
–
–
–
–
–
24.8
(24.8)
86.0
–
0.5
(0.1)
–
–
–
–
–
–
–
–
–
26.3
–
–
(7.6)
–
–
–
–
–
3.1
–
–
(0.3)
–
–
–
–
–
111.3
(6.1)
2.7
–
–
(0.8)
779.8
(32.1)
(17.0)
–
–
–
–
3.2
3.2
–
–
–
–
–
–
–
–
–
–
–
–
3.2
Retained
earnings
$M
Total
equity
$M
123.8
766.6
0.1
123.9
160.8
0.1
766.6
160.8
1.6
–
1.6
–
(19.2)
–
(16.0)
(19.2)
160.8
144.7
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(11.6)
–
–
(17.5)
–
89.1
(11.6)
0.5
(0.4)
–
–
17.2
5.5
–
5.5
(7.6)
0.2
0.2
(23.5)
92.8
–
(0.8)
17.6
–
17.6
–
–
–
–
–
–
–
–
(8.8)
17.2
–
–
–
8.4
–
These Consolidated financial statements should be read in conjunction with the accompanying notes.
26.0
(17.6)
261.2
1,003.4
Consolidated statement of changes in equityfor the year ended 30 June 2021 W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
9 7
Share
capital
$M
Treasury
share
reserve
$M
Acquisition
reserve
$M
Cash flow
hedge
reserve
$M
Notes
Share-
based
payment
reserve
$M
Foreign
currency
translation
reserve
$M
Retained
earnings
$M
Total
equity
$M
Balance as at 1 July 2020
779.8
(32.1)
(17.0)
Net profit/(loss) for the year
Other comprehensive
(loss)/income
Total comprehensive
income/(loss)
Transactions with owners
Issue of share capital
Shares issued under
acquisition
Dividends declared
and paid
Shares issued under DRP
Transaction costs
(net of tax)
Vesting of share rights
Equity settled
share‑based payment
Equity settled
remuneration to
Non‑Executive Directors
Tax benefit from equity
remuneration
Revaluation by subsidiary
due to hyperinflationary
economy
Total contributions
and distributions
Changes in ownership
interest
Acquisition of
non‑controlling interest
without a change in control
Balance as at
30 June 2021
17
17
6
17
17
19
–
–
–
–
–
–
35.8
(35.8)
11.4
–
0.7
(0.1)
–
–
0.1
–
–
–
–
–
–
12.9
–
–
–
–
–
–
–
–
0.1
–
–
–
–
–
–
–
–
48.0
(23.0)
0.1
18
–
–
(0.3)
3.2
–
(5.7)
(5.7)
–
–
–
–
–
–
–
–
–
–
–
–
26.0
–
–
–
–
–
–
–
–
(13.4)
22.1
(0.1)
13.2
–
21.9
–
(17.6)
–
261.2
108.1
1,003.4
108.1
(23.0)
–
(28.8)
(23.0)
108.1
79.3
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
11.5
(14.0)
(14.0)
–
–
0.5
–
–
(10.2)
0.7
(0.1)
–
22.1
–
3.1
0.2
0.2
(23.4)
23.6
–
(0.3)
These Consolidated financial statements should be read in conjunction with the accompanying notes.
827.8
(55.0)
(17.3)
(2.5)
47.9
(40.6)
345.8
1,106.0
Consolidated statement of changes in equityfor the year ended 30 June 2021 9 8
Operating activities
Receipts from customers
Payments to suppliers and employees 1
Income tax paid
Net cash flows from operating activities
Investing activities
Acquisition of businesses, net of cash acquired
Payments for intangible assets
Purchase of property, plant and equipment (net of disposal proceeds)
Interest received
Net cash flows used in investing activities
Financing activities
Proceeds from issue of shares
Transaction costs on issue of shares
Treasury shares acquired
Repayment of borrowings
Repayment of lease liabilities
Interest paid
Dividends paid
Net cash flows used in financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at 1 July
Effect of exchange differences on cash balances
Net cash and cash equivalents at 30 June
Notes
2021
$M
2020
$M
535.6
(305.6)
(18.4)
211.6
(5.8)
(74.5)
(16.3)
1.3
456.4
(310.0)
(16.5)
129.9
(57.0)
(70.4)
(20.1)
3.1
(95.2)
(144.4)
35.8
(0.1)
(35.8)
–
(8.7)
(2.4)
(13.2)
(24.4)
91.9
223.7
(0.6)
315.0
24.8
(0.4)
(24.8)
(0.8)
(5.9)
(2.4)
(11.1)
(20.6)
(35.2)
260.1
(1.3)
223.7
22
18
6
9
9
1 For the year ended 30 June 2021, $8.6m of payments related to restructuring programs are included in payments to suppliers and
employees (2020: nil).
These Consolidated financial statements should be read in conjunction with accompanying notes.
Consolidated statement of cash flowsfor the year ended 30 June 2021 W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
9 9
1. Corporate information
WiseTech Global Limited (“Company”) is a company domiciled in Australia. These Consolidated financial statements comprise
the Company and its controlled entities (collectively “Group”) for the year ended 30 June 2021. The Company’s registered office
is at Unit 3a, 72 O’Riordan Street, Alexandria, NSW 2015, Australia.
The Group is a for-profit entity and its principal business is providing software to the logistics services industry globally.
2. Basis of preparation
Statement of compliance
These Consolidated financial statements are general purpose financial statements, which have been prepared in accordance
with the requirements of the Corporations Act 2001, Australian Accounting Standards (“AASBs”) and other authoritative
pronouncements of the Australian Accounting Standards Board. The Consolidated financial statements also comply with
International Financial Reporting Standards (“IFRS”) and interpretations (“IFRICs”) adopted by the International Accounting
Standards Board.
Material accounting policies adopted in the preparation of these financial statements are presented alongside the relevant notes and
have been consistently applied unless stated otherwise. Other significant accounting policies which are relevant to understanding
the basis of preparation of these Consolidated financial statements are included in note 28.
The Consolidated financial statements have been prepared on an accruals basis and are based on historical costs except for:
– Derivative financial instruments which are measured at fair value in accordance with AASB 9 Financial Instruments; and
– Contingent consideration which is measured at fair value in accordance with AASB 13 Fair Value Measurement.
The Consolidated financial statements have been prepared on a going concern basis, which contemplates continuity of normal
business activities and the realisation of assets and the settlement of liabilities in the ordinary course of business.
The Consolidated financial statements were authorised by the Board of Directors on 25 August 2021.
Accounting policies
The accounting policies applied in these Consolidated financial statements are the same as those applied in the Group’s
Consolidated financial statements as at, and for the year ended 30 June 2020.
Going concern
The accompanying Consolidated financial statements have been prepared assuming the Company will continue as a going concern.
The ability of the Company to continue as a going concern has not been impacted by the outbreak of the COVID‑19 pandemic.
The ultimate parent entity’s financial position is strong with robust cash generation, and significant liquidity to support its strategic
and operational initiatives. As such, the accompanying financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts and classification of liabilities pertaining to COVID-19.
The Company supplies software as a service (“SaaS”) to the logistics industry, which is a critical service to that market sector.
The logistics sector continues to be a critical element of the global economy. The Company’s customer base is significant and
comprises large, medium and small operators. The Company is not subject to concentration of credit risk. The Company has
no borrowings as at 30 June 2021 and has sufficient cash to meet all committed liabilities and future expected liabilities.
Notes to the financial statementsfor the year ended 30 June 2021 1 0 0
2. Basis of preparation (continued)
Key accounting estimates and judgements
In preparing these Consolidated financial statements, management has made judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets and liabilities, income and expenses including accompanying
disclosures. Changes in these judgements, estimates and assumptions could result in outcomes that require a material adjustment
in future periods. Information on key accounting estimates and judgements can be found in the following notes:
Accounting judgements, estimates and assumptions
Note
Page
Income tax determination in relation to assets and liabilities
Recognition and recoverability of other intangible assets
Recoverability of goodwill
Trade receivables expected credit losses
Lease terms
Valuation of contingent consideration
4
7
7
10
16
24
105
108
108
112
117
131
Revenue recognition is excluded on the grounds that the policy adopted in the area is sufficiently objective.
Functional and presentational currency
These Consolidated financial statements are presented in Australian dollars.
Rounding of amounts
Unless otherwise expressly stated, amounts have been rounded off to the nearest whole number of millions of dollars and one
place of decimals representing hundreds of thousands of dollars in accordance with ASIC Corporations Instrument 2016/191,
dated 24 March 2016. Amounts shown as “–” represent zero amounts and amounts less than $50,000 which have been rounded
down. There may be differences in casting the values in the Consolidated financial statements due to rounding in millions to one
place of decimals.
Presentation of results
The Group has presented the expense categories within the Consolidated statement of profit or loss on a functional basis.
The categories used are cost of revenues, product design and development, sales and marketing and general and administration.
This presentation style provides insight into the Company’s business model and enables users to consider the results of the Group
compared to other major SaaS companies. The methodology and the nature of costs within each category are further described
below and on the next page.
Cost of revenues
Cost of revenues consists of expenses directly associated with securely hosting the Group’s services and providing support
to customers. Costs include data centre costs, personnel and related costs (including salaries, benefits, bonuses and share-based
payments) directly associated with cloud infrastructure and customer consulting, implementation and customer support, contracted
third party costs, related depreciation and amortisation and allocated overheads.
Product design and development expenses
Product design and development expenses consist primarily of personnel and related costs (including salaries, benefits, bonuses
and share‑based payments) directly associated with the Company’s product design and development employees, as well as
allocated overheads. When future economic benefits from development of an intangible asset are determined probable and the
development activities are capable of being reliably measured, the costs are capitalised as an intangible asset and then amortised
to profit or loss over the estimated life of the asset created. The development activities comprise the design, coding and testing
of a chosen alternative for new or improved software products, processes, systems and services. The amortisation of those costs
capitalised is included as a product design and development expense.
Sales and marketing expenses
Sales and marketing expenses consist of personnel and related costs (including salaries, benefits, bonuses, commissions and
share‑based payments) directly associated with the sales and marketing team’s activities to acquire new customers and grow
revenue from existing customers. Other costs included are external advertising, digital platforms, marketing and promotional
events, as well as allocated overheads.
Notes to the financial statementsfor the year ended 30 June 2021 W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
1 0 1
2. Basis of preparation (continued)
General and administration expenses
General and administration expenses consist of personnel and related costs (including salaries, benefits, bonuses and share-based
payments) for the Company’s executive, Board of Directors, finance, legal, people and culture, mergers and acquisitions and
administration employees. They also include legal, accounting and other professional services fees, insurance premiums,
acquisition and integration costs, restructuring expenses, other corporate expenses and allocated overheads.
Overhead allocation
The presentation of the Consolidated statement of profit or loss and other comprehensive income by function requires certain
overhead costs to be allocated to functions. These allocations require management to apply judgement. The costs associated with
Group’s facilities, internal information technology and non‑product related depreciation and amortisation are allocated to each
function based on respective headcount.
3. Revenue
Disaggregation of revenue from contracts with customers
The Company has concluded that disclosing a disaggregation of revenue types amongst ‘Recurring On‑Demand revenue’,
‘Recurring OTL maintenance revenue’ and ‘OTL and support services’ best reflects how the nature, amount, timing and uncertainty
of the Group’s revenues and cash flows are affected by economic factors, and that further disaggregation is not required to achieve
this objective. Revenue by geographic location is disclosed in note 23.
Revenue
Recurring On‑Demand revenue
Recurring One‑Time Licence (“OTL”) maintenance revenue
OTL and support services
Total revenue
2021
$M
383.0
75.1
49.4
507.5
2020
$M
309.2
72.8
47.4
429.4
The Group applies the following five steps in recognising revenue from contracts with customers:
Identify the contract with the customer;
1.
2. Identify the performance obligations in the contract;
3. Determine the transaction price;
4. Allocate the transaction price to performance obligations based on their relative standalone selling price; and
5. Recognise revenue when, or as, performance obligations are satisfied.
Revenue is recognised upon transfer of control of promised products and services to customers in the amount that reflects the
consideration expected to be received in exchange.
The Group’s revenue primarily consists of licence fees from customers to access or use computing software.
Revenue recognition approach
Recurring On‑Demand Licence revenue
The majority of revenue is derived from recurring On‑Demand Licences, where customers are provided the right to access the
Group’s software as a service, without taking possession of the software. These arrangements include the ongoing provision
of standard customer support and software maintenance services.
Revenue is recognised over the contract period and is based on the utilisation of the software (numbers of users and transactions).
Customers are typically billed on a monthly basis in arrears and revenue is recognised for the amount billed.
Recurring One‑Time Licence (“OTL”) maintenance revenue
Additional recurring revenue is derived from the recurring maintenance fees charged to customers on OTL arrangements and
is recognised over time during the maintenance period.
Notes to the financial statementsfor the year ended 30 June 2021 1 0 2
3. Revenue (continued)
OTL and support services
OTL fee revenue is derived when the Group sells, in a one‑off transaction, the perpetual right to use the software. This licence
revenue is recognised at the point in time when access is granted to the customer and the one‑off billing is raised.
Support services revenue mainly consists of fees charged for business consultancy and paid feature services delivered upon
specific customer requests. These contracts are typically short-term (less than 12 months) and are charged on a fixed-fee basis.
Consulting revenue is recognised on a proportional performance basis and ratably over the contract term. Paid features service
revenue is recognised at the time when the requested feature is completed and can be accessed by customers.
Contracts with multiple performance obligations
The Company enters into contracts with its customers that can include promises to transfer multiple performance obligations.
A performance obligation is a promise in a contract with a customer to transfer products or services that are distinct.
Revenue (including any discounts) is allocated between separate goods and services on a relative basis of standalone selling prices.
The standalone selling prices reflects the price that would be charged for a specific product or service if it was sold separately and
is calculated using standard list prices.
For On‑Demand licensing contracts, there are a series of distinct goods and services, including access to software maintenance
and support provided to customers, that are treated as a single performance obligation because they are delivered in the same
pattern over a period of time.
Material rights in the form of contract renewal options or incremental discounts
Contracts may involve customers having the option to obtain discounts upon renewal of existing arrangements. AASB 15 Revenue
from contracts with customers considers a material right to be a separate performance obligation in a customer contract, which
gives the customer an option to acquire additional goods or services at a discount or free of charge. The inclusion of these clauses
may give rise to a change in the timing of revenue recognition.
The Group assessed renewal options on current contracts. Based on this assessment, there were no renewal options which gave
rise to material rights, that would need to be accounted for as separate performance obligations.
Costs of obtaining a customer contract
AASB 15 requires that incremental costs associated with acquiring a customer contract, such as sales commissions, be recognised
as an asset and amortised over a period that corresponds with the period of benefit.
An assessment of commissions paid by the Group was performed in connection with the sale of software products. This assessment
concluded that as these commissions were conditional on future performance or service by the recipient of the commission, and
therefore were not incremental to obtaining the contract. Consequently, under current arrangements, costs of obtaining a contract
are expensed in the period incurred.
Principal versus agent
Where the Group has arrangements involving multiple parties to provide goods and services to customers, judgement is required
to determine if the Group acts as a principal or an agent.
The Group is an agent if its role is to arrange a third party to provide the goods or service; or it is to deliver a third party’s goods
or service on its behalf. The Group is a principal if it has the primary responsibility for fulfilling the promised goods or service
delivery; and has the discretion to establish the price for the specified goods or service.
Where the Group is acting as a principal, revenue is recognised on a gross basis in accordance with the transaction price defined
in contracts with customers. Where the Group is acting as an agent, revenue is recognised at a net amount reflecting the commission
or margin earned.
