A report examine theprovisions and contingencies in two different company, one is Rheinmetall AG aapliesGerman local GAAP, another is GentrackGROUP LIMITED appliesInternational Financial Reporting Standards (IFRS). Please examine these in following orders

(a) Determine the total value of IAS 37 and IAS 19 provisions on the balance sheet.

(b) Determine the total value of IAS 37 and IAS 19 provisions as a percentage of totalassets.

c) List, in descending order, the types of IAS 37 and IAS 19 provisions that companiesrecognise according to their book values.

(d) List, in descending order, the most frequent types of IAS 37 and IAS 19 provisions thatcompanies recognise according to how often they occur in your chosen annual reports.

(e) Identify the company that has the most IAS 37 and IAS 19 provisions

(f) In each of your chosen companies, identify whether they disclose the followinginformation for each class of provision:(i) the basis of measurement, including any assumptions used; and(ii) a schedule showing changes in the provision during the year, as per paragraph 84of IAS 37/AASB 137.

(g) For your chosen companies, if they have contingent liabilities or contingent assets:(i) have the companies satisfied the disclosure requirements of paragraph 85 of IAS37/AASB137;(ii) have the companies satisfied the disclosure requirements of paragraph 86 of IAS37/AASB137? and(iii) does the Australian company have more contingent liabilities or contingent assetsthan the German company (as a percentages of total assets and total liabilities)?

(h) For provisions relating to employee entitlements, is the change in the provision(s) fromlast year to the current year positively related to the change in the number of employeesover that time? (Hint: calculate the change as a % of the prior years balance.)

(i) Consider in the latest available Annual Reports (2014 or 2015) of these two companies,whether the levels of compliance with IAS 37 and IAS 19, and levels of provisions (aspercentages of total assets and total liabilities) are influenced by cultural differences atcountry level and firm level. To satisfy the requirements, you must:(i) identify the relevant cultural factors at the country level and at the firm level, doNOT use Hofstede cultural dimensions;(ii) apply TWO country level and TWO firm-level cultural factors in your analyses;and(iii) base your analyses only on items listed under (e), (f), (g) and (h).

More information can be found in Attach files.

Financial Accounting, Reporting and Auditing Services IFRS versus German GAAP (revised) Summary of similarities and differences pwc IFRS versus German GAAP (revised) Summary of similarities and differences Edited by PricewaterhouseCoopers All rights reserved. Reproductions, microfilming, storage and processing in electronic media are not permitted without the publisher's approval. Typesetting Nina Irmer, Digitale Gestaltung & Medienproduktion, Frankfurt am Main Printing Kohlhammer und Wallishauser GmbH, Hechingen Printed in Germany February 2010 PricewaterhouseCoopers refers to PricewaterhouseCoopers AG Wirtschaftsprfungsgesellschaft and the other separate and legally independent member firms of PricewaterhouseCoopers International Limited. IFRS versus German GAAP (revised) Summary of similarities and differences Contents Contents Abbreviations ................................................................................................5 Introduction ...................................................................................................6 A Comparison of IFRS and German GAAP (revised) .................................7 1 Accounting framework.............................................................................7 2 Financial statements ...............................................................................8 3 Consolidated financial statements.........................................................12 4 Business combinations..........................................................................18 5 Revenue recognition .............................................................................24 6 Pensions and other long-term benefits..................................................26 6.1 General considerations ......................................................................26 6.2 Measurement of obligation .................................................................27 6.3 Plan assets.........................................................................................28 6.4 Recognition ........................................................................................28 6.5 Presentation and disclosures .............................................................29 6.6 Transition rules...................................................................................30 7 Assets - non-financial assets................................................................30 8 Financial assets ....................................................................................39 9 Liabilities ...............................................................................................46 10 Financial liabilities .................................................................................48 11 Equity instruments.................................................................................53 12 Derivatives and hedging........................................................................54 12.1 Derivatives - non-hedging..................................................................54 12.2 Hedge accounting requirements.........................................................56 13 Deferred taxes.......................................................................................62 14 Other accounting and reporting topics...................................................65 14.1 Share-based payments ......................................................................65 3 Contents IFRS versus German GAAP (revised) Summary of similarities and differences 14.2 Foreign currency translation .............................................................. 66 14.3 Related parties................................................................................... 68 15 Management report .............................................................................. 68 B Comparative overview of IFRS, IFRS for SMEs and German GAAP (revised)..................................................................................... 72 1 Summary presentation ......................................................................... 72 2 Recognition and measurement in the statement of financial position and the statement of comprehensive income.......................... 73 2.1 Assets................................................................................................ 73 2.2 Inventories ......................................................................................... 75 2.3 Equity and liabilities ........................................................................... 76 2.4 Other relevant issues......................................................................... 78 2.5 Consolidated financial statements and business combinations ......... 82 2.6 Disclosure notes ................................................................................ 84 2.7 Other issues ...................................................................................... 