2023
ANNUAL
REPORT
CONTENTS
Chair’s Message
CEO’s Message
Directors’ Report
Environmental, Social and Governance Report
Auditor’s Independence Declaration
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
ASX Additional Information
Dividend Details
Corporate Information
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3
5
53
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79
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150
AUB GROUP ANNUAL REPORT 2023 CHAIR’S MESSAGE
David Clarke
Chair
Dear Shareholders,
On behalf of the Board of Directors, it is my great pleasure
to present AUB Group’s 2023 Financial Year (FY23)
performance and Annual Report.
FY23 has seen a continuing cycle of economic uncertainties,
including inflation, geopolitical headwinds, environmental
challenges, and capital constraints for the insurance
markets. AUB Groups’ partner businesses play a pivotal role
in assisting clients navigate the environment by providing
risk management and certainty to their business operations.
FINANCIAL PERFORMANCE AND CAPITAL
STRENGTH
FY23 was a strong year for AUB Group as we delivered
against our strategic agenda. The financial performance
exceeded the top-end of our upgraded guidance with the
Underlying Net Profit After Tax (UNPAT) increasing by 74.4%
compared to FY22, to $129.1m, while maintaining a strong
balance sheet and capital position. Divisionally, all key
metrics across all operating divisions delivered growth.
Despite a challenging and uncertain macroeconomic
environment, our balance sheet remains strong, with the
corporate entity being cash generative with $133.2m in
operating cashflow, and access to ~$256.8m in cash and
debt funding. The Group also successfully completed a
$165m equity capital raising in May 2023 to create funding
capacity for our pipeline of acquisition opportunities.
PROGRESS ON STRATEGIC AGENDA
The Group’s focus and delivery of its strategic priorities
remains core to our strong financial performance. Key
highlights during the year include strategically important
and accretive acquisitions of SRS Broking in Australian
Broking, ICIB in New Zealand, Strata Unit Underwriters in
Agencies, as well as a number of bolt-ons, equity steps
and restructures across the network. The business also
completed five divestments to realign our portfolio.
Our agencies portfolio is positioned for continued growth,
writing more than $900m premium in FY23, an increase of
34% compared to FY22, with opportunities being explored
to deliver increased capacity to existing binders as well as
expanding capability into new segments, via Tysers.
In FY23 we completed our significant and transformative
acquisition of leading London and Lloyd’s broker Tysers
with its specialist capabilities and global distribution. The
transaction is designed to expand our role across the
insurance broking value chain and increase our broker and
client proposition by providing enhanced insurance capacity
and market access. The transaction was completed on
30 September 2022 and has resulted in a much larger, more
dynamic, and pleasingly, a more balanced (geographically
and market segment) portfolio for the Group. Since
completion, the business has performed ahead of forecasts,
with both revenue and profitability growing strongly. A key
driver has been AUB’s execution of cost reduction levers
including optimising the operating and governance model.
Looking ahead, the Group’s FY23 strategic focus will be
primarily a continuation of FY23 objectives, with a particular
focus on New Zealand business performance, technology
delivery, and the successful integration of Tysers.
DIVIDENDS
As a result of our financial performance, the Directors have
declared a final fully franked dividend of 47.0 cents per share,
payable on 9 October 2023. This, together with the interim
dividend of 17.0 cents, results in a full year fully franked
dividend of 64.0 cents, an increase of 16.4% and translates
into a payout ratio of 52.8% of UNPAT.
Strong business results as well as disciplined M&A also
led to underlying Earnings per Share increasing by 33.7%
compared to FY22.
1
AUB GROUP ANNUAL REPORT 2023 CHAIR’S MESSAGE (CONTINUED)
ENVIRONMENT, SOCIAL AND GOVERNANCE
Our recent focus on improving the Group’s environmental,
social and governance (ESG) practices have resulted in a
number of key initiatives being implemented and further
planned. Our approach as well as progress in FY23 is
reported on page 53 of this report. Key highlights include:
– AUB Group was recertified as a ‘Great Place to Work’
– Roll-out of AUB Giving (employees contribute pre-tax
donations, with AUB Group matching) and Community
Day (day of paid volunteer leave to participate in
community activities)
– Continued support via donations to, and sponsorship of,
community and sporting clubs around Australia
– Ongoing trusted partner relationships with clients
demonstrated by premium retention of 91%
With respect to Governance, in FY23 Richard Deutsch
joined the board. Richard is a Non-Executive Director and
Chair of the Board Audit Committee of Bendigo & Adelaide
Bank Limited, Chair of the Movember Foundation and the
Stephenson Mansell Group. Previously, Richard was the
Chief Executive Officer of Deloitte Australia from 2018 to
2021. Prior to the CEO role, Richard was the Managing
Partner of the Audit & Advisory Practice and a member of
the Global Audit & Advisory Leadership Team. Richard’s
career includes more than 25 years working with PwC,
including nine years on PwC’s Australian executive and
brings considerable experience in finance and domestic
and international insurance auditing to the AUB Board.
Post completion of the Tysers acquisition, the business
appointed Andrew Kendrick as a Non-Executive Director
to the Tysers Board. The AUB Group Board also welcomed
Andrew to the Group Board as a Non-Executive Director.
Andrew is a former Non-Executive Director of Lloyd’s
of London, Lloyd’s Market Association and Russian
Reinsurance Co. and has more than 40 years’ experience
in the insurance industry in the UK, Europe and Bermuda.
Andrew’s executive career includes leadership positions
with Chubb and Ace, culminating in the role of President
& Chairman, Chubb European Group. Andrew’s strong
knowledge, experience, expertise, and relationships in the
London Wholesale Insurance market have added further
depth to the AUB Board.
Shareholders will be asked to formally elect both Andrew
and Richard at the 2023 Annual General Meeting.
On 23 August Paul Lahiff retires from the AUB Group Board
after almost 8 years as a Non-Executive director. Paul has
made an outstanding contribution to the Company during a
period of strong growth, particularly in his role as Chair of the
Remuneration and People Committee. We wish him every
success in the future.
CONCLUSION
I would like to conclude by thanking all our employees and
partners for their contributions during the year. Another
strong result in FY23 is testament to their effort, discipline,
and commitment to the success of the business. I’d also
like to acknowledge the ongoing support from our clients
and shareholders who continue to place their trust in our
business and look forward to further updating you on our
progress at our AGM in November.
David Clarke
Chair
2
AUB GROUP ANNUAL REPORT 2023 CEO’S MESSAGE
Michael Emmett
Chief Executive Officer
and Managing Director
Dear Shareholders,
I am delighted with AUB Group’s FY23 results and we
delivered another strong performance across all divisions.
Australian Broking continued its focus on portfolio
optimisation activities, Agencies accelerated its scale-up
and market expansion, we created momentum for the turn-
around in New Zealand and BizCover leveraged the benefits
of platform scale and business maturity. These results
were delivered against the successful completion of our
strategically important acquisition of Tysers in October 2022.
OVERALL FINANCIAL PERFORMANCE
In FY23, we grew underlying revenue of $1.11bn by 61.2% in
comparison to FY22, while Underlying NPAT grew by 74.4%
to $129.1mn. To deliver these Underlying NPAT results,
our business achieved 12.3% organic growth and 17.2%
acquisition growth, excluding Tysers, while our acquisition of
Tysers enabled a further 44.9% net growth, after allowing for
the increased net cost of funding.
All divisions delivered growth in revenue and profitability with
revenue growth ranging between 13.7% to 34.3%, margin
expansion between 140bps and 290bps and increases
in Profit before tax attributable to AUB shareholders of
between 18.9% and 59.4%.
As a result, EPS grew by 33.7% on the prior year and our
three-year average Return on Invested Capital ending on
30 June 2023 was 12.6%.
The business continues to be strongly cash generative
with underlying NPAT fully converted to cash for FY23.
The Group’s net debt position has reduced from $690mn
on 31 Dec 2022 to $474mn on 30 June 2023, with our
leverage ratio reducing to 1.71 on 30 June 2023.
Cash and undrawn debt on 30 June 2023 was $256.8mn,
allowing substantial headroom for future acquisition activity.
DIVISIONAL PERFORMANCE
Australian Broking had another very active year as we
continued to optimise our portfolio. During FY23, we
completed three acquisitions, four equity step-ups, six
equity step-downs, five divestments, and two portfolio
consolidations with several other restructures in parallel,
indicating the ongoing opportunity to optimise the
broking portfolio and the consequential potential for
margin expansion. The division continues to grow revenue
strongly while expanding margin.
BizCover delivered further margin improvement as the
platform continues to scale. In FY23, BizCover exceeded
AUB’s medium-term margin target for this business of 40%
with margin expanding both in Australian and international
markets. In addition to the financial performance, BizCover
continues to operate with a market-leading NPS of +71 and
added new insurers and products to the platform, enhancing
its future growth potential.
During FY23, Agencies grew revenue by 34.3%, expanded
margin by 140bps while EBIT grew by 39.5%. In early FY21
we communicated our strategy to build the Agency division
to $1bn of premium within five years, split across three
areas of General Commercial, Specialty, and Strata. We are
delighted with the strong progress toward this goal with
agency premium in FY23 exceeding $900mn.
Our strategic focus on a turn-around in the New Zealand
business has progressed strongly with the business
achieving organic growth of 42.5%, as well as acquisition
growth of 17.9%. The acquisition of ICIB and its merger with
BWRS created one of New Zealand’s leading brokerages.
This supported by the ongoing quality of the remaining
broking businesses and the NZbrokers network have
delivered a strong rebound in our results. Our new broking
technology solution, Lola, achieved some key milestones,
including integrating with three primary insurance partners
and implementation across two pilot branches. We are now
working with the systems vendor to resolve some technical
issues before recommencing.
3
AUB GROUP ANNUAL REPORT 2023 CEO’S MESSAGE (CONTINUED)
TYSERS UPDATE
In FY23, we completed our acquisition of Tysers. During
the nine-month period of ownership, the business delivered
an EBIT margin of 26.1% which compares favorably with
the ~20% normalised margin we announced as part of
the acquisition in May 2022. At the time of acquisition,
we also communicated overall cost and revenue run-rate
synergy targets of $25mn per annum. In FY23, we have
made strong progress in implementing the planned cost
reduction initiatives and achieved $2.9mn of in-year savings
with these expected to deliver annual run-rate savings of
$7.6mn. Various additional cost actions have been identified
for implementation that will deliver the balance of the
$15mn cost target on a run-rate basis during FY24. We also
committed to a synergy target of $10mn from increased
income arising largely from the placement of individual risks
and binders by members of the AUB network. Already during
the latter stages of FY23, Tysers earned $0.4mn income
from AUB brokers’ client risk placements while a focus by
AUB has resulted in incremental income of $2.6mn earned
from a more disciplined approach to investment.
OUTLOOK
In FY24, we forecast underlying net profit after tax to be
in the range of $154mn to $164mn, representing growth
of 19.3% to 27% on FY23. The profit contribution from
acquisition activity of 3.9% reflects only those M&A activities
that are known and of a very high certainty.
The Group continued to expand margins across all divisions
in FY23. The strong momentum and good progress made
over the past few years has enabled us to upgrade the
medium-term margin targets for four of the five divisions
with Australian Broking, New Zealand and Tysers targets
increasing by 2% and BizCover increasing the target by 10%
to 50%. The target for Agencies is unchanged.
4
ENVIRONMENT, SOCIAL AND GOVERNANCE
(ESG)
AUB Group’s business model entails distributed ownership
and partnership with hundreds of operating shareholders
who take individual ownership in supporting the ESG goals
that are specific and relevant to the communities in which
they operate. The model works well because we allow for
differences in culture, processes, work styles and ambitions
in each of these businesses.
Gender diversity in most businesses and at most levels is
excellent however we need to improve significantly at senior
levels. Our teams across our businesses and geographies
are passionate about workplace giving and supporting those
in need. The Group has adopted corporate platforms such as
the Do Good Be Better donation matching and volunteering
programme for Head Office and Agency staff. In parallel,
every one of our businesses has an active involvement in
charitable giving and a focus on diversity and equality in
each workplace. We are pleased to be once again accredited
as a Great Place to Work.
With regards to the Environment, we identified and
implemented actions to reduce our carbon impacts from
air travel by implementing a validated and audited carbon-
offset partner for all flights, transitioned our Corporate Head
Office energy consumption to renewable sources and rolled
out new workplace technologies, including energy-efficient
wide-screen monitors that reduce the need for printing. We
are also commencing a programme to work with each of our
teams to identify ways for them to transition to renewable
energy sources for their homes, with company assistance
offered as a way to afford the transition.
In FY23, we were pleased to maintain our AA rating of our
ESG initiatives from MSCI.
CONCLUSION
FY23 was a busy year with multiple imperatives, and our
progress and performance is a testament to the AUB team’s
ability to manage a complex portfolio of initiatives and
deliver strongly against our priorities.
I want to thank our clients who trust us with their business-
critical risks; grateful to our teams who go above and beyond
to deliver for our clients; and acknowledge our people for
their commitment to the success of the Group. Given our
foundations, I am confident that AUB is well placed for
continued out-performance in future years.
I look forward to updating you on our progress.
Michael Emmett
Chief Executive Officer
and Managing Director
AUB GROUP ANNUAL REPORT 2023 DIRECTORS’
REPORT
5
AUB GROUP ANNUAL REPORT 2023 DIRECTORS’ REPORT
YEAR ENDED 30 JUNE 2023
BOARD OF DIRECTORS
Your Directors submit their report for the year ended 30 June 2023. The names and details of the Company’s Directors in
office during the financial year and until the date of this report are as follows. Directors were in office for this entire period
unless otherwise stated.
David C. Clarke
LLB, MAICD
Independent Non-Executive Chair
Appointed: Non-Executive Director from 3 February 2014;
Chair from 26 November 2015
Board Committees: Board Audit & Risk, Nomination (Chair),
Remuneration & People
Background and experience:
David Clarke was Chief Executive Officer of Investec Bank
(Australia) Limited from 2009 to 2013. Prior to joining
Investec Bank, he was the CEO of Allco Finance Group and
a Director of AMP Limited, following five years at Westpac
Banking Corporation where he held a number of senior
roles, including Chief Executive of BT Financial Group. David
has 40 years’ experience in investment banking, funds
management, property and retail banking. He was previously
employed at Lend Lease Corporation Limited where he was
an Executive Director and Chief Executive of MLC Limited.
David is the Chair of Charter Hall Group Limited, Fisher
Funds Management Limited and Resolution Life Australasia
Limited.
Directorships of other listed entities (last 3 years):
– Charter Hall Group Limited (April 2014 to present)
Michael P.C. Emmett
B Com, H.Dip. Acc CA (SA)
CEO and Managing Director
Appointed: 11 March 2019
Board Committees: Nil
Background and experience:
Mike Emmett is a Director of various companies within the
Group, including Tysers Insurance Brokers Limited. Prior
to joining AUB Group, he was Group CEO for Cover-More,
previously an ASX-listed global travel insurer and now part of
the Zurich Group. Earlier, Mike was QBE Group Executive of
Operations and EY Managing Partner for Financial Services
Advisory. Prior to moving to Australia, Mike held senior roles
in Finance and Consulting in the UK and South Africa.
Directorships of other listed entities (last 3 years):
– 1ST Group Limited (January 2019 to May 2021)
6
AUB GROUP ANNUAL REPORT 2023 BOARD OF DIRECTORS (CONTINUED)
Richard D. Deutsch
B Econ, FCA
Independent Non-Executive Director
Peter G. Harmer
Harvard Advanced Management Program
Independent Non-Executive Director (from 22 July 2021)
Appointed: 3 November 2022
Board Committees: Board Audit & Risk, Nomination,
Remuneration & People (from 3 November 2022)
Appointed: 22 July 2021
Board Committees: Board Audit & Risk, Nomination,
Remuneration & People
Background and experience:
Richard Deutsch was the Chief Executive Officer of Deloitte
Australia from 2018 to 2021. Prior to the CEO role, Richard
was the Managing Partner of the Audit & Advisory Practice
and a member of the Global Audit & Advisory Leadership
Team. Richard’s career also includes more than 25 years
working with PwC, including nine years on PwC’s Australian
executive. Richard is a Non-Executive Director of Bendigo
& Adelaide Bank Limited. He is the Chair of the Movember
Foundation and Chair of the Stephenson Mansell Group,
a Champions of Change Coalition Convenor and Advisor
to CEOs and Boards.
Directorships of other listed entities (last 3 years):
– Bendigo and Adelaide Bank Limited (September 2021
to present)
Background and experience:
Peter Harmer was previously Managing Director and Chief
Executive Officer of Insurance Australia Group (IAG) Limited
and is currently a Non-Executive Director of Commonwealth
Bank of Australia Limited and nib holdings limited, and the
Chair of Lawcover Insurance Pty Limited. Prior to IAG he was
Chief Executive Officer of Aon Limited UK and a member
of Aon’s Global Executive Board, and spent seven years as
Chief Executive Officer of Aon’s Australian, New Zealand
and Pacific operation. Peter has over 40 years’ experience in
the industry spanning insurance, reinsurance broking, and
insurance broking. He is a Non-Executive Director of Tysers
Insurance Brokers Limited.
Directorships of other listed entities (last 3 years):
– Commonwealth Bank of Australia Limited (March 2021
to present)
– nib holdings limited (July 2021 to present)
– Insurance Australia Group Limited (November 2015 to
November 2020)
7
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 BOARD OF DIRECTORS (CONTINUED)
Andrew J. Kendrick
Independent Non-Executive Director
Appointed: 27 January 2023
Board Committees: Board Audit & Risk, Nomination,
Remuneration & People (from 27 January 2023)
Background and experience:
Andrew Kendrick is a former Non-Executive Director of
Lloyd’s of London, Lloyd’s Market Association and Russian
Reinsurance Co. He has more than 40 years’ experience
in the insurance industry in the UK, Europe and Bermuda.
Andrew’s executive career includes leadership positions
with Chubb and Ace, culminating in the role of President
& Chairman, Chubb European Group. He began his career
at Sturge Syndicate 210, and held a number of senior
underwriting positions with Ockham Underwriting. Andrew is
the Chair of Everest Insurance (Ireland) DAC and the Chair of
Tysers Insurance Brokers Limited.
Directorships of other listed entities (last 3 years):
– Nil
Paul A. Lahiff
BSc Agr, GAICD
Independent Non-Executive Director
Appointed: 1 October 2015
Board Committees: Board Audit & Risk, Nomination,
Remuneration & People (Chair)
Background and experience:
Paul Lahiff was previously Managing Director of Mortgage
Choice Limited (2003 - 2009) and prior to that was CEO
and an Executive Director of Heritage Bank and Permanent
Trustee and held senior roles in Westpac in Sydney and
London. Paul is the Chair of Harmoney Corp Limited, 86400
Holdings Limited and NESS Super, and Lead Independent
Director of Sezzle Inc. He is also the Chair of the Steering
Committee for ISO 20022 Migration for the Australian
Payments System.
Directorships of other listed entities (last 3 years):
– Sezzle Inc. (May 2019 to present)
– Harmoney Corp Limited (February 2021 to present)
8
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 BOARD OF DIRECTORS (CONTINUED)
Robin J. Low
B Com, FCA, GAICD
Independent Non-Executive Director
Cath L. Rogers C
FA, B Com, MBA, GAICD
Independent Non-Executive Director
Appointed: 3 February 2014
Board Committees: Board Audit & Risk (Chair), Nomination,
Remuneration & People
Appointed: 3 May 2018
Board Committees: Board Audit & Risk, Nomination,
Remuneration & People
Background and experience:
Robin Low was a partner at PricewaterhouseCoopers.
She has over 30 years’ experience in financial services,
particularly insurance, and specialises in assurance and risk
management. She is a Director of Appen Limited, IPH Limited
and Marley Spoon SE. Robin also serves on the boards of
not-for-profit organisations: Guide Dogs NSW/ACT and the
Sax Institute. Robin is a member of the audit committee of
the University of New South Wales, and is a past Deputy
Chair of the Auditing and Assurance Standards Board and
past member of Australian Reinsurance Pool Corporation.
Directorships of other listed entities (last 3 years):
– IPH Limited (September 2014 to present)
– Appen Limited (October 2014 to present)
– Marley Spoon AG (January 2020 to present)
Background and experience:
Cath Rogers is a partner at Antler, a global early-stage venture
capital firm. She is a member of the Commercialisation
Committee of the Heart Research Institute and was previously
a Non-Executive Director of fintech Digital Wallet Pty Limited
which trades as Beem It (2018-2021) and McGrath Limited
(2016-2018). Cath has a background in financial services,
private equity and venture capital both in Australia and
overseas including with AirTree Ventures, Anchorage Capital
Partners, Masdar Capital and Credit Suisse.
Directorships of other listed entities (last 3 years):
– Nil
9
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 INTERESTS IN THE SHARES AND RIGHTS OF THE COMPANY
Details of shares and rights held by Directors and KMPs are set out in the Remuneration Report.
DIRECTORS’ MEETINGS
The number of Directors’ meetings held (including meetings of Committees of Directors) and attendance of Directors during the
year ended 30 June 2023 is as follows:
Director
Board
Scheduled
Board
Unscheduled
Board Audit & Risk
Committee
Remuneration &
People Committee
Nomination
Committee
Held1
Attended
Held1
Attended
Held1
Attended
Held1
Attended
Held1
Attended
David Clarke
Michael Emmett2
Richard Deutsch3
Peter Harmer
Andrew Kendrick4
Paul Lahiff
Robin Low
Cath Rogers
8
8
5
8
4
8
8
8
8
8
5
8
4
8
8
8
10
10
5
10
4
10
10
10
10
10
5
7
3
7
9
7
6
6
4
6
3
6
6
6
6
6
4
6
3
6
6
6
8
8
5
8
3
8
8
8
8
8
5
8
3
8
8
8
4
4
3
4
2
4
4
4
4
4
3
4
2
4
4
4
The number of meetings held during the time the Director was a member of the Board or of the relevant Committee.
1
2 Michael Emmett was not a member of any Committee and attended Committee meetings as an invitee.
3
4
Richard Deutsch was appointed as a Director on 3 November 2022.
Andrew Kendrick was appointed as a Director on 27 January 2023.
COMPANY SECRETARIES
Richard H. Bell
BBus, LLB, B.Comm (Law)
(Chief Legal & Risk Officer and Company Secretary)
Richard Bell joined AUB Group on 15 June 2021 as Group General Counsel and was appointed Company Secretary on 29 June
2021 and Chief Legal & Risk Officer on 22 November 2022. Before joining AUB Group, he was General Counsel (Corporate) &
Group Company Secretary at Aristocrat Leisure Limited and previously in private practice specialising in Mergers & Acquisitions
at Allens Linklaters.
Elizabeth M. McGregor
BA, MBA, FGIA, FCIS, GAICD
(Joint Company Secretary)
Elizabeth McGregor joined AUB Group on 1 October 2021 and was appointed Joint Company Secretary on 29 October 2021.
She was previously company secretary of a number of ASX listed entities, through her work with the professional services
companies Automic Group and Mertons Corporate Services.
10
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 OUR PURPOSE AND VALUES
We place clients at the heart of everything we do – providing products, services and solutions that help protect them from
harm, damage and financial burden. Our partners and advisers provide trusted support and guidance to clients on the optimal
combination of physical, people and financial risk solutions. Our approach is backed by the same commitment to high-quality
service that we’ve had from the start. Our services are designed to help our partners operate safely, manage the business more
profitably and achieve better outcomes for clients. Together we’re providing a safer and stronger future for all.
At AUB Group we are guided by a universal set of values that describe the focus of our efforts.
AUB GROUP
SERVICES
SOLUTIONS
& PRODUCTS
PARTNERS
& ADVISERS
CLIENTS
P e o ple
cial risk
n
a
n
i
F
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a
Fin
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P
artn
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p
ort
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P
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p
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o
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M
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o
m
pliance
Physical r i s k
Acquisition
In v est m e nt
Our goal is for all of our decisions and actions to reflect these core values. We believe that putting our values into practice
creates the greatest benefits for our shareholders, partners, employees, suppliers and communities in which we serve.
For further information on our stakeholders and measurements of success please refer to our ESG Report on page 53.
11
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023
PRINCIPAL ACTIVITIES
AUB Group Limited (ASX: AUB) is an ASX200 listed group comprising insurance brokers and underwriting agencies operating
in ~570 locations . Over ~5,000 team members work with our ~950,000 clients to place more than ~$9.5bn in insurance
premiums with local and foreign insurers.
AUB Group operates through five key business segments. The Group’s core revenue is derived from arranging insurance policies
and from related products and services. The amount of revenue earned is determined by premiums placed, sums insured and
the general level of economic activity.
Australian Broking businesses provide insurance broking and advisory services primarily to SME clients. The division
encompasses broking businesses, complemented by established capabilities in member services, life insurance broking,
premium funding, and claims management.
In New Zealand Broking our businesses provide insurance broking and advisory services primarily to SME clients. AUB Group
holds equity stakes in 5 major insurance broker partners as well as ownership of NZbrokers (the largest broking management
group in New Zealand).
Agencies distribute and manage insurance products on behalf of licensed insurance companies through General Commercial,
Strata and Specialty sub-divisions with underwriting agencies with access to delegated global underwriting capacity. These
products and services are available to customers of insurance brokers, in and outside the AUB Group’s broking networks.
Tysers includes Wholesale and Retail broking and Managing General Agents (MGA) and is headquartered in London. This is a
separately reportable segment given Tysers is largely UK based operating mainly in markets outside Australia.
Support service businesses provide a diverse range of services to support the Broking, Agency, New Zealand and Tysers
segments, and external clients. Services include:
a. Platforms division: automated quoting & binding, white-labelling, and technological support. This division includes BizCover,
Australia’s leading digital SME insurance platform with multi-channel presence and a comprehensive insurance offering. The
business also provides the Austbrokers network with ExpressCover, Australia’s newest SME insurance platform utilising the
BizCover quote and bind engine.
b. Corporate: AUB Group Head office.
These sub segments are not individually reportable.
TOTAL INCOME BY SEGMENT1
UNDERLYING PROFIT BEFORE TAX
BY SEGMENT
5%
1%
14%
(28)%
(11)%
34%
37%
2023
2022
27%
28%
58%
2023
2022
14%
7%
16%
19%
8%
58%
43%
21%
81%
Australian Broking
Agencies
New Zealand
Tysers
Support Services
The Group owns equity stakes in its partner businesses, which in turn provide trusted support and guidance to clients relating to
physical, people and financial risks. This is backed by services the Group provides that help our partners operate with less risk,
manage their businesses more profitably and ultimately achieve better client outcomes. These services include broker member
services, claims and loss adjusting businesses, technology support, a centralised data-centre and related infrastructure support,
common broking and back-office platforms, finance, tax, M&A, human resources, risk, compliance and other operational support
services.
1 Total Income is presented on a statutory basis whilst Underlying Net Profit Before Tax is a non IFRS measure. Refer to Note 3 within the Financial Report for
further information.
12
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 OPERATING AND FINANCIAL REVIEW
Reconciliation of Reported Net Profit After Tax to Underlying Net Profit After Tax
The following reconciliation from Reporting NPAT to UNPAT is presented on the basis attributable to equity holders of
the parent:
Net Profit after tax attributable to equity holders of the parent
Add back/(less) (net of non-controlling interests and income tax):
- Amortisation of broking registers
2023
$’000
2022
$’000
65,253
80,836
30,352
11,143
- Adjustments to value of entities (to fair value) on the day they became controlled entities
(29,796)
(41,046)
- Remeasurement of put option liability (net of Interest unwind)
- Impairment charge
- Movements in contingent consideration
- (Profit)/Loss on deconsolidation of controlled entity , sale/dilution of associates and portfolios
- Impairment of the Right of Use Asset and Onerous Lease Expense
- Acquisition related expenses
Underlying Net Profit After Tax
3,620
5,473
39,912
(25,315)
251
39,355
129,105
1,104
7,537
(337)
(5,894)
219
20,456
74,018
Operating results for the year
In the year ended 30 June 2023 (FY23) Reported Net Profit After Tax attributable to equity holders of the parent (Reported NPAT)
was $65.25m (FY22: $80.83m). Reported NPAT was impacted by increased amortisation of broking registers due to acquisition
activity, increased contingent consideration related to acquisitions, debt raising and other acquisition related expenses including
for the acquisition of Tysers in September 2022. Tysers is a leading London based Llyod’s market broker with access to
specialist underwriting expertise and global distribution capabilities.
On a Reported NPAT basis, earnings per share was 65.35 cents for the full year (FY22: 105.60).
Underlying Net Profit After Tax (Underlying NPAT) is the key measure used by management and the board to assess and review
business performance. Underlying NPAT excludes non-controlling interests and the impact of fair value adjustments to the
carrying value of associates, profits on sale and deconsolidation of controlled entities, contingent consideration adjustments,
amortisation of intangibles, impairment charges and acquisition related costs.
Underlying NPAT increased 74.42% to $129.11m in FY23 (FY22: $74.02m) due to strong organic growth across all divisions,
complemented by the acquisition of Tysers performing above expectations.
13
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023
OPERATING AND FINANCIAL REVIEW (CONTINUED)
Operating results for the year (continued)
Underlying NPAT
129.11
46.71
53.15
65.30
74.02
140
120
100
80
60
40
20
0
FY19
FY20
FY21
FY22
FY23
Underlying NPAT ($’m)
On an Underlying NPAT basis, earnings per share (EPS) increased by 33.73% over the prior year to 129.32 cents.
Dividend per share paid for FY23 totaled 64 cents.
Underlying EPS and Dividend Growth
129.32
86.12
96.7
65.74
70.61
46.0
50.0
55.0
55.0
64.0
FY19
FY20
FY21
FY22
FY23
Underlying EPS
Dividend per share (cents)
140
120
100
80
60
40
20
0
14
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023
OPERATING AND FINANCIAL REVIEW (CONTINUED)
Results by operating division
Tysers - Tysers performed above expectations, with revenue growth for the 9 months to 30 June 2023, up 5.4% vs initial forecast
(Organic: 5.8%, FX: -0.4%). Underlying pre-tax profit contributed by Tysers for the 9 months to 30 June 2023 was $76.93m.
Australian Broking – underlying pre-tax profit for the period increased by 21.59% to $104.75m (FY22: $86.15m).
These increases were driven by organic and bolt-on acquisition growth. Growth drivers included:
– Increased Commercial Lines premiums;
– Growth in client and policy count;
– Continued network optimisation; and
– Increased interest income on trust accounts from higher interest rates.
Agencies – underlying pre-tax profit for the period increased by 53.86% to $35.05m (FY22: $22.78m). Strong organic growth
was partially offset by non-recurrence of some profit comissions.
Acquisition-related profit growth included Strata Unit Underwriters (1 September 2022).
New Zealand Broking – underlying pre-tax profit for the year increased by 59.35% to $14.27m (FY22: $8.95m) due to:
– Revenue and profit growth for all businesses, supported by increased Commercial lines premiums;
– BWRS Group merger with ICIB effective 1 December 2022; and
– Step-up investment in AUB Group NZ to 100% from 1 July 2022.
BizCover – underlying pre-tax profit for the year increased by 18.89% to $12.48m (FY22: $10.50m). This increase was due to
organic profit growth assisted by operating leverage and scalability of the platform.
FINANCIAL CONDITION
Shareholders’ equity increased to $1,513.37m from $997.68m at 30 June 2023, due to the impact of the current year financial
performance as well as issue of shares during the period.
The Group generated positive cash flow from operating activities before customer trust account movements of $113.38m
(2022: $101.96m). Cash outflow of $136.85m from investing activities in FY23 was due mainly to the purchase of Tysers. Cash
flows from financing activities were $498.66m primarily from an increase in borrowings, see further detail outlined below.
Other finance activity related cash flows were to increase our shareholding in controlled entities and to fund dividends paid to
shareholders. Cash held at the end of the period totaled $260.35m (2022: $259.33m), excluding monies held in trust.
Interest-bearing loans and borrowings increased by $536.43m to $584.23m. This is driven by the $675m syndicated debt facility
entered into to fund the Tysers acquisition. Please see details of this facility outlined in Note 17 of the Financial Statements.
Subsidiaries had debt of $63.01m (2022: $47.80m) and the look through share of borrowings by associates (including contingent
obligations) of $25.52m (2022: $17.54m)1 are not included in the Group balance sheet as these entities are not consolidated.
The borrowings by subsidiaries and associates relate largely to funding of acquisitions, premium funding and other
financing activities.
1
Total debt of associates, after considering AUB Group’s percentage shareholding.
15
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 BUSINESS STRATEGY
AUB Group’s strategy remains consistent – exploit the latent potential in our existing business supplemented with strategically
aligned and disciplined inorganic growth:
– Deliver a market leading proposition for our brokers, and in-turn our clients, by investing in processes and technologies that
drive efficient and effectives outcomes;
– Continued focus on optimising our portfolio through consolidation and targeted involvement to improve underlying business
performance; and
– Manage our active pipeline of external M&A opportunities through a disciplined and strategic approach to investment.
In FY24, the business will continue to evolve its focus from FY23 priorities with specific accountability for the following:
– Improve and enhance New Zealand performance
– Accelerated revenue and profit growth for AUB NZ’s portfolio of brokers;
– Successful development, pilot and implementation of Project Lola and commencement of roll-out to NZbrokers network.
– Optimise our network
– Continue to optimise our portfolio of businesses to outperform by consolidating into more efficient operating entities or
to expand specialistion.
– Execute on strategically aligned acquisitions
– Disciplined and targeted approach to acquisitions, either bolt-ons that deliver synergy benefits or to expand capabilities
and footprint;
– Increased investments in current network businesses to aid consolidation/optimisation.
– Stabilise and optimise Tysers post acquisition
– Enhance the business’ growth potential through strategic intervention in areas of opportunity to expand contribution to
AUB UNPAT, including execution of proposed synergy initiatives;
– Evolve the operating model to allow successful delivery of the strategic objectives and optimise costs.
PROSPECTS FOR FUTURE FINANCIAL YEARS
AUB Group has benefited from investment in our core capabilities, cost management and pricing tailwinds. The Group continues
to hold a modest outlook on the underwriting cycle with a premise that we are in the midst of a positive phase with potential for
extension considering recent ongoing losses in key global underwriting markets.
CORPORATE GOVERNANCE
The 2023 Corporate Governance Statement can be found at the AUB Group website: aubgroup.com.au/corporate-governance.
16
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 RISK MANAGEMENT
Effective risk management is an integral element in AUB Group in achieving its strategic objectives.
Overseen by the Board and the Board Audit and Risk Committee, the Risk Management Framework underpins identification and
management of enterprise-wide and emerging risks and allows for effective decision-making that is within the Board approved
risk appetite and specific limits.
The content and status of risk profiles and mitigation plans is considered and updated, in line with changes to the environment
and operations, through regular reviews by management.
The Board reviews the Group’s key risks and assesses the effectiveness of the risk management framework annually in
accordance with the ASX Corporate Governance Principles and Recommendations.
AUB Group continues to review and enhance its governance structure and processes in accordance with the ‘three lines model’
recommended by the Institute of Internal Auditors (see below).
– Management: responsible for achieving the organisation’s objectives through first-and second-line activities and risk-based
decision-making. Businesses, the ‘first line’, are responsible for evaluating their risk environment, putting in place appropriate
controls and ensuring that these controls are implemented effectively. The ‘second line’ provides complementary expertise
and continuous monitoring systems in areas including legal and compliance, information and technology security,
sustainability, and risk management.
– Internal audit function: undertake assurance and activities to promote and facilitate continuous improvement.
– the Board: responsible for organisational oversight through integrity, leadership, and transparency.
GOVERNING BODY
Accountability to stakeholders for organizational oversight
Governing body roles: integrity, leadership, and transparency
MANAGEMENT
Actions (including managing risk) to
achieve organizational objectives
First line roles:
Second line roles:
Provision of
products/
services to clients;
managing risk
Expertise, support,
monitoring and
challenge on
risk-related maters
INTERNAL AUDIT
Independent assurance
Third line roles:
Assurance on
key processes
and the control
environment
E
X
T
E
R
N
A
L
A
S
S
U
R
A
N
C
E
P
R
O
V
D
E
R
S
I
KEY:
Accountability, reporting
Delegation, direction,
resources, oversight
Alignment, communication,
coordination, collaboration
(source: The Institute of Internal Auditors, Australia.)
17
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023
KEY BUSINESS RISKS
The Group is exposed to various risks during its operations and achievement of its strategic objectives. Broad risk categories,
which may impact the Group’s business strategy and prospects for the future financial year, include:
Strategic
Clearly defining and successfully executing the AUB strategy.
Risk Description
Strategy is unclear, misaligned or fails to take into account the changing competitive, regulatory and technological landscape.
Failure to successfully execute the strategy, including M&A, and deliver strategic objectives and outcomes.
2023 Commentary
Management and Mitigation
Business model of acquiring and holding equity
in operating business
An important part of AUB’s business model and its growth
strategy is to acquire and hold equity in insurance broking,
underwriting agency.
Key considerations include the likely future performance of the
business being acquired and the extent to which the business
will fit strategically within the AUB Group. A priority is the
integration of Tysers which represents a significant acquisition
for the Group.
When due diligence related to acquisitions, mergers or when
AUB makes a strategic or financial investment in an entity, fails
to detect substantial issues, the transactional documents may
not contain corresponding safeguards including representations,
warranties or indemnities, to protect AUB against existing and
potential liabilities of the target businesses.
AUB can be made financially liable and subjected to legal
proceedings for past non-compliances of laws and regulations.
These may affect AUB’s business operations and hinder its
corporate growth. A failed merger and acquisition transaction
may also damage AUB’s reputation.
While AUB ordinarily has veto rights on most decisions
concerning AUB group members, it may not have the capacity
to implement its decisions in all cases.
There can be no assurance that the anticipated benefits and
synergies expected to result from all or some of the integrations
of these acquisitions will be realised.
As part of the annual assessment of strategic risks, the
Board and Management team assess potential risks from
both external and internal factors. Actions to mitigate
these risks are designed as appropriate. Changes to these
key risks and status of actions are reviewed quarterly
at the Risk Management Executive Committee and
bi-monthly at the Board Audit and Risk Committee
meetings.
Specific mitigation actions include:
– Annual strategy and priorities approved by the Board
with bi-annual updates and review;
– Assessment criteria (operational, financial, reputation)
for all M&A activity which is reviewed by senior
management and Board (if required);
– Investment and acquisition approach involving skilled
resource, due diligence and negotiated representations
and warranties;
– Post acquisition review, including capital and returns
analysis;
– Engagement with relevant government stakeholders,
regulators, insurers and industry bodies; and
– Experienced senior leadership team with global sector
knowledge, industry connections and reputation.
18
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 KEY BUSINESS RISKS (CONTINUED)
2023 Commentary
Management and Mitigation
Increased competition or market change
An increase in competition or deterioration in the competitive
positioning of AUB may have an adverse impact on AUB network
members and could potentially result in a reduction in gross
written premium placed through AUB network members due to
a loss of market share; a reduction in fees and commissions;
and/or a reduction in margins which may adversely impact the
revenue and earnings of AUB network members.
Increased competition from new entrants and existing
market participants, including increased commoditisation of
business insurance products, may have an adverse impact
on partner network and AUB earnings. If there are changes in
the remuneration model for, or the use of, insurance brokers,
underwriting agencies, or risk services businesses, this may
adversely impact AUB’s earnings and/or financial position
and performance.
AUB in some cases acts as agent of the insurers. Insurers
may choose to reduce their reliance on insurance brokers and
underwriting agencies including through an increase in their
direct web-based distribution models.
Continued consolidation in the general insurance industry
may result in a more limited product set and/or greater pricing
power for insurers which may result in downwards pressure
on commissions and fees.
Environmental, social and governance (ESG) risks
and expectations
Evolving community attitudes towards, and increasing regulation
and disclosure in relation to ESG issues may impact the
operation of AUB’s business. Increased expectations, and in
particular the failure to meet those expectations, with respect to
ESG may impact on the profitability or value of AUB’s business,
restrict AUB’s ability to attract financing or investment, result in
heightened compliance costs associated with meeting prevailing
regulatory and disclosure standards, or adversely impact on the
reputation of AUB, which may have an adverse effect on AUB’s
business, financial position and prospects.