Contract balances
The timing of revenue recognition, customer billings and cash collections results in trade receivables, unbilled receivables (contract
assets) and deferred revenue (contract liabilities) recognised on the Group’s Consolidated statement of financial position.
Generally, the Group invoices customers as service is provided in accordance with the agreed‑upon contract terms, either at periodic
intervals (e.g. monthly or quarterly) or upon completion. At times, billing occurs after the revenue recognition, resulting in contract
assets (unbilled receivables). For certain customer contracts, the Group receives advance payments before revenue is recognised,
resulting in contract liabilities (deferred revenue). These balances, as well as their movements from the prior reporting period, are
disclosed in notes 11 and 13 respectively.
Notes to the financial statementsfor the year ended 30 June 2021 W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
1 0 3
4.
Income tax
(a)
Income tax expense
Income tax expense/(benefit) comprises current and deferred tax expense/(benefit) and is recognised in profit or loss, except
to the extent that it relates to a business combination or items recognised directly in equity or other comprehensive income.
Income tax expense comprises:
Current tax
Deferred tax
Adjustment for prior years – current tax
Adjustment for prior years – deferred tax
Income tax expense
The prima facie tax on profit before income tax is reconciled to the income tax expense as follows:
Accounting profit before income tax
At Australia’s statutory income tax rate of 30% (2020:30%)
Adjusted for:
Other assessable income
Non‑deductible expenses
Non‑deductible acquisition expense
(Over)/under provision for income tax in prior year
Adjusted for:
Tax effect of:
Earnout adjustments
Different tax rates in overseas jurisdictions
Research and development
Non‑taxable income
Income tax expense
Significant accounting policies
2021
$M
27.7
13.1
(3.5)
2.5
39.9
2021
$M
147.9
44.4
1.1
1.4
0.1
(0.9)
46.0
(0.7)
(1.2)
(3.8)
(0.5)
39.9
2020
$M
10.6
10.0
4.4
(4.0)
21.0
2020
$M
181.8
54.5
0.7
1.3
0.4
0.1
57.0
(33.3)
0.5
(2.5)
(0.6)
21.0
Current tax
Current tax comprises the expected payable or receivable on the taxable income or loss for the year and any adjustment to tax
payable or receivable in respect of previous years.
The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that
reflects uncertainty related to income taxes.
It is measured using tax rates for each jurisdiction enacted or substantively enacted at the reporting date.
Current tax assets and liabilities are offset only if certain criteria are met.
Notes to the financial statementsfor the year ended 30 June 2021 1 0 4
4.
Income tax (continued)
Deferred tax
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for:
– Temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and
that affects neither accounting nor taxable profit or loss;
– Temporary differences related to investments in subsidiaries, associates and joint arrangements, to the extent that the Group
is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the
foreseeable future; and
– Taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent
that it is probable that future taxable profits will be available against which they can be used.
Future taxable profits are determined based on the reversal of relevant taxable temporary differences. If the amount of taxable
temporary differences is insufficient to recognise a deferred tax asset in full, then future taxable profits, adjusted for reversal
of existing temporary differences are considered, based on the business plans for the individual subsidiaries in the Group.
Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the
related tax benefit will be realised. Such reductions are revised when the profitability of future taxable profit improves.
Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that it has become probable
that future taxable profits will be available against which they can be used.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax
rates enacted or substantively enacted at the reporting date, and reflects uncertainty related to income taxes, if any.
The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Group expects,
at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset only if certain criteria are met.
(b) Movement in deferred tax balances
2020
Software development costs
Customer relationships and brands
Intellectual property
Goodwill
Property, plant and equipment
Future income tax benefits attributable
to tax losses and offsets
Provisions
Revenue timing
Cash flow hedge
Transaction costs
Employee equity compensation
Unrealised foreign exchange
Other
Net tax liabilities
Opening
balance
$M
Charged
to profit
or loss
$M
Charged
to goodwill
$M
Exchange
differences
$M
Charged
to equity
$M
35.3
5.2
2.8
–
(0.9)
(4.0)
(5.5)
0.1
–
(3.0)
(2.5)
(0.3)
–
27.2
14.4
(0.8)
(3.3)
1.1
(0.4)
(5.8)
(3.5)
(1.0)
–
0.8
4.8
(0.4)
0.1
6.0
–
0.3
0.5
–
–
–
0.8
–
–
0.7
–
–
–
2.3
–
(0.1)
0.1
(0.1)
–
0.1
0.1
–
–
–
–
–
–
0.1
–
–
–
–
–
–
–
–
1.4
–
–
–
(0.1)
1.3
Total
$M
49.7
4.6
(0.1)
1.0
(1.3)
(9.7)
(8.0)
(0.8)
1.4
(1.5)
2.3
(0.8)
–
36.7
Notes to the financial statementsfor the year ended 30 June 2021 W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
1 0 5
4.
Income tax (continued)
2021
Software development costs
Customer relationships and brands
Intellectual property
Goodwill
Property, plant and equipment
Future income tax benefits attributable
to tax losses and offsets
Provisions
Revenue timing
Cash flow hedge
Transaction costs
Employee equity compensation
Unrealised foreign exchange
Other
Net tax liabilities
Opening
balance
$M
Charged
to profit
or loss
$M
Charged
to goodwill
$M
Exchange
differences
$M
Charged
to equity
$M
49.7
4.6
(0.1)
1.0
(1.3)
(9.7)
(8.0)
(0.8)
1.4
(1.5)
2.3
(0.8)
–
36.7
12.4
(1.9)
0.7
0.9
1.6
(0.2)
(3.5)
(0.1)
0.3
0.5
4.3
0.5
0.2
15.7
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(0.1)
(0.1)
(0.1)
(0.2)
(0.1)
0.8
–
–
–
–
–
–
0.1
0.4
–
–
–
–
–
(3.3)
–
–
(2.5)
–
0.2
–
–
(5.6)
Total
$M
62.0
2.6
0.5
1.8
0.2
(12.3)
(11.6)
(0.9)
(0.8)
(1.0)
6.8
(0.2)
0.3
47.3
Key accounting estimates and judgements – Income tax
The Group is subject to tax in numerous jurisdictions. Significant judgement is required in determining the related assets or provisions
as there are transactions in the ordinary course of business and calculations for which the ultimate tax determination is uncertain.
The Group is currently reviewing the application of legislation that could result in a tax deduction for payments relating to historical
acquisitions. Due to uncertainties in the application of the legislation, management has not treated these payments as tax deductible
at 30 June 2021.
The Group recognises liabilities based on estimates of whether additional tax will be due. Where the final tax outcome of these
matters is different from the amount that was initially recognised, such differences will impact on the results for the year and the
respective income tax and deferred tax assets or provisions in the year in which such determination is made. The Group recognises
tax assets based on forecasts of future profits against which those assets may be utilised; tax losses in subsidiaries of $5.6m
(FY20: $8.7m) have not been recognised.
Notes to the financial statementsfor the year ended 30 June 2021 1 0 6
5. Earnings per share
The following reflects the income and share data used in the basic and diluted earnings per share (“EPS”) computations:
Net profit for the year ($M)
Basic weighted average number of ordinary shares (in millions)
Basic EPS (cents)
Net profit for the year ($M)
Basic weighted average number of ordinary shares (in millions)
Shares issuable in relation to equity‑based compensation schemes (in millions)
Diluted weighted average number of ordinary shares (in millions)
Diluted EPS (cents)
2021
108.1
324.9
33.3
108.1
324.9
0.1
325.0
33.2
2020
160.8
319.7
50.3
160.8
319.7
0.1
319.8
50.3
Significant accounting policies
Basic EPS is calculated by dividing profit for the year attributable to equity holders of the Company by the weighted average
number of ordinary shares outstanding during the year.
Diluted EPS is calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average
number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued
on conversion of all the dilutive potential ordinary shares into ordinary shares.
6. Dividends
Dividend distributions payable to equity shareholders are included in other liabilities when the dividends have been approved prior
to the reporting date.
The following dividends were declared and paid by the Company during the year:
Dividends on ordinary shares declared and paid:
Final dividend in respect of previous reporting period
(FY20: 1.60 cents per share, FY19: 1.95 cents per share)
– Paid in cash
– Paid via DRP
Interim dividend for the current reporting period
(FY21: 2.70 cents per share, FY20: 1.70 cents per share)
– Paid in cash
– Paid via DRP
Franking credit balance
2021
$M
2020
$M
5.0
0.2
8.2
0.6
14.0
5.9
0.3
5.2
0.2
11.6
Franking amount balance as at the end of the financial year
36.3
28.1
Final dividend on ordinary shares
Final dividend for FY21: 3.85 cents per share (FY20: 1.60 cents per share)
12.5
5.2
After the reporting date, a dividend of 3.85 cents per share was declared by the Board of Directors. The dividend has not been
recognised as a liability and will be franked at 100%.
Notes to the financial statementsfor the year ended 30 June 2021 W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
1 0 7
7.
Intangible assets
Computer
software
$M
Development
costs (WIP)
$M
External
software
licences
$M
Goodwill
$M
Intellectual
property
$M
Customer
relationships
$M
Trade
names
$M
Patents
and
other in-
tangibles
$M
Total
$M
At 30 June 2019
Cost
116.2
48.7
4.7
601.6
38.6
24.3
13.8
0.3
848.2
Accumulated
amortisation and
impairment
Net book value
At 1 July 2019
Additions
Transfers/
reclassifications
Acquisition via
business combination
Amortisation
Exchange differences
Net book value
at 30 June 2020
At 30 June 2020
(35.2)
81.0
81.0
–
–
48.7
48.7
71.5 1
101.2
(101.2)
–
(17.4)
(0.3)
–
–
0.1
(2.9)
1.9
1.9
2.8
–
–
(1.0)
–
(0.1)
601.5
(17.9)
20.8
601.5
20.8
–
–
60.0
–
(8.5)
–
–
3.4
(6.5)
(0.3)
(6.9)
17.4
17.4
–
–
0.2
(2.5)
(0.2)
(1.6)
12.1
12.1
–
–
1.6
(1.6)
0.1
–
0.3
0.3
0.1
–
–
–
–
(64.5)
783.7
783.7
74.4
–
65.1
(29.0)
(9.1)
164.5
19.1
3.6
652.9
17.4
14.9
12.2
0.4
885.0
Cost
217.1
19.1
6.6
653.0
41.6
24.1
15.2
0.4
977.0
Accumulated
amortisation and
impairment
Net book value
At 1 July 2020
Additions
Transfers/
reclassifications
Acquisition via
business combination
Amortisation
Exchange differences
Net book value
at 30 June 2021
At 30 June 2021
(52.6)
164.5
164.5
–
–
19.1
19.1
77.6 1
(3.0)
3.6
3.6
1.9
79.9
(79.9)
(0.7)
–
(26.5)
(0.8)
–
–
–
–
(1.2)
–
(0.1)
652.9
(24.2)
17.4
(9.1)
14.9
(3.0)
12.2
652.9
17.4
14.9
12.2
–
0.7
1.8
–
(23.4)
–
–
0.1
(5.6)
(0.4)
–
–
–
(2.3)
(0.6)
–
–
0.1
(1.5)
(0.4)
(0.1)
0.3
0.4
0.8
–
–
(0.1)
–
(92.0)
885.0
885.0
80.3
–
2.0
(37.2)
(25.6)
217.1
16.8
3.6
632.0
11.5
12.0
10.4
1.1
904.5
Cost
296.1
16.8
7.8
632.1
41.0
23.3
14.8
1.2
1,033.1
Accumulated
amortisation and
impairment
Net book value
(79.0)
217.1
–
16.8
(4.2)
3.6
(0.1)
632.0
(29.5)
11.5
(11.3)
12.0
(4.4)
10.4
(0.1)
(128.6)
1.1
904.5
1 For FY21, Development costs (WIP) includes $2.4m (FY20: $2.6m) of depreciation charges on right‑of‑use (ROU) assets and $0.3m
(FY20: $0.4m) of interest costs.
Notes to the financial statementsfor the year ended 30 June 2021 1 0 8
7.
Intangible assets (continued)
Intangible assets
Useful life
Amortisation method Recognition and measurement
Computer
software
5 to 10 years
Straight‑line
Development
costs (WIP)
Not applicable
Not amortised
External
software
licences
Goodwill
Intellectual
property
Customer
relationships
1 to 10 years
Straight‑line
Indefinite
Not amortised
Up to 10 years
Straight‑line
10 years
Straight‑line
Computer software comprises the historic cost of development
activities for products transferred from development costs (WIP)
when project/products are considered ready for intended use
and the historic cost of acquired software. Computer software
is carried at historic cost less accumulated amortisation and
impairment losses.
Development costs are costs incurred on internal software
development projects. Development costs are only capitalised
when they relate to the creation of an asset that can be used
or sold to generate benefits and can be reliably measured.
External software licences are carried at historic cost or fair value
at the date of acquisition less accumulated amortisation and
impairment losses.
Goodwill acquired in a business combination is measured at cost
and subsequently at cost less any impairment losses. The cost
represents the excess of the cost of a business combination over
the fair value of the identifiable assets and liabilities acquired.
Intellectual property assets are carried at their fair value
at the date of acquisition less accumulated amortisation and
impairment losses.
Customer relationships are carried at their fair value at
the date of acquisition less accumulated amortisation and
impairment losses.
Trade names
Up to 15 years
Straight‑line
Trade names are carried at their fair value at the date of acquisition
less accumulated amortisation and impairment losses.
Patents and
other intangibles
10 years
Straight‑line
Patents and other intangibles are carried at historic cost less
accumulated amortisation and impairment losses.
Subsequent expenditure
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which
it relates. All other expenditure, including expenditure on internally generated goodwill, is recognised in profit or loss as incurred.
Key accounting estimates and judgements – Measurement of other finite life
intangible assets
Management has made judgements in respect of intangible assets when assessing whether an internal project in the development
phase meets the criteria to be capitalised, and on measuring the costs and economic life attributed to such projects. On acquisition,
specific intangible assets are identified and amortised over their estimated useful lives. The capitalisation of these assets and the
related amortisation charges are based on judgements about their value and economic life.
Management also makes judgements and assumptions when assessing the economic life of intangible assets and the pattern
of consumption of the economic benefits embodied in the assets. Amortisation methods, useful lives and residual values are
reviewed at each reporting date and adjusted if appropriate. The economic lives for internal projects, which includes internal
use software and internally generated software, and acquired intangibles are between five and 10 years.
Recoverability of other finite life intangible assets
Other intangible assets with finite life are reviewed at each reporting period to determine whether there is any indication
of impairment. If any such indication exists, the recoverable amount of the asset is estimated to determine the extent of the
impairment loss (if any). The recoverable amount is the higher of fair value less costs of disposal and value in use.
If an impairment occurs, a loss is recognised in profit or loss for the amount by which an asset’s carrying amount exceeds its
recoverable amount. When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates
the recoverable amount of the cash generating unit (“CGU”) to which the asset belongs.
Notes to the financial statementsfor the year ended 30 June 2021 W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
1 0 9
7.
Intangible assets (continued)
Impairment testing of goodwill
The carrying amount of goodwill is tested for impairment annually at 30 June and whenever there is an indicator that the asset
may be impaired. If an asset is deemed to be impaired, it is written down to its recoverable amount.
For the purposes of impairment testing, goodwill is allocated to each of the CGUs, or group of CGUs, expected to benefit from the
synergies of the business combination. A CGU is the smallest identifiable group of assets that generate cash inflows that are largely
independent of the cash inflows from other assets or group of assets.
At 30 June 2021, the lowest level within the Group for which information about goodwill is monitored for internal management
purposes is the consolidated Group, which comprises a group of CGUs. All acquisitions are made with the intention of delivering
benefits of revenue growth and synergy to the Group. All CGUs are expected to benefit from synergies and sharing of expertise
from these acquisitions.
