TIDMESG
RNS Number : 9433X
eServGlobal Limited
25 August 2009
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announcement in PDF format
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eServGlobal Limited
ABN 59 052 947 743
Financial report for the financial
year ended 30 June 2009
Annual financial report
for the financial year ended
30 June 2009
Contents
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| | Page |
+-----------------------------------------+-----------------------------------------+
| | |
+-----------------------------------------+-----------------------------------------+
| Directors' report | 2 |
+-----------------------------------------+-----------------------------------------+
| | |
+-----------------------------------------+-----------------------------------------+
| Auditor's independence declaration | 16 |
+-----------------------------------------+-----------------------------------------+
| | |
+-----------------------------------------+-----------------------------------------+
| Corporate governance statement | 17 |
+-----------------------------------------+-----------------------------------------+
| | |
+-----------------------------------------+-----------------------------------------+
| Independent audit report | 23 |
+-----------------------------------------+-----------------------------------------+
| | |
+-----------------------------------------+-----------------------------------------+
| Directors' declaration | 25 |
+-----------------------------------------+-----------------------------------------+
| | |
+-----------------------------------------+-----------------------------------------+
| Income statement | 26 |
+-----------------------------------------+-----------------------------------------+
| | |
+-----------------------------------------+-----------------------------------------+
| Balance sheet | 27 |
+-----------------------------------------+-----------------------------------------+
| | |
+-----------------------------------------+-----------------------------------------+
| Statement of recognised income and | 28 |
| expense | |
+-----------------------------------------+-----------------------------------------+
| | |
+-----------------------------------------+-----------------------------------------+
| Cash flow statement | 29 |
+-----------------------------------------+-----------------------------------------+
| | |
+-----------------------------------------+-----------------------------------------+
| Notes to the financial statements | 30 |
+-----------------------------------------+-----------------------------------------+
| | |
+-----------------------------------------+-----------------------------------------+
| Additional securities exchange | 76 |
| information | |
+-----------------------------------------+-----------------------------------------+
| | |
+-----------------------------------------+-----------------------------------------+
Directors' report
+-------------------+-----------------------------------------------------------------+
| The directors of eServGlobal Limited submit herewith the annual financial report |
| for the financial year ended 30 June 2009. In order to comply with the provisions |
| of the Corporations Act 2001, the directors' report is as follows: |
| |
+-------------------------------------------------------------------------------------+
| The names and particulars of the directors of the company during or since the end |
| of the financial year are: |
+-------------------------------------------------------------------------------------+
| | |
+-------------------+-----------------------------------------------------------------+
| Name | Particulars |
+-------------------+-----------------------------------------------------------------+
| David Smart | Aged 66. Non-executive Chairman and Chairman of the Audit |
| | Committee. |
| | David held senior executive positions in large scale |
| | manufacturing and merchandising businesses for more than 20 |
| | years. This includes 13 years as Chief Financial Officer of |
| | Tubemakers of Australia Limited and Metal Manufactures Limited. |
| | He is a non-executive director of a listed company Saunders |
| | International Limited. |
| | David holds a Bachelor of Commerce and MBA from the University |
| | of New South Wales and is a Fellow of the Australian Society of |
| | Certified Practicing Accountants. |
| | David has been member of the Board since July 2000 and was |
| | appointed the Chairman on 23 July 2009. |
| | |
+-------------------+-----------------------------------------------------------------+
| Richard Mathews | Aged 45. Director and Chief Executive Officer. |
| | Richard has over 20 years management experience in |
| | telecommunications, software and investment. |
| | Prior to joining eServGlobal, he established MHB Holdings, and |
| | held the position of Managing Partner. Previous positions |
| | include senior Vice President of J.D. Edwards and Chief |
| | Executive Officer of Mincom, Australia's largest enterprise |
| | software company. |
| | Richard joined the Board in July 2009, and was appointed as a |
| | director on 23 July 2009. |
| | |
+-------------------+-----------------------------------------------------------------+
| François Barrault | Aged 49. Non-executive director. |
| | Francois was formerly CEO of BT Global services and member of |
| | the board and the operating committee of BT Group PLC until |
| | October 2008. François joined BT group in April 2004 as |
| | President of BT International. He has played significant roles |
| | within Lucent Technologies such as President Mobility |
| | International and President and CEO EMEA. Prior to Lucent, |
| | François worked at Ascend Communications, where he held the |
| | position of Senior Vice President, International. He has over |
| | 18 years' experience in this industry, including executive |
| | positions within IBM, Computervision/Prime and Stratus. |
| | François was also co-founder and Chairman of the Board of |
| | Astria, an e-commerce software supplier. He has an extensive |
| | knowledge of the International and European sector. |
| | François holds a Master of Science (D.E.A) in Robotics/AI and |
| | an E.D.P in Engineering from the Ecole Centrale de Nantes. |
| | François is based in Brussels, Belgium. |
| | François has been a member of the Board since March 2003. |
| | |
+-------------------+-----------------------------------------------------------------+
Directors' report
+-------------------+-----------------------------------------------------------------+
| Ian Buddery | Aged 51.Non-executive director and Company Secretary. |
| | Ian Buddery was a founder, past director and CEO of |
| | eServGlobal. He holds a significant interest in the company |
| | through a private company. During his 30 years in the |
| | technology industry, Ian has held senior management positions |
| | with major multinational vendor organisations and local firms. |
| | He has extensive international business experience, |
| | particularly in Europe and Australasia. |
| | Ian Buddery was Executive Chairman until 23 July 2009. |
| | |
+-------------------+-----------------------------------------------------------------+
| Anthony M Eisen | Aged 37. Non-executive director. |
| | Anthony Eisen is a chartered accountant with over 15 years |
| | experience in finance and investment. He is currently an |
| | executive of Guinness Peat Group (GPG). Prior to joining GPG, |
| | Anthony was an investment banker in Australia and the United |
| | States, wherein he specialised in the media, technology and |
| | telecommunications industries. Anthony commenced his |
| | professional career as an accountant with PriceWaterhouse. |
| | Anthony currently represents the interests of the GPG group on |
| | the boards of MMC Contrarian, Capral Limited and Tower Limited. |
| | Anthony joined the Board in March 2009. |
+-------------------+-----------------------------------------------------------------+
| Anthony Gilbert | Aged 57. Non-executive director and member of the Remuneration |
| | and Nominations Committee. |
| | Anthony was formerly Group Strategic Resourcing Director at |
| | Vodafone PLC. He joined Vodafone in April 2000 as Group |
| | Management Development Director, and was appointed to the Group |
| | Policy Committee chaired by Sir Christopher Gent. He was the |
| | Global Leadership Development/Group Strategic Resourcing |
| | Director from 2005. He was responsible for senior management |
| | recruitment and development and supporting the Main Board's |
| | Nomination Committee in their identification |
| | and appointment of non-executive directors. |
| | Prior to Vodafone, Anthony held positions at companies |
| | including Ernst & Young in the UK, the Netherlands and Belgium; |
| | UKAEA, where he was Head of IT Strategy and Tyzack and |
| | Partners. |
| | He holds an MA (Hons) in Natural Sciences from Trinity College, |
| | Cambridge (UK), an MSc in Computer Sciences from London |
| | University (UK) and an MBA from INSEAD (France). |
| | Anthony joined the Board in July 2006. |
| | |
+-------------------+-----------------------------------------------------------------+
| Michael Jefferies | Aged 53. Alternate non-executive director for Anthony M Eisen. |
| | Michael Jefferies is a chartered accountant who has extensive |
| | experience in finance and investment. He is currently an |
| | executive of Guinness Peat Group, Chairman of TAFMO Limited and |
| | a non-executive director of MMC Contrarian Limited, Tower |
| | Limited, Metals X Limited, Capral Limited and Ozgrowth Limited. |
| | Michael joined the Board in March 2009. |
+-------------------+-----------------------------------------------------------------+
Directors' report
+-------------------+-----------------------------------------------------------------+
| Laurent Lafarge | Aged 49. Former director and former Chief Executive Officer |
| | Laurent Lafarge has a 22-year track record of leadership within |
| | the high-tech industry, at companies such as Control Data, |
| | Unisys, Tandem and Hewlett-Packard. Prior to eServGlobal, he |
| | was the Chief Operating Officer at Netcentrex Comverse. He has |
| | also been Vice-President Europe and Managing Director of Lucent |
| | Technologies France and Belgium. He is a graduate of the ISG |
| | business school in France and has completed the Executive |
| | Management Program at the Wharton School of the University of |
| | Pennsylvania, USA. |
| | Laurent Lafarge was named by the French Minister for the |
| | Economy, Finance and Industry as "Chevalier dans l'Ordre |
| | National du Mérite" in 2004. |
| | Laurent Lafarge resigned as Chief Executive Officer on 1 July |
| | 2009 and as a Director on 23 July 2009. |
| | |
+-------------------+-----------------------------------------------------------------+
| Graham Libbesson | Aged 56. Former non-executive director and former member of the |
| | Audit Committee. |
| | Graham has extensive involvement in the IT industry through |
| | various directorships, consulting roles, and involvement |
| | with investments and transactions. He is a director of a number |
| | of private IT companies and ComOps Limited. He is also a |
| | consultant to Pitcher Partners Sydney Chartered Accountants and |
| | leader of that firm's ICT industry Group. He is a retired |
| | managing partner and a senior tax partner of a large firm of |
| | chartered accountants. His 31 years of experience as a |
| | chartered accountant and tax advisor, together with his strong |
| | background in corporate law and governance, and operational |
| | experience in the IT industry brought expertise in all areas of |
| | the company's activities and commercial transactions. |
| | Graham holds a Bachelor of Laws and a Bachelor of Commerce from |
| | the University of New South Wales. He is a member of the |
| | Institute of Chartered Accountants in Australia (ACA). |
| | Graham Libbesson resigned as a non-executive director and |
| | member of the Audit Committee on 23 July 2009. |
| | |
+-------------------+-----------------------------------------------------------------+
| Jim Pratt | Aged 60. Former non-executive director and former Chairman of |
| | the Remuneration and Nominations Committee. |
| | Jim brought to the Board over 30 years of experience in the |
| | telecommunications industry in Europe, Australia and Asia. In |
| | 1994, Jim was appointed as the founding Chief Executive Officer |
| | of Peoples Telephone Company Ltd., a GSM 1800 network operator |
| | in Hong Kong. On his return to Australia, Jim was appointed |
| | Managing Director of Telstra International's offshore wireless |
| | business interests and held this position until August 2001. |
| | From September 2002 to February 2006 he was President and CEO |
| | of the GlobeTrac Group of companies who are involved in AVL & |
| | Telematics in Europe. |
| | Jim is also the previous Chairman (2002/2003) of the Board of |
| | Directors of the GSM Association (GSMA). The GSMA is the |
| | world's leading wireless industry body representing some 600 |
| | GSM network operators. |
| | Jim Pratt resigned as a non-executive director and Chairman of |
| | the Remuneration and Nominations Committee on 23 July 2009. |
| | |
+-------------------+-----------------------------------------------------------------+
Directors' report
Directorships of other listed companies
Directorships of other listed companies held by Directors in the 3 years
immediately before the end of the financial year are as follows:
+-----------------------+---------------------------+--------------------------------+
| Name | Company | Period of Directorship |
+-----------------------+---------------------------+--------------------------------+
| François Barrault | BT Group plc | 24 April 2007 - 31 October |
| | | 2008 |
+-----------------------+---------------------------+--------------------------------+
| Graham Libbesson | ComOps Limited | 27 June 2007 - Ongoing |
| | East Coast Minerals NL | 17 December 2007 - Ongoing |
+-----------------------+---------------------------+--------------------------------+
| David Smart | Saunders International | 22 October 2007 - Ongoing |
| | Limited | |
+-----------------------+---------------------------+--------------------------------+
| Anthony M Eisen | MMC Contrarian Limited | 12 November 2007 - Ongoing |
| | Capral Limited | 19 October 2006 - 29 August |
| | Tower Australia Group | 2008 (i) 29 August 2008 - |
| | Limited | Ongoing |
| | Tower Limited | 19 December 2006 - 8 August |
| | | 2008 (i) |
| | | 12 December 2006 - Ongoing (i) |
+-----------------------+---------------------------+--------------------------------+
| Michael Jefferies | TAFMO Limited | 28 June 2004 - Ongoing (ii) |
+-----------------------+---------------------------+--------------------------------+
| | Tower Limited | 19 December 2006 - Ongoing |
+-----------------------+---------------------------+--------------------------------+
| | Metals X Limited | 29 December 2006 - Ongoing |
+-----------------------+---------------------------+--------------------------------+
| | Ozgrowth Limited | 31 October 2007 - Ongoing |
+-----------------------+---------------------------+--------------------------------+
| | MMC Contrarian Limited | 4 November 2008 - Ongoing |
+-----------------------+---------------------------+--------------------------------+
| | Australian Wealth | 5 November 2004 - 24 April |
| | Management Limited | 2007 |
+-----------------------+---------------------------+--------------------------------+
| | Tower Australia Group | 8 August 2006 - 8 August 2008 |
| | Limited | |
+-----------------------+---------------------------+--------------------------------+
| | Capral Limited | 6 November 2008 - Ongoing |
+-----------------------+---------------------------+--------------------------------+
| (i) Alternate | | |
| director | | |
| (ii) Non-executive | | |
| Chairman | | |
+-----------------------+---------------------------+--------------------------------+
+----------------------------------------------------------------------------------+
| Principal activities |
+----------------------------------------------------------------------------------+
| eServGlobal develops and implements solutions for mobile payment, convergent |
| charging and rating, network services and messaging products, for telecom |
| service providers, across all legacy and next generation telecom networks. |
| eServGlobal provides comprehensive services ensuring the success of projects |
| with worldwide implementation, integration and support services. Its innovative |
| solutions help service providers to grow new revenues, reduce churn and lower |
| their costs. |
| Over 80 of the world's leading telcos are taking advantage of |
| eServGlobal's advanced solutions and expertise to successfully address their |
| business challenges and to manage over 500 million telecommunications customers. |
| eServGlobal has operations in 15 countries worldwide. |
| |
+----------------------------------------------------------------------------------+
| |
+----------------------------------------------------------------------------------+
Directors' report
+----------------------------------------------------------------------------------+
| Review of operations |
+----------------------------------------------------------------------------------+
| This report is to be read in conjunction with other reports issued |
| contemporaneously. |
| The Group achieved sales revenue for the year of $147.246 million (2008: |
| $177.934 million) - a decrease of 17%. |
| A gross profit of $65.727million was achieved by the Group for the year, a |
| decrease of 31% from $95.213 million in the previous year, representing a margin |
| of 45% of sales revenue. The net result for the Group for the year was a loss |
| after tax of $34.525million (2008: profit $10.540 million). |
| |
+----------------------------------------------------------------------------------+
| Changes in state of affairs |
+----------------------------------------------------------------------------------+
| There were no significant changes in the state of affairs of the Group during |
| the financial year. |
+----------------------------------------------------------------------------------+
+----------------------------------------------------------------------------------+
| Subsequent events |
+----------------------------------------------------------------------------------+
| There has not been any matter or circumstance, other than that referred to above |
| or in the financial statements or notes thereto, that has arisen since the end |
| of the financial year, that has significantly affected, or may significantly |
| affect, the operations of the Group, the results of those operations, or the |
| state of affairs of the Group in future financial years. |
+----------------------------------------------------------------------------------+
| |
+----------------------------------------------------------------------------------+
| Future developments |
+----------------------------------------------------------------------------------+
| Disclosure of information regarding likely developments in the operations of the |
| Group in future financial years and the expected results of those operations is |
| likely to result in unreasonable prejudice to the Group. Accordingly, this |
| information has not been disclosed in this report. |
+----------------------------------------------------------------------------------+
| |
+----------------------------------------------------------------------------------+
| Dividends |
+----------------------------------------------------------------------------------+
| In respect of the financial year ended 30 June 2008, as detailed in the |
| directors' report for that financial year, a final dividend of 3.0 cents per |
| share unfranked was paid to the holders of fully paid ordinary shares on 15 |
| September 2008. |
| No dividend has been declared in respect of the current financial year. |
+----------------------------------------------------------------------------------+
Directors' report
+----------------------------------------------------------------------------------+
| |
+----------------------------------------------------------------------------------+
| Share options |
+----------------------------------------------------------------------------------+
| Share options granted to directors and executives |
+----------------------------------------------------------------------------------+
| During the financial year and up to the date of this report the company did not |
| grant any options (2008: 660,000) to employees of the entity. |
| |
+----------------------------------------------------------------------------------+
+----------------------------------------------------------------------------------+
| eServGlobal Employee Share Option Plan |
+----------------------------------------------------------------------------------+
| The company has an ownership-based remuneration scheme for directors, executives |
| and employees. In accordance with the provisions of the scheme, directors and |
| employees may be granted options to acquire ordinary shares in the company. The |
| board believes that the options scheme has a significant role to play in |
| motivating employees to help ensure the continued performance of the company. |
| The exercise of any share options is not dependant on any performance criteria, |
| however, is dependent on a period of service relative to the vesting dates. |
| The company issued nil (2008: 660,000) options during the financial year. |
| At the date of this report directors, executives and employees are entitled to |
| purchase an aggregate of 3,258,805 (2008: 4,979,478) ordinary shares of the |
| entity at issue prices ranging from $0.66 to $0.97 per ordinary share. At 30 |
| June 2009 2,660,454 (2008: 3,336,131) of these options had vested. The options |
| may be exercised at various times up until 26 October 2012. The holders of such |
| options do not have the right, by virtue of the option to participate in any |
| share issue or interest issue of any other body corporate or scheme, and do not |
| participate in any dividends declared. |
| |
+----------------------------------------------------------------------------------+
| During the financial year 144,668 options expired. From the financial year end |
| and up to the date of this report 333,337 options lapsed. |
+----------------------------------------------------------------------------------+
| Further details of the executive and employee share option plan are disclosed in |
| Note 6 to the financial statements. |
+----------------------------------------------------------------------------------+
Details of unissued shares under option as at the date of this report are:
+--------------------+--------------+------------+-----------------+--------------------+
| Issuing Entity | Number of | Class of | Exercise price | Expiry date of |
| |shares under | shares | of option | options |
| | option | | | |
+--------------------+--------------+------------+-----------------+--------------------+
| eServGlobal | 1,457,142 | Ordinary | $0.66 | 29-May-11 |
| Limited | | | | |
+--------------------+--------------+------------+-----------------+--------------------+
| eServGlobal | 500,000 | Ordinary | $0.69 | 17-Nov-11 |
| Limited | | | | |
+--------------------+--------------+------------+-----------------+--------------------+
| eServGlobal | 858,330 | Ordinary | $0.69 | 7-Mar-12 |
| Limited | | | | |
+--------------------+--------------+------------+-----------------+--------------------+
| eServGlobal | 100,000 | Ordinary | $0.97 | 26-Sep12 |
| Limited | | | | |
+--------------------+--------------+------------+-----------------+--------------------+
| eServGlobal | 293,333 | Ordinary | $0.97 | 4-Oct-12 |
| Limited | | | | |
+--------------------+--------------+------------+-----------------+--------------------+
| eServGlobal | 50,000 | Ordinary | $0.97 | 26-Oct-12 |
| Limited | | | | |
+--------------------+--------------+------------+-----------------+--------------------+
During the financial year and up to the date of this report, the following
options were exercised and consequently shares in the company issued to holders
of options issued under the eServGlobal Employee Share Option Plan:
+--------------------+--------------+------------+-----------------+--------------------+
| Issuing Entity | Number of | Class of |Amount paid for | Amount unpaid on |
| | shares | shares | shares | shares |
| | issued | | | |
+--------------------+--------------+------------+-----------------+--------------------+
| eServGlobal | 250,000 | Ordinary | $0.15 | $nil |
| Limited | | | | |
+--------------------+--------------+------------+-----------------+--------------------+
| eServGlobal | 250,000 | Ordinary | $0.20 | $nil |
| Limited | | | | |
+--------------------+--------------+------------+-----------------+--------------------+
| eServGlobal | 250,000 | Ordinary | $0.40 | $nil |
| Limited | | | | |
+--------------------+--------------+------------+-----------------+--------------------+
| eServGlobal | 250,000 | Ordinary | $0.40 | $nil |
| Limited | | | | |
+--------------------+--------------+------------+-----------------+--------------------+
| eServGlobal | 242,668 | Ordinary | $0.23 | $nil |
| Limited | | | | |
+--------------------+--------------+------------+-----------------+--------------------+
Directors' report
+----------------------------------------------------------------------------------+
| Indemnification of officers and auditors |
+----------------------------------------------------------------------------------+
| During the financial year, the company paid a premium in respect of a contract |
| insuring the directors of the company (as named above), the company secretary, |
| and all executive officers of the company and of any related body corporate |
| against any liability incurred as a director, secretary or executive officer to |
| the extent permitted by the Corporations Act 2001. The contract of insurance |
| prohibits disclosure of the nature of the liability cover and the amount of the |
| premium. |
| The company has not otherwise, during or since the financial year, indemnified |
| or agreed to indemnify an officer or auditor of the company or of any related |
| body corporate, against any liability incurred by such an officer or auditor. |
+----------------------------------------------------------------------------------+
+----------------+-----------+-----------+-----------+-----------+-----------+-----------+
| Directors' meetings |
+----------------------------------------------------------------------------------------+
| The following table sets out the number of directors' meetings (including meetings of |
| committees of directors) held during the financial year and the number of meetings |
| attended by each director (while they were a director or committee member). During |
| the financial year, 10 board meetings, 6 audit committee meetings, and 8 remuneration |
| committee meetings were held. |
| |
+----------------------------------------------------------------------------------------+
| | Board of Directors | Audit Committee | Remuneration |
| | | | Committee |
+----------------+-----------------------+-----------------------+-----------------------+
| Directors | Held | Attended | Held | Attended | Held | Attended |
+----------------+-----------+-----------+-----------+-----------+-----------+-----------+
| I Buddery | 10 | 10 | - | - | - | - |
+----------------+-----------+-----------+-----------+-----------+-----------+-----------+
| F Barrault | 10 | 9 | - | - | - | - |
+----------------+-----------+-----------+-----------+-----------+-----------+-----------+
| A Eisen | 3 | 3 | - | - | - | - |
+----------------+-----------+-----------+-----------+-----------+-----------+-----------+
| A Gilbert | 10 | 10 | - | - | 8 | 8 |
+----------------+-----------+-----------+-----------+-----------+-----------+-----------+
| L Lafarge | 10 | 9 | - | - | - | - |
+----------------+-----------+-----------+-----------+-----------+-----------+-----------+
| G Libbesson | 10 | 10 | 6 | 6 | - | - |
+----------------+-----------+-----------+-----------+-----------+-----------+-----------+
| J Pratt | 10 | 10 | - | - | 8 | 8 |
+----------------+-----------+-----------+-----------+-----------+-----------+-----------+
| D Smart | 10 | 8 | 6 | 6 | - | - |
+----------------+-----------+-----------+-----------+-----------+-----------+-----------+
Non-audit services
The directors are satisfied that the provision of non-audit services, during the
year, by the auditor (or by another person or firm on the auditor's behalf) is
compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001.
The audit committee, in conjunction with the Chief Financial Officer, assesses
the provision of non-audit services by the auditors to ensure that the auditor
independence requirements of the Corporations Act 2001 in relation to the audit
are met.
Details of amounts paid or payable to the auditor for non-audit services
provided during the year by the auditor are outlined in note 7 to the financial
statements.
Auditor's independence declaration
The auditor's independence declaration is included on page 16 of the financial
report.
+----------------------------------------------------------------------------------+
| Rounding off of amounts |
+----------------------------------------------------------------------------------+
| The company is a company of the kind referred to in ASIC Class Order 98/0100, |
| dated 10 July 1998, and in accordance with that Class Order, amounts in the |
| directors' report and the financial report are rounded off to the nearest |
| thousand dollars unless otherwise indicated. |
| |
+----------------------------------------------------------------------------------+
Directors' report
+----------------------------------------------------------------------------------+
| Remuneration Report |
+----------------------------------------------------------------------------------+
+----------------------------------------------------------------------------------+
| Determining remuneration policy for directors and executives, and its |
| relationship to eServGlobal's performance |
+----------------------------------------------------------------------------------+
| The Company is listed on both the Australian Securities Exchange and the London |
| Stock Exchange (AIM). It is an international group which is faced with all of |
| the market pressures that flow in such circumstances. It must compete |
| successfully with other international organisations that are substantially |
| larger and which have the ability to draw on enormous resources. Our employees |
| are based in diverse parts of the globe and regularly must travel to work in |
| remote locations. The remuneration policies must be appropriate to these |
| circumstances. |
| In determining the appropriate remuneration policies for the Group, the board |
| believes that the salary packages must be sufficient, in the international |
| marketplace in which the Group operates, to attract, retain and motivate high |
| calibre, hard working, dedicated employees, who have the knowledge and skills |
| appropriate for the business. In this regard, a component of the salary package |
| for employees is paid after the results of a financial year are completed, and |
| the entitlement is based primarily on the results achieved by the Group. The |
| board's broad policy is implemented through its Remuneration and Nominations |
| Committee |
| As outlined in the Statement of Corporate Governance, the Remuneration and |
| Nominations Committee reviews on an annual basis the remuneration policies |
| applicable to all directors and senior executives, and makes recommendations to |
| the board. Remuneration packages are reviewed and determined with due regard to |
| current international market rates and are benchmarked against comparable |
| industry salaries relevant for the employees involved and dependent on the |
| Group's circumstances. |
+----------------------------------------------------------------------------------+
Director and group executive details
The following persons acted as directors of the Company and the Group during or
since the end of the financial year:
* D. Smart (Non-executive Chairman, appointed 23 July 2009; previously
non-executive director)
* R Mathews (Chief Executive Officer, appointed 1 July 2009 and Director,
appointed 23 July 2009)
* F. Barrault (Non-executive)
* I. Buddery (Non-executive director, appointed 23 July 2009; Secretary, appointed
11 July 2008; previously Executive Chairman)
* A. Eisen (Non-executive)
* A. Gilbert (Non-executive)
* M. Jefferies (Alternate for A. Eisen)
* L. Lafarge (Chief Executive Officer, employment concluded 1 July 2009; Director,
resigned 23 July 2009)
* G. Libbesson (Non-executive, resigned 23 July 2009)
* J. Pratt (Non-executive, resigned 23 July 2009)
The key executives of the Group for the 2009 financial year were:
* I. Buddery
* L. Lafarge
* G. Lemoing (Chief Information Officer, employment concluded 15 May 2009)
* J G Macleod (Chief Financial Officer, appointed 11 July 2008)
* JP. Labat (Chief Marketing Officer)
Directors' report
Elements of director and executive remuneration
Non-executive directors are paid directors' fees and, in the case of those who
are Australian based, compulsory superannuation fund contributions are made on
their behalf. The board reviews the level of fees from time to time, and sets
individual non-executive directors fees based on the levels of fees for
comparable listed companies in the appropriate parts of the world. The
non-executive directors are appointed by shareholder vote and appointment is
subject to re-election on retirement required at Annual General Meetings.
Certain non-executive directors, with the approval of shareholders, in an
earlier period were issued options under the Executive Share Option Plan. The
benefit of those options is dependent on a period of service relative to the
vesting dates.
The former Executive Chairman was remunerated on a salary package basis that
included a substantial portion that is a variable component which is dependent
on agreed performance objectives. He was fully committed to eServGlobal and was
involved in the business on a full time basis. The former Executive Chairman did
not have a formal contract, however, his salary and variable components were
considered by the Remuneration and Nominations Committee on an annual basis, and
adjustments recommended to the Board. The variable component comprised elements
relating to achievement of financial plan and specific business objectives.
The former Chief Executive Officer (CEO) was remunerated on a salary package
basis that included a substantial portion that is a variable component, which is
dependent on agreed performance objectives. His base salary and variable
components were reviewed annually by the Remuneration and Nominations Committee
and recommended to the Board. The variable component comprised elements relating
to achievement of financial plan and specific business objectives. The former
CEO was a permanent employee who had a formal contract with no fixed term and a
notice period of six months required by either party. The employment of the
former CEO was concluded on 1 July 2009.
The Chief Financial Officer (CFO) is remunerated on a salary package basis that
includes a portion that is a variable component which is dependent on agreed
performance objectives. The CFO has a formal contract which links to the
eServGlobal standard conditions of employment. The contract has no set expiry
date and the notice period required by both parties is three months. His package
is reviewed annually. The CFO's variable component comprises elements relating
to achievement of financial plan and specific business objectives.
The former Chief Information Officer (CIO) had a formal contract and was a
permanent employee with no fixed term whose employment conditions required 3
months notice for both parties. In the event of termination, payment of
termination benefits on cessation of employment is based on his notice period,
statutory entitlements and any variable component due on previously agreed
objectives. The former CIO's variable component comprised elements related to
achievement of financial plan and specific business objectives. The former CIO
left the Group on 15 May 2009.
The Chief Marketing Officer (CMO) has a formal contract and is a permanent
employee with no fixed term whose employment conditions require 3 months notice
for both parties. In the event of termination, payment of termination benefits
on cessation of employment is based on his notice period, statutory entitlements
and any variable component due on previously agreed objectives. The CMO's
variable component comprises elements related to achievement of financial plan
and specific business objectives.
Directors' report
+----------------------------------------------------------------------------------+
| Elements of remuneration which are dependent on company performance |
+----------------------------------------------------------------------------------+
| The Board believes that it is critical that the specified employees are driven |
| by the financial performance of eServGlobal and, as detailed below, has |
| structured executive packages so that a substantial portion of the variable |
| component of their packages is directly linked to financial outcomes of |
| eServGlobal. The targets are established annually and are approved by the |
| Remuneration and Nominations Committee following Board approval of the Group's |
| business plan. The two key measures of this are: annual revenue and earnings |
| before interest, tax, depreciation and amortisation components. This component |
| is confirmed in conjunction with the completion of the accounts. These targets |
| are selected to ensure alignment of shareholders interests with Executive |
| remuneration. |
| |
+----------------------------------------------------------------------------------+
The tables below set out summary information about Group's earnings and
movements in shareholder wealth for the five years to June 2009:
+-----------------------------------+----------+----------+----------+----------+----------+
| | 30 June | 30 June | 30 June | 30 June | 30 June |
| | 2009 | 2008 | 2007 | 2006 | 2005 |
| | $'000 | $'000 | $'000 | $'000 | $'000 |
+ + + + + + +
| | | | | | | |
+ + + + + + +-----------------------------------+
| | | | | | | |
+-----------------------------------+----------+----------+----------+----------+----------+-----------------------------------+
| Revenue | 147,246 | 177,934 | 153,951 | 95,004 | 38,427 |
+-----------------------------------+----------+----------+----------+----------+----------+
| EBITDA | (5,261) | 24,162 | 18,934 | 10,088 | 3,318 |
+-----------------------------------+----------+----------+----------+----------+----------+
+-----------------------------------+----------+----------+----------+----------+----------+
| | 30 June | 30 June | 30 June | 30 June | 30 June |
| | 2009 | 2008 | 2007 | 2006 | 2005 |
+ + + + + + +
| | | | | | | |
+ + + + + + +-----------------------------------+
| | | | | | | |
+-----------------------------------+----------+----------+----------+----------+----------+-----------------------------------+
| Share price at start of year | $0.820 | $0.960 | $0.600 | $0.920 | $0.245 |
+-----------------------------------+----------+----------+----------+----------+----------+
| Share price at end of year | $0.455 | $0.820 | $0.960 | $0.600 | $0.920 |
+-----------------------------------+----------+----------+----------+----------+----------+
| Interim dividend | - | - | - | - | - |
+-----------------------------------+----------+----------+----------+----------+----------+
| Final dividend 1, 2 | - | 3.0 cps | 2.0 cps | 1.2 cps | 1.0 cps |
+-----------------------------------+----------+----------+----------+----------+----------+
| Basic earnings per share | (20.1) | 6.1 | 3.2 | 1.7 | 4.1 3 |
+-----------------------------------+----------+----------+----------+----------+----------+
| Diluted earnings per share | (20.1) | 6.0 | 3.2 | 1.7 | 3.9 3 |
+-----------------------------------+----------+----------+----------+----------+----------+
1 Final dividends declared for the financial years ending June 2005 and June
2006 were franked to 100% at 30% corporate income tax rate. Final dividends
declared for the financial years ending June 2007 and June 2008 are unfranked.