84 Contacts ..................................................................................................... 86 4 IFRS versus German GAAP (revised) Summary of similarities and differences Abbreviations Abbreviations AktG Aktiengesetz [Stock Corporation Act] ATZ Altersteilzeit [partial retirement] BilMoG Bilanzrechtsmodernisierungsgesetz [German Act on the Modernisation of Accounting Law] CGU Cash generating unit DB Defined benefit DBO Defined benefit obligation DC Defined contribution FIFO First in, first out HGB Handelsgesetzbuch [German Commercial Code] GAS German Accounting Standard [Deutscher Rechnungslegungs Standard] IAS International Accounting Standards ICS Internal control system IFRS International Financial Reporting Standards incl. Including InvG Investmentgesetz [German Investment Act] IPR&D In-process research and development LIFO Last in, first out MLP Minimum lease payments OCI Other comprehensive income POC Percentage of completion PPE Property, plant and equipment PublG Publizittsgesetz [German Public Disclosure Act] PUCM Projected unit credit method R Revised RMS Risk management system RckAbzinsV Rckstellungsabzinsungsverordnung Sec. Section SMEs Small and medium-sized entities SoCIE Statement of changes in equity Subsec. Subsection 5 Introduction IFRS versus German GAAP (revised) Summary of similarities and differences Introduction The global convergence towards International Financial Reporting Standards (IFRS) continuously influences the development of German statutory accounting and reporting requirements (German GAAP). With this publication we hope to provide a broad understanding of the key similarities and differences between IFRS and German GAAP (revised). The first part of this document includes a tabular summary of the similarities and differences between IFRS and German GAAP (revised). The second part of this document includes a comparative overview of the similarities and differences between IFRS, IFRS for SMEs and German GAAP (revised). The application of IFRS is required for consolidated financial statements of public companies that are listed in any EU Member State; other companies have the option to apply IFRS in their consolidated financial statements. The use of IFRS in separate entity financial statements is voluntary and only allowed for presentation purposes. German commercial law continues to require the application of German GAAP especially for profit distribution, tax and statutory presentation and disclosure purposes. The recent reform of German GAAP (Bilanzrechtsmodernisierungsgesetz - BilMoG) marked the most comprehensive revision of statutory accounting principles in the last 20 years. Its aim was to establish modern but less complex accounting principles as an adequate, sustainable alternative to IFRS and to improve the informational content of German GAAP financial reporting by implementing elements similar to IFRS. The revision implements numerous substantial changes in the recognition and measurement criteria, several new and changed disclosure requirements as well as disclosure of further information in the management report. The revision reduces the differences between IFRS and German GAAP (revised) in certain areas, but increases or changes them in other areas. No summary publication can do justice to the many differences of detail that exist between IFRS and German GAAP (revised). Even if the guidance is similar, there may be differences in the detailed application which could have a material impact on the financial statements. This publication focuses on the measurement similarities and differences most commonly found in practice. When applying the individual accounting frameworks, readers should consult all the relevant accounting standards and, where applicable, their national law. Listed companies should also follow relevant securities regulations - for example local stock exchange listing rules. This publication takes account of authoritative pronouncements issued under IFRS and German GAAP (revised) up to 30 June 2009, issued under IFRS for SMEs up to 9 July 2009 and is based on the most recent version of those pronouncements. We have noted certain developments within the tabular summary; however, not all recent developments or exposure drafts have been included. 6 IFRS versus German GAAP (revised) Summary of similarities and differences Comparison of IFRS and German GAAP (revised) A Comparison of IFRS and German GAAP (revised) 1 Accounting framework IFRS German GAAP (revised) Historical cost is the primary basis of accounting. However, IFRS permits the revaluation to fair value of intangible assets, property, plant and equipment, investment property and inventories in certain industries (e.g. commodity brokers/dealers). Historical cost is the main accounting convention. No revaluations are allowed. IFRS also requires that certain categories of financial instruments and certain biological assets be reported at fair value. A second exemption applies to assets which are deprived of all other creditor's access and exclusively relate to the coverage of pension obligations or comparable long-term liabilities. They also have to be reported at fair value. IFRS German GAAP (revised) Entities may depart from a standard under IFRS (extremely rare in practice), if management of that entity concludes that compliance with the standard or interpretation would render financials to be misleading. The reasons for such a conclusion and departure along with the financial impact need to be disclosed. If specific circumstances result in the financial statements not showing a true and fair view, additional disclosures are required in the notes (extremely rare in practice). IFRS German GAAP (revised) Full retrospective application of all IFRS effective at the reporting date for an entity's first IFRS financial statements, with some optional exemptions and limited mandatory exceptions. Comparative information is prepared and presented on the basis of IFRS. Almost all adjustments arising from the first time application of IFRS are adjusted against opening retained earnings for the first period presented on an IFRS basis. Some adjustments are made against goodwill or other classes of equity. 1 Historical cost or fair value An exception applies to banks/financial institutions, where all financial instruments held for trading are to be measured at fair value (see \"Financial assets\"). No specific guidance. 1 Fair presentation over-ride First-time adoption of accounting frameworks Most changes resulting from BilMoG are effective for financial years beginning on or after 1 January 2010. Earlier adoption of the revised regulations from 1 January 2009 is allowed (or prescribed), provided that all revised regulations are adopted. A selective application of individual revised regulations is prohibited. (Some rules resulting from EU directives with compulsory implementation have to be adopted in financial years beginning after 31 December 2008 (e.g. disclosures on related parties)). General transition rules: In principle, effects from conversion to BilMoG affect net income, except where transition rules allow treatment with no net income effect (especially through revenue reserve). Income and expenses arising from the conversion to the new regulations are to be included in the items \"extraordinary income\" and \"extraordinary expenses\". Prior year values are to be stated, although they need not be adjusted. 