Key accounting estimates and judgements – Impairment testing of goodwill
Determining whether goodwill is impaired requires judgement to allocate goodwill to CGUs and judgement and assumptions to
estimate the fair value of a CGU or group of CGUs. The Group has determined that goodwill is tested at a single group of CGU level.
The valuation model (being a value in use model) which is used to estimate the recoverable amount of the group of CGUs, requires
an estimate of the future cash flows expected to arise from the group of CGUs and a suitable discount rate in order to calculate net
present value.
Key assumptions in the Group’s discounted cash flow model as at 30 June 2021
A value-in-use discounted cash flow model has been used at 30 June 2021 to value the Group’s CGUs incorporating financial plans
approved by the Board for year ending 30 June 2022 and management projections for years ending 30 June 2023 to 30 June 2026.
These include projected revenues, gross margins and expenses and have been determined with reference to historical company
experience, industry data and management’s expectation for the future. Management has considered the impacts of COVID‑19
on forecasted cash flows and long-term projects.
The following inputs and assumptions have been adopted:
Post‑tax discount rate per annum
Pre‑tax discount rate per annum
Terminal value growth rate
Sensitivity analysis
2021
9.3%
11.9%
2.5%
2020
9.4%
12.0%
2.5%
Management has performed sensitivity analysis and assessed reasonable changes for key assumptions and has not identified
any instances that could cause the carrying amount of the group of CGUs, over which goodwill is monitored, to exceed its
recoverable amount.
Notes to the financial statementsfor the year ended 30 June 2021 1 1 0
8. Property, plant and equipment
At 30 June 2019
Cost
Accumulated depreciation
Net book value
At 1 July 2019
Recognition of right‑of‑use assets on initial application of AASB 16
Additions
Acquisition via business combination
Remeasurement of ROU assets
Transfers
Depreciation
Exchange differences
Disposals
Net book value at 30 June 2020
At 30 June 2020
Cost
Accumulated depreciation
Net book value
At 1 July 2020
Additions
Acquisition via business combination
Remeasurement of ROU assets
Depreciation
Exchange differences
Disposals
Net book value at 30 June 2021
At 30 June 2021
Cost
Accumulated depreciation
Net book value
Plant and
equipment
$M
Leasehold
improvements
$M
Right-of-use
(ROU) assets
$M
39.1
(27.1)
12.0
12.0
(0.4)
21.7
(0.1)
–
0.1
(7.7)
(0.4)
(0.7)
24.5
58.1
(33.5)
24.5
24.5
15.8
–
–
(10.1)
(0.7)
(0.2)
29.4
70.9
(41.6)
29.4
8.1
(4.3)
3.8
3.8
(0.2)
0.2
0.8
–
(0.1)
(1.0)
(0.1)
(0.3)
3.2
8.1
(4.9)
3.2
3.2
1.5
–
–
(0.9)
(0.1)
(0.1)
3.6
9.3
(5.7)
3.6
–
–
–
–
42.1
9.5
2.5
(0.1)
–
(10.9)
(0.6)
(0.2)
42.3
52.8
(10.5)
42.3
42.3
0.9
0.1
0.2
(11.3)
(0.9)
–
31.2
51.1
(19.9)
31.2
Total
$M
47.2
(31.3)
15.8
15.8
41.5
31.4
3.3
(0.1)
–
(19.6)
(1.1)
(1.1)
70.0
119.0
(49.0)
70.0
70.0
18.1
0.1
0.2
(22.2)
(1.7)
(0.2)
64.1
131.3
(67.1)
64.1
Significant accounting policies
Refer to note 16 for the accounting policy for right‑of‑use assets.
Plant and equipment and leasehold improvements are carried at cost less, where applicable, any accumulated depreciation and
impairment losses.
Any gain or loss on disposal of an item of property, plant and equipment is recognised in the Consolidated statement of profit or loss.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured
reliably. All other repairs and maintenance are recognised as expenses in the Consolidated statement of profit or loss during the
financial period in which they are incurred.
Notes to the financial statementsfor the year ended 30 June 2021 W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
1 1 1
8. Property, plant and equipment (continued)
Depreciation
Items of property, plant and equipment are depreciated on a straight‑line basis calculated using the cost of the item less its
estimated residual values over its estimated useful life. Prior to adoption of AASB 16 on 1 July 2019, leased assets were depreciated
over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain the ownership
by the end of the lease term.
The assets’ depreciation methods, residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each
reporting period. The annual depreciation rates used for each class of depreciable assets are:
Class of fixed asset
Depreciation rate
Plant and equipment
5%–50%;
Leasehold improvements
10%–20%; and
Right‑of‑use assets
Term of lease 1
1 Lease terms range between 1–10 years.
9. Cash and cash equivalents
Cash at bank and on hand
The effective interest rate on cash and cash equivalents was 0.54% per annum (2020: 1.09% per annum).
2021
$M
315.0
2020
$M
223.7
Significant accounting policies
Cash comprises cash on hand and on‑demand deposits. Cash equivalents are short‑term, highly liquid investments that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
10. Trade receivables
Trade receivables
Provision for impairment of trade receivables
2021
$M
77.7
(3.6)
74.1
The carrying value of trade receivables is considered a reasonable approximation of fair value due to the short‑term nature
of the balances.
The movements in the provision for impairment of trade receivables during the year were as follows:
Opening balance
Acquisition via business combination
Impairment loss recognised
Amount written off
Closing balance
2021
$M
2.1
–
2.5
(1.0)
3.6
2020
$M
61.7
(2.1)
59.6
2020
$M
1.7
–
1.4
(1.0)
2.1
Notes to the financial statementsfor the year ended 30 June 2021 1 1 2
10. Trade receivables (continued)
Trade receivables that were considered recoverable as at 30 June 2021 were as follows:
Not past due
Past due 0–30 days
Past due 31–60 days
Past due more than 60 days
2021
$M
62.0
9.0
0.9
2.3
74.1
2020
$M
45.7
7.0
1.5
5.3
59.6
Significant accounting policies
Trade receivables include amounts due from customers for services performed in the ordinary course of business. Trade receivables
expected to be collected within 12 months of the end of the reporting period are classified as current assets. Other trade receivables
are classified as non-current assets.
Trade receivables are initially recognised at fair value. A specific provision for impairment of trade receivables is established when
there is objective evidence that the Group will not be able to collect all amounts due according to the original terms. An expected
credit loss provision is recognised in respect of all other receivables.
The Group does not hold any collateral as security over any trade receivable balances.
Key accounting estimate and judgements on trade receivables – Expected credit
losses (“ECL”)
The Group recognises loss allowances for ECL on trade receivables.
When estimating ECL, the Group considers reasonable and supportable information that is relevant and available. This includes
qualitative and quantitative information and analysis, based on the Group’s historical experience and informed credit assessment.
The Group assumes that credit risk on an individual trade receivable has increased if it is more than 30 days past due.
The Group considers a trade receivable to be in default when the debtor is unlikely to pay its credit obligations to the Group in full,
without recourse by the Group to actions such as realising security (if any is held).
Measurement of ECL
ECL are a probability‑weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls
(i.e. the difference between the cash flows due to the entity in accordance with the customer contract and the cash flows that the
Group expects to receive). At 30 June 2021, the ECL model also incorporated estimates of potential credit losses resulting from the
impact of COVID‑19.
Presentation of allowance for ECL in the Consolidated statement of financial position
Loss allowances for trade receivables are deducted from the gross carrying amount of trade receivables.
Write‑off
The gross carrying amount of a trade receivable is written off when the Group has no reasonable expectations of recovering the
balance in its entirety or a portion thereof. For customers, the Group individually makes an assessment with respect to the timing
and amount of write-off based on whether there is a reasonable expectation of recovery. The Group expects no significant recovery
from the amount written off. However, trade receivables that are written off could still be subject to enforcement activities in order
to comply with the Group’s procedures for recovery of amounts due.
Notes to the financial statementsfor the year ended 30 June 2021 11. Other assets
Current
Prepayments
Unbilled receivables
Deposits
Indirect tax receivables
Contract assets
Other
Non-current
Prepayments
Contract assets
Other
Movements in unbilled receivables:
Opening balance
Acquisition via business combination
Accrued revenue recognised
Subsequently invoiced and transferred to trade receivables
Exchange differences
W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
1 1 3
2021
$M
16.0
2.8
1.5
1.4
0.1
0.8
22.6
2.0
1.6
1.6
5.1
2021
$M
2.8
–
1.3
(1.2)
(0.1)
2.8
2020
$M
12.5
2.8
1.6
0.6
–
1.2
18.7
0.5
–
0.9
1.3
2020
$M
3.0
0.5
2.5
(3.5)
0.3
2.8
Significant accounting policies
Unbilled receivables represent the revenue recognised to date but not yet invoiced to customers due to the timing of the accounting
invoicing cycle.
Notes to the financial statementsfor the year ended 30 June 2021 1 1 4
12. Trade and other payables
Trade payables
Other payables and accrued expenses
2021
$M
34.0
25.3
59.3
2020
$M
19.9
27.9
47.9
All amounts are short term and the carrying values are considered to be a reasonable approximation of fair value.
Significant accounting policies
Trade and other payables represent the liabilities for goods and services received by the entity that remain unpaid at the end of the
reporting period.
13. Deferred revenue
Deferred revenue
2021
$M
25.8
25.8
Deferred revenue reflects the value of advance payments made by customers who have been invoiced for services that will
be provided in the future.
Movements in deferred revenue:
Opening balance
Acquisition via business combination
Revenue recognised in current year
Advanced payments received
Exchange differences
2021
$M
22.7
–
(34.0)
37.2
(0.1)
25.8
2020
$M
22.7
22.7
2020
$M
19.0
4.2
(33.0)
32.4
0.1
22.7
The Group does not disclose further qualitative information related to remaining performance obligations, as they are either part
of a contract that has an original expected duration of one year or less; or the associated revenue is recognised in the amount
to which the Group has a right to invoice.
Notes to the financial statementsfor the year ended 30 June 2021 14. Other liabilities
Current
Customer deposits
Contingent consideration
Indirect taxes payable
Customer payables
Other current liabilities
Non-current
Contingent consideration
Other non‑current liabilities
W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
1 1 5
2021
$M
30.9
21.4
7.9
0.6
1.9
62.8
15.0
1.0
16.0
78.8
2020
$M
25.4
23.7
1.8
0.5
0.8
52.2
30.5
1.5
32.0
84.2
Customer deposits represent amounts paid in advance by customers to prepay for services in exchange for price discounts.
See note 24 for accounting policy and measurement of contingent consideration.
Included in indirect taxes payable is a provisional amount related to indirect tax liabilities in overseas jurisdictions, which is likely
to be finalised and settled in FY22.
15. Borrowings
Bank debt facilities
An unsecured syndicated facility was executed on 24 December 2018 between Westpac Banking Corporation, The Hongkong
and Shanghai Banking Corporation Limited and Citibank, N.A. The facility has a total syndicated commitment of $190.0m,
plus an additional $200.0m accordion facility and matures in March 2022. The facility was undrawn at 30 June 2021.
Please refer to note 28(f), events after reporting period, for details of new debt facility.
Notes to the financial statementsfor the year ended 30 June 2021 1 1 6
16. Lease liabilities
Current
Lease liabilities
Non-current
Lease liabilities
2021
$M
9.8
9.8
25.2
25.2
35.0
2020
$M
10.4
10.4
35.4
35.4
45.8
(i) Definition of a lease
The Group assesses whether a contract is, or contains, a lease based on the definition of a lease under AASB 16. A contract
is, or contains, a lease if the contract conveys a right to control the use of an identified asset for a period of time in exchange
for consideration.
On transition to AASB 16, the Group elected to apply the practical expedient to grandfather the assessment of which transactions
are leases.
At inception or on reassessment of a contract that contains a lease component, the Group allocates consideration in the contract
to each lease and non‑lease component, based on their relative standalone prices.
(ii) As a lessee
The Group leases properties, motor vehicles and office equipment. As a lessee, prior to 1 July 2019, the Group previously classified
leases as operating or finance leases, based on its assessment of whether the lease transferred substantially all of the risks and
rewards of ownership. Under AASB 16, the Group recognises right‑of‑use assets and lease liabilities for most leases.
However, the Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets (e.g. office
equipment) and leases with lease terms of less than 12 months. The Group recognises the lease payments associated with these
leases as an expense on a straight‑line basis over lease term.
The Group presents right‑of‑use assets in “property, plant and equipment”.
The Group presents lease liabilities separately on the face of the Consolidated statement of financial position.
The Group recognises a right‑of‑use asset and a lease liability at the lease commencement date. The right‑of‑use asset is initially
measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the
commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset
or to restore the underlying asset or the site on which it is located, less any incentives received.
The right of use asset is subsequently depreciated using the straight‑line method from the commencement date to the end
of the lease term. In addition, the right of use asset is periodically reduced by impairment losses, if any, and adjusted for certain
remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date,
discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental
borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.
The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes
certain adjustments to reflect the terms of the lease and the type of asset leased.
Lease payments included in the measurement of the lease liability comprise the following:
– Fixed payments, including in substance fixed payments;
– Variable lease payments that depend on an index variation, initially measured using the index or value as at the commencement date;
– Amounts expected to be payable under a residual value guarantee; and
– The exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in a optional
renewal period of the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease
unless the Group is reasonably certain not to terminate early.
Notes to the financial statementsfor the year ended 30 June 2021 W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
1 1 7
16. Lease liabilities (continued)
(ii) As a lessee (continued)
The lease liability is subsequently increased by the interest cost on the lease liability and decreased by lease payments made.
It is remeasured when there is a change in future lease payments arising from a change in an index or rate, a change in the estimate
of the amount expected to be payable under a residual value guarantee, or as appropriate, changes in the assessment of whether
a purchase or extension option is reasonably certain to be exercised or a termination option is reasonably certain not to be exercised.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the right‑of‑use asset carrying amount,
or is recorded in profit or loss if the right-of-use carrying amount has been reduced to nil.
Key accounting estimates and judgements – Lease term
The Group has applied judgement to determine the lease term for some lease contracts in which it is a lessee that include renewal
options. The assessment of whether the Group is reasonably certain to exercise such options impacts the lease term, which affects
the amount of lease liabilities and right‑of‑use assets recognised.
Impacts for the year
The movements during the year ended 30 June 2021 in lease liability balances are described below:
Lease liabilities
Opening balance
Lease liabilities recognised
Additions 1
Additions through business combinations
Payments
Unwinding interest on lease liabilities
Exchange difference
Closing balance
1 Additions to lease liabilities also includes remeasurement and modification of existing leases.
2021
$M
45.8
–
1.3
0.1
(12.8)
1.6
(1.0)
35.0
2020
$M
–
43.4
9.2
2.5
(10.1)
1.8
(1.1)
45.8
Notes to the financial statementsfor the year ended 30 June 2021 1 1 8
17. Share capital and reserves
Ordinary shares issued and fully paid
At 1 July 2019
Shares issued for acquisition of subsidiaries
Shares issued to employee share trust
Shares issued under DRP
Transaction costs (net of tax)
At 30 June 2020
At 1 July 2020
Shares issued for acquisition of subsidiaries
Shares issued to employee share trust
Shares issued to Non-Executive Directors for fee sacrifice
Shares issued under DRP
Transaction costs (net of tax)
At 30 June 2021
Shares
(thousands)
318,161
3,845
1,250
24
–
$M
668.5
86.0
24.8
0.5
(0.1)
323,280
779.8
323,280
779.8
505
1,100
2
27
–
324,914
11.4
35.8
0.1
0.7
(0.1)
827.8
Ordinary shares participate in dividends and the proceeds on winding‑up of the Company in proportion to the number of shares
held. At shareholders’ meetings, each ordinary share is entitled to one vote when a poll is called; otherwise, each shareholder has
one vote on a show of hands.