2 Declared after the balance date and not reflected as a liability in the
financial statements.
3 The results for year ending 30 June 2005 have been re-stated for A-IFRS, the
basic earnings per share and diluted earnings per share reported under
superseded policies were 1.0 cents.
Directors' report
The directors and the group's key executives received the following amounts as
compensation for their services as directors and executives of the Group during
the year:
+---------------------+-------------+------------+--------------+---------------+--------------+--------------+----------------+--------------+
| | Short-term employee benefits | Post | Share based | Termination | Total | Percentage |
| | | Employment | payments | Benefits | | of |
| | | benefits | | | |remuneration |
| | | | | | | related to |
| | | | | | | performance |
+---------------------+-----------------------------------------+---------------+--------------+ + + +
| 2009 | Salary & | Bonus |Non-monetary | | | | Superannuation | Options |
| | fees | (incl. | | | | | | |
| | | variable | | | | | | |
| | | pay | | | | | | |
| | |component) | | | | | | |
+---------------------+-------------+------------+--------------+---------------+--------------+--------------+----------------+--------------+
| | $ | $ | $ | $ | $ | $ | $ | % |
+---------------------+-------------+------------+--------------+---------------+--------------+--------------+----------------+--------------+
+---------------------+-------------+------------+-----------+---------------+--------------+-------------+-----------+-------------+
| Non-executive Directors | | | | | | | |
+-----------------------------------+------------+-----------+---------------+--------------+-------------+-----------+-------------+
| D Smart | 25,614 | - | - | 86,780 | - | - | 112,394 | - |
+---------------------+-------------+------------+-----------+---------------+--------------+-------------+-----------+-------------+
| A Eisen (i) | - | - | - | - | - | - | - | - |
+---------------------+-------------+------------+-----------+---------------+--------------+-------------+-----------+-------------+
| F Barrault | 70,000 | - | - | - | - | - | 70,000 | - |
+---------------------+-------------+------------+-----------+---------------+--------------+-------------+-----------+-------------+
| A Gilbert | 106,127 | - | - | - | 27,367 | - | 133,494 | - |
+---------------------+-------------+------------+-----------+---------------+--------------+-------------+-----------+-------------+
| M Jefferies (i) | - | - | - | - | - | - | - | - |
+---------------------+-------------+------------+-----------+---------------+--------------+-------------+-----------+-------------+
| G Libbesson | 21,000 | - | - | 63,475 | - | - | 84,475 | - |
+---------------------+-------------+------------+-----------+---------------+--------------+-------------+-----------+-------------+
| J Pratt | 77,500 | - | - | 6,975 | - | - | 84,475 | - |
+---------------------+-------------+------------+-----------+---------------+--------------+-------------+-----------+-------------+
| Executive Officers | | | | | | | | |
+---------------------+-------------+------------+-----------+---------------+--------------+-------------+-----------+-------------+
| I Buddery (ii) | 287,861 | - | - | 13,745 | - | 150,000 | 451,606 | - |
+---------------------+-------------+------------+-----------+---------------+--------------+-------------+-----------+-------------+
| L Lafarge (ii) | 386,924 | 207,951 | 32,670 | - | 46,460 | 552,104 | 1,226,109 | 17.0% |
| (iii) (iv) | | | | | | | | |
+---------------------+-------------+------------+-----------+---------------+--------------+-------------+-----------+-------------+
| G Lemoing (ii) | 370,525 | - | 23,163 | - | - | 511,456 | 905,144 | - |
| (iii) (iv) | | | | | | | | |
+---------------------+-------------+------------+-----------+---------------+--------------+-------------+-----------+-------------+
| J G Macleod (iii) | 305,267 | 19,987 | - | 9,163 | - | - | 334,417 | 6.0% |
+---------------------+-------------+------------+-----------+---------------+--------------+-------------+-----------+-------------+
| JP Labat (iii) (iv) | 232,741 | 43,646 | 23,008 | - | - | - | 299,395 | 14.6% |
+---------------------+-------------+------------+-----------+---------------+--------------+-------------+-----------+-------------+
| Total | 1,883,559 | 271,584 | 78,841 | 180,138 | 73,827 | 1,213,560 | 3,701,509 | - |
+---------------------+-------------+------------+-----------+---------------+--------------+-------------+-----------+-------------+
* A Eisen and M Jefferies have agreed that they will receive no benefit for their
services.
* Termination benefits were provided for in the current financial year and with
respect to the former Executive Chairman and CEO were paid early in the 2010
financial year.
* Key management personnel are remunerated on a salary package basis that includes
an appropriate portion that is a variable component which is dependent on
company performance and individual performance objectives. Key management
personnel had their variable pay components confirmed in conjunction with the
completion of the accounts. The variable components for key management personnel
were confirmed on the achievement of revenue and earnings before interest, tax,
depreciation and amortisation components and/or on the achievement of
performance criteria established during the year. These amounts, related to the
current year performance, will be paid in cash prior to 30 November 2009.
* Paid in Euros and subject to foreign exchange fluctuations at Group level.
Directors' report
The directors and the group's key executives received the following amounts as
compensation for their services as directors and executives of the Group during
the previous financial year:
+---------------------+-------------+------------+--------------+---------------+--------------+-------------+--------------+----------------+--------------+
| | Short-term employee benefits | Post | Share based |Termination | Other long | Total | Percentage |
| | | Employment | payments | Benefits | term | | of |
| | | benefits | | | employee | |remuneration |
| | | | | | benefits | | related to |
| | | | | | (v) | | performance |
+---------------------+-----------------------------------------+---------------+--------------+ + + + +
| 2008 | Salary & | Bonus |Non-monetary | | | | | Superannuation | Options |
| | fees | (incl. | | | | | | | |
| | | variable | | | | | | | |
| | | pay | | | | | | | |
| | |component) | | | | | | | |
+---------------------+-------------+------------+--------------+---------------+--------------+-------------+--------------+----------------+--------------+
| | $ | $ | $ | $ | $ | $ | $ | $ | % |
+---------------------+-------------+------------+--------------+---------------+--------------+-------------+--------------+----------------+--------------+
+---------------------+-------------+------------+-----------+---------------+--------------+-------------+------------+-------------+-------------+
| Non-executive Directors | | | | | | | | |
+-----------------------------------+------------+-----------+---------------+--------------+-------------+------------+-------------+-------------+
| F Barrault | 69,353 | - | - | - | - | - | - | 69,353 | - |
+---------------------+-------------+------------+-----------+---------------+--------------+-------------+------------+-------------+-------------+
| A Gilbert | 76,916 | - | - | - | 60,038 | - | - | 136,954 | - |
+---------------------+-------------+------------+-----------+---------------+--------------+-------------+------------+-------------+-------------+
| G Libbesson | 33,000 | - | - | 51,475 | - | - | - | 84,475 | - |
+---------------------+-------------+------------+-----------+---------------+--------------+-------------+------------+-------------+-------------+
| J Pratt | 77,500 | - | - | 6,975 | - | - | - | 84,475 | - |
+---------------------+-------------+------------+-----------+---------------+--------------+-------------+------------+-------------+-------------+
| D Smart | - | - | - | 84,475 | - | - | - | 84,475 | - |
+---------------------+-------------+------------+-----------+---------------+--------------+-------------+------------+-------------+-------------+
| Executive Officers | | | | | | | | | |
+---------------------+-------------+------------+-----------+---------------+--------------+-------------+------------+-------------+-------------+
| I Buddery (vi) | 287,861 | 191,478 | - | 13,129 | - | - | - | 492,468 | 38.9 |
+---------------------+-------------+------------+-----------+---------------+--------------+-------------+------------+-------------+-------------+
| L Lafarge (v) (vi) | 317,508 | 142,219 | 35,970 | - | 58,322 | - | 18,947 | 572,966 | 28.1 |
| (vii) | | | | | | | | | |
+---------------------+-------------+------------+-----------+---------------+--------------+-------------+------------+-------------+-------------+
| J M Hartigan (vi) | 240,000 | 6,357 | - | 43,129 | - | 140,000 | - | 429,486 | 1.5 |
| (viii) | | | | | | | | | |
+---------------------+-------------+------------+-----------+---------------+--------------+-------------+------------+-------------+-------------+
| G Lemoing (v) (vi) | 270,390 | 72,392 | 26,957 | 91,057 | - | - | 18,947 | 479,743 | 19.0 |
| (vii) | | | | | | | | | |
+---------------------+-------------+------------+-----------+---------------+--------------+-------------+------------+-------------+-------------+
| JP Labat (v) (vi) | 203,790 | 127,850 | 20,894 | - | - | - | 18,947 | 371,481 | 39.5 |
| (vii) | | | | | | | | | |
+---------------------+-------------+------------+-----------+---------------+--------------+-------------+------------+-------------+-------------+
| Total | 1,576,318 | 540,296 | 83,821 | 290,240 | 118,360 | 140,000 | 56,841 | 2,805,876 | - |
+---------------------+-------------+------------+-----------+---------------+--------------+-------------+------------+-------------+-------------+
* For companies in France employing 50 or more people profit-sharing is compulsory
and is set up by an agreement. It is calculated according to a formula based on
taxable income and distributed amongst employees in proportion to their wages
and, in certain cases, their service. The profit-sharing funds are deposited in
a corporate investment fund or savings plan and are paid after either 3 or 5
years as agreed with the employee. In the current financial year the profit
sharing arrangement has been aligned with the remuneration policies of the
consolidated group resulting in additional contributions being made.
* Key management personnel are remunerated on a salary package basis that includes
an appropriate portion that is a variable component which is dependent on
company performance and individual performance objectives. Key management
personnel had their variable pay components confirmed in conjunction with the
completion of the accounts. The variable components for key management personnel
were confirmed on the successful achievement of revenue and earnings before
interest, tax, depreciation and amortisation components and/or on the
achievement of performance criteria established during the year. These amounts,
related to the current year performance, will be paid in cash prior to
30 November 2008.
* Paid in Euros and subject to foreign exchange fluctuations at Group level.
* The CFO's contract was terminated by mutual agreement on the 11th July 2008.
Termination benefits were provided for in the current financial year and paid to
the departing employee early in the 2009 financial year.
Directors' report
+---------------------------+---------------------------+-------------+-------------+
| Directors' shareholdings |
+---------------------------------------------------------------------+
| The following table sets out each director's relevant interest in |
| shares and options in shares of the company or a related body |
| corporate as at the date of this report. |
+---------------------------------------------------------------------+
| | | |
+---------------------------+---------------------------+---------------------------+
| Directors | Fully paid ordinary | Executive share options |
| | shares | |
+---------------------------+---------------------------+---------------------------+
| I Buddery 1 | 15,055,982 | - |
+---------------------------+---------------------------+---------------------------+
| F Barrault | 500,000 | - |
+---------------------------+---------------------------+---------------------------+
| A Eisen 2 | 37,301,296 | - |
+---------------------------+---------------------------+---------------------------+
| A Gilbert | 90,000 | 500,000 |
+---------------------------+---------------------------+---------------------------+
| M Jefferies 2 | 37,301,296 | - |
+---------------------------+---------------------------+---------------------------+
| R Mathews | 17,322,713 3 | - |
| | 206,683 4 | |
+---------------------------+---------------------------+---------------------------+
| J Pratt | 500,000 | - |
+---------------------------+---------------------------+---------------------------+
| L Lafarge | - | 100,000 |
+---------------------------+---------------------------+---------------------------+
| 1 Relevant interest held in shares registered in the name of Wallaby Hill Pty Ltd |
| in which Ian Buddery holds an interest. |
| 2 Shares held by Guinness Peat Group of which Anthony Eisen and Michael Jefferies |
| are both Executives. |
| 3 Relevant interest held in shares registered in the name of MHB Holdings Pty Ltd |
| in which Richard Mathews holds an interest. |
| 4 Relevant interest held in shares registered in the name of Paua Pty Ltd in |
| which Richard Mathews holds an interest. |
+---------------------------+---------------------------+-------------+-------------+
Value of options issued to directors and executives
Options which were granted to or vested in directors and executives in the
current financial year were as follows:
+-------------+----------------------+---------+--------------+--------+--------+--------------+
| | | During the financial year | % of |
| | | |compensation |
| | | |for the year |
| | | | consisting |
| | | | of options |
+-------------+----------------------+------------------------------------------+ +
| Name | Options series | No. | | No. | % of | % of |
| | |granted | |vested | grant | grant |
| | | | | |vested | forfeited |
+-------------+----------------------+---------+--------------+--------+--------+--------------+
| A Gilbert | Issued 17 November | - | 166,667 | 66.66 | - | 20.5% |
| | 2006 | | | | | |
+-------------+----------------------+---------+--------------+--------+--------+--------------+
| L Lafarge | Issued 26 September | - | 100,000 | 33.33 | - | 3.8% |
| | 2007 | | | | | |
+-------------+----------------------+---------+--------------+--------+--------+--------------+
Executives receiving options are entitled to the beneficial interest under the
option only if they continue to be employed with the Group at the time the
option vests. Any exposure in relation to the risk associated with the movement
in the underlying share price rests with the executive.
During the financial year no options were forfeited as a result of a condition
required for vesting not being satisfied.
The following table discloses the options granted, exercised or expired during
the year:
+-------------------+----------------------+--------------------+---------------------+
| Name | Value of options | Value of options | Value of options |
| |granted at the grant | exercised at the | expired |
| | date (i) | exercise date | $ |
| | $ | $ | |
+-------------------+----------------------+--------------------+---------------------+
| F Barrault | - | 112,500 | - |
+-------------------+----------------------+--------------------+---------------------+
* The value of options granted, exercised and lapsed is calculated based on the
following:
* Value at grant date represents fair value of the option at grant date multiplied
by the number of options granted during the year.
* Value at exercise date represents fair value of the ordinary share received upon
exercise of the option, less the option exercise price multiplied by the number
of options exercised during the year.
Directors' report
During the year, the following directors and executives exercised options that
were granted to them as part of their compensation. Each option converts into
one ordinary share of eServGlobal Limited.
+-------------------+--------------+---------------------+--------------+--------------+
| Name | No. of | No. of ordinary | Amount paid | Amount |
| | options | shares of | | unpaid |
| | exercised |eServGlobal Limited | | |
+-------------------+--------------+---------------------+--------------+--------------+
| F Barrault | 250,000 | 250,000 | $0.15 | $nil |
+-------------------+--------------+---------------------+--------------+--------------+
| F Barrault | 250,000 | 250,000 | $0.40 | $nil |
+-------------------+--------------+---------------------+--------------+--------------+
During the financial year, the following share-based payment arrangements were
in existence.
+----------------------+---------------+---------------+---------------+---------------+
| Options series | Grant date | Expiry date | Exercise | Grant date |
| | | | price | fair value |
+----------------------+---------------+---------------+---------------+---------------+
| 12 November 2003 | 12/11/2003 | 2008 | $0.2 | $0.137 |
| (ii) | | | | |
+----------------------+---------------+---------------+---------------+---------------+
| 12 November 2003 | 12/11/2003 | 2008 | $0.4 | $0.114 |
| (ii) | | | | |
+----------------------+---------------+---------------+---------------+---------------+
| 20 December 2003 | 20/12/2003 | 2008 | $0.15 | $0.145 |
| (ii) | | | | |
+----------------------+---------------+---------------+---------------+---------------+
| 20 December 2003 | 20/12/2003 | 2008 | $0.4 | $0.106 |
| (ii) | | | | |
+----------------------+---------------+---------------+---------------+---------------+
| 17 November 2006 (i) | 17/11/2006 | 2011 | $0.69 | $0.297 |
+----------------------+---------------+---------------+---------------+---------------+
| 26 September 2007 | 26/09/2007 | 2012 | $0.97 | $0.430 |
| (i) | | | | |
+----------------------+---------------+---------------+---------------+---------------+
In accordance with the terms of the Employee Share Option Plan:
* options issued in these series vest as to one-third on each of the first, second
and third anniversary dates from the date of issue and expire five years from
date of issue.
* options issued in these series vest on the third anniversary date from the date
of issue and expire five years from the date of issue.
+-----------------------------------------+-----------------------------------------+
| Signed in accordance with a resolution of the directors made pursuant to s.298 |
| (2) of the Corporations Act 2001. |
| On behalf of the Board |
+-----------------------------------------------------------------------------------+
| . | |
+-----------------------------------------+-----------------------------------------+
| David Smart | |
| Chairman | |
+-----------------------------------------+-----------------------------------------+
| 25 August, 2009 | |
+-----------------------------------------+-----------------------------------------+
Deloitte Touche Tohmatsu
A.B.N. 74 490 121 060
Grosvenor Place
225
George Street
Sydney NSW 2000
PO Box N250 Grosvenor Place
Sydney NSW 1220
Australia
DX 10307SSE
Tel: +61 (0) 2 9322 7000
Fax: +61 (0) 2
9322 7001
www.deloitte.com.au
25 August 2009
The Board of Directors
eServGlobal Limited
Level 3
6 O'Connell Street
Sydney NSW 2000
Dear Board Members
eServGlobal Limited
In accordance with section 307C of the Corporations Act 2001, I am pleased to
provide the following declaration of independence to the Directors of
eServGlobal Limited.
As lead audit partner for the audit of the financial statements of eServGlobal
Limited for the financial year ended 30 June 2009, I declare that to the best of
my knowledge and belief, there have been no contraventions of:
* the auditor independence requirements of the Corporations Act 2001 in relation
to the audit; and
* any applicable code of professional conduct in relation to the audit.
Yours faithfully
DELOITTE TOUCHE TOHMATSU
Weng W Ching
Partner
Chartered Accountants
Liability limited by a scheme approved under Professional Standards Legislation.
.
Corporate governance statement
+----------------------------------------------------------------------------------+
| The eServGlobal Limited group ("eServGlobal"), through its Boards and |
| executives, recognises the need to establish and maintain corporate governance |
| policies and practices that reflect the requirements of the market regulators |
| and participants, and the expectations of members and others who deal with |
| eServGlobal. These policies and practices remain under constant review as the |
| corporate governance environment and good practices evolve. |
| This statement outlines the main corporate governance practices of eServGlobal |
| during the financial year and the extent of eServGlobal's compliance with them |
| as at the end of the financial year, by reference to the Corporate Governance |
| Reporting Principles and Recommendations published in August 2007 by the ASX |
| Corporate Governance Council, and to the Corporations Act 2001. |
+----------------------------------------------------------------------------------+
| |
+----------------------------------------------------------------------------------+
| ASX Corporate Governance Principles and Recommendations |
+----------------------------------------------------------------------------------+
| The 8 essential corporate governance principles and the recommendations on how |
| to achieve best practice for each principle are set out below with a comment for |
| each recommendation about eServGlobal compliance. |
| |
+----------------------------------------------------------------------------------+
| Principle 1. Lay solid foundations for management and oversight |
+----------------------------------------------------------------------------------+
| 1.1 Companies should establish the functions reserved to the board and those |
| delegated to senior executives and disclose those functions. |
+----------------------------------------------------------------------------------+
| The primary responsibilities of eServGlobal's board |
| include:* |
| the establishment of long term goals of the company and |
| strategic plans to achieve those goals;* |
| the review and adoption of the annual business plan and |
| budgets for the financial performance of the company and |
| monitoring the results on a monthly basis;* |
| the appointment of the chief executive officer; * |
| ensuring that the company has implemented adequate systems of |
| internal control together with appropriate monitoring of |
| compliance activities; and * |
| the approval of the annual and half-yearly accounts and |
| reports. |
| The board meets on a regular basis, normally monthly, to |
| review the performance of the company against its goals both |
| financial and non-financial. In normal circumstances, prior to |
| the scheduled monthly board meetings, each board member is |
| provided with a formal board package containing appropriate |
| management and financial reports. |
| The responsibilities of senior management including the Chief |
| Executive Officer are contained in letters of appointment and |
| job descriptions given to each executive on appointment and |
| updated at least annually or as required. |
| The primary responsibilities of senior management are:* |
| Achieve the Annual Business Plan revenue target* |
| Operate the business within the cost budget set out in the |
| Annual Business Plan* |
| Ensure the highest standards of quality and service are |
| delivered to customers* |
| Ensure that employees are supported, developed and rewarded to |
| the appropriate professional standards* |
| Ensure that the company continues to produce innovative |
| technology and leading products |
+----------------------------------------------------------------------------------+
| 1.2Companies should disclose the process for evaluating the performance of |
| senior executives. |
+----------------------------------------------------------------------------------+
| The performance of all senior executives is reviewed at least once a year by the |
| Chief Executive Officer, in conjunction with the board Remuneration and |
| Nominations committee. They are assessed against personal and Company Key |
| Performance Indicators established at the start of each calendar year for each |
| individual. |
+----------------------------------------------------------------------------------+
Corporate governance statement
+----------------------------------------------------------------------------------+
| 1.3Companies should provide the information indicated in the Guide to reporting |
| on Principle 1. |
+----------------------------------------------------------------------------------+
| A performance evaluation for each senior executive has taken place in the |
| reporting period in line with the process disclosed. |
| A Statement covering the primary responsibilities of the Board is set out in 1.1 |
| above. |
| A Statement covering the primary responsibilities of the senior executives is |
| set out in 1.1 above. |
| A copy of the board charter is not publicly available. |
+----------------------------------------------------------------------------------+
| Principle 2. Structure the board to add value |
+----------------------------------------------------------------------------------+
| 2.1Independent directors to make up the majority of board members. |
| During the reporting period, the eServGlobal board consisted of six |
| non-executive directors, and two executive directors, being the Executive |
| Chairman & Chief Executive Officer. Five of these directors (a majority) are |
| considered independent directors. |
| David Smart, Francois Barrault, Jim Pratt*, Graham Libbesson* and Anthony |
| Gilbert are independent. Anthony Eisen, Laurent Lafarge* and Ian Buddery are not |
| independent. |
| 2.2Chairperson. |
| Ian Buddery was the Executive Chairman for the 2009 year. He is not independent. |
| 2.3Chief Executive Officer. |
| Laurent Lafarge was the Chief Executive Officer throughout the 2009 year. |
| 2.4A nomination committee should be established. |
| The Remuneration and Nomination committee is established. |
| 2.5Companies should disclose the process for evaluating the performance of the |
| board, its committees and individual directors. |
| The eServGlobal board uses a personal evaluation process to review the |
| performance of directors. Individual directors are asked to write to a member of |
| the Remuneration & Nominations committee on a confidential basis to comment on |
| their own performance, and the performance of the board and its committees. This |
| information is presented to the chairman, who then assesses the information |
| received and reports the Board on the responses received from individual |
| directors, and his own personal assessment. The Remuneration & Nomination |
| Committee then determines whether any external advice or training is required, |
| and ultimately provides a general report to the board identifying the outcome of |
| the review. |
| 2.6Companies should provide the information indicated in the Guide to reporting |
| on Principle 2 |
| A description of the skills and experience of each director is contained in the |
| 2009 Directors Report. |
| David Smart, Francois Barrault, Jim Pratt, Graham Libbesson and Anthony Gilbert |
| are considered independent because they have no significant shareholding in the |
| company and are not employed by the company. |
| |
+----------------------------------------------------------------------------------+
Corporate governance statement
+----------------------------------------------------------------------------------+
| Directors are able to take independent professional advice at the expense of the |
| company, with the prior agreement of the Chairman or the Remuneration and |
| Nomination committee. |
| The Remuneration and Nomination committee consisted of Jim Pratt and Anthony |
| Gilbert. Eight meetings were held during the year, attended by both members. |
| An evaluation of the board directors took place during the reporting period and |
| was in accordance with the process described in 2.5 above. |
| New directors are selected by the Remuneration and Nomination committee and |
| their appointment voted by the board. Each year, 1/3rd of directors retire by |
| rotation and are subject to re-election by shareholders at the Annual General |
| Meeting. |
| A copy of the Remuneration and Nomination committee charter is not publicly |
| available. |
| A copy of the policy for the nomination and appointment of directors is not |
| publicly available. |
| |
+----------------------------------------------------------------------------------+
| Principle 3. Promote ethical and responsible decision-making |
+----------------------------------------------------------------------------------+
| 3.1Companies should establish a code of conduct and disclose the code or a |
| summary of the code as to: |
| . the practices necessary to maintain confidence in the company's integrity; |
| |
| . the practices necessary to take into account their legal obligations and |
| the reasonable expectations of their stakeholders; and |
| . the responsibility and accountability of individuals for reporting and |
| investigating reports of unethical practices. |
| eServGlobal Limited's policies contain a formal code of conduct that applies to |
| all directors and employees, who are expected to maintain a high standard of |
| conduct and work performance, and observe standards of equity and fairness in |
| dealing with others. The detailed policies and procedures encapsulate the |
| company's ethical standards. |
| The code of conduct is available to directors and employees on the company's |
| internal website. |
| 3.2Companies should establish a policy concerning trading in company securities |
| by directors, senior executives and employees, and disclose the policy or a |
| summary of that policy. |
| 3.3Companies should provide the information indicated in the Guide to reporting |
| on Principle 3. |
| eServGlobal Limited's shares are listed on both the Australian Stock Exchange |
| and the London Stock Exchange (AIM). The company's policies relating to board |
| and employee trading in shares has been designed to meet the requirements of |
| both stock exchanges. The current policy, which is known as the Securities |
| Dealing Policy, can be summarised as follows: * |
| A director, employee or an associate of any of them shall not:* |
| engage in short term trading of the company's securities; * |
| deal in the company's securities when he or she is in possession of insider |
| information, or unpublished price sensitive information;* |
| deal in the company's securities in the periods from the end of the financial |
| year or half year until the results of those periods are released.* |
| A director, employee or an associate of any of them shall not deal in the |
| company's securities at any time without prior approval as specified in the |
| Securities Dealing Policy. In this regard, a director or senior executive is |
| required to advise the chairman of the board before commencing a transaction, |
| and other employees are required to advise the secretary before commencing the |
| transaction. In all cases prior written approval is required. Applications to |
| trade and approvals have to follow the |
+----------------------------------------------------------------------------------+
Corporate governance statement
+----------------------------------------------------------------------------------+
| processes set out in the Securities Dealing Policy. |
| The code of conduct and the Securities Dealing Policy are available to directors |
| and employees on the company's internal website. |
| |
+----------------------------------------------------------------------------------+
| Principle 4. Safeguard integrity in financial reporting |
| |
+----------------------------------------------------------------------------------+
| 4.1Establish an audit committee. |
| The company has an Audit Committee. |
| 4.2Audit committee composition. |
| The Audit committee consisted of David Smart (Chairman) and Graham Libbesson, |
| both of whom are independent, qualified and experienced accountants. The board |
| believes that the audit committee is of an appropriate size for the company. |
| 4.3A formal charter should be established for the audit committee. |
| The company has adopted an Audit Committee charter. |
| 4.4Companies should provide the information indicated in the Guide to reporting |
| on Principle 4. |
| The audit committee met six times during the course of the year. |
| The audit committee provides a forum for the effective communication between the |
| board and external auditors. The audit committee reviews:* |
| The annual and half-year financial reports and accounts prior to their approval |
| by the board;* |
| The effectiveness of management information systems and systems of internal |
| control; and* |
| The efficiency and effectiveness of the external audit functions. |
| The audit committee meets with and receives regular reports from the external |
| auditors concerning any matters that arise in connection with the performance of |
| their role, including the adequacy of internal controls. |
| In conjunction with the auditors the audit committee monitors the term of the |
| external audit engagement partner and ensures that the regulatory limit for such |
| term is not exceeded. At the completion of the term, or earlier in some |
| circumstances, the auditor nominates a replacement engagement partner. The audit |
| committee interviews the nominee to assess relevant prior experience, potential |
| conflicts of interest and general suitability for the role. If the nominee is |
| deemed suitable, the audit committee reports to the Board on its recommendation. |
| |
+----------------------------------------------------------------------------------+
| Principle 5. Make timely and balanced disclosure |
| |
+----------------------------------------------------------------------------------+
| 5.1Written policies and procedures should be established to ensure an entity |
| complies with the ASX Listing Rule disclosure requirements and that senior |
| management is accountable for compliance. |
| The eServGlobal board and senior management are conscious of the ASX and AIM |
| Listing Rule disclosure requirements, and take steps to ensure compliance. Also, |
| the company has a policy that requires,* |
| All announcements be reviewed by the company secretary; and* |
| All media comment is provided by the chairman, chief executive officer or the |
| chief financial officer. |
| The company's continuous disclosure obligations are reviewed continuously by the |
| Chairman and the Chief Executive Officer, with full observance of the listing |
| rules and the Corporations Act. |
| |
+----------------------------------------------------------------------------------+
Corporate governance statement
+----------------------------------------------------------------------------------+
| 5.2 The company's continuous |
| disclosure policy is described above. |
| |
+----------------------------------------------------------------------------------+
| Principle 6. Respect the rights of shareholders |
| |
+----------------------------------------------------------------------------------+
| 6.1Companies should design a |
| communications policy for promoting |
| effective communication with |
| shareholders and encouraging their |
| participation at general meetings and |
| disclose their policy or a summary of |
| that policy. |
| eServGlobal provides information to |
| its shareholders through the formal |
| communications processes (eg ASX |
| releases, annual general meeting, |
| annual report, and shareholder |
| letters). This material is also |
| available on the eServGlobal website |
| (www.eservglobal.com). |
| Shareholders are encouraged to |
| participate in the AGMs and time is |
| set aside for formal and informal |
| questioning of the board and senior |
| management. |
| The company requests its external |
| auditor attend the annual general |
| meeting and to be available to answer |
| any shareholder questions about the |
| conduct of the audit and the |
| preparation and content of the audit |
| report. |
| 6.2 The company's communications |
| policy is described in 5.1 and 6.1 |
| above. |
| |
+----------------------------------------------------------------------------------+
| Principle 7. Recognise and manage risk |
| |
+----------------------------------------------------------------------------------+
| 7.1Companies should establish policies for the oversight and management of |
| material business risks. |
| The company has established policies for the oversight and management of |
| material business risks. |
| The board monitors the risks and internal controls of eServGlobal through the |
| Audit Committee. The Audit Committee looks to the CEO and CFO to ensure that an |
| adequate system is in place to identify and, where possible, on a cost effective |
| basis, to manage risks inherent in the business, and to have appropriate |
| internal controls. |
| As part of the process, eServGlobal's management formally identifies and |
| assesses the risks to the business, and these assessments are noted by the audit |
| committee and the board. |
| Categories of risks managed cover all major aspects of a global technology |
| company. The details are not disclosed as this may disadvantage the company in |
| regard to its competitors. |
| 7.2The board has required management to design and implement the risk management |
| and internal control system to manage the company's material business risks and |
| report to it on whether those risks are being managed effectively. Management |
| has reported to the board as to the effectiveness of the company's management of |
| its material business risks. |
| 7.3The board has received assurance from the chief executive officer and the |
| chief financial officer that the declaration provided in accordance with section |
| 295A of the Corporations Act 2001 is founded on a sound system of risk |
| management and internal control and that the system is operating effectively in |
| all material respects in relation to financial reporting risks. |
| 7.4The board has received the report from Management under Recommendation 7.2; |
| the board has received assurance from the chief executive officer and the chief |
| financial officer under Recommendation 7.3; the company's policies on risk |
| oversight and management of material business risks are not publicly available. |
| |
+----------------------------------------------------------------------------------+
| |
+----------------------------------------------------------------------------------+
Corporate governance statement
+----------------------------------------------------------------------------------+
| Principle 8. Remunerate fairly and responsibly |
+----------------------------------------------------------------------------------+
| 8.1Establish a remuneration committee. |
| The Company has established a Remuneration and Nomination committee. |
| 8.2Companies should clearly distinguish the structure of non-executive |
| directors' remuneration from that of executive directors and senior executives. |
| Non-executive directors are paid a fee as set out in the Directors report. |
| Senior Executives remuneration packages, which consist of base salary, fringe |
| benefits, incentive schemes (including performance related bonuses), |
| superannuation, and entitlements upon retirement or termination, are reviewed |
| annually with due regard to performance. |
| There are no schemes for retirement benefits, other than superannuation, for |
| non-executive directors. |
| A copy of the Remuneration and Nomination committee charter is not publicly |
| available. |
| The company prohibits transactions in associated products which limit risk of |
| participating in unvested entitlements under any equity based remuneration |
| schemes. |
| Notes: |
| * Laurent Lafarge, Jim Pratt and Graham Libbesson retired from the Board in July |
| 2009. |
| |
+----------------------------------------------------------------------------------+
| |
+----------------------------------------------------------------------------------+
Deloitte Touche Tohmatsu
A.B.N. 74 490 121 060
Grosvenor Place
225
George Street
Sydney NSW 2000
PO Box N250 Grosvenor Place
Sydney NSW 1220
Australia
DX 10307SSE
Tel: +61 (0) 2 9322 7000
Fax: +61 (0) 2
9322 7001
www.deloitte.com.au
Independent Audit Report to the
Members of eServGlobal Limited
Report on the Financial Report
We have audited the accompanying financial report of eServGlobal Limited, which
comprises the balance sheet as at 30 June 2009, and the income statement, cash
flow statement and statement of recognised income and expense for the year
ended on that date, a summary of significant accounting policies, other
explanatory notes and the directors' declaration of the consolidated entity
comprising the company and the entities it controlled at the year's end or from
time to time during the financial year as set out on pages 25 to 75.