The Board and Senior Management are constantly
assessing market dynamics and conduct formal strategic
planning sessions twice a year.
Specific additional mitigants include:
– Annual strategy and priorities approved by the Board
with bi-annual updates and review;
– Specialist advisors (eg Sector, banks, legal) provide
market insights, competitor analysis (threats,
opportunities) and regulatory updates;
– Engagement with relevant government stakeholders,
regulators, insurers and industry bodies; and
– Experienced senior leadership team with global sector
knowledge, industry connections and reputation.
The manner in which ESG risks and opportunities are
embedded in the day-to-day business activities continues
to evolve and improve. The following key mitigants have
been implemented over the last 18 months:
– Independent specialists conducted an ESG materiality
assessment, engagement and reporting programme;
– ESG considerations are included as part of stakeholder
engagement plans;
– ESG risks are included as part of each M&A business
assessment; and
– ESG reporting is provided to senior management and
Board.
19
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 KEY BUSINESS RISKS (CONTINUED)
Financial
Risks relating to funding and liquidity management, expected return on investments and mitigation of fraud, client disputes and
professional indemnity claims.
Risk Description
Multiple factors could lead to the Group having insufficient capital or cash flow to meet its obligations including unfavourable
outcomes from inappropriate management of interest rate, foreign exchange, counterparty credit, liquidity and self-insurance
risks, adverse effects from capital structure and funding or losses associated with fraud, claims or disputes.
2023 Commentary
Market risk
The operating and financial performance of AUB is influenced
by a variety of general economic and business conditions,
including levels of consumer spending, inflation, interest rates
and exchange rates and government fiscal, monetary and
regulatory policies.
Changes in general economic conditions may result from many
factors including government policy, international economic
conditions, significant acts of terrorism, hostilities or war
or natural disasters, A prolonged deterioration in general
economic conditions could be expected to have an adverse
impact on AUB’s operating and financial performance and
financial prospects.
The ability of AUB to secure debt financing, or financing on
acceptable terms, may be affected by volatility in the financial
markets, globally or within a particular geographic region,
industry or economic sector. An inability to obtain, or increase
in the costs of obtaining, financing on acceptable terms could
adversely impact AUB’s financial position and performance.
AUB is exposed to movements in interest rates through its
debt facility.
Fraudulent or inappropriate conduct
AUB has in place policies and procedures implemented in
relation to the risk of fraud. However, particularly in relation
to businesses where AUB does not control the day-to-day
operations, there is a risk that funds of the business or of
those held on behalf of clients may be the subject of fraudulent
behaviour. Any such fraudulent behaviour would likely have
an adverse impact of AUB’s financial position, performance
and reputation.
Management and Mitigation
AUB Group proactively manages these risks and
opportunities through its established corporate
governance structures, through the Compliance
Framework, Risk Management Framework, and Assurance
program supported by company policies, standards and
procedures.
We employ specialised and experienced resources and
teams to oversee and educate stakeholders of relevant
regulatory requirements and monitor potential changes.
Where required, we also engage specialist advisors to
support internal resources where required.
Other specific mitigation plans include:
– Finance specialists undertake forecasting and financial
scenario testing activities;
– The organisation operates with segregation of duties
and a Board approved delegation of authority;
– Actions to improve fraud reporting and dashboards
to facilitate more effective oversight; and
– Implementation of external advisory channels for
improved accessibility, accuracy and consistency.
The AUB Group Financial Risk Management Committee
(FRMC) is accountable for assessing key existing and
emerging financial risks, including whether there are
appropriate and effective risk management controls
in place to manage these risks. The Committee meets
at least quarterly and reports significant findings to
the BARC.
20
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 KEY BUSINESS RISKS (CONTINUED)
Compliance and regulatory risk
Risk of non-compliance with obligations (legal, regulatory, contractual) or failure to identify or appropriately respond to changes
in the regulatory environment.
Risk Description
AUB operates in a regulated environment which has been and continues to be subject to regulatory review and change.
2023 Commentary
Management and Mitigation
Failure to act in accordance with regulation, licenses, industry
standards and codes, internal policies and procedures and
principles of good governance could result in regulatory or legal
action, licences being suspended or withdrawn, significant
fines, penalties, other costs, reputation damage and/or reduced
investor confidence. This, in turn, may adversely impact AUB’s
reputational, financial performance and position.
AUB may be exposed to violations of financial crime laws
including fraud, anti-bribery and corruption, sanctions and anti-
money laundering and terrorism financing. The acquisition of
Tysers has further exposed AUB to some jurisdictions which can
be higher risk for breach of such financial crime laws. A breach
of financial crime laws or other applicable laws or regulatory
requirements could lead to enforcement action by regulators,
and/or significant fines and/or other penalties, litigation, as
well as the risk of reputational damage.
Regulatory changes may also impact AUB and/or its operating
entities through costly and burdensome regulation and may
have consequences which cannot be foreseen. Additionally,
compliance with these regulatory obligations may require
considerable investment into the establishment of compliance
systems and the monitoring and maintenance of such systems
to minimise the risk of noncompliance in the future.
AUB also faces the risk of failing to identify or appropriately
respond to changes in the regulatory environment or of
damaging AUB’s standing with its regulators as a result of AUB
not meeting regulatory expectations.
AUB Group proactively manages these risks and
opportunities through its established corporate
governance structures, through the Compliance
Framework, Risk Management Framework, and Assurance
program supported by company policies, standards and
procedures.
We employ specialised and experienced resources and
teams (Legal, Compliance, Finance, etc.) to oversee and
educate stakeholders of relevant regulatory requirements
and monitor potential changes. Where required, we also
engage specialist advisors to support internal resources
where required.
Other specific mitigation plans include:
– Continuous disclosure policy and Management
Disclosure Committee;
– Improved oversight and reporting at a Group and Board
level;
– Policies, Frameworks and Procedures; and
– Financial Crime Compliance Framework.
– Legal advisors identify any potential changes in
legislation, including the impact on AUB business; and
– Structured approach for Regulatory change
implementation, including training and education
of relevant AUB and broker stakeholders.
21
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 KEY BUSINESS RISKS (CONTINUED)
Operational
A disruption that impacts the ability of AUB to operate effectively.
Risk Description
AUB may be unable to continue to operate effectively due to inadequate or failed internal systems and processes, disruption
including inability to access premises, inability to use technology or systems (may be information security or cyber related), an
infrastructure failure, impact to people and third-party disruption (including loss of Binder arrangements).
2023 Commentary
Management and Mitigation
Loss of capacity for underwriting agencies
Unexpected loss of underwriter capacity, whereby an underwriter
fails to renew a binder or withdraws capacity for strategic
reasons (such as exiting lines of business or a specific country
exit) is likely to result in significant loss of income.
Further risk may be as a result of an underwriter withdrawing
capacity due to uneconomic underwriting results. This would
severely constrain the ability of underwriting agencies to write
new business and may restrict them from renewing existing
business. Any such scenario would have an adverse impact on
the financial performance of AUB’s underwriting business.
There are a number of key mitigation strategies to manage
this risk including:
– Binder agreements are subject to layered review by key
and external legal advisors;
– Key binder obligations are identified, communicated
to relevant stakeholders and monitored on a regular
basis;
– Peer to peer review reviews in accordance with
underwriting guidelines;
– Insurer claims and underwriting audits conducted to
identify any control weaknesses or non-performance
of binder agreements; and
– Internal assurance activities are conducted to identify
control weaknesses, the results of which are tabled at
key management and Board meetings.
Specific mitigation actions to manage binder compliance
include:
– Binder management approach;
– Business Continuity Framework and Plans;
– Disaster recovery plans and annual disaster recovery
tests;
– Information security strategy, framework, roadmap;
and
– Tactical controls such as malware, multi-factor
authentication, network segmentation among others.
22
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 KEY BUSINESS RISKS (CONTINUED)
2023 Commentary
Management and Mitigation
Technology and cyber security risk
AUB’s information technology systems (including those
provided by third party technology vendors) are vulnerable to
damage or interruption from a number of sources. Information
security breaches or Cyber incidents could significantly curtail
AUB’s ability to conduct its business and generate revenue
and lead to losses associated with investigation, rectification
and remediation activities. Loss of sensitive (personal or
organisational) information can lead to reputational damage,
client distrust and regulatory inquiries or actions.
– Group has designed and implemented a suite of core
capabilities to manage cyber security and cyber risk.
From the establishment of a set of strategic objectives,
to an industry aligned cyber security framework, to a
roadmap focused on embedding solid foundations,
we have developed an ecosystem whereby our cyber
posture is continually assessed and enhanced.
Taking a risk-based approach to prioritising the cyber
roadmap initiatives, we are focused on meeting our
strategic information security objectives and managing
risk within the enterprises risk appetite and tolerance
levels. Mitigation plans include:
– a security operations centre with technologies
such as managed detection and response (MDR)
and security information and event management
(SIEM);
– cyber awareness training;
– phishing simulation exercises;
– vulnerability and patch management;
– risk and threat assessments;
– third party audits;
– penetration testing; and
– incident and disaster recovery exercises.
Personal and Confidential Information
Specific mitigation actions include:
AUBs operations rely on the secure processing, transmission
and storage of confidential, proprietary and other information.
In addition to information loss from technology and cyber
security breaches, personal and confidential information may
be lost due to theft, misplacement of data, human error or
other similar events.
Any loss, unauthorised disclosure or use of confidential
information, including financial data, commercially sensitive
information or other proprietary data whether by AUB or a third
party could have a material adverse effect on AUB.
The loss of confidential information could result in interruptions
to operations, reputational damage and regulatory action.
– Data protection framework including policies,
standards and procedures;
– Third party contracts include privacy and data loss
provisions;
– Use of incident management and responses plans;
– Physical and system controls to ensure information is
secure and available only to approved personnel;
– Staff training on data and privacy requirements; and
– Privacy due diligence checklist for M&A transactions.
23
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 KEY BUSINESS RISKS (CONTINUED)
Partnering and Outsourcing
AUB failing to identify, develop and manage Broker partnerships and third party relationships to best deliver the long term
strategy
Risk Description
Inability to identify, onboard and effectively manage insurers and third parties by AUB may result in missed opportunities,
financial losses, inability to deliver the strategy, reputation damage and increased concentration risk.
Management and Mitigation
Specific mitigation actions include:
– Contract development and review approach;
– Third party Service Level Agreements (SLAs)/Key
Performance Indicators (KPIs) embedded in contracts
and monitored;
– Partner Development Manager Roles; and
– Delegations of authority are in place, outlining who
can bind AUB into agreements.
2023 Commentary
An important part of AUB’s business model and its growth
strategy is to acquire and hold equity in insurance broking,
underwriting agency or risk services businesses. These
relationships are a significant contributor to AUB Group success.
Failure to manage these relationships effectively could lead
to reduced revenues, increased costs and an inability for AUB
Group to deliver its strategy.
Third Party Risk
AUB utilises third party suppliers to bring external expertise
and support to the business. Insufficient or uncommercial
contractual arrangements may impact the Group’s ability
to maintain efficiency and ensure third parties meet their
obligations.
The risks associated with engaging third parties include
reputational damage, operational disruption, and risks
to AUB’s compliance with laws and regulations.
People
AUB relies on the recruitment, retention and engagement of skilled personnel.
Risk Description
Ineffective recruitment, retention and engagement of skilled/key personnel, or failure to appropriately manage work health
and safety, may result in AUB being unable to operate efficiently and effectively, leading to potential financial and reputational
impacts and inability to successfully execute its strategy.
2023 Commentary
A loss of key personnel by AUB may lead to material business
interruption and loss of key customer or partner relationships.
AUB also relies on the need to be able to attract staff with the
right experience and expertise to assist AUB with successful
execution of its strategic priorities and growth plans. Particularly
given the presently competitive labour market, there can be no
certainty that AUB will be able to attract the people it desires.
Skilled/key personnel may include key persons noted on
Binder Authorities, Responsible Managers as noted on AFSL’s,
incumbents in key roles or individuals who hold business
critical knowledge.
Management and Mitigation
Specific mitigation plans include
– Succession plans and review approach;
– KPI setting and performance reviews;
– Regular monitoring of staff hours and skills gaps to
identify recruitment needs;
– Workforce planning including recruitment and
employee development plans to assist achieve the
organisation’s future goals and keep talent engaged;
and
– Use of employee engagement surveys and anonymous
feedback to be pro-active in employee satisfaction,
work-life balance, and mental health.
24
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 SIGNIFICANT CHANGES IN THE STATE
OF AFFAIRS
There were no significant changes in the state of affairs of
the consolidated entity during the financial year, other than
acquisitions and disposals disclosed above.
SIGNIFICANT EVENTS AFTER THE
BALANCE DATE
On 22 August 2023, the Directors of AUB Group Limited
determined a final fully franked dividend on ordinary shares
of 47.0 cents per share in respect of the 2023 financial year.
Based on the current number of ordinary shares on issue,
the total amount of the dividend is estimated to be $50.95m.
ENVIRONMENTAL REGULATION AND
PERFORMANCE
The Directors are satisfied that adequate systems are in
place for management of the Company’s environmental
responsibility and compliance with various requirements
and regulations. The Directors are not aware of any material
breaches to these requirements, and to the best knowledge,
all activities have been undertaken in compliance with
environmental requirements. Refer to the Environmental,
Social and Governance Report for more details.
INDEMNIFICATION AND INSURANCE
OF DIRECTORS AND OFFICERS
During or since the end of the financial year, the Company
has paid premiums in respect of a contract insuring all
the Directors and Officers of AUB Group Limited against
liabilities, past, present and future.
In accordance with normal commercial practice, the
disclosure of the total amount of premiums under and the
nature of the liabilities covered by the insurance contract
is prohibited by a confidentiality clause in the contract.
INDEMNIFICATION OF AUDITOR
To the extent permitted by law, the Company has agreed to
indemnify its auditor, Ernst & Young Australia, as part of the
terms of its audit engagement agreement, against claims
by third parties arising from the audit (for an unspecified
amount). No payment has been made to indemnify Ernst
& Young during or since the financial year.
25
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 REMUNERATION & PEOPLE COMMITTEE CHAIR’S LETTER
Dear Shareholders
On behalf of the Board of AUB Group Limited (AUB Group), I am pleased to present our Remuneration Report for the financial
year ended 30 June 2023.
The purpose of this report is to describe AUB Group’s remuneration strategy and framework for its Key Management Personnel
(KMP), in particular the links between AUB Group’s executive remuneration framework and business strategy, performance
and reward.
Key financial highlights for FY23
Key FY23 financial highlights include:
– Underlying revenue of $1,111.4m, representing growth of 61.2% from FY22;
– Underlying NPAT of $129.11m, representing growth of 74.42% from FY22; and
– Underlying earnings per share of 129.32 cents, an uplift of 33.73% in comparison to FY22.
Changes to remuneration and key governance measures
The Board continually monitors AUB Group’s incentive scheme frameworks to ensure they appropriately reflect AUB Group’s
profile, are effective in driving business strategy and financial performance to create sustainable shareholder value and continue
to reflect our ‘pay for performance’ philosophy.
During the course of FY23, the Board undertook a review of our Long Term Incentive (LTI) Plan framework, in conjunction with
external stakeholder feedback. Key changes and remuneration governance measures arising from that review included the
following in respect of FY23 LTI awards:
– The addition of a new Return on Invested Capital (ROIC) performance measure;
– An increase in EPS hurdles;
– The introduction of a one year holding lock in relation to Performance Share Rights (PSRs) that vest and convert into Shares
under the LTI Plan; and
– PSRs awarded at share price face value with vested PSRs receiving a cash equivalent of dividends awarded during the
performance period.
It was pleasing to receive overwhelming shareholder support for these changes to the LTI Plan, with 99.8% of shareholders
voting in favour at the Extraordinary General Meeting (EGM) in March 2023.
Furthermore, a minimum shareholding policy for both Non-Executive Directors and Group Executives has been introduced to
provide strong ongoing alignment between Non-Executive Directors, Group Executives and shareholders.
The Board continued to align our risk, remuneration and consequences management framework, with the Remuneration
& People Committee and Board Audit & Risk Committee meeting concurrently to consider if there were risk-based or other
adjustments that may warrant consideration in the Board’s determination of remuneration outcomes. The Committees
observed management’s continued progress in integrating and embedding effective risk management throughout the
organisation to support achievement of business priorities and fulfill corporate governance objectives. The Board is pleased
to confirm that no risk-based or other adjustments to remuneration were recommended by the Committees as a result of their
review of risks and behaviours.
The Board believes that these changes further enhance AUB Group’s remuneration framework and people strategy, and that AUB Group
continues to provide clear and transparent disclosure.
26
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 REMUNERATION & PEOPLE COMMITTEE CHAIR’S LETTER (CONTINUED)
Alignment between performance and remuneration outcomes
AUB Group’s remuneration strategy and framework is based on a ‘pay for performance’ philosophy which supports sustainable
value for our shareholders.
Group Executives received on average 146% of their STI target award (compared to the maximum target STI opportunity of
150%), supported by Underlying NPAT increasing by 74.42% to $129.11m from FY22. This strong Underlying NPAT growth was
driven by both underlying organic growth, pleasingly across all operating businesses, and acquisition driven growth.
To further align the interests of Group Executives with shareholders, 30% of STI outcomes are deferred in the form of PSRs that
vest over 12 and 24 months.
This Remuneration Report discloses the outcome of the FY21 LTI grant (performance period ending 30 June 2023). Based on
sustained long-term performance over this performance period, 100% (in total) of LTI PSRs will vest following testing against
the TSR and EPS performance measures. This was driven by strong EPS growth, combined with high relative TSR performance
resulting in AUB Group significantly outperforming its Peer Comparator Group.
Group Executive remuneration framework review
As part of the annual remuneration review cycle, and following the recent international expansion of AUB’s business, the Board
undertook a review of the Group Executive remuneration framework to ensure competitiveness across its global markets,
alignment to strategic priorities and effectiveness in retaining and attracting the leadership and talent it needs to drive
business strategy and financial performance in the interests of shareholders, The changes to CEO remuneration are set out
in this report.
We invite you to read the Remuneration Report and welcome your feedback.
Paul Lahiff
Chair of Remuneration & People Committee
27
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023
REMUNERATION REPORT OVERVIEW
This Remuneration Report for the financial year ended 30 June 2023 has been prepared in accordance with section 300A of the
Corporations Act and has been audited as required by section 308(3C) of the Corporations Act.
Terms used in this Remuneration Report are defined in the Glossary within Section 7 of this report.
List of KMPs – Reporting Period
Table 1 below outlines the KMP during the Reporting Period.
Name
Position
Term as KMP
Non-Executive Directors
David Clarke
Richard Deutsch
Peter Harmer
Andrew Kendrick
Paul Lahiff
Robin Low
Cath Rogers
Executive KMP
Michael Emmett
Mark Shanahan
Chair; Non-Executive Director
Full financial year
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
From 3 November 2022
Full financial year
From 27 January 2023
Full financial year
Full financial year
Full financial year
Chief Executive Officer and Managing Director
Full financial year
Chief Financial Officer
Full financial year
Contents
This Remuneration Report is set out in the following sections:
Section 1 – Group Executive Remuneration Framework
Section 2 – How variable remuneration is structured
Section 3 – Remuneration Outcomes and Alignment to Performance
Section 4 – Remuneration Governance
Section 5 – Non-Executive Director Remuneration
Section 6 – Statutory Remuneration Tables and Data
Section 7 – Glossary of terms commonly used in this Remuneration Report
28
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 SECTION 1 GROUP EXECUTIVE REMUNERATION FRAMEWORK
OUR REMUNERATION PRINCIPLES
The following principles guide AUB Group’s remuneration strategy and ‘pay for performance’
philosophy, which are designed to attract, retain and motivate highly skilled individuals.
Alignment to shareholder
interests & sustainable
shareholder returns
Encourage behaviours consistent
with values & deliver good
partner outcomes
Reflect the markets
we recruit from
and need to be
competitive in
Performance based –
link rewards to business
results and strategy
Robust governance
with focus on risk
management
SENIOR EXECUTIVE REMUNERATION STRUCTURE
FIXED
STI
LTI
FIXED REMUNERATION
Base salary, superannuation
& other benefits
SHORT-TERM INCENTIVE (STI)
Reward for strong individual and
group performance during the
performance period
LONG-TERM INCENTIVE (LTI)
Reward for sustainable longer-term
AUB Group performance
VALUE DETERMINED BY
– Experience, position and
responsibilities
– Competitive fixed
remuneration in the market
(market median)
Achievement of annual financial
and non-financial performance
hurdles at a:
– TSR – 40% weighting
– EPS – 40% weighting
– ROIC – 20% weighting
– Group level
– Business unit level
– Individual level
HOW DOES IT LINK WITH STRATEGY & PERFORMANCE
– Provides competitive ongoing
remuneration in recognition
of day-to-day responsibilities
and accountabilities
– Supports annual delivery of
– Focuses on multi-year metrics
key strategic and operational
targets and to recognise and
reward individual performance
– Deferred STI supports
retention and more closely
aligns the interest of
executives and shareholders
that support sustained
shareholder value creation
– Delivered in equity to align
the interests of executives
and shareholders
– Supports retention
AT RISK
29
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 SECTION 1 GROUP EXECUTIVE REMUNERATION FRAMEWORK (CONTINUED)
Group Executive Remuneration Mix
Total remuneration includes both a fixed component and an at-risk or performance-related component, comprising both short-
term and long-term incentives. The Board views the at-risk component as an essential driver of a high-performance culture and
one that contributes to achievement of sustainable shareholder returns.
The following illustration shows the remuneration mix for the Group Executives in FY23. It has been modelled on the average
of the Group Executive’s target opportunity (but excluding the one-off grant of Share Appreciation Rights (SARs) under the
Outperformance Plan).
The Board aims to achieve a balance between fixed and performance-related components of remuneration. The actual
remuneration mix for the Group Executives will vary depending on the level of performance achieved by the AUB Group as
well as the realised value of PSRs that vest and convert into shares.
CEO Remuneration Mix
Target Remuneration
Maximum Remuneration
Actual Remuneration
36%
32%
32%
27%
36%
35%
36%
32%
32%
0%
20%
40%
60%
80%
100%
Fixed
STI*
LTI
Group Executive (ex-CEO) Remuneration Mix
Target Remuneration
Maximum Remuneration
Actual Remuneration
0%
37%
33%
34%
20%
26%
34%
33%
37%
33%
34%
40%
60%
80%
100%
Fixed
STI*
LTI
*
15% of STI is deferred is deferred for 1 year, a further 15% is deferred for 2 years.
Minimum Shareholding Policy
The Board endorsed during this Reporting Period a minimum shareholding policy for Group Executives to promote the
alignment of executive interests with the long-term interests of shareholders and support long-term sustained value creation for
AUB Group. The CEO is required to acquire AUB Group shares equivalent to 150% of base salary, and other Group Executives are
required to acquire AUB Group shares equivalent to 100% of base salary. Group Executives have a five-year period commencing
on the later of 1 July 2023 or the date of their appointment (hire or promotion) to meet the minimum shareholding expectation.
Further details of Executive KMP shareholdings are provided in Table 9.
30
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023
SECTION 1 GROUP EXECUTIVE REMUNERATION FRAMEWORK (CONTINUED)
Group Executive remuneration time horizon
The following diagram provides an illustrative indication of how remuneration is delivered to Group Executives.
Fixed Remuneration
STI cash component (70%)
STI deferred component (15%)
STI deferred component (15%)
LTI
Year 1
Year 2
Year 3
Year 4
Date granted
End of deferral/performance period
Date paid/eligible for vesting
End of holding lock
Adjustments to ongoing CEO remuneration
Executive Remuneration was reviewed and there were no adjustments during the reporting period, including no adjustments to
CEO & Managing Director remuneration. A summary of CEO & Managing Director remuneration arrangements for the reporting
period is as follows:
Item
Fixed remuneration
STI (at target)
LTI opportunity
Total target remuneration
$
1,000,000
750,000
1,000,000
2,750,000
Following the reporting period, the Board has adjusted the CEO & Managing Director remuneration for FY24 as follows:
Item
Fixed remuneration
STI (at target)*
FY24 LTI opportunity**
Total target remuneration
* Maximum Short-Term Incentive opportunity is capped at 150% of target STI award.
** Face value of LTI award. The FY24 LTI grant is subject to being approved by shareholders at the Annual General Meeting in November 2023..
$
1,250,000
1,000,000
1,875,000
4,125,000
31
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023
SECTION 2 HOW VARIABLE REMUNERATION IS STRUCTURED
SHORT TERM INCENTIVE (STI) – HOW DOES IT WORK?
Description
Group Executives have the opportunity to earn an annual incentive award which is delivered in cash.
The STI Plan recognises and rewards short-term performance.
STI opportunity
The STI Plan is considered to be at-risk remuneration and is not a guaranteed part of Group
Executive remuneration.
A target opportunity is set for each Group Executive, which is earned if individual performance is
on target and the participant performs against a balanced scorecard set of KPIs, which includes
both financial and non-financial measures that have weighted allocations and are aligned to AUB
Group’s strategic priorities (the Balanced Scorecard). The Board determines the total STI accrual to
be distributed.
Group Executives (including the CEO) have (on average) a target STI opportunity of 70% of fixed
remuneration. The maximum STI payout is capped at a maximum of 150% of a participant’s target
STI opportunity.
Performance
conditions
Group Executive performance is assessed against a Balanced Scorecard (for further details of the
CEO’s Balanced Scorecard, refer to Table 4).
Individual targets as set out in the Balanced Scorecard include consideration as to role-related
accountabilities and responsibilities in the context of business strategy and objectives.
A behavioural gateway is incorporated into the performance review process and operates to
reduce an incentive payment should there be conduct that is inconsistent with AUB Group’s
values, irrespective of performance. The Group CEO’s behaviour is assessed by the Board. Group
Executives’ behaviours are assessed by the CEO, who recommends eligibility for Group Executive
STI to the Board.
Underlying NPAT is the key financial performance measure in the Balanced Scorecard, is used by
management and the Board to assess operational performance and is a strong indication of the
underlying health of the business.
Why were these
performance
conditions chosen?
The Board considers that a Balanced Scorecard which contains weighted allocations to both
financial and non-financial performance conditions is appropriate as they are aligned with AUB
Group’s objectives of delivering sustainable growth and returns to shareholders.
Group Executives have a clear line of sight to KPIs and are able to directly affect outcomes through
their own actions. Group Executives are also assessed on behavior metrics (the ‘how’) which
contribute to that individual’s overall performance rating. This operates to reduce an incentive
payment should there be conduct that is inconsistent with AUB Group’s values, irrespective of
performance.
For all individuals, the Board may apply discretion in determining the STI outcomes to ensure they
appropriately reflect performance.
How STI outcome
is then determined
On an annual basis, a rating is determined for each Group Executive based on an evaluation of their
performance against the balanced scorecard. This individual performance rating metric is then
applied to the individual’s STI target award.
Individual STI Payment = STI Target Incentive Award x Scorecard Performance Rating
STI outcomes are therefore scaled up or down to reflect performance against the agreed KPIs
in their Balanced Scorecard. The KPIs are set and reviewed annually.
Prior to an award, the scorecard outcome is assessed holistically against individual and Group
performance to determine if any discretion to vary from scorecard results should apply. The level
of incentive outcome reflects the performance of AUB Group and the individual, thereby ensuring
it is aligned with shareholders’ interests.
32
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 SECTION 2 HOW VARIABLE REMUNERATION IS STRUCTURED (CONTINUED)
SHORT TERM INCENTIVE (STI) – HOW DOES IT WORK?
(CONTINUED)
Deferral terms
The following STI deferral arrangements have been introduced for Group Executives: 70% of STI
outcome will be paid in cash and the remaining 30% is deferred in the form of an equity award of
PSRs, with these PSRs vesting as follows:
– half of the deferred component (15% of the STI outcome) after 12 months; and
– half of the deferred component (15% of the STI outcome) after 24 months.
No additional performance conditions apply to the vesting of PSRs, with the exception of the
continued employment by the relevant Group Executive as described below.
The number of PSRs is calculated using the VWAP over the 60 trading days immediately prior
to and including the last day of the performance period.
An amount (based upon dividends paid by AUB during the deferral period) accrues on the PSRs
and is paid in cash at the end of the deferral period if the PSRs vest.
The Board has broad ‘clawback’ powers to lapse unvested PSRs in a number of circumstances,
including in the event of fraud, dishonesty, gross misconduct, breach of duties or obligations, a
material misstatement, error or omission in the financial report, to prevent a participant being
entitled to an inappropriate benefit, or if there is a change of control event.
The clawback policy also permits clawback of any shares allocated on exercise of the PSRs, as well
as cash payments received on vesting and exercise of PSRs.
Eligibility for
dividends
Forfeiture and
clawback
Who assesses
performance?
The Board assesses performance of the CEO and Managing Director against the Balanced
Scorecard (as described in Table 4) with the benefit of recommendations from the Remuneration
and People Committee.
The CEO and Managing Director assesses the other Group Executives’ performance based on the
Group Balanced Scorecard outcomes and achievement against individual goals. The CEO and
Managing Director then recommends an STI award for consideration by the Remuneration and
People Committee, which then recommends an STI award for approval by the Board.
The Board believes the abovementioned methods in assessing performance are an appropriate way
to assess the performance of AUB Group and the Group Executives’ individual contribution, and to
determine their remuneration outcomes.
In addition, the aggregate of annual STI payments available for all employees is subject to review
by the Remuneration and People Committee and approval of the Board.
Cessation of
employment
A Group Executive will only remain eligible to receive an STI outcome if that person ceases
employment prior to the STI entitlement date and is a ‘good leaver’ (for example, ceases
employment by reason of retirement or bona fide redundancy), unless the Board determines
otherwise.
If a Group Executive has ceased employment and is a ‘good leaver’, then unvested PSRs (deferred
STI) will remain on foot and vest in the ordinary course, unless the Board determines otherwise.
If a Group Executive has ceased employment and is not a ‘good leaver’, then unvested PSRs
will automatically lapse on or around the date of cessation of employment, unless the Board
determines otherwise.
Restrictions on
transfer or hedging
PSRs granted under the plan are not transferable and participants are prohibited from entering into
hedging arrangements in respect of unvested PSRs.
33
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 SECTION 2 HOW VARIABLE REMUNERATION IS STRUCTURED (CONTINUED)
FY23 LONG TERM INCENTIVE – HOW DOES IT WORK?
Description
Under the FY23 LTI Plan, annual grants of PSRs are made to eligible participants to align
remuneration outcomes with the creation of sustainable shareholder value over the long term.
Group Executives are eligible to participate, as these employees on an individual basis have the
ability to impact AUB Group’s longer term financial performance.
Non-Executive Directors are not eligible to participate in the LTI Plan.
LTI opportunity
The number of PSRs granted to a Group Executive is calculated by dividing the dollar value of the
Group Executive’s LTI Opportunity by the VWAP over the 60 trading days prior to the start of the
relevant performance period.
In determining the ‘LTI Opportunity’, the Board will take into account the nature of the position, the
context of the current market, the function and purpose of the long-term component and other
relevant information.
Vesting conditions
PSRs will only vest to the extent that the vesting conditions and ongoing employment conditions
(set out below later in this table) are satisfied over the relevant three year performance period.
PSRs are tested against three vesting conditions over a three year performance period:
– 40% of PSRs are tested against an EPS hurdle;
– 40% of PSRs are tested against a Relative TSR hurdle; and
– 20% of PSRs are tested against a Return on Invested Capital (ROIC) hurdle.
Vesting outcomes for FY20 and FY19 LTI PSRs exercised during FY23 are detailed in Note 21 of the
Financial Report.
The EPS vesting condition is measured by comparing the Compound Annual Growth Rate (CAGR)
of the Underlying EPS from the financial year immediately preceding the start of the performance
period to the Underlying EPS for the final year of the performance period. CAGR is therefore
measured using the most recent financial year-end prior to the grant as the base year and the final
financial year in the three-year performance period as the end year.
The percentage of EPS PSRs granted in FY23 that may vest is determined based on the following
vesting schedule (see hurdles and outcomes of FY21 grants in section 3 of this report):
CAGR of Underlying EPS
PSRs subject to EPS vesting
condition that vests (%)
Base and required EPS Outcomes
for FY23 Grant
(cents per share – cps)
Base for EPS growth
30 June 2022 Underlying EPS
96.70 cps Base
Less than 7%
7%
0%
50%
Less than 118.46 cps in FY25
At 118.46 cps in FY25
Greater than 7% to less than
12%
Straight line vesting between
50% and 100%
Between 118.46 cps and
135.85 cps in FY25
12% or more
100%
135.85 cps in FY25 or greater
EPS – 40%
weighting
34
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 SECTION 2 HOW VARIABLE REMUNERATION IS STRUCTURED (CONTINUED)
FY23 LONG TERM INCENTIVE – HOW DOES IT WORK?
(CONTINUED)
Relative TSR –
40% weighting
The Board approves a Peer Comparator Group and has the discretion to periodically review and
adjust the composition of the Peer Comparator Group, including to take into account acquisitions,
mergers, or other relevant corporate actions.
For purposes of calculating the growth in AUB Group’s share price over the performance period, the
following opening and closing share prices will be used:
– for the opening share price, the VWAP during the 60 trading days ending on the first day of the
performance period, and
– for the closing share price, the VWAP during the 60 trading days ending on the last day of the
performance period.
Relative TSR performance is assessed over a three-year period which commences at the start of
the financial year during which the PSRs are granted.
For any PSRs to vest pursuant to the Relative TSR vesting condition, AUB Group’s compound TSR
must be equal to or greater than the median ranking of constituents of the Peer Comparator Group.
The percentage of TSR PSRs that may vest is determined based on the following vesting schedule:
AUB Group’s TSR ranking relative to Peer
Comparator Group
PSRs subject to Relative TSR vesting
condition that vests (%)
Below the 50th percentile
50th percentile
0%
50%
Between the 50th and 75th percentile
Straight line vesting between 50% and 100%
At or above the 75th percentile
100%
ROIC – 20%
weighting
The ROIC vesting condition is measured based on the average annual return on invested capital
(ROIC) achieved, which is assessed over a 3 year performance period.
The percentage of PSRs that may vest is determined based on the following vesting schedule:
3 year average ROIC
Less than 11%
11%
PSRs subject to ROIC vesting condition that vests
(%)
0%
50%
Greater than 11% to less than 12%
Straight line vesting between 50% and 100%
12% or more
100%
ROIC in each year is calculated as EBITA Less Tax divided by Average Invested Capital, defined as
follows:
EBITA Less Tax
Invested Capital
Underlying NPAT, add back interest expense related to external
borrowings (net of interest received from operating bank accounts)
as per consolidated financial statements after tax.
The sum of equity attributable to equity holders of the parent plus
interest-bearing loans and borrowings (excluding lease liabilities),
less cash and cash equivalents not held in trust.
Average Invested Capital
(Invested Capital at financial year end + Invested Capital at previous
financial year end)/2
3 year average ROIC
Simple average of ROIC in each of the 3 years of the performance
period
35
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 SECTION 2 HOW VARIABLE REMUNERATION IS STRUCTURED (CONTINUED)
FY23 LONG TERM INCENTIVE – HOW DOES IT WORK?
(CONTINUED)
ROIC – 20%
weighting
Calculation of invested capital and average invested capital at the end of the reporting period ($,000)
Equity attributable to Shareholders of AUB Group
as at 30 June
External interest-bearing Loans and Borrowings
(excluding lease liabilities)
Less cash and cash equivalents (excluding cash
held in trust)
Invested Capital
Average Invested Capital
3 year average ROIC
FY21
FY22
FY23
478,754
854,494
1,279,853
212,283
47,802
584,230
(76,588)
(259,329)
(260,352)
614,449
595,561
11.8%
642,967
1,603,731
628,708
1,123,349
11.7%
12.6%
Why were these
performance
conditions chosen?
The Board is confident that it has the right arrangements in place to drive performance and
retention in line with shareholders’ interests.
EPS
– Is a relevant indicator of increases in shareholder value; and
– Is a target that provides a suitable line of sight to encourage executive performance.
Relative TSR
– Ensures alignment between comparative shareholder return and reward for the executive;
– Provides a relative test that reflects AUB Group’s performance against the market and an
objective test reflective of management’s performance in growing earnings per share; and
– Is widely understood and accepted by key stakeholders.
ROIC
– Ensures alignment between an increase in underlying profit and appropriate returns on new
acquisitions;
– Indicates the company’s ability to generate a return on all its capital;
– Outcomes can be measured against peers to determine relative performance; and
– Performance can be measured against acquisition strategy and compared against actual
outcomes.
Who assesses
performance
and when?
EPS and ROIC results are calculated by AUB Group and an external remuneration advisor tests the
TSR results as soon as practicable after the end of the relevant three year performance period. The
calculations are considered by the Board to determine vesting outcomes.
The vesting conditions are therefore tested at the end of the performance period and the Board
determines the relevant number (if any) of PSRs that will vest and convert into shares.
Calculation of the vesting conditions and achievement against the vesting conditions is
determined by the Board in its absolute discretion, having regard to any matters that it considers
relevant (including any adjustments for unusual or non-recurring items that the Board considers
appropriate).
Any PSRs that do not vest following testing at the completion of the performance period, lapse.
36
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 SECTION 2 HOW VARIABLE REMUNERATION IS STRUCTURED (CONTINUED)
FY23 LONG TERM INCENTIVE – HOW DOES IT WORK?
(CONTINUED)
Vesting
PSRs vest following testing by the Board at the end of the relevant three year performance period.
Prior to vesting, the outcome is assessed holistically against individual and Group performance
to determine if any discretion to vary from formulaic results should apply. The Board will have the
discretion to exclude the impact of significant acquisitions or capital raisings that are considered
in the best long-term interest of AUB if these occur within the final 12 months of the performance
period. Any discretion applied will be disclosed.
If PSRs vest, the Board has discretion to issue new shares, acquire shares on-market or to cash
settle to satisfy the PSRs that will vest.
Participants receive one share for each PSR that vests or, if the Board determines, an equivalent
cash payment.
Shares allocated on vesting of the PSRs are subject to the terms of AUB Group’s Securities Trading
Policy and carry full dividend and voting rights upon allocation.
Holding Lock
There will be a holding lock for a period of one year from the date that the PSRs vest and convert
into shares.
During this period executives will be restricted from dealing with any of the shares allocated on
vesting.
Are PSRs eligible
for dividends?
For PSR grants issued after 1 July 2022, holders of PSRs are entitled to a cash equivalent of
dividends paid during the performance period if the PSRs vest.
There are no voting rights until the PSRs have vested and converted into shares.
Cessation of
employment – CEO
and Managing
Director
Cessation of
employment –
Group Executives
other than the CEO
If the CEO and Managing Director ceases employment before his PSRs vest, then the following
treatment applies:
– if employment is terminated in accordance with Mr Emmett’s employment agreement, without
notice, for serious misconduct or by reason of illness, injury or incapacity of Mr Emmett, all
unvested PSRs will automatically lapse; or
– if employment is terminated with notice given by the Company or Mr Emmett, all unvested PSRs
remain on foot and will be tested in the ordinary course.
If a participant ceases employment before his/her PSRs vest, then the following treatment applies,
unless the Board determines otherwise:
– if employment is terminated for cause, as a result of the participant being unable to perform
duties due to ill health, injury or incapacity or if the participant resigns, then all unvested PSRs
automatically lapse; or
– if employment ceases in any other circumstances, then a pro rata portion of the participant’s
PSRs (based on the portion of the performance period that has elapsed up to the date of
cessation) remain on foot and are tested in the ordinary course in accordance with the vesting
conditions.
If a participant ceases employment and holds vested PSRs which have not been exercised, then the
following treatment applies, unless the Board determines otherwise:
– if employment is terminated for cause, then all vested PSRs automatically lapse; or
– if employment ceases in any other circumstances, then all vested PSRs must be exercised
within three months of cessation of employment. After this time, all vested PSRs are
automatically exercised at a time determined by the Board.
37
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 SECTION 2 HOW VARIABLE REMUNERATION IS STRUCTURED (CONTINUED)
FY23 LONG TERM INCENTIVE – HOW DOES IT WORK?