The Company does not have a par value in respect of its issued shares.
Nature and purpose of reserves
Treasury share reserve
(i)
The reserve for the Company’s treasury shares comprises the cost of the Company’s shares held by the WiseTech Global Limited
Employee Share Trust. At 30 June 2021, the Trust held 1,978,217 shares of the Company (2020:1,474,894 shares).
(ii) Acquisition reserve
The acquisition reserve comprises the cumulative consideration paid to acquire minority interests in excess of the fair value of the
net assets when attaining control, in addition to the difference between the share price at the time of the agreement to issue shares
and the share price on the date of issue when the Group’s shares are issued under acquisition agreements.
(iii) Cash flow hedge reserve
The cash flow hedge reserve comprises the effective portion of the cumulative net change in the fair value of cashflow hedging
instruments.
(iv) Share‑based payment reserve
The share‑based payment reserve represents the value of unvested shares and unissued shares as part of the share‑based
payment scheme.
Foreign currency translation reserve
(v)
The foreign currency translation reserve comprises all foreign currency differences arising from the translation of the financial
statements not in Australian dollar functional currency.
Notes to the financial statementsfor the year ended 30 June 2021 W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
1 1 9
17. Share capital and reserves (continued)
Capital management
Management controls the capital of the Group in order to maintain a sustainable debt to equity ratio, generate long‑term shareholder
value and ensure that the Group can fund its operations and continue as a going concern. The Group’s capital and debt include
ordinary share capital and financial liabilities, supported by financial assets.
Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital structure
in response to changes in these risks and in the market. These responses include the management of debt levels, distributions
to shareholders and share issues.
Throughout FY21, the Group issued $11.4m in shares to pay for obligations under acquisition agreements. In addition, at 30 June 2021
the Group had an undrawn debt facility of $190.0m, to apply towards future strategic initiatives. The total equity of the Group at
30 June 2021 was $1,106.0m (2020: $1,003.4m) and total cash and cash equivalents at 30 June 2021 were $315.0m (2020: $223.7m).
The total bank loans at 30 June 2021 were $nil (2020: $nil).
The Group is not subject to any externally imposed capital requirements.
18. Business combinations and acquisition
of non-controlling interests
Acquisitions in 2021
On 2 November 2020, the Group acquired 100% of the shares and voting interests in Kabushiki Kaisha Exas (“EXA”). EXA is a leading
customs and freight forwarding solutions provider in Japan.
Details of the fair value of identifiable assets acquired, liabilities assumed, and goodwill determined are set out below. The identification
and fair value measurement of the assets and liabilities acquired are provisional and amendments may be made to these figures
up to 12 months following the date of acquisition if new information is obtained about facts and circumstances that existed at the
acquisition date and, if known, would have affected the measurement of the amounts recognised as of that date.
Cash and cash equivalents
Trade receivables
Intangible assets
Property, plant and equipment
Trade and other payables
Other current liabilities
Lease liabilities
Fair value of net assets acquired
Total consideration paid and payable
Less: Fair value of net identifiable assets acquired
Goodwill
$M
0.2
0.1
0.2
0.1
(0.2)
(0.1)
(0.1)
0.2
2.0
(0.2)
1.8
Goodwill
The total goodwill arising on acquisition is $1.8m which relates predominantly to the key management, specialised know‑how of the
workforce, employee relationships, competitive position and service offerings that do not meet the recognition criteria as an intangible
asset at the date of acquisition.
Consideration
The upfront consideration was $1.4m payable in cash, with further contingent consideration payable of $0.7m. Contingent consideration
is based on a number of milestones, including the successful integration of acquired intellectual property. At acquisition, the discounted
fair value of these arrangements is $0.6m. The acquisition included $0.2m of cash and cash equivalents acquired.
The Group incurred acquisition‑related costs of $0.2m (FY20: $1.3m) to external service providers in addition to internal costs which
are recorded within general and administration expenses.
Notes to the financial statementsfor the year ended 30 June 2021 1 2 0
18. Business combinations and acquisition
of non-controlling interests (continued)
Contribution of acquisitions to revenue and profits
EXA contributed $0.4m to Group revenue and had no impact on net profit from the date of acquisition. If EXA had been acquired
from 1 July 2020, the contribution to the Group revenue would have been $0.6m and no impact on net profit.
Additional investment in Softship GmbH (formerly ‘Softship AG’)
During the year ended 30 June 2021, the Group made payments of $0.3m towards obligations under previously announced share
purchase agreements for the acquisition of Softship GmbH shares. This resulted in an increase in the acquisition reserve of $0.3m.
Acquisitions in 2020
During the year ended 30 June 2020, the Group completed the following five acquisitions:
Business acquired
Date of acquisition
Description of acquisition
Cypress 1
Depot Systems 1
16 Sep 2019
1 Oct 2019
Ready Korea
31 Dec 2019
Sisa
SAD EC 1
1 Asset acquisitions.
3 Feb 2020
2 Mar 2020
Tariff management software provider in the USA
Leading US‑based container yard and terminal management logistics
solutions provider
Leading customs, bonded warehouse and trade compliance solutions
provider in South Korea
Leading customs and freight forwarding solutions provider in Switzerland
Customs solutions provider in Poland
None of the acquisitions completed during the period is individually significant. Accordingly, key information on these acquisitions
has been presented on an aggregated basis as set out below.
Details of the fair value of identifiable assets acquired, liabilities assumed, and goodwill determined are set out in the following
tables. The identification and fair value measurement of the assets and liabilities acquired are provisional and amendments
may be made to these figures up to 12 months following the date of acquisition if new information is obtained about facts and
circumstances that existed at the acquisition date and, if known, would have affected the measurement of the amounts recognised
as of that date.
Cash and cash equivalents
Trade receivables
Other current assets
Intangible assets
Property, plant and equipment
Trade and other payables
Deferred revenue
Current tax liabilities
Other current liabilities
Lease liabilities
Deferred tax liabilities
Fair value of net identifiable assets acquired (100%)
Total consideration paid and payable
Less: Fair value of net identifiable assets acquired
Goodwill
Total
acquisitions
$M
12.8
5.4
2.4
5.2
3.7
(1.9)
(4.2)
(0.9)
(0.9)
(2.5)
(1.6)
17.5
76.3
(17.5)
58.8
Notes to the financial statementsfor the year ended 30 June 2021 W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
1 2 1
18. Business combinations and acquisition
of non-controlling interests (continued)
Goodwill
The total goodwill arising on acquisitions is $58.8m, which relates predominantly to the key management, specialised know‑how
of the workforce, employee relationships, competitive position and service offerings that do not meet the recognition criteria
as an intangible asset at the date of acquisition. The total amount of goodwill expected to be deductible for tax purposes is $6.5m.
Consideration
Total upfront consideration was $48.2m (cash paid $45.2m and equity shares issued $3.0m) with further contingent consideration
payable of $31.0m. Contingent consideration is based on a number of milestones including the successful integration of acquired
intellectual property and transfer of customers into CargoWise and in certain acquisitions performance in future periods based
on selected revenue and profitability targets of the acquisition. These targets take account of the performance expectations
of the acquired business in the context of their contribution across the Group. At acquisition, the discounted fair value of these
arrangements is $28.1m. These acquisitions included $12.8m of cash and cash equivalents acquired.
In addition to consideration paid, an additional $0.7m of debt‑like items were settled by the Group following the completion
of the acquisition and are recorded in the Consolidated statement of cash flows as investing activities, acquisition of businesses,
net of cash acquired.
The Group incurred acquisition‑related costs of $1.3m (FY19: $4.7m) to external service providers, in addition to internal costs which
are recorded within general and administration expenses.
Contribution of acquisitions to revenue and profits
In total, these acquisitions contributed $10.3m to Group revenue and a reduction to net profit of $0.2m from their respective dates
of acquisition. If the acquisitions had been acquired from 1 July 2019, the contribution to the Group revenue would have been
$22.4m and a reduction to net profit of $0.8m.
Additional investment in Softship
During the year ended 30 June 2020, the Group made payments of $0.8m towards obligations under previously announced share
purchase agreements for the acquisition of Softship shares. This resulted in an increase in the acquisition reserve of $0.8m.
Significant accounting policy
Business combinations occur where an acquirer obtains control over one or more businesses.
A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or
businesses under common control. Under the acquisition method, the business combination will be accounted for from the date
that control is attained, whereby the fair value of the identifiable assets acquired and liabilities (including contingent liabilities)
assumed is recognised (subject to certain limited exemptions).
Consideration transferred, including any contingent consideration is required to be measured at fair value on the date of
acquisition, which takes into account the perspective of a ‘market participant’ and is a measurement of the amount that the
Group would have to pay to such a participant for them to assume the remaining obligations under the contracts to acquire
these businesses.
Contingent consideration obligations are classified as equity or liability in accordance with AASB 132 Financial Instruments:
Presentation. If an obligation to pay contingent consideration that meets the definition of a financial instrument is classified
as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, other contingent consideration
is remeasured at fair value at each reporting date and subsequent changes in the fair value of the contingent consideration
are recognised in profit or loss. Where the accounting standards require that an obligation to be settled in shares is classified
as a liability, changes in measurement from the point of initial recognition through to when the milestone is achieved and the
number of shares to be granted is determined, are recognised in profit or loss. Subsequently, once the number of shares is fixed
and determined, any changes in the value of the shares to be granted between the milestone being achieved and the point
of settlement, are recognised in acquisition reserve within equity (see note 17).
The Group only has contingent consideration obligations classified as liabilities at the reporting date.
As a consequence, any changes in the fair value of contingent consideration that do not meet the requirements above, such
as a subsequent renegotiation and settlement of the obligation, does not result in any change to the measurement of goodwill.
Instead, changes to the fair value of contingent consideration classified as a liability are recognised in the profit or loss.
Any goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognised in profit or loss immediately.
Transaction costs are expensed as incurred except if related to the issue of debt or equity securities.
The consideration transferred does not include amounts related to the settlement of pre‑existing relationships. Such amounts
are generally recognised in the Consolidated statement of profit or loss.
Notes to the financial statementsfor the year ended 30 June 2021 1 2 2
19. Employee benefits
Wages and salaries
Share‑based payment expense
Defined contribution superannuation expense
Total employee benefit expense (gross before capitalisation)
Annual leave and long service leave
Current
Annual leave
Long service leave
Non-current
Long service leave
Total annual leave and long service leave
Significant accounting policies
2021
$M
233.0
22.0
18.3
273.3
2021
$M
17.0
3.7
20.7
2.1
2.1
22.8
2020
$M
236.4
17.2
17.3
270.9
2020
$M
15.0
3.2
18.2
1.8
1.8
20.0
Short-term employee benefits
Short-term employee benefits are benefits (other than termination benefits) that are expected to be settled wholly within 12 months
after the end of the annual reporting period in which the employees render the related service, including wages, salaries and sick
leave. Short-term employee benefits are measured at the (undiscounted) amounts expected to be paid when the obligation is settled.
The Group’s obligations for short-term employee benefits such as wages, salaries and sick leave are recognised as a part of current
trade and other payables in the Consolidated statement of financial position. The Group’s obligations for employees’ annual leave
and long service leave entitlements are recognised as employee benefits in the Consolidated statement of financial position.
Long-term employee benefits
Provision is made for employees’ long service leave and not expected to be settled wholly within 12 months after the end of the
annual reporting period in which the employees render the related service. Long-term employee benefits are measured at the
present value of the expected future payments to be made to employees.
Expected future payments incorporate anticipated future wage and salary levels, duration of service and employee departures and
are discounted at rates determined by reference to market yields at the end of the reporting period on corporate bonds that have
maturity dates that approximate the terms of the obligations. Any remeasurements for changes in assumptions of obligations for
long-term employee benefits are recognised in profit or loss in the periods in which the changes occur.
The Group’s obligations for long-term employee benefits are presented as non-current employee benefits in its Consolidated
statement of financial position, except where the Group does not have an unconditional right to defer settlement for at least
12 months after the end of the reporting period, in which case the obligations are presented as current employee benefits.
Defined contribution superannuation benefits
All obligations for contributions in respect of employees’ defined contribution superannuation benefits are recognised as an expense
as the related service is provided.
Notes to the financial statementsfor the year ended 30 June 2021 W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
1 2 3
19. Employee benefits (continued)
Share‑based payment transactions
The Company has a number of share‑based payment arrangements that were granted to employees during FY21. These related
to shares or share rights granted as part of employee remuneration packages (base remuneration and performance incentives) and
arrangements following completion of business acquisitions. The awards were granted on various dates in FY21, based on a specified
monetary value to each recipient and a share price at the time the offer is determined. The fair value of these arrangements was
deemed to be the function of the number of share rights granted and the share price at grant date. Share rights granted may vest
in predetermined tranches. Share rights were also granted as part of the employee Invest As You Earn program which operated
during the year. Vesting is dependent on continued employment with the Group. The fair value of the grant is recognised in profit
or loss to match to each employee’s service period until vesting. Generally, upon cessation of employment unvested rights are
forfeited. The cost recognised in prior periods in respect of forfeited rights is credited to the consolidated statement of profit
and loss.
The total value of share‑based payments was $22.0m for employees and $0.1m for Non‑Executive Directors (2020: $17.2m), which
was also recognised in the consolidated statement of profit and loss. Subsequently, $5.8m (2020: $3.9m) was capitalised as part
of directly attributable development costs, which are required to be recognised as internally developed intangibles (refer note 7).
20. Key management personnel transactions
Key management personnel (“KMP”) compensation
The total remuneration of the KMP of the Company are as follows:
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Share‑based payments
Total KMP compensation
2021
$000
3,306
163
192
1,369
5,030
2020
$000
3,293
158
138 1
1,064
4,654
1 Other long-term benefits relates to annual and long service leave. The comparatives have been amended to a consistent basis with the
current year, being the movement in the balance, rather than disclosing the annual and long service leave balance.
Short-term benefits comprise salary, fringe benefits and cash bonuses awarded. Post-employment benefits consist of superannuation
contributions made during the year. Other long-term benefits comprise accruals for annual leave and long service leave. Share-based
payments represents the expensing over the period to vesting of the fair value at grant date of share rights granted.
Notes to the financial statementsfor the year ended 30 June 2021 1 2 4
20. Key management personnel transactions (continued)
KMP transactions
A KMP holds positions in other companies that result in them having control or significant influence over these companies. Some
of these companies transacted with the Group during the year. The terms and conditions of these transactions were no more
favourable than those available, or which might reasonably be expected to be available, in similar transactions with non-KMP related
companies on an arm’s length basis. The aggregate value of transactions and outstanding balances related to Richard White (CEO)
and entities over which he has control or significant influence were as follows:
Director
R White
R White
R White
R White
R White
R White
Transactions
Office leases 1
Staff training facility 2
Office services agreement 3
Company apartments rent 4
US data centre services 5
Plant and equipment 5
Transaction values for year
ended 30 June
Balance outstanding
as at 30 June
2021
$000
2,860
–
(18)
–
–
–
2020
$000
1,583
102
(18)
73
1,000
53
2021
$000
2020
$000
–
–
–
–
–
–
– 1
–
–
–
–
–
The above transactions are made at normal market rates and approved by the Related Party Committee.
1 The Group leases an office owned by R White, in Chicago, USA which has a term ending September 2024 with an annual rent of US Dollars
0.6m. The Group leased an office owned by R White in Alexandria, Australia with a term ending April 2025 and annual rent of Australian
Dollars 2.5m. In May 2021, R White completed the sale of the Alexandria property to an unrelated party. Both leases were determined
in accordance with advice from independent property valuers. In the prior period, the Group utilised storage space owned by R White.