Directors' Responsibility for the Financial Report
The directors of the company are responsible for the preparation and fair
presentation of the financial report in accordance with Australian Accounting
Standards (including the Australian Accounting Interpretations) and the
Corporations Act 2001. This responsibility includes establishing and maintaining
internal control relevant to the preparation and fair presentation of the
financial report that is free from material misstatement, whether due to fraud
or error; selecting and applying appropriate accounting policies; and making
accounting estimates that are reasonable in the circumstances. In Note 1, the
directors also state, in accordance with Accounting Standard AASB 101
Presentation of Financial Statements, that compliance with the Australian
equivalents to International Financial Reporting Standards ensures that the
financial report, comprising the financial statements and notes, complies with
International Financial Reporting Standards.
Auditor's Responsibility
Our responsibility is to express an opinion on the financial report based on our
audit. We conducted our audit in accordance with Australian Auditing Standards.
These Auditing Standards require that we comply with relevant ethical
requirements relating to audit engagements and plan and perform the audit to
obtain reasonable assurance whether the financial report is free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the
amounts and disclosures in the financial report. The procedures selected depend
on the auditor's judgement, including the assessment of the risks of material
misstatement of the financial report, whether due to fraud or error. In making
those risk assessments, the auditor considers internal control relevant to the
entity's preparation and fair presentation of the financial report in order to
design audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the entity's
internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by
the directors, as well as evaluating the overall presentation of the financial
report.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Liability limited by a scheme approved under Professional Standards Legislation.
Auditor's Independence Declaration
In conducting our audit, we have complied with the independence requirements of
the Corporations Act 2001.
Auditor's Opinion
In our opinion:
(a)the financial report of eServGlobal Limited is in accordance with the
Corporations Act 2001, including:
* giving a true and fair view of the company's and consolidated entity's financial
position as at 30 June 2009 and of their performance for the year ended on that
date; and
* complying with Australian Accounting Standards (including the Australian
Accounting Interpretations) and the Corporations Regulations 2001; and
(b)the financial report also complies with International Financial Reporting
Standards as disclosed in Note 1.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 9 to 15 of the
directors' report for the year ended 30 June 2009. The directors of the company
are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit
conducted in accordance with Australian Auditing Standards.
Auditor's Opinion
In our opinion the Remuneration Report of eServGlobal Limited for the year ended
30 June 2009, complies with section 300A of the Corporations Act 2001.
DELOITTE TOUCHE TOHMATSU
Weng W Ching
Partner
Chartered Accountants
Sydney, 25 August 2009
Directors' declaration
+-----------------------------------------+-----------------------------------------+
| The directors declare that: |
+-----------------------------------------------------------------------------------+
| (a) in the directors' opinion, there are reasonable |
| grounds to believe that the company will be able to |
| pay its debts as and when they become due and payable. |
| (b) in the directors' opinion, the attached |
| financial statements and notes thereto are in |
| accordance with the Corporations Act 2001, including |
| compliance with accounting standards and giving a true |
| and fair view of the financial position and |
| performance of the Company and the Group; and |
| (c) the directors have been given the declarations |
| required by s.295A of the Corporations Act 2001. |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| Signed in accordance with a resolution of the directors made pursuant to s.295(5) |
| of the Corporations Act 2001. |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| On behalf of the Directors |
+-----------------------------------------------------------------------------------+
| | |
+-----------------------------------------+-----------------------------------------+
| | |
+-----------------------------------------+-----------------------------------------+
| David Smart | |
+-----------------------------------------+-----------------------------------------+
| Chairman | |
+-----------------------------------------+-----------------------------------------+
| 25 August, 2009 | |
+-----------------------------------------+-----------------------------------------+
| | |
+-----------------------------------------+-----------------------------------------+
| | |
+-----------------------------------------+-----------------------------------------+
Income Statement for the
financial year ended 30 June 2009
+------------------------------------+--------+----------+----------+--+----------+---------+
| | Note | Consolidated | | Company |
+------------------------------------+--------+---------------------+--+--------------------+
| | | 2009 | 2008 | | 2009 | 2008 |
| | | $'000 | $'000 | | $'000 | $'000 |
| | | | | | | |
+------------------------------------+--------+----------+----------+--+----------+---------+
| Revenue | 2 | 147,246 | 177,934 | | 9,652 | 7,432 |
+------------------------------------+--------+----------+----------+--+----------+---------+
| Cost of sales | | (81,519) | (82,721) | | (7,746) |(6,285) |
+------------------------------------+--------+----------+----------+--+----------+---------+
| Gross profit | | 65,727 | 95,213 | | 1,906 | 1,147 |
+------------------------------------+--------+----------+----------+--+----------+---------+
| | | | | | | |
+------------------------------------+--------+----------+----------+--+----------+---------+
| Other revenue | 2 | 421 | 272 | | 6,493 | 5,041 |
+------------------------------------+--------+----------+----------+--+----------+---------+
| | | | | | | |
+------------------------------------+--------+----------+----------+--+----------+---------+
| Research and development expenses | | (17,906) | (25,062) | | - | - |
+------------------------------------+--------+----------+----------+--+----------+---------+
| Sales and marketing expenses | | (24,650) | (20,271) | | (1,533) | (370) |
+------------------------------------+--------+----------+----------+--+----------+---------+
| Administration expenses | | (28,853) | (25,990) | | (2,707) | (2,413) |
+------------------------------------+--------+----------+----------+--+----------+---------+
| Earnings before interest, tax, | | (5,261) | 24,162 | | 4,159 | 3,405 |
| depreciation, amortisation and | | | | | | |
| impairment | | | | | | |
+------------------------------------+--------+----------+----------+--+----------+---------+
| Amortisation | 3 | (7,783) | (6,883) | | - | - |
+------------------------------------+--------+----------+----------+--+----------+---------+
| Impairment of goodwill | 14 | (12,501) | - | | - | - |
+------------------------------------+--------+----------+----------+--+----------+---------+
| Impairment of loan to subsidiary | 11 | - | - | | (12,583) | - |
+------------------------------------+--------+----------+----------+--+----------+---------+
| Depreciation | 3 | (3,284) | (2,997) | | (56) | (100) |
+------------------------------------+--------+----------+----------+--+----------+---------+
| Earnings before interest and tax | | (28,829) | 14,282 | | (8,480) | 3,305 |
+------------------------------------+--------+----------+----------+--+----------+---------+
| Finance costs | 3 | (262) | (400) | | - | (1) |
+------------------------------------+--------+----------+----------+--+----------+---------+
| (Loss)/profit before tax | 3 | (29,091) | 13,882 | | (8,480) | 3,304 |
+------------------------------------+--------+----------+----------+--+----------+---------+
| | | | | | | |
+------------------------------------+--------+----------+----------+--+----------+---------+
| Income tax expense | 4 | (5,434) | (3,342) | | (561) | (1,219) |
+------------------------------------+--------+----------+----------+--+----------+---------+
| (Loss)/profit for the year | | (34,525) | 10,540 | | (9,041) | 2,085 |
+------------------------------------+--------+----------+----------+--+----------+---------+
| Attributable to: | | | | | | |
+------------------------------------+--------+----------+----------+--+----------+---------+
| Equity holders of the parent | | (34,743) | 10,391 | | (9,041) | 2,085 |
+------------------------------------+--------+----------+----------+--+----------+---------+
| Minority interest | | 218 | 149 | | - | - |
+------------------------------------+--------+----------+----------+--+----------+---------+
| | | (34,525) | 10,540 | | (9,041) | 2,085 |
+------------------------------------+--------+----------+----------+--+----------+---------+
| | | | | | |
+------------------------------------+--------+----------+----------+--+--------------------+
| Earnings/(loss) per share | | | | | |
+------------------------------------+--------+----------+----------+--+--------------------+
| Basic (cents per share) | 22 | (20.1) | 6.1 | | |
+------------------------------------+--------+----------+----------+--+--------------------+
| Diluted (cents per share) | 22 | (20.1) | 6.0 | | |
+------------------------------------+--------+----------+----------+--+--------------------+
| |
+------------------------------------+--------+----------+----------+--+----------+---------+
Notes to the financial statements are included on pages 30 to 75
Balance Sheet
as at 30 June 2009
+-----------------------------------+-------+----------+----------+--+----------+---------+
| | Note | Consolidated | | Company |
+-----------------------------------+-------+---------------------+--+--------------------+
| | | 2009 | 2008 | | 2009 | 2008 |
| | | $'000 | $'000 | | $'000 | $'000 |
| | | | | | | |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Current assets | | | | | | |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Cash and cash equivalents | 28 | 14,135 | 18,288 | | 11,948 | 9,626 |
| | (a) | | | | | |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Trade and other receivables | 8 | 63,493 | 80,120 | | 12,682 | 8,493 |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Inventories | 10 | 623 | 1,456 | | - | - |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Current tax receivables | 4 | 7,368 | 5,555 | | - | - |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Total current assets | | 85,619 | 105,419 | | 24,630 | 18,119 |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| | | | | | | |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Non-current assets | | | | | | |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Trade and other receivables | 11 | - | 5,077 | | 53,389 | 63,189 |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Other financial assets | 12 | - | - | | 38,432 | 38,432 |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Property, plant and equipment | 13 | 4,891 | 5,855 | | 83 | 85 |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Goodwill | 14 | 35,483 | 46,804 | | - | - |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Other intangible assets | 15 | 20,383 | 22,544 | | - | - |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Deferred tax assets | 4 | 2,929 | 6,715 | | 485 | 675 |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Total non-current assets | | 63,686 | 86,995 | | 92,389 | 102,381 |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Total assets | | 149,305 | 192,414 | | 117,019 | 120,500 |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| | | | | | | |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Current liabilities | | | | | | |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Trade and other payables | 16 | 31,963 | 46,164 | | 742 | 1,128 |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Current tax payables | 4 | 930 | 86 | | - | - |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Provisions | 17 | 5,562 | 5,346 | | 155 | 128 |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Other | 18 | 7,219 | 7,432 | | 2,262 | 62 |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Total current liabilities | | 45,674 | 59,028 | | 3,159 | 1,318 |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| | | | | | | |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Non-current liabilities | | | | | | |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Deferred tax liabilities | 4 | 8,040 | 8,510 | | 390 | 207 |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Provisions | 17 | 537 | 1,331 | | - | - |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Total non-current liabilities | | 8,577 | 9,841 | | 390 | 207 |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Total liabilities | | 54,251 | 68,869 | | 3,549 | 1,525 |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Net assets | | 95,054 | 123,545 | | 113,470 | 118,975 |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| | | | | | | |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Equity | | | | | | |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Issued capital | 19 | 123,946 | 115,325 | | 123,946 | 115,325 |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Reserves | 20 | 4,411 | 1,638 | | 1,088 | 1,042 |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| (Accumulated losses)/retained | 21 | (33,338) | 6,536 | | (11,564) | 2,608 |
| earnings | | | | | | |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Equity attributable to equity | | 95,019 | 123,499 | | 113,470 | 118,975 |
| holders of the parent | | | | | | |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Minority interest | | 35 | 46 | | - | - |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Total equity | | 95,054 | 123,545 | | 113,470 | 118,975 |
+-----------------------------------+-------+----------+----------+--+----------+---------+
Notes to the financial statements are included on pages 30 to 75
Statement of recognised income and expense
for the financial year ended 30 June 2009
+-----------------------------------+-------+----------+----------+--+----------+---------+
| | Note | Consolidated | | Company |
+-----------------------------------+-------+---------------------+--+--------------------+
| | | 2009 | 2008 | | 2009 | 2008 |
| | | $'000 | $'000 | | $'000 | $'000 |
| | | | | | | |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Translation of foreign | | | | | | |
| operations: | | | | | | |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Exchange differences taken to | 20 | 2,727 | 1,690 | | - | - |
| equity | | | | | | |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Net income recognised directly in | | 2,727 | 1,690 | | - | - |
| equity | | | | | | |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| | | | | | | |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| (Loss)/profit for the year | | (34,525) | 10,540 | | (9,041) | 2,085 |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| | | | | | | |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Total recognised income and | | (31,798) | 12,230 | | (9,041) | 2,085 |
| expense for the year | | | | | | |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| | | | | | | |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Attributable to: | | | | | | |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Equity holders of the parent | | (32,016) | 12,081 | | (9,041) | 2,085 |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| Minority interest | | 218 | 149 | | - | - |
+-----------------------------------+-------+----------+----------+--+----------+---------+
| | | (31,798) | 12,230 | | (9,041) | 2,085 |
+-----------------------------------+-------+----------+----------+--+----------+---------+
Notes to the financial statements are included on pages 30 to 75
Cash flow statement for the
financial year ended 30 June 2009
+-----------------------------------+-------+-----------+-----------+--+----------+---------+
| | Note | Consolidated | | Company |
+-----------------------------------+-------+-----------------------+--+--------------------+
| | | 2009 | 2008 | | 2009 | 2008 |
| | | $'000 | $'000 | | $'000 | $'000 |
| | | | | | | |
+-----------------------------------+-------+-----------+-----------+--+----------+---------+
| Cash flows from operating | | | | | | |
| activities | | | | | | |
+-----------------------------------+-------+-----------+-----------+--+----------+---------+
| Receipts from customers | | 159,013 | 176,215 | | 9,113 | 3,583 |
+-----------------------------------+-------+-----------+-----------+--+----------+---------+
| Payments to suppliers and | | (165,926) | (153,173) | | (7,219) | (7,605) |
| employees | | | | | | |
+-----------------------------------+-------+-----------+-----------+--+----------+---------+
| Interest and other costs of | | (262) | (400) | | - | (1) |
| finance paid | | | | | | |
+-----------------------------------+-------+-----------+-----------+--+----------+---------+
| Income tax (paid)/refunded | | 5,081 | (10,008) | | (386) | (242) |
+-----------------------------------+-------+-----------+-----------+--+----------+---------+
| Net cash (used in)/provided by |28(c) | (2,094) | 12,634 | | 1,508 | (4,265) |
| operating activities | | | | | | |
+-----------------------------------+-------+-----------+-----------+--+----------+---------+
| | | | | | | |
+-----------------------------------+-------+-----------+-----------+--+----------+---------+
| Cash flows from investing | | | | | | |
| activities | | | | | | |
+-----------------------------------+-------+-----------+-----------+--+----------+---------+
| Interest received | | 271 | 196 | | 228 | 170 |
+-----------------------------------+-------+-----------+-----------+--+----------+---------+
| Payment for property, plant and | 13 | (2,159) | (4,184) | | (54) | (59) |
| equipment | | | | | | |
+-----------------------------------+-------+-----------+-----------+--+----------+---------+
| Software development costs | 15 | (4,035) | - | | - | - |
+-----------------------------------+-------+-----------+-----------+--+----------+---------+
| Net cash (used in)/provided by | | (5,923) | (3,988) | | 174 | 111 |
| investing activities | | | | | | |
+-----------------------------------+-------+-----------+-----------+--+----------+---------+
| | | | | | | |
+-----------------------------------+-------+-----------+-----------+--+----------+---------+
| Cash flows from financing | | | | | | |
| activities | | | | | | |
+-----------------------------------+-------+-----------+-----------+--+----------+---------+
| Proceeds from issues of equity | 19 | 8,460 | 228 | | 8,460 | 228 |
| securities | | | | | | |
+-----------------------------------+-------+-----------+-----------+--+----------+---------+
| Loans repaid from / (advanced | | - | - | | (2,689) | 15,868 |
| to) subsidiaries | | | | | | |
+-----------------------------------+-------+-----------+-----------+--+----------+---------+
| Dividends paid | 23 | (5,131) | (3,408) | | (5,131) | (3,408) |
+-----------------------------------+-------+-----------+-----------+--+----------+---------+
| Net cash (used in)/provided by | | 3,329 | (3,180) | | 640 | 12,688 |
| financing activities | | | | | | |
+-----------------------------------+-------+-----------+-----------+--+----------+---------+
| | | | | | | |
+-----------------------------------+-------+-----------+-----------+--+----------+---------+
| Net increase/(decrease) in cash | | (4,688) | 5,466 | | 2,322 | 8,534 |
| held | | | | | | |
+-----------------------------------+-------+-----------+-----------+--+----------+---------+
| Cash and cash equivalents at the | | 18,288 | 12,528 | | 9,626 | 1,092 |
| beginning of the financial year | | | | | | |
+-----------------------------------+-------+-----------+-----------+--+----------+---------+
| Effects of exchange rate changes | | 535 | 294 | | - | - |
| on the balance of cash held in | | | | | | |
| foreign currencies | | | | | | |
+-----------------------------------+-------+-----------+-----------+--+----------+---------+
| Cash and cash equivalents at the |28(a) | 14,135 | 18,288 | | 11,948 | 9,626 |
| end of the financial year | | | | | | |
+-----------------------------------+-------+-----------+-----------+--+----------+---------+
| | | | | | | |
+-----------------------------------+-------+-----------+-----------+--+----------+---------+
Notes to the financial statements are included on pages 30 to 75
Notes to the Financial Statements
for the financial year ended 30 June
2009
+-----+---------------------------------------------------------+--+---------+---------+
| 1. | SUMMARY OF ACCOUNTING POLICIES | | | |
+-----+---------------------------------------------------------+--+---------+---------+
+----------------------------------------------------------------------------------+
| Adoption of new and revised Accounting Standards |
+----------------------------------------------------------------------------------+
| In the current year, the Group has not early adopted any of the new and revised |
| Standards and Interpretations issued by the Australian Accounting Standards |
| Board (the AASB) that are relevant to its operations and effective for the |
| current annual reporting period. |
| |
+----------------------------------------------------------------------------------+
| Initial application of the following Standards and Interpretations, which are |
| relevant to the financial report, is not expected to have material impacts to |
| the financial report nor significantly affect the disclosures presently made in |
| relation to the consolidated entity and the company's financial report: |
| |
+----------------------------------------------------------------------------------+
+-------------------------------------+------------------------+--------------------+
| Standard | Effective for annual | Expected to be |
| | reporting periods | initially applied |
| | beginning on or after | in the financial |
| | | year ending |
+-------------------------------------+------------------------+--------------------+
| AASB 101 'Presentation of Financial | 1 January 2009 | 30 June 2010 |
| Statements (revised September 2007) | | |
+-------------------------------------+------------------------+--------------------+
| AASB 8 'Operating Segments' and | 1 January 2009 | 30 June 2010 |
| AASB 2007-3 'Amendments to | | |
| Australian Accounting Standards | | |
| arising from AASB 8' | | |
+-------------------------------------+------------------------+--------------------+
| AASB 123 'Borrowing Costs' | 1 January 2009 | 30 June 2010 |
| (revised) | | |
+-------------------------------------+------------------------+--------------------+
| AASB 2008-5 'Amendments to | 1 January 2009 | 30 June 2010 |
| Australian Accounting Standards | | |
| arising from the Annual | | |
| Improvements Process' | | |
+-------------------------------------+------------------------+--------------------+
| AASB 2008-6 'Further Amendments to | 1 July 2009 | 30 June 2010 |
| Australian Accounting Standards | | |
| arising from the Annual | | |
| Improvements Process' | | |
+-------------------------------------+------------------------+--------------------+
| AASB 2008-7 'Amendments to | 1 January 2009 | 30 June 2010 |
| Australian Accounting Standards - | | |
| Cost of an Investment in a | | |
| Subsidiary, Jointly Controlled | | |
| Entity or Associate' | | |
+-------------------------------------+------------------------+--------------------+
| AASB 3 'Business Combinations' and | 1 July 2009 | 30 June 2010 |
| AASB 127 'Consolidated and Separate | | |
| Financial Statements' | | |
+-------------------------------------+------------------------+--------------------+
| AASB 2007-10 'Amendments to | 1 January 2009 | 30 June 2010 |
| Australian Accounting Standards | | |
| arising from AASB 101 | | |
+-------------------------------------+------------------------+--------------------+
| AASB 2009-2 'Amendments to | 1 January 2009 | 30 June 2010 |
| Australian Accounting Standards - | | |
| Improving Disclosures about | | |
| Financial Instruments | | |
+-------------------------------------+------------------------+--------------------+
| AASB 2009-6 'Amendments to | 1 January 2009 | 30 June 2010 |
| Australian Accounting Standards | | |
+-------------------------------------+------------------------+--------------------+
| AASB 2009-7 'Amendments to | 1 July 2009 | 30 June 2010 |
| Australian Accounting Standards | | |
+-------------------------------------+------------------------+--------------------+
| AASB - 2009-4 Amendments to | 1 July 2009 | 30 June 2010 |
| Australian Accounting Standards | | |
| arising from the annual | | |
| improvements process | | |
+-------------------------------------+------------------------+--------------------+
| AASB - 2009-5 Further Amendments to | 1 July 2010 | 30 June 2011 |
| Australian Accounting Standards | | |
| arising from the annual | | |
| improvements process | | |
+-------------------------------------+------------------------+--------------------+
Notes to the Financial Statements
for the financial year ended 30 June
2009
+-----+---------------------------------------------------------+--+---------+---------+
| 1. | SUMMARY OF ACCOUNTING POLICIES (continued) | | | |
+-----+---------------------------------------------------------+--+---------+---------+
+----------------------------------------------------------------------------------+
| Statement of compliance |
+----------------------------------------------------------------------------------+
| The financial report is a general purpose financial report which has been |
| prepared in accordance with the Corporations Act 2001, Accounting Standards and |
| Interpretations, and complies with other requirements of the law. |
| The financial report includes the separate financial statements of the company |
| and the consolidated financial statements of the Group. |
| Accounting Standards include Australian equivalents to International Financial |
| Reporting Standards ('A-IFRS'). Compliance with A-IFRS ensures that the |
| financial statements and notes of the Group and Company comply with |
| International Financial Reporting Standards ('IFRS'). |
+----------------------------------------------------------------------------------+
| The financial statements were authorised for issue by the directors on 25 August |
| 2009. |
+----------------------------------------------------------------------------------+
Basis of preparation
+----------------------------------------------------------------------------------+
| The financial report has been prepared on the basis of historical cost. Cost is |
| based on the fair values of the consideration given in exchange for assets. All |
| amounts are presented in Australian dollars, unless otherwise noted. |
| |
+----------------------------------------------------------------------------------+
| The company is a company of the kind referred to in ASIC Class Order 98/100, |
| dated 10 July 1998, and in accordance with that Class Order amounts in the |
| financial report are rounded off to the nearest thousand dollars, unless |
| otherwise indicated. |
+----------------------------------------------------------------------------------+
The following significant accounting policies have been adopted in the
preparation and presentation of the financial report:
(a)Cash and cash equivalents
Cash and cash equivalents include cash on hand and in banks, deposits held at
call with banks and financial institutions, investments in money market
instruments with maturities of three months or less from the date of
acquisition, and bank overdrafts. Bank overdrafts are shown within short?term
borrowings in current liabilities on the balance sheet.
(b)Employee benefits
Provision is made for benefits accruing to employees in respect of wages and
salaries, annual leave and long service leave when it is probable that
settlement will be required and they are capable of being measured reliably.
Provisions made in respect of employee benefits expected to be settled within 12
months, are measured at their nominal values using the remuneration rate
expected to apply at the time of settlement.
Provisions made in respect of employee benefits which are not expected to be
settled within 12 months are measured as the present value of the estimated
future cash outflows to be made by the Group in respect of services provided by
employees up to reporting date.
Defined contribution plans
Contributions to defined contribution superannuation plans are expensed when
employees have rendered service entitling them to the contributions.
Notes to the Financial Statements
for the financial year ended 30 June
2009
+-----+---------------------------------------------------------+--+---------+---------+
| 1. | SUMMARY OF ACCOUNTING POLICIES (continued) | | | |
+-----+---------------------------------------------------------+--+---------+---------+
(c)Financial assets
Investments
Investments in subsidiaries are recognised at cost, less impairment losses, in
the company financial statements.
Other financial assets are classified into the following specified categories:
financial assets, 'held to maturity investments' and 'loans and receivables'.
The classification depends on the nature and purpose of the financial assets and
is determined at the time of initial recognition.
Loans and receivables
Trade and other receivables that have fixed or determinable payments that are
not quoted in an active market are classified as 'loans and receivables'. Loans
and receivables are measured at amortised cost using the effective interest
method less impairment. Interest income is recognised by applying the effective
interest rate.
Appropriate allowances for estimated irrecoverable amounts are recognised in
profit or loss when there is objective evidence that the asset is impaired. The
allowance recognised is measured as the difference between the asset's carrying
amount and the present value of estimated future cash flows discounted at the
effective interest rate computed on initial recognition.
The carrying amount of loans and receivables is reduced by the impairment loss
through the use of an allowance account. Subsequent recoveries of amounts
previously written off are credited against the allowance account. Changes in
the carrying value of the allowance account are recognised in profit and loss.
(d)Financial instruments issued by the company
Debt and equity instruments
Debt and equity instruments are classified as either liabilities or as equity in
accordance with the substance of the contractual arrangement. An equity
instrument is any contract that evidences a residual interest in the assets of
an entity after deducting all of its liabilities. Equity instruments issued by
the Group are recorded at the proceeds received, net of direct issue costs.
Transaction costs on the issue of equity instruments
Transaction costs arising on the issue of equity instruments are recognised
directly in equity as a reduction of the proceeds of the equity instruments to
which the costs relate. Transaction costs are the costs that are incurred
directly in connection with the issue of those equity instruments and which
would not have been incurred had those instruments not been issued.
Financial guarantee contract liabilities
Financial guarantee contract liabilities are measured initially at their fair
values and subsequently at the higher of:
* The amount of the obligation under the contract, as determined under AASB 137
'Provisions, Contingent Liabilities and Contingent Assets'; and
* The amount initially recognised less, where appropriate, cumulative amortisation
in accordance with the Group's revenue recognition policies.
Notes to the Financial Statements
for the financial year ended 30 June
2009
+-----+---------------------------------------------------------+--+---------+---------+
| 1. | SUMMARY OF ACCOUNTING POLICIES (continued) | | | |
+-----+---------------------------------------------------------+--+---------+---------+
(d)Financial instruments issued by the company (continued)
Other financial liabilities
Other financial liabilities, including borrowings, are initially measured at
fair value, net of transaction costs and are subsequently measured at amortised
cost using the effective interest method, with the interest expense recognised
in an effective yield basis. The effective interest method is a method of
calculating the amortised cost of a financial liability and of allocating
interest expense over the relevant period. The effective interest rate is the
rate that exactly discounts estimated future cash payments through the expected
life of the financial liability, or, where appropriate, a shorter period.
Trade payables
Trade payables are initially measured at fair value, and are subsequently
measured at amortised cost.
(e)Foreign currency
Foreign currency transactions
All foreign currency transactions arising during the financial year are brought
to account using the exchange rate in effect at the date of the transaction.
Foreign currency monetary items at reporting date are translated at the exchange
rate existing at reporting date. Non-monetary assets and liabilities carried at
fair value that are denominated in foreign currencies are translated at the
rates prevailing at the date when the fair value was determined. Non-monetary
items that are measured at historical cost in a foreign currency are not
re-translated.
Exchange differences are recognised in profit or loss in the period in which
they arise.
Foreign operations
All overseas subsidiaries, other than those that are part of the eServGlobal
Holdings SAS group, report in their functional currency of AUD, in accordance
with the requirements of AASB 121 "The Effects of Changes in Foreign Currency
Exchange Rates" and as a consequence all exchange rate translation differences
are taken to profit or loss. The eServGlobal Holdings SAS group reports in its
functional currency of EUR and on consolidation, the assets and liabilities of
the eServGlobal Holdings SAS group are translated at exchange rates prevailing
at the reporting date. Income and expense items are translated at the average
exchange rates for the period unless exchange rates fluctuate significantly.
Exchange differences arising, if any, are recognised in the foreign currency
translation reserve, and recognised in profit or loss on disposal of the foreign
operation.
Goodwill and fair value adjustments arising on the acquisition of a foreign
entity on or after the date of transition to A-IFRS are treated as assets and
liabilities of the foreign entity and translated at exchange rates prevailing at
the reporting date.
Notes to the Financial Statements
for the financial year ended 30 June
2009
+-----+---------------------------------------------------------+--+---------+---------+
| 1. | SUMMARY OF ACCOUNTING POLICIES (continued) | | | |
+-----+---------------------------------------------------------+--+---------+---------+
| | | | |
+-----+---------------------------------------------------------+--+---------+---------+
(f)Goods and services tax
Revenues, expenses and assets are recognised net of the amount of goods and
services tax (GST), except:
i. where the amount of GST incurred is not recoverable from the taxation
authority, it is recognised as part of the cost of acquisition of an asset or as
part of an item of expense; or
ii. for receivables and payables which are recognised inclusive of GST.
The net amount of GST recoverable from, or payable to, the taxation authority is
included as part of receivables or payables.
Cash flows are included in the cash flow statement on a gross basis. The GST
component of cash flows arising from investing and financing activities which is
recoverable from, or payable to, the taxation authority is classified as
operating cash flows.
(g)Goodwill
Goodwill, representing the excess of the cost of acquisition over the fair value
of the identifiable assets, liabilities and contingent liabilities acquired, is
recognised as an asset and not amortised, but tested for impairment annually and
whenever there is an indication that the goodwill may be impaired.
Any impairment is recognised immediately in profit or loss and is not
subsequently reversed. Refer also note 1(h).
(h)Impairment of assets
At each reporting date, the Group reviews the carrying amounts of its tangible
and intangible assets to determine whether there is any indication that those
assets have suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine the extent of
the impairment loss (if any). Where the asset does not generate cash flows that
are independent from other assets, the Group estimates the recoverable amount of
the cash-generating unit to which the asset belongs.
For the purpose of impairment testing, goodwill is allocated to the
cash-generating units expected to benefit from the synergies of the business
combination.
Recoverable amount is the higher of fair value less costs to sell and value in
use. In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the
asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to
be less than its carrying amount, the carrying amount of the asset
(cash-generating unit) is reduced to its recoverable amount. An impairment loss
is recognised in profit or loss immediately.
Where an impairment loss subsequently reverses, the carrying amount of the asset
(cash-generating unit) is increased to the revised estimate of its recoverable
amount, but only to the extent that the increased carrying amount does not
exceed the carrying amount that would have been determined had no impairment
loss been recognised for the asset (cash-generating unit) in prior years. A
reversal of an impairment loss is recognised in profit or loss immediately.
Notes to the Financial Statements
for the financial year ended 30 June
2009
+-----+---------------------------------------------------------+--+---------+---------+
| 1. | SUMMARY OF ACCOUNTING POLICIES (continued) | | | |
+-----+---------------------------------------------------------+--+---------+---------+
(i)Income tax
Current tax
Current tax is calculated by reference to the amount of income taxes payable or
recoverable in respect of the taxable profit or tax loss for the period. It is
calculated using tax rates and tax laws that have been enacted or substantively
enacted by reporting date. Current tax for current and prior periods is
recognised as a liability (or asset) to the extent that it is unpaid (or
refundable).
Deferred tax
Deferred tax is accounted for using the comprehensive balance sheet liability
method in respect of temporary differences arising from differences between the
carrying amount of assets and liabilities in the financial statements and the
corresponding tax base of those items.