7 Comparison of IFRS and German GAAP (revised) IFRS versus German GAAP (revised) Summary of similarities and differences 2 Components of financial statements Financial statements IFRS German GAAP (revised) A complete set of financial statements comprises: Similar to IFRS for consolidated financial statements, as well as for publicly traded companies.2 statement of financial position; statement of comprehensive income; statement of changes in equity; statement of cash flows; and notes (incl. a summary of significant accounting policies). Further requirements apply when accounting policies are applied retrospectively or items are reclassified. For single-entity financial statements, statement of cash flows and statement of changes in equity are not required.3 It is optional for companies who have to prepare consolidated financial statements to include segment reporting. Publicly traded companies who do not have to prepare consolidated financial statements can add segment reporting to their individual financial statements. Further financial statements include a management report (see \"Management report\"). Statement of financial position (balance sheet) IFRS IFRS does not prescribe a particular format. Currenton-current presentation of assets and liabilities is used. A liquidity presentation may be used when this provides more relevant and reliable information. IFRS requires, as a minimum, the presentation of certain items on the face of the balance sheet. Offsetting assets and liabilities is only allowed where an entity has a legally enforceable right to offset. Minority interests are presented as a part of equity. 8 Separate presentation of fixed assets and current assets is required. Current assets are those not intended for long-term use in the business. Offsetting of assets and liabilities is only allowed under restrictive conditions. 3 Items on the face of the balance sheet are presented in increasing order of liquidity. Current assets/liabilities include items due or expected to be realised within the next 12 months. Deferred taxes are classified as non-current on the balance sheet with a currenton-current break up discussed in the notes. 2 German GAAP (revised) Minority interests are presented as a part of equity. Entities with specific legal forms (e.g. corporations) are required to use a particular balance sheet format. Additional requirements exist for banks and insurance companies. A company is publicly traded under German GAAP when it utilises an organised market for trading its issued securities (as defined by the German Securities Trading Act) or when it has applied for an accreditation to trade its issued securities on an organised market. However some companies are exempt from preparation of financial statements when their revenue and profit are below certain thresholds in two consecutive years. IFRS versus German GAAP (revised) Summary of similarities and differences Comparison of IFRS and German GAAP (revised) IFRS German GAAP (revised) An entity can choose to present income and expense in either: In general similar to IFRS. a single statement of comprehensive income or two statements - a statement displaying components of profit or loss (separate income statement) and a second statement beginning with profit or loss and displaying components of other comprehensive income (statement of comprehensive income). IFRS does not prescribe a standard format for the income statement. Expenditure is presented either by function or by nature. Certain items are presented on the face of the income statement. Income statement/statement of comprehensive income Under German GAAP there is no \"statement of comprehensive income\". Income statement may be presented using the total cost (nature of expense) or the cost of sales (function of expense) method. For both methods a minimum structure is provided. Under BilMoG, income from discounting provisions is to be included in \"other interest and similar income\ACCT 3563 Group and Individual Reports ACCT3563 - Issues in Financial Reporting & Analysis Semester 1, 2016 Individual Report FIRST SUBMISSION DUE: 11.59 p.m. Saturday 2 April 2016 SECOND SUBMISSION DUE: 11.59 p.m. Saturday 14 May 2016 (These reports are worth a total of 20% of the final marks for this course) BACKGROUND International Financial Reporting Standards (IFRS) have been adopted in about 130 countries, with many adoptions occurring from 2005. For example, Australia and Germany adopted IFRS in 2005. In Australia, IFRS is now used by most companies, listed or unlisted. In Germany (and in every EU country) IFRS is only required in the consolidated accounts of listed companies. Local GAAP is still used by unlisted companies and in the parent company accounts of listed companies. Although IFRS can be used voluntarily in unconsolidated accounts, only local GAAP is required for taxation and dividend distribution purposes in Germany. So if German local GAAP differs from IFRS, then the accounting policies in consolidated accounts may differ from those in the parent company's accounts. In Germany, local GAAP is called Handelsgesetzbuch (HGB for short). Similarities and differences between IFRS and German GAAP (HGB) are summarised in the PriceWaterhouseCoopers reference below. Recent research has raised the concern that the adoption of IFRS does not necessarily lead to high-quality reporting across different jurisdictions, because different country and firm-level cultural factors influence financial reporting practices. One of the papers demonstrating this difference in reporting practices is Kvaal and Nobes (2010) below; it covers Australia and Germany and other countries. The papers below by Tarca et al (2013) and Hellman et al (2015) test the model based on types of financing proposed by Nobes (1998), i.e., Class A, Class B accounting systems. Different financing types were found to influence company accounting choices, including the impact of IFRS adoption. Other things such as legal system, tax, culture to name only three, can also influence company accounts. The point is that even though IFRS has been adopted, underlying factors can still make a difference between the financial statements of companies in two different countries. Kvaal and Nobes (2010), Tarca et al (2013) and Hellman et al (2015) do not examine provisions and contingencies. This project does that. 1 Some of the background research literature appears below and is uploaded on Moodle. PriceWaterCoopers, IFRS versus German GAAP (revised): Summary of Similarities and Differences, 2010. A. Tarca, R, Morris and M. Moy \"An Investigation of the Relationship between Use of International Accounting Standards and Source of Company Finance in Germany\Gentrack Group Limited Financial Statements For the year ended 30 September 2014 GENTRACK GROUP F INANCIAL STATEMENTS 201 4_ www.ge n trac k.com TA B L E O F C O N T E N T S _ Company Directory 3 Statement of Changes in Equity Auditor's Report 4 Statement of Cash Flows 10 Directors' Responsibility Statement 6 Notes to the Financial Statements 11 Statement of Comprehensive Income 7 Disclosures 39 Statement of Financial Position 8 2 / TA B L E O F C O N T E N T S 9 C O M PA N Y D I R E C T O R Y _ FOR THE YEAR ENDED 30 SEPTEMBER 2014 REGISTERED OFFICE AUDITOR Gentrack Group Limited 25 College Hill, Freemans Bay, Auckland 1011, New Zealand Phone: +64 9 966 6090 Facsimile: +64 9 376 7223 KPMG Level 9, 390 St Kilda Road, Melbourne, VIC 3004 Australia