During FY20 the Group stopped using this storage space.
2 Staff training courses run by a third‑party service provider were held at a facility owned by R White. The charge for usage of the facility
was embedded in the service provider fees. During FY20 the Group stopped using this facility.
3 The Group provided office accommodation and related services to a company controlled by R White. The service agreement was
terminated in FY21.
4 The Group had agreements for apartment leases. During FY20, the Group stopped renting these units.
5 The Group procured data centre services from a company controlled by R White. The service agreement was terminated in FY20.
Notes to the financial statementsfor the year ended 30 June 2021 W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
1 2 5
21. Auditor’s remuneration
Audit and assurance related services
KPMG Australia
Audit and review of the financial reports
Audit and assurance related services
KPMG and non-KPMG overseas
Audit of statutory financial reports KPMG overseas
Audit of statutory financial reports by Non-KPMG firms
Total audit and assurance related services KPMG and non-KPMG overseas
Total audit and assurance related services
Other services
KPMG Australia
Other assurance, advisory and taxation services
Total other services KPMG Australia
Other services
KPMG overseas and Non-KPMG
Other assurance, advisory and taxation services-KPMG overseas
Other assurance, advisory and taxation services-Non KPMG
Total other services KPMG overseas and non-KPMG
Total other services
Total auditor’s remuneration
2021
$000
2020
$000
959.0
959.0
863.2
863.2
765.1
79.2
844.3
1,803.3
769.6
65.7
835.3
1,698.5
–
–
5.5
11.7
17.1
17.1
5.0
5.0
7.5
14.7
22.2
27.2
1,820.4
1,725.7
Notes to the financial statementsfor the year ended 30 June 2021 1 2 6
22. Reconciliation of net cash flows from operating activities
Cash flow reconciliation
Reconciliation of net profit after tax to net cash flows from operating activities:
Profit after tax from continuing operations
Net Profit after tax
Adjustments to reconcile profit before tax to net cash flows from operating activities:
Share‑based payment expense
Depreciation
Net gain on asset disposals
Capitalisation of share‑based payment expense and depreciation
Amortisation
Doubtful debt expense
Net finance costs/(income)
Exchange differences
Change in assets and liabilities:
Increase in trade receivables
Increase in other current and non‑current assets
Increase in trade and other payables
Increase in current tax liabilities
Increase in deferred tax payable
Increase in other liabilities
Increase/(decrease) in deferred revenue
Increase in provisions
Net cash flows from operating activities
2021
$M
2020
$M
108.1
108.1
160.8
160.8
22.1
22.2
(0.2)
(8.2)
37.2
2.5
1.9
0.9
(18.1)
(7.6)
11.2
5.5
16.1
10.8
4.0
3.1
17.2
19.6
–
(6.5)
29.1
1.4
(101.3)
1.2
(4.6)
(8.4)
11.1
0.7
3.9
0.7
(0.7)
5.7
211.6
129.9
Notes to the financial statementsfor the year ended 30 June 2021 W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
1 2 7
23. Segment information
The Group manages its operations as a single business operation and there are no separate parts of the Group that qualify
as operating segments under AASB 8 Operating Segments. The Board (Chief Operating Decision Maker or “CODM”) assesses
the financial performance of the Group on an integrated basis only and accordingly, the Group is managed on the basis
of a single segment.
Information presented to the CODM on a monthly basis is categorised by type of revenue, recurring and non‑recurring.
This analysis is presented below:
Continuing operations
Recurring On‑Demand revenue
Recurring OTL maintenance revenue
OTL and support services
Total revenue
Segment EBITDA 1
Depreciation and amortisation
Other finance income/(cost)
Profit before income tax
Income tax expense
Net profit for the year
2021
$M
383.0
75.1
49.4
507.5
206.7
(56.8)
(1.9)
147.9
(39.9)
108.1
2020
$M
309.2
72.8
47.4
429.4
126.7
(46.2)
101.3
181.8
(21.0)
160.8
1 Earnings before interest, tax, depreciation and amortisation.
In general, a large amount of revenue is generated by customers that are global, from transactions that cross multiple countries
and where the source of revenue can be unrelated to the location of the users using the software. Accordingly, the Group
is managed as a single segment. The amounts for revenue by region in the following table are based on the invoicing location of the
customer. Customers can change their invoicing location periodically. The CODM does not review or assess financial performance
on a geographical basis.
There were no customers contributing more than 10% of revenue during the current and comparative period.
Geographic information
Revenue generated by location of customer (invoicing location):
Americas
Asia Pacific
Europe, Middle East and Africa (“EMEA”)
Total revenue
Non‑current assets by geographic location:
Americas
Asia Pacific
EMEA
Total non-current assets
2021
$M
144.2
154.5
208.8
507.5
2021
$M
237.7
469.1
278.4
985.2
2020
$M
128.9
134.5
166.1
429.4
2020
$M
244.8
458.7
264.2
967.6
Notes to the financial statementsfor the year ended 30 June 2021 1 2 8
24. Financial instruments
(i) Recognition and initial measurement
Trade receivables are initially recognised when customers are invoiced. All other financial assets and financial liabilities are initially
recognised when the Group becomes a party to the contractual obligations.
A financial asset (unless it is a trade receivable) or financial liability is initially measured at fair value plus transaction costs that are
directly attributable to its acquisition. Trade receivables are initially measured at the transaction price.
(ii) Derecognition
Financial assets
The Group derecognises a financial asset when the contractual rights to the cash flows from a financial asset expire, or it transfers
the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership
of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards
of ownership and it does not retain control of the financial asset.
Financial liabilities
The Group derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire. The Group also
derecognises a financial liability when its terms are modified and the cash flows of the modified financial liability are substantially
different, in which case a new financial liability based on the modified terms is recognised at fair value.
On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid
(including any non-cash assets transferred or liabilities assumed) is recognised in profit or loss.
(iii) Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the Consolidated statement of financial position
when, and only when, the Group currently has a legally enforceable right to set off the amounts and it intends either to settle them
on a net basis or to realise the asset and settle the liability simultaneously.
(iv) Derivative financial instruments and hedge accounting
The Group holds derivative financial instruments to hedge some of its foreign currency risk exposures.
Derivatives are initially measured at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes
therein are generally recognised in profit or loss.
The Group designates certain derivatives as hedging instruments to hedge the variability in cash flows associated with highly
probable forecasted transactions arising from changes in foreign exchange rates.
At inception of designated hedging relationships, the Group documents the risk management objective and strategy for undertaking
the hedge. The Group also documents the economic relationship between the hedged item and the hedging instrument, including
whether the changes in cash flows of the hedged item and hedging instrument are expected to offset each other.
Cash flow hedges
When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative
is recognised in other comprehensive income (“OCI”) and accumulated in the cash flow hedge reserve. The effective portion
of changes in the fair value of the derivative that is recognised in OCI is limited to the cumulative change in fair value of the hedged
item, determined on a present value basis, from inception of the hedge. Any ineffective portion of changes in the fair value of the
derivative is recognised immediately in profit and loss.
The Group has designated foreign exchange forward contracts and foreign exchange collars as hedging instruments in cash flow
hedge relationships with highly probable forecasted foreign exchange sales. The change in fair value of the foreign exchange
instruments is recognised in a hedging reserve within equity.
When the hedged forecast transaction subsequently results in the recognition of a non-financial item, the amount accumulated
in the hedging reserve and the cost of hedging reserve is included directly in the initial cost of the non-financial item when
it is recognised.
For all other hedged forecast transactions, the amount accumulated in the hedging reserve and the cost of hedging reserve is
reclassified to profit or loss in the same period or periods during which the hedged expected future cash flows affect profit or loss.
Notes to the financial statementsfor the year ended 30 June 2021 W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
1 2 9
24. Financial instruments (continued)
If the hedge no longer meets the criteria for hedge accounting or the hedging instrument is sold, expires, is terminated or is
exercised, then hedge accounting is discontinued prospectively. When hedge accounting for cash flow hedges is discontinued,
the amount that has been accumulated in the hedging reserve remains in equity until, for a hedge of a transaction resulting
in the recognition of a non-financial item, it is included in the non-financial item’s cost on its initial recognition or, for other cash
flow hedges, it is reclassified to profit or loss in the same period or periods as the hedged expected future cash flows affect
profit or loss.
If the hedged future cash flows are no longer expected to occur, then the amounts that have been accumulated in the hedging
reserve and the hedging reserve are immediately reclassified to profit or loss.
(v) Credit‑impaired trade receivables
At each reporting date, the Group assesses whether trade receivables are credit‑impaired. A trade receivable is credit‑impaired
when one or more events that have a detrimental impact on the estimated future cash flows have occurred.
Evidence that a trade receivable is credit‑impaired includes the following observable data:
– Significant financial difficulty of the debtor;
– A breach of contract such as a default; or
– It is probable that the debtor will enter bankruptcy or other financial reorganisation.
(vi) Measurement of fair values
Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a liability in an orderly (i.e. unforced)
transaction between independent, knowledgeable and willing market participants at the measurement date.
As fair value is a market‑based measure, the closest equivalent observable market pricing information is used to determine fair
value. Adjustments to market values may be made having regard to the characteristics of the specific asset or liability. The fair
value of assets and liabilities that are not traded in an active market are determined using one or more valuation techniques.
These valuation techniques maximise, to the extent possible, the use of observable market data.
To the extent possible, market information is extracted from either the principal market for the asset or liability (i.e. the market with
the greatest volume and level of activity for the asset of liability), or, in the absence of such a market, the most advantageous market
available to the entity at reporting date (i.e. the market that maximises the receipts from the sale of the asset or minimises the
payment made to transfer the liability, after taking into account transaction costs).
For non-financial assets, the fair value measurement also takes into account a market participant’s ability to use the asset in its
highest and best use or to sell it to another market participant that would use the asset in its highest and best use.
The fair value of liabilities and the entity’s own equity instruments (excluding those related to share‑based payment arrangements)
may be valued, where there is no observable market price in relation to the transfer of such financial instrument, by reference
to observable market information where such instruments are held as assets. Where this information is not available, other valuation
techniques are adopted and where significant, are detailed in the respective note to the financial statements.
Fair value hierarchy
Significant valuation issues are reported to the Audit & Risk Committee.
When measuring the fair value of an asset or a liability, the Group uses market observable data as far as possible. Fair values
are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:
– Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
– Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly
(i.e as prices) or indirectly (i.e. derived from prices); and
– Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
If the inputs used to measure the fair value of an asset or a liability might be categorised in different levels of the fair value hierarchy,
then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input
that is significant to the entire measurement.
The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the
change has occurred.
Notes to the financial statementsfor the year ended 30 June 2021 1 3 0
24. Financial instruments (continued)
The following tables detail the Group’s assets and liabilities, measured or disclosed at fair value, using a three level hierarchy
as detailed above, based on the lowest level of input that is significant to the entire fair value measurement.
Group – 2021
Assets
Forward foreign exchange contracts
Foreign exchange collars
Total assets
Liabilities
Forward foreign exchange contracts
Foreign exchange collars
Contingent consideration
Total liabilities
Group – 2020
Assets
Forward foreign exchange contracts
Total assets
Liabilities
Contingent consideration
Total liabilities
Fair value of assets
Level 1
$M
Level 2
$M
Level 3
$M
–
–
–
–
–
–
–
2.9
0.4
3.3
4.0
2.3
–
6.3
–
–
–
–
–
36.5
36.5
Level 1
$M
Level 2
$M
Level 3
$M
–
–
–
–
4.6
4.6
–
–
–
–
54.2
54.2
Total
$M
2.9
0.4
3.3
4.0
2.3
36.5
42.8
Total
$M
4.6
4.6
54.2
54.2
Hedging instruments
The Group has recognised an asset measured at fair value in relation to derivative financial instrument (i.e. forward foreign exchange
contracts – cash flow hedges and options). The derivative financial instrument is designated as a financial asset and deemed
to be a level 2 measurement of fair value. Changes in the fair value of derivative financial instrument are recognised in ‘other
comprehensive income’.
Opening balance (pre‑tax)
New contracts entered during the year
Contracts settled during the year
Revaluation
Closing balance (pre-tax)
Fair value of liabilities
2021
$M
4.6
(3.4)
(4.3)
0.1
(3.0)
2020
$M
–
4.6
–
–
4.6
Contingent consideration
The Group has recognised liabilities measured at fair value in relation to contingent consideration arising out of acquisitions
made by the Group. The contingent consideration is designated as a financial liability and deemed to be a Level 3 measurement
of fair value. It has been discounted accordingly based on estimated time to complete a number of milestones. As part of the
assessment at each reporting date, the Group has considered a range of reasonably possible changes for key assumptions and
has not identified instances that could cause the fair value of contingent consideration to change significantly. Changes in the fair
value of contingent consideration after the acquisition date are recognised in profit or loss, unless the changes are measurement
period adjustments.
Notes to the financial statementsfor the year ended 30 June 2021 W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
1 3 1
24. Financial instruments (continued)
A reconciliation of the movements in recurring fair value measurements allocated to Level 3 and the end of the measurement period
of the hierarchy is provided below.
Opening balance
Change in fair value estimate 1
Equity payments
Cash payments
Additions
Unwinding interest 1
Foreign exchange differences 1
Closing balance
2021
$M
54.2
(2.2)
(11.4)
(4.2)
0.6
1.3
(1.8)
36.5
2020
$M
226.9
(111.0)
(86.4)
(22.8)
28.1
10.0
9.4
54.2
1 The effect on profit or loss is due to unwinding of earnout interest on acquisitions, change in fair value estimate and a portion of foreign
exchange, as indicated in the above reconciliation.
Key accounting estimates and judgements – contingent consideration
Contingent consideration is measured at fair value, which requires management to estimate the amount likely to be paid in the
future and the timing of the payment, to assess the present value using appropriate discount rates. The determination of fair value
involves judgement about the probability of an acquired business achieving certain performance milestones, which include both
financial and non-financial results.
Financial risk management objectives and policies
The Group has exposure to the following risks arising from financial instruments:
– credit risk;
– liquidity risk; and
– market risk.
Risk management framework
(a)
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework.
The Board is responsible for developing and monitoring the Group’s risk management policies. The Board has delegated day‑to‑day
responsibility for implementation of the risk management framework to the risk committee. The risk committee is a management
committee comprising senior executives and is chaired by the CEO. The aim of the risk committee is to provide our Board with
assurance that the major business risks are being identified and consistently assessed and that plans are in place to address risk.
The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk
limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly
to reflect changes in market conditions and the Group’s activities. The Group, through its training and management standards and
procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles
and obligations.
The Board, in conjunction with the Board’s Audit & Risk Committee, oversees how management monitors compliance with the Group’s
risk management policies and procedures and reviews the adequacy of the risk management framework in relation to risks faced
by the Group.
In FY21, an internal audit and risk management function was established. Detailed work of the function is executed by internal
resources and also by external service providers.
(b) Credit risk
Credit risk is the risk of financial loss to the Group if a customer fails to meet its contractual obligations, and arises principally
from the Group’s receivables from customers.
The Group’s standard payment and delivery terms and conditions are that payment is generally due within 30 days on receipt
of any invoice and the preferred payment options are by direct debit from a bank account or credit card. No limits are used and
the Group’s receivables are carefully managed by the credit management team. This role includes establishing customer deposits
(refer to note 14).
Notes to the financial statementsfor the year ended 30 June 2021 1 3 2
24. Financial instruments (continued)
Financial risk management objectives and policies (continued)
Trade receivables
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management
also considers the factors that may influence the credit risk of its customer base including the default risk of the industry and
country in which customers operate.