In principle, deferred tax liabilities are recognised for all taxable temporary
differences. Deferred tax assets are recognised to the extent that it is
probable that sufficient taxable amounts will be available against which
deductible temporary differences or unused tax losses and tax offsets can be
utilised. However, deferred tax assets and liabilities are not recognised if the
temporary differences giving rise to them arise from the initial recognition of
assets and liabilities (other than as a result of a business combination) which
affects neither taxable income nor accounting profit. Furthermore, a deferred
tax liability is not recognised in relation to taxable temporary differences
arising from goodwill.
Deferred tax assets and liabilities are measured at the tax rates that are
expected to apply to the period(s) when the asset and liability giving rise to
them are realised or settled, based on tax rates (and tax laws) that have been
enacted or substantively enacted by reporting date. The measurement of deferred
tax liabilities and assets 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 when they relate to income taxes
levied by the same taxation authority and the company/Group intends to settle
its current tax assets and liabilities on a net basis.
Current and deferred tax for the period
Current and deferred tax is recognised as an expense or income in the income
statement, except when it relates to items credited or debited directly to
equity, in which case the deferred tax is also recognised directly in equity, or
where it arises from the initial accounting for a business combination, in which
case it is taken into account in the determination of goodwill or excess.
Tax consolidation
The company and all its wholly-owned Australian resident entities are part of a
tax-consolidated group under Australian taxation law. eServGlobal Limited is the
head entity in the tax-consolidated group. Tax expense/income, deferred tax
liabilities and deferred tax assets arising from temporary differences of the
members of the tax-consolidated group are recognised in the separate financial
statements of the members of the tax-consolidated group using the 'separate
taxpayer within group' approach. Current tax liabilities and assets and deferred
tax assets arising from unused tax losses and tax credits of the members of the
tax-consolidated group are recognised by the company (as head entity in the
tax-consolidated group).
Due to the existence of a tax funding arrangement between the entities in the
tax-consolidated group, amounts are recognised as payable to or receivable by
the company and each member of the group in relation to the tax contribution
amounts paid or payable between the parent entity and the other members of the
tax-consolidated group in accordance with the arrangement. Where the tax
contribution amount recognised by each member of the tax-consolidated group for
a particular period is different to the aggregate of the current tax liability
or asset and any deferred tax asset arising from unused tax losses and tax
credits in respect of that period, the difference is recognised as a
contribution from (or distribution to) equity participants.
Notes to the Financial Statements
for the financial year ended 30 June
2009
+-----+---------------------------------------------------------+--+---------+---------+
| 1. | SUMMARY OF ACCOUNTING POLICIES (continued) | | | |
+-----+---------------------------------------------------------+--+---------+---------+
(j)Intangible assets
All intangible assets acquired in a business combination are identified and
recognised separately from goodwill where they satisfy the definition of an
intangible asset and their fair value can be measured reliably.
Software and Documentation
Software and Documentation are recorded initially at fair value and have an
estimated useful life. Amortisation is charged on a straight line basis over
their useful lives.
Customer Relationships
Customer Relationships are recorded initially at fair value and have an
estimated useful life. Amortisation is charged on a straight line basis over
their useful lives.
(k)Inventories
Inventories are valued at the lower of cost and net realisable value. Costs are
assigned to inventory on hand by the method most appropriate to each particular
class of inventory, with the majority being valued on a first in first out
basis. Net realisable value represents the estimated selling price less all
estimated costs to be incurred in marketing, selling and distribution.
(l)Leases
Operating lease payments, where substantially all of the risks and benefits
remain with the lessor, are recognised as an expense on a straight-line basis
over the lease term, except where another systematic basis is more
representative of the time pattern in which economic benefits from the leased
asset are consumed. Contingent rentals are recognised as an expense in the
period in which they are incurred.
Lease incentives
In the event that lease incentives are received to enter into operating leases,
such incentives are recognised as a liability. The aggregate benefits of
incentives are recognised as a reduction of rental expense on a straight-line
basis.
(m)Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the Company and entities controlled by the Company (its subsidiaries) (referred
to as 'the Group' in these financial statements). Control is achieved where the
Company has the power to govern the financial and operating policies of an
entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are included
in the consolidated income statement from the effective date of acquisition or
up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of
subsidiaries to bring their accounting policies into line with those used by
other members of the Group.
All intra-group transactions, balances, income and expenses are eliminated in
full on consolidation. In the separate financial statements of the Company,
intra-group transactions ('common control transactions') are generally accounted
for by reference to the existing (consolidated) book value of the items. Where
the transaction value of common control transactions differ from their
consolidated book value, the difference is recognised as a contribution by or
distribution to equity participants by the transacting entities.
Notes to the Financial Statements
for the financial year ended 30 June 2009
+-----+---------------------------------------------------------+--+---------+---------+
| 1. | SUMMARY OF ACCOUNTING POLICIES (continued) | | | |
+-----+---------------------------------------------------------+--+---------+---------+
(m)Basis of consolidation (continued)
Minority interest in the net assets (excluding goodwill) of consolidated
subsidiaries are identified separately from the Group's equity therein. Minority
interests consist of the amount of those interests at the date of the original
business combination and the minority's share of changes in equity since the
date of the combination. Losses applicable to the minority in excess of the
minority's interest in the subsidiary's equity are allocated against the
interests of the Group except to the extent that the minority has a binding
obligation and is able to make an additional investment to cover the losses.
Acquisitions of subsidiaries and businesses are accounted for using the purchase
method. The cost of the business combination is measured as the aggregate of the
fair values (at the date of exchange) of the assets given, liabilities incurred
or assumed, and equity instruments issued by the group in exchange for control
of the acquiree, plus any cost directly attributable to the business
combination. The acquiree's identifiable assets, liabilities and contingent
liabilities that meet the conditions for recognition under AASB 3 "Business
Combinations" are recognised at their fair values at the acquisition date,
except for non-current assets (or disposal groups) that are classified as held
for sale in accordance with AASB 5 "Non-current Assets Held for Sale and
Discontinued Operations", which are recognised and measured at fair value less
costs to sell.
Goodwill arising on acquisition is recognised as an asset and initially measured
at cost, being the excess of the cost of the business combination over the
groups interest in the net fair value of the identifiable assets, liabilities
and contingent liabilities recognised. If after reassessment, the group's
interest in the net fair value of the acquiree's identifiable assets,
liabilities and contingent liabilities exceeds the cost of the business
combination, the excess is recognised immediately in profit or loss.
The interest of minority shareholders in the acquiree is initially measured at
the minority's proportion of the net fair value of the assets, liabilities and
contingent liabilities recognised.
(n)Property, plant and equipment
Plant and equipment, office furniture and fittings and leasehold improvements
are stated at cost less accumulated depreciation and impairment. Cost includes
expenditure that is directly attributable to the acquisition of the item. In the
event that settlement of all or part of the purchase consideration is deferred,
cost is determined by discounting the amounts payable in the future to their
present value as at the date of acquisition.
Depreciation is provided on property, plant and equipment. Depreciation is
calculated on a straight line
basis so as to write off the net cost of each asset over its expected useful
life to its estimated residual value. Leasehold improvements are depreciated
over the period of the lease or estimated useful life, whichever is the shorter,
using the straight line method. The estimated useful lives, residual values and
depreciation method are reviewed at the end of each annual reporting period.
The following estimated useful lives are used in the calculation of
depreciation:
+--------------------+-----------------------+
| Office furniture | 5 years |
| and fittings | |
+--------------------+-----------------------+
| Plant and | 3 years |
| equipment | |
+--------------------+-----------------------+
| Leasehold | over the period of |
| improvements | the lease |
+--------------------+-----------------------+
Notes to the Financial Statements
for the financial year ended 30 June
2009
+-----+---------------------------------------------------------+--+---------+---------+
| 1. | SUMMARY OF ACCOUNTING POLICIES (continued) | | | |
+-----+---------------------------------------------------------+--+---------+---------+
(o)Provisions
Provisions are recognised when the Group has a present obligation, the future
sacrifice of economic benefits is probable, and the amount of the provision can
be measured reliably.
The amount recognised as a provision is the best estimate of the consideration
required to settle the present obligation at reporting date, taking into account
the risks and uncertainties surrounding the obligation. Where a provision is
measured using the cash flows estimated to settle the present obligation, its
carrying amount is the present value of those cash flows.
When some or all of the economic benefits required to settle a provision are
expected to be recovered from a third party, the receivable is recognised as an
asset if it is virtually certain that recovery will be received and the amount
of the receivable can be measured reliably.
Onerous Contracts
An onerous contract is considered to exist where the Group has a contract under
which the unavoidable cost of meeting the contractual obligations exceeds the
economic benefits estimated to be received. Present obligations arising under
onerous contracts are recognised as a provision to the extent that the present
obligation exceeds the economic benefits estimated to be received.
(p)Research and development costs
Internally-generated intangible assets - research and development expenditure
Expenditure on research activities is recognised as an expense in the period in
which it is incurred. Where no internally-generated intangible asset can be
recognised, development expenditure is recognised as an expense in the period as
incurred.
An intangible asset arising from development (or from the development phase of
an internal project) is recognised if, and only if, all of the following have
been demonstrated:
* the technical feasibility of completing the intangible asset so that it will be
available for use or sale;
* the intention to complete the intangible asset and use or sell it;
* the ability to use or sell the intangible asset;
* how the intangible asset will generate probable future economic benefits;
* the availability of adequate technical, financial and other resources to
complete the development and to use or sell the intangible asset; and
* the ability to measure reliably the expenditure attributable to the intangible
asset during its development.
The amount initially recognised for internally-generated intangible assets is
the sum of the expenditure incurred from the date when the intangible asset
first meets the recognition criteria listed above.
Subsequent to initial recognition, internally-generated intangible assets are
reported at cost less accumulated amortisation and accumulated impairment
losses, on the same basis as intangible assets acquired separately.
Notes to the Financial Statements
for the financial year ended 30 June
2009
+-----+---------------------------------------------------------+--+---------+---------+
| 1. | SUMMARY OF ACCOUNTING POLICIES (continued) | | | |
+-----+---------------------------------------------------------+--+---------+---------+
(q)Revenue recognition
Sale of Goods and Licences
Revenue from the sale of goods and licences is recognised when the Group has
passed control of the goods or other assets to the buyer, except in the case of
projects involving significant customisation where revenue is recognised by
reference to the stage of completion of the project.
Rendering of Services
Revenue from services to supply custom designed and developed software or
solutions is recognised by reference to the stage of completion of the project.
The stage of completion is determined by assessing, at the reporting date, the
level of actual services performed as a percentage of total services to be
performed in relation to the project.
Revenue recognised in advance of the corresponding bill being raised is recorded
as 'work in progress', whilst bills raised in advance of the services being
performed is recorded as 'deferred income'.
Where a loss is expected to occur it is recognised immediately and a provision
is made in relation to any future work on the contract.
Revenue from Support, Maintenance and Facilities Management Agreements
Revenue from support and maintenance contracts is recognised over time as it is
earned.
Work in Progress
Work in progress is stated at the aggregate of contract costs incurred to date
plus recognised profits less recognised losses and progress billings. If there
are contracts where progress billings exceed the aggregate costs incurred plus
profits less losses, the net amounts are presented in other liabilities.
Contracts costs include all costs directly related to specific contracts and
costs that are specifically chargeable to the customers under the terms of the
contract.
(r)Share-based payments
Equity-settled share-based payments granted after 7 November 2002 that were
unvested as of 1 July 2005, are measured at fair value at the date of grant.
Fair value is measured by use of either a Black Scholes or binomial model. The
expected life used in the model has been adjusted, based on management's best
estimate, for the effects of non-transferability, exercise restrictions, and
behavioural considerations.
The fair value determined at the grant date of the equity-settled share-based
payments is expensed on a straight-line basis over the vesting period, based on
the Group's estimate of shares that will eventually vest.
(s)Derivative financial instruments and hedge accounting
The Group uses derivative financial instruments (primarily foreign currency
forward contracts) to hedge its risks associated with foreign currency
fluctuations relating to transactions arising from specific customer orders.
Derivatives are initially recognised at fair value at the date a derivative
contract is entered into and are subsequently remeasured to their fair value at
each reporting date. The resulting gain or loss is recognised in profit or loss
immediately unless the derivative is designated and effective as a hedging
instrument, in which event, the timing of the recognition in profit or loss
depends on the nature of the hedge relationship.
Notes to the Financial Statements
for the financial year ended 30 June
2009
+-----+---------------------------------------------------------+--+---------+---------+
| 1. | SUMMARY OF ACCOUNTING POLICIES (continued) | | | |
+-----+---------------------------------------------------------+--+---------+---------+
+-----+-----------------------------------------------------------------------------+
| (s) | Derivative financial instruments and hedge accounting (continued) |
+-----+-----------------------------------------------------------------------------+
The fair value of all derivative financial instruments outstanding at the
balance sheet date are recognised in the balance sheet as either financial
assets or financial liabilities. Changes in the fair value of derivative
financial instruments that are designated and effective as hedges of future cash
flows are recognised directly in equity, with any ineffective portion being
recognised in the income statement. Amounts deferred in equity are recycled in
profit or loss in the periods when the hedged item is recognised in profit or
loss in the same line of the income statement as the recognised hedged item.
Changes in the fair value of derivative financial instruments that do not
qualify for hedge accounting are recognised in profit or loss as they arise.
Derivatives embedded in other financial instruments, or other non financial host
contracts, are treated as separate derivatives when their risks and
characteristics are not closely related to those of the host contract, and the
host contract is not carried at fair value with unrealised gains or losses
reported in profit or loss.
(t)Critical accounting judgments and key sources of estimation uncertainty
The directors evaluate estimates and judgments incorporated into the financial
report based on historical knowledge and best available current information.
Estimates assume a reasonable expectation of future events and based on current
trends and economic data, obtained both externally and within the Group.
The following are the key assumptions concerning the future, and other key
sources of estimation uncertainty at the balance sheet date, that have a
significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year:
Impairment of goodwill
The Group assesses impairment at each reporting date by evaluating conditions
specific to the Group that may lead to impairment of goodwill. Where an
impairment trigger exists, the recoverable amount of the asset is determined.
Value?in?use calculations performed in assessing recoverable amounts incorporate
a number of key estimates described in note 14.
Revenue recognition
Revenue in relation to the supply of custom designed and developed software or
solutions is recognised on each project by reference to the stage of completion
of the project. The method of calculating the percentage completion of the
project involves an element of judgement based on future project costs and
profitability of each project. The information used to forecast these costs is
based on historical events and current economic data on a customer by customer
basis.
Notes to the financial statements
for the financial year ended 30 June
2009
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | | Consolidated | | Company |
+-----+-------------------------------------+---------------------+--+-------------------+
| | | 2009 | 2008 | | 2009 | 2008 |
| | | $'000 | $'000 | | $'000 | $'000 |
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| 2. | REVENUE | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Revenue from continuing operations | | | | | |
| | consisted of the following items: | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Revenue from the sale of goods | 74,435 | 101,567 | | 3,786 | 1,955 |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Revenue from the rendering of | 72,811 | 76,367 | | 4,761 | 4,077 |
| | services | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Fees from subsidiaries | - | - | | 1,105 | 1,400 |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | | 147,246 | 177,934 | | 9,652 | 7,432 |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Interest revenue: | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Bank deposits | 271 | 196 | | 228 | 170 |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Subsidiaries | - | - | | 3,415 | 4,795 |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | | 271 | 196 | | 3,643 | 4,965 |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Other revenue | 150 | 76 | | 150 | 76 |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Dividends from subsidiaries | - | - | | 2,700 | - |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | | 421 | 272 | | 6,493 | 5,041 |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | | 147,667 | 178,206 | | 16,145 | 12,473 |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| 3. | (LOSS)/PROFIT BEFORE TAX | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | (Loss)/profit before tax has been | | | | | |
| | arrived at after charging the | | | | | |
| | following expenses from continuing | | | | | |
| | operations: | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Net foreign exchange loss/(gain) | 632 | 677 | | (166) | 87 |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Finance costs: | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Interest - other entities | 262 | 400 | | - | 1 |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Depreciation of non-current assets: | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Office furniture and | 599 | 685 | | - | - |
| | fittings | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Leasehold | 19 | 26 | | 11 | 16 |
| | improvements | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Plant and equipment | 2,666 | 2,286 | | 45 | 84 |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | | 3,284 | 2,997 | | 56 | 100 |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Amortisation of intangible assets: | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Customer | 7,783 | 6,883 | | - | - |
| | relationships, | | | | | |
| | software and | | | | | |
| | documentation | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Operating lease rental expenses: | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Minimum lease | 4,365 | 3,246 | | 135 | 140 |
| | payments | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Net loss on disposal of non-current | | | | | |
| | assets | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Plant and | 32 | 5 | | - | 5 |
| | equipment | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
Notes to the financial statements
for the financial year ended 30 June
2009
+----+------------------------------------+---+----------+---------+---+---------+-------------+
| | | Consolidated | | Company |
+----+----------------------------------------+--------------------+---+-----------------------+
| | | 2009 | 2008 | | 2009 | 2008 |
| | | $'000 | $'000 | | $'000 | $'000 |
| | | | | | | |
+----+----------------------------------------+----------+---------+---+---------+-------------+
| 3. | (LOSS)/PROFIT BEFORE TAX (continued) | | | | | |
+----+----------------------------------------+----------+---------+---+---------+-------------+
| | Employee benefit expense: | | | | | |
+----+----------------------------------------+----------+---------+---+---------+-------------+
| | Contributions to | 221 | 197 | | 221 | 197 |
| | defined contribution | | | | | |
| | plans | | | | | |
+----+----------------------------------------+----------+---------+---+---------+-------------+
| | | 221 | 197 | | 221 | 197 |
+----+----------------------------------------+----------+---------+---+---------+-------------+
| | | | | | | |
+----+----------------------------------------+----------+---------+---+---------+-------------+
| | Share-based payments: | | | | | |
+----+----------------------------------------+----------+---------+---+---------+-------------+
| | Equity settled share-based | 207 | 348 | | 207 | 348 |
| | payments | | | | | |
+----+----------------------------------------+----------+---------+---+---------+-------------+
| | | 207 | 348 | | 207 | 348 |
+----+----------------------------------------+----------+---------+---+---------+-------------+
| | | | | | | |
+----+----------------------------------------+----------+---------+---+---------+-------------+
| | Staff redundancies and termination | 7,691 | 140 | | 150 | 140 |
| | costs | | | | | |
+----+----------------------------------------+----------+---------+---+---------+-------------+
| | | | | | | |
+----+----------------------------------------+----------+---------+---+---------+-------------+
| 4. | INCOME TAXES | | | | | |
+----+----------------------------------------+----------+---------+---+---------+-------------+
| | (a) Income | | | | | |
| | tax recognised | | | | | |
| | in | | | | | |
| | (loss)/profit | | | | | |
+----+----------------------------------------+----------+---------+---+---------+-------------+
| | Tax expense comprises: | | | | | |
+----+----------------------------------------+----------+---------+---+---------+-------------+
| | Current tax expense/(income) | 3,658 | 3,472 | | 176 | (1,051) |
+----+----------------------------------------+----------+---------+---+---------+-------------+
| | Adjustments recognised in the current | 43 | 123 | | 12 | 79 |
| | year in relation to the current tax of | | | | | |
| | prior years | | | | | |
+----+----------------------------------------+----------+---------+---+---------+-------------+
| | Deferred tax (income)/expense relating | 1,733 | (253) | | 373 | 2,191 |
| | to the origination and reversal of | | | | | |
| | temporary differences | | | | | |
+----+----------------------------------------+----------+---------+---+---------+-------------+
| | Total tax expense | 5,434 | 3,342 | | 561 | 1,219 |
+----+----------------------------------------+----------+---------+---+---------+-------------+
| | | | | | | |
+----+------------------------------------+--------------+---------+---+---------+-------------+
| | The prima facie income tax expense | | | | | |
| | on pre-tax accounting | | | | | |
| | (loss)/profit from operations | | | | | |
| | reconciles to the income tax | | | | | |
| | expense in the financial | | | | | |
| | statements as follows: | | | | | |
+----+------------------------------------+--------------+---------+---+---------+-------------+
| | (Loss)/profit from operations | (29,091) | 13,882 | | (8,480) | 3,304 |
+----+------------------------------------+--------------+---------+---+---------+-------------+
| | Income tax (benefit)/expense | (8,727) | 4,165 | | (2,544) | 991 |
| | calculated at 30% | | | | | |
+----+------------------------------------+--------------+---------+---+---------+-------------+
| | | | | | | |
+----+------------------------------------+--------------+---------+---+---------+-------------+
| | Non-deductible expenses | 1,014 | 1,533 | | 128 | 149 |
+----+------------------------------------+--------------+---------+---+---------+-------------+
| | Foreign withholding tax credits | 2,544 | - | | - | - |
| | not utilised | | | | | |
+----+------------------------------------+--------------+---------+---+---------+-------------+
| | Non-deductible impairment loss | 3,549 | - | | 3,775 | - |
+----+------------------------------------+--------------+---------+---+---------+-------------+
| | Deferred tax assets not recognised | 8,105 | - | | - | - |
+----+------------------------------------+--------------+---------+---+---------+-------------+
| | Non-assessable item - research tax | (1,165) | (1,711) | | - | - |
| | credits | | | | | |
+----+------------------------------------+--------------+---------+---+---------+-------------+
| | Non-assessable income | (105) | (1,544) | | - | - |
+----+------------------------------------+--------------+---------+---+---------+-------------+
| | Effect of different tax rate in | 176 | 751 | | - | - |
| | foreign operations | | | | | |
+----+------------------------------------+--------------+---------+---+---------+-------------+
| | Effect on deferred tax balances | - | 25 | | - | - |
| | due to change of rate in other | | | | | |
| | jurisdiction | | | | | |
+----+------------------------------------+--------------+---------+---+---------+-------------+
| | Non assessable dividend | - | - | | (810) | - |
+----+------------------------------------+--------------+---------+---+---------+-------------+
| | Under provision of income tax in | 43 | 123 | | 12 | 79 |
| | previous year | | | | | |
+----+------------------------------------+--------------+---------+---+---------+-------------+
| | | 5,434 | 3,342 | | 561 | 1,219 |
+----+------------------------------------+--------------+---------+---+---------+-------------+
| | The tax rate used in the above reconciliation is the corporate tax rate of 30% payable |
| | by Australian corporate entities on taxable profits under Australian tax law. There |
| | has been no change in the corporate tax rate when compared with the previous reporting |
| | period. |
+----+------------------------------------+---+----------+---------+---+---------+-------------+
Notes to the financial statements
for the financial year ended 30 June 2009
+-----+----------------------+----------------+-----+---------+----------+--+---------+---------+
| | | Consolidated | | Company |
+-----+---------------------------------------------+--------------------+--+-------------------+
| | | 2009 | 2008 | | 2009 | 2008 |
| | | $'000 | $'000 | | $'000 | $'000 |
+----------------------------+----------------------+---------+----------+--+---------+---------+
| 4. | INCOME TAXES (continued) | | | | | |
+-----+---------------------------------------------+---------+----------+--+---------+---------+
| | (b) | | | | | | |
| | Current | | | | | | |
| | tax | | | | | | |
| | assets | | | | | | |
| | and | | | | | | |
| | liabilities | | | | | | |
+-----+---------------------------------------+-----+---------+----------+--+---------+---------+
| | Current tax assets: | | | | | | |
+-----+---------------------------------------+-----+---------+----------+--+---------+---------+
| | Tax refund receivables | | 7,368 | 5,555 | | - | - |
+-----+---------------------------------------+-----+---------+----------+--+---------+---------+
| | | | | | | | |
+-----+---------------------------------------+-----+---------+----------+--+---------+---------+
| | Current tax payables: | | | | | | |
+-----+---------------------------------------+-----+---------+----------+--+---------+---------+
| | Income tax payables | | 930 | 86 | | - | - |
+-----+----------------------+----------------+-----+---------+----------+--+---------+---------+
Deferred tax balances
Deferred tax assets and liabilities arise from the following:
+-----------------------------------+-----------+------------+------------+------------+
| 2009 | Consolidated |
+ +--------------------------------------------------+
| | Opening balance | Charged |Charged to | Closing |
| | |to income | equity | balance |
+ +-----------------------------------+-----------+------------+------------+
| | $'000 | $'000 | $'000 | $'000 |
+-----------------------------------+-----------------------------------+-----------+------------+------------+
| Deferred tax liabilities: | | | | |
+-----------------------------------+-----------+------------+------------+------------+
| Accrued income | 207 | 183 | - | 390 |
+-----------------------------------+-----------+------------+------------+------------+
| Exchange difference on foreign | 190 | - | 1,068 | 1,258 |
| subsidiary | | | | |
+-----------------------------------+-----------+------------+------------+------------+
| Property, plant and equipment | 140 | (140) | - | - |
+-----------------------------------+-----------+------------+------------+------------+
| Intangible assets | 7,973 | (2,133) | 552 | 6,392 |
+-----------------------------------+-----------+------------+------------+------------+
| | 8,510 | (2,090) | 1,620 | 8,040 |
+-----------------------------------+-----------+------------+------------+------------+
| | | | | |
+-----------------------------------+-----------+------------+------------+------------+
| Deferred tax assets: | | | | |
+-----------------------------------+-----------+------------+------------+------------+
| Tax losses - revenue | 2,816 | (567) | - | 2,250 |
+-----------------------------------+-----------+------------+------------+------------+
| Foreign tax credits | 14 | (14) | - | - |
+-----------------------------------+-----------+------------+------------+------------+
| Property, plant and equipment | 110 | (51) | - | 59 |
+-----------------------------------+-----------+------------+------------+------------+
| Deferred income | 48 | (41) | - | 7 |
+-----------------------------------+-----------+------------+------------+------------+
| Accrued costs | 2,679 | (2,386) | 69 | 362 |
+-----------------------------------+-----------+------------+------------+------------+
| Retirement provisions | 458 | (458) | - | - |
+-----------------------------------+-----------+------------+------------+------------+
| Exchange difference on foreign | 224 | - | (224) | - |
| subsidiary | | | | |
+-----------------------------------+-----------+------------+------------+------------+
| Other - AIM listing costs | 17 | (17) | - | - |
+-----------------------------------+-----------+------------+------------+------------+
| Other - share issue expenses | 349 | (175) | - | 174 |
+-----------------------------------+-----------+------------+------------+------------+
| Other | - | 77 | - | 77 |
+-----------------------------------+-----------+------------+------------+------------+
| | 6,715 | (3,823) | (155) | 2,929 |
+-----------------------------------+-----------+------------+------------+------------+
Notes to the financial statements
for the financial year ended 30 June 2009
+------+------------------------------------+-----+---------+----------+--+---------+---------+
| 4. | INCOME TAXES (continued) | | | | | | |
+------+------------------------------------+-----+---------+----------+--+---------+---------+
+-----------------------------------+-----------+------------+------------+------------+
| 2008 | Consolidated |
+ +--------------------------------------------------+
| | Opening balance | Charged |Charged to | Closing |
| | |to income | equity | balance |
+ +-----------------------------------+-----------+------------+------------+
| | $'000 | $'000 | $'000 | $'000 |
+-----------------------------------+-----------------------------------+-----------+------------+------------+
| Deferred tax liabilities: | | | | |
+-----------------------------------+-----------+------------+------------+------------+
| Accrued income | 132 | 75 | - | 207 |
+-----------------------------------+-----------+------------+------------+------------+
| Exchange difference on foreign | - | - | 190 | 190 |
| subsidiary | | | | |
+-----------------------------------+-----------+------------+------------+------------+
| Property, plant and equipment | 89 | 51 | - | 140 |
+-----------------------------------+-----------+------------+------------+------------+
| Intangible assets | 9,535 | (1,562) | - | 7,973 |
+-----------------------------------+-----------+------------+------------+------------+
| | 9,756 | (1,436) | 190 | 8,510 |
+-----------------------------------+-----------+------------+------------+------------+
| | | | | |
+-----------------------------------+-----------+------------+------------+------------+
| Deferred tax assets: | | | | |
+-----------------------------------+-----------+------------+------------+------------+
| Tax losses - revenue | 3,408 | (592) | - | 2,816 |
+-----------------------------------+-----------+------------+------------+------------+
| Foreign tax credits | 392 | (378) | - | 14 |
+-----------------------------------+-----------+------------+------------+------------+
| Property, plant and equipment | 121 | (11) | - | 110 |
+-----------------------------------+-----------+------------+------------+------------+
| Deferred income | 39 | 9 | - | 48 |
+-----------------------------------+-----------+------------+------------+------------+
| Accrued costs | 2,801 | (122) | - | 2,679 |
+-----------------------------------+-----------+------------+------------+------------+
| Retirement provisions | 355 | 103 | - | 458 |
+-----------------------------------+-----------+------------+------------+------------+
| Exchange difference on foreign | 562 | - | (338) | 224 |
| subsidiary | | | | |
+-----------------------------------+-----------+------------+------------+------------+
| Other - AIM listing costs | 34 | (17) | - | 17 |
+-----------------------------------+-----------+------------+------------+------------+
| Other - share issue expenses | 524 | (175) | - | 349 |
+-----------------------------------+-----------+------------+------------+------------+
| | 8,236 | (1,183) | (338) | 6,715 |
+-----------------------------------+-----------+------------+------------+------------+
| | | | | |
+-----------------------------------+-----------+------------+------------+------------+
+-------------------------------+----------------+----------------+----------------+
| 2009 | Company |
+ +--------------------------------------------------+
| | Opening balance | Charged to | Closing |
| | | income | balance |
+ +-------------------------------+----------------+----------------+
| | $'000 | $'000 | $'000 |
+-------------------------------+-------------------------------+----------------+----------------+
| Deferred tax liabilities: | | | |
+-------------------------------+----------------+----------------+----------------+
| Accrued income | 207 | 183 | 390 |
+-------------------------------+----------------+----------------+----------------+
| | 207 | 183 | 390 |
+-------------------------------+----------------+----------------+----------------+
| | | | |
+-------------------------------+----------------+----------------+----------------+
| | | | |
+-------------------------------+----------------+----------------+----------------+
| Deferred tax assets: | | | |
+-------------------------------+----------------+----------------+----------------+
| Tax losses - revenue | 57 | (20) | 37 |
+-------------------------------+----------------+----------------+----------------+
| Property, plant and equipment | 37 | (24) | 13 |
+-------------------------------+----------------+----------------+----------------+
| Accrued costs | 215 | (31) | 184 |
+-------------------------------+----------------+----------------+----------------+
| Other - AIM listing costs | 17 | (17) | - |
+-------------------------------+----------------+----------------+----------------+
| Other - share issue expenses | 349 | (175) | 174 |
+-------------------------------+----------------+----------------+----------------+
| Other | - | 77 | 77 |
+-------------------------------+----------------+----------------+----------------+
| | 675 | (190) | 485 |
+-------------------------------+----------------+----------------+----------------+
| | | | |
+-------------------------------+----------------+----------------+----------------+
Notes to the financial statements
for the financial year ended 30 June
2009
+------+------------------------------------+-----+---------+----------+--+---------+---------+
| 4. | INCOME TAXES (continued) | | | | | | |
+------+------------------------------------+-----+---------+----------+--+---------+---------+
+-------------------------------+----------------+----------------+----------------+
| 2008 | Company |
+ +--------------------------------------------------+
| | Opening balance | Charged to | Closing |
| | | income | balance |
+ +-------------------------------+----------------+----------------+
| | $'000 | $'000 | $'000 |
+-------------------------------+-------------------------------+----------------+----------------+
| Deferred tax liabilities: | | | |
+-------------------------------+----------------+----------------+----------------+
| Accrued income | 132 | 75 | 207 |
+-------------------------------+----------------+----------------+----------------+
| | 132 | 75 | 207 |
+-------------------------------+----------------+----------------+----------------+
| | | | |
+-------------------------------+----------------+----------------+----------------+
| | | | |
+-------------------------------+----------------+----------------+----------------+
| Deferred tax assets: | | | |
+-------------------------------+----------------+----------------+----------------+
| Tax losses - revenue | 1,184 | (1,127) | 57 |
+-------------------------------+----------------+----------------+----------------+
| Foreign tax credits | 392 | (392) | - |
+-------------------------------+----------------+----------------+----------------+
| Trade receivables | 200 | (200) | - |
+-------------------------------+----------------+----------------+----------------+
| Property, plant and equipment | 34 | 3 | 37 |
+-------------------------------+----------------+----------------+----------------+
| Accrued costs | 423 | (208) | 215 |
+-------------------------------+----------------+----------------+----------------+
| Other - AIM listing costs | 34 | (17) | 17 |
+-------------------------------+----------------+----------------+----------------+
| Other - share issue expenses | 524 | (175) | 349 |
+-------------------------------+----------------+----------------+----------------+
| | 2,791 | (2,116) | 675 |
+-------------------------------+----------------+----------------+----------------+
+------------------------------------------------------------------------------------+
| Tax consolidation |
+------------------------------------------------------------------------------------+
| Relevance of tax consolidation to the consolidated entity |
+------------------------------------------------------------------------------------+
| The company and its wholly-owned Australian resident entities have formed a |
| tax-consolidated group with effect from 1 July 2002 and are therefore taxed as a |
| single entity from that date. The head entity within the tax-consolidated group is |
| eServGlobal Limited. The members of the tax-consolidated group are identified at |
| note 25. |
+------------------------------------------------------------------------------------+
| |
+------------------------------------------------------------------------------------+
| Nature of tax funding arrangements and tax sharing agreements |
+------------------------------------------------------------------------------------+
| Entities within the tax-consolidated group have entered into a tax funding |
| arrangement and a tax-sharing agreement with the head entity. Under the terms of |
| the tax funding arrangement, eServGlobal Limited and each of the entities in the |
| tax-consolidated group has agreed to pay a tax equivalent payment to or from the |
| head entity, based on the current tax liability or current tax asset of the |
| entity. Such amounts are reflected in amounts receivable from or payable to other |
| entities in the tax-consolidated group. |
+------------------------------------------------------------------------------------+
| The tax sharing agreement entered into between members of the tax-consolidated |
| group provides for the determination of the allocation of income tax liabilities |
| between the entities should the head entity default on its tax payment |
| obligations. No amounts have been recognised in the financial statements in |
| respect of this agreement as payment of any amounts under the tax sharing |
| agreement is considered remote. |
+------------------------------------------------------------------------------------+
Notes to the financial statements
for the financial year ended 30 June
2009
+----+---------------------------------------------------------+--+---------+----------+
| 5. | KEY MANAGEMENT PERSONNEL COMPENSATION | | | |
+----+---------------------------------------------------------+--+---------+----------+
| Key management personnel compensation policy |
| The Remuneration and Nominations Committee reviews the remuneration packages of all |
| key management on an annual basis and makes recommendations to the Board. The Boards |
| approach on Remuneration Policies is set out in the Remuneration Report which forms |
| part of the Directors' Report. |
+----+---------------------------------------------------------+--+---------+----------+
+----------------------------------+------------+------------+--+-----------+------------+
| |
+----------------------------------+
| The aggregate compensation made to key management personnel of the company and the |
| Group is set out below: |
+----------------------------------------------------------------------------------------+
| The aggregate compensation made to key management personnel of the company and the |
| Group is set out below: |
+----------------------------------------------------------------------------------------+
| | Consolidated | | Company |
+----------------------------------+-------------------------+--+------------------------+
| | 2009 | 2008 | | 2009 | 2008 |
| | $ | $ | | $ | $ |
+----------------------------------+------------+------------+--+-----------+------------+
| Short-term employee benefits | 2,233,984 | 2,200,435 | | 913,356 | 982,465 |
+----------------------------------+------------+------------+--+-----------+------------+
| Post-employment benefits | 180,138 | 290,240 | | 180,138 | 199,183 |
+----------------------------------+------------+------------+--+-----------+------------+
| Termination benefits | 1,213,560 | 140,000 | | 150,000 | 140,000 |
+----------------------------------+------------+------------+--+-----------+------------+
| Other long term employee | - | 56,841 | | - | - |
| benefits | | | | | |
+----------------------------------+------------+------------+--+-----------+------------+
| Share-based payment | 73,827 | 118,360 | | 27,367 | 60,038 |
+----------------------------------+------------+------------+--+-----------+------------+
| | 3,701,509 | 2,805,876 | | 1,270,861 | 1,381,686 |
+----------------------------------+------------+------------+--+-----------+------------+
+-----+------------------------------------------------------------------------------+
| 6. | EXECUTIVE AND EMPLOYEE SHARE OPTIONS |
+-----+------------------------------------------------------------------------------+
| The Group has ownership-based remuneration schemes for directors, executives and |
| employees of the Group. In accordance with the provisions of the scheme, directors |
| and employees may be granted options to acquire ordinary shares in the company. |
| The board believes that the options scheme has a significant role to play in |
| motivating employees to help ensure the continued performance of the Group, |
| although the obligations under A-IFRS to expense the notional benefit of options |
| issued has impacted the attractiveness of issuing options. The vesting of any |
| share options is not dependent on any performance criteria, however, is dependent |
| on a period of service relative to the vesting dates. |
| During the financial year, the company did not issue any options (2008: 660,000). |
| |
| Under the eServGlobal Employee Share Option Plan, established 4 August 2000 to |
| assist in the attraction, retention and motivation of employees and Directors of |
| the company and its related bodies corporate, at 30 June 2009, executives and |
| employees are entitled to purchase an aggregate of 3,592,142 (2008: |
| 4,979,478) ordinary shares of the entity at an exercise price ranging from $0.66 |
| to $0.97 (2008: $0.15 to 0.97) per ordinary share. At 30 June |
| 2009 2,660,454 (2008: 3,336,131) of these options had vested. The options may be |
| exercised at various times up until 26 October 2012. The holders of such options |
| do not have the right, by virtue of the option to participate in any share issue |
| or interest issue of any other body corporate or scheme, and do not participate in |
| any dividends declared. |
+-----+------------------------------------------------------------------------------+
Notes to the financial statements
for the financial year ended 30 June
2009
+-----+-------------------------------------------------------------------------------+
| 6. | EXECUTIVE AND EMPLOYEE SHARE OPTIONS (continued) |
+-----+-------------------------------------------------------------------------------+
The following share-based payment arrangements were in existence during the
period:
+--------------------------+-----------+-----------+----------+----------+----------+
| Option Series | Number | Grant | Expiry |Exercise | Fair |
| | | Date | Date | Price |value at |
| | | | | $ | grant |
| | | | | | date |
+--------------------------+-----------+-----------+----------+----------+----------+
| Issued 12 November 2003 | 250,000 |12-Nov-03 | 2008 | 0.20 | 34,250 |
| (ii) | | | | | |
+--------------------------+-----------+-----------+----------+----------+----------+
| Issued 12 November 2003 | 250,000 |12-Nov-03 | 2008 | 0.40 | 28,500 |
| (ii) | | | | | |
+--------------------------+-----------+-----------+----------+----------+----------+
| Issued 20 December 2003 | 250,000 |20-Dec-03 | 2008 | 0.15 | 72,500 |
| (ii) | | | | | |
+--------------------------+-----------+-----------+----------+----------+----------+
| Issued 20 December 2003 | 250,000 |20-Dec-03 | 2008 | 0.40 | 53,000 |
| (ii) | | | | | |
+--------------------------+-----------+-----------+----------+----------+----------+
| Issued 30 June 2004 (i) | 387,336 |30-Apr-04 | 2009 | 0.23 | 161,913 |
+--------------------------+-----------+-----------+----------+----------+----------+
| Issued 29 May 2006 (iii) | 1,457,142 |29-May-06 | 2011 | 0.66 | 364,286 |
+--------------------------+-----------+-----------+----------+----------+----------+
| Issued 17 November 2006 | 500,000 |17-Nov-06 | 2011 | 0.69 | 148,333 |
| (i) | | | | | |
+--------------------------+-----------+-----------+----------+----------+----------+
| Issued 7 March 2007 (i) | 975,000 |07-Mar-07 | 2012 | 0.69 | 321,750 |
+--------------------------+-----------+-----------+----------+----------+----------+
| Issued 26 September | 300,000 |26-Sep-07 | 2012 | 0.97 | 129,100 |
| 2007(i) | | | | | |
+--------------------------+-----------+-----------+----------+----------+----------+
| Issued 4 October 2007(i) | 310,000 |04-Oct-07 | 2012 | 0.97 | 136,917 |
+--------------------------+-----------+-----------+----------+----------+----------+
| Issued 26 October | 50,000 |26-Oct-07 | 2012 | 0.97 | 21,367 |
| 2007(i) | | | | | |
+--------------------------+-----------+-----------+----------+----------+----------+
In accordance with the terms of the Employee Share Option Plan:
* options issued in these series vest as to one-third on each of the first, second
and third anniversary dates from the date of issue and expire five years from
date of issue.