(CONTINUED)
Forfeiture and
clawback
The Board has broad ‘clawback’ powers to lapse unvested PSRs in a number of circumstances,
including in the event of fraud, dishonesty, gross misconduct, breach of duties or obligations,
a material misstatement, error or omission in the financial report, to prevent a participant being
entitled to an inappropriate benefit, or if there is a change of control event.
What happens
in the event of a
change of control?
The clawback policy also permits clawback of any shares allocated on exercise of the PSRs,
as well as cash payments received on vesting and exercise of PSRs.
There is no automatic vesting of PSRs on a change of control. The Board has discretion to
determine the appropriate treatment regarding PSRs in the event of a change of control.
Where the Board does not exercise this discretion, there will be a pro-rata vesting of PSRs based
on the proportion of the performance period that has passed at the time of the change of control
event.
Restrictions on
transfer or hedging
PSRs granted under the LTI Plan are not transferable and participants are prohibited from
entering into hedging arrangements in respect of PSRs.
38
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 SECTION 3 REMUNERATION OUTCOMES AND ALIGNMENT TO PERFORMANCE
Alignment between remuneration and group performance
Numerous elements of AUB Group’s remuneration strategy and framework are directly linked to group performance.
The table below sets out information about movements in shareholder wealth for the financial years ended 30 June 2019 to
30 June 2023 highlighting alignment between AUB Group’s remuneration strategy and framework and group performance over
the past 5 years.
Table 2: Summary of movement in shareholder wealth
Underlying NPAT ($m)
Underlying EPS (cents)
TSR (%)
Share price ($)
Change in share price ($)
Dividends paid and proposed (cents)
2023
129.11
129.32
69.40
29.40
11.72
64.0
2022
74.02
96.70
(18.58)
17.68
(4.71)
55.0
2021
65.30
86.12
60.99
22.39
7.69
55.0
2020
53.15
70.61
5.20
14.70
4.26
50.0
2019
46.71
65.74
(10.50)
10.44
(3.14)
46.0
Executive remuneration is directly aligned with group performance through STI measures of profitability, and LTI measures of
EPS growth, capital efficiency, and TSR performance relative to constituents of the S&P/ASX Small Ordinaries Industrials Index.
AUB Group Limited (AUB) v S&P/ASX Small Ordinaries Industrials Index (AXSID)
AUB Group Limited TSR compared to S&P/ASX Small Ordinaries Industrials Index
250
200
150
100
50
)
0
0
1
o
t
d
e
x
e
d
n
I
(
n
r
u
t
e
R
r
e
d
o
h
e
r
a
h
S
l
l
a
t
o
T
0
Jun-20
260.28
174.59
107.09
Dec-20
Jun-21
Dec-21
Jun-22
Dec-22
Jun-23
AUB Group Ltd
Peer Comparator Group 50th Percentile
Peer Comparator Group 75th Percentile
Further details about AUB Group’s performance over this period can be found in the Operating and Financial Review section
contained in this Directors’ Report.
39
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023
SECTION 3 REMUNERATION OUTCOMES AND ALIGNMENT TO PERFORMANCE (CONTINUED)
Remuneration outcomes
The remainder of this section of the Remuneration Report discloses the outcome of awards made under:
– the FY23 STI award (performance period 1 July 2022 – 30 June 2023); and
– the FY21 LTI grant (performance period 1 July 2020 – 30 June 2023).
FY23 STI Outcomes
FY23 continued a run of strong performance for the Group and therefore the Board considered STI for FY23 and has provided
for an accrual of $5.96m for all Group STI participants (including deferred components of STI granted in prior periods).
Table 3: Group STI accrual outcome
($’m)
Cash bonuses
2023
5.96
2022
4.74
2021
4.01
2020
3.57
2019
0.88
Table 4: FY23 CEO Balanced Scorecard
Performance Category and
Weighting
Measures
FY23 Balanced Scorecard
Financial
(70%)
Business profitability and financial performance:
– % Growth in Group UNPAT;
– % Growth in Tysers UNPAT;
– Network growth, including value of M&A transactions (excl. Tysers);
– % NZ Profit Growth; and
– % Profit Growth in Agencies.
Achieved
(% of max)
100%
Network Partners
and Customers
(16.67%)
– Board Assessment of Network, Customer and Team progress;
– Number of business optimisations (consolidations, simplifications and equity
90%
restructuring); and
– Continued uplift in effectiveness of risk management and compliance
processes and reporting.
Other
(13.33%)
– Number of alternative Premium Funding Arrangements;
– Successful completion of Tysers integration activities, including incentive
schemes to retain key brokers; and
– Scaling of IT platforms, including Lola development.
STI Scorecard outcome
93.33%
97.44%
This resulted in an STI award of $1,096,250 of which 70% will be paid in cash with the balance allocated to PSRs and will vest
over 12 and 24 months. See section 2 of this report for further details.
40
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 SECTION 3 REMUNERATION OUTCOMES AND ALIGNMENT TO PERFORMANCE (CONTINUED)
LTI Outcomes
2021 LTI grant outcomes
100% of the total 2021 LTI grant will vest:
– 100% of the Relative TSR component will vest given that AUB Group’s TSR was 141.09%, which resulted in AUB’s percentile
rank at 95.09% over the performance period;
– 100% of the EPS component will vest given that AUB Group’s actual EPS AAGR across the performance period was 22.74%;
and
– 164,436 PSRs will vest on 31 August 2023.
Table 5 below discloses the outcomes of the 2021 LTI grant. All unvested PSRs after testing will lapse.
1 July 2020 to 30 June 2023
Total shareholder return (TSR) outcomes – 40% of total PSR grant* (65,775 PSRs)
TSR of AUB Group Limited
Percentile Rank
Number of TSR PSRs vesting percentage under the 2021 LTI plan
100% vesting of TSR PSRs where AUB Group’s TSR ranking relative to Peer Comparator Group
exceeds 75% percentile.
Actual outcome
141.09%
95.09%
100%
Earnings Per Share (EPS) outcomes – 60% of total PSR grant* (98,661 PSRs)
1 July 2020 to
30 June 2023
Minimum entry
target for vesting
Straight line
for vesting
Maximum threshold
target for vesting
Actual 3-year AAGR
achieved (%)
Actual vesting
outcome
5% AAGR
5%-10% AAGR
10% AAGR
22.74%
N/A
EPS vesting
percentage
(of the 60%)
50%
50%-100%
100%
N/A
Total percentage of EPS PSRs vesting under the 2021 LTI Plan
*
The vesting conditions in Table 5 apply to the 2021 LTI Plan.
100.00%
100%
Results of the 3 year testing of the CEO’s 200,000 PSRs sign on grant.
A sign-on bonus of 200,000 PSRs was granted to the CEO and Managing Director that vest over five years. In the previous year,
one third of the PSRs were tested over the three year performance period from 1 July 2019 to 30 June 2022.
The TSR and EPS hurdles for the sign-on PSR grant were the same as the hurdles for the FY20 grants.
Based on the TSR and EPS outcomes (refer to the remuneration report included in the 2022 Annual Report), all 66,667 PSRs
(both TSR PSRs and EPS PSRs) satisfied the performance hurdles and will therefore remain on foot and vest at the end of the
5 year period ended 30 June 2024, subject to the CEO’s employment conditions.
The remaining balance of 133,333 PSRs (TSR and EPS) will be tested after the completion of the 5 year period ended 30 June
2024. Any unvested PSRs at that time will lapse.
41
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 SECTION 4 REMUNERATION GOVERNANCE
Overview
The following diagram illustrates AUB Group’s remuneration governance framework.
BOARD
The Board reviews, amends and approves the recommendations from the Board’s Committees around governance,
strategy, performance, and the remuneration arrangements for all Group Executives and Non-Executive Directors.
REMUNERATION & PEOPLE COMMITTEE
Oversees our remuneration philosophy
and framework.
The Committee is responsible for reviewing
compensation arrangements for the Directors, CEO
and Group Executives, including the Company’s
KMP and making recommendations in that regard
for determination by the Board. The Committee
comprises all Non-Executive Directors of the Board.
EXTERNAL ADVISORS
The Board and the Committee seek advice from
independent experts and advisors from time to time
on various matters, including remuneration. The
Committee appoints remuneration consultants and
external advisors and ensures independence.
CEO & MANAGING DIRECTOR (CEO) AND MANAGEMENT
The CEO makes recommendations to the Committee regarding Executives’ remuneration. These recommendations
take into account performance, culture and values. Together with management, the CEO also provides information and
recommendations for deliberation and implements arrangements once they have been approved.
Use of remuneration advisors
In making recommendations to the Board, the Remuneration & People Committee seeks advice from external advisors from
time to time to assist in its deliberations. Remuneration advisors are engaged by the Chair of the Remuneration & People
Committee with an agreed set of protocols that determine the way in which remuneration recommendations would be
developed and provided to the Board. This process is intended to ensure there can be no undue influence by Executive KMP to
whom any recommendations may relate. No remuneration recommendations, as defined by the Corporations Act, were made
by the remuneration advisors during the Reporting Period.
42
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023
SECTION 4 REMUNERATION GOVERNANCE (CONTINUED)
Executive Service Agreements
The remuneration and other terms of employment for the Executive KMP are formalised in employment agreements, which have
no specified term. Each of these agreements provide for performance-related bonuses under the STI Plan, and participation,
where eligible, in the LTI Plan. Other major provisions of the service agreements of the Executive KMP are as follows:
Table 6: Executive Service Agreement terms
Name
CEO and Managing Director
Michael Emmett
Other Executive KMP
Notice to be given
by executive
Notice to be given
by AUB Group*
Termination
payment
Post-employment
restraint
12 months
12 months
12 months fixed
remuneration
12 months
Mark Shanahan
6 months
6 months
6 months fixed
remuneration
12 months
*
Payments may be made in lieu of notice period.
Disclosures under Listing Rule 4.10.22
A total of 39,169 shares were acquired on-market by the Austbrokers Employee Share Acquisition Schemes Trust (at an average
price of $27.07 per share) during the Reporting Period to satisfy AUB Group’s obligations under various equity and related plans.
Securities Trading Policy
AUB Group’s securities trading policy prohibits Group Executives from entering into margin lending or similar arrangements in
relation to AUB Group’s securities, including transferring securities into an existing margin loan account and/or selling securities
to satisfy a call pursuant to a margin loan.
Breaches of AUB Group’s securities trading policy are regarded very seriously and may lead to disciplinary action being taken
(including termination of employment).
43
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 SECTION 5 NON-EXECUTIVE DIRECTOR REMUNERATION
Details of the Non-Executive Directors of AUB Group during the Reporting Period are provided in the Directors’ Report.
Components and details of Non-Executive Director remuneration
Non-Executive Directors receive a fixed fee (inclusive of superannuation) for services to the Board and each Board Committee
on which the Director serves.
A further fee is payable to Non-Executive Directors who are directors of Tysers Insurance Brokers Limited, which is a wholly
owned subsidiary of AUB Group. Non-Executive Director fees for the reporting period are shown in Table 7.
Non-Executive Directors do not receive retirement benefits other than amounts paid by way of the superannuation guarantee,
nor do they participate in any incentive programs, but they may be reimbursed for expenses reasonably incurred in the course of
carrying out their duties.
AUB Group does not make sign-on payments to new Non-Executive Directors and does not provide for retirement allowances for
Non-Executive Directors.
Aggregate fee cap approved by shareholders
Non-Executive Directors’ fees are set by the Board within the maximum aggregate amount of $1,500,000 per annum approved
by shareholders at the Annual General Meeting in November 2022.
Table 7: Non-Executive Director fees payable during the Reporting Period
1 July 2022 to 30 June 2023
Board fees per annum
Chair
Non-Executive Director
Committee Chair (Board Audit & Risk)
Committee Chair (Remuneration & People)
Committee Chair (Nomination)
Subsidiary Boards (excluding Tysers)
Committee member
Tysers Insurance Brokers Limited: Chair
Tysers Insurance Brokers Limited: Non-Executive Director
$ Amount (incl. of statutory superannuation)
240,000
120,000
Additional 25,000
Additional 15,000
N/A
Additional 10,000
N/A
GBP 100,000
GBP 50,000
Non-Executive Directors Minimum Shareholding Policy
Non-Executive Directors are encouraged to hold AUB shares and the Board has endorsed a minimum shareholding policy for
Non-Executive Directors to hold 100% of the annual director (or Board Chair) base fee within five years, commencing on the later
of 1 July 2023 or the date of their appointment. The value of shares for determining compliance is the higher of cost or market
value.
Our Non-Executive Director minimum shareholding policy is intended to align the interests of Non-Executive Directors with our
shareholders. The Non-Executive Directors do not participate in any of our performance-based incentive schemes and have to
acquire shares out of their own funds.
44
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 SECTION 6 STATUTORY REMUNERATION TABLES AND DATA
Table 8: PSR/SARs movements for the period
The LTI grants for FY23 and movements in all unvested PSRs previously granted to Senior Employees are summarised in the
LTIP tables below:
GROUP EXECUTIVES (including KMPs)
LTIP Financial Year
(tranche)
Opening
Granted
Lapsed
Exercised
Remaining
Earliest
vesting date
Lapse date
Fair
value
per PSR
at grant
date ($)
Fair value
to be
expensed in
the future ($)
2019 (14th)
4,873
–
(3,674)
(1,199)
–
31-Oct-21
31-Oct-25
10.72
–
2020 (15th -5 year
PSRs)
200,000
2020 (15th -3 year
PSRs)
2021 (16th)
2022 (17th)
2022 (DSTI)
2023 (18th)
101,219
164,436
144,879
–
39,169
– 150,146
–
–
–
–
–
–
–
–
–
–
–
200,000
31-Aug-24
31-Aug-28
8.91
335,104
(101,219)
– 31-Aug-22
31-Aug-26
9.37
–
–
–
–
164,436 31-Aug-23
31-Aug-27
11.27
144,879
31-Aug-24
31-Aug-28
18.02
788,720
39,169
31-Aug-23
31-Aug-24
19.02
–
150,146
31-Aug-25
31-Aug-29
20.04
1,790,041
–
–
Total
615,407 189,315
(3,674)
(102,418)
698,630
2,913,865
Total Share
Appreciation
Rights
1,016,776
–
–
–
1,016,776
31-Aug-26
31-Aug-26
3.79
1,965,326
Shares issued as a result of the exercise of PSRs
During FY23, 101,219 PSRs were exercised and converted to shares in AUB Group Limited under the 2020 LTIP and 1,199 PSRs
were exercised under the 2019 LTIP. The remaining 3,674 unvested 2019 LTIP PSRs, lapsed. The hurdles and vesting conditions
for 2019 and 2020 LTIP were detailed in the FY22 financial statements.
All PSRs are granted over shares in the ultimate controlling entity AUB Group Limited.
Unissued shares
As at the date of this report, there were 698,630 unissued ordinary shares under PSRs as part of the LTIP that have not vested.
Refer to Note 21 of the Financial Report for further details of the PSRs outstanding.
Holders of PSRs do not have any right, by virtue of the option to participate in any share issue of the Company or any related
body corporate.
45
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 SECTION 6 STATUTORY REMUNERATION TABLES AND DATA (CONTINUED)
Table 9: Shares held in AUB Group Limited at 30 June 2023
Directors
D. C. Clarke (Chair)
M. P. C. Emmett (CEO)
R. D. Deutsch1
P. G. Harmer
A .J. Kendrick2
P. A. Lahiff
R. J. Low
C. L. Rogers
Executives
M. J. Shanahan
Total
Balance at
30-Jun-22
Shares acquired
during the year
Shares disposed
during the year
Balance at
30-Jun-23
29,587
5,405
–
2,497
–
12,322
23,196
7,154
14,301
94,462
1,250
77,279
1,000
918
–
416
1,250
1,250
14,319
97,682
–
–
–
–
–
–
–
–
–
–
30,837
82,684
1,000
3,415
–
12,738
24,446
8,404
28,620
192,144
1. R. D. Deutsch was appointed as a Director on 3 November 2022.
2. A .J. Kendrick was appointed as a Director on 27 January 2023.
Table 10: PSRs/SARs holdings of KMP at 30 June 2023
Balance at
30-Jun-22
Granted as
remuneration
PSRs
exercised
PSRs
lapsed/
forfeited
Balance at
30-Jun-23
Vested/
exercisable
Not vested/
not
exercisable
Total PSRs/SARs at year end
Directors
M. P. C. Emmett (CEO)
PSRs
PSRs (DSTI) *
SARs
Executives
M. J. Shanahan (CFO)
408,101
52,576
(76,029)
–
16,009
508,388
–
–
–
–
–
–
384,648
16,009
508,388
PSRs
59,306
28,917
(14,319)
(1,341)
72,563
PSRs (DSTI) *
–
8,218
SARs
254,194
–
–
–
–
–
8,218
254,194
*
PSRs granted as part of the FY22 deferred short term incentive scheme (DSTI).
The outstanding PSRs have an exercise price of $NIL.
During the current year a total of 189,315 PSRs were granted (105,720 to KMP).
–
–
–
–
–
–
384,648
16,009
508,388
72,563
8,218
254,194
Loans or other transactions with KMP
No KMP or their related parties held any loans from the AUB Group during or at the end of the year ended 30 June 2023 or prior
year. Apart from the details disclosed in this Report, there were no transactions between KMP (or their related parties) and AUB
Group or any of its subsidiaries during the Reporting Period.
46
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023
SECTION 6 STATUTORY REMUNERATION TABLES AND DATA (CONTINUED)
Compensation of Directors and other Key Management Personnel
Table 11: Statutory Reporting Basis – period ending 30 June 2023
The table below outlines senior management team remuneration as calculated in accordance with accounting standards and
the Corporations Act requirements. The amounts shown are equal to the amount expensed in the Company’s Financial Report
for the particular year.
30 June 2023
Year
Salary
& fees
$
Non Executive Directors
D. C. Clarke (Chair)
2023
217,195
R. J. Carless
2022
218,182
2023
2022
–
18,182
P. G. Harmer***
2023
167,653
2022
102,937
P. A. Lahiff
2023
122,172
2022
122,727
R. J. Low
2023
145,000
2022
145,000
C. L. Rogers
2023
108,598
R.D. Deutsch
2022
109,091
2023
2022
79,091
–
A.J. Kendrick****
2023
153,916
2022
–
Equity
Settled
Short
term
incentive
Cash
short term
incentive*
Non
monetary
benefits
Post employ-
ment Super
-annuation
contributions
Share-
based
payment
Equity
PSRs/
SARS**
$
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
$
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
$
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
$
22,805
21,818
–
1,818
17,604
10,294
12,828
12,273
–
–
11,402
10,909
–
–
–
–
$
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
remunera-
tion
$
240,000
240,000
–
20,000
185,257
113,231
135,000
135,000
145,000
145,000
120,000
120,000
79,091
–
153,916
–
Total per-
formance
related
%
0%
0%
–
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
–
0%
–
Executive Directors
M. P. C. Emmett
(CEO)
Executives
M. J. Shanahan
(CFO)
Total
Remuneration
Total
Remuneration
2023
971,762
767,376
328,874
2022
973,410
710,500 304,500
2,922
2,922
27,500 1,530,697
3,629,131
27,500 1,352,767 3,371,599
72.39%
70.23%
2023
478,098
378,000 162,000
46,585
27,500
527,840 1,620,023
2022
454,425
364,723
156,310
71,060
27,500
365,598 1,439,616
65.92%
61.59%
2023 2,443,485
1,145,376
490,874
49,507
119,639 2,058,537
6,307,418
2022 2,143,954 1,536,033 460,810
73,982
112,112 1,718,365 5,584,446
*
STI amounts included above relate to the accrued provision in respect of the current year’s performance that will be paid/settled during the following financial
year. The 2023 amounts have been approved by the Remuneration Committee.
** Share based payments are calculated on the accrued cost to the Company recognising that PSRs issued to KMP will vest over 3 years (5 years for CEO sign-on
PSRs and 5 years for SARs) after taking into account a 75% -100% probability that the Group will achieve the performance hurdles required for those PSRs/SARs
to vest.
*** P.G. Harmer was appointed to the Tysers Insurance Brokers Limited Board on 1 October 2022. Remuneration is based on GBP 50,000 per annum.
**** A.J. Kendrick, joined the AUB Group Board on 27 January 2023. During the period he received an amount of AUD 51,613 based on an annual Directors fee of AUD
120,000. In addition to the AUB Group Board, A.J. Kendrick also received remuneration as chair of the Tysers Insurance Brokers Board, based on a fee of GBP
100,000 per annum. The remuneration received from 1 December 22 to 30 June 23 was AUD 102,303. Fees were converted based on an AUD/GBP exchange
rate of 0.5702.
47
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023
SECTION 6 STATUTORY REMUNERATION TABLES AND DATA (CONTINUED)
Statutory remuneration represents the accounting expense of remuneration in the financial year. It includes salary remuneration,
annual and long service leave payments, the amortisation expense of deferred performance share rights previously granted and
an accrual for STIs. 30% of the FY23 STI will be settled by the grant of further performance share rights of which 50% will vest
on 31 August 2024 and the balance will vest on 31 August 2025. There are no performance hurdles required for vesting of the
deferred short term incentives settled as performance share rights other than continuing employment.
Table 12: Cash and vesting basis - period ending 30 June 2023
The table below outlines remuneration received individually during the year including the prior year STI paid in cash, including
the deferred component, in the reporting year plus the benefit received from vesting of shares granted under the Employee Long
Term Incentive Scheme.
30 June 2023
Year
Salary
& fees
$
Non Executive Directors
D. C. Clarke (Chair)
2023
217,195
R. J. Carless
2022
218,182
2023
2022
–
18,182
P. G. Harmer
2023
167,653
2022
102,937
P. A. Lahiff
2023
122,172
2022
122,727
R. J. Low
2023
145,000
2022
145,000
C. L. Rogers
2023
108,598
R.D. Deutsch
2022
109,091
2023
2022
79,091
–
A.J. Kendrick
2023
153,916
2022
–
Cash
short
term
incentive*
Equity
settled
Short
term
incentive
Non
monetary
benefits
$
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
$
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
$
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Post em-
ployment
Superannu-
ation
$
22,805
21,818
–
1,818
17,604
10,294
12,828
12,273
–
–
11,402
10,909
–
–
–
–
Share-
based
payment
PSRs/
SARS**
$
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total remu-
neration
$
240,000
240,000
–
20,000
185,257
113,231
135,000
135,000
145,000
145,000
120,000
120,000
79,091
–
153,916
–
Total
performance
related
%
0%
0%
–
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
–
0%
–
Executive Directors
M. P. C. Emmett
Executives
M. J. Shanahan
2023
2022
2023
2022
971,762
710,500 304,500
2,922
27,500
1,696,055
3,713,239
73.01%
973,410
884,375
–
2,922
27,500
–
1,888,207
46.84%
478,098
364,723
156,310
46,585
27,500
319,428
1,392,644
454,425
457,517
–
71,060
27,500
235,052
1,245,554
60.35%
36.73%
Total Remuneration 2023 2,443,485 1,075,223
460,810
49,507
119,639
2,015,483
6,164,147
Total Remuneration 2022 2,143,954 1,341,892
–
73,982
112,112
235,052
3,906,992
*
STI amounts paid during each financial year for performance during the prior financial year based on agreed KPIs. 30% of FY22 STI amounts were settled by
grant of performance share rights of which 50% vest on 31 August 2023 and the balance on 31 August 2024. There are no performance hurdles required for
vesting of the deferred short term incentives settled as performance share rights other than continuing employment.
** The actual remuneration relating to share based payments is based on the market value on the date the PSRs were exercised multiplied by the actual number
of PSRs vested during the year.
48
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023
SECTION 6 STATUTORY REMUNERATION TABLES AND DATA (CONTINUED)
Table 13: Number of PSRs granted as part of remuneration
30 June 2023
(Grant year FY23)
Directors
M. P. C. Emmett
PSRs
PSRs (DSTI)
Executives
M. J. Shanahan
PSRs
PSRs (DSTI)
Total
Granted no.
Grant date
Fair value per
PSR at grant
date
(see Note 21)
Exercise price
per PSR
(see Note 21)
$
Expiry date
First
exercise
date
Last
exercise
date
52,576
29-Mar-23
16,009
2-Sep-22
20.04
19.02
0.00
31-Aug-29
31-Aug-25
31-Aug-29
0.00
31-Aug-24
31-Aug-23
31-Aug-24
28,917
29-Mar-23
8,218
2-Sep-22
20.04
19.02
0.00
31-Aug-29
31-Aug-25
31-Aug-29
0.00
31-Aug-24
31-Aug-23
31-Aug-24
105,720
The fair value above is the weighted average price of the EPS and TSR PSRs at the date the PSRs were granted. All PSRs were
issued with an exercise price of $NIL and the expiry date of the PSRs is four years after the vesting date.
Mr Emmett’s grant of 52,576 PSRs under the Long Term Incentive Plan was approved by shareholders at the EGM on 28 March
2023, and this approval was for all purposes, including Listing Rule 10.14.
Deferred Short term Incentive (DSTI)
30% of the FY22 STI was deferred in the form of an equity award based on the 60 day VWAP for 30 June 2022. Half of the PSRs
will vest on 31 August 2023 with the remaining PSRs vesting on 31 August 2024. No additional performance conditions apply to
the vesting of these PSRs other than continued employment to the date the PSRs vest.
49
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023
SECTION 6 STATUTORY REMUNERATION TABLES AND DATA (CONTINUED)
Table 14: Value of PSRs/SARs granted as part of remuneration (including PSRs/SARs vested or lapsed during the year)
Shares issued on exercise
of PSRs
Value of PSRs/
SARs granted
during the
year*
Value of
PSRs/SARs
exercised
during the
year**
Percentage of
remuneration
consisting
of value
share based
payments
incurred during
the year***
Number of
shares issued
on exercise of
PSRs
Paid per
share on
shares issued
on exercise of
PSRs
Number of
PSRs vested
during the
year
Number of
PSRs lapsed
during the
year
$
$
%
No.
$
No.
No.
1,053,623
1,696,055
304,491
–
–
–
76,029
–
1,358,114
1,696,055
40.24%
76,029
–
–
–
76,029
–
76,029
–
–
–
579,496
319,428
156,306
–
–
–
–
735,802
319,428
40.67%
14,319
2,093,916
2,015,483
90,348
–
0.00
0.00
–
14,319
90,348
–
1,341
1,341
14,319
0.00
14,319
1,341
30 June 2023
Directors
M. P. C. Emmett
PSRs
DSTI***
Total
Executives
M. J. Shanahan*
PSRs
DSTI***
Total
Total
Total gross value of PSRs granted during the year which will vest over three years if all performance hurdles required for PSRs and SARs to vest, are met.
*
** Total value of PSRs exercised during the year is calculated based on the fair value of the PSRs at exercise date multiplied by the number of PSRs exercised.
*** Share based payments as a percentage of remuneration is calculated on the accrued cost to the Company recognising that PSRs issued to KMP will vest over
3 years after taking into account a 75 - 100% probability that the Group will achieve the performance hurdles required for those PSRs to vest.
50
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023
SECTION 7 GLOSSARY
AAGR
Average annual growth rate (expressed as a %)
Balanced Scorecard
A balanced scorecard set of KPIs, which includes both financial and non-financial measures
that have weighted allocations and are aligned to AUB Group’s strategic priorities
CAGR
Compound annual growth rate (expressed as a %)
Corporations Act
Corporations Act 2001 (Cth)
EPS
Underlying earnings per share
Executive KMP
Michael Emmett (CEO and Managing Director) and Mark Shanahan (Chief Financial Officer)
Group Executives
The CEO, CFO, Chief Broking Officer, Chief Underwriting Officer and Chief Legal & Risk Officer
KMP
Persons who, directly or indirectly, have authority and responsibility for planning, directing and
controlling the activities of AUB Group during the Reporting Period
LTI Plan
AUB Group’s Long-Term Incentive Plan
Peer Comparator Group
Constituents of the S&P/ASX Small Ordinaries Industrials Index (AXSID), defined at the
commencement of the performance period
PSR
Performance Share Right, with each right entitling the holder to receive one fully-paid ordinary
share in AUB Group on vesting (or, if the Board determines, an equivalent cash payment).
Vesting of PSRs may be subject to vesting conditions and performance hurdles
Relative TSR
AUB Group’s compounded TSR measured against the ranking of constituents of the Peer
Comparator Group
Reporting Period
12 months period ended 30 June 2023
ROIC
SAR
STI Plan
TSR
Underlying EPS
Underlying NPAT
Return on Invested Capital – is a profitability or performance ratio that aims to measure the
percentage return that AUB Group earns on invested capital. The ratio shows how efficiently
the Group is using the investors’ funds to generate income. Invested capital also includes
interest bearing debt (net of cash and cash equivalents) but excludes lease liabilities.
Share Appreciation Right, with each right entitling the holder to receive fully-paid ordinary
shares in AUB Group on vesting (or, if the Board determines, an equivalent cash payment). See
remuneration report included in the 2022 Annual Report for further details.
AUB Group’s Short-Term Incentive Plan
Total shareholder return measures the percentage growth in the share price together with
the value of dividends paid during the relevant three year performance period, assuming all
dividends are reinvested into new securities
Underlying earnings per share, being, in respect of any financial year, the Underlying NPAT
divided by the weighted average number of shares on issue during the financial year.
Underlying net profit after tax, being, in respect of any financial year, the consolidated net profit
after tax of AUB Group for that year excluding fair value adjustments to the carrying values
of associates, profit on sale of entities and assets or deconsolidation of controlled entities,
contingent consideration adjustments, impairment charges and amortisation of intangibles.
Other adjustments to the Underlying NPAT calculation may be made in limited circumstances
where the Board considers it to be appropriate.
VWAP
Volume weighted average price of shares in AUB Group traded on the ASX
51
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 ROUNDING
The amounts contained in this report and in the financial report have been rounded to the nearest $1,000 (where rounding
is applicable) under the option available to the Company under ASIC instrument “Rounding in Financial/Directors’ Reports”
2016/191. The Company is an entity to which this legislative instrument applies.
AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES
The Directors received an independence declaration from the auditors of AUB Group Limited. Refer to page 74 of the
Directors’ Report.
Non-audit services provided to the AUB Group by the entity’s auditor, Ernst & Young, in the financial year ended 30 June 2023
were predominantly in relation to tax matters. Other services included independent investigation and reviews. The directors
are satisfied that the provision of non-audit services is compatible with the general standard of independence for auditors
imposed by the Corporations Act (2001) Cth. The nature and scope of each of the non-audit services provided means that auditor
independence was not compromised. The amounts received or due to be received are detailed in Note 24 of the Financial
Report.
Signed in accordance with a resolution of the Directors.
D.C. Clarke
Chair
Sydney: 22 August 2023
M. P. C. Emmett
Chief Executive Officer and Managing Director
52
DIRECTORS’ REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023
DIRECTORS’ REPORT
YEAR ENDED 30 JUNE 2023
ENVIRONMENTAL,
SOCIAL AND
GOVERNANCE
REPORT
53
AUB GROUP ANNUAL REPORT 2023 CONTENTS
1. Scope and Methodology
1.1 Introduction
1.2 Global policies and principles
1.3 Themes that matter - Stakeholder Engagement and Materiality
1.4 Our SDG Contribution
2. ESG Balance Scorecard
3. ESG Governance
4. Environment
4.1 Risks and Opportunities
5. Social
5.1 Our Community Investment
5.2 Supporting Our Customers
5.3 Our People
6. Governance
55
55
55
55
57
58
60
61
61
64
64
65
67
70
54
AUB GROUP ANNUAL REPORT 2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
YEAR ENDED 30 JUNE 2023
1. SCOPE AND METHODOLOGY
INTRODUCTION
1.1
Doing the right thing by our people, our partners, our customers, our environment, and the communities in which we operate
is part of our ethos. At AUB Group we recognise our responsibility in society towards creating a more sustainable future. We
continue to embed ESG into our business strategy and operations. This is increasingly important as our business continues
to grow year on year. With changing customer expectations and increasing demand for ESG engagement, sustainability is
increasingly becoming a driver for success. The visible impacts of climate change increase the urgency for action and the need
to continue to develop our ESG strategy, as well as support our customers also facing these risks.
We are a services organisation operating in more than ~570 locations globally. AUB Group’s network of insurance intermediaries
conduct business with clients and other stakeholders both face-to-face and remotely. We maintain office space in the locations
in which we operate and our team travels to these office locations and client venues. We do not consume raw materials or
manufacture any physical products so our environmental footprint and exposure to supply chain risks is limited to our direct
operations.
During FY23, we continued to build on our ESG strategy and working towards achieving our ESG commitments. The Tysers
acquisition is a direct response to serving our customers and providing them access to cover for harder to place climate risks.
We have formalised our ESG targets into a balance scorecard approach, ensuring that we set ambitious ESG goals which will
help us create long term sustainable value for our stakeholders. Our ESG priorities across each pillar are the result of extensive
stakeholder engagement, including materiality assessments.
This report covers AUB Group’s ESG management approach and associated activities for the year ending 30 June 2023. Unless
otherwise indicated, ESG data is presented for the period from 1 May 2022 to 30 April 2023 (the ‘reporting period’). This report
includes the activities of our subsidiaries and their controlled entities at the end of the reporting period. The data for these
subsidiaries has been presented for the full year, irrespective of when control was obtained, and comparative information has
been represented where necessary.
Governance is a key aspect on delivering on our ESG strategy and in ensuring we have the right policies and processes in place
to support our ESG commitments. As further detailed within this report, the Board, in consultation with the Board Audit and Risk
Committee, oversees and approves AUB Group’s ESG activities, including our strategy, policies and procedures.
1.2 GLOBAL POLICIES AND PRINCIPLES
We recognise the need to provide our stakeholders with clear and transparent ESG
reporting. This report has been prepared considering the guidance provided by the
Global Reporting Initiative (GRI) Standards 2016. We have also considered the United
Nations Sustainable Development Goals and disclosed in this report the areas where we
believe we can have the greatest impact. We will comply with a globally accepted ESG
reporting standard by FY25.
1.3 THEMES THAT MATTER - STAKEHOLDER ENGAGEMENT AND MATERIALITY
Social responsibility and caring for our environment are aligned with our stakeholders’ interests. Listening to our stakeholders
diverse needs, helps us adapt and shape our approach to ESG, and identify the key themes that matter to them.
In 2021 we conducted a materiality assessment to develop our fundamental ESG principles and identify our most important
focus areas. The materiality assessment involved:
– Engaging expert advisors;
– A desktop review and of industry trends and leading practice in ESG;
– Interviews with internal and external stakeholders to determine material topics and their relative importance; and
– An assessment of our impact areas against the UN Sustainable Development Goals (SDGs).
The three areas of employees, customers and social and environment are the themes under which our material impacts are
organised. Our strong relationship with our partner businesses is an essential component of our framework, and our ethics
and integrity underpin everything that we do; they guide us in our approach to all of our stakeholders and business activities.
55
AUB GROUP ANNUAL REPORT 2023 Material Topics identified
Ethics and Integrity:
– Responsible business and governance;
– Integrity and ethical behaviour;
– Responsible investment;
– Financial resilience and profitability;
– Trust, transparency and disclosure;
– Fair insurance broker commissions;
– Compliance; and
– Data security and privacy.
Employee:
– Partner relationship advocacy;
– Employee training, development, and retention; and
– Health, Safety and wellbeing.
Customers:
– Technological transformation; and
– Product innovation.
Social and Environment:
– Climate change, environmental sustainability, and
stewardship;
– Social responsible engagement and reconciliation; and
– Responsible supply chain.
During 2023 we reviewed the outcomes of the materiality assessment and confirmed that the topics identified remained our most
important focus areas. Additionally, we considered stakeholder feedback obtained throughout the year from our stakeholders and
whether this has any impact on our ESG strategy, ensuring we are agile and continuing to focus on the themes that matter most.
We plan to undertake a materiality assessment every 3 years, with our next assessment to be completed in FY24.
We engage with all our stakeholder groups on a regular basis to ensure we are responsive to their needs and concerns.
ESG matters are becoming a growing area of concern for many of our stakeholders. Our key stakeholders and methods
of engagement are:
STAKEHOLDER
DESCRIPTION
INTEREST
CUSTOMERS
Our network partners are in regular direct contact with their
customers. They collect and analyse customer feedback
through a range of interactions such as one on one meetings,
online surveys, social media and focus groups. This helps
to ensure that we are aware of, and able to respond to, the
evolving needs of customers. A hardening commercial
insurance market over the past 5 years has impacted the
price and availability of insurance cover for our customers.
Acting fairly and in their best interest.
Providing access to insurance.
Reducing cost pressures.
Deliver a reliable and secure service.
SHAREHOLDERS
We have regular discussions, briefings and meetings
with investors, analysts and proxy advisors to keep them
informed of our performance and any emerging risks and
opportunities.
Responsible investing.
Good governance practices.
Oversight of decentralised group.
EMPLOYEES
We conduct regular employee engagement surveys, industry
benchmark research and regular team meetings to keep our
employees up-to-date on the latest company and industry
developments. Using feedback and research we set targets
to appropriately respond to employee issues.
Development opportunities.
Market tested salaries.
Technology to eliminate repetition.
GOVERNMENT
AND
REGULATORS
We engage with Federal and state-level governments,
regulators and industry bodies through meetings and formal
policy consultation submissions to advocate for issues
important to our stakeholders. We ensure we comply with
regulation and proactively adopt key principles of upcoming
changes and best practice.
Flexible arrangements.
Diversity targets and plans.
Good governance practices and risk
mitigation.
Strong asset management and protection.
SUPPLIERS
We hold formal and informal meetings with our top suppliers
including IT, product suppliers, insurance underwriters and
finance providers.
Prompt payments to small businesses.
Supply chain integrity.
COMMUNITY
We engage with the communities in which we operate
through volunteering, fundraising initiatives and events,
workshops and funded programs.
Being a good corporate citizen
Giving back through volunteering and
charity
56
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 1.4 OUR SDG CONTRIBUTION
Our approach to ESG supports the United Nations Sustainable Development Goals (SDGs). As our business continues to grow
internationally, supporting these global goals is increasingly important for the Group. AUB Group have identified priority SDGs
where we believe we can have the greatest impact and have incorporated the goals into our broader ESG framework.
SDG
WHAT AUB GROUP IS DOING AND WHERE IS OUR FOCUS
We ensure our employees have a safe working environment and offer them health
and wellbeing programs and initiatives. With greater numbers of employees working
remotely, we are mindful of the need to monitor and address the impact on their mental
wellbeing as well as look to broader health and wellbeing challenges in our customers
and communities.
We use Officevibe, a platform which prompts employees to complete fortnightly surveys
anonymously and provides resulting insights to management. The tool enables us to
collect continuous feedback from employees on range of topics including well-being.
As with others in our industry, reaching gender balance throughout AUB Group remains
a challenge. We have assessed our recruitment, selection and retention processes and
explored opportunities to improve gender equality at all levels across the organisation.
Our longer term gender balance goal is to achieve 40:40:20 (40% men, 40% women and
20% open) – at all levels of our organisation.
During FY23 we completed a review of Group wide pay to identify whether there was
any gender pay gaps within the Group that need to be addressed. As a result of this
review, we have identified measures to improve our gender pay equity that we will focus
on during FY24.
We stay at the forefront of market developments so that we can offer our customers the
best technology and product solutions for their needs. Developments and better use of
customer data have led to greater choice, and a more efficient & customised experience.
We negotiate terms with underwriters to enable our customers to obtain the most
affordable and appropriate protection for themselves, their workers and their families.
We provide our employees opportunities to develop their careers with us through internal
and external training and study assistance. We have strengthened our training platform
and program, with the objective organisation-wide engagement and alignment with key
policies and commitments. We introduced an updated Modern Slavery Policy to address
modern slavery risks within our operations, supply chains and investment activities.
We are committed to continuous assessment of potential modern slavery issues in our
supply chain and focusing on developing our approach to quantifying and managing
impacts.
We contribute to our communities through volunteering and fundraising. Our
decentralised business model means that our partner businesses are free to contribute
to causes and local communities at their own discretion. We plan to support this
activity by developing partnerships with our community stakeholders and our partner
business to address inequalities.