The maximum exposure to credit risk at balance date to recognised financial assets, is the carrying amount, net of any provision for
impairment of those assets, as disclosed in the Consolidated statement of financial position. These predominantly relate to trade
receivables. Refer to note 10 for further details.
Cash and cash equivalents
The Group held cash and cash equivalents of $315.0m at 30 June 2021 (2020: $223.7m).
Liquidity risk
(c)
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that
are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as far as possible,
that it will always have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions,
without incurring unacceptable losses or risking damage to the Group’s reputation. The Group manages liquidity risk by monitoring
net cash balances, actual and forecasted operating cash flows and unutilised debt facilities.
Exposure to liquidity risk
The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts of contractual cash
flows are gross and undiscounted, and include estimated interest payments and exclude the impact of netting agreements.
2021
Financial liabilities
Contingent consideration 1
Lease liabilities
Trade payables
Other payables and accrued expenses
Other liabilities
Total
Carrying
amount
$M
8.2
35.0
34.0
25.3
42.3
Total
$M
(8.6)
(38.7)
(34.0)
(25.3)
(42.3)
144.8
(148.9)
Contractual cash flow
Less than
1 year
$M
1–5 years
$M
(5.9)
(11.0)
(34.0)
(25.3)
(41.3)
(117.6)
(2.7)
(27.7)
–
–
(1.0)
(31.3)
1 The total carrying value of contingent consideration is $36.5m, which includes $28.3m to be settled for an equivalent value of shares
once milestones are achieved and become payable and $8.2m in the table above, which will be cash settled.
2020
Financial liabilities
Contingent consideration 2
Lease liabilities
Trade payables
Other payables and accrued expenses
Other liabilities
Total
Contractual cash flow
Carrying
amount
$M
Total
$M
Less than
1 year
$M
1–5 years
$M
14.8
45.7
19.9
27.9
30.0
138.4
(15.4)
(46.0)
(19.9)
(27.9)
(30.0)
(139.3)
(7.4)
(12.0)
(19.9)
(27.9)
(28.5)
(95.7)
(8.0)
(34.1)
–
–
(1.5)
(43.6)
2 The total carrying value of contingent consideration is $54.2m, which includes $39.4m to be settled for an equivalent value of shares
once milestones are achieved and become payable and $14.8m in the table above, which will be cash settled.
Notes to the financial statementsfor the year ended 30 June 2021 W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
1 3 3
24. Financial instruments (continued)
Financial risk management objectives and policies (continued)
Bank debt facilities
An unsecured syndicated facility was executed on 24 December 2018 between Westpac Banking Corporation, The Hongkong
and Shanghai Banking Corporation Limited and Citibank, N.A. The facility has a total syndicated commitment of $190.0m, plus
an additional $200.0m accordion facility and matures in March 2022. The facility was undrawn at 30 June 2021. Please refer
to note 28(f), events after reporting period, for details of new debt facility.
Finance costs are broken down as follows:
Unwinding interest on contingent consideration
Unwinding interest on lease liabilities
Lease liability interest capitalised to intangible assets
Interest expense and facility fees
Other
Total finance costs
2021
$M
1.3
1.6
(0.3)
1.6
1.3
5.5
2020
$M
10.0
1.8
(0.4)
1.3
0.1
12.9
(d) Market risk
Market risk is the risk that changes in market prices such as foreign exchange rates, interest rates and equity prices will adversely
affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage
and control market risk exposures within acceptable parameters, while optimising the return.
Currency risk
Currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in foreign
exchange rates. The source and nature of this risk arise from operations and translation risks.
The Company’s reporting currency is Australian dollars. However, international operations give rise to an exposure to changes
in foreign exchange rates as the majority of revenue from outside Australia is denominated in currencies other than Australian
dollars, most significantly US dollars (“USD”), pounds sterling (“GBP”), and euros (“EUR”).
The Group has exposures surrounding foreign currencies due to non‑functional currency transactions within operations
in overseas jurisdictions.
The Group has hedged approximately 45% of its estimated foreign currency exposure in respect of forecasted sales over
the following 12 months. The Group uses forward exchange contracts and foreign currency collars to hedge its currency risk.
These instruments are generally designated as cash flow hedges.
The Group designates the spot element of foreign exchange instruments to hedge its currency risk and applies a hedge ratio of 1:1.
Any forward elements of forward exchange contracts is excluded from the designation of the hedging instrument and is separately
accounted for in equity in a cash flow hedge reserve.
The Group’s policy is for the critical terms of the foreign exchange instruments to align with the hedged item.
The Group determines the existence of an economic relationship between the hedging instrument and hedged item based on the
currency, amount and timing of their respective cash flows. The Group assesses whether the derivative designated in each hedging
relationship is expected to be and has been effective in offsetting changes in cash flows of the hedged item using the hypothetical
derivative method.
In these hedged relationships, the main sources of the ineffectiveness are the effect of the counterparties and the Group’s own
credit risk on the fair value of the foreign exchange instruments, which is not reflected in the change in the fair value of the hedged
cash flows attributable to the change in exchange rates; and changes in the timing of the hedged transactions.
Notes to the financial statementsfor the year ended 30 June 2021 1 3 4
24. Financial instruments (continued)
Financial risk management objectives and policies (continued)
Details of total outstanding cash flow hedges as at 30 June 2021:
Foreign exchange contracts
EUR
Up to 1 year
1–5 years
Total
USD
Up to 1 year
1–5 years
Total
FX Collars
EUR
Up to 1 year
Total
USD
Up to 1 year
1–5 years
Total
Average
exchange
rates
Contract
value LC 1
(Millions)
Asset
AUD
(Millions)
Liability
AUD
(Millions)
0.6199
0.6261
0.7538
0.7660
22.9
25.1
48.0
111.7
58.0
169.7
0.7
0.2
1.0
1.7
0.2
1.9
(0.2)
(0.4)
(0.5)
(1.9)
(1.5)
(3.4)
Average put
rates
Average call
rates
Contract
value LC 1
(Millions)
Asset
AUD
(Millions)
Liability
AUD
(Millions)
0.6000
0.6315
0.7125
0.7665
0.7480
0.7845
4.2
4.2
18.2
64.8
83.0
0.1
0.1
0.4
–
0.4
–
–
–
(2.3)
(2.3)
Details of total outstanding cash flow hedges as at 30 June 2020:
Foreign exchange contracts
EUR
Up to 1 year
1–5 years
Total
USD
Up to 1 year
1–5 years
Total
1 LC – Local currency.
Average
exchange
rates
Contract
value LC 1
(Millions)
Asset
AUD
(Millions)
Liability
AUD
(Millions)
0.5421
0.5395
0.5950
0.5953
7.0
2.0
9.0
10.3
2.1
12.4
1.4
0.4
1.8
2.3
0.5
2.8
–
–
–
–
–
–
Notes to the financial statementsfor the year ended 30 June 2021 W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
1 3 5
24. Financial instruments (continued)
Financial risk management objectives and policies (continued)
Variance analysis – FY21
A reasonably possible strengthening (weakening) of the USD or EUR weighted average exchange rate against AUD at 30 June 2021
would have affected the measurement of financial instruments denominated in a foreign currency and affected equity by the
amounts shown below. This analysis assumes hedge designations as at 30 June 2021 remain unchanged and that all designations
are effective.
Effect on equity
(pre-tax)
Profit
(pre-tax)
Foreign currency forward
contracts
Average
exchange
rate
+10%
-10%
Change (+10%)
AUD
(Millions)
Change (-10%)
AUD
(Millions)
Change (+10%)
AUD
(Millions)
Change (-10%)
AUD
(Millions)
AUD/EUR
AUD/USD
0.6231
0.7579
0.6854
0.8337
0.5608
0.6821
–
0.2
–
(0.2)
–
–
–
–
Forward contracts with maturity dates greater than 12 months hedge revenues for July 2022 to December 2023.
Variance analysis – FY20
A reasonably possible strengthening (weakening) of the USD or EUR weighted average exchange rate against AUD at 30 June 2020
would have affected the measurement of financial instruments denominated in a foreign currency and affected equity by the
amounts shown below. This analysis assumes hedge designations as at 30 June 2020 remain unchanged and that all designations
are effective.
Effect on equity
(pre-tax)
Profit
(pre-tax)
Foreign currency
forward contracts
AUD/EUR
AUD/USD
Average
exchange
rate
+10%
-10%
Change (+10%)
AUD
(Millions)
Change (-10%)
AUD
(Millions)
Change (+10%)
AUD
(Millions)
Change (-10%)
AUD
(Millions)
0.5415
0.5951
0.5957
0.6546
0.4874
0.5356
0.2
0.3
(0.2)
(0.3)
–
–
–
–
Forward contracts with maturity dates greater than 12 months hedge revenues for April 2020 to June 2020.
A reasonably possible strengthening (weakening) of the USD, GBP or EUR against all other currencies at 30 June 2021 would have
affected the measurement of financial instruments denominated in a foreign currency and affected profit or loss and equity by the
amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any
impact of forecast sales and purchases.
Profit or loss (pre-tax)
Equity
30 June 2021
LC 1
(Millions)
Change (+10%)
LC
(Millions)
Change (-10%)
LC
(Millions)
Change (+10%)
LC
(Millions)
Change (-10%)
LC
(Millions)
USD
Net trade receivables/(payables) exposure
GBP
Net trade receivables/(payables) exposure
EUR
Net trade receivables/(payables) exposure
12.5
0.3
2.3
(1.1)
–
(0.2)
1.4
–
0.3
–
–
–
–
–
–
Notes to the financial statementsfor the year ended 30 June 2021 1 3 6
24. Financial instruments (continued)
Financial risk management objectives and policies (continued)
USD
Net trade receivables/(payables) exposure
GBP
Net trade receivables/(payables) exposure
EUR
Net trade receivables/(payables) exposure
1 LC – Local currency.
Profit or loss (pre-tax)
Equity
30 June 2020
LC
(Millions)
Change (+10%)
LC
(Millions)
Change (–10%)
LC
(Millions)
Change (+10%)
LC
(Millions)
Change (–10%)
LC
(Millions)
7.7
0.3
1.9
(0.7)
–
(0.2)
0.9
–
0.2
–
–
–
–
–
–
Interest rate risk and cash flow sensitivity
At 30 June 2021, the Group held no interest bearing financial liabilities (i.e. bank loans) (2020: nil) and held interest bearing financial
assets (i.e. cash and short‑term deposits) of $315.0m (2020: $223.7m).
Based on the cash balance at 30 June, a reasonably possible change of 100 basis points in interest rates at the reporting date
would increase the profit or loss after tax by $2.2m (2020: increase by $1.6m). This analysis assumes that all other variables,
in particular foreign currency exchange rates, remain constant.
25. Group information
Parent entity
WiseTech Global Limited
Subsidiaries
Candent Australia Pty Ltd
Cargo Community Network Pty Ltd
CMS Transport Systems Pty Ltd
Compdata Technology Services Pty Ltd
Container Chain Pty Ltd
Containerchain Australia Pty Ltd
Containerchain Australia Holdings Pty Ltd
Containerchain Unit Trust
IFS Global Holdings Pty Ltd
IFS Global Pty Ltd 1
IFS NZ Pty Ltd 1
Interactive Freight Systems Pty Ltd
Maximas Pty Ltd
Microlistics International Pty Ltd 1
Microlistics Pty Ltd
Tankstream Systems Pty Ltd
Translogix (Australia) Pty Ltd
WiseTech Academy Pty Ltd
WiseTech Global (Australia) Pty Ltd
Country of
incorporation
Australia
Country of
incorporation
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
% Equity interest
2021
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
–
–
100.0
100.0
–
100.0
100.0
100.0
100.0
100.0
2020
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
Notes to the financial statementsfor the year ended 30 June 2021 W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
1 3 7
25. Group information (continued)
% Equity interest
Subsidiaries
WiseTech Global (Europe) Holdings Pty Ltd
WiseTech Global (Financing) Pty Ltd
WiseTech Global (Licensing) Pty Ltd
WiseTech Global (Holdings 2) Pty Ltd
WiseTech Global (Trading) Pty Ltd
WiseTech Global Holdings Pty Ltd
WiseTech Global Limited Employee Share Trust
WiseTech Global (Argentina) S.A.U.
Intris N.V.
Bysoft Solucoes em Sistemas Para Comercio Exterior Ltda 1
CargoWise Brasil Solucoes em Sistemas Ltda
Fenix Data Systems Inc. 1
WiseTech Global (CA) Ltd
Softcargo Chile SpA
WiseTech Global (China) Information Technology Ltd
Pierbridge Finland Oy
EasyLog SAS
CargoWise GmbH
Containerchain Germany GmbH
Softship GmbH (formerly Softship AG)
znet group GmbH
Containerchain Hong Kong Ltd
WiseTech Global (HK) Ltd
WiseTech Global (India) Private Limited
ABM Data Systems Ltd
Cargo Community Systems Ltd
CargoWise (Ireland) Ltd
A.C.O. Informatica S.r.l.
Kabushiki Kaisha Exas
WiseTech Global (Japan) K.K.
Containerchain Malaysia Sdn Bhd
Maxfame Technologies Sdn Bhd
Cargoguide International B.V.
Containerchain Netherlands B.V.
LSP Solutions B.V.
Containerchain New Zealand Ltd
WiseTech Global (NZ) Ltd
Systema AS
Softship Inc.
Candent Singapore Pte Ltd
Containerchain Global Holdings Pte Ltd
Containerchain (Singapore) Pte Ltd
Country of
incorporation
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Argentina
Belgium
Brazil
Brazil
Canada
Canada
Chile
China
Finland
France
Germany
Germany
Germany
Germany
Hong Kong
Hong Kong
India
Ireland
Ireland
Ireland
Italy
Japan
Japan
Malaysia
Malaysia
Netherlands
Netherlands
Netherlands
New Zealand
New Zealand
Norway
Philippines
Singapore
Singapore
Singapore
2021
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
–
100.0
–
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
2020
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
–
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
Notes to the financial statementsfor the year ended 30 June 2021 1 3 8
25. Group information (continued)
% Equity interest
Subsidiaries
Softship Dataprocessing Pte Ltd
WiseTech Global (SG) Pte Ltd
Compu‑Clearing (Pty) Ltd
Compu‑Clearing Drome Road Property (Pty) Ltd
Compu‑Clearing Outsourcing Ltd
Core Freight Systems (Pty) Ltd
Drome Road Share Block (Pty) Ltd
Wisetechglobal (Pty) Ltd
WiseTech Global LLC
Ready Korea Co., Ltd.
Taric Canarias S.A.
Taric S.A.U.
Taric Trans S.L.
CargoIT i Skandinavien AB
X Ware Aktiebolag
Sisa Studio Informatica SA
WiseTech Global (Taiwan) Ltd
Containerchain (Thailand) Pte Ltd
Ulukom Bilgisayar Yazılım Donanım Danışmanlık ve Ticaret A.Ş.
WiseTech Global FZ‑LLC
LSI – Sigma Software Limited
Pierbridge Ltd
WiseTech Global (International) Ltd
WiseTech Global (UK) Ltd
Eyalir S.A.
Ilun S.A.
Pierbridge Holdings Inc.
Pierbridge Inc.
Planet Traders Inc.
Softship America Inc.
WiseTech Global (US) Inc.
1 Entity de‑registered, merged or amalgamated in 2021.
Country of
incorporation
Singapore
Singapore
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Korea
South Korea
Spain
Spain
Spain
Sweden
Sweden
Switzerland
Taiwan
Thailand
Turkey
UAE
UK
UK
UK
UK
Uruguay
Uruguay
USA
USA
USA
USA
USA
2021
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
2020
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
Notes to the financial statementsfor the year ended 30 June 2021 W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
1 3 9
26. Deed of Cross Guarantee
Pursuant to the relief provided under ASIC Corporations (Wholly-owned Companies) Instrument 2016/785, the ten wholly‑owned
subsidiaries listed below are relieved from the Corporations Act 2001 requirements for preparation, audit and lodgement of financial
reports, and Directors’ reports.