* options issued in these series vest on the third anniversary date from the date
of issue and expire five years from the date of issue
* options issued in this series vest one-half immediately on issue and the balance
on the first anniversary date from the date of issue and expire five years from
date of issue.
+--------------------------------------------------------------------------------+
| In accordance with the terms of the Employee Share Option Plan, options may be |
| exercised at any time from the date on which they vest to the date of their |
| expiry. |
| There were no share options granted during the financial year (2008: 660,000). |
| The weighted average fair value of the share options granted during 2008 |
| financial year was $0.435. |
| Options issued November 2003 to June 2004 |
| Options were priced with the assistance of an appropriately qualified expert |
| using the Black Scholes model. Where relevant, the expected life used in the |
| model has been adjusted based on a best estimate for the effects of |
| non-transferability, exercise restrictions and behavioural considerations. |
| Expected volatility is based on the semi-annual historical volatility of share |
| prices as at the grant date. The interest rate has been derived from swap |
| market interest rates on the valuation date in the model. This data is sourced |
| from the Bloomberg financial data provider. |
| |
+--------------------------------------------------------------------------------+
Notes to the financial statements
for the financial year ended 30 June 2009
+-----+-------------------------------------------------------------------------------+
| 6. | EXECUTIVE AND EMPLOYEE SHARE OPTIONS (continued) |
+-----+-------------------------------------------------------------------------------+
Inputs into the models
Inputs into the models for the series of options issued from September 2000 to
June 2004 are:
+-----------+------------+----------+-----------+-----------+------------+----------+------------+
| Issue |Underlying |Exercise | Expiry | Vesting | Expected |Interest |Historical |
| Date | Price | Price | Date | Date | Life | Rate |Volatility |
+-----------+------------+----------+-----------+-----------+------------+----------+------------+
|12-Nov-03 | $0.20 | $0.20 |12-Nov-08 |12-Nov-06 | 12-Nov-07 | 6.07% | 110.43% |
+-----------+------------+----------+-----------+-----------+------------+----------+------------+
|12-Nov-03 | $0.20 | $0.40 |12-Nov-08 |12-Nov-06 | 12-Nov-07 | 6.07% | 110.43% |
+-----------+------------+----------+-----------+-----------+------------+----------+------------+
|20-Dec-03 | $0.21 | $0.15 |20-Dec-08 |20-Dec-06 | 20-Dec-07 | 5.87% | 97.18% |
+-----------+------------+----------+-----------+-----------+------------+----------+------------+
|20-Dec-03 | $0.21 | $0.40 |20-Dec-08 |20-Dec-06 | 20-Dec-07 | 5.87% | 97.18% |
+-----------+------------+----------+-----------+-----------+------------+----------+------------+
|30-Jun-04 | $0.25 | $0.23 |30-Jun-09 |30-Jun-05 | 30-Jun-07 | 5.48% | 107.44% |
+-----------+------------+----------+-----------+-----------+------------+----------+------------+
|30-Jun-04 | $0.25 | $0.23 |30-Jun-09 |30-Jun-06 | 30-Dec-07 | 5.79% | 107.44% |
+-----------+------------+----------+-----------+-----------+------------+----------+------------+
|30-Jun-04 | $0.25 | $0.23 |30-Jun-09 |30-Jun-07 | 30-Jun-09 | 5.84% | 107.44% |
+-----------+------------+----------+-----------+-----------+------------+----------+------------+
Options issued since June 2004
Options were priced by an appropriately qualified expert who chose to use the
binomial pricing model, because it allows for performance hurdles and settlement
before expiry. Where relevant, the expected life used in the model has been
adjusted based on a best estimate for the effects of non-transferability,
exercise restrictions and behavioural considerations. Expected volatility is
based on the historical share price volatility over the past 5 years. The
risk-free rate is sourced from the Reserve Bank of Australia. To allow for
effects of early exercise, it was assumed that employees would exercise the
options after vesting date when the share price was two times the exercise
price.
Inputs into the models for the series of options issued post June 2004:
+-----------+-----------+--------------+---------------------+-----------+---------------+-------------+
| Issue | Share | Risk free | Years to | Dividend | Volatility |Sub optimal |
| Date | price at | rate of |expiration/exercise | yield | | early |
| | grant | return to | | (p.a.) | | exercise |
| | date | expiry | | | | factor |
| | | (p.a.) | | | | |
+-----------+-----------+--------------+---------------------+-----------+---------------+-------------+
| 29-May-06 | 0.66 | 5.62% | 5 | 0.0% | 50.00% - | 2.00 |
| | | | | | 60.00% | |
+-----------+-----------+--------------+---------------------+-----------+---------------+-------------+
| 17-Nov-06 | 0.70 | 5.80% | 5 | 1.5% | 50.00% - | 2.00 |
| | | | | | 60.00% | |
+-----------+-----------+--------------+---------------------+-----------+---------------+-------------+
| 7-Mar-07 | 0.77 | 5.80% | 5 | 1.5% | 45.00% - | 2.00 |
| | | | | | 55.00% | |
+-----------+-----------+--------------+---------------------+-----------+---------------+-------------+
| 26-Sep-07 | 1.06 | 6.36% | 5 | 1.5% | 45.00% - | 2.00 |
| | | | | | 50.00% | |
+-----------+-----------+--------------+---------------------+-----------+---------------+-------------+
| 4-Oct-07 | 1.07 | 6.42% | 5 | 1.5% | 45.00% - | 2.00 |
| | | | | | 50.00% | |
+-----------+-----------+--------------+---------------------+-----------+---------------+-------------+
| 26-Oct-07 | 1.05 | 6.41% | 5 | 1.5% | 45.00% - | 2.00 |
| | | | | | 50.00% | |
+-----------+-----------+--------------+---------------------+-----------+---------------+-------------+
Notes to the financial statements
for the financial year ended 30 June
2009
+-----+-------------------------------------------------------------------------------+
| 6. | EXECUTIVE AND EMPLOYEE SHARE OPTIONS (continued) |
+-----+-------------------------------------------------------------------------------+
The following reconciles the outstanding share options granted under the
executive share option plan at the beginning and the end of the financial year:
+-------------------------------+-------------+--------------+--+------------+--------------+
| | 2009 | | 2008 |
+-------------------------------+----------------------------+--+---------------------------+
| | | | |
+-------------------------------+----------------------------+--+---------------------------+
| | Number of | Weighted | | Number of | Weighted |
| | Options | average | | Options | average |
| | | exercise | | | exercise |
| | | price | | | price |
| | | $ | | | $ |
+-------------------------------+-------------+--------------+--+------------+--------------+
| Balance at the beginning of | 4,979,478 | 0.602 | | 5,302,935 | 0.497 |
| the year | | | | | |
+-------------------------------+-------------+--------------+--+------------+--------------+
| Granted during the year | - | - | | 660,000 | 0.970 |
+-------------------------------+-------------+--------------+--+------------+--------------+
| Exercised during the | (1,242,668) | 0.277 | | (933,457) | 0.244 |
| financial year | | | | | |
+-------------------------------+-------------+--------------+--+------------+--------------+
| Expired during the year | (144,668) | 0.230 | | (50,000) | 1.00 |
+-------------------------------+-------------+--------------+--+------------+--------------+
| Balance at the end of the | 3,592,142 | 0.729 | | 4,979,478 | 0.602 |
| year | | | | | |
+-------------------------------+-------------+--------------+--+------------+--------------+
| Exercisable at the end of the | 2,660,454 | 0.697 | | 3,336,131 | 0.503 |
| financial year | | | | | |
+-------------------------------+-------------+--------------+--+------------+--------------+
Exercised during the financial year
The following options were exercised during the financial year:
+-----------------+------------+---------------+-----------------+
| Issued | Number |Exercise Date | Share Price at |
| | Exercised | | Exercise Date |
+ + + +-----------------+
| | | | $ |
+-----------------+------------+---------------+-----------------+
| 30-Jun-04 | 26,000 | 07-Aug-08 | 0.760 |
+-----------------+------------+---------------+-----------------+
| 12-Nov-03 | 500,000 | 02-Oct-08 | 0.800 |
+-----------------+------------+---------------+-----------------+
| 20-Dec-03 | 500,000 | 19-Dec-08 | 0.500 |
+-----------------+------------+---------------+-----------------+
| 30-Jun-04 | 30,000 | 15-May-09 | 0.500 |
+-----------------+------------+---------------+-----------------+
| 30-Jun-04 | 186,668 | 30-Jun-09 | 0.455 |
+-----------------+------------+---------------+-----------------+
| | 1,242,668 | | |
+-----------------+------------+---------------+-----------------+
Notes to the financial statements
for the financial year ended 30 June 2009
+-----+-------------------------------------------------------------------------------+
| 6. | EXECUTIVE AND EMPLOYEE SHARE OPTIONS (continued) |
+-----+-------------------------------------------------------------------------------+
The following options were exercised during the previous financial year:
+-----------------+------------+---------------+-----------------+
| Issued | Number |Exercise Date | Share Price at |
| | Exercised | | Exercise Date |
+ + + +-----------------+
| | | | $ |
+-----------------+------------+---------------+-----------------+
| 1-Jan-00 | 37,454 | 6-Sep-07 | 0.95 |
+-----------------+------------+---------------+-----------------+
| 4-Sep-02 | 50,000 | 30-Aug-07 | 0.95 |
+-----------------+------------+---------------+-----------------+
| 4-Sep-02 | 106,666 | 9-Aug-07 | 0.98 |
+-----------------+------------+---------------+-----------------+
| 20-Dec-03 | 500,000 | 4-Jun-08 | 0.93 |
+-----------------+------------+---------------+-----------------+
| 30-Jun-04 | 87,000 | 9-Oct-07 | 1.08 |
+-----------------+------------+---------------+-----------------+
| 30-Jun-04 | 40,000 | 30-Nov-07 | 1.08 |
+-----------------+------------+---------------+-----------------+
| 30-Jun-04 | 42,002 | 9-Aug-07 | 0.98 |
+-----------------+------------+---------------+-----------------+
| 30-Jun-04 | 22,001 | 4-Mar-08 | 1.15 |
+-----------------+------------+---------------+-----------------+
| 30-Jun-04 | 10,000 | 9-Aug-07 | 0.98 |
+-----------------+------------+---------------+-----------------+
| 30-Jun-04 | 13,334 | 23-Apr-08 | 1.06 |
+-----------------+------------+---------------+-----------------+
| 30-Jun-04 | 20,000 | 8-Jan-08 | 1.20 |
+-----------------+------------+---------------+-----------------+
| 30-Jun-04 | 5,000 | 26-Oct-07 | 1.05 |
+-----------------+------------+---------------+-----------------+
| | 933,457 | | |
+-----------------+------------+---------------+-----------------+
Balance at the end of the financial year
The share options outstanding at the end of the financial year are as follows:
+---------------------+-----------+---------------------+-----------+------------+-----------+-------------+
| Issued | No | Vested | Unvested | Expiry |Exercise |Contractual |
+ + +---------------------+-----------+------------+-----------+-------------+
| | | No. | No. | Date | Price | Life |
+ + +---------------------+-----------+------------+-----------+-------------+
| | | | | | $ | (days) |
+---------------------+-----------+---------------------+-----------+------------+-----------+-------------+
| Issued 29 May 2006 | 1,457,142 | 1,457,142 | - | 2011 | $0.66 | 698 |
+---------------------+-----------+---------------------+-----------+------------+-----------+-------------+
| Issued 17 November | 500,000 | 333,333 | 166,667 | 2011 | $0.69 | 870 |
| 2006 | | | | | | |
+---------------------+-----------+---------------------+-----------+------------+-----------+-------------+
| Issued 7 March 2007 | 975,000 | 649,986 | 325,014 | 2012 | $0.69 | 981 |
+---------------------+-----------+---------------------+-----------+------------+-----------+-------------+
| Issued 26 September | 300,000 | 100,000 | 200,000 | 2012 | $0.97 | 1,184 |
| 2007 | | | | | | |
+---------------------+-----------+---------------------+-----------+------------+-----------+-------------+
| Issued 4 October | 310,000 | 103,327 | 206,673 | 2012 | $0.97 | 1,192 |
| 2007 | | | | | | |
+---------------------+-----------+---------------------+-----------+------------+-----------+-------------+
| Issued 26 October | 50,000 | 16,666 | 33,334 | 2012 | $0.97 | 1,214 |
| 2007 | | | | | | |
+---------------------+-----------+---------------------+-----------+------------+-----------+-------------+
| | 3,592,142 | 2,660,454 | 931,688 | |
+---------------------+-----------+---------------------+-----------+------------+-----------+-------------+
Notes to the financial statements
for the financial year ended 30 June
2009
+-----+-------------------------------------+----------+----------+--+---------+---------+
| |
+-----+
| | | Consolidated | | Company |
+-----+-------------------------------------+---------------------+--+-------------------+
| | | Consolidated | | Company |
+-----+-------------------------------------+---------------------+--+-------------------+
| | | 2009 | 2008 | | 2009 | 2008 |
| | | $ | $ | | $ | $ |
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| 7. | REMUNERATION OF AUDITORS | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Auditor of the Parent Entity | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Auditing of the financial report | 225,750 | 228,000 | | 225,750 | 228,000 |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Other services - Taxation advice | - | 6,500 | | - | 6,500 |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Other services - Other | 550 | 5,775 | | 550 | 5,775 |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | | 226,300 | 240,275 | | 226,300 | 240,275 |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Other Auditors | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Auditing the financial report | 335,353 | 306,405 | | - | - |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Other services - Taxation | 14,982 | 11,047 | | - | - |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | | 350,335 | 317,452 | | - | - |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | | 576,635 | 557,727 | | 226,300 | 240,275 |
+-----+-------------------------------------+----------+----------+--+---------+---------+
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | The auditor of eServGlobal is | | | | | |
| | Deloitte Touche Tohmatsu in | | | | | |
| | Australia and the Other Auditors | | | | | |
| | are all affiliated firms of | | | | | |
| | Deloitte Touche Tohmatsu. Fees paid | | | | | |
| | to other auditors are charged in | | | | | |
| | Euros and are subject to exchange | | | | | |
| | rate fluctuations. | | | | | |
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
+-----+-------------------------------------+----------+----------+--+----------+----------+
| | | 2009 | 2008 | | 2009 | 2008 |
| | | $'000 | $'000 | | $'000 | $'000 |
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+----------+----------+
| 8. | CURRENT TRADE AND OTHER RECEIVABLES | | | | | |
+-----+-------------------------------------+----------+----------+--+----------+----------+
| | Trade receivables (i) | 47,973 | 57,123 | | 3,695 | 2,658 |
+-----+-------------------------------------+----------+----------+--+----------+----------+
| | Prepayments | 2,625 | 2,342 | | 86 | 91 |
+-----+-------------------------------------+----------+----------+--+----------+----------+
| | Goods and services tax receivable | 1,602 | 2,438 | | 93 | 124 |
+-----+-------------------------------------+----------+----------+--+----------+----------+
| | Amount owed by subsidiaries | - | - | | 7,501 | 4,931 |
+-----+-------------------------------------+----------+----------+--+----------+----------+
| | Work in progress (Note 9) | 10,203 | 14,911 | | 1,299 | 687 |
+-----+-------------------------------------+----------+----------+--+----------+----------+
| | Deposits | 1,090 | 3,306 | | 8 | 2 |
+-----+-------------------------------------+----------+----------+--+----------+----------+
| | | 63,493 | 80,120 | | 12,682 | 8,493 |
+-----+-------------------------------------+----------+----------+--+----------+----------+
| * The average credit period on sales of goods and rendering |
| of services is 60 days (2008: 60 days). Historically, the |
| Group has had no requirement to charge interest on overdue |
| receivables, although customer contractual terms include the |
| ability to do this. Objective evidence is determined by |
| reference to knowledge of disputes at balance date, where |
| applicable. The Group also considers any change in the |
| quality of the trade receivable from the date credit was |
| initially granted up to the reporting date. |
| Before accepting any new customers, the Group obtains, |
| where considered necessary, third party references to assess |
| the potential customer's credit worthiness. The majority of |
| the Group and Company's outstanding trade receivables consist |
| of large Telecommunication companies and are considered high |
| quality creditworthy customers. |
| |
+-----+-------------------------------------+----------+----------+--+----------+----------+
Notes to the financial statements
for the financial year ended 30 June 2009
+-----+-------------------------------------+----------+----------+--+----------+----------+
| 8. | CURRENT TRADE AND OTHER RECEIVABLES | | | | | |
| | (continued) | | | | | |
+-----+-------------------------------------+----------+----------+--+----------+----------+
| Included in the Group's trade receivable balance are debtors |
| with a carrying amount of $17.3 million (2008: $14.5 million) |
| which are past due at the reporting date for which the Group |
| has not provided as there has not been a significant change |
| in credit quality and the amounts are still considered |
| recoverable. The Group does not hold any collateral over |
| these balances. In the current year, a provision, and |
| subsequent write-off, in relation to the credit quality of a |
| specific customer account was recognised, as detailed below. |
| The average days overdue for these receivables is 64 days |
| (2008: 56 days). |
| |
+-----+-------------------------------------+----------+----------+--+----------+----------+
+-----+-------------------------------------+----------+----------+-+-+-+---------+---------+
| | | Consolidated | | Company |
+-----+-------------------------------------+---------------------+---+---------------------+
| | | 2009 | 2008 | | 2009 | 2008 |
| | | $'000 | $'000 | | $'000 | $'000 |
+-----+-------------------------------------+----------+----------+---+-----------+---------+
| | Ageing of past due but not impaired | | | | | |
+-----+-------------------------------------+----------+----------+---+-----------+---------+
| | By up to 30 days | 7,878 | 8,364 | | 22 | 471 |
+-----+-------------------------------------+----------+----------+---+-----------+---------+
| | 30 - 90 days | 5,569 | 3,214 | | 21 | 243 |
+-----+-------------------------------------+----------+----------+---+-----------+---------+
| | 90 - 120 days | 487 | 405 | | - | 206 |
+-----+-------------------------------------+----------+----------+---+-----------+---------+
| | 120 + days | 3,367 | 2,498 | | - | 141 |
+-----+-------------------------------------+----------+----------+---+-----------+---------+
| | | 17,301 | 14,481 | | 43 | 1,061 |
+-----+-------------------------------------+----------+----------+---+-----------+---------+
| | | | | | | |
+-----+-------------------------------------+----------+----------+---+-----------+---------+
| | Movement in allowance for doubtful | | | | | |
| | debts | | | | | |
+-----+-------------------------------------+----------+----------+---+-----------+---------+
| | Balance at the beginning of the | - | - | | - | - |
| | year | | | | | |
+-----+-------------------------------------+----------+----------+---+-----------+---------+
| | Impairment losses recognised on | 711 | - | | - | - |
| | receivables | | | | | |
+-----+-------------------------------------+----------+----------+---+-----------+---------+
| | Amounts written off as | (711) | - | | - | - |
| | unrecoverable | | | | | |
+-----+-------------------------------------+----------+----------+---+-----------+---------+
| | Balance at the end of the year | - | - | | - | - |
+-----+-------------------------------------+----------+----------+---+-----------+---------+
| 9. | WORK IN PROGRESS |
+-----+-------------------------------------------------------------------------------------+
| | Contract work in progress | 47,707 | 95,345 | | 1,716 | 2,454 |
+-----+-------------------------------------+----------+------------+---+---------+---------+
| | Progress billings and advances | (44,723) | (87,866) | | (2,679) | (1,829) |
| | received | | | | | |
+-----+-------------------------------------+----------+------------+---+---------+---------+
| | | 2,984 | 7,479 | | (963) | 625 |
+-----+-------------------------------------+----------+------------+---+---------+---------+
| | Recognised and included in the | | | | | |
| | financial statements as amounts | | | | | |
| | due: | | | | | |
+-----+-------------------------------------+----------+------------+---+---------+---------+
| | From customers: | | | | | |
+-----+-------------------------------------+----------+------------+---+---------+---------+
| | Current (note 8) | 10,203 | 14,911 | | 1,299 | 687 |
+-----+-------------------------------------+----------+------------+---+---------+---------+
| | | | | | | |
+-----+-------------------------------------+----------+------------+---+---------+---------+
| | To customers as deferred income: | | | | | |
+-----+-------------------------------------+----------+------------+---+---------+---------+
| | Current (note 18) | (7,219) | (7,432) | | (2,262) | (62) |
+-----+-------------------------------------+----------+------------+---+---------+---------+
| | | 2,984 | 7,479 | | (963) | 625 |
+-----+-------------------------------------+----------+----------+-+-+-+---------+---------+
Notes to the financial statements
for the financial year ended 30 June 2009
+-----+--------------------------------------+---------+----------+--+----------+----+----+
| | | Consolidated | | Company |
+-----+--------------------------------------+--------------------+--+---------------+
| | | 2009 | 2008 | | 2009 | 2008 |
| | | $'000 | $'000 | | $'000 | $'000 |
+-----+--------------------------------------+---------+----------+--+----------+---------+
| | | | | | | |
+-----+--------------------------------------+---------+----------+--+----------+---------+
| 10. | CURRENT INVENTORIES | | | | | |
+-----+--------------------------------------+---------+----------+--+----------+---------+
| | Finished goods - at net realisable | 623 | 1,456 | | - | - |
| | value | | | | | |
+-----+--------------------------------------+---------+----------+--+----------+---------+
| | | | | | | |
+-----+--------------------------------------+---------+----------+--+----------+---------+
| 11. | NON-CURRENT TRADE AND OTHER | | | | | |
| | RECEIVABLES | | | | | |
+-----+--------------------------------------+---------+----------+--+----------+---------+
| | Amount owed by wholly-owned | - | - | | 65,972 | 63,189 |
| | subsidiaries - at amortised cost (i) | | | | | |
+-----+--------------------------------------+---------+----------+--+----------+---------+
| | Less allowance for impairment | - | - | | (12,583) | - |
+-----+--------------------------------------+---------+----------+--+----------+---------+
| | | | | | 53,389 | |
+-----+--------------------------------------+---------+----------+--+----------+---------+
| | | | | | | |
+-----+--------------------------------------+---------+----------+--+----------+---------+
| | Other | - | 5,077 | | - | - |
+-----+--------------------------------------+---------+----------+--+----------+---------+
| | | - | 5,077 | | 53,389 | 63,189 |
+-----+--------------------------------------+---------+----------+--+----------+---------+
| | (i) The wholly-owned | | | | | |
| | subsidiaries | | | | | |
| | receivable is due | | | | | |
| | from a creditworthy | | | | | |
| | related parties. The | | | | | |
| | amount is not past | | | | | |
| | due or impaired and | | | | | |
| | no allowance has | | | | | |
| | been provided on the | | | | | |
| | receivable. The | | | | | |
| | outstanding amount | | | | | |
| | is available on call | | | | | |
| | and bears interest | | | | | |
| | at a variable rate. | | | | | |
| | | | | | | |
+-----+--------------------------------------+---------+----------+--+----------+---------+
| 12. | OTHER NON-CURRENT FINANCIAL ASSETS | | | | | |
| | | | | | | |
+-----+--------------------------------------+---------+----------+--+----------+---------+
| | Shares in subsidiaries - at cost | - | - | | 38,432 | 38,432 |
+-----+--------------------------------------+---------+----------+--+----------+----+----+
Notes to the financial statements
for the financial year ended 30 June
2009
+--------------------------------+--------------------------------+-----------+--------------+------------+----------+
| 13. | PROPERTY, PLANT AND EQUIPMENT | | |
+--------------------------------+-----------------------------------------------------------+------------+----------+
| | | Consolidated |
+--------------------------------+--------------------------------+--------------------------------------------------+
| | | Office | Leasehold | Plant and | Total |
| | |furniture |improvements | equipment | |
| | | and | | | |
| | | fittings | | | |
+ +--------------------------------+ + + + +
| | | | | | |
+ +--------------------------------+ + + + +
| | | | | | |
+--------------------------------+--------------------------------+-----------+--------------+------------+----------+
| | | $'000 | $'000 | $'000 | $'000 |
+--------------------------------+--------------------------------+-----------+--------------+------------+----------+
| | | | | | |
+--------------------------------+--------------------------------+-----------+--------------+------------+----------+
| | Gross carrying amount - at | | | | |
| | cost | | | | |
+--------------------------------+--------------------------------+-----------+--------------+------------+----------+
| | Balance at 1 July 2007 | 1,353 | 470 | 10,813 | 12,636 |
+--------------------------------+--------------------------------+-----------+--------------+------------+----------+
| | Additions | 662 | 3 | 3,519 | 4,184 |
+--------------------------------+--------------------------------+-----------+--------------+------------+----------+
| | Disposals | - | - | (535) | (535) |
+--------------------------------+--------------------------------+-----------+--------------+------------+----------+
| | Net foreign currency | 143 | (35) | 318 | 426 |
+--------------------------------+--------------------------------+-----------+--------------+------------+----------+
| | Balance at 30 June 2008 | 2,158 | 438 | 14,115 | 16,711 |
+--------------------------------+--------------------------------+-----------+--------------+------------+----------+
| | Additions | 369 | 40 | 1,750 | 2,159 |
+--------------------------------+--------------------------------+-----------+--------------+------------+----------+
| | Disposals | (26) | (218) | (672) | (916) |
+--------------------------------+--------------------------------+-----------+--------------+------------+----------+
| | Net foreign currency | 57 | 2 | 242 | 301 |
+--------------------------------+--------------------------------+-----------+--------------+------------+----------+
| | Balance at 30 June 2009 | 2,558 | 262 | 15,435 | 18,255 |
+--------------------------------+--------------------------------+-----------+--------------+------------+----------+
| | | | | | |
+--------------------------------+--------------------------------+-----------+--------------+------------+----------+
| | Accumulated depreciation | | | | |
+--------------------------------+--------------------------------+-----------+--------------+------------+----------+
| | Balance at 1 July 2007 | 904 | 390 | 6,639 | 7,933 |
+--------------------------------+--------------------------------+-----------+--------------+------------+----------+
| | Depreciation expense | 685 | 26 | 2,286 | 2,997 |
+--------------------------------+--------------------------------+-----------+--------------+------------+----------+
| | Disposal | - | - | (530) | (530) |
+--------------------------------+--------------------------------+-----------+--------------+------------+----------+
| | Net foreign currency | 133 | (28) | 351 | 456 |
+--------------------------------+--------------------------------+-----------+--------------+------------+----------+
| | Balance at 30 June 2008 | 1,722 | 388 | 8,746 | 10,856 |
+--------------------------------+--------------------------------+-----------+--------------+------------+----------+
| | Depreciation expense | 599 | 19 | 2,666 | 3,284 |
+--------------------------------+--------------------------------+-----------+--------------+------------+----------+
| | Disposal | (26) | (218) | (640) | (884) |
+--------------------------------+--------------------------------+-----------+--------------+------------+----------+
| | Net foreign currency | 22 | 2 | 84 | 108 |
+--------------------------------+--------------------------------+-----------+--------------+------------+----------+
| | Balance at 30 June 2009 | 2,317 | 191 | 10,856 | 13,364 |
+--------------------------------+--------------------------------+-----------+--------------+------------+----------+
| | | | | | |
+--------------------------------+--------------------------------+-----------+--------------+------------+----------+
| | Net book value | | | | |
+--------------------------------+--------------------------------+-----------+--------------+------------+----------+
| | As at 30 June 2008 | 436 | 50 | 5,369 | 5,855 |
+--------------------------------+--------------------------------+-----------+--------------+------------+----------+
| | As at 30 June 2009 | 241 | 71 | 4,579 | 4,891 |
+--------------------------------+--------------------------------+-----------+--------------+------------+----------+
Notes to the financial statements
for the financial year ended 30 June
2009
+--------------------------------+--------------------------------+-----------+--------------+------------+-----------+
| 13 | PROPERTY, PLANT AND EQUIPMENT (continued) | | |
| | | | |
+--------------------------------+-----------------------------------------------------------+------------+-----------+
| | | Company |
+--------------------------------+--------------------------------+---------------------------------------------------+
| | | Office | Leasehold | Plant and | Total |
| | |furniture |improvements | equipment | |
| | | and | | | |
| | | fittings | | | |
+ +--------------------------------+ + + + +
| | | | | | |
+ +--------------------------------+ + + + +
| | | | | | |
+--------------------------------+--------------------------------+-----------+--------------+------------+-----------+
| | | $'000 | $'000 | $'000 | $'000 |
+--------------------------------+--------------------------------+-----------+--------------+------------+-----------+
| | | | | | |
+--------------------------------+--------------------------------+-----------+--------------+------------+-----------+
| | Gross carrying amount - at | | | | |
| | cost | | | | |
+--------------------------------+--------------------------------+-----------+--------------+------------+-----------+
| | Balance at 1 July 2007 | 32 | 215 | 863 | 1,110 |
+--------------------------------+--------------------------------+-----------+--------------+------------+-----------+
| | Additions | - | 2 | 57 | 59 |
+--------------------------------+--------------------------------+-----------+--------------+------------+-----------+
| | Disposals | - | - | (499) | (499) |
+--------------------------------+--------------------------------+-----------+--------------+------------+-----------+
| | Balance at 30 June 2008 | 32 | 217 | 421 | 670 |
+--------------------------------+--------------------------------+-----------+--------------+------------+-----------+
| | Additions | - | 33 | 21 | 54 |
+--------------------------------+--------------------------------+-----------+--------------+------------+-----------+
| | Disposals | (27) | (217) | (12) | (256) |
+--------------------------------+--------------------------------+-----------+--------------+------------+-----------+
| | Balance at 30 June 2009 | 5 | 33 | 430 | 468 |
+--------------------------------+--------------------------------+-----------+--------------+------------+-----------+
| | | | | | |
+--------------------------------+--------------------------------+-----------+--------------+------------+-----------+
| | Accumulated depreciation/ | | | | |
| | amortisation | | | | |
+--------------------------------+--------------------------------+-----------+--------------+------------+-----------+
| | Balance at 1 July 2007 | 32 | 195 | 752 | 979 |
+--------------------------------+--------------------------------+-----------+--------------+------------+-----------+
| | Depreciation expense | - | 16 | 84 | 100 |
+--------------------------------+--------------------------------+-----------+--------------+------------+-----------+
| | Disposals | - | - | (494) | (494) |
+--------------------------------+--------------------------------+-----------+--------------+------------+-----------+
| | Balance at 30 June 2008 | 32 | 211 | 342 | 585 |
+--------------------------------+--------------------------------+-----------+--------------+------------+-----------+
| | Depreciation expense | - | 11 | 45 | 56 |
+--------------------------------+--------------------------------+-----------+--------------+------------+-----------+
| | Disposals | (27) | (217) | (12) | (256) |
+--------------------------------+--------------------------------+-----------+--------------+------------+-----------+
| | Balance at 30 June 2009 | 5 | 5 | 375 | 385 |
+--------------------------------+--------------------------------+-----------+--------------+------------+-----------+
| | | | | | |
+--------------------------------+--------------------------------+-----------+--------------+------------+-----------+
| | Net book value | | | | |
+--------------------------------+--------------------------------+-----------+--------------+------------+-----------+
| | As at 30 June 2008 | - | 6 | 79 | 85 |
+--------------------------------+--------------------------------+-----------+--------------+------------+-----------+
| | As at 30 June 2009 | - | 28 | 55 | 83 |
+--------------------------------+--------------------------------+-----------+--------------+------------+-----------+
Notes to the financial statements
for the financial year ended 30 June 2009
+-----+--------------------------------------+----------+----------+--+---------+----------+
| | | Consolidated | | Company |
+-----+--------------------------------------+---------------------+--+--------------------+
| | | 2009 | 2008 | | 2009 | 2008 |
| | | $'000 | $'000 | | $'000 | $'000 |
| | | | | | | |
+-----+--------------------------------------+----------+----------+--+---------+----------+