The roll-out of our ‘Do Good, Be Better’ program during the year saw increased
volunteering hours across the group. Our AUB Community Day grants employees a
day of paid volunteer leave to participate in community activities such as volunteering,
mentoring, and working with charities and other not-for-profit organisations. The AUB
Community Day includes partnerships with community groups who benefit from our
involvement and support to deliver their mission.
During 2023, the Group has contributed over $1.2m (FY22: $1.2m) of donations to a
range of organisations. This is comprised of:
Direct contributions to charities from the Group of $374k (FY22: $507k);
Indirect contributions to charities through foundations run by the Group of $435k
(FY22: $315k); and
Direct and indirect contributions of the Group’s associate businesses of more than
$350k (FY22: $325k).
57
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023
SDG
WHAT AUB GROUP IS DOING AND WHERE IS OUR FOCUS
We make efforts to manage our environmental footprint. This includes measure such
as carbon offsetting, switching to renewable energies and measuring our scope 1, 2
and 3 emissions. We carbon offset our business travel emissions.
We are committed to net zero emissions by 2050 for wholly owned group entities.
We are working to improve how we measure and report on our environmental impacts
and our long-term approach to mitigate climate change, including by developing our
ESG reporting to comply with a globally accepted ESG reporting standard by FY24.
2. ESG BALANCE SCORECARD
AUB Group have committed to a range of short to longer term ESG targets, as reviewed and approved by our Board of Directors.
These targets support our wider ESG strategy, as well as our contribution to the UN SDGs. AUB Group is comprised of a number
of controlled entities, who are either fully owned or majority owned entities. Some of our targets range from group wide or with
initial focus on wholly owned entities and commitment to expand the target to all controlled entities in the subsequent year.
Our balanced scorecard represents our commitments for FY23 and our progress against these.
FOCUS AREA
MEASURE
PROGRESS
Environmental Governance
(Environment)
Extend renewable
energy and carbon
offset model to
others in the Group
During the year, additional group entities switched to 100%
renewable energy usage in their offices. In FY23, 38% of the
Group’s energy usage was from renewable resources. We are
committed to continuing to rollout the renewable energy model
to additional entities in the Group and increasing our renewable
energy usage.
AUB head office entities and Tysers currently are part of carbon
offsetting programs, offsetting 100% of scope 3 emissions from
business flights. Tysers began carbon offsestting in July 2022
and AUB head office entities from October 2022. We will extend
carbon offsetting to other entities in the Group during FY24.
Employee Development (Social)
Minimum of
20 hours training in
addition to ethics
training for all AUB
Group head office
staff
During FY23, all head office employees completed on average
20.7 hours of training (FY22: 19.5).
This training was completed on LITMOS, our centralised learning
and development (L&D) platform.
58
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023
FOCUS AREA
MEASURE
PROGRESS
Community Investment (Social)
Rollout of a
donation and
volunteering model
Social Governance (Social)
Corporate governance over M&A
(Governance)
Assess strategic
measures to be
implemented to
achieve long term
gender balance
objective of
40/40/20
Benchmark and
assess strategic
measures to assess
and eliminate any
gender wage gap.
ESG metrics
formally codified
within M&A
checklist
We launched the following as part of our ‘Do Good, Be Better’
initiative;
AUB Community Day grants a day of paid volunteer leave to all
AUB had office employees to participate in community activities
such as volunteering, mentoring, and working with charities
and other not-for-profit organisations. The AUB Community Day
includes partnerships with community groups who benefit from
our involvement and support to deliver their mission.
AUB Giving programme allows our team members the freedom
to support causes they are passionate about via pre-tax
donations, deducted directly from their pay, with AUB Group
matching each donation up to a maximum of $1,000 per head
office employee per annum. The program will also become part
of AUB Group’s performance recognition process with the option
to receive ‘charity gift cards’ instead of other financial awards. At
launch, all employees received a one-off $50 in their AUB Giving
account to facilitate donations to the charities of their choice.
The Group has a target to achieve 40:40:20 (40% men, 40%
women and 20% open) – at all levels of our organisation. During
the year, a gender wage assessment was completed across the
Group. As a result of this assessment, we have identified focus
areas for FY24 and are assessing measures to eliminate any
gender wage gaps identified.
We have taken initial steps to formally build ESG metrics into our
M&A checklist.
This goal will be finalised during FY24.
59
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023
ESG RATING HISTORY
We are proud of our MSCI rating. Our rating from MSCI has
consistently improved since their initial assessment in 2019
and we are please to have maintained our rating during FY23.
For our stakeholders on average the most material areas
of focus relate to the Governance Pillar. In this regard we
proactively work to uplift the Group’s governance through
hiring skilled employees in the right positions, and a drive to
achieve best practice outcomes. The improvement in our
score is a reflection of this journey.
3. ESG GOVERNANCE
AUB Group is committed to high standards of corporate governance. Embedding ESG into our existing
business is key to optimising our impact and therefore it is treated as a key part of our system of
governance.
AUB Group’s Board comprises three Board Committees that guide our governance activities in respective areas according to
their Committee Charters and Group policies.
Board structure and responsibilities
AUB GROUP LTD BOARD
BOARD AUDIT & RISK COMMITTEE REMUNERATION & PEOPLE COMMITTEE NOMINATION COMMITTEE
The Board of Directors is responsible for the corporate governance of AUB Group and ensuring high standards of governance
are maintained across all the aspects of Group’s business and operations. The Board guides and monitors the business and
affairs of AUB Group on behalf of stakeholders. Our corporate structure ensures that the Board maintains an appropriate level
of oversight over our operations.
The Board, in consultation with the Board Audit and Risk Committee (BARC), oversees and approves AUB Group’s ESG activities,
including our strategy and policies and procedures. The Board delegates responsibility for ESG to management, with our Chief
Executive Officer having ultimate responsibility of our ESG activities.
During the year, to further embed and support our ESG governance, AUB Group established a new ESG related committee run
by management.
The BARC endorses all ESG targets, progress is formally reported in BARC meetings held every 2 months, and reviews all ESG
materials, and outcomes of ESG rating agencies assessments. The BARC also approve our ESG report prior to publication,
ensuring that all material topics are appropriately reported on.
Our ESG Policy sets out how we work towards being a socially and environmentally responsible corporate citizen. It outlines
policies and procedures we adopt across all our businesses to support socially and commercially ethical practices, reduce
our environmental footprint and manage our environmental risks. We have a number of more specific policies that cover other
ESG areas, such as diversity and inclusion, workplace health and safety, and modern slavery.
Our Corporate Governance Statement is founded on the ASX Corporate Governance Council’s Corporate Governance
Principles and Recommendations (4th Edition). We review and revise our Corporate Governance Statement to reflect
the changing standards and expectations of our industry annually. It is available on our website:
www.aubgroup.com.au/corporate-governance.
60
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 4. ENVIRONMENT
Environmental sustainability is integral to a strong, secure future. AUB Group is committed to being
a responsible and sustainable organisation.
4.1 RISKS AND OPPORTUNITIES
Climate change presents a number of risks and opportunities for all sectors, including the insurance industry. These include
direct damage to assets or property from climate related events, pricing and demand changes flowing from the transition to a
low-carbon economy, and business disruption from a changing regulatory environment. Increasing frequency and severity of
climate-related events pose increased risk to some customers and as these events become more regular, the cost of insurance
may become prohibitive and certain risks may become uninsurable. This has direct impact on AUB Group Limited as a broking
and underwriting group.
AUB Group believes that we must take climate risks seriously to ensure the viability of our business as well as identify
opportunities to change and grow in a changing world. We acknowledge the science and are supportive of global efforts to
decarbonize the economy. We are committed to net zero emissions by 2050 for wholly owned Group entities.
We are working to align practices with the goals set in the Paris Agreement, including to limit global warming to well below
1.5 degrees.
We are also committed to further developing our climate risk reporting, with a view to aligning our reporting practices to the
recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD). We have made
an initial assessment of our risks and opportunities against the TCFD, and will comply with a globally accepted ESG reporting
standard by FY25.
We are committed to reducing the environmental impact of our direct operations, including reduced emissions and carbon
offsetting, reducing energy and water/waste consumption. Our specific climate goals are set out in our ESG scorecard.
AUB Group’s environmental objectives and how we are achieving them are summarised below.
OUR OBJECTIVE
HOW WE ACHIEVE IT
Reduce water and energy
consumption
– Reducing and consolidating office space.
– 4/1 work from home program for Sydney-based agency and head office staff, where
employees work from home 4 days a week.
– Measuring Scope 1, 2 and 3 emissions across the AUB Group.
– Monitoring and reducing water consumption year-on-year.
– Monitoring and encouraging carbon offsets purchase and use of renewable energy.
Head office and a number of other businesses’ energy supply switched to fully renewable
sources.
– Choosing green buildings for our office, including our North Sydney head office, which
boasts a 5.5 Star NABERS energy rating and a 4.0 Star NABERS water rating.
– Use of energy efficient lighting in our office buildings.
– 5 buildings in the target emissions group have an average energy rating of 4.5.
– 4 buildings in the target emissions group have an average water rating or 4.5
Minimise waste, and
encourage the reuse and
recycling of waste items
– Actively encouraging recycling of paper, glass and aluminium. We also provide printer
toner cartridge recycling stations in each office.
– Encouraging our employees to use reusable water bottles, cups, and mugs while in the
office to reduce waste.
– 2 buildings in the target emissions group have an average waste rating of 2.8.
Promote sustainable
transport to employees,
clients, and suppliers
– Providing office space in central locations near public transport hubs. Most employees
travel to and from work via public transport (train, bus, ferry) or active transport (walking
and cycling).
– Encouraging video and audio communication to reduce air and road travel.
– Carbon offset purchase for corporate travel.
Support sustainable
procurement and
other sustainable work
practices
– Procuring environmentally friendly office supplies.
– Adopting digital solutions to reduce our use of paper and our need for business travel.
– Reducing our paper usage by setting printers to print double-sided output.
– Equipping our employees with knowledge and training to minimise their own
environmental footprint.
– Actively engaging with our network partners on good ESG practices.
61
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 Carbon emissions reduction
AUB Group’s emissions reporting covers ours and our partners’ tenanted offices and car fleets. Our primary measures of these
activities are scope 1, 2 and 3 emissions.
– Scope 1 emissions relate to emissions from our car fleets.
– Scope 2 emissions relate to energy we purchase from the electricity grid.
– Scope 3 emissions are the result of activities from activities not directly controlled by the Group and consists of activities
in our supply chain. This includes business travel.
Scope 1 and 2 Emissions
)
e
-
2
O
C
s
e
n
n
o
T
(
1500
1000
500
0
Scope 1 - Diesel & Petrol
Combustion and Natural Gas via
Pipeline
Scope 2 - Electricity from
National Grid
PE23
PE22
Total
The Graphs include impacts of newly acquired entities if they had been in the Group for the full period. The increase has been
due to the growth of the business, primarily through acquisitions. Pleasingly carbon emissions per employee continues to fall
compared to FY22.
Scope 1 and 2 Emissions, tCO2-e/employee
2023
0.44
2022
0.50
Movement,
%
(12.00%)
AUB operates a 4/1 work from home program for our North Sydney head office, where employees of AUB Group, our agencies
and two brokerages work from home four days a week. This has allowed our staff greater flexibility and control over their
working hours and reduced our office space needs. We have sub-let or surrendered a number of offices. We continue to monitor
our emissions across the AUB Group and explore initiatives to reduce them.
Scope 3 emissions and carbon offsets
AUB head office entities and Tysers use carbon offsetting programs, offsetting 100% of scope 3 emissions from business
flights. Tysers began carbon offsestting in July 2022 and AUB head office entities from October 2022. As this is the first year
of our carbon offsetting programs, no prior period comparatives are applicable.
tCO2 from business flights- Tysers and AUB Head Office entities
4,820
(3,217)
1,603
2023
Scope 3
Emissions
2023
Total
Emissions
Offset
2023 Scope
3 Net
Emissions
62
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023
Energy consumption
As a services organisation, our energy consumption relates to energy used to power our offices. In April 2022, AUB head office
entities switched to renewable energy. During FY23, 15% of our total electricity usage was derived from renewable sources.
This is expected to increase in FY24 as the renewable energy model is extended to others in the Group.
Total energy consumption (kWh) 000’s
Renewable (%)
2023
2,012
15%
2022
1,352
1%
Energy consumption by segment from
non-renewable sources
Energy consumption by segment from
renewable sources
KWH CONSUMED
KWH CONSUMED
2%
39%
34%
14%
25%
9%
28%
63%
Agencies
Australian Broking
NZ
Tysers
Agencies
Australian Broking
Support Services
Water consumption
We strive to monitor and reduce our water consumption across our businesses. Consolidating our office space, as well as
promoting flexible working arrangements have been the key factors in reduction of water consumption in the reporting period,
compared to the prior year.
63
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 Our network partnerships and initiatives
AUB Group and our partners support community
organisations, such as charities and sporting clubs, through
fundraising, sponsorship, and volunteering. Because our
partners are located in a wide range of locations, we adopt a
decentralised approach to community support, allowing our
partners to determine how they can have the greatest impact
in their local communities. During FY23, our employees
volunteered over 1,079 hours to charitable causes.
Our agency and Austbrokers divisions contributed monetary
donations to, and participated in, a range of fundraising and
community initiatives during the year, including as:
– Sponsor of the annual Insurances Ashes, which is a
cricket event run by charity the Primary Club of Australia
(PCA). The event raises funds for the PCA, which gives
people with disabilities the opportunity to experience the
joy and exhilaration that comes from playing cricket. We
also actively support other PCA events that take place
throughout the year.
– Major sponsor of the Lloyd’s Australia Golf Day. In 2022,
the event supported SpinalCure Australia in their work to
find a cure for spinal cord injury.
– Charity partner with AllKids, which is a not-for-profit
organisation providing education to disadvantaged
children in the coastal commune of Ream in Sihanouk
Province, Cambodia. Our sponsorship enables the AllKids
staff to work with local public schools, teachers and
principals, local government, commune officials and
families to give all children in their community access to
quality education. Throughout the year we sponsored the
education of 10 children in Cambodia through the AllKids
Kids to School program.
– Sponsorship for 4 students studying English in
Cambodia to attend the Central Coast Grammar School
and develop educational skills to assist the teachers at
Sunrise Cambodia, an organisation that provides care
for at risk children. This includes the provision of a home,
food, clothing and education including English and
computer lessons.
– The Insurance Advisernet Foundation supports local
Australian and New Zealand organisations that work
to help change the lives of individuals, families and
communities for the better. Over the past 10 years, IA and
its Foundation has contributed over $3m to more than
50 different charities. Each year over $400k is donated to
a variety of community fundraising initiatives, including
charities such as Men’s Shed Association, Tour De
Cure, Act for Kids, South Australian Health and Medical
Research Institute, Starlight Foundation and Pancare.
5. SOCIAL
The pillars of our social approach are community,
our customers and our people.
5.1 OUR COMMUNITY INVESTMENT
AUB Group is committed to supporting the
communities in which operate, and to manage our
wider social responsibilities. We recognise the
importance of focusing on economic and social
wellbeing by supporting our local communities.
Do Good, Be Better
During FY23, we successfully launched our AUB Group ‘Do
Good, Be Better’ initiative’ which is designed to support the
aspirations of our teams and employees to make a difference
to the causes they care about most. Initially offering paid
volunteer leave and donation matching, in partnership with
The Good Company.
AUB Community Day
During the year we granted a day of paid volunteer leave to
all AUB Head Office employees to participate in community
activities such as volunteering, mentoring, and working with
charities and other not-for-profit organisations. This includes
partnerships with community groups who benefit from our
involvement and support to deliver their mission – whether
by assisting the homeless, supporting children in need,
working at schools or volunteering at animal shelters.
AUB Giving
The AUB Giving program allows our team members the
freedom to support causes they are passionate about via
pre-tax donations, deducted directly from their pay. During
FY23 AUB Group matched each donation up to a maximum
of $1,000 per head office employee per annum. Since the
launch of the program, there has been $18.4k of donations.
This is a positive uptake and we expect to further the uptake
in FY24 as the program becomes more established. The
program will also become part of AUB Group’s performance
recognition process with the option to receive ‘charity gift
cards’ instead of other financial awards. At launch, all head
office employees received a one-off $50 in their AUB Giving
account to facilitate donations to the charities of their choice.
Tysers
Tysers donates fortnightly to charities chosen by employees.
Since launching in 2019, over 60 charities have benefited
from this scheme. During 2023, Tysers also selected a
charity via employee vote to support via donations and an
employee volunteer program. The chosen charity operates in
the UK to help those impacted by homelessness.
64
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 – Adroit Insurance and Risk, based in regional Victoria
and Albury holds strong community values at the heart
of their organisation. The team has raised over $2m
for local community organisations and foundations
since it was established in 1978. In the reporting period,
Adroit made donations to a variety of local community
groups, organised and hosted many fundraising events
and volunteered over 400 hours of staff time. Adroit
has proudly supported foundations and their projects
including, The Power In You Project who help those
affected by substance, mental health or justice related
challenges, Ballarat Health Services by raising funds
to purchase two new infant resuscitation cots – for the
Emergency Department and the Operating Theatre, and
The Border Trust Foundation – various projects within
the Albury Wodonga region including, financially assisting
families to get their children back to school.
We also provided donations to, and sponsorship of,
community and sporting clubs around Australia, including
AllKids, the St George Australia Football Club, Primary Club
of Australia and Drummoyne Water Polo Club.
Commitment to fair tax contributions
AUB recognises that without taxes, communal investment
including development of future talent through formal
education opportunities would suffer. We benefit from
this communal investment and as such believe we have
an obligation to pay a fair share of taxes. AUB’s Board has
a strict policy to operate within the law and not to take
aggressive tax positions, or operate within tax havens.
Our aim is to avoid any tax controversies and to pay a fair
share of our profits as taxes in each country we operate in.
In FY23 the Group paid $32.34m (FY22: $26.9m) in income
tax, and $21.9m (FY22: $6.7m) in payroll tax. In addition,
our associates (companies we don’t control) pay taxes at
similar rates.
The Effective Tax Rate for the Year Ended 30 June 2023 was
28% (2022: 18%). The Group’s tax rate is below the main
effective tax rate in Australia of 30% largely as a result of
the $9m tax impact of entities that are accounted for on
an equity basis. Entities accounted for on an equity basis
are fully tax paying in Australia, however for accounting
purposes the related tax expense is reflected in the net
return on the investment rather than the tax expense of the
Group. This is offset by a $4m increase in the tax charge
resulting from expenses that are not deductible for tax
purposes which principally relate to fees incurred when
acquiring new businesses in the year.
The increase in the effective tax rate of 10% is largely the
result of a net loss on the adjustment to carrying value
of investments in 2022 (see Note 4f of the Notes to the
Financial Statements), that did not have an associated tax
credit, which did not recur in 2023. The main impact on
the tax rate in future years is expected to be the continued
profitability of the business accounted for under the
equity accounting rules as discussed above, the change
in geographic profile of the earnings of the Group and any
changes in tax legislation.
5.2 SUPPORTING OUR CUSTOMERS
Our customers are at the heart of everything we
do. Our approach is based on our commitment
to high-quality service and seeks to support our
customers in safeguarding their future. Every
day we provide valuable support through market-
leading technology and products backed by strong
customer service.
Customer Engagement
Our partners and their employees actively engage with
our customers and earn their long-term trust by providing
high standards of customer service. We strive to provide all
our customers with products that are appropriate to their
financial objectives and circumstances. We do this as part
of our customer service standards and to ensure we are
compliant with the relevant financial services laws.
As part of our commitment to high quality customer service,
our partner businesses must also ensure robust dispute
resolution processes are in place to handle complaints in a
timely and fair manner. AUB Group provides all partner firms
with access to up-to-date resources on these requirements
and provides support, as and when required, to meet
regulatory notification and ongoing reporting obligations.
Customer complaints are monitored by Group Risk and
Compliance, and are reported to the Group Board Audit and
Risk Committee on a regular basis.
Technological Transformation
To deliver a stable, reliable and secure service to our partner
businesses, we provide an opt in centrally managed network
and infrastructure services. This centralised technology
service leverages our scale and helps partners better serve
their clients confidently. All data is backed up and secured
in our dedicated Sydney data centre with a second back
up datacenter site in Melbourne. AUB Group has made
several strategic acquisitions which uniquely position us to
transform our broker platform experience. We now have the
building blocks to create a cohesive modern suite of digital
broker solutions. In addition, our Underwriting Agencies have
transitioned to a new digital platform which will better enable
them to serve brokers and clients.
Product Access and Innovation
We keep abreast of product innovation to ensure our
partners are constantly meeting our customers’ needs. We
provide our partners with insurance services that enhance
their ability to support their customers including claims
services, specialist estimating, forensic and investigation
support. Further to enable our partners to concentrate
more on their customers we provide a range of opt-in
administrative support services in accounting, payroll, tax
and analytics. We also assist our partners to optimise their
businesses by facilitating financial advice, legal advice,
management support, succession advice and support,
funding, mergers and acquisitions support, and strategy
formulation and execution.
65
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 The acquisition of Tysers represents significant acquisition
during the period to increase capacity and support hard
to place insurance risks. Tysers is a leading Lloyds and
London based broker with access to specialist underwriting
expertise and global distribution capabilities. Tysers operates
primarily out of the UK but has operations in more than a
dozen countries including the United States.
The acquisition represents vertical integration of wholesale
insurance in the Group. The acquisition will enable the Group
to enhance client service, by increasing capacity for harder to
place risks for our clients direction of wholesale placement
from our Agencies to Tysers. The acquisition will also
provide Brokers and Agencies across the Group to access
capabilities and facilities in the Lloyd’s and International
markets.
Digital Confidence
Ensuring that we have robust data privacy and security
measures helps us to improve customer experience and
develop trust with our customers.
Data Privacy- AUB Group is committed to protecting the
privacy of personal and sensitive information collected as
part of its business operations in line with the Australian
Privacy Act (1988). Our Privacy Policy sets out our privacy
principles and provides guidance to member firms on
the collecting, using, holding, disclosing, and otherwise
managing personal information.
Cyber Security- AUB Group has designed and implemented
a suite of core capabilities to manage cyber security and
cyber risk, including the establishment of a set of strategic
objectives to an industry aligned cyber security framework
and a roadmap focused on embedding solid foundations.
We have developed a capability whereby our cyber posture
is continually assessed and enhanced. Taking a risk-based
approach to prioritising the cyber roadmap initiatives, we
are focused on meeting our strategic information security
objectives and managing risk consistent with enterprise risk
appetite and tolerance levels. The minority of partner firms
within the group who manage their own IT services and
security, are subject to AUB’s Security Policy and IT Service
Standards.
66
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 5.3 OUR PEOPLE
Our employees are a critically important asset and a key pillar of our ESG framework.
We aim to equip our employees with the skills they need to deliver for our customers and
to provide them with opportunities so that they can reach their full potential. We know that
a diverse and inclusive workforce is the foundation for innovative thinking and new ideas.
For the second year in row, an independent review conducted by Great Place to Work benchmarked the staff of AUB’s Sydney
office against peers globally and certified AUB as a Great Place to Work. Of approximately 300 employees surveyed: – 98%
believe it is a safe place to work – 95% believed they are treated fairly regardless of their race or sexual orientation – 89%
believed they are treated fairly irrespective of their gender or age – 88% believed they can take off time when they believe it’s
necessary – 89% average score for justice.
Employee Development
We are committed to ensuring that our employees get a sense of fulfilment from their work. We do this by providing them
with ongoing development opportunities through AUB Group learning and development programs as well as further study
assistance.
Our Broking Division has an Education Committee comprising senior broking management from across the country. The
Committee ensures that insurance broker employees receive the necessary training and education through the National
Insurance Brokers Association, Australia (NIBA), the Australian and New Zealand Institute of Insurance and Finance (ANZIIF),
LMI College and other specialist providers.
Our Agency Division and Head Office employees complete their ongoing training requirements online through the LITMOS
learning management system. Our agencies’ training managers are responsible for running LITMOS, ensuring that the available
learning material meets the relevant training requirements and ensures that agency staff complete their training in a timely
manner.
During the year, training hours for our employees across the group remained consistent with the previous year. In FY23,
employees undertook an average of 21.1 hours of training each, including our broker and agency employees.
2023
2022
Movement,
%
Employee training hours (includes compliance related)
46,757
46,975
(0.5)
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ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 PROMOTIONS 2023
PROMOTIONS 2022
42
Female
Male
35
Female
Male
58
65
Employee Engagement
We use our Employee Net Promoter Score (eNPS) to
assess employee engagement based on their willingness to
recommend the organisation to others. AUB Group’s head
office employee satisfaction is measured regularly and
reflects a strong level of overall satisfaction, especially with
respect to how our employees feel about their relationships
with peers and their managers.
We utilise Officevibe, a dynamic online employee
engagement platform. The platform prompts employees
to complete fortnightly surveys anonymously and provides
resulting insights to management. The tool enables us
to collect continuous feedback on employee sentiment
and dive deeper into emerging trends and developments
amongst our workforce. Officevibe has been rolled out to our
head office teams as well as to all Sydney, Melbourne and
Brisbane teams in our agencies, and a number of brokers in
the Group.
Diversity and Inclusion
Gender parity is integral to a dynamic balanced workforce.
We are working to improve gender balance across the
AUB Group. We have made a number of improvements
to our recruitment, selection and succession processes,
incorporating psychometric testing as part of the
recruitment process and ensuring succession planning is
evaluated on an ongoing basis and continuously updated
and monitored.
Our longer term gender balance goal is to achieve 40:40:20
(40% men, 40% women and 20% open) – at all levels of our
organisation. We recognise this is a long-term commitment
and that the insurance industry as a whole will require
substantial work in this space.
The Group is committed to the development, promotion and
retention of women in leadership. Some of these initiatives
include:
– Seeking to achieve gender diversity in the composition
of our board and with a target of 30% female directors;
– Mentoring and career resiliency programs that are
focused on giving female staff equal opportunity to rise
to senior positions;
– Regular remuneration reviews to ensure remuneration
is relevant to the market and commensurate to the role
regardless of gender;
– In January 2023 Tysers joined Insurance Cultural
Awareness Network (iCAN) as a bronze sponsor. iCAN
is an industry-wide independent network that supports
multicultural inclusion across the UK insurance sector.
It aims to bring the industry together to share best
practices and to promote multicultural inclusion in the
workplace; and
– Tysers’ Charity Initiative donations for March were
directed to Smart Works which provides interview
training and clothing to help low-income women in the
UK improve their confidence, secure employment and
gain financial independence.
We report annually to the Workplace Gender Equality Agency,
in line with the Workplace Gender Equality Act. These reports
provide valuable insights into our workforce composition
and flag areas where we can improve our employee value
proposition and retention and recruitment practices. The
latest filing is available on our website.
As at 30 June 2023 AUB Group and its controlled entities
had a total of 2,433 (FY22: 1,208) employees with women
representing 58% (FY22: 61%) across the Group. We’re
pleased to report that throughout the year approximately
58% (FY22: 65%) of our internal promotions were female,
demonstrating that the efforts we are making to support
the careers of our female employees are delivering results.
During the year, 65% of our new hires were female.
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ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 EMPLOYEE GENDER COMPOSITION (%)
100
80
60
40
20
0
80
20
38
62
55
45
79
21
Executives
Non Executive
Management
Professionals
Other
Female
Male
We also recognise our workforce and that of Australia as a
whole is built on migration. 30% of Australians were born
overseas, and our workforce reflects this at all levels.
BIRTHPLACE OF WORKFORCE (%)
100
80
60
40
20
0
37
63
50
50
65
66
35
34
Executives
Non-Executive
Management
Professionals
Other
Employees
Overseas
Australia
We will build processes in the next period to assess and
report on cultural diversity within our workforce. We also
plan to focus on broader diversity in the future to improve
representation across other groups, including the indigenous
and LGBTQIA+ communities, as well as people living with a
disability and people of different ages, to align our workforce
makeup with the communities that we serve.
Talent Attraction and Retention
We see increasing demand for talent across several skill
sets. We monitor employee turnover to understand trends
in demand for skills and to assist us adjusting our retention
strategies to ensure our high performers are fulfilled and
engaged with their roles. We conduct exit interviews to help
management ensure that organizational issues are identified
and dealt with. Employee turnover across the Group was
17% in 2023 compared to 20% in 2022. The volatility was
experienced particularly around new starters and casual
employees as the industry and Australia as a whole
struggles with a shortage in the employment market.
Absenteeism can be a lead indicator for poor wellbeing.
We recognise equally a very low absentee rate indicates
employees being over worked. We aim to keep absentee
rates below 5% (excluding paid annual leave). We encourage
all our employees to utilise their full entitlement to paid leave
each year.
Fair Remuneration
Many of our employees are highly skilled and their
remuneration reflects their value to AUB and the market.
We recognise our responsibility to ensure all our staff are
able to achieve a livable wage (60% of the median wage).
We have benchmarked the lowest paid employees to an
FTE equivalent to ensure their pay meets the higher of this
benchmark and the related industry award.
Based on the benchmark there were 4 employees marginally
below the threshold, 3 of whom were school leaver/
interns and 1 part-time employee working 1 day per week.
Such opportunities represent an alternative pathway to
higher education with an expectation to complete industry
qualifications after gaining sufficient relevant practical
experience.
A number of non-cash benefits such as work from home
allowances, complimentary or discounted insurance
coverage available to staff, are not considered in the analysis
above. The average salary across the Group was $132k, and
median salary was $104k.
We have also engaged an external party to review all casual
rates to benchmark against industry standards. In addition
to benchmarking current pay and conditions we engaged
the same external party to review all termination entitlement
payments to ensure employees are paid what they are owed
at all times.
69
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 Workplace health and safety
We aim to provide a physically and psychologically safe
workplace for our people. All health and safety incidents are
reported to AUB Group Board’s Remuneration and People
Committee and Board Audit & Risk Committee.
We have a dedicated free and confidential Employment
Assistance Program (EAP) to support our employees and
their families 24/7. During the current year, we have not
witnessed any increase in reported incidents related to
mental health, however, we acknowledge that with most of
our workforce carrying out desk work remotely, workplace
health and safety incidents may not be as visible to us. We
encourage our employees to provide feedback to us about
their physical and psychological health through our regular
online employee surveys, their direct managers and HR.
Advocacy
We engage in industry research, public relations initiatives
and policy advocacy on behalf of our partners. Our activities
include engaging with governments, regulators and industry
bodies through official consultations and meetings in order
to provide information and perspectives on our industry and
our members.
The main industry associations and advocacy organisations
which are Group employees are members of include The
Insurance Association of Australia, The Australian and
New Zealand Institute of Insurance and Finance and The
Insurance Brokers Association of New Zealand.
70
6. GOVERNANCE
Our Policies and Processes
AUB Group have implemented policies and processes across
the Group to support our high standards of governance,
ensuring that those in the business are guided by our
core principles and appropriate support is in place for
communicating any grievances to appropriate levels of
governance.
Commitment to Responsible Investing
As outlined in the Directors report, a key element of the
Group’s strategy is to execute on strategically aligned
acquisitions. As part of further embedding ESG into our daily
governance, we have implemented a formal ESG Mergers
and Acquisitions checklist.
Working to formalise our ESG considerations in M&A
activity will support creating long term stakeholder value by
acquiring businesses with ESG strategies and commitments
aligned to our strategy.
Our commitment to responsible investing includes;
1. Acquisitions of ethical businesses with ethical leadership;
2. A long term view of ownership and sustainable operating
models; and,
3. Consideration of all stakeholders.
Code of Conduct
AUB Group’s Code of Conduct (Code) sets out the ethical
standards expected of all directors, officers, and employees
of AUB Group and its controlled entities. AUB Group
encourages any businesses in which AUB Group has a direct
or indirect equity investment to adopt the code.
The Code is designed to ensure AUB Group delivers on its
commitment to corporate responsibility and sustainable
business practice. It establishes a foundation to our
business decisions and provides clear, consistent guidelines
on ethical behaviour.
The Code requires our people to:
– Act with honesty and integrity in dealing with all
stakeholders, including shareholders and the community;
– Manage conflicts of interest;
– Comply with the law;
– Adhere to company policies and procedures; and
– Respect confidentiality and privacy.
All employees are required to complete ethics training
annually. Breaches of our code of conduct will impact an
employee’s annual performance rating and in turn the
at-risk portion of their remuneration. Except for fixed term
contractors and other labour hire staff, all employees have a
portion of their remuneration at risk based on performance
measures.
In additional to standard HR policies, and our code of
conduct, our businesses have policies governing (1)
Complaints, (2) Financial Hardship, (3) Domestic Violence
and (4) Flexible working.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 Employee and Customer Grievance
There are risks which may arise from our decentralised
operation such as pockets of poor culture or leadership. In
addition to grievance and escalation policies that exist within
each of our businesses we provide an anonymous access
point for any employee of any company in the Group or any
customer to contact the head office. Submissions are jointly
reviewed by the Group legal counsel & Head of People and
Culture on any grievance they may have.
This process is designed to pro-actively manage a range of
issues including mismanagement across the decentralised
Group. Although these issues may not constitute
whistleblower events, we believe it is best practice to enable
them to surface and be dealt with.
Whistleblower events are dealt with through our
Whistleblower portal - Whisplii. We do not report the number
of whistleblower or grievance instances to protect the
anonymity of any submitted.
Supply Chain Management
AUB Group acknowledges that modern slavery can occur in
every industry, sector, and country, including those where we
operate. AUB Group has a zero tolerance policy for modern
slavery in our supply chain and is committed to continual
improvement in combating all forms of modern slavery
such as forced labour, debt bondage, deceptive recruiting,
human trafficking and child labour. AUB Group’s ESG policy
promotes ethical and sustainable practices, in particular
respecting human rights through developing high quality and
ethical partnerships with suppliers and service providers.
AUB Group encourages all employees and business
partners to escalate any concerns internally or through our
anonymous reporting service. We comply with all relevant
laws and expect the same from all our stakeholders.
We recognise that as an organisation our suppliers are
key to positively contributing to the social, economic, and
environmental wellbeing of the communities that we are part
of. Therefore, an assessment of modern slavery risks forms
part of our review of all potential supplier engagements.
We include standard ethical sourcing contractual clauses
in all contracts where new vendors are directly engaged
to provide services to AUB Group. We expect our first-tier
suppliers to comply with these standards and encourage
that they expect the same level of compliance from their
suppliers. We believe mutual commitments between AUB
Group and our suppliers, to operate in accordance with
community expectations of businesses, creates sustainable
value for all our stakeholders. We work collaboratively with
our suppliers to foster relationships that align with the
standards in our governance framework and the interests
of our stakeholders.
AUB Group takes a systematic approach to assessing
modern slavery risks to ensure we remain compliant with
modern slavery requirements and educate, encourage
and provide resources (including self-certification) to
support compliance by controlled entities with modern
slavery requirements. AUB Group conducted a preliminary
review of and its controlled entities’ supply chain partners
and assessed it against government and international
organisations’ data and resources as part of our
enterprisewide Risk & Compliance Management Framework.
As our approach to addressing modern slavery risk matures,
we will continue to develop systems, controls and processes
to assess and further develop the effectiveness of our risk
management framework, including in respect of controlled
entities. AUB Group has implemented compliance measures
to assess and review potential risks.
To further complement our framework and demonstrate
compliance with modern slavery requirements and
obligations, the Group has developed a range of controls
to reduce modern slavery risks. These include policies,
training and awareness, reporting tools, due diligence and
monitoring. These policies and procedures promote and
instill good practices and behaviours and protect the human
rights of our employees and suppliers.
During the reporting period, AUB Group took action to uplift
its processes across three broad categories: (1) Governance,
(2) Supplier Assessment and (3) Internal Awareness,
Education & Training. The key uplifts across these categories
included:
– Incorporating a review of embedment of modern slavery
practices across our broker network;
– Enhancing our reporting line and internal accountability
through the introduction of a grievance form available on
our public website;
– Engaging an external party to review AUB’s key supplier
agreements to align contractual standards with AUB’s
minimum compliance requirements;
– Focusing on training related to mental health and
modern slavery, and continuing training and awareness
through delivery of training programs for directors and
employees; and
– Reporting on training completion rates to our Board Audit
and Risk Committee.
In subsequent reporting periods, we will continue to review
and develop our processes to ensure effectiveness of our
actions. The AUB Group Board Audit and Risk Committee
has responsibility for overseeing the Group’s response to
modern slavery risks. Modern slavery risk management is
discussed by the Group Board and the Group Board Audit
and Risk Committee. Our Modern Slavery Statement is
available on our website.
71
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 AUB Group takes a systematic approach to assessing
modern slavery risks to ensure we remain compliant with
modern slavery requirements and educate, encourage
and provide resources (including self-certification) to
support compliance by controlled entities with modern
slavery requirements. AUB Group conducted a preliminary
review of and its controlled entities’ supply chain partners
and assessed it against government and international
organisations’ data and resources as part of our enterprise-
wide Risk & Compliance Management Framework.
As our approach to addressing modern slavery risk matures,
we will continue to develop systems, controls and processes
to assess and further develop the effectiveness of our risk
management framework, including in respect of controlled
entities. AUB Group has implemented compliance measures
to assess and review potential risks.
To further complement our framework and demonstrate
compliance with modern slavery requirements and
obligations, the Group has developed a range of controls
to reduce modern slavery risks. These include policies,
training and awareness, reporting tools, due diligence and
monitoring. These policies and procedures promote and
instill good practices and behaviours and protect the human
rights of our employees and suppliers.
During the reporting period, AUB Group took action to
uplift its processes across three (3) broad categories:
“Governance”, “Supplier Assessment” and “Internal
Awareness, Education & Training”. The key uplifts across
these categories included:
– Incorporating a review of embedment of modern slavery
practices across our broker network;
– Enhancing our reporting line and internal accountability
through the introduction of a grievance form available on
our public website;
– Engaging an external party to review AUB’s key supplier
agreements to align contractual standards with AUB’s
minimum compliance requirements;
– Focusing on training related to mental health and
modern slavery, and continuing training and awareness
through delivery of training programs for directors and
employees; and
– Reporting on training completion rates to our Board Audit
and Risk Committee.
Over subsequent reporting periods, we will continue to review
and develop our processes to ensure effectiveness of our
actions. The AUB Group Board Audit and Risk Committee
has responsibility for overseeing the Group’s response to
modern slavery risks. Modern slavery risk management is
discussed by the Group Board and the Group Board Audit
and Risk Committee. Our Modern Slavery Statement is
available on our website.