Phone: +61 3 9867 9100 Facsimile: +61 9867 9140 LEGAL ADVISERS POSTAL ADDRESS PO Box 3288, Shortland Street, Auckland 1140 New Zealand 18 Viaduct Harbour Avenue, Auckland, 1140 Phone: +64 9 367 5800 Facsimile: +64 9 367 5875 BELL GULLY KENSINGTON SWAN BANKERS ANZ LIMITED BARCLAYS PLC NEW ZEALAND INCORPORATION NUMBER 3768390 SHARE REGISTRAR NEW ZEALAND AUSTRALIAN REGISTERED BODY NUMBER (ARBN) 169 195 751 DIRECTORS John Clifford, Chairman Andy Coupe James Docking Graham Shaw Leigh Warren COMPANY SECRETARY Jon Kershaw LINK MARKET SERVICES LIMITED Level 7, Zurich House, 21 Queen Street, Auckland 1010 PO Box 91 976, Auckland 1142 Phone: +64 9 375 5998 Facsimile: +64 9 375 5990 Email: enquiries@linkmarketservices.com AUSTRALIA LINK MARKET SERVICES LIMITED Level 12, 680 George Street, Sydney, NSW 2000 Locked Bag A14, Sydney South, NSW 1235 Phone: +61 1300 554 474 Facsimile: +2 9287 0303 Email: enquiries@linkmarketservices.com C O M PA N Y D I R E C T O R Y / 3 Independent auditor's report To the shareholders of Gentrack Group Limited Report on the company and group nancial statements We have audited the accompanying nancial statements of Gentrack Group Limited (''the company'') and the group, comprising the company and its subsidiaries, on pages 7 to 38. The nancial statements comprise the statements of nancial position as at 30 September 2014, the statements of comprehensive income, changes in equity and cash ows for the year then ended, and a summary of signicant accounting policies and other explanatory information, for both the company and the group. Directors' responsibility for the company and group nancial statements The directors are responsible for the preparation of company and group nancial statements in accordance with generally accepted accounting practice in New Zealand and International Financial Reporting Standards that give a true and fair view of the matters to which they relate, and for such internal control as the directors determine is necessary to enable the preparation of company and group nancial statements that are free from material misstatement whether due to fraud or error. Auditor's responsibility Our responsibility is to express an opinion on these company and group nancial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing (New Zealand). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the company and group nancial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the company and group nancial statements. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company and group's preparation of the nancial statements that give a true and fair view of the matters to which they relate 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 company and group's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates, as well as evaluating the presentation of the nancial statements. We believe that the audit evidence we have obtained is sufcient and appropriate to provide a basis for our audit opinion. Our rm has also provided other services to the company and group in relation to taxation and audit and advisory work in connection with the Initial Public Offering. Subject to certain restrictions, partners and employees of our rm may also deal with the company and group on normal terms within the ordinary course of trading activities of the business of the company and group. These matters have not impaired our independence as auditor of the company and group. The rm has no other relationship with, or interest in, the company and group. 4 / AUDITOR'S REPORT Opinion In our opinion the nancial statements on pages 7 to 38: comply with generally accepted accounting practice in New Zealand; give a true and fair view of the nancial position of the company and the group as at 30 September 2014 and of the nancial performance and cash ows of the company and the group for the year then ended. Report on other legal and regulatory requirements In accordance with the requirements of sections 16(1)(d) and 16(1)(e) of the Financial Reporting Act 1993, we report that: we have obtained all the information and explanations that we have required; and in our opinion, proper accounting records have been kept by Gentrack Group Limited as far as appears from our examination of those records. 26 November 2014 Auckland AUDITOR'S REPORT / 5 D I R E C T O R S ' R E S P O N S I B I L I T Y S TAT E M E N T _ FOR THE YEAR ENDED 30 SEPTEMBER 2014 In the opinion of the directors of Gentrack Group the financial statements and notes, on pages 7 to 38, comply with the New Zealand Generally Accepted Accounting Practice and give a true and fair view of the financial position of the Group and Company as at 30 September 2014 and the results of operations and cash flows for the year ended on that date. They have been prepared using the appropriate accounting policies, which have been consistently applied and supported by reasonable judgements and estimates. The directors believe that proper accounting records have been kept which enable, with reasonable accuracy, the determination of the financial position of the company and facilitate compliance of the financial statements with the Financial Reporting Act 1993. The directors consider that they have taken adequate steps to safeguard the assets of the Company and to prevent and detect fraud and other irregularities. Internal control procedures are also considered to be sufficient to provide reasonable assurance as to the integrity and reliability of the financial statements. The directors are pleased to present the financial statements of Gentrack Group Limited for the year ended 30 September 2014. 6 / D I R E C T O R S R E S P O N S I B I L I T Y S TAT E M E N T For and on behalf of the Board of Directors: James Docking Chief Executive Officer Date: 26 November 2014 John Clifford Chairman Date: 26 November 2014 S TAT E M E N T O F C O M P R E H E N S I V E I N C O M E _ FOR THE YEAR ENDED 30 SEPTEMBER 2014 ($000) GROUP NOTES PARENT 2014 2013 Revenue 3 38,531 40,126 Expenditure 4 (25,489) 13,042 Profit before depreciation, amortisation, non-operating costs, financing and tax 2014 2013 -. -. (25,878) (277) (177) 14,248 (277) (177) Depreciation and amortisation 5 (2,251) (2,207) -. -. Non-operating costs 6 (3,865) (170) (3,865) (87) (4,142) (264) Profit before financing and tax 6,926 11,871 Finance income 555 94 Finance expense (1,465) (2,644) (1,512) (910) (2,550) 4,819 32,789 Net finance (expense)/income 7 Profit before tax Income tax (expense)/benefit 6,331 34,682 (1,893) 6,016 32,525 (2,633) (2,685) 432 541 6,636 1,109 33,066 229 -. -. 3,036 Profit attributable to the shareholders of the company 677 3,383 8 9,321 6,865 1,109 33,066 $0.05 $0.12 OTHER COMPREHENSIVE INCOME Exchange differences on translation of foreign operations 12 Total comprehensive income for the year (347) EARNINGS PER SHARE FROM PROFIT ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE PARENT (EXPRESSED IN DOLLARS PER SHARE) Basic and diluted earnings per share - restated for 3:1 share split 10 The accompanying notes form part of these financial statements. S TAT E M E N T O F C O M P R E H E N S I V E I N C O M E / 7 S TAT E M E N T O F F I N A N C I A L P O S I T I O N _ AS AT 30 SEPTEMBER 2014 ($000) GROUP NOTES 2014 PARENT 2013 2014 2013 CURRENT ASSETS Cash and cash equivalents 14 5,249 143 10 -. Trade and other receivables 15 10,231 11,196 72 292 Amount owing from subsidiary 24 -. -. 