| 14. | GOODWILL | | | | | |
+-----+--------------------------------------+----------+----------+--+---------+----------+
| | Gross carrying amount and net book | | | | | |
| | value | | | | | |
+-----+--------------------------------------+----------+----------+--+---------+----------+
| | Balance at the beginning of the | 46,804 | 46,210 | | - | - |
| | financial year | | | | | |
+-----+--------------------------------------+----------+----------+--+---------+----------+
| | Translation effects of foreign | 1,262 | 594 | | - | - |
| | currency exchange movements | | | | | |
+-----+--------------------------------------+----------+----------+--+---------+----------+
| | Balance at end of financial year | 48,066 | 46,804 | | - | - |
+-----+--------------------------------------+----------+----------+--+---------+----------+
| | |
+-----+------------------------------------------------------------------------------------+
| | Accumulated impairment losses | | | | | |
+-----+--------------------------------------+----------+----------+--+---------+----------+
| | Balance at the beginning of the | - | - | | - | - |
| | financial year | | | | | |
+-----+--------------------------------------+----------+----------+--+---------+----------+
| | Impairment losses for the year (i) | (12,501) | - | | - | - |
+-----+--------------------------------------+----------+----------+--+---------+----------+
| | Translation effects of foreign | (82) | | | | |
| | currency exchange movements | | | | | |
+-----+--------------------------------------+----------+----------+--+---------+----------+
| | Balance at end of financial year | (12,583) | - | | - | - |
+-----+--------------------------------------+----------+----------+--+---------+----------+
| | | | | | |
+-----+-------------------------------------------------+----------+--+---------+----------+
| | Net book value | | | | |
+-----+-------------------------------------------------+----------+--+---------+----------+
| | At the beginning of the financial | 46,804 | 46,210 | | - | - |
| | year | | | | | |
+-----+--------------------------------------+----------+----------+--+---------+----------+
| | At the end of the financial year | 35,483 | 46,804 | | - | - |
+-----+--------------------------------------+----------+----------+--+---------+----------+
| | | | | | |
+-----+-------------------------------------------------+----------+--+---------+----------+
| | * During the financial year, the Group assessed the recoverable amount of |
| | goodwill based on the methodology below, and determined that it was |
| | impaired by $12,501 thousand (2008: nil). The recoverable amount was |
| | assessed by reference to the cash-generating unit's value in use. A |
| | discount factor of 23.01% per annum (2008: 26.14% per annum) was applied |
| | in the value in use model. The goodwill impairment necessitated an |
| | allowance for impairment losses in the loan to subsidiaries by the |
| | Company. Refer to Note 11. No write-down of the carrying amounts of other |
| | assets in the cash- generating unit was necessary. |
+-----+------------------------------------------------------------------------------------+
| | |
+-----+------------------------------------------------------------------------------------+
| | Allocation of goodwill to cash-generating units |
+-----+------------------------------------------------------------------------------------+
| | Goodwill has been allocated for impairment testing purposes to a single cash |
| | generating unit, being the entire business. This is because substantially the |
| | entire product list of the combined entity is available for sale to, and being |
| | sold to, substantially the entire customer base of the combined entity. |
+-----+------------------------------------------------------------------------------------+
| | The recoverable amount of the cash-generating unit is determined based on a |
| | value-in-use calculation which uses cash flow projections based on financial |
| | budgets approved by management covering a 5 year period, and a terminal value |
| | based upon an extrapolation of cash flows beyond the 5 year period using an |
| | estimated growth rate of 3% per annum. |
| | The key assumptions used in the value-in-use calculation for the cash generating |
| | unit are as follows: |
| | * |
| | Sales are expected to grow over the forecast period at 4% - 7.5%. * |
| | A gross margin of 51% over the forecast period: this is based upon average gross |
| | margins achieved in the period immediately before the forecast period.* |
| | In performing the value-in-use calculations, the company has applied post-tax |
| | discount rates to discount the forecast future attributable post tax cash flows. |
| | The equivalent pre-tax discount rate is 23.01% per annum.* |
| | Operating expenses are expected to increase steadily over the forecast period, |
| | but at a rate lower than the sales growth. |
| | Management believes that any reasonably possible change in the key assumptions on |
| | which recoverable amount is based would not cause the aggregate carrying amount |
| | to exceed the aggregate recoverable amount of the cash-generating unit. |
| | |
+-----+--------------------------------------+----------+----------+--+---------+----------+
Notes to the financial statements
for the financial year ended 30 June 2009
+-----+--------------------------------------+---------+----------+--+---------+---------+
| 15. | INTANGIBLES | | | | | |
+-----+--------------------------------------+---------+----------+--+---------+---------+
+------------------------------+---------------+---------------+-------------+-------------+
| | Consolidated |
+------------------------------+-----------------------------------------------------------+
| | Software & | Customer | Software | Total |
| |documentation |relationships |development | $'000 |
| | acquired | acquired | $'000 | |
| | $'000 | $'000 | | |
+------------------------------+---------------+---------------+-------------+-------------+
| Gross carrying amount | | | | |
+------------------------------+---------------+---------------+-------------+-------------+
| Balance at 1 July 2007 | 17,594 | 21,909 | - | 39,503 |
+------------------------------+---------------+---------------+-------------+-------------+
| Effects of foreign currency | 415 | 591 | - | 1,006 |
| exchange movements | | | | |
+------------------------------+---------------+---------------+-------------+-------------+
| Balance at 30 June 2008 | 18,009 | 22,500 | - | 40,509 |
+------------------------------+---------------+---------------+-------------+-------------+
| Internally developed | - | - | 4,035 | 4,035 |
+------------------------------+---------------+---------------+-------------+-------------+
| Effects of foreign currency | 510 | 842 | (253) | 1,099 |
| exchange movements | | | | |
+------------------------------+---------------+---------------+-------------+-------------+
| Balance at 30 June 2009 | 18,519 | 23,342 | 3,782 | 45,643 |
+------------------------------+---------------+---------------+-------------+-------------+
| | | | | |
+------------------------------+---------------+---------------+-------------+-------------+
| Accumulated Amortisation and | | | | |
| impairment | | | | |
+------------------------------+---------------+---------------+-------------+-------------+
| Balance at 1 July 2007 | (5,863) | (5,216) | - | (11,079) |
+------------------------------+---------------+---------------+-------------+-------------+
| Amortisation expense | (3,642) | (3,241) | - | (6,883) |
+------------------------------+---------------+---------------+-------------+-------------+
| Effects of foreign currency | (2) | (1) | - | (3) |
| exchange movements | | | | |
+------------------------------+---------------+---------------+-------------+-------------+
| Balance at 30 June 2008 | (9,507) | (8,458) | - | (17,965) |
+------------------------------+---------------+---------------+-------------+-------------+
| Amortisation expense | (4,118) | (3,665) | - | (7,783) |
+------------------------------+---------------+---------------+-------------+-------------+
| Effects of foreign currency | 259 | 229 | - | 488 |
| exchange movements | | | | |
+------------------------------+---------------+---------------+-------------+-------------+
| Balance at 30 June 2009 | (13,366) | (11,894) | - | (25,260) |
+------------------------------+---------------+---------------+-------------+-------------+
| | | | | |
+------------------------------+---------------+---------------+-------------+-------------+
| Net Book Value | | | | |
+------------------------------+---------------+---------------+-------------+-------------+
| As at 30 June 2008 | 8,502 | 14,042 | - | 22,544 |
+------------------------------+---------------+---------------+-------------+-------------+
| As at 30 June 2009 | 5,153 | 11,448 | 3,782 | 20,383 |
+------------------------------+---------------+---------------+-------------+-------------+
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| Significant intangible assets |
| The carrying amount of 'Software & documentation acquired' of $5.153 million |
| (2008: $8.502 million) will be fully amortised in 2 years (2008: 3 years). |
| The carrying amount of 'Customer relationships acquired' of $11.448 million |
| (2008: $14.042 million) will be fully amortised in 4 years (2008: 5 years). |
| The carrying amount of 'Software development' of $3.782 million will be amortised |
| over 3 years from the date the software is ready for use (2008: n/a). |
+-----------------------------------------------------------------------------------+
Notes to the financial statements
for the financial year ended 30 June 2009
+-----+------------------------------------+----+---+----+---+---+--+----------+---+---------+
| | | Consolidated | | Company |
+-----+------------------------------------+-----------------+------+------------------------+
| | | 2009 | 2008 | | 2009 | 2008 |
| | | $'000 | $'000 | | $'000 | $'000 |
| | | | | | | |
+-----+------------------------------------+--------+--------+------+----------+-------------+
| 16. | CURRENT TRADE AND OTHER PAYABLES | | | | | |
+-----+------------------------------------+--------+--------+------+----------+-------------+
| | Trade payables (i) | 5,587 | 13,007 | | 138 | 148 |
+-----+------------------------------------+--------+--------+------+----------+-------------+
| | Accruals and other payables | 26,376 | 33,157 | | 604 | 980 |
+-----+------------------------------------+--------+--------+------+----------+-------------+
| | | 31,963 | 46,164 | | 742 | 1,128 |
+-----+------------------------------------+--------+--------+------+----------+-------------+
| | | | | | | |
+-----+------------------------------------+--------+--------+------+----------+-------------+
| | (i) The average credit period on purchases of certain goods is 45 days (2008: |
| | 45 days). No interest is charged on overdue payables. The Group has financial risk |
| | management policies in place to ensure that all payables are paid within the |
| | credit timeframe. |
+-----+--------------------------------------------------------------------------------------+
| | | | | | | |
+-----+------------------------------------+----+---+----+---+---+--+----------+---+---------+
+-----+-------------------------------------+----------+----------+--+-----------------+
| 17. | PROVISIONS | | | | |
+-----+-------------------------------------+----------+----------+--+-----------------+
+----------------+----------------+----------------+----------------+---------------+
| | Employee leave | Retirement | Total |
| | provisions | contribution | |
| | | plans (i) | |
+ +----------------+----------------+---------------+
| | $'000 | $'000 | $'000 |
+---------------------------------+----------------+----------------+----------------+
| Consolidated | | | |
+---------------------------------+----------------+----------------+---------------+
| Balance as at 1 July 2008 | 5,346 | 1,331 | 6,677 |
+---------------------------------+----------------+----------------+---------------+
| Additional provisions | 216 | - | 216 |
| recognised | | | |
+---------------------------------+----------------+----------------+---------------+
| Utilised during the period | - | (794) | (794) |
+---------------------------------+----------------+----------------+---------------+
| Balance as at 30 June 2009 | 5,562 | 537 | 6,099 |
+---------------------------------+----------------+----------------+---------------+
| | | | |
+---------------------------------+----------------+----------------+---------------+
| Current | 5,562 | - | 5,562 |
+---------------------------------+----------------+----------------+---------------+
| Non-current | - | 537 | 537 |
+---------------------------------+----------------+----------------+---------------+
| | 5,562 | 537 | 6,099 |
+---------------------------------+----------------+----------------+---------------+
| | | | |
+---------------------------------+----------------+----------------+---------------+
| Company | | | |
+---------------------------------+----------------+----------------+---------------+
| Balance as at 1 July 2008 | 128 | - | 128 |
+---------------------------------+----------------+----------------+---------------+
| Additional provisions | 27 | - | 27 |
| recognised | | | |
+---------------------------------+----------------+----------------+---------------+
| Balance as at 30 June 2009 | 155 | - | 155 |
+---------------------------------+----------------+----------------+---------------+
| | | | |
+---------------------------------+----------------+----------------+---------------+
| Current | 155 | - | 155 |
+---------------------------------+----------------+----------------+---------------+
| | (i) The retirement contribution plan is the statutory |
| | termination payment due to eligible employees in France. |
+----------------+----------------+----------------+----------------+---------------+
Notes to the financial statements
for the financial year ended 30 June
2009
+-----+-------------------------------------+----+----+----+----+--+----+--+----+----+---------+
| | | Consolidated | | Company |
+-----+------------------------------------------+----------------------+--+-------------------+
| | | 2009 | 2008 | | 2009 | 2008 |
| | | $'000 | $'000 | | $'000 | $'000 |
| | | | | | | |
+-----+------------------------------------------+---------+------------+--+---------+---------+
| 18. | OTHER CURRENT LIABILITIES | | | | | |
+-----+------------------------------------------+---------+------------+--+---------+---------+
| | Deferred income (Note 9) | 7,219 | 7,432 | | 2,262 | 62 |
+-----+------------------------------------------+---------+------------+--+---------+---------+
| | | | | | | |
+-----+------------------------------------------+---------+------------+--+---------+---------+
| 19. | ISSUED CAPITAL | | | | | |
+-----+------------------------------------------+---------+------------+--+---------+---------+
| | 196,847,706 fully paid ordinary shares | 123,946 | 115,325 | | 123,946 | 115,325 |
| | (2008: 171,009,598) | | | | | |
+-----+------------------------------------------+---------+------------+--+---------+---------+
| | | | | | | |
+-----+------------------------------------------+---------+------------+--+---------+---------+
| | | Consolidated and Company |
+-----+------------------------------------------+---------------------------------------------+
| | | 2009 | | 2008 |
+-----+------------------------------------------+----------------------+--+-------------------+
| | | No. | $ | | No. | $ |
| | | '000 | '000 | | '000 | '000 |
+-----+------------------------------------------+---------+------------+--+---------+---------+
| | Fully Paid Ordinary Shares | | | | | |
+-----+------------------------------------------+---------+------------+--+---------+---------+
| | Balance at the beginning of financial | 171,009 | 115,325 | | 170,076 | 115,005 |
| | year | | | | | |
+-----+------------------------------------------+---------+------------+--+---------+---------+
| | Issue of shares | 24,596 | 8,117 | | - | - |
+-----+------------------------------------------+---------+------------+--+---------+---------+
| | Issue of shares under the executive and | 1,243 | 343 | | 933 | 228 |
| | employee share option plan (Note 6) | | | | | |
+-----+------------------------------------------+---------+------------+--+---------+---------+
| | Transfer from employee equity-settled | - | 161 | | - | 92 |
| | benefits reserve | | | | | |
+-----+------------------------------------------+---------+------------+--+---------+---------+
| | Balance at the end of financial year | 196,848 | 123,946 | | 171,009 | 115,325 |
+-----+------------------------------------------+---------+------------+--+---------+---------+
| | | | | | | |
+-----+------------------------------------------+---------+------------+--+---------+---------+
| | Fully paid ordinary shares carry one vote per share and carry the right to dividends. |
+-----+----------------------------------------------------------------------------------------+
| | | | | | | |
+-----+-------------------------------------+---------+---------+--+------------+--------------+
| | Changes to the then Corporations Law abolished the authorised capital and par value |
| | concept in relation to share capital from 1 July 1998. Therefore, the company does not |
| | have a limited amount of authorised capital and issued shares do not have a par value. |
| | |
+-----+----------------------------------------------------------------------------------------+
| | Share Options | | | | | |
+-----+-------------------------------------+---------+---------+--+------------+--------------+
| | In accordance with the executive and employee share option plan as at 30 June 2009, |
| | employees are entitled to purchase shares in the company. Details of the executive and |
| | employee share option plan are contained in note 6 to the financial statements. |
+-----+-------------------------------------+----+----+----+----+--+----+--+----+----+---------+
Notes to the financial statements
for the financial year ended 30 June
2009
+-----+-------------------------------------+----------+----------+--+----------+---------+
| | | Consolidated | | Company |
+-----+-------------------------------------+---------------------+--+--------------------+
| | | 2009 | 2008 | | 2009 | 2008 |
| | | $'000 | $'000 | | $'000 | $'000 |
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+----------+---------+
| 20. | RESERVES | | | | | |
+-----+-------------------------------------+----------+----------+--+----------+---------+
| | Foreign currency translation | 3,323 | 596 | | - | - |
+-----+-------------------------------------+----------+----------+--+----------+---------+
| | Employee equity-settled benefits | 1,088 | 1,042 | | 1,088 | 1,042 |
+-----+-------------------------------------+----------+----------+--+----------+---------+
| | | 4,411 | 1,638 | | 1,088 | 1,042 |
+-----+-------------------------------------+----------+----------+--+----------+---------+
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+----------+---------+
| | Foreign currency translation | | | | | |
| | reserve | | | | | |
+-----+-------------------------------------+----------+----------+--+----------+---------+
| | Balance at beginning of financial | 596 | (1,094) | | - | - |
| | year | | | | | |
+-----+-------------------------------------+----------+----------+--+----------+---------+
| | Translation of foreign operations | 2,727 | 1,690 | | - | - |
| | (net of deferred tax) | | | | | |
+-----+-------------------------------------+----------+----------+--+----------+---------+
| | Balance at the end of the financial | 3,323 | 596 | | - | - |
| | year | | | | | |
+-----+-------------------------------------+----------+----------+--+----------+---------+
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+----------+---------+
| | Exchange differences relating to the translation from Euros, being the |
| | functional currency of the eServGlobal SAS and its controlled entities, into |
| | Australian dollars are brought to account by entries made directly to the |
| | foreign currency translation reserve. |
| | |
+-----+-----------------------------------------------------------------------------------+
| | Employee equity-settled | | | | | |
| | benefits reserve | | | | | |
+-----+-------------------------------------+----------+----------+--+----------+---------+
| | Balance at beginning of financial | 1,042 | 786 | | 1,042 | 786 |
| | year | | | | | |
+-----+-------------------------------------+----------+----------+--+----------+---------+
| | Share based payments | 207 | 348 | | 207 | 348 |
+-----+-------------------------------------+----------+----------+--+----------+---------+
| | Transfer to issued share capital | (161) | (92) | | (161) | (92) |
| | (note 19) | | | | | |
+-----+-------------------------------------+----------+----------+--+----------+---------+
| | Balance at the end of the financial | 1,088 | 1,042 | | 1,088 | 1,042 |
| | year | | | | | |
+-----+-------------------------------------+----------+----------+--+----------+---------+
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+----------+---------+
| | The employee equity-settled benefits reserve arises on the grant of share |
| | options to executives and employees under the executive and employee share |
| | option plan. Amounts are transferred out of the reserve and into issued capital |
| | when options are exercised. Further information about share-based payments to |
| | executives and employees is contained in note 6 to the financial statements. |
+-----+-----------------------------------------------------------------------------------+
| 21. | (ACCUMULATED LOSSES)/ | | | | | |
| | RETAINED EARNINGS | | | | | |
+-----+-------------------------------------+----------+----------+--+----------+---------+
| | Balance at beginning of the | 6,536 | (447) | | 2,608 | 3,931 |
| | financial year | | | | | |
+-----+-------------------------------------+----------+----------+--+----------+---------+
| | (Loss)/profit for the year | (34,743) | 10,391 | | (9,041) | 2,085 |
| | attributable to equity holders of | | | | | |
| | the parent | | | | | |
+-----+-------------------------------------+----------+----------+--+----------+---------+
| | Dividends paid (note 23) | (5,131) | (3,408) | | (5,131) | (3,408) |
+-----+-------------------------------------+----------+----------+--+----------+---------+
| | Balance at end of financial year | (33,338) | 6,536 | | (11,564) | 2,608 |
+-----+-------------------------------------+----------+----------+--+----------+---------+
Notes to the financial statements
for the financial year ended 30 June
2009
+-----+-------------------------------------+-------------------+--+------------------+
| | | Consolidated |
+-----+-------------------------------------+-----------------------------------------+
| | | 2009 | | 2008 |
| | | Cents Per Share | | Cents Per Share |
| | | | | |
+-----+-------------------------------------+-------------------+--+------------------+
| 22. | EARNINGS/(LOSS) PER SHARE | | | |
+-----+-------------------------------------+-------------------+--+------------------+
| | Basic earnings/(loss) per share | (20.1) | | 6.1 |
+-----+-------------------------------------+-------------------+--+------------------+
| | Diluted earnings/(loss) per share | (20.1) | | 6.0 |
+-----+-------------------------------------+-------------------+--+------------------+
| | | | | |
+-----+-------------------------------------+-------------------+--+------------------+
| | Basic earnings/(loss) per share | | | |
+-----+-------------------------------------+-------------------+--+------------------+
| | The earnings/(loss) and weighted average number of ordinary shares used in |
| | the calculation of basic earnings/(loss) per share are as follows: |
+-----+-------------------------------------------------------------------------------+
| | | 2009 | | 2008 |
| | | $'000 | | $'000 |
+-----+-------------------------------------+-------------------+--+------------------+
| | Earnings - being the (loss)/profit | (34,743) | | 10,391 |
| | for the year attributable to equity | | | |
| | holders of the parent | | | |
+-----+-------------------------------------+-------------------+--+------------------+
| | | | | |
+-----+-------------------------------------+-------------------+--+------------------+
| | | 2009 | | 2008 |
| | | No '000 | | No '000 |
+-----+-------------------------------------+-------------------+--+------------------+
| | Weighted average number of ordinary | 172,688 | | 170,435 |
| | shares | | | |
+-----+-------------------------------------+-------------------+--+------------------+
| | | | | |
+-----+-------------------------------------+-------------------+--+------------------+
| | Diluted earnings/(loss) per share | | | |
+-----+-------------------------------------+-------------------+--+------------------+
| | The earnings/(loss) and weighted average number of ordinary and potential |
| | ordinary shares used in the calculation of diluted earnings/(loss) per share |
| | are as follows: |
+-----+-------------------------------------------------------------------------------+
| | | 2009 | | 2008 |
| | | $'000 | | $'000 |
+-----+-------------------------------------+-------------------+--+------------------+
| | Earnings - being the (loss)/profit | (34,743) | | 10,391 |
| | for the year attributable to equity | | | |
| | holders of the parent | | | |
+-----+-------------------------------------+-------------------+--+------------------+
| | | | | |
+-----+-------------------------------------+-------------------+--+------------------+
+-----+-------------------------------------+-------------------+--+------------------+
| | | 2009 | | 2008 |
| | | No '000 | | No '000 |
+-----+-------------------------------------+-------------------+--+------------------+
| | Weighted average number of ordinary | 172,688 | | 172,535 |
| | shares and potential ordinary | | | |
| | shares (a) | | | |
+-----+-------------------------------------+-------------------+--+------------------+
| | | | | |
+-----+-------------------------------------+-------------------+--+------------------+
| | (a) Weighted average numbers of ordinary shares and potential ordinary shares |
| | used in the calculation of diluted earnings/(loss) per share reconciles to |
| | the weighted average number of ordinary shares used in the calculation of |
| | basic earnings/(loss) per share as follows: |
| | |
+-----+-------------------------------------------------------------------------------+
| | Weighted average number of ordinary | 172,688 | | 170,435 |
| | shares used in the calculation of | | | |
| | basic earnings/(loss) per share | | | |
+-----+-------------------------------------+-------------------+--+------------------+
| | Shares deemed to be issued for no | - | | 2,100 |
| | consideration in respect of | | | |
| | employee options | | | |
+-----+-------------------------------------+-------------------+--+------------------+
| | Weighted average number of ordinary | 172,688 | | 172,535 |
| | shares and potential ordinary | | | |
| | shares used in the calculation of | | | |
| | diluted earnings/(loss) per share | | | |
+-----+-------------------------------------+-------------------+--+------------------+
| | | | | |
+-----+-------------------------------------+-------------------+--+------------------+
Notes to the financial statements
for the financial year ended 30 June 2009
+-----+-------------------------------------+----------+----------+--+---------+---------+
| |
+-----+
| | | Consolidated and Company |
+-----+-------------------------------------+--------------------------------------------+
| | | 2009 | | 2008 |
+-----+-------------------------------------+---------------------+--+-------------------+
| | | Cents | Total | | Cents | Total |
| | | Per | $'000 | | Per | $'000 |
| | | Share | | | Share | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| 23. | DIVIDENDS | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Recognised Amounts | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Final dividend | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Fully Paid Ordinary Shares | 3.0 | 5,131 | | 2.0 | 3,408 |
| | unfranked | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Unrecognised Amounts | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Final dividend | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Fully Paid Ordinary Shares | - | - | | 3.0 | 5,131 |
| | unfranked | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| In respect of the current financial year no dividend has |
| been declared. |
| On 24 July 2008, the directors declared an unfranked final |
| dividend of 3.0 cents per share to the holders of fully |
| paid ordinary shares in respect of the financial year |
| ended 30 June 2008, to be paid to shareholders on 15 |
| September 2008. As this dividend was declared subsequent |
| to 30 June 2008 it had not been included as a liability in |
| the 2008 financial statements. The dividend was paid to |
| all shareholders on the Register of Members on 29 August |
| 2008. As at 15 September 2008 there was sufficient |
| retained earnings within the Company to support payment of |
| this dividend. |
| |
+----------------------------------------------------------------------------------------+
| | | | | | Company |
+-----+-------------------------------------+----------+----------+--+-------------------+
| | | | | | 2009 | 2008 |
| | | | | | $'000 | $'000 |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Adjusted franking account balance | | | | 99 | 99 |
| | (tax paid basis) | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Impact on franking account of | | | | - | - |
| | unrecognised dividends | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
+-----+-------------------------------------+----------+----------+--+---------+---------+
| 24. | LEASES | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Operating Leases | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Leasing arrangements |
| | Operating leases relate to office facilities with lease terms of up to six |
| | years. The company/Group does not have an option to purchase the leased asset at |
| | the expiry of the lease period. |
+-----+-------------------------------------+----------+----------+--+---------+---------+
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | | Consolidated | | Company |
+-----+-------------------------------------+---------------------+--+-------------------+
| | | 2009 | 2008 | | 2009 | 2008 |
| | | $'000 | $'000 | | $'000 | $'000 |
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Non-cancellable operating leases | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Not longer than 1 year | 5,128 | 2,662 | | 116 | 70 |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Longer than 1 year and not longer | 14,193 | 12,853 | | 285 | - |
| | than 5 years | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Longer than 5 years | 2,776 | 2,179 | | - | - |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | | 22,097 | 17,694 | | 401 | 70 |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
Notes to the financial statements
for the financial year ended 30 June
2009
+-----+----------------------------------+---------+---------+-------------------+---------+--+---------+---------+
| |
+-----+
| | | | | Ownership |
| | | | | Interest |
+-----+--------------------------------------------+---------------------------------------+--+-------------------+
| | | COUNTRY OF INCORPORATION | | 2009 | 2008 |
| | | | | % | % |
+-----+--------------------------------------------+---------------------------------------+--+---------+---------+
| 25. | SUBSIDIARIES | | | | |
+-----+--------------------------------------------+---------------------------------------+--+---------+---------+
| | Parent Entity | | | | |
+-----+--------------------------------------------+---------------------------------------+--+---------+---------+
| | eServGlobal | Australia (vii) (viii) | | - | - |
| | Limited | | | | |
+-----+--------------------------------------------+---------------------------------------+--+---------+---------+
| | | | | | |
+-----+--------------------------------------------+---------------------------------------+--+---------+---------+
| | Subsidiary | | | | |
+-----+--------------------------------------------+---------------------------------------+--+---------+---------+
| | eServGlobal | France (i) | | 100 | 100 |
| | Holdings SAS | | | | |
+-----+--------------------------------------------+---------------------------------------+--+---------+---------+
| | eServGlobal SAS | France (i) (iii)(ix) | | 100 | 100 |
+-----+--------------------------------------------+---------------------------------------+--+---------+---------+
| | PT eServGlobal | Indonesia (i) (x) | | 100 | 100 |
| | Indonesia | | | | |
+-----+--------------------------------------------+---------------------------------------+--+---------+---------+
| | eServGlobal | China (i) (x) | | 100 | 100 |
| | (Beijing) | | | | |
| | Telecommunication | | | | |
| | Technical | | | | |
| | Services, Co Ltd | | | | |
+-----+--------------------------------------------+---------------------------------------+--+---------+---------+
| | eServGlobal | Romania (i)(x) | | 50 | 50 |
| | Telecom Romania | | | | |
| | Srl | | | | |
+-----+--------------------------------------------+---------------------------------------+--+---------+---------+
| | eServGlobal | Brazil (i) (x) | | 100 | - |
| | Telecom Serviços | | | | |
| | do Brasil Ltda | | | | |
+-----+--------------------------------------------+---------------------------------------+--+---------+---------+
| | eServGlobal (NZ) | Australia (ii) (vi) (vii) | | 100 | 100 |
| | Pty Limited | | | | |
+-----+--------------------------------------------+---------------------------------------+--+---------+---------+
| | eServGlobal (HK) | Hong Kong (i) | | 100 | 100 |
| | Limited | | | | |
+-----+--------------------------------------------+---------------------------------------+--+---------+---------+
| | eServGlobal NVSA | Belgium (i) | | 100 | 100 |
+-----+--------------------------------------------+---------------------------------------+--+---------+---------+
| | eServGlobal UK | United Kingdom (i) | | 100 | 100 |
| | Limited | | | | |
+-----+--------------------------------------------+---------------------------------------+--+---------+---------+
| | eServ UK Limited | United Kingdom (i) | | 100 | 100 |
+-----+--------------------------------------------+---------------------------------------+--+---------+---------+
| | eServGlobal | Singapore (i) | | 100 | - |
| | Singapore Pte. | | | | |
| | Ltd. | | | | |
+-----+--------------------------------------------+---------------------------------------+--+---------+---------+
| | eServGlobal Inc | United States of America (iv) | | 100 | 100 |
+-----+--------------------------------------------+---------------------------------------+--+---------+---------+
| | eServGlobal Aust | Australia (v) (vi) (vii) | | 100 | 100 |
| | Pty Limited | | | | |
| | (formerly | | | | |
| | Integrator Pty | | | | |
| | Limited) | | | | |
+-----+--------------------------------------------+---------------------------------------+--+---------+---------+
| | | | | | |
+-----+--------------------------------------------+---------------------------------------+--+---------+---------+