72
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORTYEAR ENDED 30 JUNE 2023AUB GROUP ANNUAL REPORT 2023 FINANCIAL
REPORT
73
AUB GROUP ANNUAL REPORT 2023 AUDITORS INDEPENDENCE DECLARATION
Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Auditor’s Independence Declaration to the Directors of AUB Group
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(cid:3)
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(cid:70)(cid:17) (cid:49)(cid:82)(cid:3)(cid:81)(cid:82)(cid:81)(cid:16)(cid:68)(cid:88)(cid:71)(cid:76)(cid:87)(cid:3)(cid:86)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:86)(cid:3)(cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:71)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:68)(cid:89)(cid:72)(cid:81)(cid:72)(cid:3)(cid:68)(cid:81)(cid:92)(cid:3)(cid:68)(cid:83)(cid:83)(cid:79)(cid:76)(cid:70)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:70)(cid:82)(cid:71)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:83)(cid:85)(cid:82)(cid:73)(cid:72)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:68)(cid:79)(cid:3)(cid:70)(cid:82)(cid:81)(cid:71)(cid:88)(cid:70)(cid:87)(cid:3)(cid:76)(cid:81)(cid:3)
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(cid:3)
PLEASE LEAVE AS IS
(cid:55)(cid:75)(cid:76)(cid:86)(cid:3)(cid:71)(cid:72)(cid:70)(cid:79)(cid:68)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:76)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:85)(cid:72)(cid:86)(cid:83)(cid:72)(cid:70)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:36)(cid:56)(cid:37)(cid:3)(cid:42)(cid:85)(cid:82)(cid:88)(cid:83)(cid:3)(cid:47)(cid:76)(cid:80)(cid:76)(cid:87)(cid:72)(cid:71)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:81)(cid:87)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)(cid:76)(cid:87)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:82)(cid:79)(cid:79)(cid:72)(cid:71)(cid:3)(cid:71)(cid:88)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:17)(cid:3)
Ernst & Young
Michael Wright
Partner
22 August 2023
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
74
AUB GROUP ANNUAL REPORT 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
YEAR ENDED 30 JUNE 2023
Notes
2023
$’000
2022
$’000
4 (a)
4 (b)
4 (c)
4 (d)
4 (e)
4 (f)
4 (g)
5 (a)
Revenue from contracts with customers
Other Income
Share of profit of associates
Cost to provide services and administrative expenses
Finance costs
Adjustments to carrying value
Profit from sale or dilution of interests in associates, controlled entities and broking
portfolios
Profit before income tax
Income tax expense
Profit for the year
Other comprehensive income
Other comprehensive income to be reclassified to profit or loss in subsequent periods:
Exchange Differences on Translation of Foreign Operations
Gains/(Losses) on Cash Flow Hedges
Tax on Other Comprehensive Income to be reclassified to profit or loss in subsequent
periods
Other comprehensive income not to be reclassified to profit or loss in subsequent
periods:
Remeasurements of Post-Employment Benefit Obligations and Other
Tax on Other Comprehensive Income not to be reclassified to profit or loss in
subsequent periods
Other comprehensive income after income tax for the period
Total comprehensive income after tax for the year
Profit for the year attributable to:
Equity holders of the parent
Non-controlling interests
Total comprehensive income after tax for the year attributable to:
Equity holders of the parent
Non-controlling interests
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
6 (a)
6 (a)
763,659
332,502
28,084
35,690
1,035
39,053
(660,625)
(282,701)
(72,102)
94,706
(6,750)
83,139
(6,649)
31,817
39,046
127,103
7,250
122,206
(35,480)
(22,322)
91,623
99,884
62,688
17,601
(4,264)
(1,122)
(3,911)
(32)
(7,124)
17
69,271
160,894
65,253
26,370
91,623
134,462
26,432
160,894
65.35
65.08
180
–
(5,238)
94,646
80,836
19,048
99,884
76,322
18,323
94,646
105.60
105.23
The above Consolidated Statement of Comprehensive Income (SOCI) should be read in conjunction with the notes to the
Financial Report.
75
AUB GROUP ANNUAL REPORT 2023
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
ASSETS
Current Assets
Cash and Cash Equivalents
Cash and Cash Equivalents - Trust
Trade and Other Receivables
Lease Net Investment
Financial and Other Assets
Deferred Acquisition Costs
Total Current Assets
Non-current Assets
Trade and Other Receivables
Right of Use Asset and Lease Net Investment
Financial and Other Assets
Property, Plant and Equipment
Investment in Associates
Intangible Assets and Goodwill
Deferred Tax Asset
Total Non-current Assets
Total Assets
LIABILITIES
Current Liabilities
Trade and Other Payables
Deferred Revenue from Contracts with Customers
Income Tax Payable
Provisions
Lease Liabilities
Interest-bearing Loans and Borrowings
Financial Liabilities
Total Current Liabilities
Non-current Liabilities
Provisions
Lease Liabilities
Interest-bearing Loans and Borrowings
Financial Liabilities
Deferred Tax Liabilities
Total Non-current Liabilities
Total Liabilities
Net Assets
EQUITY
Issued Capital
Retained Earnings
Foreign Currency Translation Reserve
Hedge Reserve
Defined Benefits Plan and Other Reserves
Put Option Reserve
Share-based Payments Reserve
Equity attributable to equity holders of the parent
Non-controlling Interests
Total Equity
Notes
2023
$’000
2022
$’000
10
10
11
12
11
12
8
13
5 (b)
260,352
936,369
313,079
1,804
11,718
13,822
259,329
333,131
117,679
1,020
1,868
–
1,537,144
713,027
17,286
70,360
29,891
12,885
238,526
1,956,841
21,385
2,347,174
739
23,851
9,214
6,347
250,100
622,510
14,694
927,455
3,884,318
1,640,482
15
1,050,117
407,651
16
17
18
16
17
18
5 (b)
20
18
30,827
26,482
204,547
14,743
19,769
36,138
10,382
7,967
29,104
8,187
8,941
17,976
1,382,623
490,208
5,475
62,134
564,461
237,940
118,317
988,327
2,370,950
1,513,368
945,687
258,399
57,340
12,562
(6,617)
(11,781)
24,263
1,279,853
233,515
1,513,368
4,505
18,752
38,861
72,876
17,603
152,597
642,805
997,677
608,520
247,278
(5,057)
(1,128)
261
(8,161)
12,781
854,494
143,183
997,677
The above Consolidated Statement of Financial Position (SOFP) should be read in conjunction with the notes to the Financial Report.
76
AUB GROUP ANNUAL REPORT 2023
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
YEAR ENDED 30 JUNE 2023
Attributable to equity holders of the parent
Issued
capital
$’000
Retained
earnings
$’000
Foreign
currency
translation
reserves
$’000
Put option
reserves
$’000
Hedge
reserves
$’000
Defined
benefit
plan and
other
reserves
$’000
Share-
based
payments
reserves
$’000
Non-
controlling
interests
$’000
Total
$’000
Total
equity
$’000
At 1 July 2022
608,520
247,278
(5,057)
(8,161)
(1,128)
261
12,781 854,494
143,183
997,677
Net profit after tax for the
year
Other comprehensive
income
Tax on other
comprehensive income
Net comprehensive
income for the period
Transactions with owners in
their capacity as owners:
Ownership changes
without gaining/losing
control (Note 9)
Non-controlling interests
relating to new acquisitions
(Note 7(a))
Non-controlling interests
relating to disposals
(Note 7(b))
Transfer to put option
reserve & impact of put
option release
Net cost of share-based
payment
Issue of shares, net
of issue costs
Equity dividends
(Note 6(d))
–
–
–
–
65,253
–
–
–
62,397
–
65,253
62,397
–
(5,337)
–
–
–
337,167
–
–
3,620
–
–
–
(52,415)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(3,620)
–
–
–
–
–
17,601
(6,895)
(3,911)
17
–
–
–
65,253
26,370
91,623
73,103
62
73,165
(3,894)
–
(3,894)
13,690
(6,878)
– 134,462
26,432 160,894
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(5,337)
4,012
1,325
–
84,046
84,046
–
(2,020)
(2,020)
–
–
–
–
–
–
–
11,482
11,482
11,482
– 337,167
–
337,167
–
(52,415)
(22,138)
(74,553)
At 30 June 2023
945,687 258,399
57,340
(11,781)
12,562
(6,617)
24,263 1,279,853
233,515 1,513,368
The above Consolidated Statement of Changes in Equity (SOCIE) should be read in conjunction with the notes to the Financial
Report.
77
AUB GROUP ANNUAL REPORT 2023 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
YEAR ENDED 30 JUNE 2022
Attributable to equity holders of the parent
Issued
capital
$’000
Retained
earnings
$’000
Foreign
currency
translation
reserves
$’000
Put option
reserves
$’000
Hedge
reserves
$’000
Defined
benefit
plan and
other
reserves
$’000
Share-
based
payments
reserves
$’000
Non-
controlling
interests
$’000
Total
$’000
Total
equity
$’000
At 1 July 2021
266,659
210,424
(1,519)
(7,057)
108
10,139 478,754
119,533 598,287
Net profit after tax for the
year
Other comprehensive
income
Tax on other
comprehensive income
Net comprehensive
income for the period
Transactions with owners in
their capacity as owners:
Ownership changes
without gaining/losing
control (Note 9)
Non-controlling interests
relating to new acquisitions
(Note 7(a))
Non-controlling interests
relating to disposals
(Note 7(b))
Transfer to put option
reserve & impact of put
option release
Net cost of share-based
payment
–
–
–
–
80,836
–
–
–
(3,538)
–
80,836
(3,538)
–
(3,408)
–
–
–
–
–
1,104
–
–
–
–
–
(1,128)
185
–
(32)
(1,128)
153
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(1,104)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
80,836
19,048
99,884
(4,481)
(725)
(5,206)
(32)
–
(32)
76,323
18,323
94,646
–
(3,408)
6,619
3,211
–
–
–
–
14,131
14,131
–
–
(436)
(436)
–
–
–
2,642
2,642
2,642
–
–
341,861
– 341,861
(41,678)
(14,987)
(56,665)
Issue of shares, net of issue
costs
341,861
Equity dividends (Note 6(d))
–
(41,678)
At 30 June 2022
608,520
247,278
(5,057)
(8,161)
(1,128)
261
12,781 854,494
143,183
997,677
78
AUB GROUP ANNUAL REPORT 2023 CONSOLIDATED STATEMENT OF CASH FLOWS
YEAR ENDED 30 JUNE 2023
Notes
2023
$’000
2022
$’000
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Dividends/trust distributions received from associates
Management fees received from associates/related entities, and interest received
Payments to suppliers and employees
Income tax paid
Interest paid
Interest paid - lease liabilities
Net cash from operating activities before customer trust account movements
Net increase/(decrease) in cash held in customer trust accounts
NET CASH FLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for acquisition of consolidated entities, net of cash acquired
Cash inflow from sale/deconsolidation of controlled entities
Payment for new associates and increases in holdings in associates
Proceeds from reduction in interests in associates
Payment for contingent and deferred consideration on prior year acquisitions
Net payment for new broking portfolios purchased/broking portfolios sold
Net payments from purchases/sales of plant and equipment, capitalised projects, and
other assets
Net repayments/(advances) of loans to associates/related entities
4
7 (a)
7 (b)
8
18
816,668
345,154
38,203
34,665
43,149
15,988
(677,007)
(268,931)
(32,339)
(26,904)
(62,813)
(4,001)
113,376
88,862
(5,489)
(1,006)
101,961
(6,426)
202,238
95,535
(160,199)
109,303
9,710
(7,207)
42,135
(16,078)
(4,307)
(749)
(159)
5,330
(5,408)
8,124
(5,179)
10
(2,193)
2,500
NET CASH FLOWS (USED IN)/FROM INVESTING ACTIVITIES
(136,854)
112,487
CASH FLOWS FROM FINANCING ACTIVITIES
Capital raising
Dividends paid to shareholders of the Group
Dividends paid to shareholders of non-controlling interests
Distributions paid outside the group to unitholders of controlled trusts
Increase in borrowings
Repayment of borrowings
Proceeds from issue of capital to non-controlling interest
Payments of principal for lease liabilities
Payment of financial liabilities resulting from acquisition of controlled entity
Payment for increase in interests in controlled entities
Proceeds from reduction in interests in controlled entities
NET CASH FLOWS FROM FINANCING ACTIVITIES
NET INCREASE IN CASH AND CASH EQUIVALENTS
Cash and cash equivalents at beginning of the period
Impact as a result of foreign exchange
20
161,297
341,861
10 (b)
10 (b)
10 (b)
(52,415)
(22,137)
(11,804)
(41,678)
(14,987)
–
709,315
32,103
(178,825)
(208,352)
–
(10,255)
(92,978)
(21,934)
18,394
5,967
(7,392)
–
(3,136)
380
498,658
104,766
564,042
312,788
592,460
281,820
40,219
(2,148)
Cash and cash equivalents at the end of the period
10
1,196,721
592,460
The above Consolidated Statement of Cash Flows (SOCF) should be read in conjunction with the notes to the Financial Report.
79
AUB GROUP ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
CORPORATE INFORMATION
1
The consolidated financial statements are those of AUB
Group Limited (the parent ‘Company’) and all entities that
AUB Group Limited controlled (together the ‘Group’) during
the year and at the reporting date.
The financial report of AUB Group Limited for the year ended
30 June 2023 was authorised for issue in accordance with a
resolution of the directors on 22 August 2023. The Directors
have the power to amend and reissue the financial report.
AUB Group Limited is a for profit company limited by shares
incorporated in Australia whose shares are publicly traded
on the Australian Securities Exchange.
The principal activities of entities within the consolidated
Group for the year were the provision of services globally
across insurance broking, agencies, and distribution of
ancillary products within the support services businesses.
The registered office and principal place of business of the
Company is Level 14, 141 Walker Street, North Sydney NSW
2060, Australia.
2.1
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
a. Basis of preparation of the financial report
The financial report is a general purpose financial report which
has been prepared in accordance with the requirements of
the Corporations Act 2001, Australian Accounting Standards
and other authoritative pronouncements of the Australian
Accounting Standards Board.
The financial report has been prepared under the historical
cost convention, as modified by applying fair value accounting
to certain financial assets and financial liabilities (including
derivative instruments) measured at Fair Value through Profit
or Loss (FVTPL) or in other comprehensive income (OCI).
The financial report is presented in Australian dollars ($) and
all values are rounded to the nearest $1,000 (where rounding
is applicable), unless otherwise stated, under the option
available to the Company under ASIC instrument “Rounding
in Financial/Directors’ Reports” 2016/191. The Company is
an entity to which this legislative instrument applies.
The functional currency of the Group and all segments other
than New Zealand and Tysers is Australian Dollars. The
New Zealand Broking segment’s functional currency is New
Zealand dollars. The Tysers segment’s functional currency is
British Pounds. The presentational currency of the Group is
Australian Dollars.
The financial statements have been prepared on a going
concern basis.
Certain comparative information has been revised in
this financial report to conform with the current period’s
presentation.
b. Statement of compliance
The financial statements comply with Australian Accounting
Standards as issued by the Australian Accounting Standards
Board and International Financial Reporting Standards
(‘IFRS’) as issued by the International Accounting Standards
Board (‘IASB’).
80
c. Basis of consolidation
Information from the financial statements of controlled
entities is included from the date the parent entity obtains
control until such time as control ceases. Generally, there
is a presumption that a majority of voting rights results
in control. To support this presumption, the Group also
considers all relevant facts and circumstances in assessing
whether it has control over an entity, including rights arising
from contractual arrangements with the entity and/or other
vote holders of the entity.
Where there is a loss of control of a controlled entity, the
consolidated financial statements include the results for the
part of the reporting period during which the parent entity
had control.
The financial information in respect of controlled entities is
prepared for the same reporting period as the parent Company
using consistent accounting policies. Adjustments are made to
ensure conformity with the Group’s accounting policies.
All intercompany balances and transactions, including
unrealised profits arising from intra-group transactions, have
been eliminated in the consolidated accounts.
Non-controlling interests represent the portion of profit
or loss and net assets in subsidiaries which are not 100%
owned by the Group. These are presented separately in the
Consolidated Statement of Comprehensive Income and
within equity in the Consolidated Statement of Financial
Position.
Transactions with owners in their capacity as owners
A change in ownership interest without loss of control is
accounted for as an equity transaction. The difference
between the consideration transferred and the book value of
the share of the non-controlling interest acquired or disposed
is recognised directly in equity attributable to the parent entity.
Where the parent entity loses control over a controlled entity,
it derecognises the assets including goodwill, liabilities and
non-controlling interests in the controlled entity together
with any accumulated translation differences previously
recognised in equity. The Group recognises the fair value of
the consideration received and the fair value of the investment
retained together with any gain or loss in the Consolidated
Statement of Comprehensive Income.
d.
Significant accounting judgements,
estimates and assumptions
The preparation of the financial statements requires
management to make judgements, estimates and
assumptions that affect the reported amounts in the
financial statements. Management continually evaluates its
judgements and estimates in relation to assets, liabilities,
contingent liabilities, revenue and expenses.
Management bases its judgements and estimates on
historical experience and on other various factors it believes
to be reasonable under the circumstances, the result of
which form the basis of the carrying values of assets and
liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates under
different assumptions and conditions.
AUB GROUP ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
2.1
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)
d.
Significant accounting judgements,
estimates and assumptions (continued)
Management has identified the following critical accounting
policies for which significant judgements, estimates and
assumptions are made. Actual results may differ from these
estimates under different assumptions and conditions
and may materially affect financial results or the financial
position reported in future periods.
Further details of the nature of these assumptions and
conditions are found in the relevant notes to the financial
statements.
The carrying amounts of certain assets and liabilities are
often determined based on estimates and assumptions of
future events. The key estimates and assumptions that have
a significant risk of causing a material adjustment to the
carrying amounts of certain assets and liabilities within the
next annual reporting period are:
Impairment of goodwill/intangibles and investments in
associates
The Group determines whether goodwill is impaired at
least on an annual basis and for any identifiable intangibles
and investments in associates that have an indicator of
impairment. This requires an estimation of the recoverable
amount of the cash-generating units to which the goodwill
is allocated. The resulting recoverable amounts derived
from the appropriate measures described in Note 13 are
compared to the carrying value for each CGU and in the event
that the carrying value exceeds the recoverable amount, an
impairment loss is recognised. The assumptions used in this
estimation of recoverable amount and the carrying amount of
goodwill are discussed in Note 14.
Measurement of contingent consideration
The Group recognises contingent consideration at fair value
through profit or loss. Contingent considerations terms vary
between transactions but generally involves either (1) an EBIT
or Revenue (fixed) performance hurdle (generally 2-3 years)
post the acquisition date (i.e. high water mark) or (2) future
dated (generally 2-3 years) EBIT or Revenue times a fixed
multiple less historic payments made.
See Note 7(a) and Note 8 for further details on current year
transactions and Note 18 for movements in all contingent and
deferred considerations.
Re-estimation of financial liability at amortised cost
A financial liability at amortised cost has been recognised
representing an estimate of the value the Group could be
required to pay on the future exercise by holders of put
options over non-controlling interests and the value of
units held by others for consolidated trusts. The Group re-
estimates the financial liability at the reporting date, taking
into account the estimated future outcomes for income
or profit. For put options, generally this involves projecting
the EBIT of the entity to the first exercise date multiplied by
the expected EBIT multiple and projected net debt (based
on known information and the company’s gearing targets).
Historical trends and any relevant external factors are taken
into account in determining the likely outcome. See Note 18
for further details.
Deferred Tax Assets
Deferred tax assets (DTA) are recognised for deductible
temporary differences when management considers
that it is probable that future tax profits will be available
to utilise those temporary differences. Judgement is
required in relation to DTAs recognised in relation to carry
forward losses. The future profitability of each entity or tax
consolidation group (if a part of a tax consolidation group)
needs to be assessed including where a capital loss is made,
the probability of a future capital gain to offset the carry
forward capital loss. See Note 5 for further details.
Pensions
Tysers operates two defined benefit pension schemes, which
require contributions to be made to separately administered
funds. The cost of the defined benefit pension schemes and
the present value of the pension obligation are determined
using actuarial valuations. An actuarial valuation involves
making various assumptions that may differ from actual
developments in the future. These include the determination
of the discount rate, future salary increases, mortality rates
and future pension increases. Due to the complexities involved
in a valuation and its long-term nature, a defined benefit
obligation is highly sensitive to changes in these assumptions.
All assumptions are reviewed at each reporting date.
Remeasurements, comprising actuarial gains and losses, the
effect of any asset ceiling, excluding amounts included in net
interest on the net defined benefit liability and the return on
plan assets (excluding amounts included in net interest on
the net defined benefit liability), are recognised immediately in
the statement of financial position with a corresponding debit
or credit to retained earnings through other comprehensive
income in the period in which they occur. Remeasurements
are not reclassified to profit or loss in subsequent periods.
Capital Risk Management
AUB Group’s risk management policy is to identify, assess,
and manage risks, which are likely to adversely impact its
financial performance, continued growth and its survival. In
terms of financial risk management, the Group takes a risk-
averse approach, and seeks to minimise risk whilst bearing in
mind cost effectiveness.
AUB will not engage in speculative activity, nor will it explicitly
seek opportunities to profit from expected movements in the
financial markets. The Group hedges cashflows where there
is a mis-match in cash receipts compared to the functional
expense base of an entity.
As at 30 June 2023, AUB Group’s hedge program includes
foreign currency hedges, to mitigate the risk of variability
of operating cash flows caused by foreign currency
fluctuations. The current hedges are designed to ensure
that USD revenue exposures are hedged to GBP, the Tysers
operating currency.
Where possible the Group takes advantage of natural hedges
offsetting foreign currency assets and liabilities.
Hedge Accounting
The Group uses derivative financial instruments, such as
forward currency contracts to hedge its exposure to foreign
currency risk in forecast transactions and firm commitments.
81
AUB GROUP ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
2.1
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)
d.
Significant accounting judgements,
estimates and assumptions (continued)
At the inception of a hedge relationship, AUB Group formally
designates and documents the hedge relationship to which it
wishes to apply hedge accounting and the risk management
objective and strategy for undertaking the hedge.
Such derivative financial instruments are initially recognised
at fair value on the date on which a derivative contract is
entered into and are subsequently remeasured at fair value.
Derivatives are carried as financial assets when the fair value is
positive and as financial liabilities when the fair value is negative.
The effective portion of the gain or loss on the hedging
instrument is recognised in other comprehensive income in
the cash flow hedge reserve. If there is any ineffective hedge,
that portion is recognised immediately in profit or loss.
Climate Change
Climate change is a material risk to the global economy
including the insurance sector. As a result of an increased
frequency and severity of climate related events, the
availability and cost of insurance coverage for some of our
customers may be materially impacted.
Our decentralised operating approach and diversified
investment strategy helps manage concentration risk to
locations, industries, and products. As a result, we are not
materially exposed to industries expected to be significantly
impacted by climate change.
There are opportunities for the Group to facilitate alternative
insurance cover for customers impacted by climate change.
There are also opportunities for the Group within new and
emerging markets such as renewable energy.
OPERATING SEGMENTS
3
An operating segment is a component of an entity that
engages in business activities from which it may earn
revenues and incur expenses, whose operating results are
regularly reviewed by members of the senior executive
management team who are the entity’s Chief Operating
Decision Makers (CODM) 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 that meet the quantitative criteria as
prescribed by AASB 8 are reported separately. However,
an operating segment that does not meet the aggregation
criteria is still reported separately where information about
the segment would be useful for the users of the financial
statements. Information about other business activities and
operating segments that are below the quantitative criteria
are combined and disclosed in a separate category.
The Group’s corporate structure is organised into five
business units which have been identified as separate
reportable segments as follows:
Australian Broking: assesses the insurable risks and risk
appetite of customers and sources relevant insurance
products from insurers and underwriters which meets
the needs of the customer. Post policy binding services
1.
82
2.
3.
4.
primarily include claims handling services on behalf of
the customer (claims preparation). Customers generally
comprise of Small and Medium Enterprise (SME)
businesses, however services are also provided to large
institutions and individuals.
Agencies: assesses, on behalf of the insurer, the risk
profile of the end customer and pricing of policies
requested by brokers. Post policy-binding services
primarily include claims handling on behalf of the insurer
(claims processing). Business is largely generated by
brokers operating within the SME insurance sector.
Agencies do not assume any underwriting risk and
accordingly do not incur or hold policy liabilities.
New Zealand Broking: provides broking services within
the New Zealand market. Operations are centrally
monitored and managed by AUB Group NZ head office.
As a distinct overseas operation and investment,
performance of the segment is separately monitored.
Tysers: includes Wholesale and Retail broking and
Managing General Agents (MGA) and is headquartered
in London. This is a separately reportable segment
given Tysers is largely UK based and operating mainly
in markets outside Australia. Tysers operates across:
– Wholesale broking: wholesale broker to the Lloyd’s
marketplace with global distribution largely through
retail brokers;
– Retail broking: provides retail broking services within
the UK market; and
– Managing General Agents: operates insurer delegated
authorities, both in-house and through third parties.
5. Support Services: provides a diversified range of services
to support the Australian Broking, Agencies, and New
Zealand Broking and Tysers segments, and external clients.
Services includes post claim rehabilitation, investigation, loss
adjusting, legal, white labelling, Group captive insurance and
AUB Group head office support. These sub segments are not
individually reportable.
Discrete financial information about each of these segments
is reported to management on a regular basis and the
operating results are monitored separately for the purposes
of resource allocation and performance assessment.
Each segment, except Support Services, contains entities
which operate within a uniform regulatory environment,
and contains similar characteristics in relation to customer
profile and operational risks.
Underlying Net Profit Before Tax
Performance of segments is reviewed by CODM on an
Underlying Net Profit Before Tax (UNPBT) basis. UNPBT
excludes the effects of non-recurring events or other items not
representative of the underlying operating items of income and
expenditure which do not represent the underlying performance
of the Group and segments of the Group, such as restructuring
costs, acquisition costs, fair value gain/losses, profits on sale,
amortisation of broking registers and impairments.
Such items are considered to be a result of non-recurring
events or non-representative of the underlying operations of
the Group and segments of the Group. UNPBT also excludes
non-controlling interests to reflect the performance attributable
to the shareholders of the Group.
AUB GROUP ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
OPERATING SEGMENTS (CONTINUED)
3
UNPAT reconciles to the Profit after income tax attributable to equity holders of the parent (Reported NPAT) within the
Statement of Comprehensive Income (SOCI) as follows:
Net Profit after tax attributable to equity holders of the parent
Add back/(less) (net of NCI and income tax):
– Amortisation of broking registers
– Adjustments to value of entities (to fair value) on the day they became controlled
entities
– Remeasurement of put option liability (net of Interest unwind)
– Impairment charge
– Movements in contingent consideration, net of impairment charge
– (Profit)/Loss on deconsolidation of controlled entity, sale/dilution of associates
and portfolios
– Impairment of the Right of Use Asset and Onerous Lease Expense
Notes
SOCI
2023
$’000
2022
$’000
65,253
80,836
30,352
11,143
(29,796)
(41,046)
3,620
5,473
39,912
1,104
7,537
(337)
(25,315)
(5,894)
251
39,355
129,105
219
20,456
74,018
180,643
106,086
(51,538)
(32,068)
129,105
74,018
– Acquisition related expenses
Underlying Net Profit After Tax
Represented by:
Underlying profit pre tax
Tax Expense
Underlying Net Profit After Tax
Segment Financial Performance
Inter-segment revenue**
Revenue from external customers
Total revenue and other income
Share of Net Underlying Profits of
Associates accounted for using the
equity method before amortisation
on broking registers and income tax
expense
Total income
Less: Expenses
Total underlying cost to provide
services and administrative
expenses*
Australian
Broking
$’000
5,618
279,517
285,135
30 June 2023
New Zealand
Broking
$’000
–
60,690
60,690
Agencies
$’000
–
137,584
137,584
Tysers
$’000
–
311,069
311,069
Support
Services
$’000
41,924
2,883
Total
$’000
47,542
791,743
44,807
839,285
41,069
2,855
1,287
(325)
326,204
140,439
61,977
310,744
12,480
57,287
57,366
896,651
(175,097)
(88,696)
(37,824)
(211,203)
(65,955)
(578,775)
Inter-segment expenses**
(21,450)
–
(6,050)
(20,042)
–
(47,542)
Interest paid and other borrowing
costs
Non-controlling interest
Underlying Net Profit Before Tax
(741)
(24,165)
104,751
(58)
(16,635)
35,050
(1,196)
(2,640)
14,267
(992)
(1,578)
(41,686)
–
(44,673)
(45,018)
76,929
(50,354)
180,643
Excludes non-operating expenses, refer to preceding table for reconciliation between statutory profit and underlying profit after tax.
*
** Management fees and interest on loans are recognised as revenue within the Support services segment, and as an expense within other segments.
83
AUB GROUP ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
3
OPERATING SEGMENTS (CONTINUED)
Segment Financial Performance
Inter-segment revenue**
Revenue from external customers
Total revenue and other income
Share of Net Underlying Profits of
Associates accounted for using the
equity method before amortisation
on broking registers and income tax
expense
Total income
Less: Expenses
23%
Total underlying cost to provide
services and administrative
expenses*
59%
Inter-segment expenses**
Interest paid and other borrowing
costs
Non-controlling interest
Underlying Net Profit Before Tax
Australian
Broking
$’000
2,846
192,659
195,505
30 June 2022
New Zealand
Broking
$’000
–
48,524
48,524
Agencies
$’000
–
92,120
92,120
42,689
2,724
238,194
94,844
1,669
50,193
(132,366)
(60,717)
(2,862)
(640)
(16,177)
86,149
–
(31)
(11,314)
22,782
(36,911)
(1,825)
(530)
(1,974)
8,953
Tysers
$’000
–
–
–
–
–
–
–
–
–
–
Support
Services
$’000
1,841
234
2,075
Total
$’000
4,687
333,537
338,224
10,497
12,572
57,579
395,803
(20,061)
(250,055)
–
(4,687)
(4,309)
(5,510)
–
(29,465)
(11,798)
106,086
Excludes non-operating expenses, refer to preceding table for reconciliation between statutory profit and underlying profit after tax.
*
** Management fees and interest on loans are recognised as revenue within the Support services segment, and as an expense within other segments.
Tysers was acquired during the year therefore no comparatives shown.
Segment Non-Current Assets
The total of non-current assets other than financial instruments and deferred tax assets are provided in the following graphs.
The measurement of segment non-current assets follows the accounting policies of the Group.
6%
2023
28%
10%
7%
49%
16%
13%
2022
51%
20%
Australian Broking
Agencies
New Zealand
Tysers
Support service
Intangible assets such as Goodwill, and investment in associates have been presented within the segment the respective
underlying operations is contained.
Disaggregated information by segment of the carrying value of associates is disclosed in Note 8.
84
AUB GROUP ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
3
OPERATING SEGMENTS (CONTINUED)
Other Segment Information
Revenue from external customers is attributed to geographic location based on the country where services were provided.
Revenue based on geographic location
Australia
New Zealand
UK
USA
Rest of Europe
Other
Total revenue
4
REVENUE AND EXPENSES
Revenue recognition
2023
$’000
2022
$’000
418,448
285,103
80,759
196,269
69,476
24,987
1,804
48,524
–
–
–
–
791,743
333,537
Revenue from contracts with customers
The Group will recognise as revenue the amount of the transaction price that is allocated to the performance obligation,
excluding any amounts that are highly probable of significant reversal, when the performance obligation has been satisfied.
Australian Broking, Agencies, and New Zealand segments
Commission, brokerage and fees
In most instances the Group receives short-term advances from its customers, being the receipt of the premium and fees on bound
policies prior to due date to the insurer. Using the practical expedient in AASB 15, the Group does not adjust the consideration for
the effects of a significant financing component if it expects, at contract inception, that the period between the transfer of the
promised service to the customer and when the customer pays for that service will be one year or less.
Non-Variable component
Policy Issuance
Commission, brokerage and fee income is generated by brokers primarily through assessment of insurable risks and risk
appetite of customers and sourcing relevant insurance products from insurers and underwriters which meets the needs of
the customer. For agencies, services are provided to brokers (the customer), through assessment of risk profile and pricing of
policies requested by brokers.
The Group recognised commissions, brokerage and fee revenue at invoice date on the basis that: (a) the Group acts primarily
as an agent of the customer when acting in the capacity as a broker, and as an agent of the insurer while acting in the capacity
as an agent; (b) the Group’s performance obligations are distinct from those of the insurer; and (c) the Group’s performance
obligations are predominantly completed prior to the inception of the insurance policy, the invoice date is the relevant date to
recognise the fixed components of revenue.
Claims handling
Claims handling for agencies refers to claims processing on behalf of insurers. In certain arrangements (separate contract or
distinct clause within binding agreements with insurers) the cost per claim processed is separately identifiable. For such claims
the revenue is recognised over time based on the number of claims processed and the percentage of completion of claims
assessment in progress at the balance sheet date.
Variable components
The Group recognises the variable amount of revenue only to the extent that it is highly probable that a significant reversal of
revenue will not occur when the uncertainty associated with the variability is resolved.
85
AUB GROUP ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
4
REVENUE AND EXPENSES (CONTINUED)
Claims handling and premium settlement activities
In most arrangements for agencies, claims handling services forms part of the binding arrangement with insurers. Claims handling
for brokers refers to claims preparation services on behalf of the insured. Premium settlement refers to post policy issuance
activities such as payment processing and bordereaux/settlement reporting.
Revenue associated with claims handling services and premium settlement activities is recognised over time as the services are
provided to the customer and variable consideration is constrained to reflect potential cancellations.
Premium Funding Commissions
Premium funding companies provide services to a similar customer base as the brokers within the Group. The services provided
by these companies involve short term lending of the upfront Gross Written Premium (‘GWP’) in return for the principal loan
repaid over the term of the insurance cover plus interest and fees.
The Group receives commission from Premium Funding companies on successful referral of customers contingent on the
customer’s ongoing repayments. Additionally, the Group receives commissions payments on volume based incentives provided
typically as a percentage of GWP based on hurdle targets, with a minimum floor to generate the volume based incentive
payments. Such arrangements exist at both the Group and individual broker level, subsequently the outcome of broker/agencies
may be contingent on both future sale volume and performance of related entities contributing to the scheme.
The Premium Funding Commission is recognised monthly by the Group on receipt of cash or notification by the Premium
Funding Company on the commission due to the Group. No component of the commission is deferred as no ongoing obligation
exists for the Group.
Profit Commissions
Profit Commissions refer to the share of profits provided to the broker or agencies by the insurer in relation to the book of
policies (the ‘book’) bound by the broker or agency in any given underwriting year. Insurers calculate the profit based on the
GWP less any cost incurred to maintain the book, and satisfy its obligations under the policies within the book such as claim
acquisition, and maintenance costs. The variable consideration is contingent on the performance of the book and in particular
the quantum of claims.
The Group recognises profit commission at the earlier of:
– receipt of payment;
– receipt of the insurers’ advice of the amount earned; or
– where the recipient is an agency who administers the related claims handling services, the point at which the profit
commission no longer contains a highly probable risk of significant reversal of revenue.
Support Services segment
Fees
Fee revenue earned is recognised upon issue of an invoice for services rendered, plus an accrual for a percentage of completion
of any work in progress (including a profit margin), which has yet to be invoiced, but for which the Group has an enforceable right
of payment. No ongoing performance obligation exists after the issuance of the invoice.
Other Revenue
Other income is recognised when the service has been performed and the right to receive the payment is established.
Management fees from related entities
Management fees and other revenue are recognised over time as the performance obligation is satisfied.
Interest income
Interest income is recognised as interest accrues using the effective interest method.
Dividends and Distributions from trusts
Dividends and distributions from trusts are recognised when the shareholder’s right to receive the payment is established.
Share of profits of associates
The Group recognises its share of profits of associates using the equity accounted method, being the recognition of a post-
tax share of profits at the Group’s economic interest of each associate. The share of profits excludes any fair value changes
or impairments incurred within the associate as a result of a downstream transaction such as bolt on acquisitions or changes
in control. Additionally, differences between the Group and entity accounting policies are adjusted at the Group level, primarily
in relation to intangibles recognised by the acquirer (i.e. the Group) which were not recognised at the associate level. The
amortisation of such intangibles over its useful life (generally 10 years) is separately disclosed.
86
AUB GROUP ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
4
REVENUE AND EXPENSES (CONTINUED)
(a) Revenue from contracts with customers
Commission, brokerage and fee income
Management fees from related entities
Other revenue
Total revenue from contracts with customers
Recognised at a point in time
Recognised over time
(b) Other income
Interest income from related parties
Interest from other persons/corporations
Total other income
(c) Share of Profit of Associates
Share of Profit of Associates After Tax but Before Amortisation
Amortisation of intangibles – Associates
Total share of profit of associates
Expenses
2023
$’000
2022
$’000
734,033
312,765
5,982
23,644
13,774
5,963
763,659
332,502
727,847
35,812
312,496
20,006
248
27,836
28,084
41,920
(6,230)
35,690
169
866
1,035
45,853
(6,800)
39,053
Expenses
Expenses including salaries and wages, business technology and software costs, insurance, advertising and marketing, and
interest are recognised as incurred or as services are provided to the Group.
Salary related statutory obligations such as long service leave are accrued on a probability weighted basis to the vesting
date. Assumptions are applied in relation to annual and long service leave with respect to expected wage growth and risk free
discount rates over the next 10 years.
Amortisation of brokering registers is conducted on a straight line basis over the useful life of the asset, generally 10-12 years.
The right of use asset incorporates fixed rental increases, with changes based on indexes and rental market reviews
incorporated when such changes are known. The Group applies practical expedients in relation to short term (less than
12 months) and low value (less than $7,000 AUD) leases. Such leases are recognised on a straight line basis of the expected
gross expense over the term of the lease.
Depreciation/Amortisation of all other assets is recognised on a straight line basis over the useful life of the asset, refer to
Note 27 for more details.
Commission expenses are sub agent and referral fees paid to another party in return for introductory services on insurances
brokered by the Group. The expense is recognised in full when the related insurance policy is invoiced. For broking entities,
typically they are the principal in the arrangement and as such the commission income and expense are not offset. For
agencies, and in some arrangements for broking entities, the commission is recognised on a net basis as the entity was
determined to be an agent in the arrangement.
Legal fees/acquisition costs are recognised as they are incurred except in relation to acquisition of a non-financial asset,
borrowing facility, or associates. The costs that are directly attributable to bringing the asset to its intended use are capitalised
and depreciated over the useful life of the asset. The costs directly attributable to obtaining funding are capitalised and
amortised over the term of the facility to a maximum of 5 years. The cost directly attributable to acquisition of an associate is
capitalised as part of the carrying value of the associate.
Further disclosures in relation to non-operating gains and losses such as fair value adjustments to carrying value or gains/
losses from sale are made in Notes 7-9.
87
AUB GROUP ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
4
REVENUE AND EXPENSES (CONTINUED)
(d) Costs to provide services and administration expenses
Salaries and wages
Business technology and software costs
Commission expense
Amortisation/impairment of right of use asset and rent expense
Amortisation of broking registers
Amortisation of other financial assets
Amortisation of capitalised project costs
Depreciation
Insurance
Advertising, marketing and travel costs
Consulting, accounting, and audit fees
Legal fees/acquisition costs
Share-based payments
Other expenses
2023
$’000
2022
$’000
403,164
162,400
43,571
26,045
17,097
35,920
1,104
2,365
3,876
22,776
29,826
21,150
19,349
10,591
23,791
20,190
17,990
10,369
9,341
839
675
2,333
12,778
7,924
6,470
20,862
2,365
8,165
Total cost to provide services and administrative expenses
660,625
282,701
(e) Finance costs
Interest paid and other borrowing costs
Interest unwind on lease liability
Interest unwind on put option liability
Interest unwind on contingent consideration
Finance charge on profits of trust minority interests
Total finance costs
(f) Adjustments to carrying value
Fair value adjustment relating to the carrying value of associates and goodwill
Adjustment to contingent consideration on acquisitions
Remeasurement of put option liability
Impairment charge relating to the carrying value of goodwill and intangible assets
(see Note 13)
Total adjustments to carrying value
44,673
4,001
303
12,126
10,999
72,102
29,930
(26,920)
(3,317)
(6,342)
(6,649)
5,510
1,006
234
–
–
6,750
40,715
411
(870)
(8,439)
31,817
(g) Profit from sale or dilution of interests in associates, controlled entities and broking
portfolios
Profit on sale of controlled entities leading to deconsolidation (Note 7 (b))
Profit from sale or dilution of interests in associates and broking register
Total profit from sale or dilution of interests in associates, controlled entities and broking
portfolios
4,447
34,599
3,928
3,322
39,046
7,250
88
AUB GROUP ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
INCOME TAX
5
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from
or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or
substantively enacted by the year end date as presented in the Consolidated Statement of Financial Position.
Deferred income tax is provided on all temporary differences at the date of the Consolidated Statement of Financial Position
between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
– when the deferred income tax liability arises from the initial recognition of goodwill, or of an asset or liability in a transaction
that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit
or loss; or
– when the taxable temporary differences associated with investments in subsidiaries, associates or interests in joint
ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary
differences will not reverse in the foreseeable future. No deferred tax liability has been recognised in respect of any
potential profit on the disposal of an associate or controlled entity by the Group as there is no intention of disposing of
these assets in the foreseeable future. Any tax liability will be recognised before the date of asset’s disposal, when it is
considered probable that the temporary difference will reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and
unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary
differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except:
– when the deductible temporary differences arise from the initial recognition of an asset or liability in a transaction that is not
a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or
– when the deductible temporary differences associated with investments in subsidiaries, associates or interests in joint
ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the temporary difference
will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be
utilised.