In order to receive the benefit of the relief provided under the Instrument, the Company and each subsidiary must be a party
to the Deed of Cross Guarantee. The effect of the Deed of Cross Guarantee is that each party guarantees to each creditor of each
other party, payment in full of any debt in the event of winding up of another party to the Deed of Cross Guarantee under certain
provisions of the Corporations Act 2001.
Details of entities entering and exiting the Deed of Cross Guarantee, which represent a ‘Closed Group’ for the purposes of the
Instruments are as follows:
Parent entity
WiseTech Global Limited
Subsidiary entities
Microlistics International Pty Ltd
Microlistics Pty Ltd
Translogix (Australia) Pty Ltd
WiseTech Academy Pty Ltd
WiseTech Global (Australia) Pty Ltd
WiseTech Global (Europe) Holdings Pty Ltd
WiseTech Global (Financing) Pty Ltd
WiseTech Global (Licensing) Pty Ltd
WiseTech Global Holdings Pty Ltd
WiseTech Global (Holdings 2) Pty Ltd
WiseTech Global (Trading) Pty Ltd
Assumption date
Revocation date
20 Jun 2017
–
15 Jun 2018
15 Jun 2018
6 Jun 2019
6 Jun 2019
20 Jun 2017
6 Jun 2019
6 Jun 2019
15 Jun 2018
5 May 2021
5 May 2021
20 Jun 2017
5 Dec 2020
–
–
–
–
–
–
–
–
–
–
The Consolidated statement of profit or loss and other comprehensive income and Consolidated statement of financial position
of the entities that are members of the Closed Group, after eliminating all transactions between members of the Closed Group,
are as follows:
Profit from continuing operations before income tax
Income tax expense
Profit after tax from continuing operations
Retained earnings at the beginning of the period
Opening retained earnings of entities added to the deed
Net profit for the period
Dividend declared and paid
Vesting of share rights
Tax benefit from equity remuneration
Retained earnings at the end of the period
Closed Group
2021
$M
131.5
(34.7)
96.7
213.3
1.5
96.7
(14.0)
0.5
3.1
301.1
2020
$M
132.3
(25.3)
106.9
130.2
–
106.9
(11.6)
(17.5)
5.2
213.3
Notes to the financial statementsfor the year ended 30 June 2021 1 4 0
26. Deed of Cross Guarantee (continued)
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Intercompany receivables
Derivative financial instruments
Current tax receivables
Other current assets
Total current assets
Non-current assets
Investments in subsidiaries
Intangible assets
Property, plant and equipment
Derivative financial instruments
Other non‑current assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Intercompany payables
Lease liabilities
Deferred revenue
Employee benefits
Current tax liabilities
Derivative financial instruments
Other current liabilities
Total current liabilities
Non-current liabilities
Lease liabilities
Employee benefits
Deferred tax liabilities
Derivative financial instruments
Other non‑current liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Reserves
Retained earnings
Total equity
Closed Group
2021
$M
2020
$M
222.5
39.6
8.7
2.9
–
15.3
289.0
750.7
229.7
24.0
0.4
3.8
1,008.6
1,297.6
26.3
9.6
4.1
7.5
13.8
2.3
2.1
43.2
108.8
9.8
2.1
58.0
4.3
7.4
81.5
190.3
1,107.4
827.8
(21.6)
301.1
1,107.4
165.6
29.8
16.6
3.7
2.0
12.9
230.7
693.9
189.4
27.3
0.9
1.1
912.5
1,143.2
18.6
–
3.8
5.3
11.3
–
–
25.6
64.6
14.4
1.7
42.6
–
28.5
87.2
151.8
991.4
779.8
(1.7)
213.3
991.4
Notes to the financial statementsfor the year ended 30 June 2021 W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
1 4 1
27. Parent entity information
As at, and throughout the financial year ended, 30 June 2021 the parent entity of the Group was WiseTech Global Limited.
Result of parent entity
Net profit for the year
Total comprehensive income for the year
Financial position of parent entity at year end
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Total equity of parent entity comprising:
Share capital
Reserves
Retained earnings
Total equity
2021
$M
113.1
113.1
2021
$M
592.5
1,241.2
41.9
113.5
1,127.6
2020
$M
48.8
48.8
2020
$M
537.7
1,097.3
39.2
103.0
994.3
2021
$M
2020
$M
827.8
(7.7)
307.5
1,127.6
779.8
(2.7)
217.3
994.3
(a) Parent entity contingent liabilities
The parent entity has provided guarantees for the future settlement of a portion of contingent consideration (cash and shares)
recognised in subsidiaries of the Group. There are no other contingent liabilities as at 30 June 2021 or 30 June 2020.
(b)
Parent entity capital commitments for acquisition of property,
plant and equipment
The parent entity had no capital commitments as at 30 June 2021 or 30 June 2020.
(c) Parent entity guarantees in respect of the debts of its subsidiaries
The parent entity has entered into a Deed of Cross Guarantee. Refer to note 26 for further details.
Notes to the financial statementsfor the year ended 30 June 2021 1 4 2
28. Other policies and disclosures
(a) Principles of consolidation
The Consolidated financial statements incorporate all of the assets, liabilities and results of WiseTech Global Limited and all of the
subsidiaries. Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the Group from the date
on which control is obtained by the Group. The consolidation of a subsidiary is discontinued from the date that control ceases.
When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any related
non-controlling interest and other components of equity. Any resulting gain or loss is recognised in profit or loss. Any interest
retained in the former subsidiary is measured at fair value when control is lost.
Intercompany transactions, balances and unrealised gains or losses on transactions between Group entities are fully eliminated
on consolidation. Accounting policies of subsidiaries have been changed and adjustments made where necessary to ensure
uniformity of the accounting policies adopted by the Group.
(b) Foreign currency transactions and balances
Transactions and balances
Foreign currency transactions are translated into the functional currency, using the exchange rates prevailing at the date of the
transaction. Foreign currency monetary items are translated at the exchange rate at the reporting date. Non‑monetary items
measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non‑monetary items
measured at fair value in a foreign currency are translated to the functional currency at the exchange rate when fair values
were determined.
Exchange differences arising on the translation of monetary items are recognised in profit or loss, except where deferred in equity
as a qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of non‑monetary items are recognised directly in other comprehensive income
to the extent that the underlying gain or loss is recognised in other comprehensive income; otherwise, the exchange difference
is recognised in profit or loss.
Group companies
The financial results and position of foreign operations whose functional currency is different from the Group’s presentation
currency are translated as follows:
– assets and liabilities including goodwill and fair value adjustments arising on acquisition are translated at exchange rates
prevailing at the reporting date;
– income and expenses are translated at average exchange rates for the period; and
– retained earnings are translated at the exchange rates prevailing at the date of the transactions.
Exchange differences arising on translation of foreign operations with functional currencies other than Australian dollars are
recognised in other comprehensive income and included in the foreign currency translation reserve in the Consolidated statement
of financial position. The cumulative amount of these differences is reclassified into profit or loss in the period in which the
operation is disposed of.
Currency of hyperinflationary economy
If the functional currency of a foreign operation is the currency of a hyperinflationary economy, then its financial information is first
adjusted to reflect the purchasing power at the current reporting date and then translated into the presentation currency, using the
exchange rate at the current reporting date.
(c) Provisions
Provisions are recognised when the Group has a legal or constructive obligation as a result of past events, for which it is probable
that an outflow of economic benefits will result and that outflow can be reliably measured.
Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments
of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as a finance cost.
Notes to the financial statementsfor the year ended 30 June 2021 W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
1 4 3
28. Other policies and disclosures (continued)
(d) Standards issued but not yet effective
A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 July 2021
and have not been applied in preparing these Consolidated financial statements.
The following amended standards and interpretations are not expected to have a significant impact on the Group’s Consolidated
financial statements:
– AASB 2021‑3 Amendments to Australian Accounting Standards – Covid-19-Related Rent Concessions beyond 30 June 2021;
– AASB 2014‑10 Amendments to Australian Accounting Standards – Sale or Contribution of Assets between an Investor and its
Associate or Joint Venture.
(e) Commitments and contingencies
Guarantees
The Group has not provided for any material guarantees at 30 June 2021 (2020: nil).
Contingent assets and contingent liabilities
There were no contingent assets or liabilities of the Group in relation to FY21 or FY20.
(f) Events after reporting period
New debt facility
On 28 July 2021, a new unsecured four‑year bi‑lateral debt facility was executed with six banks and the previous facility was retired.
The new facility has a total commitment of $225.0m.
Dividend
Since the period end, the Directors have declared a fully franked final dividend of 3.85 cents per share, payable 8 October 2021.
The dividend will be recognised in subsequent financial statements.
Notes to the financial statementsfor the year ended 30 June 2021 1 4 4
In accordance with a resolution of the Directors of WiseTech Global Limited, we state that:
1.
In the opinion of the Directors:
(a) the consolidated financial statements and notes that are set out on pages 94 to 143 and the Remuneration report
on pages 67 to 86 in the report are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2021 and of its performance
for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable.
2. There are reasonable grounds to believe that the Company and the Group entities identified in Note 26 will be able to meet
any obligations or liabilities to which they are or may become subject to by virtue of the Deed of Cross Guarantee between
the Company and those Group entities pursuant to ASIC Corporations (Wholly owned Companies) Instrument 2016/785.
3. This declaration has been made after receiving the declarations required to be made to the Directors by the chief executive
officer and chief financial officer in accordance with section 295A of the Corporations Act 2001 for the financial year ended
30 June 2021.
4. The Directors draw attention to note 2 to the consolidated financial statements, which includes a statement of compliance
with the International Financial Reporting Standards.
On behalf of the board
Andrew Harrison
Chair
25 August 2021
Richard White
Executive Director, Founder and CEO
25 August 2021
Directors’ declarationfor the year ended 30 June 2021 W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
1 4 5
This is the original version of the audit report over the financial statements signed by the directors on
25 August 2021. Page references in relation to the Remuneration Report should be read as referring to
pages 68 to 86 as opposed to 7 to 22, to reflect the correct references now that the financial
statements have been presented in the context of the annual report in its entirety.
Independent Auditor’s Report
To the shareholders of WiseTech Global Limited
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of
WiseTech Global Limited (the Company).
In our opinion, the accompanying
Financial Report of the Company is in
accordance with the Corporations Act
2001, including:
•
•
giving a true and fair view of the
Group's financial position as at 30
June 2021 and of its financial
performance for the year ended on
that date; and
complying with Australian
Accounting Standards and the
Corporations Regulations 2001.
Basis for opinion
The Financial Report comprises:
• Consolidated statement of financial position as at 30
June 2021
• Consolidated statement of profit or loss and other
comprehensive income, Consolidated statement of
changes in equity, and Consolidated statement of cash
flows for the year then ended
• Notes including a summary of significant accounting
policies
• Directors' Declaration.
The Group consists of the Company and the entities it
controlled at the year end or from time to time during the
financial year.
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the
audit of the Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of
the Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordance with the
Code.
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member
firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights
reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the
KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation.
Independent Auditor’s Reportfor the year ended 30 June 2021 1 4 6
Key Audit Matters
The Key Audit Matters we identified are:
•
•
•
•
Recognition of revenue;
Capitalisation of software
development costs;
Accounting for contingent
consideration; and
Testing for impairment of goodwill
and intangible assets.
Recognition of revenue ($507.5m)
Key Audit Matters are those matters that, in our
professional judgement, were of most significance in our
audit of the Financial Report of the current period.
These matters were addressed in the context of our audit
of the Financial Report as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion
on these matters.
Refer to Note 3 ‘Revenue,’ and Note 13 ‘Deferred revenue’ of the financial report
The key audit matter
How the matter was addressed in our audit
The recognition of revenue is considered
to be a key audit matter due to:
•
The significance of revenue to the
financial statements;
Our procedures included:
• We stratified the revenue population into homogenous
revenue streams for the purposes of performing our
testing;
• Recurring CargoWise One revenue
•
that is earned in relation to customer
usage is determined by the Group
with reference to price lists and
complex discount structures. It
involves high volumes of customer
transaction data recorded using a
highly automated billing system.
Auditing the revenue recognised
based on this transactional data
requires significant effort, including
the use of IT and Data Specialists to
supplement our senior audit team
members; and
• Remaining revenue is recorded across
a large number of different billing
systems as a result of multiple
acquisitions. Auditing this revenue
requires significant audit effort with
extensive sample sizes, and involving
multiple overseas KPMG teams.
For key recurring CargoWise One revenue streams,
where revenue is recognised based on customer
usage of the software, with the assistance of our IT
and Data Specialists, we developed an expectation of
the revenue for the year and compared this to the
amount recorded by the Company. The formation of
our expectation involved:
-
-
-
-
-
-
understanding the Group’s process for collection of
transaction data, and the application of price lists
and discount structures to this data;
assessing the completeness, existence and
accuracy of transaction data interfaced with the
billing module;
inspecting transaction data which is not subject to
billing for consistency with our understanding of the
process;
testing controls over access to the billing module,
price lists and discount structures;
testing the interface of the output from the billing
module to the general ledger; and
assessing for a sample of customers the
appropriateness of price list records and discount
structures based on their underlying contract
Independent Auditor’s Reportfor the year ended 30 June 2021 W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
1 4 7
documentation.
• We tested the Group’s key manual revenue
recognition controls including;
-
-
-
•
approval of new customer contracts;
review and approval of customers initial billing
invoice, including checking prices to underlying
signed customer contracts;
review of monthly billing data.
For other revenue, we selected a statistical sample of
revenue across the Group’s subsidiaries. We tested
revenue recognition and related deferred revenue, by
obtaining and inspecting revenue contracts and
invoices, checking against cash receipts recorded in
bank statements, and using the conditions of the
contract to check appropriateness of the timing of
revenue. We evaluated the adequacy of disclosures
included in the financial report against the
requirements of the accounting standards.
Capitalisation of software development costs ($77.6m)
Refer to Note 7 ‘Intangible assets’ of the financial report
The key audit matter
How the matter was addressed in our audit
Capitalisation of software costs is
considered to be a key audit matter due
to:
•
•
•
The high volume of software
developer hours;
The Group’s calculation of the amount
of hours capitalised is reliant on data
extracts from the Company’s
automated software workflow tool
(PAVE) used for monitoring and
recording the activities of software
developers for the majority of its
capitalised software development;
The Group develops its software
products using an iterative
development methodology. This
approach requires more judgement in
assessing the Group’s application of
the requirements of the accounting
Our procedures included:
• We inspected the Group’s documentation on the
status of projects and the evaluation of the future
economic return of the software under development;
• We assessed the Group’s positions using our
knowledge of the business and projects, and through
discussions with various stakeholders, including:
Project Managers, the Chief Technology Officer, the
Chief Executive Officer and the Chief Financial Officer.
We also inspected price lists and Board of Director’s
papers to evaluate these assertions;
• We obtained an understanding of the Group’s
software development processes and how software
developers use PAVE to record activities;
• We inspected the information recorded in PAVE and
assessed the Group’s identification of activities that
constitute development;
Independent Auditor’s Reportfor the year ended 30 June 2021 1 4 8
standards to capitalise the
development costs. These
assessments include:
• Working with our IT specialists we tested the
computer system controls designed to safeguard
information recorded in PAVE;
- Whether a project can be
completed and produce a viable
software product;
- whether an activity is eligible for
capitalisation;
-
determination of the appropriate
rate per hour for developers’ time
eligible for capitalisation; and
- whether a project is available for its
intended use and, accordingly,
commence amortisation.