| | (i) | These subsidiaries carry on business in their country of |
| | | incorporation; France, Indonesia, China, Romania, Brazil, Hong Kong, |
| | | Belgium, United Kingdom and Singapore . |
+-----+----------------------------------+------------------------------------------------------------------------+
| | (ii) | eServGlobal (NZ) Pty Ltd carries on business in Australia and has a |
| | | branch which carries on business in New Zealand. |
+-----+----------------------------------+------------------------------------------------------------------------+
| | (iii) | eServGlobal SAS carries on business in France and has branches which |
| | | carry on business in Egypt, Poland, India and the United Arab |
| | | Emirates. |
+-----+----------------------------------+------------------------------------------------------------------------+
| | (iv) | This subsidiary did not trade during the current financial year and is |
| | | relieved from the requirement to prepare, audit and lodge a financial |
| | | report. |
+-----+----------------------------------+------------------------------------------------------------------------+
| | (v) | This subsidiary did not trade in the year ended 30 June 2009. |
+-----+----------------------------------+------------------------------------------------------------------------+
| | (vi) | These subsidiaries are classified as small proprietary companies and, |
| | | in accordance with the Corporations Act 2001, are relieved from the |
| | | requirement to prepare, audit and lodge a financial report. |
+-----+----------------------------------+------------------------------------------------------------------------+
| | (vii) | These companies are members of the Australian tax consolidated group. |
+-----+----------------------------------+------------------------------------------------------------------------+
| | (viii) | eServGlobal Limited is the head entity within the tax consolidated |
| | | group. |
+-----+----------------------------------+------------------------------------------------------------------------+
| | (ix) | This company is a subsidiary of eServGlobal Holdings SAS |
+-----+----------------------------------+------------------------------------------------------------------------+
| | (x) | These companies are subsidiaries of eServGlobal SAS |
+-----+----------------------------------+------------------------------------------------------------------------+
| | | | | | |
+-----+----------------------------------+---------+---------+-------------------+---------+--+---------+---------+
Notes to the financial statements
for the financial year ended 30 June
2009
+-----+-------------------------------------+-------------------+--+---------+---------+
| 26. | SEGMENT INFORMATION | | | | |
+-----+-------------------------------------+-------------------+--+---------+---------+
+-----+---------------------+-----------+----------+----------+-+--------+---------+---------+
| | | | | |
+-----+---------------------+----------------------+---------------------+-------------------+
| Based on the risks and rewards associated with the company's business, organisational |
| structure and system of internal financial reporting to the Board of Directors, |
| management considers that the Group operates in one business segment, the |
| Telecommunications Software Solutions business, and in the following geographical |
| segments. |
+--------------------------------------------------------------------------------------------+
| Revenue in the table below has been calculated based on the geographical location of the |
| group company deriving the revenue. |
| |
+--------------------------------------------------------------------------------------------+
| | Segment Revenues | EXTERNAL SALES | INTER-SEGMENT | TOTAL |
+-----+---------------------+----------------------+---------------------+-------------------+
| | Geographical | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 |
| | | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 |
+-----+---------------------+-----------+----------+----------+----------+---------+---------+
| | Asia Pacific | 15,414 | 10,807 | 4,301 | 6,972 | 19,715 | 17,779 |
+-----+---------------------+-----------+----------+----------+----------+---------+---------+
| | Europe | 131,982 | 167,203 | 483 | 271 | 132,465 | 167,474 |
+-----+---------------------+-----------+----------+----------+----------+---------+---------+
| | Total of all | 147,396 | 178,010 | 4,784 | 7,243 | 152,180 | 185,253 |
| | geographies | | | | | | |
+-----+---------------------+-----------+----------+----------+----------+---------+---------+
| | Eliminations | | | | | (4,784) | (7,243) |
+-----+---------------------+-----------+----------+----------+----------+---------+---------+
| | Unallocated | | | | | 271 | 196 |
+-----+---------------------+-----------+----------+----------+----------+---------+---------+
| | Consolidated | | | | | 147,667 | 178,206 |
+-----+---------------------+-----------+----------+----------+----------+---------+---------+
| |
+--------------------------------------------------------------------------------------------+
| The Group also captures revenue by the geographical segment, based on the location of |
| the ultimate customer: |
| |
+--------------------------------------------------------------------------------------------+
| | Segment Revenues | EXTERNAL SALES | INTER-SEGMENT | TOTAL |
+-----+---------------------+----------------------+---------------------+-------------------+
| | Geographical | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 |
| | | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 |
+-----+---------------------+-----------+----------+------------+--------+---------+---------+
| | Middle East | 83,912 | 109,873 | - | - | 83,912 | 109,873 |
+-----+---------------------+-----------+----------+------------+--------+---------+---------+
| | Asia Pacific | 27,624 | 25,885 | - | - | 27,624 | 25,885 |
+-----+---------------------+-----------+----------+------------+--------+---------+---------+
| | Europe | 22,285 | 31,078 | - | - | 22,285 | 31,078 |
+-----+---------------------+-----------+----------+------------+--------+---------+---------+
| | Africa | 5,862 | 7,433 | - | - | 5,862 | 7,433 |
+-----+---------------------+-----------+----------+------------+--------+---------+---------+
| | Central and South | 7,713 | 3,741 | - | - | 7,713 | 3,741 |
| | America | | | | | | |
+-----+---------------------+-----------+----------+------------+--------+---------+---------+
| | Total of all | 147,396 | 178,010 | - | - | 147,396 | 178,010 |
| | geographies | | | | | | |
+-----+---------------------+-----------+----------+------------+--------+---------+---------+
| | Eliminations | | | | | - | - |
+-----+---------------------+-----------+----------+------------+--------+---------+---------+
| | Unallocated | | | | | 271 | 196 |
+-----+---------------------+-----------+----------+------------+--------+---------+---------+
| | Consolidated | | | | | 147,667 | 178,206 |
+-----+---------------------+-----------+----------+------------+--------+---------+---------+
| The group does not capture costs and assets information based on customer geographies. |
+-----+---------------------+-----------+----------+----------+-+--------+---------+---------+
Notes to the financial statements
for the financial year ended 30 June
2009
+-----+------------------------+------------------------------+---------+--+-------------+
| 27. | RELATED PARTY DISCLOSURES | | | |
+-----+-------------------------------------------------------+---------+--+-------------+
| | a) Equity Interests in Related Parties | | | |
+-----+-------------------------------------------------------+---------+--+-------------+
| | Equity Interests in Controlled Entities |
| | Details of the percentage of ordinary shares held in subsidiaries are disclosed |
| | in note 25 to the financial statements. |
+-----+----------------------------------------------------------------------------------+
| | | | | | |
+-----+------------------------+------------------------------+---------+--+-------------+
| | b) Key management personnel compensation | | |
+-----+-----------------------------------------------------------------+--+-------------+
| | Details of key management personnel compensation are disclosed in note 5 to the |
| | financial statements. |
+-----+----------------------------------------------------------------------------------+
| | c) Key management personnel equity holdings | | |
+-----+-----------------------------------------------------------------+--+-------------+
| | Fully paid ordinary shares issued by eServGlobal | | | |
| | Limited | | | |
+-----+------------------------+------------------------------+---------+--+-------------+
+-----+----------------------+-------------+--------------+------------+------------+
| | | | | | |
+-----+----------------------+-------------+--------------+------------+------------+
| | | Balance at | Received on | Net other | Balance |
| | | 1 July | exercise of | change | at 30 |
| | | | options | | June |
+-----+----------------------+-------------+--------------+------------+------------+
| | | No. | No. | No. | No. |
+-----+----------------------+-------------+--------------+------------+------------+
| | 2009 | | | | |
+-----+----------------------+-------------+--------------+------------+------------+
| | I Buddery (i) | 15,055,982 | - | - | 15,055,982 |
+-----+----------------------+-------------+--------------+------------+------------+
| | F Barrault | - | 500,000 | - | 500,000 |
+-----+----------------------+-------------+--------------+------------+------------+
| | A Eisen (iii) | - | - | 37,301,296 | 37,301,296 |
+-----+----------------------+-------------+--------------+------------+------------+
| | A Gilbert | 90,000 | - | - | 90,000 |
+-----+----------------------+-------------+--------------+------------+------------+
| | M Jefferies (iii) | - | - | 37,301,296 | 37,301,296 |
+-----+----------------------+-------------+--------------+------------+------------+
| | JP Labat (ii) | 99,464 | - | - | 99,464 |
+-----+----------------------+-------------+--------------+------------+------------+
| | G Lemoing (ii) | 99,464 | - | - | 99,464 |
+-----+----------------------+-------------+--------------+------------+------------+
| | J Pratt | 500,000 | - | - | 500,000 |
+-----+----------------------+-------------+--------------+------------+------------+
| | J M Hartigan (v) | 10,000 | - | (10,000) | - |
+-----+----------------------+-------------+--------------+------------+------------+
| | | | | | |
+-----+----------------------+-------------+--------------+------------+------------+
| | 2008 | | | | |
+-----+----------------------+-------------+--------------+------------+------------+
| | I Buddery (i) | 15,055,982 | - | - | 15,055,982 |
+-----+----------------------+-------------+--------------+------------+------------+
| | A Gilbert | 90,000 | - | - | 90,000 |
+-----+----------------------+-------------+--------------+------------+------------+
| | J M Hartigan (iv) | 10,000 | - | - | 10,000 |
+-----+----------------------+-------------+--------------+------------+------------+
| | JP Labat (ii) | 99,464 | - | - | 99,464 |
+-----+----------------------+-------------+--------------+------------+------------+
| | G Lemoing (ii) | 99,464 | - | - | 99,464 |
+-----+----------------------+-------------+--------------+------------+------------+
| | J Pratt | - | 500,000 | - | 500,000 |
+-----+----------------------+-------------+--------------+------------+------------+
* Relevant interest held in shares registered in the name of Wallaby Hill Pty Ltd
in which I Buddery holds an interest.
* Shares held by a company in trust.
* Shares held by Guinness Peat Group of which Anthony Eisen and Michael Jefferies
are both Executives.
* Held indirectly.
* J M Hartigan resigned on 11 July 2008.
Notes to the financial statements
for the financial year ended 30 June
2009
+-----+------------------------------------------------------+---------+--+-------------+
| 27. | RELATED PARTY DISCLOSURES (continued) | | | |
+-----+------------------------------------------------------+---------+--+-------------+
+-----+---------------------------------------------------------------+--+-------------+
| | c) Key management personnel equity holdings (continued) | | |
+-----+---------------------------------------------------------------+--+-------------+
+-----+---------------------------------------------------------+--+---------+---------+
| | Options issued by eServGlobal Limited to Executives | | | |
+-----+---------------------------------------------------------+--+---------+---------+
+------------------+---------+---------------+-----------+-----------+---------+---------+-------------+-------------+---------+
| |Balance | Granted |Exercised | Net |Balance |Balance | Vested | Vested | Vested |
| | at 1 | as | | other | at | vested | but | and | during |
| | July |compen-sation | | change |30 June | at 30 | not |exercisable | the |
| | | | | | | June |exercisable | | year |
+------------------+---------+---------------+-----------+-----------+---------+---------+-------------+-------------+---------+
| | No. | No. | No. | No. | No. | No. | No. | No. | No. |
+------------------+---------+---------------+-----------+-----------+---------+---------+-------------+-------------+---------+
| 2009 | | | | | | | | | |
+------------------+---------+---------------+-----------+-----------+---------+---------+-------------+-------------+---------+
| JP | 242,857 | - | - | - | 242,857 | 242,857 | - | 242,857 | - |
| Labat | | | | | | | | | |
+------------------+---------+---------------+-----------+-----------+---------+---------+-------------+-------------+---------+
| G | 242,857 | - | - | - | 242,857 | 242,857 | - | 242,857 | - |
| Lemoing | | | | | | | | | |
+------------------+---------+---------------+-----------+-----------+---------+---------+-------------+-------------+---------+
| L | 300,000 | - | - | - | 300,000 | 100,000 | - | 100,000 | 100,000 |
| Lafarge | | | | | | | | | |
+------------------+---------+---------------+-----------+-----------+---------+---------+-------------+-------------+---------+
| J M | 500,000 | - | - | (500,000) | - | - | - | - | - |
| Hartigan | | | | | | | | | |
| (i) | | | | | | | | | |
+------------------+---------+---------------+-----------+-----------+---------+---------+-------------+-------------+---------+
| | | | | | | | | | |
+------------------+---------+---------------+-----------+-----------+---------+---------+-------------+-------------+---------+
| 2008 | | | | | | | | | |
+------------------+---------+---------------+-----------+-----------+---------+---------+-------------+-------------+---------+
| J M | 500,000 | - | - | - | 500,000 | 500,000 | - | 500,000 | - |
| Hartigan | | | | | | | | | |
+------------------+---------+---------------+-----------+-----------+---------+---------+-------------+-------------+---------+
| JP | 242,857 | - | - | - | 242,857 | 242,857 | - | 242,857 | - |
| Labat | | | | | | | | | |
+------------------+---------+---------------+-----------+-----------+---------+---------+-------------+-------------+---------+
| G | 242,857 | - | - | - | 242,857 | 242,857 | - | 242,857 | - |
| Lemoing | | | | | | | | | |
+------------------+---------+---------------+-----------+-----------+---------+---------+-------------+-------------+---------+
| L | - | 300,000 | - | - | 300,000 | - | - | - | - |
| Lafarge | | | | | | | | | |
+------------------+---------+---------------+-----------+-----------+---------+---------+-------------+-------------+---------+
* J M Hartigan resigned on 11 July 2008
All executive share options issued to key management during the financial year
were made in accordance with the provisions of the executive share option plan.
Each executive share plan option converts into 1 ordinary share of eServGlobal
Limited when the option is exercised and the exercise price paid. When options
are issued, no amounts are paid or payable by the recipient of the option (Refer
Note 6).
+-----+---------------------------------------------------------------+--+-------------+
| | d) Non executive directors option holdings | | |
+-----+---------------------------------------------------------------+--+-------------+
+------------------+---------+---------------+-----------+----------+---------+---------+-------------+-------------+---------+
| |Balance | Granted |Exercised | Net |Balance |Balance | Vested | Vested | Vested |
| | at 1 | as | | other | at | vested | but | and | during |
| | July |compen-sation | | change |30 June | at 30 | not |exercisable | the |
| | | | | | | June |exercisable | | year |
+------------------+---------+---------------+-----------+----------+---------+---------+-------------+-------------+---------+
| | No. | No. | No. | No. | No. | No. | No. | No. | No. |
+------------------+---------+---------------+-----------+----------+---------+---------+-------------+-------------+---------+
| 2009 | | | | | | | | | |
+------------------+---------+---------------+-----------+----------+---------+---------+-------------+-------------+---------+
| F | 500,000 | - | (500,000) | - | - | - | - | - | - |
| Barrault | | | | | | | | | |
+------------------+---------+---------------+-----------+----------+---------+---------+-------------+-------------+---------+
| A | 500,000 | - | - | - | 500,000 | 333,333 | - | 333,333 | 166,666 |
| Gilbert | | | | | | | | | |
+------------------+---------+---------------+-----------+----------+---------+---------+-------------+-------------+---------+
| | | | | | | | | | |
+------------------+---------+---------------+-----------+----------+---------+---------+-------------+-------------+---------+
| 2008 | | | | | | | | | |
+------------------+---------+---------------+-----------+----------+---------+---------+-------------+-------------+---------+
| F | 500,000 | - | - | - | 500,000 | 500,000 | - | 500,000 | - |
| Barrault | | | | | | | | | |
+------------------+---------+---------------+-----------+----------+---------+---------+-------------+-------------+---------+
| A | 500,000 | - | - | - | 500,000 | 166,667 | - | 166,667 | 166,667 |
| Gilbert | | | | | | | | | |
+------------------+---------+---------------+-----------+----------+---------+---------+-------------+-------------+---------+
| J | 500,000 | - | (500,000) | - | - | - | - | - | - |
| Pratt | | | | | | | | | |
+------------------+---------+---------------+-----------+----------+---------+---------+-------------+-------------+---------+
| D | 50,000 | - | - | (50,000) | - | - | - | - | - |
| Smart | | | | | | | | | |
+------------------+---------+---------------+-----------+----------+---------+---------+-------------+-------------+---------+
Notes to the financial statements
for the financial year ended 30 June
2009
+-----+------------------------------------------------------+---------+--+-------------+
| 27. | RELATED PARTY DISCLOSURES (continued) | | | |
+-----+------------------------------------------------------+---------+--+-------------+
+-----+---------------------------------------------------------------+--+-------------+
| | d) Non executive directors option holdings (continued) | | |
+-----+---------------------------------------------------------------+--+-------------+
All executive share options issued to non executive directors during the
financial year were made in accordance with the provisions of the executive
share option plan. Each executive share plan option converts into 1 ordinary
share of eServGlobal Limited when the option is exercised and the exercise price
paid. When options are issued, no amounts are paid or payable by the recipient
of the option (Refer Note 6).
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | | Consolidated | | Company |
+-----+-------------------------------------+---------------------+--+-------------------+
| | | 2009 | 2008 | | 2009 | 2008 |
| | | $ | $ | | $ | $ |
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | e) Other transactions with key | | | | | |
| | management personnel | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | The profit from operations includes | | | | | |
| | the following items of expenditure | | | | | |
| | that resulted from transactions, | | | | | |
| | other than compensation or equity | | | | | |
| | holdings, with key management | | | | | |
| | personnel or their related | | | | | |
| | entities: | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Graham Libbesson (a non-executive | 4,515 | 27,000 | | 4,515 | 27,000 |
| | director) is a director of the | | | | | |
| | company Unorfadox Pty Limited which | | | | | |
| | provided services in relation to | | | | | |
| | the group's taxation position, on | | | | | |
| | normal commercial terms. | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Anthony Gilbert (a non-executive | - | 59,312 | | - | 59,312 |
| | director) provided services in | | | | | |
| | relation to professional consulting | | | | | |
| | services, on normal commercial | | | | | |
| | terms | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | | | | | |
+-----+------------------------------------------------+----------+--+---------+---------+
| | f) Transactions within the Wholly-Owned Group | | | | |
+-----+------------------------------------------------+----------+--+---------+---------+
| | The wholly-owned group includes: |
| | * |
| | the ultimate parent entity in the wholly-owned group and* |
| | wholly-owned controlled entities |
| | The ultimate parent entity in the wholly-owned group is eServGlobal Limited. |
| | Amounts owed by wholly-owned controlled entities are disclosed in notes 8 and 11 |
| | to the financial statements. |
| | Details of dividend revenue derived by the entity from entities in the |
| | wholly-owned group are disclosed in note 2 to the financial statements. |
| | During the financial year eServGlobal Limited provided accounting and |
| | administration services, at cost, to entities in the wholly-owned group. |
| | Under the Australian Tax Consolidation system eServGlobal Ltd assumed all of the |
| | tax liabilities of the Australian tax consolidated group. |
+-----+----------------------------------------------------------------------------------+
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | g) Parent Entities | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | The parent entity in the Group is eServGlobal Limited. |
+-----+-------------------------------------+----------+----------+--+---------+---------+
Notes to the financial statements
for the financial year ended 30 June 2009
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| 28. | NOTES TO THE CASH FLOW STATEMENT | | | |
+-----+-----------------------------------------------------------+--+---------+---------+
| | | Consolidated | | Company |
+-----+-------------------------------------+---------------------+--+-------------------+
| | | 2009 | 2008 | | 2009 | 2008 |
| | | $'000 | $'000 | | $'000 | $'000 |
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | a) Reconciliation of cash | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | For the purposes of the cash flow | | | | | |
| | statement, cash and cash | | | | | |
| | equivalents includes cash on hand | | | | | |
| | and in banks and investments in | | | | | |
| | money market instruments, net of | | | | | |
| | outstanding bank overdrafts. Cash | | | | | |
| | at the end of the financial year as | | | | | |
| | shown in the statement of cash | | | | | |
| | flows is reconciled to the related | | | | | |
| | items in the balance sheet as | | | | | |
| | follows: | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Cash and cash equivalents | 14,135 | 18,288 | | 11,948 | 9,626 |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | b) Financing facilities | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Secured bank facilities with a | | | | | |
| | maturity date of 30 September 2009 | | | | | |
| | which may be extended by mutual | | | | | |
| | agreement. | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | * amount used in guarantee | - | 1,318 | | - | - |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | * amount unused | 5,000 | 3,682 | | 5,000 | 5,000 |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | | 5,000 | 5,000 | | 5,000 | 5,000 |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | A bank guarantee allowing the group to participate in a specific customer bid |
| | (Bid Bond) was entered into during the previous financial year which remained |
| | valid until the expiry date of 25 August 2008. At 30 June 2008 the facility |
| | limit had been reduced by $1.318 million to partake in this tender process. The |
| | bank guarantee was released on expiry date and the facility limit returned to $5 |
| | million. |
+-----+-------------------------------------+----------+----------+--+---------+---------+
Notes to the financial statements
for the financial year ended 30 June
2009
+-----+-------------------------------------------------+----------+----------+--+---------+---------+
| | | | | | | |
+-----+-------------------------------------------------+----------+----------+--+---------+---------+
| 28. | NOTES TO THE CASH FLOW STATEMENT (continued) | | | |
+-----+-----------------------------------------------------------------------+--+---------+---------+
| | | Consolidated | | Company |
+-----+-------------------------------------------------+---------------------+--+-------------------+
| | | 2009 | 2008 | | 2009 | 2008 |
| | | $'000 | $'000 | | $'000 | $'000 |
| | | | | | | |
+-----+-------------------------------------------------+----------+----------+--+---------+---------+
| | | | | | | |
+-----+-------------------------------------------------+----------+----------+--+---------+---------+
| | c) Reconciliation of profit for the | | | | | |
| | year to net cash flows from | | | | | |
| | operating activities | | | | | |
+-----+-------------------------------------------------+----------+----------+--+---------+---------+
| | (Loss)/profit for the year | (34,525) | 10,540 | | (9,041) | 2,085 |
+-----+-------------------------------------------------+----------+----------+--+---------+---------+
| | Interest received | (271) | (196) | | (228) | (170) |
+-----+-------------------------------------------------+----------+----------+--+---------+---------+
| | Depreciation of non-current assets | 3,284 | 2,997 | | 56 | 100 |
+-----+-------------------------------------------------+----------+----------+--+---------+---------+
| | Amortisation of non-current assets | 7,783 | 6,883 | | - | - |
+-----+-------------------------------------------------+----------+----------+--+---------+---------+
| | Impairment of goodwill | 12,501 | - | | - | - |
+-----+-------------------------------------------------+----------+----------+--+---------+---------+
| | Impairment of loan to subsidiary | - | - | | 12,583 | - |
+-----+-------------------------------------------------+----------+----------+--+---------+---------+
| | Loss on disposal of non-current | 32 | 5 | | - | 5 |
| | assets | | | | | |
+-----+-------------------------------------------------+----------+----------+--+---------+---------+
| | Equity settled share-based payments | 207 | 348 | | 207 | 348 |
+-----+-------------------------------------------------+----------+----------+--+---------+---------+
| | | | | | | |
+-----+-------------------------------------------------+----------+----------+--+---------+---------+
| | Increase/(decrease) in current | (969) | (6,411) | | - | - |
| | income tax balances | | | | | |
+-----+-------------------------------------------------+----------+----------+--+---------+---------+
| | Increase/(decrease) in deferred tax | 3,316 | (253) | | 373 | 2,191 |
| | balances | | | | | |
+-----+-------------------------------------------------+----------+----------+--+---------+---------+
| | Changes in net assets and | | | | | |
| | liabilities, net of effects from | | | | | |
| | acquisition of businesses: | | | | | |
+-----+-------------------------------------------------+----------+----------+--+---------+---------+
| | - | | | | | |
| | (Increase)/decrease | | | | | |
| | in assets: | | | | | |
+-----+-------------------------------------------------+----------+----------+--+---------+---------+
| | - | 16,627 | (6,792) | | (1,500) | (3,563) |
| | Current | | | | | |
| | receivables | | | | | |
+-----+-------------------------------------------------+----------+----------+--+---------+---------+
| | - Other | 833 | (749) | | - | - |
| | current | | | | | |
| | inventories | | | | | |
+-----+-------------------------------------------------+----------+----------+--+---------+---------+
| | - Other | 5,077 | (5,077) | | (2,783) | (4,489) |
| | assets | | | | | |
+-----+-------------------------------------------------+----------+----------+--+---------+---------+
| | | | | | | |
+-----+-------------------------------------------------+----------+----------+--+---------+---------+
| | Increase/(decrease) in liabilities: | | | | | |
+-----+-------------------------------------------------+----------+----------+--+---------+---------+
| | - | (15,199) | 12,285 | | (386) | (699) |
| | Current | | | | | |
| | trade | | | | | |
| | payables | | | | | |
+-----+-------------------------------------------------+----------+----------+--+---------+---------+
| | - | 216 | 400 | | 27 | 3 |
| | Current | | | | | |
| | provisions | | | | | |
+-----+-------------------------------------------------+----------+----------+--+---------+---------+
| | - Other | (213) | (1,330) | | 2,200 | (76) |
| | current | | | | | |
| | liabilities | | | | | |
+-----+-------------------------------------------------+----------+----------+--+---------+---------+
| | - | (793) | (16) | | - | - |
| | Non-current | | | | | |
| | provisions | | | | | |
+-----+-------------------------------------------------+----------+----------+--+---------+---------+
| | Net cash from operating activities | (2,094) | 12,634 | | 1,508 | (4,265) |
+-----+-------------------------------------------------+----------+----------+--+---------+---------+
Notes to the financial statements
for the financial year ended 30 June
2009
+-----+-------------------------------------+----+--+----+--+--+--+--+--------+--+---------+--+
| 29. | FINANCIAL INSTRUMENTS | | | | | |
+-----+-------------------------------------+-------+-------+-----+--------------+---------+
| | a) Significant Accounting Policies | | | | | |
+-----+-------------------------------------+-------+-------+-----+--------------+---------+
| | Details of the significant accounting policies and methods adopted, including |
| | the criteria for recognition, the basis of measurement and the basis on which |
| | revenues and expenses are recognised, in respect of each class of financial |
| | asset, financial liability and equity instrument are disclosed in note 1 to |
| | the financial statements. |
+-----+------------------------------------------------------------------------------------+
| | | | | | | |
+-----+-------------------------------------+-------+-------+-----+--------------+---------+
| | b) Capital Risk Management | | | | | |
+-----+-------------------------------------+-------+-------+-----+--------------+---------+
| | The Group manages its capital to ensure that entities in the Group will be |
| | able to continue as a going concern while maximising the return to |
| | stakeholders through the optimisation of the debt and equity balance. The |
| | Group's overall strategy remains unchanged from 2008. |
| | The capital structure of the Group includes cash and cash equivalents and |
| | equity attributable to equity holders of the parent, comprising issued |
| | capital, reserves and retained earnings. At 30 June 2009 and 30 June 2008 the |
| | Group had no borrowings against formalised available facilities disclosed in |
| | note 28. Operating cash flows are used to maintain and expand the Group's |
| | assets as well as to pay for operating expenses, tax liabilities and |
| | development activities. |
+-----+------------------------------------------------------------------------------------+
| | | | | | | |
+-----+-------------------------------------+-------+-------+-----+--------------+---------+
| | c) Financial Risk Management | | | | | |
| | Objectives | | | | | |
+-----+------------------------------------------+-------+-----+-----+--------+---------------+
| | The Group's activities expose it to a variety of financial risks: market risk |
| | (including currency and interest rate risk), credit risk and liquidity risk. |
| | The Group's overall risk management program focuses on the unpredictability of |
| | financial and exchange rate markets and seeks to minimise potential adverse |
| | effects on the Group's performance. The Group seeks to minimise the effect of |
| | foreign currency risks using derivative financial instruments detailed at 29 |
| | (e). A risk management framework, including the policy on use of financial |
| | derivatives is governed by the Board of Directors. The Group does not enter |
| | into or trade financial instruments, including derivative financial |
| | instruments, for speculative purposes. |
| | The Group's activities expose it to a variety of financial risks: market risk |
| | (interest rate risk), credit risk and liquidity risk. |
+-----+------------------------------------------------------------------------------------+
| | | | | | | |
+-----+-------------------------------------+-------+-------+-----+--------------+---------+
| | d) Market Risk | | | | | |
+-----+-------------------------------------+-------+-------+-----+--------------+---------+
| | The Group's activities expose it primarily to the financial risks of changes |
| | in foreign currency exchange rates. The Group has entered into forward foreign |
| | exchange contracts to cover foreign currency receipts arising from specific |
| | customer orders. There has been no change to the Group's exposure to market |
| | risks or the manner in which it manages and measures the risk from the |
| | previous period. |
+-----+------------------------------------------------------------------------------------+
| | | | | | | |
+-----+-------------------------------------+-------+-------+-----+--------------+---------+
| | e) Foreign Currency Risk Management | | | |
| | | | | |
| | | | | |
+-----+-----------------------------------------------------+-----+--------------+---------+
| | The Group undertakes certain transactions denominated in foreign currencies |
| | that are different to the functional currency of the respective entities |
| | undertaking the transactions, hence exposures to exchange rate fluctuations |
| | arise. Exchange rate exposures arising from specific customer orders are |
| | managed within approved policy parameters utilising forward foreign exchange |
| | contracts. |
| | The carrying amount of the Group's foreign currency denominated monetary |
| | assets and monetary liabilities at the reporting date that are denominated in |
| | a currency that is different to the functional currency of the respective |
| | entities holding the monetary assets and liabilities are as follows: |
| | |
+-----+------------------------------------------------------------------------------------+
| | | Assets | | Liabilities |
+-----+-------------------------------------+---------------+-----+------------------------+
| | | 2009 | 2008 | | 2009 | 2008 |