The carrying amount of deferred income tax assets is reviewed at each year end date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised
Unrecognised deferred income tax assets are reassessed at each year end date and are recognised to the extent that it has
become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is
realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the year-
end date as presented in the Consolidated Statement of Financial Position.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss. Deferred tax assets
and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax
liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority.
Tax consolidation
For the purposes of income taxation, AUB Group Limited (AUB) entered into a Consolidated Tax Group with its 100% owned
Australian subsidiaries. Tax consolidation results in the controlled entity members being treated as part of the Head Company
for tax purposes rather than as a separate taxpayers. The Income Tax Assessment Act (1997) provides that the Consolidated
Tax Group is to be treated as a single entity for Australian tax purposes with the Head Company responsible for the tax payable.
AUB formally notified the Australian Taxation Office of its adoption of the tax consolidation regime.
The Consolidated Tax Group was formalised by entering into tax sharing and tax funding agreements in order to allocate income
tax payable to group members. Each member of the group calculates tax expense on an entity basis. The agreement also
provides that AUB carries forward tax funding assets or tax funding liabilities for which an intercompany loan is recognised
between the parties.
Tax effect accounting by members of the tax consolidated group
Members of the tax consolidated group have entered into a tax funding agreement. The tax funding agreement provides for the
allocation of current taxes to members of the tax consolidated group in accordance with their accounting profit for the period,
while deferred taxes are allocated to members of the tax consolidated group in accordance with the principles of AASB 112
Income Taxes. Allocations under the tax funding agreement are made at the end of each quarter.
89
AUB GROUP ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
5
INCOME TAX (CONTINUED)
Effective Tax Rate
The Effective Tax Rate for the Year Ended 30 June 2023 was 28% (2022: 18%). The Group’s tax rate is below the main effective
tax rate in Australia of 30% largely as a result of the $9m tax impact of entities that are accounted for on an equity basis. Entities
accounted for on an equity basis are fully tax paying in Australia, however for accounting purposes the related tax expense is
reflected in the net return on the investment rather than the tax expense of the Group. This is offset by a $4m increase in the tax
charge resulting from expenses that are not deductible for tax purposes which principally relate to fees incurred when acquiring
new businesses in the year.
The increase in the effective tax rate of 10% is largely the result of a net loss on the adjustment to carrying value of investments
in 2022 (see Note 4 (f)), that did not have an associated tax credit, which did not recur in 2023. The main impact on the tax rate
in future years is expected to be the continued profitability of the business accounted for under the equity accounting rules as
discussed above, the change in geographic profile of the earnings of the Group and any changes in tax legislation.
The AUB Group consists of AUB Group Limited, the parent entity and ASX listed entity, and over 300 entities in which the parent
has a direct or indirect economic interest. The information reported by the Australian Taxation Office (ATO) (as prescribed by
statute) in respect of corporate tax entities will not necessarily provide the complete picture, particularly for organisations such
as the AUB Group that receive a significant amount of its income is received from franked dividends.
The AUB Tax Consolidation Group (AUB TCG), comprises only AUB Group Limited (the parent entity) and its 100% wholly owned
entities. The primary income of the AUB TCG is the receipt of franked dividend income received from the partly owned entities.
Given tax has already been paid in respect of the franked dividends, the AUB TCG is entitled to a credit equal to that tax. That is,
the franking credits attaching to the dividends reflect tax that has already been paid by the individual entity paying the dividends.
While the franking credits represent tax paid, they are reflected in the income tax return of the AUB TCG as an offset against
AUB’s gross tax, thereby reducing the amount disclosed as ‘tax payable’. The amount disclosed by the ATO in their report is after
the franking credits have been taken into account, which does not reflect the tax paid by the Group.
a)
Income tax expense
i) Major components of income tax expense are as follows:
Current income tax
Current income tax charge
Adjustment for prior years
Deferred tax credit
Origination and reversal of temporary differences
Total income tax expense in Consolidated Statement of Comprehensive Income
2023
$’000
2022
$’000
49,638
(1,077)
21,810
(15)
(13,081)
35,480
527
22,322
ii)
A reconciliation between tax expense and the product of accounting profit before income tax multiplied by the
company’s applicable income tax rate is as follows:
Profit before income tax
At the company's statutory income tax rate of 30% (2022: 30%)
Impact of:
Equity accounted income/distributions from entities operating as trusts
(Loss)/Gain on sale
Adjustments to carrying value (see Note 4(f))
Tax losses not recognised
Benefit of tax losses not previously recognised
Income taxed at different tax rates on overseas operations
(Over)/under provision prior year
Acquisition costs and other non-deductible expenses
Income tax expense reported in the Consolidated Statement of Comprehensive Income
90
2023
$’000
2022
$’000
127,103
122,206
38,131
36,662
(8,975)
775
1,995
1,095
(1,099)
981
(1,077)
3,654
35,480
(8,998)
(1,375)
(9,545)
-
-
(115)
(16)
5,709
22,322
AUB GROUP ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
5
INCOME TAX (CONTINUED)
b) Deferred income tax
Deferred Tax Assets and Liabilities are netted where arising within the same tax payer and to the same tax authority and
expected to unwind in the same period.
i) Movement in deferred income tax during the year relates to the following:
Assets
2023
$’000
2022
$’000
Liabilities
2023
$’000
Unamortised broking registers (and other intangibles)
Non assessable income
Foreign currency hedge
Defined benefit pensions
Accrued expenses and provisions
PPE & ROU tax timing differences
Borrowing costs
Carry forward capital losses
Carry forward operating losses
Other
Netting of deferred taxes (arising within same tax consolidated
group or entity)
Deferred tax assets/(liabilities)
–
–
–
–
30,092
5,578
4,068
–
9,737
–
(28,090)
21,385
–
–
–
–
(132,791)
(5,912)
(4,332)
(1,611)
–
–
–
–
–
15,357
3,947
340
123
1,505
592
(7,170)
14,694
(1,761)
(385)
28,090
7,170
(118,317)
(17,603)
2022
$’000
(16,793)
(7,595)
–
–
–
–
–
ii) Unrecognised deferred tax assets
Deferred tax assets for tax losses incurred are recognised to the extent that the Group expects the carry forward losses
to be utilised in the future. Deferred tax assets arising from unused tax losses not recognised at 30 June 2023 was $2.0m
(2022: $1.24m). Deferred tax assets arising from unused capital losses not recognised at 30 June 2023 was $1.1m (2022: $nil).
6
EARNINGS PER SHARE (EPS)/DIVIDENDS PAID AND PROPOSED
Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to exclude any costs of
servicing equity (other than dividends), divided by the weighted average number of ordinary shares.
Diluted earnings per share is calculated as net profit attributable to members of the parent, adjusted for:
– the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as
expenses;
– other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential
ordinary shares; and
– divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.
a) Earnings Per Share (EPS)
The following reflects the income and share data used in the basic and diluted earnings per share computations:
Net profit attributable to ordinary equity holders of the parent
2023
$’000
2022
$’000
65,253
80,836
2023
Thousands
Shares
2022
Thousands
Shares
Weighted average number of ordinary shares for basic earnings per share
99,837
76,546
Effect of dilution:
Share Options
Weighted average number of ordinary shares adjusted for the effect of dilution
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
430
100,267
65.35
65.08
269
76,815
105.60
105.23
91
AUB GROUP ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
6
EARNINGS PER SHARE (EPS)/DIVIDENDS PAID AND PROPOSED (CONTINUED)
b) Changes in weighted average number of shares
There have been no significant transactions involving ordinary shares or potential ordinary shares that would significantly
change the number of ordinary shares or potential ordinary shares outstanding between the reporting date and the date of
completion of these financial statements.
Information on the classification of securities
c)
Options granted to employees as described in Note 21 are considered to be potential ordinary shares and have been included
in the determination of the diluted earnings per share to the extent they are dilutive. These options have not been included in
the determination of the basic earnings per share. The amount of the dilution of these options is the average market price of
ordinary shares during the year minus the exercise price.
d) Equity dividends on ordinary shares
Dividends paid or recognised as a liability during the year
Final franked dividend for financial year ended 30 June 2021: 39.0 cents
Interim franked dividend for financial year ended 30 June 2022: 17.0 cents
Final franked dividend for financial year ended 30 June 2022: 38.0 cents
Interim franked dividend for financial year ended 30 June 2023: 17.0 cents
Total dividends paid/provided in current year
In addition to the above, dividends paid to non-controlling interests totalled $22.14m (FY22:$14.99m).
Dividends proposed and not recognised as a liability
Final franked dividend for financial year ended 30 June 2022: 38.0 cents
Final franked dividend for financial year ended 30 June 2023: 47.0 cents
Dividends paid and accrued per share (cents per share)
Dividends proposed per share (cents per share) not recognised at balance date
Franking credit balance
e)
The amount of franking credits available for the subsequent financial year are:
2023
$’000
2022
$’000
29,017
12,661
41,678
35,155
35,155
56.00
39.00
35,155
17,260
52,415
50,951
50,951
55.00
47.00
franking account balance as at the end of the financial year at 30% (2022: 30%)
61,938
52,547
15,359
77,297
(21,836)
55,461
–
52,547
(15,049)
37,498
–
–
franking credits that will arise from the payment of income tax payable as at the end of the
financial year
The amount of franking credits available for future reporting periods
–
impact on the franking account of dividends proposed or declared before the financial report
was authorised for issue but not recognised as a distribution to equity holders during the year
The amount of franking credits available for future reporting periods after payment of dividend
The tax rate at which paid dividends have been franked is 30% (2022: 30%).
Dividends proposed and accrued will be franked at the rate of 30% (2022: 30%).
92
AUB GROUP ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
7
BUSINESS COMBINATIONS AND TRANSACTIONS INVOLVING GAIN OR LOSS OF CONTROL
a) Business combinations
A major strategy of the Group is to acquire part ownership in insurance broking, agency and other complementary services
businesses or portfolios. The terms of these acquisitions vary in line with negotiations with individual vendors but are structured
to achieve the Group’s benchmarks for return on investment.
The business combinations in the current period primarily relate to insurance broking and agency businesses in Australia, New
Zealand, and the purchase of Tysers which is incorporated in the UK and the US.
The acquisition method of accounting is used to account for all business combinations. Consideration transferred is measured
as the fair value of the assets given, shares issued or liabilities assumed at the date of exchange. All acquisition costs including
legal fees are charged against profits to acquisition and legal fees (see Note 4(d)) as incurred, except stamp duty which is
recognised in acquisition costs as incurred.
An estimate is made of the fair value of the future contingent consideration. Any variation to this amount in future periods
(either up or down) is recognised through the Consolidated Statement of Comprehensive Income. Over accruals are recognised
as income in the year the amount is reversed and any under accruals are charged as an expense against profits. Contingent
considerations are recognised in the Consolidated Statement of Financial Position at fair value. Refer to Refer to Note 2.1 (d) and
Note 18 for further information on measurement and critical assumptions.
When a business combination occurs, the acquiree’s identifiable assets and liabilities are measured at their fair value at the
date of acquisition to determine the amount of any goodwill associated with the transaction. Any previously held interests of the
acquiree are remeasured to fair value, with the movement reflected in the Consolidated Statement of Comprehensive Income
as either a profit or loss. If new information becomes available within one year of acquisition about the facts and circumstances
that existed at the date of acquisition, then any revisions to the fair value previously recognised, will be retrospectively adjusted.
Non-Controlling Interest is initially measured at fair value.
When the Group increases their interest in a company leading to the Group obtaining control in the company, the Group
derecognises the investment in associate and recognises the acquiree’s identifiable assets and liabilities measured at their
fair value in line with other business combinations. The shares held immediately preceding the Group obtaining control is
remeasured based on the fair value of the shares acquired, resulting in a fair value gain or loss. The cumulative amount
recognised through Other Comprehensive Income is reclassified to profit or loss when the control is obtained or lost.
Where there is a change in ownership and the Group loses control, the gain or loss will be recognised in the Consolidated
Statement of Comprehensive Income and the net assets of the entity including the carrying value of non-controlling interests
is derecognised.
Change in the ownership interest in a controlled entity (without loss of control) is accounted for as a transaction with owners
in their capacity as owners and these transactions will not give rise to a gain or loss in the Consolidated Statement of
Comprehensive Income.
Refer to Note 9 for all transactions between owners.
i)
During the current period, the following transactions occurred:
– Effective 1 July 2022, Austbrokers Corporate Pty Ltd (AUC), a controlled entity of the Group, acquired 100% of SRS
Broking Pty Ltd. AUC partially funded the acquisition by issuing shares, resulting in AUB diluting its ownership in AUC
by 20% to 80%.
– Effective 30 September 2022, AUB Group acquired 100% of Integro Insurance Brokers Holdings Limited and its
controlled entities, Galileo Insurance Services LLC, and Integro Insurance Brokerage Services LLC (collectively Tysers)
for GBP 520m, comprising GBP 320m in cash, GBP 100m in AUB shares, and GBP 100m in contingent consideration.
The contingent consideration is subject to Tysers meeting revenue growth hurdles within 24 months of completion.
The fair value of the contingent consideration at acquisition date is based on the probability weighted outcome
discounted over 24 months at 9.88%.
Tysers is a leading Lloyd’s and London based broker with access to specialist underwriting expertise and global
distribution capabilities. Tysers operates primarily out of the UK but has operations in more than a dozen countries,
and services clients in more than 100 countries.
Tysers is a material acquisition for the Group. The acquisition will enable the Group to enhance client service by
increasing capacity for harder to place risks for our clients and generate synergies through economies of scale, cost
rationalisation and direction of wholesale placement from our Agencies to Tysers. The acquisition provides Brokers
and Agencies across the Group with access to the capabilities and facilities of the Lloyd’s and international markets.
Total transaction costs for the Tysers acquisition were $35.5m of which $19.0m was expensed in the prior year.
93
AUB GROUP ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
7
a)
i)
BUSINESS COMBINATIONS AND TRANSACTIONS INVOLVING GAIN OR LOSS OF CONTROL (CONTINUED)
Business combinations (continued)
During the current period, the following transactions occurred (continued):
Regulatory investigation
The acquisition of Tysers has exposed the Group to risk in relation to the alleged conduct of business in Ecuador
between 2013 and 2017 by Integro Insurance Brokers Limited (a company within the Tysers group) and/or its
employees, agents and associated persons. While the UK Serious Fraud Office has communicated that it has
decided not to take any action against Integro Insurance Brokers Limited/Tysers in respect of the alleged conduct,
the U.S. Department of Justice (DOJ) investigation into Integro Insurance Brokers Limited, its employees, agents
and associated persons remains ongoing. The DOJ investigation relates to suspicions of bribery and corruption,
and possible associated money laundering. If this investigation reveals any unlawful conduct by companies within
the Tysers group, Tysers (and/or the relevant group companies) may be subject to fines and/or other penalties
and may incur reputational damage. As previously disclosed, AUB obtained a number of contractual protections in
the Tysers transaction documents, including indemnification that AUB considered appropriate for the recovery of
potential losses/fines and penalties which may become payable by Tysers in connection with the aforementioned
investigations. On acquisition of Tysers, AUB Group has recognised a provision and related recoveries in respect of
this matter in accordance with the Australian Accounting Standards.
– Effective 1 January 2023, AUB Group acquired a further 25% of AEI Insurance Group Pty Ltd (AEI). On this date AEI
became a controlled entity of the Group, and the transaction resulted in a fair value gain on step up of $27.4m.
The above acquisitions have been provisionally accounted for as the initial accounting for the business combinations are
incomplete at the reporting date, The accounting will be completed within 12 months of the acquisition date.
The total Revenue and Net Profit After Tax recognised during the year in relation to the current period acquisitions were $373.9m,
and $37.8m respectively. Group revenue in relation to current period acquisitions would have been $481.7m had all of the above
transactions closed on 1 July 2022. The profit contribution to the Group had all the above transactions closed on 1 July is
impractical to measure given significant change in operational and financing aspects of the acquirees prior to acquisition.
Business Acquired
SRS Broking Pty Ltd
Integro Insurance Brokers Holdings Limited
AEI Insurance Group Pty Ltd
All other transactions
Transaction date(s)
1/07/2022
30/09/2022
1/01/2023
Various
Total consideration paid for all additional interest acquired
Less contingent/deferred consideration
Less shares issued by AUB Group Limited
Less cash acquired
Less trust cash acquired
Payments for acquisition of consolidated entities, net of cash acquired
Goodwill arising on acquisition related to the Group
Goodwill arising on acquisition relating to non-controlling interests
Total Goodwill arising on acquisition
Other intangibles net of deferred taxes
Net increase in non-controlling interest
FY22
%
0.00
0.00
45.00
Various
FY23
%/$ ‘000
100.00
100.00
65.00
Various
1,101,779
154,912
215,016
95,131
476,521
(160,199)
801,739
48,967
850,706
340,484
84,046
94
AUB GROUP ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
BUSINESS COMBINATIONS AND TRANSACTIONS INVOLVING GAIN OR LOSS OF CONTROL (CONTINUED)
7
The fair value of the identifiable assets and liabilities recognised as a result of the acquisition of Tysers are as follows:
ASSETS
Cash and Cash Equivalents
Cash and Cash Equivalents - Trust
Trade and Other Receivables
Right of Use Asset
Intangible Assets
Property, Plant and Equipment
Deferred Acquisition Costs
Total Assets
LIABILITIES
Trade and Other Payables
Deferred Revenue from Contracts with Customers
Provisions
Lease Liabilities
Deferred Tax Liability
Total Liabilities
Net Assets
Total consideration paid for interest acquired
Less contingent/deferred consideration
Less shares issued by AUB Group Limited
Less cash acquired
Less trust cash acquired
Payments for acquisition of Tysers, net of cash acquired
Goodwill arising on acquisition related to the Group
Goodwill arising on acquisition relating to non-controlling interests
Tysers
$’000
85,878
421,442
148,623
36,205
388,289
10,671
10,320
1,101,428
514,290
9,750
173,559
37,223
76,539
811,361
290,067
939,225
154,737
175,870
85,878
421,442
(101,298)
649,158
2,318
ii)
During the prior period, the following transactions occurred:
– Effective 1 July 2021, the Group acquired a further 8.8% of HQ Insurance Brokers Pty Ltd (HQ) for $2.74m cash. On this
date the entity became a controlled entity of the Group, and the transaction resulted in a fair value gain on step up of
$7.73m.
– Effective 1 October 2021, the Group acquired 100% of iaAnyware Unit Trust (iaAnyware) for $18.15m cash plus
estimated contingent consideration of $11.85m. iaAnyware is a leading software platform business providing licensing
of their proprietary software to brokers across Australia and New Zealand. The deferred consideration is based on
estimated normalised EBIT in 2 years from the acquisition date and is uncapped.
– Effective 1 October 2021, a controlled entity of the Group, acquired 90% of Rosser Underwriting Limited (Rosser),
including 50% from another controlled entity of the Group. On this date Rosser became a controlled entity of the
Group. The Group’s effective ownership has increased by 2.3%, however control was established as the Group controls
an entity which in turn controls Rosser.
– Effective 30 June 2022, the Group acquired a further 5.5% of Insurance Advisernet Unit Trust (IAA) & Insurance
Advisernet New Zealand Unit Trust (IAH). On this date IAA & IAH become controlled entities of the Group, and the
transaction resulted in a fair value gain on step up of $29.06m.
95
AUB GROUP ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
7
BUSINESS COMBINATIONS AND TRANSACTIONS INVOLVING GAIN OR LOSS OF CONTROL (CONTINUED)
Loss of Control
b)
When a 100% disposal occurs the Group derecognises all assets and liabilities previously recognised in relation to the disposed
entity including associated goodwill. A gain or loss is recognised in relation to the disposal based on the difference between the
carrying value of net assets (including goodwill) associated with the entity and the sale price.
When a partial disposal occurs leading to the Group losing control of the entity, the Group derecognises all assets, liabilities and NCI
previously recognised in relation to the disposed entity including associated goodwill with an investment in associate recognised in
relation to the remaining interest continued to be held by the Group. A gain or loss is recognised in relation to the disposal based on
the difference between the share (portion of interest being disposed) of net assets (including goodwill) associated with the entity
and the sale price.
During the current period, the following transactions occurred:
i)
Effective 31 January 2023, the Group disposed all of its interest in Austbrokers Coast to Coast Pty Ltd (“Coast to Coast”).
On that date Coast to Coast ceased to be a controlled entity.
Business Disposed
Austbrokers Coast to Coast Pty Ltd
Various
Total consideration received for all additional interests disposed
Less cash disposed
Receipts for disposal of consolidated entities, net of cash disposed
Total goodwill derecognised on disposal
Total intangibles derecognised on disposal
Total non-controlling interest derecognised
Transaction
date(s)
1/01/2023
Various
2022
%/$’000
51.00
Various
2023
%/$’000
–
Various
13,633
(3,923)
9,710
(9,014)
(1,604)
(2,020)
ii)
During the previous period, there were no individually significant transactions which resulted in the Group losing
control of any of its subsidiaries.
8
INVESTMENT IN ASSOCIATES
The Group’s investments in its associates are accounted for under the equity method of accounting in the Consolidated
Financial Statements. These are entities in which the Group has significant influence and which are not controlled entities.
The Group deems they have significant influence if they have more than 20% of the voting rights.
The financial statements of the associates are used by the Group to apply the equity method. The reporting dates of the
associates and the AUB Group are identical and adjustments are made to bring into line dissimilar accounting policies used
by associates.
The investment in associates is carried in the Consolidated Statement of Financial Position at cost plus post-acquisition
changes in the Group’s share of net assets of the associates, less dividends and any impairment in value. The Consolidated
Statement of Comprehensive Income reflects the Group’s share of the results of operations of the associates.
Refer to Note 14 Impairment Testing of Identifiable Intangible Assets and Goodwill.
On partial acquisition whilst maintaining significant influence the purchase price is added to the investment in associate
carrying value, and on partial disposal whilst maintaining significant influence the portion of interest in the entity being sold is
proportionately derecognised from the investment in associate carrying value. As part of impairment testing we consider the
recent purchase/disposal prices when determining if there are indicators of impairment.
96
AUB GROUP ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
INVESTMENT IN ASSOCIATES (CONTINUED)
During the current period, the following transactions occurred:
8
i)
Entity
Increase in voting shares
Various
Transaction
date(s)
30 Jun 2023
%/$‘000
30 Jun 2022
%/$‘000
Various
Various
Various
Total cash consideration paid for all interest acquired
7,207
Decrease in voting shares
SRG Group Pty Ltd
Western United Financial Services Pty Ltd
Various
Total consideration received for all interest disposed
Less carrying value of shares being sold
Less Capital Gains Tax on shares being sold
Net gain on disposal of interest
01-Aug-22
01-May-23
–
–
50.0%
50.0%
Various
Various
Various
43,435
(6,104)
(10,948)
26,383
ii) During the previous period, the following transactions occurred:
There were no individually significant transactions with associates in the prior year.
97
AUB GROUP ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
8
INVESTMENT IN ASSOCIATES (CONTINUED)
iii) The Group’s investment in associates ownership at balance date is as follows:
Australian Broking
Adroit Specialty Risks Pty Limited
Austbrokers ABS Aviation Pty Ltd
AEI Insurance Group Pty Ltd*
Austbrokers Dalby Insurance Brokers Pty Ltd
Austbrokers Kelly Partners Pty Ltd
Austbrokers RIS Pty Ltd*
Austbrokers SPT Pty Ltd
Austral Insurance Brokers Pty Ltd
Bluestone Insurance Pty Ltd
Brett Grant and Associates Pty Ltd
Broker Claims Pty Ltd
Countrywide Insurance Holdings Pty Ltd**
Cruden & Read Pty Ltd
Finzane Group Pty Ltd
Global Assured Finance Pty Ltd
JMD Ross Insurance Brokers Pty Ltd
KJ Risk Group Pty Ltd
Lea Insurance Brokers Pty Ltd/Lea Group Trust**
Markey Group Pty Ltd
MGA Management Services Pty Ltd
National Rural Insurance Group Pty Ltd
Nexus Advisernet (Aust) Pty Ltd
Oxley Insurance Brokers Pty Ltd/Port Macquarie Insurance Brokers Unit Trust
Pace Insurance Pty Ltd/Pace Insurance Group Unit Trust***
Peter L Brown & Associates Pty Ltd
Rework Pty Ltd
Rivers Insurance Brokers Pty Ltd
SRG Group Pty Ltd
Supabrook Pty Ltd
The Procare Group Pty Ltd
Western United Financial Services Pty Ltd
YDR Pty Ltd
Agencies
Anchorage Marine Underwriting Agency Pty Ltd
Longitude Insurance Pty Ltd*
Millennium Underwriting Agencies Pty Ltd
Sura Hiller Marine Pty Ltd
Sura Professional Risks Pty Ltd
Sura Technology Risks Pty Ltd
Tasman Underwriting Pty Ltd
2023
%
34.0
50.0
65.0
50.0
50.0
95.0
50.0
–
50.0
50.0
47.5
52.5
50.0
50.0
50.0
50.0
49.0
57.0
50.0
49.9
25.0
50.0
42.7
10.4
50.0
50.0
50.0
–
50.0
48.8
–
50.0
26.2
100.0
–
50.0
50.0
50.0
50.0
2022
%
34.0
50.0
40.0
50.0
50.0
50.0
50.0
50.0
50.0
50.0
47.5
52.5
50.0
–
50.0
40.0
49.0
53.4
50.0
49.9
25.0
50.0
42.7
–
50.0
–
50.0
50.0
50.0
49.0
50.0
50.0
26.2
75.0
49.9
50.0
50.0
–
50.0
The Group obtained control of the entity during the period as a result of further shares obtained.
*
** Whilst the Group holds more than 50% interest in the entity, the Group’s voting rights are capped at 50%, hence it was determined that the Group maintains
significant influence and does not have control of the entity.
*** Whilst the Group’s look through interest in the entity is less than 20%, the Group controls an entity which has significant influence over the entity.
98
AUB GROUP ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
8
INVESTMENT IN ASSOCIATES (CONTINUED)
iii) The Group’s investment in associates ownership at balance date is as follows (continued):
New Zealand Broking
BWRS (North Shore) Limited
Commercial and Rural Insurance Limited
McDonald Everest Insurance Brokers Limited
Support Services
BizCover Pty Ltd
Tysers
Factory and Industrial Risk Managers (Pty) Ltd
2023
%
36.1
36.1
50.0
2022
%
44.7
44.7
44.7
40.7
40.6
40.0
–
Other information in respect of associated entities which carry on business directly or through controlled
entities:
a)
The principal activity of each associate is insurance broking or agency business except The Procare Group Pty Ltd which
offers investigation, and loss adjusting services.
b) There have been nil impairments relating to the investment in associates during the current year or previous year.
c)
All associates, including unit trusts, were incorporated, or established in Australia, except for associates owned by AUB
Group NZ Limited, which is a controlled entity incorporated in New Zealand, and associates owned by Tysers Insurance
Brokers Limited which is a controlled entity incorporated in the UK
d) The following associates are considered material to the Group as at 30 June 2023:
– BizCover is a commercial online insurance platform that allows SME clients to compare quotes from insurance providers
and purchase a variety of insurance products, including public liability, professional indemnity and business insurance. The
carrying value at 30 June 2023 is $129.49m (2022: $131.68m); and
– MGA Management Services Pty Limited provides insurance agent and broker services for a range of insurance types including
commercial insurance, personal insurance and specialised insurance. The carrying value at 30 June 2023 is $26.80m (2022:
$25.00m).
Revenue
Operating profits before income tax
Amortisation of intangibles
Net profit before income tax
Income tax expense
Share of associates' net profits
2023
$’000
2022
$’000
176,639
198,886
56,588
(6,230)
50,358
(14,668)
35,690
58,853
(6,800)
52,053
(13,000)
39,053
99
AUB GROUP ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
8
INVESTMENT IN ASSOCIATES (CONTINUED)
The Group’s reconciliation of its carrying value in its investment in associates are
iv)
presented below:
Balance at the beginning of the period
Acquisition of or increase of investment in associates
Disposal or dilution of interest in associates
Reclassification of investment in associates becoming controlled entities
Reclassification of controlled entity to investment in associate on losing control
Reclassification of investment in associate to other investments where significant influence was
lost
Share of associates’ profit after income tax
Dividends/trust distributions received
Net foreign exchange and other movements
Balance at the end of the period
v) The Group’s share of the assets and liabilities of associates:
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
2023
$’000
2022
$’000
250,100
280,643
10,522
(6,104)
(13,057)
569
(1,786)
35,690
(37,889)
481
9,552
(6,048)
(29,957)
34
–
39,053
(43,149)
(28)
238,526
250,100
2023
$’000
2022
$’000
205,892
165,777
66,485
94,250
(176,769)
(145,137)
(24,927)
(28,335)
70,681
86,555
100
AUB GROUP ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
9
SHARES IN CONTROLLED ENTITIES
New acquisitions of controlled entities or transactions which lead to the Group obtaining or losing control in an entity during
the current and previous period are disclosed in Note 7. The following transactions involve transactions between owners where
there is no change in the control assessment.
i)
During the current period, the following transactions occurred:
Entity
Increase in voting shares
AUB Group NZ Ltd
All other transactions
Decrease in voting shares
AUB Three Sixty Pty Ltd
All other transactions
Transaction
date(s)
June 2023
%
June 2022
%
01-Jul-22
Various
100.00
Various
89.30
Various
01-Jan-23
Various
49.65
Various
52.27
Various
ii)
During the previous period, the following transactions occurred:
– On 1 October 2021 AUB Three Sixty Pty Ltd undertook a capital raise of $6m to fund the increased interest in Rosser
Underwriting Limited and Anchorage Marine Underwriting Agency Pty Ltd.
There were no other significant transactions between owners during the period.
Other information
a) All controlled entities are incorporated in Australia except for the following:
– AUB Group NZ Limited (AUB NZ), AUB Three Sixty NZ Limited and Insurance Advisernet New Zealand Unit Trust and their
controlled entities which are incorporated in New Zealand;
– Ludgate Limited which is incorporated in the UK;
– Ludgate US Corp which is incorporated in the US; and
– Colonnade Pte Ltd (Colonnade) which is incorporated in Singapore.
b)
Colonnade is the Group’s insurance captive. Given the size and scale of the Group including associates, certain insurable
risks are internally manageable. Furthermore, the entity provides the Group opportunities to insure certain non-insurable or
hard to place risks at more equitable terms for all participants in the scheme. During the current period, insurance placed
through the Colonnade covers AUB Group, some of its controlled entities and some of its associates. No external parties to
the Group are part of the schemes provided by Colonnade.
c) Material non-controlling interests (NCI) of the Group’s controlled entities include the following:
As at 30 June 2023
Principal place of business
Non
Controlling
Interest
%
Profit or loss
attributed to
minority
$’000
Total NCI
balance at
balance date
$’000
AUB Three Sixty Pty Ltd
AEI Insurance Group Pty Ltd
Australia and New Zealand
Australia
50.3
35.0
9,086
1,380
92,494
37,221
As at 30 June 2022
Name of controlled entity
AUB Group NZ Limited
AUB Three Sixty Pty Ltd
Principal place of business
Non
Controlling
Interest
%
Profit or loss
attributed to
minority
$’000
Total NCI
balance at
balance date
$’000
New Zealand
Australia and New Zealand
10.7
47.7
668
6,542
17,153
81,912
No other NCI or minority interest is material to the Group.
101
AUB GROUP ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
9
SHARES IN CONTROLLED ENTITIES (CONTINUED)
iii) The Group’s shares in controlled entities ownership at balance date is as follows:
Name and Interests in controlled entities:
Australian Broking
AB Phillips Group Pty Ltd and its controlled entities
Austbrokers Life Pty Ltd and its controlled entities
Adroit Holdings Pty Ltd and its controlled entities
AEI Insurance Group Pty Ltd and its controlled entities*
Astute Insurance Services Pty Ltd
AUB Hospitality Pty Ltd
Austbrokers Canberra Pty Ltd
Austbrokers Coast to Coast Pty Ltd and its controlled entity
Austbrokers City State Pty Ltd
Austbrokers InterRisk Pty Ltd
Austbrokers Member Services Pty Ltd
Austbrokers RIS Pty Ltd and its controlled entities*
Austbrokers RWA Pty Ltd
Austbrokers Southern Pty Ltd
Austbrokers Sydney Pty Ltd and its controlled entities
Austbrokers Trade Credit Pty Ltd
CityCover (Aust) Pty Ltd and its controlled entities (Austbrokers Comsure)
Experien Insurance Services Pty Ltd and its controlled entities
Finsura Holdings Pty Ltd and its controlled entities
Insurance Advisernet Unit Trust and its controlled entities
Insurance Advisernet New Zealand Unit Trust and its controlled entities
Austbrokers Corporate Pty Ltd and its controlled entities
McNaughton Gardiner Insurance Brokers Pty Ltd
North Coast Insurance Brokers Pty Ltd**
Northlake Holdings Pty Ltd (Country Wide Insurance Brokers WA) and its controlled entities
Terrace Insurance Brokers Pty Ltd and its controlled entity
The Insurance Alliance Pty Ltd and its controlled entity
Agencies
Austagencies Pty Ltd and its controlled entities
AUB Three Sixty Pty Ltd and its controlled entities
New Zealand Broking
AUB Group NZ Limited and its controlled entities
Brokerweb Risk Services Limited and its controlled entities
Runacres Limited and its controlled entities
Support Services — Australia
AUB Group Services Pty Ltd
Austbrokers Investments Pty Ltd
Colonnade Pte Ltd
Tysers
Ludgate Limited and its controlled entities
Ludgate US Corp and its controlled entity
2023
%
2022
%
58.2
95.1
100.0
65.0
53.2
100.0
100.0
–
60.0
51.0
100.0
95.0
51.0
51.0
100.0
75.0
83.5
73.2
70.0
52.0
52.0
80.0
75.0
39.0
89.1
50.5
60.8
95.1
100.0
40.0
–
100.0
85.0
51.0
60.0
80.0
100.0
50.0
60.0
80.0
100.0
75.0
83.5
73.2
70.0
52.0
52.0
100.0
75.0
75.0
90.5
53.7
100.0
100.0
100.0
49.7
100.0
72.1
67.0
100.0
100.0
100.0
100.0
100.0
100.0
52.3
89.3
89.3
67.0
100.0
100.0
100.0
–
–
The Group obtained control of the entity during the period as a result of further shares obtained. The entity was previously an associate of the Group.
*
** While the look through economic interest in the entity is below 50%, the entity is controlled by intermediary holding group, which is in turn controlled by the Group.
102102
AUB GROUP ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
10 CASH AND CASH EQUIVALENTS
Cash and cash equivalents, and cash and cash equivalents - trusts (trust cash), in the Consolidated Statement of Financial
Position comprise cash at bank, in hand and short-term deposits with an original maturity of three months or less.
Although there is a concentration of cash and cash equivalents held with major banks, the lifetime expected credit losses on
cash and cash equivalents are insignificant.
Trust cash relates to cash held for insurance premiums received from policyholders which will ultimately be paid to insurers,
claims floats and amounts to be held in escrow for specified purposes. Trust cash cannot be used to meet business obligations/
operating expenses other than payments to underwriters and/or refunds to policyholders.
For the purposes of the Consolidated Statement of Cash Flows, cash and cash equivalents as defined above are shown net of
outstanding bank overdrafts.
Foreign currency
Transactions in foreign currencies are translated to the respective functional currencies of the entities at exchange rates
at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are
retranslated to the functional currencies at the exchange rate at that date. The foreign currency gain or loss on monetary items
is the difference between amortised cost in the functional currency at the beginning of the year, adjusted for payments during
the year, and the amortised cost in foreign currency translated at the exchange rate at the end of the year.
The assets and liabilities of foreign operations are translated to Australian dollars at exchange rates at the reporting date.
The income and expenses of foreign operations are translated to Australian dollars at exchange rates on the dates of the
transactions. Foreign currency differences are recognised in other comprehensive income and presented in the foreign currency
translation reserve, in equity. If the foreign operation is not a wholly owned controlled entity then the relevant proportion of the
translation difference is allocated to non-controlling interests.
Cash and cash equivalents
Cash and cash equivalents - Trust
Total Cash and cash equivalents
2023
$’000
260,352
936,369
2022
$’000
259,329
333,131
1,196,721
592,460
103103
AUB GROUP ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
10 CASH AND CASH EQUIVALENTS (CONTINUED)
a) Cashflow from operating activities
Profit after tax for the period
Equity accounted (profits) after income tax
Dividends/trust distributions received from associates
Amortisation of intangibles
Amortisation of capitalised project costs
Amortisation and impairment of Right of Use Asset
Depreciation of fixed assets
Share options expensed
Adjustments to contingent consideration on acquisitions
Remeasurement of put option and interest unwind
Finance charge on movement in trust minority interests
2023
$’000
2022
$’000
91,623
99,884
(35,690)
(39,053)
38,203
35,920
3,469
12,024
3,876
10,590
26,920
3,620
10,999
43,149
10,180
675
7,171
2,333
2,366
(411)
636
–
Profit/Loss from sale of associates, controlled entities and broking portfolios
(34,599)
(6,782)
Profit on deconsolidation of controlled entity
Interest unwind on contingent consideration
Adjustments to fair value of associates and goodwill
Impairment of intangibles
Changes in assets and liabilities
(Increase) in trade and other receivables
(Decrease)/increase in trade and other payables
Increase in deferred revenue from customers
Increase/(decrease) in trust payables
(Decrease)/increase in provisions
Change in deferred tax
Increase/(decrease) in provision for tax
Net cash flows from operating activities
(4,447)
12,126
–
–
(29,930)
(40,715)
6,342
8,439
(46,724)
(19,239)
10,149
109,919
(6,054)
(13,081)
16,222
(7,387)
12,949
2,108
(7,486)
12,061
(3,333)
(1,249)
202,238
95,535
104
AUB GROUP ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
10 CASH AND CASH EQUIVALENTS (CONTINUED)
b) Changes in liabilities arising from financing activities
Listed below are the disclosure requirements in respect of the changes in the liabilities arising from financing activities, including
both changes arising from cash flows and non-cash changes (such as foreign exchange gains or losses).
1 July
2022
$’000
Cash flows
$’000
Foreign
exchange
movement
$’000
New
Acquisitions
$’000
New
consolidated
entity/
deconsolidation
$’000
Other
$’000
30 June
2023
$’000
Year ended 30 June 2023
Current interest bearing loans and
borrowings (excluding items listed below)
Current lease liability
Current unsecured loan other
8,388
8,187
553
10,624
1,721
14
Non-current interest bearing loans and
borrowings
Non current lease liability
38,630
519,934
18,752
8,534
Non Current Unsecured Loan Other
231
(82)
Total liabilities from financing activities
74,741
540,745
–
72
–
416
510
–
998
195
4,821
–
5,355
34,371
–
44,742
–
–
–
–
–
–
(5)
19,202
(58)
14,743
–
567
(23)
564,312
(33)
62,134
–
149
(119)
661,107
1 July
2021
$’000
Cash flows
$’000
Foreign
exchange
movement
$’000
New
Acquisitions
$’000
New
consolidated
entity/
deconsolidation
$’000
Other
$’000
30 June
2022
$’000
Year ended 30 June 2022
Current interest bearing loans and
borrowings (excluding items listed below)
Current lease liability
Current unsecured loan other
Non-current interest bearing loans and
borrowings
Non current lease liability
Non Current Unsecured Loan Other
10,508
(4,558)
7,786
750
43
(182)
(80)
(42)
(15)
200,345
(166,764)
(513)
18,080
680
(296)
(448)
(43)
(1)
2,518
400
–
9,250
1,011
–
Total liabilities from financing activities
238,149
(172,205)
(694)
13,179
–
–
–
–
–
–
–
–
–
8,388
8,187
553
(3,688)
38,630
–
–
18,752
231
(3,688)
74,741
105
AUB GROUP ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
11
TRADE AND OTHER RECEIVABLES
Trade and other receivables which generally have 30-day credit terms, are initially recognised at fair value and subsequently
measured at amortised cost.