We involved IT specialists to supplement
our senior audit team members in
assessing this key audit matter
• We tested a statistical sample of PAVE and non-PAVE
recorded developer time capitalised, to check the
activities being performed related to a project in
development or an enhancement to an existing
software product as opposed to research or
maintenance;
• We tested the capitalisation of developer hours to
projects on a sample basis;
-
-
-
evaluating task descriptions logged against the
criteria in the accounting standards;
assessing, for the sampled activity, the hours
recorded for coding relates to an employee with a
developer related role; and
investigated task nature with Project Managers.
• We assessed the rate per hour calculations applied to
time eligible for capitalisation by testing a sample of
key inputs to underlying records. We also assessed
the Group’s allocation of directly attributable overhead
costs against the criteria within the accounting
standards.
• We considered the appropriateness of the
amortisation period including the commencement
date of amortisation for completed projects for the
capitalised software development costs.
• We evaluated the adequacy of the disclosures
included in the financial report against the
requirements of the accounting standards.
Accounting for contingent consideration ($36.4m)
Refer to Note 14 ‘Other liabilities’ and Note 24 ‘Financial instruments’ of the financial report.
The key audit matter
How the matter was addressed in our audit
In accordance with the accounting
standards and the Group’s policy,
contingent consideration payable is initially
recognised at fair value in connection with
a business combination, and subsequently
assessed at each reporting period. During
the measurement period (maximum 12
Our procedures included:
• We assessed the Group’s determination of the
contingent consideration against the contractual terms
of the underlying sale and purchase agreements and
the criteria in the accounting standards;
Independent Auditor’s Reportfor the year ended 30 June 2021 W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
1 4 9
months following the acquisition), if new
information is obtained about facts and
circumstances that existed at the
acquisition date and, if known, would have
affected the measurement of amounts
recognised as of that date, then fair values
are reassessed and adjusted against
goodwill. After the measurement period,
all reassessments, settlements and fair
value adjustments are made through the
profit or loss. There is uncertainty
regarding the actual contingent
consideration payments that will be made
by the Group, as they are subject to
financial and non-financial metrics and
targets occurring in the future.
The fair value of contingent consideration
is a key audit matter due to the judgement
applied by us when evaluating the Group’s
assessment of fair value of these
arrangements. We focused on:
•
•
•
assessing the feasibility of forward
looking assumptions in relation to the
achievement of financial and non-
financial metrics;
assessing whether for accounting
purposes contingent consideration
obligations that are settled in shares,
are classified as either a liability or
equity; and
assessing whether remeasurement of
the liability is to be accounted for as a
measurement period adjustment to
business combination accounting.
• We checked the integrity of the Group’s fair value of
contingent consideration models including accuracy of
the underlying calculation formula;
• We evaluated the forward looking assumptions
underpinning the significant judgements used by the
Group including examining the basis for the Group’s
expectation that remaining contingent consideration
will be paid. We did this by considering the
performance assumptions (financial and non-financial)
against the actual performance achieved to date and
our understanding of the business and economic
environment relevant in the forecast period;
• Where contingent consideration obligations are to be
settled through the issuance of shares, we assessed
the Group’s classification of those obligations as either
a liability or equity for appropriateness. We did this by
inspecting the terms of the sale and purchase
agreement and considering the application of the
criteria in the accounting standards. We evaluated the
amounts recognised in the acquisition reserve and the
profit or loss by assessing contractual terms and
amended agreement terms, and applying relevant
share prices and foreign exchange rates, with
reference to the requirements of the accounting
standards;
• We assessed the remeasurement of contingent
consideration not being treated as a measurement
period adjustment to business combination accounting
(i.e. which would have been adjusted against
goodwill), by evaluating the factors giving rise to the
remeasurement;
• We evaluated the adequacy of the disclosures
included in the financial report against the
requirements of the accounting standards.
Independent Auditor’s Reportfor the year ended 30 June 2021 1 5 0
Testing for impairment of goodwill and other intangible assets ($904.5m)
Refer to Note 7 ‘Intangible assets’ of the financial report.
The key audit matter
How the matter was addressed in our audit
The Group’s annual testing of goodwill and
intangible assets for impairment is a key audit
matter, given the size of the balance relative to
total assets and the judgements applied by us
in assessing the Group’s identification of Cash
Generating Units (CGUs), allocation of goodwill
and the forward-looking assumptions that the
Group applied in their value in use models.
We focused on:
•
Identification of CGUs – non-financial
assets (other than goodwill) are required to
be assessed for impairment separately, or
as part of a CGU where the assets do not
generate independent cash inflows. As the
Group is pursuing a strategy for the
integration of acquired businesses,
assessing whether an acquired business
generates substantially independent cash
inflows during the process of integration
with the global platform requires
judgement;
• Allocation of goodwill to CGUs – goodwill
is required to be allocated to the CGU or
group of CGUs that is expected to benefit
from the synergies of the business
combination. As the Group is acquiring
businesses for the purposes of integrating
functionality into a global platform,
determining which of the CGUs that these
synergies will be obtained, and the amount
of goodwill to be allocated to them
requires judgement; and
•
Forward looking assumptions - forecast
cash flows, growth rates, discount rates
and terminal growth rates used by the
Group given their inherent uncertainty.
We involved valuation specialists to
supplement our senior audit team members in
assessing this key audit matter.
Our procedures included:
• We assessed the Group’s determination of the
CGUs used in the impairment model and the
determination that goodwill is tested at the single
group of CGU level with other intangible and
operating assets test at a lower level, based on
our understanding of the Group’s business,
acquisition strategy, and examination of cash
inflows. We assessed these against the criteria in
the accounting standards. We also considered
internal reporting of the Group’s results to assess
how earnings and goodwill are monitored and
reported;
• We assessed the impairment testing
methodology used by the Group against the
requirements of Australian Accounting Standards;
• We tested the mathematical accuracy of the
Group’s value in use models;
• We assessed the Group’s cash flow forecasts
including;
-
-
Consideration of the historical accuracy of
previous estimates
Reconciled the underlying cash flow
projections to Board approved forecasts
• We assessed the cash flows and related growth
rates applied in the models by comparing them to
external analysts’ reports. We checked the
consistency of the growth rates to the Group’s
stated plan and strategy, past performance of the
Group, and our experience regarding the
feasibility of these in the industry in which they
operate;
• Working with our valuation specialists we
assessed the Group’s assumptions for terminal
growth rates in comparison to economic and
industry forecasts;
• Working with our valuation specialists we
analysed the discount rates against publicly
Independent Auditor’s Reportfor the year ended 30 June 2021 W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
1 5 1
available data of a group of comparable entities,
adjusted by risk factors specific to the Group;
• We performed sensitivity analyses on the key
assumptions used in the models and applied
other values within a range that we assessed as
being reasonably possible, to focus our further
work; and
• We assessed the disclosures in the financial
report using our understanding of the Group’s
testing for impairment obtained from our
procedures and against the requirements of the
accounting standards.
Other Information
Other Information is financial and non-financial information in WiseTech Global Limited’s annual reporting
which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are
responsible for the Other Information.
The Other Information we obtained prior to the date of this Auditor’s Report was the Operating and
Financial Review, Board of Directors, and the Directors’ Report. The Financial Highlights, Strategic
highlights, Chair’s Letter, CEO’s message, Our business, Sustainability report (Environmental, social and
governance), Five year financial summary, Risk management, Shareholder information, Glossary and
Corporate Directory are expected to be made available to us after the date of the Auditor's Report.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not and
will not express an audit opinion or any form of assurance conclusion thereon, with the exception of the
Remuneration Report and our related assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In
doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or
our knowledge obtained in the audit, or otherwise appears to be materially misstated.
We are required to report if we conclude that there is a material misstatement of this Other Information,
and based on the work we have performed on the Other Information that we obtained prior to the date of
this Auditor’s Report we have nothing to report.
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
• preparing the Financial Report that gives a true and fair view in accordance with Australian
Accounting Standards and the Corporations Act 2001
•
•
implementing necessary internal control to enable the preparation of a Financial Report that gives a
true and fair view and is free from material misstatement, whether due to fraud or error
assessing the Group and Company's ability to continue as a going concern and whether the use of
the going concern basis of accounting is appropriate. This includes disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless they
Independent Auditor’s Reportfor the year ended 30 June 2021 1 5 2
either intend to liquidate the Group and Company or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
•
to obtain reasonable assurance about whether the Financial Report as a whole is free from material
misstatement, whether due to fraud or error; and
•
to issue an Auditor’s Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error. They 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 the Financial Report.
A further description of our responsibilities for the audit of the Financial Report is located at the Auditing
and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our
Auditor’s Report.
Report on the Remuneration Report
Opinion
Directors’ responsibilities
In our opinion, the Remuneration
Report of WiseTech Global Limited for
the year ended 30 June 2021,
complies with Section 300A of the
Corporations Act 2001.
The Directors of the Company are responsible for the
preparation and presentation of the Remuneration Report in
accordance with Section 300A of the Corporations Act 2001.
Our responsibilities
We have audited the Remuneration Report included in pages 7
to 22 of the Directors’ report for the year ended 30 June 2021.
Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
KPMG
Caoimhe Toouli
Partner
Sydney
25 August 2021
Independent Auditor’s Reportfor the year ended 30 June 2021 W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
1 5 3
WiseTech Global Limited ordinary shares
WiseTech Global’s ordinary shares are listed on the Australian Securities Exchange under ASX code: WTC.
At a general meeting, every shareholder present, in person or by proxy, attorney or representative has one vote on a show of hands
and, on a poll, one vote for each share held.
All information below is as at 1 September 2021.
Distribution of shareholdings
Number of shares held
Number of holders
Number of shares
% of issued capital
100,001 and over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
55
203
280
2,310
10,801
13,649
309,399,416
5,440,036
1,930,726
4,929,501
3,237,343
95.22
1.67
0.59
1.52
1.00
324,937,022
100.00
There were 268 investors holding less than a marketable parcel of 11 shares (based on a share price of $48.45).
Largest 20 shareholders
Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
RealWise Holdings Pty Limited
HSBC Custody Nominees (Australia) Limited
J P Morgan Nominees Australia Pty Limited
Citicorp Nominees Pty Limited
Fabemu No 2 Pty Ltd ABN 67 003 954 070
MSG Holdings Pty Ltd
Mr Richard John White
Citicorp Nominees Pty Limited
Mr Michael John Gregg & Mrs Suzanne Jane Gregg
National Nominees Limited
Merrill Lynch (Australia) Nominees Pty Limited
BNP Paribas Noms Pty Ltd
BNP Paribas Nominees Pty Ltd
Solium Nominees (Aus) Pty Ltd
Mycroft Investments Pty Ltd
HSBC Custody Nominees (Australia) Limited ‑ A/C 2
HSBC Custody Nominees (Australia) Limited
BNP Paribas Nominees Pty Ltd Six Sis Ltd
Solium Nominees (Australia) Pty Ltd
20
Mr William Leigh Porter
Total
Number of shares
% of issued capital
137,015,458
43,574,980
37,217,698
17,425,477
17,127,197
7,339,893
6,110,800
5,632,093
5,296,707
5,169,371
4,766,939
4,381,490
2,646,856
1,616,574
1,567,000
1,224,081
970,411
929,900
858,029
730,000
301,600,954
42.17
13.41
11.45
5.36
5.27
2.26
1.88
1.73
1.63
1.59
1.47
1.35
0.81
0.50
0.48
0.38
0.30
0.29
0.26
0.22
92.82
Shareholder information 1 5 4
Substantial shareholders
The following have disclosed a substantial shareholder notice:
Name
Number of shares
% of voting power
Date of latest notice
Richard White and RealWise Holdings Pty Ltd
Charles Gibbon, Fabemu No 2 Pty Ltd and
Gibbon Family Holdings Pty Limited
145,094,141
17,349,014
44.66
5.47
30 April 2021
6 May 2019
Shares subject to voluntary escrow
Number of shares
34,328
21,081
Unlisted securities
Date period of escrow ends
19 January 2022
8 July 2022
There were a total of 2,296,547 share rights on issue, held by 1,212 individual holders. Share rights have no voting rights.
On‑market buy‑back
There is no current on‑market buy‑back.
Shareholder information
W I S E T E C H G L O B A L A N N U A L R E P O R T 2 0 2 1
1 5 5
Term
3PL
Attrition rate
BCO
CargoWise
Meaning
Third party logistics provider
Annual attrition rate is a customer attrition measurement relating to the CargoWise platform
(excluding any customers on acquired platforms). A customer’s users are included in the customer
attrition calculation upon leaving i.e. having not used the product for at least four months
Beneficial Cargo Owner
Our flagship product, a single source, cloud-based, deeply integrated global platform for the logistics
industry; see page 13
CargoWise Neo
Our global integrated platform for BCOs
‘Contracted and
in Progress’ global rollouts
Refers to CargoWise customers who are contracted to grow to rolling out CargoWise in 10 or more
countries and for 400 or more registered users
EBITDA
Ecosystem
Foothold acquisition
Global manufactured
trade flows
‘In Production’ global
rollouts
Large Global Freight
Forwarder
Earnings before interest, tax, depreciation and amortisation
A complex network or interconnected system of components and participants
Targeted acquisitions of strategically valuable software providers in key regions (in Europe, Asia and
the Americas focusing primarily on customs and cross‑border capability) to provide safer, faster,
stronger entry into new geographic markets
Refers to import and export related manufactured commodities
Refers to CargoWise customers who are operationally live on CargoWise and using the platform
on a production database (rolled out in 10 or more countries and 400 or more registered users
on CargoWise)
A Large Global Freight Forwarder is a CargoWise customer contracted to grow or who has grown
either organically or contractually to 10 or more countries and 400 or more registered users
on CargoWise
NPAT
Net profit after tax attributable to equity holders of the parent
Production Release
of native customs
R&D
Recurring revenue
CargoWise Customs is defined as ‘Production Release’ for a particular country when the product
module has been released into the main CargoWise release build, available for production use
by any customer, and is able to be used for all major customs import/export procedures
Total investment in product design and development expense, excluding depreciation and
amortisation, but including capitalised development investment
Recurring revenue is the sum of On‑Demand revenue and OTL maintenance revenue which
is categorised in our statutory financial statements as recurring monthly and recurring annual
software usage revenue
Share right
A right to receive an ordinary share in WiseTech Global at a point in the future. Share rights are issued
to employees
TSR
Total Shareholder Return
Underlying NPAT
Net Profit After Tax excluding fair value adjustments from changes to acquisition contingent
consideration and contingent consideration interest unwind net of tax
Glossary 1 5 6
Shareholder enquiries
Enquiries about shareholdings in WiseTech Global
Please direct all correspondence to WiseTech Global’s share registry:
Link Market Services
Level 12, 680 George Street
Sydney NSW 2000
Telephone: 1300 554 474
Email: registrars@linkmarketservices.com.au
Website: www.linkmarketservices.com.au
Further information about WiseTech Global
Website
www.wisetechglobal.com/investors
Investor relations
Email: investor.relations@wisetechglobal.com
Telephone: +61 (0)2 8001 2200
Registered office
Unit 3a, 72 O’Riordan Street
Alexandria NSW 2015
Telephone: +61 (0)2 8001 2200
Company Secretary
Email: company.secretary@wisetechglobal.com
Telephone: +61 (0)2 8001 2200
Auditor
KPMG
Level 38, Tower Three
International Towers Sydney
300 Barangaroo Avenue
Sydney NSW 2000
Telephone: +61 (0)2 9335 7000
Corporate directory wisetechglobal.com/investors