201 402 15,480 11,339 283 694 Total current assets NON-CURRENT ASSETS Property, plant and equipment 16 565 700 -. -. Goodwill 17 40,277 40,277 -. -. Intangibles 18 20,233 22,275 -. -. Loan to related parties 24 -. -. 6,389 288 Deferred tax asset 9 562 627 -. -. Investment 19 -. -. 86,000 86,000 Total non-current assets 61,637 63,879 92,389 86,288 Total assets 77,117 75,218 92,672 86,982 CURRENT LIABILITIES Trade payables and accruals 20 1,426 1,972 141 217 Amount owing to subsidiary 24 -. -. 153 318 3,957 2,944 -. -. 339 351 -. -. 1,324 1,164 -. -. 719 1,923 -. -. -. 111 -. -. Deferred revenues GST payable Employee entitlements 21 Income tax payable Derivative financial liabilities Borrowings 22 6 4,585 -. 4,552 7,771 Total current liabilities 13,050 294 5,087 NON-CURRENT LIABILITIES Employee entitlements 21 279 242 -. -. Borrowings 22 -. 24,030 -. 24,030 Loan from related parties 24 -. -. 4,597 36 Deferred tax liabilities 9 3,371 4,079 -. -. Total non-current liabilities 3,650 28,351 4,597 24,066 Total liabilities 11,421 41,401 4,891 29,153 65,696 33,817 87,781 57,829 Net assets EQUITY Share capital 11 60,396 25,398 60,396 25,398 Retained earnings 13 5,179 7,951 27,385 32,431 Reserves 12 121 468 -. -. 65,696 33,817 87,781 57,829 Total shareholders' equity The accompanying notes form part of these financial statements. 8 / S TAT E M E N T O F F I N A N C I A L P O S I T I O N S TAT E M E N T O F C H A N G E S I N E Q U I T Y _ FOR THE YEAR ENDED 30 SEPTEMBER 2014 GROUP ($000) NOTES Balance as at 1 October 2012 SHARE CAPITAL RETAINED EARNINGS TRANSLATION RESERVE TOTAL EQUITY 25,398 1,315 239 26,952 -. 6,636 -. 6,636 -. -. 229 229 -. 6,636 229 6,865 Balance as at 30 September 2013 25,398 7,951 468 33,817 Balance as at 1 October 2013 25,398 7,951 468 33,817 -. 3,383 -. 3,383 -. -. (347) (347) -. 3,383 (347) 3,036 34,998 -. -. 34,998 -. (6,155) -. (6,155) 60,396 5,179 121 65,696 Profit attributable to the shareholders of the company Other comprehensive income 12 Total comprehensive income for the year, net of tax Profit attributable to the shareholders of the company Other comprehensive income 12 Total comprehensive income/(loss) for the year, net of tax Transactions with owners: Issue of capital 11 Dividend paid (prior to Initial Public Offering) Balance at 30 September 2014 PARENT $000 Balance as at 1 October 2012 SHARE CAPITAL RETAINED EARNINGS 25,398 NOTES (635) TRANSLATION RESERVE TOTAL -. 24,763 Profit attributable to the shareholders of the company -. 33,066 -. 33,066 Total comprehensive income for the year, net of tax -. 33,066 -. 33,066 Balance as at 30 September 2013 25,398 32,431 -. 57,829 Balance at 1 October 2013 25,398 32,431 -. 57,829 Profit attributable to the shareholders of the company -. 1,109 -. 1,109 Total comprehensive income for the year, net of tax -. 1,109 -. 1,109 34,998 -. -. 34,998 -. (6,155) -. (6,155) -. 87,781 Transactions with owners: Issue of capital 11 Dividend paid (prior to Initial Public Offering) Balance at 30 September 2014 60,396 27,385 The accompanying notes form part of these financial statements. S TAT E M E N T O F C H A N G E S I N E Q U I T Y / 9 S TAT E M E N T O F C A S H F L O W S _ FOR THE YEAR ENDED 30 SEPTEMBER 2014 ($000) GROUP NOTES PARENT 2014 2013 2014 39,989 40,101 (29,230) 2013 CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Income tax paid Net cash inflow/(outflow) from operating activities 29(a) -. (26,119) (4,054) (388) (4,467) Payments to suppliers and employees -. (2,404) -. -. 6,292 11,578 (4,054) (388) CASH FLOWS FROM INVESTING ACTIVITIES Property, plant and equipment (110) (460) -. -. Net cash outflow from investing activities (110) (460) -. -. -. 36,000 -. CASH FLOWS FROM FINANCING ACTIVITIES Gross proceeds from issue of share capital 11 Costs in relation to issue of share capital Drawdown of borrowings Repayment of borrowings 36,000 (915) 6,155 -. -. (915) 6,155 -. -. (34,765) (9,080) (34,737) (9,063) Dividends paid prior to Initial Public Offering (6,155) -. (6,155) -. Net interest paid (1,396) (2,287) (1,303) (1,972) -. -. 5,019 11,423 (1,076) (11,367) 4,064 388 (249) 10 Transfers with subsidiaries Net cash (outflow)/inflow from financing activities Net increase/(decrease) in cash held Cash at beginning of the financial year Closing cash and cash equivalents The accompanying notes form part of these financial statements. 1 0 / S TAT E M E N T O F C A S H F L O W S 5,106 -.. 143 392 -. -. 5,249 143 10 -. N O T E S T O T H E F I N A N C I A L S TAT E M E N T S _ FOR THE YEAR ENDED 30 SEPTEMBER 2014 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Gentrack Group Limited is a limited liability company, domiciled and incorporated in New Zealand and registered under the New Zealand Companies Act 1993. The registered office of the Company is 25 College Hill, Auckland 1011, New Zealand. The financial statements presented are for Gentrack Group Limited (the 'Parent'/'Company') and its subsidiaries (together 'the Group') for the year ended 30 September 2014. Last year comparatives are for the year ended 30 September 2013. Gentrack Group Limited is an issuer for the purposes of the Financial Reporting Act 1993 and is listed on the New Zealand Stock Exchange (NZX) and the Australian Securities Exchange (ASX). The consolidated financial statements of the Group for the year ended 30 September 2014 were authorised for issue in accordance with a resolution of the directors on 26 November 2014. The Group's principal activity is the development, integration, and support of enterprise billing and customer management software solutions for the utility (energy and water) and airport industries. (a) CHANGES IN ACCOUNTING POLICY The accounting policies adopted are consistent with those of the previous year. (b) BASIS OF PREPARATION The financial statements have been prepared in accordance with New Zealand Generally Accepted Accounting Practice ('NZ GAAP'). They comply with the New Zealand Equivalents to International Financial Reporting Standards ('NZ IFRS') and other applicable Financial Reporting Standards as appropriate to profit-oriented entities. The financial statements comply with International Financial Reporting Standards ('IFRS'). The financial statements have been prepared in accordance with the requirements of the Financial Reporting Act 1993 and the Companies Act 1993. The Company and Group are profit-oriented entities for financial reporting purposes. The financial statements are prepared on the historical cost basis except that the following assets and liabilities are stated at their fair value: foreign exchange contracts and derivative financial instruments. From 1 April 2014, the new Financial Reporting Act 2013 ('FRA 2013') has come into force replacing the Financial Reporting Act 1993, this is effective for all for-profit entities with reporting periods beginning on or after 1 April 2014. This will be effective for the Group's 30 September 2015 year end. It is expected that the change in legislation will have no material impact on the Company's obligation to prepare general purpose financial statements. In addition to the change in legislation the External Reporting Board of New Zealand ('XRB') has released a new accounting standards framework which establishes the financial standards to be applied to entities with statutory financial reporting obligations. The Group is currently reporting under NZ IFRS. Under the new XRB framework management expects that the Group is expected to continue to apply NZ IRFS as applicable for Tier 1 for profit entities. Management expects that this will have no material impact on the preparation and disclosures included in the financial statements. Presentation currency The financial statements are presented in New Zealand dollars unless otherwise stated and all values are rounded to the nearest $1,000 (where rounding is applicable). The functional currency is New Zealand dollars ('NZD'). Use of estimate and judgements In preparing the financial statements, management has to make certain judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, revenue and expenses. The actual outcome may differ from these judgements, estimates and assumptions. Judgements, estimates and assumptions are reviewed on an ongoing basis and are based on historical experience and various other factors, including expectations about future events, which are believed to be reasonable under the circumstances. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. The significant judgements, estimates and assumptions made by management in the preparation of these financial statements are outlined below. (i) Impairment of goodwill and other assets The Company tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy stated in note 1(l). The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. These calculations require the use of assumptions. Refer to note 17 for details of these assumptions and the potential impact of changes to the assumptions. All other assets are reviewed for indicators or object evidence of impairment. If indicators or objective evidence exists, the recoverable amount is reviewed. (ii) Long service leave A liability for long service leave is recognised and measured at the present value of the estimated future cash flows to be made in respect of all employees at balance date. In determining the present value of the liability, attrition rates and pay increases through inflation have been taken into account. (iii) Revenue recognition Revenue recognition involves certain revenue streams being recognised based on the stage of completion. This is discussed in more detail in note 1(d). (iv) Doubtful debts In providing for doubtful debts, management have used assumptions and estimates. The actual outcome may differ from the reported position. (c) BASIS OF CONSOLIDATION Business combinations Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the Group. Control is the exposure or right to variable N O T E S T O T H E F I N A N C I A L S TAT E M E N T S / 1 1 N O T E S T O T H E F I N A N C I A L S TAT E M E N T S _ FOR THE YEAR ENDED 30 SEPTEMBER 2014 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued... returns from involvement with the entity and the ability to affect those returns through power over the entity. The Group recognises the fair value of all identifiable assets, liabilities and contingent liabilities of the acquired business. Goodwill is measured as the excess cost of the acquisition over the recognised assets and liabilities. When the excess is negative (negative goodwill), the amount is recognised immediately in the Statement of Comprehensive Income. Subsidiaries Subsidiaries are entities controlled by the Group. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. In assessing control, potential voting rights that currently are exercisable are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the Group. Investments in subsidiaries are carried at their cost of acquisition in the Company's financial statements. Transactions eliminated on consolidation Intra-group balances and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. (d) REVENUE Revenues are recognised at the fair value of the consideration received or receivable. The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the Group's activities as described below. The Group bases its estimates on the historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement. Revenue is recognised for the major business activities as follows: (i) Software Licence Fee Revenue Revenue from licence fees due to software sales is recognised on the transferring of significant risks and rewards of control of the licensed software under agreement between the Company and the customer. (ii) Implementation and consulting services revenue for licensed software Revenue from implementation and consulting services attributable to licensed software is recognised based on the stage of completion, typically in accordance with the achievement of contract milestones and/or hours expended, and forecast. (iii) Post sales customer support revenue for licensed software Post sales customer support ('PSCS') revenue for licensed software comprises fees for ongoing upgrades, minor software revisions and helpline support. PSCS revenue is allocated between annual fees for helpline support and fees for rights of access to ongoing upgrades and 1 2 / N O T E S T O T H E F I N A N C I A L S TAT E M E N T S minor software patches. At each reporting date, the unearned portion of the revenue is assessed and deferred to be recognised over the period of service. (iv) Project services revenue Revenue from project services agreements is based on the stage of completion, typically in accordance with the achievement of contract milestones and/or hours expended, and forecast. (v) Deferred revenues Consideration received prior to the goods or service being rendered is recognised in the Statement of Financial Position as deferred revenues. (vi) Accrued income Revenue for which goods or services have been rendered but invoices have not been issued is recognised within the Statement of Financial Position as accrued income and included within trade and other receivables. (vii) Government grants Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Group will comply with all attached conditions. When a grant relates to an expense item, it is recognised as income over the period necessary to match the grant on a systematic basis to the costs that it is intended to compensate. (e) NET FINANCE COST Finance income comprises interest income, dividend income, gains on the disposal of available-for-sale financial assets, changes in the fair value of financial assets at fair value through profit and loss, foreign currency gains, and gains on hedging instruments that are recognised in profit and loss. Interest income is recognised as it accrues, using the effective interest method. Dividend income is recognised on the date that the Company's right to receive payments is established, which in the case of quoted securities is the ex-dividend date. Finance expenses comprise interest expense on borrowings, unwinding of the discount on provisions, foreign currency losses, changes in the fair value of the financial assets at fair value through profit and loss, impairment losses recognised on the financial assets (except for trade receivables), losses on the disposal of available-forsale financial assets and losses on hedging instruments that are recognised in profit and loss. All borrowing costs are recognised in profit and loss using the effective interest method. (f) INCOME TAX In the Statement of Comprehensive Income the income tax expense comprises current and deferred tax. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Current tax payable also includes any tax liability arising from the declaration of dividends. Deferred tax is recognised, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. N O T E S T O T H E F I N A N C I A L S TAT E M E N T S _ FOR THE YEAR ENDED 30 SEPTEMBER 2014 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued... Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the reporting date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related benefits will be realised. Deferred income tax is provided on temporary differences arising on investments in subsidiaries, except for deferred income tax liabilities where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income tax levied by the same taxation authority on either the same taxable entity or different entities where there is an intention to settle the balance on a net basis. Additional income tax expenses that arise from the distribution of cash dividends are recognised at the same time that the liability to pay the related dividend is recognised. The Group does not distribute non-cash assets as dividends to its shareholders. (g) SALES TAX The Statement of Comprehensive Income and the Statements of Cash Flows have been prepared so that all components are stated exclusive of sales tax, except where sales tax is not recoverable. All items in the Statements of Financial Position are stated net of sales tax with the exception of receivables and payables, which include sales tax invoiced. the average monthly exchange rates for income and expenses. The difference arising from the translation of the Statements of Financial Position at the closing rates and the Statement of Comprehensive Income at the average rates is recorded within the foreign currency translation reserve. (i) RESEARCH AND DEVELOPMENT COSTS Research and development expenses include payroll, employee benefits and other employee-related costs associated with product development. Technological feasibility for software products is reached shortly before products are released for commercial sale to customers. Costs incurred after technological feasibility is established are not material, and accordingly, all research and development costs are expensed when incurred. (j) PROPERTY, PLANT AND EQUIPMENT In the Statement of Financial Position property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Depreciation on assets is calculated using the straight-line method to allocate the difference between their original costs and their residual values over their estimated useful lives, as follows: Office equipment, fixtures and fittings 7 years Computer equipment 3 to 7 years Leasehold improvements Terms of lease The assets' residual values and useful lives are reviewed and adjusted if appropriate at each balance date. An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount. Commitments and contingencies are disclosed net of the amount of sales tax recoverable from, or payable to, the taxation authority. Gains and losses on disposals are determined by comparing proceeds with carrying amounts and are recognised in the Statement of Comprehensive Income. Sales tax includes Goods and Services Tax (GST) and Value Added Tax (VAT) where applicable. (k) INTANGIBLE ASSETS (h) FOREIGN CURRENCY TRANSLATIONS Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The consolidated financial statements are presented in New Zealand dollars ($) (the 'presentation currency'), which is the Company's functional currency. Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Comprehensive Income. Foreign exchange gains and losses are presented in the Statement of Comprehensive Income within net finance costs. The Group translates the results of its foreign operations from their functional currencies to the presentation currency of the Group using the closing exchange rate at balance date for assets and liabilities and Goodwill Goodwill represents the difference between the cost of acquisition and the fair value of the net identifiable assets acquired. Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units and is not amortised but is tested annually for impairment. Brands Brands are considered to have an indefinite useful life and are held at cost and are not amortised, but are subject to an annual impairment test. Other intangible asset Other intangible assets consist of internal use software, acquired source code, and customer relationships. They have finite useful lives and are measured at cost less accumulated amortisation and accumulated impairment losses. N O T E S T O T H E F I N A N C I A L S TAT E M E N T S / 1 3 N O T E S T O T H E F I N A N C I A L S TAT E M E N T S _ FOR THE YEAR ENDED 30 SEPTEMBER 2014 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued... Amortisation Except for goodwill and brands, intangible assets are amortised on a straight-line basis in the Statement of Comprehensive Income over their estimated useful lives, from the date that they are available for use. The estimated useful lives for the current and comparative periods are as follows: Acquired source code 10 years Customer relationships 10 years Internal use software 3 years Amortisation methods, useful lives and residual values are reviewed at each financial year end and adjusted if appropriate. (l) IMPAIRMENT At each reporting date, the Group accesses whether there is any indication that an asset may be impaired. Where an indicator of impairment exists, the Group makes a formal estimate of the recoverable amount. Where the carrying value of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Recoverable amount is the greater of fair value less costs to sell or the asset's value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date. (m) LOANS AND RECEIVABLES The Group classifies its financial assets as loans and receivables. Management determines the classifications of its financial assets at initial recognition. The Group's loans and receivables are nonderivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for those with maturities greater than 12 months after the reporting date. These are classified as non-current assets. The Group's loans and receivables comprise 'trade and other receivables' and cash and cash equivalents in the Statement of Financial Position. Loans and receivables are carried at amortised cost using the effective interest method. The Group assesses at each reporting date whether there is objective evidence that a financial asset or a group of financial assets is impaired. Impairment testing of trade receivables is described in Note 1(o). (n) CASH AND CASH EQUIVALENTS Comprise cash in hand, deposits held at call with banks, other short-term and highly liquid investments with original maturities of six months or less. (o) TRADE AND OTHER RECEIVABLES The Group recognises trade and other receivables initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due 1 4 / N O T E S T O T H E F I N A N C I A L S TAT E M E N T S according to the original terms of the receivables. The carrying amount of an asset is reduced through the use of a provision account, and the amount of the loss is recognised in the Statement of Comprehensive Income. When a receivable is uncollectible, it is written off against the provision account for receivables. Subsequent recoveries of amounts previously written off are credited against the Statement of Comprehensive Income. (p) TRADE AND OTHER PAYABLES The Group recognises trade and other payables initially at fair value and subsequently measured at amortised cost using the effective interest method. They represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid. The amounts are unsecured, non-interest bearing and are usually paid within 45 days of recognition. (q) PROVISIONS The Group recognises a provision when it has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and the amount has been reliably estimated. Provisions are not recognised for future operating losses. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to the passage of time is recognised as an interest expense in the Statement of Comprehensive Income. (r) EMPLOYEE BENEFITS Liabilities for wages and salaries, including non-monetary benefits, long service leave and annual leave are recognised in employee benefits in respect of employees' services up to the reporting date. They are measured at the amounts expected to be paid when the liabilities are settled. Cost for non-accumulating sick leave is recognised when the leave is taken and measured at the rates paid or payable. (s) EARNINGS PER SHARE The Group presents basic and diluted earnings per share ('EPS') data for its ordinary shares. Basic EPS is calculated by dividing the Group profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares on issue during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares on issue for the effects of all dilutive potential ordinary shares. N O T E S T O T H E F I N A N C I A L S TAT E M E N T S _ FOR THE YEAR ENDED 30 SEPTEMBER 2014 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued... (t) SHARE CAPITAL Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity, net of any tax effects. Where any Group company purchases the Company's equity share capital (treasury shares), the consideration paid is deducted from equity attributable to the Company's equity holders until the shares are cancelled or transferred outside the Group. Preference share capital is classified as equity if it is non-redeemable and dividends are discretionary, or it is redeemable but only at the Company's option. Dividends on preference share capital classified as equity are recognised as distributions within equity. (u) SEGMENT REPORTING An operating segment is a component of an entity that engages in business activities from which it may earn revenue and incur STANDARD/INTERPRETATION expenses, whose operating results are regularly reviewed by the entity's Chief Operating Decision Maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. Operating segments, are aggregated for disclosure purposes where they have similar products and services, production processes, customers, distribution methods and regulatory environments. (v) STANDARDS OR INTERPRETATIONS ISSUED BUT NOT YET EFFECTIVE AND RELEVANT TO THE GROUP The following are the new or revised standards, amendments and interpretations applicable to the Group which are in issue that are not yet required to be adopted by the Group in preparing its financial statements for the year ended 30 September 2014: EFFECTIVE FOR ANNUAL REPORTING PERIODS BEGINNING ON OR AFTER EXPECTED TO BE INITIALLY APPLIED IN THE FINANCIAL YEAR ENDING 1 January 2017 30 September 2018 1 January 2018 30 September 2019 NZ IFRS 9 'Financial Instruments' Addresses measurement and recognition of financial assets and liabilities. NZ IFRS 15 'Revenue from Contracts with Customers' Establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenues and cashflows from contracts with customers. The financial statement impact of adoption of these standards, amendments and interpretations are not quantified by the management. Adoption of new and revised standards, amendments and interpretations The standards, amendments and interpretations listed below applicable to the Group became mandatory in the current year: NZ IFRS 12 - Disclosure of Interests in other Entities NZ IFRS 13 - Fair Value Measurement Revised NZ IAS 27 - Separate Financial Statements The adoption of these new and revised standards, amendments and interpretations did not have a material impact on the results or position reported by the Group. NZ IFRS 10 - Consolidated Financial Statements NZ IFRS 11 - Joint Arrangements N O T E S T O T H E F I N A N C I A L S TAT E M E N T S / 1 5 N O T E S T O T H E F I N A N C I A L S TAT E M E N T S _ FOR THE YEAR ENDED 30 SEPTEMBER 2014 2 OPERATING SEGMENTS The Group currently operates in two business segments, utility billing software and airport management software, as at 30 September 2014. These segments have been determined based on the reports reviewed by the Board (Chief Operating Decision Maker) to make strategic decisions. ($000) The assets and liabilities of the Group are reported to and reviewed by the Chief Operating Decision Maker in total and are not allocated by business segment. Therefore, operating segment assets and liabilities are not disclosed. UTILITY AIRPORT TOTAL External revenue 32,959 5,572 38,531 Total external expenditure (21,035) (4,454) (25,489) 11,924 1,118 13,042 Depreciation and amortisation -. -. (2,251) Non-operating costs -. -. (3,865) Finance income -. -. GROUP - FOR THE YEAR ENDED 30 SEPTEMBER 2014 Segment contribution before depreciation, amortisation, non-operating costs, financing and tax 555 Finance expense -. -. (1,465) Income tax expense -. -. (2,633) Profit attributable to the shareholders of the company -. -. 3,383 GROUP - FOR THE YEAR ENDED 30 SEPTEMBER 2013 External revenue Total external expenditure Segment contribution before depreciation, amortisation, non-operating costs, financing and tax 36,005 4,121 40,126 (22,430) (3,448) (25,878) 13,575 673 Depreciation and amortisation -. -. (2,207) Non-operating costs -. -. (170) Finance income -. -. 94 Finance expense -. -. (2,644) Income tax expense -. -. (2,685) Profit attributable to the shareholders of the company -. -. 6,636 ($000) 14,248 2014 2013 Australia 18,859 20,643 New Zealand 19,672 19,483 38,531 40,126 Australia 21,088 21,274 New Zealand 10,324 12,987 United Kingdom 4,963 2,946 Rest of World 2,156 2,919 38,531 40,126 REVENUE BY DOMICILE OF ENTITY REVENUE BY DOMICILE OF CUSTOMER Revenues of approximately $6,155,000 (2013: $4,681,000) are derived from single customers and their subsidiaries from which revenue is 1 6 / N O T E S T O T H E F I N A N C I A L S TAT E M E N T S 10% or more of the Group's revenue. These revenues are attributable to the utilities business segment. N O T E S T O T H E F I N A N C I A L S TAT E M E N T S _ FOR THE YEAR ENDED 30 SEPTEMBER 2014 3 REVENUE ($000) GROUP 2014 PARENT 2013 2014 2013 OPERATING REVENUE: Recurring 11,798 11,062 -. -. Non-recurring 3,405 3,790 -. -. 22,948 24,834 -. -. 38,151 39,686 -. -. 380 440 -. -. 38,531 40,126 -. -. Professional services OTHER INCOME: Government grants Total revenue awarded a new grant in the current financial year, which is effective from 1 January 2014 to 31 December 2016. Government grants revenue relates to a 3 year agreement for 'Technology Development Grant Funding' with Callaghan Innovations. Gentrack was 4 EXPENDITURE ($000) GROUP PARENT 2014 2013 2014 2013 16,591 16,088 -. -. Defined contribution plan contributions 570 512 -. -. AUDITORS' REMUNERATION (1) 229 488 72 104 Rental and operating lease costs 1,480 1,279 -. -. Loss on disposal of fixed assets -. 2 -. -. Profit before income tax includes the following specific expenses: EMPLOYEE COSTS Wages and salaries OTHER EXPENSES Doubtful debts 448 (98) -. -. Advertising and marketing 585 563 -. -. Communication costs 391 169 -. -. Consultancy 145 261 -. -. Contractors 814 1,326 -. -. Directors' fees 213 130 119 -. Staff recruitment 200 291 -. -. Travel related 894 1,319 -. -. 2