The Group acts as an agent in the collection of amounts due from customers for premiums and amounts payable to insurers on
broking/agency operations, as the Group is not liable for the underlying insurance contract. As such these balances do not meet
the definition of a financial liability or financial asset respectively. The Group recognises amounts due from customers in relation
to uncollected fees and commissions due to the Group for services rendered, adjusted for the expected credit loss. The Group
only recognises amounts due to insurers for premiums when collected but yet to be transferred to the insurer.
Amounts due from premium funding operations include amounts due from policyholders in respect of insurances arranged
by a controlled entity. These arrangements with policyholders have repayment terms up to 12 months from policy inception.
The individual funding arrangements are used to pay insurers. Should policyholders default under the premium funding
arrangement, the insurance policy is cancelled by the insurer and a refund issued which is credited against the amount due.
The Group’s credit risk exposure in relation to these receivables is limited to commissions and fees charged plus any additional
interest charged under the premium funding arrangement.
Other receivables are loan receivables and short-term intercompany funding to related entities.
The Group’s business model for managing financial assets refers to how it manages its financial assets in order to generate
cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the
financial assets, or both. Financial assets classified and measured at amortised cost are held within a business model with the
objective to hold financial assets in order to collect contractual cash flows.
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised
when:
a) the rights to receive cash flows from the asset have expired;
b)
c)
the Group retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without
material delay to a third party under a ‘pass-through’ arrangement; or
the Group has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the
risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset,
but has transferred control of the asset.
When the Group has transferred its rights to receive cash flows from an asset and has neither transferred or retained
substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of
the Group’s continuing involvement in the asset. Continuing involvement that takes the form of a guarantee over the transferred
asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration received
that the Group could be required to repay.
As at 30 June 2023
Due not later
than 6 months
$’000
6 months to
no later than
1 year
$’000
Later than
1 year and
not later than
5 years
$’000
Later than
5 years/
No maturity
$’000
Total
$’000
59,898
186,265
2,038
16,925
65,238
–
–
–
6,661
–
6.661
330,365
Trade receivables
59,422
–
476
Amount due from customers on broking/agency
operations
Amount due from clients in respect of premium
funding
Related party receivables
Prepayments and other receivables
Total trade and other receivables
111,236
75,029
2,038
7,069
53,506
233,271
–
–
4,779
79,808
–
–
3,195
6,953
10,625
106
AUB GROUP ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
11
TRADE AND OTHER RECEIVABLES (CONTINUED)
As at 30 June 2022
Due not later
than 6 months
$’000
6 months to
no later than
1 year
$’000
Later than
1 year and
not later than
5 years
$’000
Later than
5 years/
No maturity
$’000
24,414
74,967
1,018
14,279
2,128
116,806
–
–
873
–
–
873
45
–
–
694
–
739
–
–
–
–
–
–
Total
$’000
24,459
74,967
1,891
14,973
2,128
118,418
Trade receivables
Amount due from customers on broking/agency
operations
Amount due from clients in respect of premium
funding
Related party receivables
Prepayments and other receivables
Total trade and other receivables
Expected Credit Losses (ECL)
For trade receivables and other receivables, an allowance is made for anticipated losses based upon historical information,
adjusted for forward-looking information, and specific credit information of counterparties where available.
Amounts over due by more than (a) Brokers - 30 days, (b) Support services entities and Underwriters - 90 days and (c) Wholesale
brokers - 180 days are considered to have a significance increase in credit risk.
Expected credit losses are recorded on receivables, including trade and other receivables, interest-bearing loan assets,
investments and other financial assets. The Group applies the simplified approach to its trade receivables, and measures the
loss allowance at an amount equal to lifetime expected credit losses.
For amounts due from customers of broking/agency operations and amounts due from clients in respect of premium funding
operations, an allowance is made for anticipated lapses and cancellations based upon historical information, adjusted for
forward-looking information.
ECL allowance included in trade and other receivables (current) above using the simplified approach as follows:
The provision for lapses 5.0% (2022: 5.0%) provides an amount for expected cancellations and loss of commissions and fees
(amounts due from broking/agency operations, debtors) based on Group wide historic data. Australian Agencies provision at
50% for debtors over 90 days, and 100% for debtors over 120 days in line with their binding arrangements to generally cancel
policies past due by 90 days.
Commercial loans to controlled entities and associates are secured over the shares of the non AUB Group shareholders of
the borrower. Other related party loans are generally provided to a related party for purchase of shares in a controlled entity or
associate, where the shares acquired form collateral in the loan deed. All other loans and receivables, including intercompany
and short-term loans to controlled entities and associates are unsecured. The valuation of shares held as security exceed the
total loans receivable for the years ended 30 June 2023 and 30 June 2022.
The Group recognises under AASB 15 a deferred component of Revenue representing the significant risk of reversal on issued
policies. This is within the Group’s Deferred Revenue balance within the Consolidated Statement of Financial Position. In addition
to requirements under AASB 15, forward looking elements under ECL provisioning is required. This is presented in the table
above, along with ECL provisioning on assets not impacted by AASB 15. As such changes in forward looking elements of ECL
provisioning have an impact on the table below.
Opening balance 1 July
ECL from acquisition of a controlled entity
Movements during the year
Total Expected Credit Loss
2023
$’000
316
3,780
1,100
5,196
2022
$’000
2,792
103
(2,579)
316
107
AUB GROUP ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
12. FINANCIAL AND OTHER ASSETS
Foreign Exchange Forward Contract Asset
The Group uses forward currency contracts as hedges of its exposure to foreign currency risk in forecast transactions and firm
commitments. Such derivative financial instruments are initially recognised at fair value at the date at which a derivative contract
is entered into and are subsequently remeasured at fair value. If there is any ineffective portion, it is recognised immediately in
profit or loss. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair
value is negative.
For the purposes of hedge accounting, hedges are classified as:
– Fair value hedges when hedging the exposure to changes in the fair value of a recognised asset or liability or an
unrecognised firm commitment.
– Cash flow hedges when hedging the exposure to variability in cash flows that is either attributable to a particular risk
associated with a recognised asset of liability or a highly probable forecast transaction or the foreign currency risk in an
unrecognised firm commitment.
At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which it wishes
to apply hedge accounting and the risk management objective and strategy for undertaking the hedge. The documentation
includes identification of the hedging instrument, the hedged item, the nature of the risk being hedged and how the Group will
assess whether the hedging relationship meets the hedge effectiveness requirements.
A hedging relationship qualifies for hedge accounting if it meets all of the following effectiveness requirements:
– There is ‘an economic relationship’ between the hedged item and the hedging instrument;
– The effect of credit risk does not ‘dominate the value changes’ that result from that economic relationship; and
– The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Group
actually hedges and the quantity of the hedging instrument that the Group actually uses to hedge that quantity of hedged
item.
The Group designates only the spot element of forward contracts as a hedging instrument. The forward element is recognised
in OCI and accumulated in a separate component of equity under cost of hedging reserve.
The amounts accumulated in OCI are accounted for, depending on the nature of the underlying hedged transaction. If the
hedged transaction subsequently results in the recognition of a non-financial item, the amount accumulated in equity is
removed from the separate component of equity and included in the initial cost or other carrying amount of the hedged asset
or liability. This is not a reclassification adjustment and will not be recognised in OCI for the period. This also applies where the
hedged forecast transaction of a non-financial asset or non-financial liability subsequently becomes a firm commitment for
which fair value hedge accounting is applied.
Other Assets
Other assets are contract assets, secured loans, minor investment in listed equities and defined benefit scheme asset. For AUB’s
policy on defined benefit schemes refer to Note 16.
Contract assets represent assets recognised at fair value acquired on acquisition of a subsidiary in relation to expected revenues
generated by existing contracts over the next 10 years. The asset has finite life and is amortised over the term of the contract
(10 years).
108
AUB GROUP ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
12 FINANCIAL AND OTHER ASSETS (CONTINUED)
As at 30 June 2023
Due not later
than 6 months
$’000
6 months to
no later than
1 year
$’000
Later than
1 year and
not later than
5 years
$’000
Later than
5 years/
No maturity
$’000
Foreign Exchange Forward Contract Asset
Other Assets
Total Financial and Other Assets
5,628
744
6,372
4,603
743
5,346
13,303
16,588
29,891
–
–
–
As at 30 June 2022
Due not later
than 6 months
$’000
6 months to
no later than
1 year
$’000
Later than
1 year and
not later than
5 years
$’000
Later than
5 years/
No maturity
$’000
Foreign Exchange Forward Contract Asset
Other Assets
Total Financial and Other Assets
–
1,868
1,868
–
–
–
–
9,214
9,214
–
–
–
Total
$’000
23,534
18,075
41,609
Total
$’000
–
11,082
11,082
109
AUB GROUP ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
13
INTANGIBLE ASSETS AND GOODWILL
Capitalised project costs
Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled
by the Group are recognised as intangible assets where the following criteria are met:
it is technically feasible to complete the software so that it will be available for use;
i.
ii. management intends to complete the software and use or sell it;
iii. there is an ability to use or sell the software;
iv.
v. adequate technical, financial and other resources to complete the development and to use or sell the software are available,
it can be demonstrated how the software will generate probable future economic benefits; and
and the expenditure attributable to the software during its development can be reliably measured.
Directly attributable costs that are capitalised as part of the software including eligible employee costs and an appropriate
portion of relevant overheads.
Capitalised development costs are recorded as intangible assets and amortised from the point at which the asset is ready for use.
Research expenditure and development expenditure that do not meet the criteria above are recognised as an expense as
incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.
Assessments are made on a project by project basis on the expected life of the intangible with a maximum useful life of 5 years
adopted by the Group. Costs associated with maintaining software programs and Software-as-a-Service (SaaS) are recognised
as an expense as incurred.
Software-as-a-Service (SaaS) arrangements
SaaS arrangements are service contracts providing the Group with the right to access the cloud provider’s application software
over the contract period. As such the Group does not receive a software intangible asset at the contract commencement date.
A right to receive future access to the supplier’s software does not, at the contract commencement date, give the customer the
power to obtain the future economic benefits flowing from the software itself and to restrict others’ access to those benefits.
The following outlines the accounting treatment of costs incurred in relation to SaaS arrangements:
– Recognise as an operating expense over the term of the service contract:
– Fee for use of application software;
– Support and maintenance services;
– Program/Project management;
– Integration; and
– Customisation costs.
– Recognise as an operating expense as the service is received (as considered distinct services):
– Configuration costs;
– Data conversion and migration costs;
– Testing costs; and
– Training costs.
Costs incurred for the development of software code that enhances or modifies, or creates additional capability to, existing
on-premise systems and meets the definition of and recognition criteria for an intangible asset are recognised as intangible
software assets.
Goodwill
Goodwill on acquisition is initially measured at cost, being the excess of the cost of the business combination over the acquirer’s
interest in the fair value of the identifiable net assets acquired at the date of acquisition. Following initial recognition, goodwill is
measured at cost less any accumulated impairment losses and is not amortised.
As at the acquisition date, any goodwill acquired is allocated to each of the cash-generating units expected to benefit from the
combination’s synergies. Goodwill is reviewed for impairment annually, or more frequently if events or changes in circumstances
indicate that the carrying value may be impaired. Impairment is determined by assessing the recoverable amount of the
cash-generating unit to which the goodwill relates. Where the recoverable amount of the cash-generating unit is less than the
carrying amount, an impairment loss is recognised.
110
AUB GROUP ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
13
INTANGIBLE ASSETS AND GOODWILL (CONTINUED)
Goodwill (continued)
Where goodwill forms part of a cash-generating unit and part of the operation of that unit is disposed, the goodwill associated
with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal
of the operation. Impairment losses recognised for goodwill are not subsequently reversed.
Intangible assets - Insurance Broking Register and Brand Name
Identifiable intangible assets acquired separately or in a business combination are initially measured at cost. The cost of an
intangible asset acquired in a business combination is its fair value as at the date of acquisition. Following initial recognition,
intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment. Internally generated
intangible assets are not capitalised and expenditure is charged against profits in the year in which the expenditure is incurred.
The useful lives of these intangible assets are assessed to be finite for insurance broking registers and indefinite for brand name.
Intangible assets with finite lives are amortised over the useful life, currently estimated to be 10 and 12 years (2022: 10 years)
for broking portfolios/client relationships and financial services businesses (life risk), and assessed for impairment whenever
there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for
an identifiable intangible asset with a finite useful life is reviewed at least at each financial year end. Changes in the expected
useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by
changing the amortisation period or method, as appropriate, which is a change in accounting estimate. The amortisation
expense on identifiable intangible assets with finite lives is recognised in the expense category of the Consolidated Statement
of Comprehensive Income consistent with the function of the intangible asset.
Gains or losses arising from derecognition of an identifiable intangible asset are measured as the difference between the net
disposal proceeds and the carrying amount of the asset and are recognised in the Consolidated Statement of Comprehensive
Income when the asset is derecognised.
Year ended 30 June 2023
Capitalised
project costs
$’000
Goodwill
$’000
Insurance
broking
registers
$’000
Brand name
$’000
Total
$’000
Cost
Balance at the beginning of the year
5,538
559,847
123,081
Net addition/(disposals) not related to consolidation/
(deconsolidation)
Acquisition of controlled entities
Deconsolidation of controlled entities
Impairments/write-off during the year
Translation of foreign exchange rate movements
4,714
1,026
(11)
(201)
653
–
–
688,466
9,021
–
4,307
850,707
402,010
54,886
1,308,629
(9,014)
(1,219)
43,113
(1,604)
(4,922)
24,156
–
–
3,977
(10,629)
(6,342)
71,899
Total Intangibles at cost
Amortisation
Balance at the beginning of the year
Deconsolidation of controlled entities
Amortisation during the year
Translation of foreign exchange rate movements
Total Accumulated amortisation
Summary
Net carrying amount at beginning of year
Net carrying amount at end of year
11,719
1,443,434
547,028
58,863
2,061,044
2,299
–
2,365
299
4,963
–
–
–
–
–
63,657
(1,604)
35,920
1,267
99,240
3,239
6,756
559,847
1,443,434
59,424
447,788
–
–
–
–
–
–
65,956
(1,604)
38,285
1,566
104,203
622,510
58,863
1,956,841
111
AUB GROUP ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
13
INTANGIBLE ASSETS AND GOODWILL (CONTINUED)
Year ended 30 June 2022
Capitalised
project costs
$’000
Goodwill
$’000
Insurance
broking
registers
$’000
Brand name
$’000
Total
$’000
Cost
Balance at the beginning of the year
2,240
416,241
107,709
Net addition/(disposals) not related to consolidation/
(deconsolidation)
Acquisition of controlled entities
Deconsolidation of controlled entities
Translation of foreign exchange rate movements &
Other
Total Intangibles at cost
Amortisation
Balance at the beginning of the year
(Disposals) not related to deconsolidation
Amortisation during the year
Impairments/write-off during the year
Translation of foreign exchange rate movements
Total Accumulated amortisation
Summary
Net carrying amount at beginning of year
Net carrying amount at end of year
702
2,686
–
(1,723)
161,627
(5,320)
1,977
15,801
(1,139)
(90)
(2,539)
(1,267)
5,538
568,286
123,081
1,696
(137)
675
–
65
2,299
544
3,239
–
–
–
8,439
–
8,439
416,241
559,847
54,817
–
9,341
–
(501)
63,657
52,892
59,424
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
526,190
956
180,114
(6,459)
(3,896)
696,905
56,513
(137)
10,016
8,439
(436)
74,395
469,677
622,510
112
AUB GROUP ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
13
INTANGIBLE ASSETS AND GOODWILL (CONTINUED)
Intangible assets are attributable to the following controlled entities:
i) Goodwill
Ludgate Limited and its controlled entities
AUB Group NZ Limited and its controlled entities
Insurance Advisernet Unit Trust & Insurance Advisernet
New Zealand Unit Trust
AUB Three Sixty Pty Ltd and its controlled entities
Austagencies Pty Ltd and its controlled entities
AEI Insurance Group Pty Ltd and its controlled entities
Austbrokers Corporate Pty Ltd and its controlled entities
Adroit Holdings Pty Ltd and its controlled entities
Ludgate US Corp and its controlled entities
Experien Insurance Brokers Pty Ltd
Other controlled entities
Total Goodwill
ii) Insurance Broking Registers
Ludgate Limited and its controlled entities
AUB Group NZ Limited and its controlled entities
AEI Insurance Group Pty Ltd and its controlled entities
Austbrokers Corporate Pty Ltd and its controlled entities
Other controlled entities
Total Insurance Broking Register
Remaining amortisation period
(years)
2023
11.3
5.5
9.5
5.5
2022
–
6.5
–
3.5
2023
$’000
2022
$’000
670,177
109,325
117,109
115,319
79,232
75,143
58,867
41,954
19,531
18,538
138,239
1,443,434
–
82,692
103,812
115,012
47,021
–
17,545
38,272
–
18,596
136,897
559,847
2023
$’000
2022
$’000
329,021
36,270
29,952
14,382
38,163
447,788
–
26,832
–
1,312
31,280
59,424
113
AUB GROUP ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
14
IMPAIRMENT
Impairment of non-financial assets other than Investment in Associates, Intangibles and Goodwill
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication
exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset’s recoverable
amount. An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in use and is determined for
an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets
or groups of assets and the asset’s value in use cannot be estimated to be close to its fair value. In such cases the asset
is tested for impairment as part of the cash-generating unit to which it belongs. When the carrying amount of an asset or
cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is written
down to its recoverable amount.
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. Impairment losses relating
to continuing operations are recognised in those expense categories consistent with the function of the impaired asset.
If indication of impairment exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed
only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment
loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increased
amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been
recognised for the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at its revalued
amount, in which case the reversal is treated as a revaluation increase. After such a reversal the depreciation charge is adjusted
in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining
useful life.
No such indicators were noted in the current or prior year and subsequently no impairments recorded.
Investments in Associates, Intangibles and Goodwill
The Group assesses the impairment of investments in Associates, Intangibles, and Goodwill as a significant judgement and
material to the financial statements.
The recoverable amount of the intangible assets and goodwill is determined based on the higher of the estimate of fair value of
the cash generating unit (CGU) to which they relate less costs to sell or its value in use. In determining fair value, each controlled
entity or associate is considered a separate CGU or grouped into a single CGU for impairment testing where cash inflows are
interdependent and have similar characteristics.
The CGU represent the lowest level within the Group at which the goodwill is monitored for internal management purposes.
Australian Broking entities, New Zealand entities and Support Services entities are viewed as separate CGUs at the entity level
for impairment purposes, whilst Agency businesses have been disaggregated into two CGU and Tysers businesses have been
aggregated into one CGU.
To conduct impairment testing, the Group compares the carrying value with the recoverable amount of each CGU.
The recoverable amount is based on the higher of:
– Fair value - based on maintainable earnings; or
– Value in use - based on a discounted cash flow model.
The Group conducts testing over multiple phases, throughout the year and with several layers of review:
1.
Half year impairment review: Review of all cash generating unit (CGU) at 31 December for indicators of impairment
including qualitative questionnaires to each Group representative which has oversight of the respective CGU.
2. Annual Impairment testing:
– Phase I - Targeting: Fair value measurement of all CGUs and compared to carrying value as at 31 March to determine
if any entities show a potential impairment or low headroom. Testing is conducted irrespective of any indicators of
impairment (or lack thereof). EBITs are averaged over 3 years to consider the impact of timing differences, however
stress testing is conducted using (1) a 5% decline in EBIT, (2) stressed multiples, and (3) a single year EBIT.
– Phase II – Screening: Update of prior year Discounted Cash Flow (DCF) models where an entity continues to rely on a
value in use model to support its carrying value and current year results meet or exceed prior year projections.
– Phase III – Detailed Review: Review of entities identified in Phase I and II as having potential impairment issues including
creation of new DCFs, supporting normalisations or plans to rectify profitability concerns.
– Phase IV – Year End Refresh: Review of following year budgets, and current year actuals to ensure no significant
changes to the reporting date at 30 June compared to the interim testing date 31 March. Low head room entities are
revisited to mitigate the risk of an undetected impairments.
114
AUB GROUP ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
14
IMPAIRMENT CONTINUED)
Investments in Associates, Intangibles and Goodwill (continued)
3.
Watchlist Monitoring: Entities with low headroom are monitored at Board Audit & Risk Committee (BARC) level and
specifically considered during half year and year end testing given sensitivity to impairment.
4.
Governance: Impairment testing is conducted by the Group financial control team in conjunction with the mergers &
acquisitions team, and reviewed at 3 levels (1) Head of Financial Control, (2) Chief Financial Officer, and (3) BARC.
The Group maintains a policy to seek independent advice on multiples every 3 years from an appropriate valuations firm.
The Group sought independent advice in 2022 to determine the appropriate earnings before interest and tax (EBIT) multiple
used to determine fair value.
The extensive impairment testing and monitoring exceeds requirements under accounting standards and reflects the
materiality of the balances to the Group and the low risk appetite of management and the BARC.
Key assumptions for the fair value methodology are as follows:
Fair value is based on estimates of maintainable earnings. The appropriate pre-tax maintainable
earnings for each CGU is multiplied by a multiple from within the range, depending on the type of
business carried out by the CGU.
The risk free rate (before risk margin).
2023
2022
8-15 times
8-15 times
3.65%
2.8-3.1%
Multiples have been determined after factoring in the following assumed sustainable long-term
profit growth.
up to 2%
up to 2%
Value in use
Where the Value In Use methodology produces a higher valuation than Fair Value Less Costs of Disposal (FVLCD), this valuation
is used for the Recoverable Amount. This measurement takes into account the expected Discounted Cash Flows (DCF) for
the next 5 -15 years based on the forecast profitability. The valuation takes into account the weighted average cost of capital
(WACC) for those CGUs and also looks at the expected long term growth rate with a terminal value calculation at the end of the
intermediary cash flows. This methodology will result in a better estimate valuation for entities where historic performance may
not factor in the medium and long term expected growth from this business.
During the current year, no CGU’s (2022: three CGU’s) were valued using the value in use methodology. All CGUs were
supportable using the fair value methodology. For two of the CGUs it was determined that an EBIT multiple was not appropriate
in measuring the recoverable amount for the Group in relation to the entities. The fair value measurements were categorised as
level 3 fair value based on the lack of observable inputs in the valuation technique used (see Note 19).
Key assumptions for the value in use methodology are as follows:
Post-tax discount rates (WACC).
Short-term revenue growth rate - used in discount cash flow assumptions (1-5 years).
Long-term revenue growth rate.
2023
N/A
N/A
N/A
2022
6.5%-10.9%
2.5%-5.7%
1.5%-2.0%
Low headroom
Entities are considered to have low headroom if headroom is less than $500k or 5% of total carrying value (whichever is lower)
or show impairment using any of the following: (1) Stressed multiple (2) 5% reduction in EBIT or (3) single current year profit (to
ensure 3-year average does not hide a decline in profitability).
No reasonably possible change in key assumptions would result in the recoverable amount of a CGU that is material to the
Group’s total intangible assets, goodwill and investment in associates, being significantly less than the carrying value included
in the accounts.
When making an acquisition, the Group may pay a deposit and defer a component of the purchase price to be determined
based on future financial results. Estimates of the final acquisition cost are made and recognised in the financial statements.
An estimate of the contingent consideration is made at the time of acquisition and is reviewed and varied at balance date if
estimates change or actual payments are made. This adjustment can be a loss (if increased) or a profit (if reduced). Where an
estimate is reduced an offsetting adjustment (impairment) is generally made to the carrying value.
During the current year, due to current market conditions further adjustments to contingent considerations in respect of current
and prior year acquisitions resulted in a net reduction (previous year increase) to the estimates previously recognised by the
Consolidated Group of $0.28m (2022: $0.41m). Where the revised contingent consideration estimates were below the original
estimated contingent consideration payments, a corresponding and offsetting impairment charge may be recognised. The
reduction in contingent consideration lead to an impairment of $nil (2022: $nil).
115
AUB GROUP ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
14
IMPAIRMENT (CONTINUED)
Impairment - current year
Phase I -Targeting
Phase 2 -
Screening
Phase 3 -
Detailed review
Phase 4 -Low
Head Room
No impairment
Impairment
All other entities
1 Entity
2 Entities
Two cash generating unit were assessed to be impaired during the current year by $6.34m. One CGU remains on the watchlist
due to low headroom. One CGU was removed from the watchlist. No CGUs were added to the watchlist.
Impairment - previous year
Phase I -Targeting
Phase 2 -
Screening
Phase 3 -
Detailed review
Phase 4 -Low
Head Room
No impairment
Impairment
All other entities
2 Entities
2 Entities
1 Entity
One cash generating unit was assessed to be impaired during the previous year by $8.44m. Two CGUs remain on the watchlist
due to low headroom. No CGUs were added to the watchlist
15 TRADE AND OTHER PAYABLES
Liabilities for trade creditors and other amounts are carried at amortised cost which is the fair value of the consideration to be
paid in the future for goods and services received, whether or not billed to the entity. Payables to related parties are carried at
the principal amount. Interest, when charged, is recognised as an expense on an accrual basis. Payables are normally settled
on 90 day terms.
The Group recognises amounts due to insurers for premiums collected but yet to be transferred to the insurer.
As at 30 June 2023
Due not later
than 6 months
$’000
6 months to
no later than
1 year
$’000
Later than
1 year and
not later than
5 years
$’000
Later than
5 years/No
maturity
$’000
Trade payables and accruals
Amount payable on broking/agency operations
Related party payables
Other payables
Total trade and other payables
53,782
932,983
3,387
59,965
1,050,117
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
As at 30 June 2022
Due not later
than 6 months
$’000
6 months to
no later than
1 year
$’000
Later than
1 year and
not later than
5 years
$’000
Later than
5 years/No
maturity
$’000
42,100
354,176
1,130
10,245
407,651
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Trade payables and accruals
Amount payable on broking/agency operations
Related party payables
Other payables
Total trade and other payables
116
Total
$’000
53,782
932,983
3,837
59,965
1,050,117
Total
$’000
42,100
354,176
1,130
10,245
407,651
AUB GROUP ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
16 PROVISIONS
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event and it
is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation. If the effect of the time value of money is material, provisions are
determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time
value of money and, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision
due to the passage of time is recognised as a finance cost.
Make good provision on leased premises
In accordance with the various lease agreements, the Group must restore the leased premises to a similar condition that
existed prior to leasing the premises by removing all fixed and removable partitions. A provision has been included for expected
amounts payable. Because of the long-term nature of the liability, the greatest uncertainty in estimating the provision is the cost
that will ultimately be incurred. During the year further amounts were provided for premises leased during the year. Current lease
durations range from less than 1 year to 10 years. Make good payments will only be made at the end of the lease.
Employee entitlements
Liabilities for employee entitlements to annual leave and other current entitlements are accrued at amounts calculated on the
basis of current wage and salary rates, including package costs and on-costs. Liabilities for non accumulating sick leave are
recognised when the leave is taken and are measured at the rate paid or payable. Liabilities for employee entitlements to long
service leave, which are not expected to be settled within twelve months after balance date, are accrued at the present value
of the future amounts to be made in respect of services provided by employees up to the reporting date using the projected
unit credit method. Consideration is given to expected future wage and salary level, experience of employee departures and
periods of service. The discount factor applied to all such future payments is determined using high quality corporate bond rates
attaching as at the reporting date, with terms to maturity that match, as closely as possible, estimated future cash outflows. Any
contributions made to the accumulated superannuation funds by entities within the Group are charged against profits when due.
Defined benefit plan liability
The Group operates two defined benefit pension plans in the UK. All of the plans are final salary pension plans, which provide
benefits to members in the form of a guaranteed level of pension payable for life. The level of benefits provided depends on
members’ length of service and their salary in the final years leading up to retirement.
Defined benefit schemes are funded, with assets of the scheme held separately from those of the Group, in separate trustee administered
funds. Defined benefit scheme assets are measured at fair value and liabilities are measured by independent actuaries using the
projected unit credit method. The actuarial valuations are obtained at least triennially and are updated at each balance sheet date.
If the present value of defined benefit obligations at the reporting date is less/more than the fair value of plan assets at that date,
the plan has a surplus/deficit respectively which is presented in the Consolidated Statement of Financial position. The Group
recognises a plan surplus as a defined benefit plan asset only to the extent that it is able to recover the surplus either through
reduced contributions in the future or through refunds from the plan.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair
value of plan assets. This cost is included in employee benefit expense in the statement of profit or loss.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised
immediately in the statement of financial position with a corresponding debit or credit to retained earnings through OCI in the
period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised
immediately in profit or loss as past service costs.
117
AUB GROUP ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
16 PROVISIONS (CONTINUED)
Balance at the beginning of the year
Payments made during the year
Change in estimates
Additions during the year
Acquisition of controlled entity
Deconsolidation of controlled entities
Foreign exchange rate movements
Balance at the end of the year
Current 2023
Non-current 2023
Balance at the end of the year
Employee
entitlements
$’000
31,414
(18,690)
(273)
13,729
95,890
(580)
5,465
126,955
123,476
3,479
126,955
Year ended 30 June 2023
Make good
provision
$’000
2,195
–
(88)
669
Other general
provisions
$’000
–
(729)
(823)
151
Total
$’000
33,609
(19,419)
(1,184)
14,549
1,088
77,824
174,802
(5)
92
3,951
1,955
1,996
3,951
–
2,693
79,116
79,116
–
79,116
(585)
8,250
210,022
204,547
5,475
210,022
A regulatory investigation of Tysers for an event which occurred prior to AUB’s ownership is currently in progress. Please refer to
Note 7 for further details.
Balance at the beginning of the year
Additions/Disposals/Other during the year
Balance at the end of the year
Current 2022
Non-current 2022
Balance at the end of the year
Year ended 30 June 2022
Employee
entitlements
$’000
22,819
Make good
provision
$’000
1,628
Other general
provisions
$’000
–
8,595
31,414
28,479
2,935
31,414
567
2,195
625
1,570
2,195
–
–
–
–
–
Total
$’000
24,447
9,162
33,609
29,104
4,505
33,609
17
INTEREST-BEARING LOANS AND BORROWINGS
Interest-bearing liabilities are initially recognised at fair value of the consideration received, net of any directly attributable
transaction costs. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost.
Gains and losses are recognised in profit or loss when the liabilities are derecognised. Borrowing costs are amortised over the
term of the loans.
Group Borrowing facilities as at 30 June 2023
AUB Group entered into a Syndicated Debt Facility totalling $675m to fund the completion of the Tysers acquisition. The facility
has a maturity date of 30th September 2027. The total facility consists of:
– Tranche A: AUD term facility of $525m (amortising $1.5m per quarter); and
– Tranche B: multi-currency facility of $150m.
At 30 June 2023 the total outstanding facility balance is $520.5m.
AUB Group Limited’s borrowing facilities are subject to financial undertakings and warranties typical of facilities of this nature
and have sub-limits for various purposes including acquisitions.
A small number of controlled entities within the Group in Australia and New Zealand have negotiated facilities with other banks.
During the current and prior period, there were no defaults or breaches of terms and conditions of any of these facilities.
118
AUB GROUP ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
17
INTEREST-BEARING LOANS AND BORROWINGS (CONTINUED)
Current
Secured bank loan
Other
Total interest-bearing loans and borrowings (current)
Non-current
Secured bank loan
Other
Total interest-bearing loans and borrowings (non-current)
AUB Group Limited syndicated finance facility (see below)
Commonwealth Bank
Hunter Premium Funding
St George Bank
Australia and New Zealand Banking Group
Macquarie Bank
Other
Total secured bank loans
Group Borrowing facilities as at 30 June 2023
2023
$’000
2022
$’000
19,202
567
19,769
564,312
149
564,461
520,500
19,251
17,191
7,278
8,316
5,471
5,507
583,514
8,388
553
8,941
38,630
231
38,861
–
2,518
14,790
16,170
9,250
3,690
600
47,018
Facility
provider
Type of
Borrowing
Total
Facility
$’000
Undrawn
Amount
$’000
Amount
Utilised
$’000
Borrowing
Amount
$’000
Current
$’000
Non
Current
$’000
Expiry Date(s)
Interest
Rate
%
Variable/
Fixed
(Var/Fix)
AUB Group Limited
Syndicated
Finance Facility
Australia and
New Zealand
Banking Group
Loan Facility
670,500
150,000
520,500
520,500
6,000
514,500
30/09/2027
8
Var
Bank
Guarantees
13,458
–
13,458
–
–
–
N/A
N/A
N/A
Facilities arranged by other controlled entities
Commonwealth
Bank
Hunter Premium
Funding
Australia and
New Zealand
Banking Group
Loan facility
20,257
1,006
19,251
19,251
1,994
17,257
Loan Facility
20,268
3,077
17,191
17,191
2,833
14,358
Loan facility
St George Bank
Loan Facility
8,316
8,000
–
722
8,316
7,278
8,316
7,278
1,552
1,100
6,764
6,178
31/07/2023 &
01/07/2026
Between
30/11/2024 &
31/05/2028
30/06/2032
5/12/2024
Between
01/05/2024 &
6-10
Var
1 - 2.75
Fixed
7
7
Var
Var
Var and
Fixed
Macquarie Bank
Loan facility
8,471
3,000
5,471
5,471
377
5,094
30/04/2027 3.75 - 5.2
Other
Loan facility
7,201
1,694
5,507
5,507
5,346
161
Total Borrowing Facilities
756,471
159,499
596,972
583,514
19,202
564,312
Between
30/11/2023 &
30/06/2032 &
31/10/2025
8 - 9.1
Var
119
AUB GROUP ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
17
INTEREST-BEARING LOANS AND BORROWINGS (CONTINUED)
Group Borrowing facilities as at 30 June 2022
Facility
provider
Type of
Borrowing
AUB Group Limited
Australia and
New Zealand
Banking Group
Bank
Guarantees
Total
Facility
$’000
Undrawn
Amount
$’000
Amount
Utilised
$’000
Borrowing
Amount
$’000
Current
$’000
Non
Current
$’000
Expiry Date(s)
Interest
Rate
%
Variable/
Fixed
(Var/Fix)
23,179
–
23,179
–
–
–
N/A
N/A
N/A
Facilities arranged by other controlled entities
Hunter Premium
Funding
Loan facility
18,694
3,904
14,790
14,790
2,669
12,121
St George Bank
Loan Facility
16,888
719
16,170
16,170
2,468
13,702
Between
01/11/2025 &
27/01/2035
Between
18/10/2022 &
19/03/2023
Between
01/05/2024 &
Macquarie Bank
Loan facility
4,140
449
3,691
3,691
133
3,558
30/04/2027 3.75 - 5.2
1 - 2
Fixed
4 - 4.2
Var
Var and
Fixed
Australia and
New Zealand
Banking Group
Loan Facility
14,896
5,646
9,250
9,250
–
9,250
20/04/2027
Other
Loan facility
4,706
1,588
3,118
3,118
3,118
–
30/11/2022
Total Borrowing
Facilities
82,502
12,305
70,197
47,018
8,388
38,630
2
6
Fixed
Fixed
18 FINANCIAL LIABILITIES
Contingent and deferred consideration payable
The Group initially recognises estimated contingent and deferred consideration at present value as part of purchase
consideration and is remeasured at amortised cost at each reporting date.
Contingent considerations terms vary between transactions but generally involves either (1) an EBIT or Revenue (fixed)
performance hurdle (generally 2-3 years) post the acquisition date (i.e. high water mark) or (2) future dated (generally 2-3 years)
EBIT or Revenue times a fixed multiples less historic payments made.
Financial liability at amortised cost
AUB recognises a financial liability in relation to units held by non-AUB parties for unit trusts controlled by the Group, as the
Group does not control the distribution of profits by these entities to their beneficiaries. These liabilities are initially measured at
fair value and subsequently measured at each reporting date at amortised cost as an expense through finance costs.
Put options
AUB Group Limited entered into agreements with various shareholders of controlled entities and associates, granting options to
put shares held by those shareholders to AUB Group Limited at fair value at the date of exercise of that option. The earliest the
put option can be exercised is 5 years from the date of AUB acquiring its initial shareholding in those entities.
The Group recognises put options financial liability initially at estimated present value of the value the Group could be required to
pay on the future exercise by holders of the put options. Refer to Note 2.1 (d) for further information on measurement and critical
assumptions and for Put Option liability movement during the current period, refer to the SOCIE.
120120
AUB GROUP ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
18 FINANCIAL LIABILITIES (CONTINUED)
Put options (continued)
After initial recognition, put options financial liability is subsequently measured at amortised cost using the effective interest
method. The Group re-estimates put options financial liability at the reporting date using the same model applied during
the initial measurement, however the discount rate is not reset as the liability is held at amortised cost. The adjustment is
recognised through the Consolidated Statement of Comprehensive Income as income or expense. Movements in the put option
liability are ultimately transferred from retained earnings to the Put Option Reserve.
Whilst this obligation will only be payable in the event that other shareholders of controlled and associated entities put
their remaining shares to the Group, a liability has been recognised in relation to the put option. The financial liability will be
derecognised when the put option expires unexercised or an entity is disposed with the corresponding movement being
reflected in the Put Option Reserve. At balance date there has been no indication from the non-controlling shareholders that
they wish to exit their respective businesses and put their shares to the Group.
Included in financial liabilities are the following:
Balance at the beginning of the period
Additions during the year
Interest unwind/Finance charge on profits of trust
minority
Remeasurement of past obligations (including
foreign currency movements)
Payments made in respect of previously recognised
balances
Balance at the end of the period
As at 30 June 2023
Contingent
and Deferred
Considerations
$’000
17,576
152,516
Financial
Liability at
amortised
Cost
$’000
51,861
–
Actuarial
Liability
$’000
5,252
6,235
Put
Options
$’000
8,161
–
Total
$’000
82,850
158,751
12,126
10,999
–
397
23,522
26,920
7,642
(757)
3,223
37,028
(16,078)
193,060
(11,805)
58,697
(190)
–
(28,073)
10,540
11,781
274,078
Contingent consideration sensitivity: A 10% increase or decrease in profit or revenue of acquired entities which are subject to an
earn out would have a $2.68m charge or $19.36m release to the profit or loss respectively.
Contingent
and Deferred
Considerations
$’000
Balance at the beginning of the period
Additions during the year
Interest unwind/Finance charge on profits of trust
minority
Remeasurement of past obligations (including
foreign currency movements)
Payments made in respect of previously recognised
balances
Balance at the end of the period
8,606
14,529
–
(380)
(5,179)
17,576
As at 30 June 2022
Financial
Liability at
amortised
Cost
$’000
–
51,861
–
–
–
Actuarial
Liability
$’000
817
4,435
–
–
–
51,861
5,252
Put
Options
$’000
7,057
–
234
870
–
8,161
Total
$’000
16,480
70,825
234
490
(5,179)
82,850
121
121
AUB GROUP ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
18 FINANCIAL LIABILITIES (CONTINUED)
Ageing is presented below:
As at 30 June 2023
Due not later
than 6 months
$’000
6 months to
no later than
1 year
$’000
Later than
1 year and
not later than
5 years
$’000
Later than
5 years/
No maturity
$’000
Total
$’000
Contingent or deferred consideration payables
Financial Liability at amortised cost
Actuarial Liability
Put Options
Total Financial Liabilities
26,790
–
743
3,223
30,756
–
166,270
–
193,060
4,639
743
–
–
9,054
8,558
54,058
–
–
58,697
10,540
11,781
5,382
183,882
54,058
274,078
As at 30 June 2022
Due not later
than 6 months
$’000
6 months to
no later than
1 year
$’000
Later than
1 year and
not later than
5 years
$’000
Later than
5 years/
No maturity
$’000
Contingent or deferred consideration payables
Financial Liability at amortised cost
Actuarial Liability
Put Options
Total Financial Liabilities
8,352
9,624
–
–
17,976
–
–
–
–
–
9,224
–
5,252
8,161
–
50,239
–
–
22,637
50,239
90,852
Total
$’000
17,576
59,863
5,252
8,161
19 FINANCIAL INSTRUMENTS
Financial risk management objectives and policies
The Group’s principal financial instruments comprise receivables, loans, cash and short-term deposits, payables, lease liabilities,
overdrafts, interest bearing loans and borrowings, bank overdrafts and derivatives.
The Group manages its exposure to key financial risks, including interest rate and foreign currency risk in accordance with the
Group’s financial risk management policy. The objective of the policy is to support the delivery of the Group’s financial targets
whilst protecting future financial security.
