Corporate Travel Management : Full Year Statutory Accounts

2015 - 16

Annual Financial Report

ABN 17 131 207 611

Annual Financial Report - 30 June 2016

Table of Contents

Annual Financial Report 2

Chairman and Managing Director's Report 3

Corporate Directory 5

Directors' Report 6

Corporate Governance Statement 26

Consolidated Statement of Comprehensive Income 27

Consolidated Statement of Financial Position 28

Consolidated Statement of Changes in Equity 29

Consolidated Statement of Cash Flows 30

Notes to the Consolidated Financial Statements 31

Directors' Declaration 82

Independent Auditor's Report 83

Shareholder Information 85

Dear Shareholders,

We are pleased to present the 2016 Annual Financial Report of Corporate Travel Management Limited ("CTM" or "the Group"). The Group has had another strong year, its 6th year since the IPO of the Company in December 2010.

All CTM regions performed strongly, with growth driven both organically and through acquisitions. CTM also remains well placed to benefit from future upturns in the general economic environment, despite what may appear to be challenging economic conditions in some of the regions in which CTM operates.

The acquisition of Montrose Travel, effective on 1 January 2016, was particularly significant in that it provides CTM with access to additional expertise in the area of loyalty programs which have significant potential in other regions. Subsequent to 30 June 2016, CTM also acquired the Boston based Travizon Travel (Travizon, Inc., Business Travel, Inc., and All Performance Associates, Inc.) to further expand its footprint in North America.

In the year to 30 June 2016, CTM's TTV (total transaction value) of $3,587m (unaudited) was 35.1% higher than the previous year and travel income of $260.9m was 32.0% higher than the previous year.

CTM's statutory net profit after tax ("NPAT") of $42.1m for the year to 30 June 2016 compares with $26.4m in the previous year, representing a 59.5% increase.

CTM is in a sound financial position, with total assets of $570.1m at 30 June 2016, an increase of $129.7m or 29.4% from 30 June 2015. The growth in assets is largely due to the impact of the Montrose Travel acquisition completed during the year.

The continued generation of strong cash flows contributed to the Group's sound financial position, with net cash flows from operating activities of $70.2m over the year to 30 June 2016.

The acquisition of Montrose Travel was funded by using cash reserves and borrowings of $38.0m. Importantly, this acquisition was able to be achieved without the need to raise additional capital.

Total equity of $271.6m at 30 June 2016 compares with $235.9m at 30 June 2015, an increase of $35.7m or 15.1% over the year.

The Group focused on the following key strategic initiatives during the year;

1. Strong Organic Growth and Acquisitions

   • Enhancing our value proposition to meet client needs across the CTM global network.

   • Organic growth in local, regional and global segments.

2. Client Facing Innovation

   • Expanding SMART technology globally by developing new tools for and with our clients.

   • Continued to leverage our technology suite in new market segments, including B2B and B2C.

3. Productivity and Internal Innovation

   • Internal innovation feedback loops to improve and automate existing client and non-client facing processes.

   • Staff empowerment in decisions to drive high staff engagement and client satisfaction outcomes.

4. Leveraging our Scale and Geography

   • Capitalising on scale and our global network, to develop and optimise supplier performance for our clients.

   • Continued to demonstrate that CTM is a valuable partner in the supply chain.

   Financial position (continued)
5. Our People

• Continue to attract, retain and develop the industry's brightest talent.

• Empower our team to support our client's needs.

• Embraced a culture that represents our values and business drivers.

A competent and motivated workforce is integral to CTM's success.

CTM's culture is founded upon the principle of empowering its people, through good processes and excellent training, to grow, evolve, and deliver the superior service that CTM's clients demand. CTM continues to invest in its people, through its in-house training programs, selective recruitment and a commitment to provide the resourcing to support its people in delivering service excellence to clients.

Over the past year, the total number of employees increased by 5.0% to over 2,000 (full time equivalent), reflecting the Montrose Travel acquisitions and CTM's positioning to underwrite growth with the best talent.

The Board and the senior management team appreciate the contribution that CTM's staff have made to the Group's strong performance. Their professionalism and commitment have been fundamental to the development of CTM's reputation as a highly valued business partner for its clients.

As we look forward to 2017, CTM remains confident that its customer value proposition remains compelling and that there is enormous untapped potential in each of the markets in which we operate.

CTM's continued investment in innovative client facing technology, particularly the introduction of CTM SMART Technology, coupled with the entry into the European market in 2015 and enhanced market presence in North America through further acquisition in 2016, has the Company well positioned for growth.

CTM now has operations in the four identified key markets and is expanding its global footprint as an underpinning for sustained growth. Geographic diversification is important in driving the sustainable performance and managing risk.

CTM's focus remains its clients and staff, to ensure its service offering is both innovative and cost effective, and enabling staff to offer the personalised service and expertise demanded by clients.

CTM will continue to pursue additional EPS accretive acquisition opportunities in FY17.

We would like to take this opportunity to thank the Board, management team and staff for their efforts, and congratulate them on the continued success of CTM as a leading-edge and profitable corporate travel solutions company.

We would also like to thank CTM's shareholders and, most importantly, CTM's clients for their continuing support.

The Board has declared a dividend of 15 cents per share on 26 August 2016, which will be paid on 6 October 2016 to all shareholders registered on 9 September 2016.

Tony Bellas Chairman

Corporate Travel Management Limited 26 August 2016

Pherous ging Director

Jamie Mana

Corporate Travel Management Limited 26 August 2016