+-----+-------------------------------------+-------+-------+-----+--------------+---------+
| | | $'000 | $'000 | | $'000 | $'000 |
+-----+-------------------------------------+-------+-------+-----+--------------+---------+
| | US dollars | 8,498 | 8,698 | | 840 | 476 |
+-----+-------------------------------------+-------+-------+-----+--------------+---------+
| | Euro | 188 | 477 | | - | 42 |
+-----+-------------------------------------+-------+-------+-----+--------------+---------+
| | | | | | | |
+-----+-------------------------------------+----+--+----+--+--+--+--+--------+--+---------+--+
Notes to the financial statements
for the financial year ended 30 June 2009
+-----+-------------------------------------+----------+----------+--+---------+---------+
| 29. | FINANCIAL INSTRUMENTS (continued) | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
+-----+-----------------------------------------------------------------------------+
| | Forward foreign exchange contracts |
+-----+-----------------------------------------------------------------------------+
| | It is the policy of the Group to enter into forward foreign exchange |
| | contracts to cover foreign currency receipts arising from specific customer |
| | orders. The Group has entered into fixed price contracts to supply Software |
| | and Services and as a consequence has, in certain cases, entered into |
| | forward foreign exchange contracts (for terms not exceeding 12 months) to |
| | hedge the exchange risk arising from these transactions. |
| | The following table details the forward foreign currency contract |
| | outstanding as at the reporting date: |
| | |
+-----+-----------------------------------------------------------------------------+
+---------+----------+---------+----------+--------+---------+--------+---------+--------+++
| | Average Exchange |Foreign Currency | Contract Value | Fair |
| Outstanding | Rate | | | Value |
| Contacts | | | | |
+ +--------------------+------------------+------------------+----------+
| | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 |
| | | |USD'000 | USD'000 | $'000 | $'000 | $'000 | $'000 |
+--------------------+---------+----------+---------+----------+--------+---------+--------+------------------+
| Sell US Dollars | | | | | | | | |
+--------------------+---------+----------+--------+---------+--------+---------+--------+-+
| Less than 3 months | 0.7842 | 0.9440 | 3,686 | 4,658 | 4,699 | 4,934 | 162 |77 |
+--------------------+---------+----------+--------+---------+--------+---------+--------+-+
| 3 to 6 months | 0.8303 | 0.9535 | 869 | 2,407 | 1,047 | 2,524 | (23) |4 |
+--------------------+---------+----------+--------+---------+--------+---------+--------+-+
| 7 to 9 months | 0.8838 | 0.9499 | 79 | 1,507 | 90 | 1,586 | (8) |2 |
+--------------------+---------+----------+--------+---------+--------+---------+--------+-+
| 10 to 12 months | - | 0.9428 | - | 772 | - | 819 | - |2 |
+--------------------+---------+----------+--------+---------+--------+---------+--------+-+
| | | | 4,634 | 9,344 | 5,836 | 9,863 | 131 |85 |
+--------------------+---------+----------+--------+---------+--------+---------+--------+-+
| | |
+---------+----------+---------+----------+--------+---------+--------+---------+--------+++
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | | Consolidated | | Company |
+-----+-------------------------------------+---------------------+--+-------------------+
| | | 2009 | 2008 | | 2009 | 2008 |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Categories of financial instruments | $'000 | $'000 | | $'000 | $'000 |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Financial Assets: | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Cash and cash equivalents | 14,135 | 18,288 | | 11,948 | 9,626 |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Loans and receivables | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Receivables | 47,973 | 57,123 | | 3,695 | 2,658 |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Deposits | 1,090 | 3,306 | | 8 | 2 |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Loans to | - | - | | 7,501 | 4,931 |
| | subsidiaries | | | | | |
| | - current | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Loans to | - | - | | 53,389 | 63,189 |
| | subsidiaries - | | | | | |
| | non current | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Financial Liabilities: | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | At amortised cost | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Trade payables | 5,587 | 13,007 | | 138 | 148 |
+-----+-------------------------------------+----------+----------+--+---------+---------+
Notes to the financial statements
for the financial year ended 30 June
2009
+-----+-------------------------------------+----------+----------+--+---------+---------+
| 29. | FINANCIAL INSTRUMENTS (continued) | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
+----+--------------------------------------+----------+----------+--+---------+-----------+
| | Foreign currency sensitivity | | | | | |
| | analysis | | | | | |
+----+--------------------------------------+----------+----------+--+---------+-----------+
| | The following table details the Company's and Group's sensitivity to a 10% increase |
| | and decrease in the Australian dollar against the relevant foreign currencies, |
| | which represents management's assessment of the possible change in foreign exchange |
| | rates. The sensitivity analysis includes only outstanding foreign currency |
| | denominated monetary items (arising from monetary assets and liabilities held at |
| | balance date in a currency different to the functional currency of the respective |
| | entities holding the assets or liabilities) and adjusts their translation at a |
| | period end for a 10% change in foreign currency rates. |
| | |
+----+-------------------------------------------------------------------------------------+
| | | USD Impact |
+----+--------------------------------------+----------------------------------------------+
| | | Consolidated | | Company |
+----+--------------------------------------+---------------------+--+---------------------+
| | | 2009 | 2008 | | 2009 | 2008 |
+----+--------------------------------------+----------+----------+--+---------+-----------+
| | | $'000 | $'000 | | $'000 | $'000 |
+----+--------------------------------------+----------+----------+--+---------+-----------+
| | Profit or loss | 810 | 860 | | 436 | 315 |
+----+--------------------------------------+----------+----------+--+---------+-----------+
| | | | | | | |
+----+--------------------------------------+----------+----------+--+---------+-----------+
| | | Euro Impact |
+----+--------------------------------------+----------------------------------------------+
| | | Consolidated | | Company |
+----+--------------------------------------+---------------------+--+---------------------+
| | | 2009 | 2008 | | 2009 | 2008 |
+----+--------------------------------------+----------+----------+--+---------+-----------+
| | | $'000 | $'000 | | $'000 | $'000 |
+----+--------------------------------------+----------+----------+--+---------+-----------+
| | Profit or loss | 2 | 48 | | 2 | 48 |
+----+--------------------------------------+----------+----------+--+---------+-----------+
| | | | | | | |
+----+--------------------------------------+----------+----------+--+---------+-----------+
| | A positive number indicates an increase in profit or loss with the Australian |
| | Dollar strengthening against the respective currency. For a weakening of the |
| | Australian Dollar against the respective currency there would be an equal and |
| | opposite impact on the profit, and the amounts above would be negative. |
+----+--------------------------------------+----------+----------+--+---------+-----------+
+-----+-------------------------------------+----------+----------+--+---------+-----------+
| | In management's opinion, the above sensitivity analysis is not fully |
| | representative of the inherent foreign exchange risk as the year end exposure does |
| | not necessarily reflect the exposure during the course of the year. |
| | In addition, the Group includes certain subsidiaries whose functional currencies |
| | are different to the Group's presentation currency. The main operating entity |
| | outside of Australia is based in France. This entity transacts primarily in its |
| | functional currency, the Euro, and does not have significant foreign currency |
| | exposures, because of the hedging policies outline above. As stated in the Group's |
| | Accounting Policies Note 1(e), on consolidation the assets and liabilities of |
| | these entities are translated into Australian dollars at exchange rates prevailing |
| | on the balance sheet date. The income and expenses of these entities is translated |
| | at the average exchange rates for the period. Exchange differences arising are |
| | classified as equity and are transferred to a foreign exchange translation |
| | reserve. The Group's future reported profits could therefore be impacted by |
| | changes in rates of exchange between the Australian Dollar and the Euro. |
| | |
+-----+------------------------------------------------------------------------------------+
| | f) Interest Rate Risk Management | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+-----------+
| | The Company's and Group's exposure to interest rate risk at 30 June 2009 is |
| | limited to the interest generated on deposits balances invested during the course |
| | of the year which attract a variable interest rate and yielded a 2.9% (2008: |
| | 6.3%) weighted average interest rate for the financial year. |
| | |
+-----+------------------------------------------------------------------------------------+
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+-----------+
| | Interest rate sensitivity analysis | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+-----------+
| | The Group's sensitivity to interest rates is restricted only to surplus cash |
| | placed on short-term deposit or short-term drawings on facilities utilised to |
| | manage operational cash requirements across the entities within the group. The |
| | Company's sensitivity to interest rate is restricted to surplus cash placed and |
| | loans from wholly-owned controlled entities which are available on call. |
+-----+------------------------------------------------------------------------------------+
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+-----------+
Notes to the financial statements
for the financial year ended 30 June 2009
+-----+-------------------------------------+----------+----------+--+---------+---------+
| 29. | FINANCIAL INSTRUMENTS (continued) | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
+-----+-------------------------------------+----------+----------+--+---------+-----------+
| | g) Credit Risk Management | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+-----------+
| | Credit risk refers to the risk that a counterparty will default on its contractual |
| | obligations resulting in financial loss to the Company or Group. The Group has |
| | adopted the policy of only dealing with creditworthy counterparties, as a means of |
| | mitigating the risk of financial loss from defaults. Trade receivables consist of |
| | a relatively small number of closely managed customers, spread across diverse |
| | geographical areas. Ongoing credit evaluation is performed on the financial |
| | condition of accounts receivable as part of the overall client management process. |
| | The carrying amount of the financial assets recorded in the financial statements, |
| | net of any allowance for losses, represents the Company's and Group's maximum |
| | exposure to credit risk. |
+-----+-------------------------------------+----------+----------+--+---------+-----------+
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | h) Liquidity Risk Management | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Ultimate responsibility for liquidity risk management rests with the board of |
| | directors, who have built an appropriate liquidity risk management framework for |
| | the management of the Company's and Group's short, medium and long-term funding |
| | and liquidity management requirements. The Company and Group manages liquidity |
| | risk by maintaining adequate reserves, banking facilities and reserve borrowing |
| | facilities by continuously monitoring forecast and actual cash flows and |
| | matching the maturity profiles of financial assets and liabilities. |
+-----+----------------------------------------------------------------------------------+
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | Liquidity and interest risk tables | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | The following tables detail the company's and the Group's remaining contractual |
| | maturity for its non-derivative financial liabilities. The tables have been |
| | drawn up based on the undiscounted cash flows of financial liabilities based on |
| | the earliest date on which the Group can be required to pay. The table includes |
| | both interest and principal cash flows. |
+-----+-------------------------------------+----------+----------+--+---------+---------+
+---------------------+------------+-----------+-----------+------------+------------+
| | Weighted |Less than | 1-3 |3 months - | 1-5 years |
| | average | 1 month | months | 1 year | $'000 |
| | effective | $'000 | $'000 | $'000 | |
| | interest | | | | |
| | rate | | | | |
| | % | | | | |
+---------------------+------------+-----------+-----------+------------+------------+
| Consolidated | | | | | |
+---------------------+------------+-----------+-----------+------------+------------+
| 2009 | | | | | |
+---------------------+------------+-----------+-----------+------------+------------+
| Trade payables - | - | 1,500 | 4,087 | - | - |
| Non-interest | | | | | |
| bearing | | | | | |
+---------------------+------------+-----------+-----------+------------+------------+
| | | | | | |
+---------------------+------------+-----------+-----------+------------+------------+
| 2008 | | | | | |
+---------------------+------------+-----------+-----------+------------+------------+
| Trade payables - | - | 3,975 | 8,974 | 58 | - |
| Non-interest | | | | | |
| bearing | | | | | |
+---------------------+------------+-----------+-----------+------------+------------+
| | | | | | |
+---------------------+------------+-----------+-----------+------------+------------+
| Company | | | | | |
+---------------------+------------+-----------+-----------+------------+------------+
| 2009 | | | | | |
+---------------------+------------+-----------+-----------+------------+------------+
| Trade payables - | - | 138 | - | - | - |
| Non-interest | | | | | |
| bearing | | | | | |
+---------------------+------------+-----------+-----------+------------+------------+
| | | | | | |
+---------------------+------------+-----------+-----------+------------+------------+
| 2008 | | | | | |
+---------------------+------------+-----------+-----------+------------+------------+
| Trade payables - | - | 148 | - | - | - |
| Non-interest | | | | | |
| bearing | | | | | |
+---------------------+------------+-----------+-----------+------------+------------+
| | | | | | |
+---------------------+------------+-----------+-----------+------------+------------+
Notes to the financial statements
for the financial year ended 30 June
2009
+-----+-------------------------------------+----------+----------+--+---------+---------+
| 29. | FINANCIAL INSTRUMENTS (continued) | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
+--------------------------+-----------+-------------+--------+---------+----------+--------+
| The following tables detail the company's and the Group's expected maturity for its |
| non-derivative financial assets. The tables have been drawn up based on the undiscounted |
| contractual maturities of the financial assets including interest that will be earned on |
| those assets except where the company/Group anticipates that the cash flow will occur in |
| a different period based on the earliest date on which the Group can expect to receive |
| payment. The table includes both interest and principal cash flows. |
| |
+-------------------------------------------------------------------------------------------+
| | | | | | | |
+--------------------------+-----------+-------------+--------+---------+----------+--------+
| | Weighted |Less than 1 | 1-3 | 3 | 1-5 | 5+ |
| | average | month |months | months | years | years |
| |effective | $'000 | $'000 | - 1 | $'000 | $'000 |
| | interest | | | year | | |
| | rate | | | $'000 | | |
| | % | | | | | |
+--------------------------+-----------+-------------+--------+---------+----------+--------+
| Consolidated | | | | | | |
+--------------------------+-----------+-------------+--------+---------+----------+--------+
| 2009 | | | | | | |
+--------------------------+-----------+-------------+--------+---------+----------+--------+
| Cash and cash | 2.42 | 14,135 | - | - | - | - |
| equivalents | | | | | | |
+--------------------------+-----------+-------------+--------+---------+----------+--------+
| Deposits - Non-interest | - | - | - | 1,090 | - | - |
| bearing | | | | | | |
+--------------------------+-----------+-------------+--------+---------+----------+--------+
| Trade receivables - | - | 11,483 | 23,930 | 12,560 | - | - |
| Non-interest bearing | | | | | | |
+--------------------------+-----------+-------------+--------+---------+----------+--------+
| | | 26,708 | 23,930 | 12,560 | - | - |
+--------------------------+-----------+-------------+--------+---------+----------+--------+
| | | | | | | |
+--------------------------+-----------+-------------+--------+---------+----------+--------+
| 2008 | | | | | | |
+--------------------------+-----------+-------------+--------+---------+----------+--------+
| Cash and cash | 3.73 | 18,288 | - | - | - | - |
| equivalents | | | | | | |
+--------------------------+-----------+-------------+--------+---------+----------+--------+
| Deposits- Non-interest | - | - | - | 3,306 | - | - |
| bearing | | | | | | |
+--------------------------+-----------+-------------+--------+---------+----------+--------+
| Trade receivables - | - | 23,465 | 22,386 | 11,272 | - | - |
| Non-interest bearing | | | | | | |
+--------------------------+-----------+-------------+--------+---------+----------+--------+
| | | 41,753 | 22,386 | 14,578 | - | - |
+--------------------------+-----------+-------------+--------+---------+----------+--------+
| | | | | | | |
+--------------------------+-----------+-------------+--------+---------+----------+--------+
| Company | | | | | | |
+--------------------------+-----------+-------------+--------+---------+----------+--------+
| 2009 | | | | | | |
+--------------------------+-----------+-------------+--------+---------+----------+--------+
| Cash and cash | 2.90 | 11,948 | - | - | - | - |
| equivalents | | | | | | |
+--------------------------+-----------+-------------+--------+---------+----------+--------+
| Deposits- Non-interest | - | 8 | - | - | - | - |
| bearing | | | | | | |
+--------------------------+-----------+-------------+--------+---------+----------+--------+
| Trade receivables - | - | 592 | 2,724 | 379 | - | - |
| Non-interest bearing | | | | | | |
+--------------------------+-----------+-------------+--------+---------+----------+--------+
| Intercompany loan - | 4.80 | - | - | 7,501 | 11,116 | 42,273 |
| Variable interest rate | | | | | | |
| instruments | | | | | | |
+--------------------------+-----------+-------------+--------+---------+----------+--------+
| | | 12,548 | 2,724 | 7,860 | 11,116 | 42,273 |
+--------------------------+-----------+-------------+--------+---------+----------+--------+
| | | | | | | |
+--------------------------+-----------+-------------+--------+---------+----------+--------+
| 2008 | | | | | | |
+--------------------------+-----------+-------------+--------+---------+----------+--------+
| Cash and cash | 6.91 | 9,626 | - | - | - | - |
| equivalents | | | | | | |
+--------------------------+-----------+-------------+--------+---------+----------+--------+
| Deposits- Non-interest | - | 2 | - | - | - | - |
| bearing | | | | | | |
+--------------------------+-----------+-------------+--------+---------+----------+--------+
| Trade receivables - | - | 1,258 | 1,400 | - | - | - |
| Non-interest bearing | | | | | | |
+--------------------------+-----------+-------------+--------+---------+----------+--------+
| Intercompany loan - | 6.73 | - | - | 4,931 | 29,528 | 33,661 |
| Variable interest rate | | | | | | |
| instruments | | | | | | |
+--------------------------+-----------+-------------+--------+---------+----------+--------+
| | | 10,886 | 1,400 | 4,931 | 29,528 | 33,661 |
+--------------------------+-----------+-------------+--------+---------+----------+--------+
Notes to the financial statements
for the financial year ended 30 June
2009
+-----+-------------------------------------+----------+----------+--+---------+---------+
| 29. | FINANCIAL INSTRUMENTS (continued) | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | i) Fair Value of Financial | | | | | |
| | Instruments | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | The fair values of financial assets and financial liabilities are determined as |
| | follows:* |
| | The fair value of other financial assets and financial liabilities are |
| | determined in accordance with generally accepted pricing models based on |
| | discounted cash flow analysis using prices from observable current market |
| | transactions;* |
| | Foreign currency forward contracts are measured using quoted forward exchange |
| | rates and yield curves derived from quoted interest rates matching maturities of |
| | the contracts. |
| | The directors consider that the carrying amount of financial assets and |
| | financial liabilities recorded at amortised cost in the financial statements |
| | approximates their fair values. |
+-----+----------------------------------------------------------------------------------+
| | | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
+-----+-------------------------------------+----------+----------+--+---------+---------+
| 30. | SUBSEQUENT EVENTS | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | There has not been any matter or circumstance, other than that referred to in |
| | the financial statements or notes thereto, that has arisen since the end of the |
| | financial year, that has significantly affected, or may significantly affect, |
| | the operations of the Group, the results of those operations, or the state of |
| | affairs of the Group in future financial years. |
+-----+----------------------------------------------------------------------------------+
| | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
+-----+-------------------------------------+----------+----------+--+---------+---------+
| 31. | ADDITIONAL COMPANY INFORMATION | | | | | |
+-----+-------------------------------------+----------+----------+--+---------+---------+
| | eServGlobal Limited is a listed public company, incorporated in Australia and |
| | operating in Australia, Europe, the Middle East, North Africa, Asia/Pacific and |
| | the Americas. |
+-----+-------------------------------------+----------+----------+--+---------+---------+
+------+------------------------------------+-----------------------------------------+
| | Registered Office | |
+------+------------------------------------+-----------------------------------------+
| | Level 3, | |
| | 6 O'Connell Street | |
| | Sydney NSW 2000 | |
| | Australia | |
| | Tel: +61 2 93642700 | |
+------+------------------------------------+-----------------------------------------+
Additional Securities Exchange Information
as at 18 August 2009
+---------------------------------+------------+---------+--+---------------------+--+------------+---------+
| Ordinary share capital |
+-----------------------------------------------------------------------------------------------------------+
| 196,847,706 fully paid ordinary shares are held by 1,315 individual shareholders on the |
| Australian Securities Exchange and 94 individual depository interest holders on the London |
| Stock Exchange (AIM). |
| All issued ordinary shares carry one vote per share. |
+-----------------------------------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------------------------------+
| Options |
+-----------------------------------------------------------------------------------------------------------+
| 61 individual option holders hold 3,258,805 options |
| Options do not carry a right to vote. |
+-----------------------------------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------------------------------+
| Distribution of holders of equity securities |
+-----------------------------------------------------------------------------------------------------------+
| | Fully Paid | Depository | Options- not |
| | Ordinary Shares |Interests Listed on | listed |
| | Listed on ASX | LSE (AIM) | |
+---------------------------------+-------------------------+---------------------+-------------------------+
| 1-1,000 | 99 | 10 | - |
+---------------------------------+-------------------------+---------------------+-------------------------+
| 1,001-5,000 | 503 | 14 | - |
+---------------------------------+-------------------------+---------------------+-------------------------+
| 5,001-10,000 | 243 | 9 | 18 |
+---------------------------------+-------------------------+---------------------+-------------------------+
| 10,001-100,000 | 398 | 32 | 36 |
+---------------------------------+-------------------------+---------------------+-------------------------+
| 100,001-Over | 72 | 29 | 7 |
+---------------------------------+-------------------------+---------------------+-------------------------+
| Total | 1,315 | 94 | 61 |
+---------------------------------+-------------------------+---------------------+-------------------------+
| Holding less than a marketable | 100 | | |
| parcel | | | |
+---------------------------------+-------------------------+---------------------+-------------------------+
| |
+-----------------------------------------------------------------------------------------------------------+
| Substantial shareholders | Number | Percentage |
+-----------------------------------------------------------+---------------------+-------------------------+
| Guinness Peat Group plc and its subsidiaries | 37,301,296 | 18.97% |
+-----------------------------------------------------------+---------------------+-------------------------+
| Gartmore Investment Limited | 19,885,760 | 10.10% |
+-----------------------------------------------------------+---------------------+-------------------------+
| MHB Holdings Pty Ltd | 17,322,713 | 8.80% |
+-----------------------------------------------------------+---------------------+-------------------------+
| Wallaby Hill Pty Ltd | 15,055,982 | 7.65% |
+-----------------------------------------------------------+---------------------+-------------------------+
| UBS Nominees Pty Ltd and its related bodies | 14,034,828 | 7.13% |
| corporate | | |
+-----------------------------------------------------------+---------------------+-------------------------+
| |
+-----------------------------------------------------------------------------------------------------------+
| Twenty largest holders of quoted equity securities |
+-----------------------------------------------------------------------------------------------------------+
| Australian Securities Exchange | London Stock Exchange (AIM) |
+--------------------------------------------------------+--------------------------------------------------+
| Ordinary Shareholders | Number | % of | Depository Interest | Number | % of |
| | | capital | Holders | | capital |
+---------------------------------+------------+---------+---------------------------+------------+---------+
| GPG NOMINEES PTY LIMITED | 28,131,946 | 14.29% | VIDACOS NOMINEES LIMITED | 14,034,828 | 7.13% |
+---------------------------------+------------+---------+---------------------------+------------+---------+
| MHB HOLDINGS PTY LTD | 17,322,713 | 8.80% | NORTRUST NOMINEES LIMITED | 7,048,243 | 3.58% |
+---------------------------------+------------+---------+---------------------------+------------+---------+
| WALLABY HILL PTY LTD | 15,055,982 | 7.65% | CHASE (GA GROUP) NOMINEES | 3,995,965 | 2.03% |
| | | | LIMITED | | |
+---------------------------------+------------+---------+---------------------------+------------+---------+
| NATIONAL NOMINEES LIMITED | 8,963,319 | 4.55% | NORTRUST NOMINEES LIMITED | 3,480,907 | 1.77% |
+---------------------------------+------------+---------+---------------------------+------------+---------+
| LINK 405 PTY LTD | 8,006,536 | 4.07% | CHASE NOMINEES LIMITED | 2,529,092 | 1.28% |
+---------------------------------+------------+---------+---------------------------+------------+---------+
| JOHN CRAIG HALLIDAY | 7,272,727 | 3.69% | VIDACOS NOMINEES LIMITED | 1,811,265 | 0.92% |
+---------------------------------+------------+---------+---------------------------+------------+---------+
| GPG NOMINEES PTY LTD | 7,169,350 | 3.64% | NORTRUST NOMINEES LIMITED | 1,048,407 | 0.53% |
+---------------------------------+------------+---------+---------------------------+------------+---------+
| RBC DEXIA INVESTOR SERVICES | 6,640,627 | 3.37% | BNY MELLON NOMINEES | 974,969 | 0.50% |
| AUSTRALIA NOMINEES PTY LIMITED | | | LIMITED | | |
+---------------------------------+------------+---------+---------------------------+------------+---------+
| ANDY TAYLOR | 5,794,535 | 2.94% | PERSHING NOMINEES LIMITED | 927,500 | 0.47% |
+---------------------------------+------------+---------+---------------------------+------------+---------+
| BT PORTFOLIO SERVICES LIMITED | 2,450,000 | 1.24% | BNY GIL CLIENT ACCOUNT | 878,756 | 0.45% |
| | | | (NOMINEES) LIMITED | | |
+---------------------------------+------------+---------+---------------------------+------------+---------+
| GPG NOMINEES PTY LTD | 2,000,000 | 1.02% | EUROCLEAR NOMINEES | 693,000 | 0.35% |
| | | | LIMITED | | |
+---------------------------------+------------+---------+---------------------------+------------+---------+
| JAMES CONE | 1,946,008 | 0.99% | BARNARD NOMINEES LTD | 675,000 | 0.34% |
+---------------------------------+------------+---------+---------------------------+------------+---------+
| MR IAN FRASER MCMANAMEY | 1,818,654 | 0.92% | CREDIT AGRICOLE CHEUVREUX | 495,000 | 0.25% |
| | | | INTERNATIONAL LIMITED | | |
+---------------------------------+------------+---------+---------------------------+------------+---------+
| ADRIAN SEAL | 1,764,862 | 0.90% | TD WATERHOUSE NOMINEES | 465,585 | 0.24% |
| | | | (EUROPE) LIMITED | | |
+---------------------------------+------------+---------+---------------------------+------------+---------+
| HSBC CUSTODY NOMINEES | 1,739,172 | 0.88% | HAREWOOD NOMINEES LIMITED | 445,901 | 0.23% |
| (AUSTRALIA) LIMITED | | | | | |
+---------------------------------+------------+---------+---------------------------+------------+---------+
| PATRICK MCGRORY | 1,730,426 | 0.88% | BNY NORWICH UNION | 367,770 | 0.19% |
| | | | NOMINEES LIMITED | | |
+---------------------------------+------------+---------+---------------------------+------------+---------+
| J P MORGAN NOMINEES AUSTRALIA | 1,715,229 | 0.87% | BNY GIL CLIENT ACCOUNT | 331,287 | 0.17% |
| LIMITED | | | (NOMINEES) LIMITED | | |
+---------------------------------+------------+---------+---------------------------+------------+---------+
| ANZ NOMINEES LIMITED | 1,517,253 | 0.77% | W B NOMINEES LIMITED | 290,500 | 0.15% |
+---------------------------------+------------+---------+---------------------------+------------+---------+
| MR RAYMOND JOHN MURPHY | 977,546 | 0.50% | BARNARD NOMINEES LTD | 275,000 | 0.14% |
+---------------------------------+------------+---------+---------------------------+------------+---------+
| FORBAR CUSTODIANS LIMITED | 908,000 | 0.46% | E*TRADE UK NOMINEES | 222,360 | 0.11% |
| | | | LIMITED | | |
+---------------------------------+------------+---------+--+---------------------+--+------------+---------+
Additional Securities Exchange Information
as at 18 August 2009
+----------------------------------------------------------------------------------+
| Secretary |
+----------------------------------------------------------------------------------+
| Ian Buddery |
+----------------------------------------------------------------------------------+
| |
+----------------------------------------------------------------------------------+
| Chief Financial Officer |
+----------------------------------------------------------------------------------+
| Jonathan Macleod (B Com, CA (Aust) CA (NZ), GAICD) |
+----------------------------------------------------------------------------------+
| |
+----------------------------------------------------------------------------------+
| Registered Office |
+----------------------------------------------------------------------------------+
| Level 3, |
| 6 O'Connell Street |
| Sydney NSW 2000 |
| Australia |
| Tel: +61.2.93642700 |
+----------------------------------------------------------------------------------+
| |
+----------------------------------------------------------------------------------+
| Principal administration office |
+----------------------------------------------------------------------------------+
| Level 3, |
| 6 O'Connell Street |
| Sydney NSW 2000 |
| Australia |
| Tel: +61.2.93642700 |
+----------------------------------------------------------------------------------+
| |
+----------------------------------------------------------------------------------+
| |
+----------------------------------------------------------------------------------+
| |
+----------------------------------------------------------------------------------+
| Share Registry |
+----------------------------------------------------------------------------------+
| Computershare Registry Services Pty Ltd |
| Level 3, 60 Carrington Street |
| Sydney NSW 2000 |
| Australia |
+----------------------------------------------------------------------------------+
| |
+----------------------------------------------------------------------------------+
| Stock Exchange listings |
+----------------------------------------------------------------------------------+
| eServGlobal Limited's ordinary shares are quoted on the Australian Securities |
| Exchange Limited under the ticker "ESV", and on the London Stock Exchange (AIM) |
| as Depositary Interests under the ticker "ESG". |
+----------------------------------------------------------------------------------+
| |
+----------------------------------------------------------------------------------+
| Annual General Meeting |
+----------------------------------------------------------------------------------+
| The annual general meeting will be held Press Room 1 at the Radisson Plaza |
| Hotel, 27 O'Connell Street Sydney on Thursday 1 October, 2009 at 3pm. The |
| business of the meeting will include the normal business for an annual general |
| meeting and will be set out in a formal Notice of Meeting. |
+----------------------------------------------------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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