AUB has entered into forward contracts to manage the foreign currency risk associated with multi-currency cash flows
generated by Tysers. AUB has designated these instruments in hedge relationships.
The Board reviews and agrees policies for managing each of these risks as summarised below. Primary responsibility for
identification and control of financial risks rests with the Board Audit and Risk Management Committee, supported by a
Management Committee, under the authority of the Board. The Board reviews and agrees policies for managing each of the
risks identified below.
Risk exposures and Responses
Credit Risk
a)
Refer to Note 10 Cash and Cash Equivalents and Note 11 Trade and Other Receivables.
Liquidity Risk
b)
The Company’s objective is to maintain adequate cash to ensure continuity of funding and flexibility in its day-to-day operations.
The Company reviews its cash flows weekly and models expected cash flows for the following 12 to 24 months (updated
monthly) to ensure that any stress on liquidity is detected, monitored and managed, before risks arise.
To monitor existing financial assets and liabilities as well as enable an effective control of future risks, the Group has established
comprehensive risk reporting that reflects expectations of management of expected settlement of financial assets and liabilities. The
Group’s main borrowing facilities are provided by a syndicated facility as outlined in Note 17, although some controlled entities
have arranged borrowing facilities with other banks.
The Company considers the maturity of its financial assets and projected cash flows from operations to monitor liquidity risk.
Liquidity risk arises in the event that the financial assets/liabilities are not able to be realised/settled for the amounts disclosed
in the accounts on a timely basis.
122
AUB GROUP ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
19 FINANCIAL INSTRUMENTS (CONTINUED)
Liquidity Risk (continued)
b)
The table below reflects all contractually fixed pay-outs and receivables for settlement, repayments and interest resulting from
recognised financial assets and liabilities. Cash flows for financial assets and liabilities without a fixed amount or timing are
based on the conditions existing at 30 June 2023 with comparatives based on conditions existing at 30 June 2022.
Financial Assets
Due not later than 6 months
6 months to not later than one year
Later than one year and not later than five years
Later than five years
Total financial assets
Financial Liabilities
Due not later than 6 months
6 months to not later than one year
Later than one year and not later than five years
Later than five years
Total financial liabilities
2023
$’000
2022
$’000
1,433,664
710,710
93,480
40,516
6,661
2,317
5,346
4,607
1,584,321
722,980
(1,126,784)
(439,381)
(51,293)
(810,477)
(54,058)
(13,756)
(75,001)
(50,239)
(2,042,611)
(578,377)
Whilst the Group’s financial liabilities exceed its financial assets for periods past 12 months, AUB generates significant cash
flows from its long term equity interest in its subsidiaries and associates which are excluded from the table above. This cash
flow is expected to enable AUB to meet its debts when they become due and payable. Furthermore AUB has the ability to raise
substantial debt and capital from the market should it need.
The risk implied from the values shown in the table below, reflects a balanced view of cash inflows and outflows. Lease
liabilities, trade payables and other financial liabilities mainly originate from the financing of assets used in the Group’s ongoing
operations such as plant and equipment and investments in working capital, e.g. trade receivables and deferred payments on
broker acquisitions.
The table summarises the maturity profile of the Group’s financial assets and financial liabilities based on contractual
undiscounted payments.
123
AUB GROUP ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
19 FINANCIAL INSTRUMENTS (CONTINUED)
Fair Values of recognised assets and liabilities
c)
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to
sell the asset or transfer the liability takes places either
– in the principal market for the asset or liability; or
– in the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Group.
The fair value of an asset or lability is measured using the assumptions that market participants would use when pricing the
asset or liability, assuming that the market participants act in their economic best interests.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to
measure the fair value, maximising the use of relevant observable inputs and minimising the unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair
value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities, including cash.
Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or
indirectly observable.
Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
The Company’s deferred acquisition costs, contingent considerations, put option liabilities, actuarial liability and contingent
considerations made in relation to acquisitions of controlled entities and associated are categorised as level 3. These are valued
based on the inputs in the valuation used on new acquisitions during the reporting period, refer to Note 2.1(d), Note 7(a) and
Note 18 for measurement techniques & critical assumptions, new transactions, and movements during the year respectively.
All other assets and liabilities measured at fair value are categorised as level 2 under the three level hierarchy reflecting the
availability of observable market inputs when estimating the fair value.
Management has assessed that the fair value of cash and short-term deposits, trade receivables, trade payables, bank
overdrafts and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these
instruments.
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a
current transaction between willing parties, other than in a forced or liquidation sale.
The following methods and assumptions were used to estimate the fair values:
– The fair value of loans and other financial assets has been calculated using market interest rates;
– Long-term fixed-rate and variable-rate receivables/borrowings are evaluated by the Group based on parameters such as
interest rates and individual creditworthiness of the customer. Based on this evaluation, allowances are taken into account
for the expected losses of these receivables. Market values have been used to determine the fair value of securities;
– Fair values of the Group’s interest-bearing borrowings and loans are determined by using the DCF method using a discount
rate that reflects the issuer’s borrowing rate as at the end of the reporting period;
– The fair value of unquoted instruments, loans from banks and other financial liabilities (including put option liability),
obligations under leases, as well as other non-current financial liabilities is estimated by discounting future cash flows using
rates currently available for debt on similar terms, credit risk and remaining maturities;
– The fair value of the non-current deferred and contingent consideration payments may change as a result of changes in the
projected future financial performance of the acquired assets and liabilities. Refer to Note 18 for further information; and
– The fair value of forward contracts is determined based on standard market valuation methodologies which use reliable
observable inputs including yield curves and market rates.
124
AUB GROUP ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
19 FINANCIAL INSTRUMENTS (CONTINUED)
Fair Values of recognised assets and liabilities (continued)
c)
The carrying value of most of the Group’s financial assets and financial liabilities approximate their fair value due to their short
term nature. Presented below are the between the book value and fair value of the Group’s financial assets and liabilities:
Financial Assets measured at fair value
Financial Assets;
Foreign Exchange Forward Contract Asset
Total Financial Assets measured at fair value
Financial Assets not measured at fair value
Cash and cash equivalents
Cash and cash equivalents - Trust
Deferred Acquisition Costs
Financial Assets;
Other Financial Assets
Total Financial Assets not measured at fair value
Financial Liabilities not measured at fair value
Contingent or deferred consideration payables
Actuarial Liability
Put Options
Financial Liability at amortised cost
Interest-bearing loans and borrowings
Total Financial Liabilities not measured at fair
value
Financial Assets measured at fair value
Other Financial Assets;
Foreign Exchange Forward Contract Asset
Total Financial Assets measured at fair value
Financial Assets not measured at fair value
Cash and cash equivalents
Cash and cash equivalents - Trust
Deferred Acquisition Costs
Financial Assets;
Other Financial Assets
Total Financial Assets not measured at fair value
Financial Liabilities not measured at fair value
Contingent of deferred consideration payables
Actuarial Liability
Put Options
Financial Liability at amortised cost
Interest-bearing loans and borrowings
Total Financial Liabilities not measured at fair
value
2023
Level 1
$’000
Level 2
$’000
Level 3
$’000
Carrying
value
$’000
Fair Value
$’000
–
–
23,534
23,534
–
–
23,534
23,534
23,534
23,534
260,352
936,369
–
–
–
–
–
–
13,822
260,352
936,369
13,822
260,352
936,369
13,822
–
1,196,721
18,075
18,075
–
13,822
18,075
1,228,618
18,075
1,228,618
–
–
–
–
–
–
–
–
–
–
584,230
193,060
10,540
11,781
58,697
–
193,060
10,540
11,781
58,697
584,230
193,617
10,540
10,228
71,139
584,230
584,230
274,078
858,308
869,754
2022
Level 1
$’000
Level 2
$’000
Level 3
$’000
Carrying
Value
$’000
Fair Value
$’000
–
–
–
259,329
333,131
–
–
592,460
–
–
–
–
–
–
–
–
–
–
–
–
11,082
11,082
–
–
–
–
47,802
–
–
–
–
–
–
–
–
–
–
–
–
–
259,329
333,131
–
259,329
333,131
–
11,082
603,542
11,082
603,542
17,576
5,252
8,161
51,861
–
17,576
5,252
8,161
51,861
47,802
17,576
5,252
7,954
62,608
47,802
47,802
82,850
130,652
141,192
There were no transfers between Level 1 and Level 2 of the fair value hierarchy for the current or prior period.
No level 3 financial instrument is measured at fair value on a recurring basis.
125
AUB GROUP ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
19 FINANCIAL INSTRUMENTS (CONTINUED)
c) Fair Values of recognised assets and liabilities (continued)
Put Options
AUB Group Limited has entered into agreements with various financiers and shareholders of related entities and associates,
granting options to put shares held in related companies or associates to AUB Group Limited, refer Note 23.
Other than shown on Note 18, at balance date no liability has arisen in relation to these arrangements.
d) Market Risk
Interest rate risk
The Group’s exposure to interest rate movements relates to cash and cash equivalents held by the Group and the Group’s
long-term debt obligations. To manage interest rate risk, interest rates on borrowings are fixed for a period depending on market
conditions. This risk is minimal as the Group holds cash (including trust cash) in excess of the amount of borrowings and
therefore the Group has a hedge against interest rate rises. Loans generally have interest rate resets every three months. In the
event of interest rate rises, a net increase in interest revenue will occur due to cash and cash equivalents exceeding borrowings.
The main risk to the Group is in relation to interest rate reductions which will decrease the net income earned on cash and cash
equivalents held. The cash held to pay insurers must be held in prescribed investments (investment grade bank accounts or
deposits) and as such will be subject to market interest rate fluctuations. The Group has at balance date, the following mix of
financial assets and liabilities exposed to variable interest rate risk.
Financial Assets
Cash and cash equivalents (including trust account balance)
Loans and advances - related entities
Other financial assets
Total financial assets
Financial Liabilities
Loans and other borrowings
Net exposure to interest rate movements
2023
$’000
2022
$’000
1,196,721
592,460
16,925
41,609
1,255,255
14,973
11,082
618,515
(567,691)
687,564
(56,934)
561,581
The Group’s long-term policy is to maintain a component of long-term borrowings at fixed interest rates, which are carried at
amortised cost and it is acknowledged that exposure to fluctuations in fair value is a by-product of the Group’s policy. Due to
AUB’s current positive net exposure to interest rates, fixing interest rates on borrowings has been assessesd by the Group to be
unnecessary. Materially all borrowings are based on variable interest rates. See Note 17 for full details of terms and conditions.
The Group constantly analyses its interest rate exposure. Within this analysis consideration is given to potential renewals of
existing positions, alternative financing and the term for fixing interest rates.
126
AUB GROUP ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
19 FINANCIAL INSTRUMENTS (CONTINUED)
d) Market Risk (continued)
The following sensitivity analysis is based on the interest rate exposures in existence at year end. The sensitivity for the prior
year has been prepared on an equivalent basis. At year end, had interest rates moved as illustrated in the table below, with all
other variables held constant, post-tax profits and equity would have been affected as follows:
Judgements of reasonably possible movements
+1.00% (100 basis points) (2022 +0.50% (50 basis points))
-1.00% (100 basis points) (2022 -0.50% (50 basis points))
Post tax profits
Higher/(lower)
Impacts directly to equity
Higher/(lower)
2023
$’000
6,876
(6,876)
2022
$’000
2,808
(2,808)
2023
$’000
–
–
2022
$’000
–
–
Equity securities price risk
Equity securities price risk arises from investments in equity securities. The Group does not invest in listed equity securities or
derivatives.
At year end, the Group had no material exposure to equities other than to shares in associates and controlled entities and
therefore has no exposure to price risk that has not already been reflected in the financial statements. The Group tests for
impairment annually and reviews all investments at least half yearly. The methodology for testing for impairment and results is
shown in Note 14.
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign
currency rates. The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s operating
activities (when revenue or expenses is denominated in a foreign currency) and the Group’s investment in overseas controlled entities.
The Group maintains a hedge program to manage its foreign currency risks in relation to cash flows. Refer to Note 12 for further
information on the Group’s hedge instruments.
The majority of the foreign exchange rate exposure relates to the investment in New Zealand and Tysers operations, although some
controlled entities raise client invoices in foreign currency denominations.
The Group does not hedge its net investment in foreign operations through derivatives. The Group’s syndicate facility arrangement
includes a component of borrowing in New Zealand Dollars utilised by the Group’s New Zealand arm which reduces the net assets the
Group exposed to foreign currency.
At year end, had foreign exchange rates moved as illustrated in the table below, with all other variables held constant, post-tax profits
and equity would have been affected as follows:
Judgements of reasonably possible movements
-10% NZD:AUD
+10% NZD:AUD
-10% GBP:AUD
+10% GBP:AUD
-10% USD:AUD
+10% USD:AUD
Post tax profits
Higher/(lower)
Impacts directly to equity
Higher/(lower)
2023
$’000
(250)
250
9,165
(9,165)
(2,680)
2,680
2022
$’000
(118)
118
–
–
–
–
2023
$’000
(15,533)
15,533
(40,599)
40,599
(18,266)
18,266
2022
$’000
(11,792)
11,742
–
–
–
–
127
AUB GROUP ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
19 FINANCIAL INSTRUMENTS (CONTINUED)
e) Capital Management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide
returns to shareholders and benefits for other stakeholders and to maintain an optimum capital structure.
In order to maintain or adjust the capital structure or in response to changes in economic conditions and the requirements of the financial
covenants, the Group may adjust the amount of dividends paid to shareholders, issue new shares or sell assets to reduce debt if required.
The Group monitors capital using the leverage ratio. Leverage is calculated as Net Debt divided by Earnings Before Interest, Tax,
Depreciation and Amortisation (EBITDA), as defined below.
– Net Debt contains the Group’s interest-bearing loans and borrowings, other debt (including guarantees), the Group’s
contingent consideration*, the Group’s share of borrowings and contingent consideration in relation to associates less
uncommitted cash and cash equivalents**.
– EBITDA includes the Group’s share of associate EBITDA plus an annualised EBITDA of entities acquired during the period
plus any pro forma cost synergies achieved during the period in relation to entities acquired less contribution of EBITDA for
any entities disposed during the period.
The leverage ratios at 30 June were as follows:
Leverage ratio
Interest-bearing loans and borrowings
Debt like items
Contingent consideration
Interest bearing loans, borrowings & contingent consideration payable - associates (AUB Group
share)
Contingent consideration payable for obligors*
Uncommitted cash and cash equivalents**
Total Net Debt
EBITDA- controlled entities
Normalisation due to M&A
EBITDA- associates (AUB Group share)
Total Normalised EBITDA
Leverage Ratio - Net Debt/EBITDA
2023
$’000
2022
$’000
584,230
16,552
193,060
25,522
(192,859)
(152,870)
473,636
164,500
50,469
61,571
276,540
1.71
47,802
19,231
17,576
31,063
–
(196,550)
(80,879)
84,195
–
62,450
146,645
(0.55)
Contingent consideration excludes contingent consideration recognised by wholly owned Group entities.
*
** Uncommitted cash and cash equivalents excludes trust cash accounts, and restricted cash such as to meet regulatory obligations.
128
AUB GROUP ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
20
ISSUED CAPITAL
Issued Capital opening balance
Issue of shares, net of issue costs
Issued Capital closing balance
Number of Shares on Issue (ordinary shares fully paid)
Movements in number of shares on issue
Beginning of the financial year
Issue of shares*
Issue of shares- acquisition**
Number of shares issued during period - options exercised
Number of shares issued during period - options exercised on 11 November 2021
Total Shares on Issue
Weighted average number of shares on issue at end of the year
2023
$’000
608,520
337,167
945,687
2022
$’000
266,659
341,861
608,520
Shares No.
Shares No.
108,405,620
92,409,126
92,409,126
74,403,507
6,875,102
17,950,069
9,018,974
102,418
–
–
–
55,550
108,405,620
92,409,126
99,836,672
76,545,637
On 24 May 2023, AUB issued 6,875,102 shares at $24.00. Total amount raised less issue costs was $161.7m.
*
** On 30 September 2022, AUB issued 9,018,974 shares at $19.50 to the vendors of Tysers as part of the acquisition (refer to Note 7 for further information).
The shares whilst issued are held in escrow for 2 years. Total amount raised less issue costs was $175.9m.
Ordinary shares have the right to receive dividends and, in the event of winding up the company, to participate in the proceeds
from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held.
Ordinary share capital is recognised at the fair value of the consideration received by the company, net of issue costs.
Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the company.
21. SHARE-BASED PAYMENT PLANS
The Group provides benefits to employees (including executive directors) of the Group in the form of share-based payments,
whereby employees render services in exchange for shares or rights over shares (‘equity-settled transactions’).
An Employee Performance Share Rights Plan is in place which provides benefits to executive directors and senior executives
through the issue of both Performance Share Rights (PSRs) and Share Appreciation Rights (SARs). The performance hurdles
relating to PSRs issued in previous periods remain unchanged.
The cost of these equity-settled transactions with employees is measured by reference to the fair value of the equity instruments
at the date at which they are granted. Details of the methodology to value of PSRs is included below.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price
of the shares of AUB Group Limited (market conditions) if applicable.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which
the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled
to the award (the vesting period).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the extent
to which the vesting period has expired and (ii) the Group’s best estimate of the number of equity instruments that will ultimately
vest. No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is
included in the determination of fair value at grant date. The Consolidated Statement of Comprehensive Income charge or credit
for a period represents the movement in cumulative expense recognised as at the beginning and end of that period. It is included
in Note 4(d) Expenses.
The Share Based Payment reserve is used to record the value of equity benefits provided to employees and directors as part of
their remuneration.
129
AUB GROUP ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
21 SHARE-BASED PAYMENT PLANS (CONTINUED)
For PSRs vesting based on earnings per share hurdles, no expense is recognised for awards that do not ultimately vest, except
for awards that are cancelled or where vesting is only conditional upon a market condition.
For PSRs issued based on Total Shareholder Return (TSR) hurdles, an expense is recognised irrespective of the Group meeting
market expectations.
In the event PSRs are cancelled, or cancelled and reissued, the remaining cost for these is brought forward and recognised
immediately in addition to the expense for any reissued/new PSRs.
If the terms of an equity-settled award are modified, as a minimum, an expense is recognised as if the terms had not been
modified. In addition, an expense is recognised for any modification that increases the total fair value of the share-based payment
arrangement, or is otherwise beneficial to the employee as measured, at the date of modification.
The dilutive effect, if any, of outstanding PSRs is reflected as additional share dilution in the computation of earnings per share
(see Note 6).
The number of PSRs outstanding is represented by:
Financial
year Grants
issued
As at
30 June
2021
lapsed
during FY22
exercised
during FY22
Granted
during FY22
As at
30 June
2022
lapsed
during FY23
exercised
during FY23
Granted
during
FY23
As at
30 June
2023
Grant date
Earliest
exercise
date
Valuation
$
2018
2019
2020
2020
2021
2022
2023*
2023
33,586
(6,077)
(27,509)
32,914
101,219
200,000
125,688
–
–
–
–
–
–
–
–
–
–
(28,041)
–
–
–
–
–
–
–
–
–
–
101,219
200,000
38,748
164,436
144,879
144,879
–
–
–
–
–
–
–
4,873
(3,674)
(1,199)
–
–
–
–
–
–
–
–
–
07-Apr-16
23-Nov-20
08-Dec-16
31-Oct-21
24-Jan-17
31-Aug-22
200,000
23-Nov-17
31-Aug-24
164,436
31-Oct-18
31-Aug-23
144,879
13-Nov-21
31-Aug-24
39,169
39,169
02-Sep-22
31-Aug-23
150,146
150,146
29-Mar-23
31-Aug-25
11.83
10.72
9.37
8.91
11.27
18.02
19.02
20.92
–
–
–
–
–
–
(101,219)
–
–
–
–
–
493,407
(6,077)
(55,550)
183,627
615,407
(3,674)
(102,418)
189,315
698,630
Share Appreciation Rights (SARS’s)
2022
*
–
–
–
1,016,776
1,016,776
–
–
–
1,016,776
11-Nov-21
31-Aug-26
3.79
39,169 Equity award resulting from deferring 30% of the FY22 Short Term Incentive(DSTI). No additional performance conditions apply to the vesting of the
PSRs with the exception of the continued employment by the relevant Group Executive. Half of the DSTI will vest after 12 months and the remaining balance will
vest after 24 months.
The weighted average exercise price for all PSRs exercised in FY23 and FY22 was $NIL.
All PSRs lapsed during FY22 and FY23 were due to vesting conditions not being met.
Vesting conditions for PSRs
The following option exercise conditions apply to all PSRs issued.
For PSRs issued in FY21 and FY22, 60% are subject to an average annual growth rate (AAGR) hurdle set out in part (a) below
(EPS PSRs) and 40% of PSRs issued will be subject to the total shareholder return hurdle set out in part (b) below (TSR PSRs).
For PSRs issued in FY23 40% are subject to a compound annual growth rate (CAGR) hurdle set out in part (a) below (EPS PSRs),
40% of PSRs issued will be subject to the total shareholder return hurdle set out in part (b) below (TSR PSRs) and 20% subject to
an average of 3 years return on invested capital hurdle (ROIC PSRs) set out in part (c) below.
For the purposes of calculating the compound annual growth rate (CAGR) or Annual average growth rate (AAGR), an underlying
form of earnings per share will be utilised (Underlying EPS) being, in respect of any financial year, the consolidated net profit after
tax of the Company for that year excluding the effects of non-recurring events or other items not representative of the underlying
operating items of income and expenditure of the Group and segments of the Group, such as restructuring costs, acquisition
costs, fair value gain/losses, profits on sale, amortisation of broking registers and impairments (Underlying NPAT) divided by
the weighted average number of shares on issue during the financial year. Other adjustments to the Underlying NPAT calculation
may be made in limited circumstances where the Board considers it to be appropriate.
Subject to satisfaction of the performance based conditions referred to in paragraphs (a), (b) and (c) below, the PSRs will vest
3 years (5 years for sign-on grant – see part (d)) after the start of the performance period;
130
AUB GROUP ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
21 SHARE-BASED PAYMENT PLANS (CONTINUED)
(a) Earnings Per Share Growth hurdles are as follows:
Issued in FY20
Issued in FY21 and FY22
Issued in FY23
AAGR EPS
EPS vesting
AAGR EPS
EPS vesting
CAGR EPS
EPS vesting
less than 5%
5%
5-7%
NIL
50%
50% - 100%
less than 7%
7%
7-10%
7% or more
100%
10% or more
NIL
50%
50%- 100%
100%
less than 7%
7%
7-12%
12% or more
NIL
50%
50%- 100%
100%
(b) TSR hurdles for all grant years are as follows:
Relative TSR performance is assessed over a three-year period which commences at the start of the financial year during which
the PSRs are granted.
For any PSRs to vest pursuant to the Relative TSR vesting condition, AUB Group’s compound TSR must be equal to or greater
than the median ranking of constituents of the Peer Comparator Group.
TSR PSRs will be measured by comparing the TSR of the Company with the TSRs of the constituents of the S&P/ASX Small
Ordinaries Industrials Index (AXSID) (Comparator Group).
Hurdles for TSRs issued after 1 July 2021
Less than 50th percentile of the Comparator Group, 0% of the PSRs will vest.
50th percentile of the Comparator Group, 50% of the PSRs will vest.
Between 50th percentile and 75th percentile of the comparator Group, between 50% and 100% of the PSRs will vest.
75th percentile of the Comparator Group or higher, 100% of the PSRs will become vest.
(c) Return on Invested Capital (ROIC)
The ROIC vesting condition for PSRs granted during FY23 is measured based on the average annual ROIC achieved from
1 July 2022 (the start of the performance period) to 30 June 2025 (being the final year of the performance period).
ROIC in each year is calculated as EBITA Less Tax, divided by Average Invested Capital, defined as follows:
EBITA Less Tax
Invested Capital
Underlying NPAT plus interest expense (net of interest received from operating bank account) as per
consolidated accounts after tax
The sum of equity attributable to equity holders of the parent and interest-bearing borrowings and
loans, less cash and cash equivalents (excluding cash held in trust).
Average Invested Capital
(Invested Capital at financial year end + Invested Capital at previous financial year end)/2
3 year average ROIC
Simple average of ROIC in each of the 3 years of the performance period
The percentage of ROIC PSRs that may vest is determined based on the following vesting schedule.
3 year average ROIC
Less than 11%
11%
Greater than 11% to less than 12%
12% or more
PSRs subject to ROIC vesting condition that vests (%)
0%
50%
Straight line between 50% and 100%
100%
131
AUB GROUP ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
21 SHARE-BASED PAYMENT PLANS (CONTINUED)
(d) Performance Period - 200,000 CEO 5 year PSRs
In FY20, a sign-on bonus of 200,000 PSRs was granted to the CEO that vest over 5 years.
In the previous year, one third of the PSRs were tested over the three year performance period from 1 July 2019 to 30 June
2022.
The TSR and EPS hurdles for the sign-on PSR grant are as shown in part (a) and (b).
Based on the TSR and EPS outcomes (see previous year remuneration report), all 66,667 PSRs (both TSR PSRs and EPS PSRs)
satisfied the performance hurdles and will therefore remain on foot and vest at the end of the 5 year period ended 30 June 2024,
subject to the CEO’s employment conditions.
The remaining balance of 133,333 PSRs (TSR and EPS) will be tested after the completion of the 5 year period ended
30 June 2024. Any unvested PSRs at that time will lapse.
Share Appreciation Rights (SARs)
Key terms of the SARs are as follows:
The SARs granted in FY22, have five-year performance period which is intentionally longer than the 3 year performance period
for other performance options granted under the LTI Plan. Additionally there is a further post exercise holding lock of two years
which is designed to act as an additional mechanism with executives having additional AUB Group equity ownership.
SARs will be tested against a CAGR of the EPS of the Company during the five-year performance period covering 1 July 21 to
30 June 2026.
Vested SARs
Vesting will require stretch performance exceeding regular LTI plan maximum, as well as peer LTI maximum, together with
5 years of ongoing employment from 1 July 2021.
Shares allocated on vesting and conversion of SARs are subject to the terms of AUB Group’s Share Trading Policy and carry full
dividend and voting rights upon allocation.
SARs will automatically vest and convert into Shares if the vesting conditions have been satisfied, expected to be on or around
31 August 2026. Vested SARs will be converted to shares in AUB Group Limited based on the formula below.
There is no conversion price or exercise price payable for the conversion of any vested SARs.
Vesting is conditional on meeting performance targets in line with table below
Achieving a CAGR of Underlying EPS of
Vesting outcomes of SARS
Less than 12%
12%
0%
25%
Greater than 12% but less than 14%
Pro rata straight line vesting between 25% and 100%
14% or more
100%
If the vesting conditions are satisfied, the SARs will convert into that number of Shares based on the following formula:
Number of vested SARs x
Conversion Price-Initial VWAP
Conversion Price
Where:
– Number of vested SARs means the number of SARs that vested after the EPS calculation has been undertaken at the end of
the 5 year performance period.
– Conversion Price means the VWAP of the Shares traded on the ASX over the 60 trading days prior to 30 June 2026.
– Initial VWAP means $20.33, being the VWAP of the Shares traded on the ASX over the 60 trading days prior to 1 July 2021
(the first day of the Performance Period).
– The base underlying EPS at 30 June 2021 was 87.93 cents per share (86.12 cents per share TERP adjusted).
During the year the Group has commenced recognition of share based payment expenses in relation to the retention
programme for Tysers key producers. The share appreciation rights will be granted around 31 August 2023, with a performance
measurement period from 1 July 2023 to 30 June 2026.
132
AUB GROUP ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
22 PARENT ENTITY INFORMATION
The parent company’s summary financials are presented below:
ASSETS
Cash and cash equivalents
Current Assets
Non-current Assets
Total Assets
LIABILITIES
Current Liabilities
Non-current Liabilities - Interest bearing loans and borrowings
Total Liabilities
NET ASSETS
EQUITY
Issued capital
Reserves
Retained earnings
TOTAL SHAREHOLDERS EQUITY
Profit for the year before income tax
Income tax (expense)/credit
Net profit after tax for the year
Other comprehensive income/(expense) after income tax for the year
Total comprehensive income after tax for the year
Other information
2023
$’000
2022
$’000
111,311
176,673
414,986
131,632
1,202,789
436,961
1,729,086
745,266
92,728
514,500
607,228
9,054
–
9,054
1,121,858
736,212
945,687
608,520
17,684
12,641
158,487
115,051
1,121,858
736,212
91,659
4,192
95,851
9
62,010
2,985
64,995
(140)
95,860
64,855
Guarantees entered into by the parent entity in relation to the debts of its controlled entities or
associates:
AUB Group Limited has guaranteed loan facilities provided to controlled entities and associates in
proportion to its shareholding
13,701
–
AUB Group Ltd has guaranteed lease facilities provided to controlled entities and associates in
proportion to its shareholding
Total Guarantees
4,841
18,542
16,745
16,745
Contingent liabilities
AUB Group Limited has provided indemnities to other shareholders of related entities and associates in relation to guarantees
given by those shareholders, to financiers of or lessors to entities in which AUB Group Limited has an equity interest.
AUB Group Limited has entered into agreements with various financiers and shareholders of related entities and associates,
granting options to put shares held in related companies or associates to AUB Group Limited.
133
AUB GROUP ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
23 COMMITMENTS AND CONTINGENCIES
The Group’s commitments and contingencies are presented below:
Commitments - Group excluding AASB 16 Lease Liabilities
- Not later than one year
- Later than one year and not later than five years
- Later than five years
Commitments - Associate excluding AASB 16 Lease Liabilities
- Not later than one year
- Later than one year and not later than five years
- Later than five years
Contingent liabilities
Estimates of the maximum amounts of contingent liabilities that may become payable:
AUB Group Limited has guaranteed loan facilities provided to associates in proportion to its
shareholding.
AUB Group Limited has guaranteed lease facilities provided to associates in proportion to its
shareholding.
Contingent liabilities on committed transactions
2023
$’000
2022
$’000
88
–
–
88
–
–
–
–
706,608
204
–
706,812
68
116
–
184
1,946
3,598
172
–
234
196,553
2,118
200,385
134
AUB GROUP ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
24 AUDITORS’ REMUNERATION
The Group’s payments to audit firms are presented below:
Amounts received or due to Ernst & Young (globally and NZ) for:
Audit of the financial statements of Group and its Controlled entities in Australia
Audit of the financial statements of Controlled entities overseas
Other statutory assurance services
Other assurance related services
Total audit services
Non-audit services
Taxation advice
Taxation compliance services
Consulting services
Total non-audit services
Total services provided by Ernst & Young
Amounts received or due to non Ernst & Young audit firms for:
Audit and review of financial statements
Other statutory assurance services
Other assurance related services
Total audit services
Non-audit services
Taxation advice
Taxation compliance services
Other consulting services
Total non-audit services
Total services provided by other auditors
Total Auditors' remuneration
Consolidated
2023
$
2022
$
1,646,000
1,200,804
3,017,000
195,000
214,000
156,072
–
58,000
4,877,000
1,609,876
–
–
57,000
158,271
–
38,000
57,000
196,271
4,934,000
1,806,147
661,721
280,645
164,707
85,000
20,716
–
911,428
301,361
–
26,640
59,329
85,969
–
26,669
3,030
29,699
997,397
331,060
5,931,397
2,137,207
135
AUB GROUP ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
25 RELATED PARTY DISCLOSURES
a) Details of Key Management Personnel (KMP)
The directors of the company in office throughout the year and until the date of signing this report are:
D. C. Clarke
Chairman (non-executive)
R. D. Deutsch
Director (non-executive) (appointed 3 November 2022)
P. G. Harmer
Director (non-executive)
A. J. Kendrick
Director (non-executive) (appointed 27 January 2023)
P. A. Lahiff
Director (non-executive)
R. J. Low
Director (non-executive)
C. L. Rogers
Director (non-executive)
The following persons were the executives with the greatest authority for the planning, directing and controlling the activities of
the consolidated entity during the financial year:
M.P.C. Emmett
Director and Chief Executive Officer
M. J. Shanahan
Chief Financial Officer
b) There are no loans outstanding owing by KMP at 30 June 2023 (2022: NIL).
c) Compensation of KMP’s by Category
Salary, fees and short-term incentives
Post employment benefits
Other long-term benefits
Termination benefits
Share-based Payments
Total
2023
$
2022
$
4,158,471
3,753,969
119,639
112,112
–
–
–
–
2,058,537
1,718,365
6,336,647
5,584,446
d) STI amounts included above relate to the accrued provision in respect of the current year’s performance that will be paid
during the following financial year. The 2023 amounts have been approved by the Remuneration Committee.
e) The following related party transactions occurred during the year:
i)
Transactions with related parties in parent, controlled entities and associates
1. Entities within the Consolidated Group charge associates management fees for expenses incurred and services
rendered. Refer to Note 4.
2. Entities within the Consolidated Group provide funds to other related entities within the Group. These funds are
interest bearing, excluding small working capital advances, and are repayable on demand. See Note 11 for amounts
receivable from related parties and Note 15 for payables to related parties.
These transactions are at normal commercial terms and conditions.
Entities within the Consolidated Group have advanced funds to other related parties
Associates
Related persons/Companies – Shareholder Loan
Loans to association members
2023
$
2022
$
5,912,764
11,682,895
9,147,665
1,817,877
1,864,908
1,472,274
136
AUB GROUP ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
25 RELATED PARTY DISCLOSURES (CONTINUED)
ii)
Transactions with other related parties
Other payables - related parties
Associates
Related persons/Companies – Trust distribution
Related persons/Companies – Shareholder Loan
2023
$
2022
$
2,527,183
1,129,651
1,461,629
8,115,125
859,652
–
Entities within the Consolidated Group provide Shareholder loans to enable key employees to buy into the business (as part of
the Group’s strategy to retain key employees). These loans (except one loan payable in 10 years), are payable within 5 years,
are fully securitised on the shares of the company, and mechanisms for repayments include garnishing rights over associated
dividends.
These transactions are at normal commercial terms and conditions.
Transactions with directors and director-related entities.
iii)
Entities within the Consolidated Group receive fees for arranging insurance cover for directors and/or director related entities.
These transactions are at normal commercial terms and conditions.
Other than disclosed above and in Notes 25(b) and 25(c), there were no other transactions with director or director related
entities.
26 SUBSEQUENT EVENTS
On 22 August 2023, the Directors of AUB Group Limited declared a final dividend on ordinary shares in respect of the 2023
financial year. The total amount of the dividend is $50.95m which represents a fully franked dividend of 47.0 cents per share.
The dividend has not been provided for in the 30 June 2023 financial statements.
27 OTHER POLICIES
Other Policies
For the basis of preparation, significant accounting policies, and changes to accounting refer to Note 2.
For accounting policies on material balances refer to notes above.
Current versus non-current classification
The Group presents assets and liabilities in the Consolidated Statement of Financial Position based on current and non-current
classification.
An asset is current when it is:
– expected to be realised, or intended to be sold, or consumed in the normal operating cycle;
– expected to be realised within twelve months after the reporting period;
– held primarily for the purpose of trading; or
– cash or cash equivalents unless restricted from being exchanged or used to settle a liability for at least twelve months after
the reporting period.
An liability is current when:
– it is expected to be settled in the normal operating cycle;
– it is held primarily for the purpose of trading;
– it is due to be settled within twelve months after the reporting period; or
– there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
The Group classifies all other assets and liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
137
AUB GROUP ANNUAL REPORT 2023
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
27 OTHER POLICIES (CONTINUED)
Deferred acquisition costs
Deferred customer acquisition costs represent costs associated with acquiring a new customer contract where a relationship is bound
by contractual agreement. The costs are capitalised only when they are determined to be recoverable per the customer contract.
Deferred acquisition costs are amortised over the term of the customer contract.
Deferred revenue from contracts with customers
Revenue from broking and agency activities are partially (1%, 2022: 1%) deferred for premium settlement and claims handling services
(1.5%, 2022: 1.5%) and cancellations (5%, 2022: 5%). The amount of deferral is based on historic data (on time and cost such activities)
adjusted for any forward looking anticipated changes, and margin on service of a standalone service (based on available external
data). The revenue is recognised over time, generally 90 days for premium settlement, and within 12 months for claims handling.
Dividends Received
The Group recognises dividends received within the Consolidated Statement of Cash Flows as cash from operating activities.
The Group’s strategy involves investing into other businesses (see Note 7). Cash flows from the Group’s investment in
associates is derived in the form of dividends received. As the Group intends to hold such businesses for the long term,
dividends from associates represents operating cash flows from the Group’s equity investments. The parent actively monitors
dividend payout ratios compared to net profits generated by each business in which the parent has a direct investment.
Leases
The Group has entered into leases for premises, car parking and fixed assets for varying periods of up to seven years. The lease
contracts are recognised on the balance sheet at commencement of the lease, with the exception of short-term leases not
exceeding 12 months and leases of low-value assets. The Group applied practical expedients and the exemptions to short-term
leases and low-value underlying assets available in the accounting standard.
Pursuant to some of its lease agreements, the Group has the option to renew the lease for a period of up to ten years. The Group
has no restrictions placed upon the lessee by entering into these leases. The Group applies judgement and considers all relevant
factors in assessing whether it is reasonably certain to exercise an option. This assessment is performed periodically, and when
the Group is reasonably certain to exercise an option to extend the duration of a lease, that option is then taken into account in
calculating or recalculating the right-of-use asset and lease liability.
Where the Group sub leases a premises, it derecognises the right of use asset and immediately recognising a lease net
investment asset representing the net present value of all future net cash flows expected from the sub lease. Any gain or loss
is charged against profit and loss.
Non-controlling Interests
This is measured at their proportionate share of the identifiable net assets and proportion of goodwill.
Other taxes
Revenues, expenses and assets are recognised net of the amount of Goods and Services Tax (GST)/Value Added Tax (VAT)
except:
– when the GST/VAT incurred on a purchase of goods and services is not recoverable from the taxation authority, in which
case the GST/VAT is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable;
and
– receivables and payables, which are stated with the amount of GST included.
The net amount of GST/VAT recoverable from, or payable to, the taxation authority is included as part of receivables or payables
in the Consolidated Statement of Financial Position.
Cash flows are included in the Consolidated Statement of Cash Flows on a gross basis and the GST/VAT component of
cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority are
classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST/VAT recoverable from, or payable to, the taxation
authority.
138
AUB GROUP ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
27 OTHER POLICIES (CONTINUED)
Property, plant and equipment
Property, plant and equipment, is stated at cost less depreciation and any impairment in value.
Depreciation is calculated on a straight-line over the estimated useful life of the asset as follows:
Motor vehicles: 5 to 8 years;
Plant and equipment: 5 to 10 years.
Impairment
The carrying value of property, plant and equipment is reviewed for impairment at each reporting date, with recoverable amount
being estimated when events or changes in circumstances indicate the carrying value may be impaired.
For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash
generating unit to which the asset belongs. If any such indication exists and where the carrying value exceeds the estimated
recoverable amount, the asset or cash generating unit is written down to their recoverable amount.
Derecognition and disposal
An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits
are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is
derecognised.
28.1 CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES
The accounting policies and methods of computation are the same as those adopted in prior years except for new and amended
accounting standards which came into effect on 1 July 2022.
The 30 June 2023 financial statements, and respective notes to the financial statements have been prepared in accordance with
the new and amended accounting standards. The accounting policies in the notes below have also been updated to reflect the
new and amended accounting standards in effect during the year.
The Group has applied the following standards and amendments for the first time for the annual reporting period commencing
1 July 2022:
– AASB 2020-3 Amendments to Australian Accounting Standards – Annual Improvements 2018-2020 and Other
Amendments; and
– AASB 2021-7 Amendments to Australian Accounting Standards – Effective Date of Amendments to AASB 10 and AASB 128
and Editorial Corrections.
The amendments listed above did not have any material impact on the amounts recognised in prior periods and are not
expected to significantly affect the current or future periods.
28.2 STANDARDS ISSUED BUT NOT YET EFFECTIVE
There are a number of new accounting standards and amendments issued, but not yet effective, none of which have been
early adopted by the Group in this Financial Report. The new standards and amendments (noted below), when applied in future
periods, are not expected to have a material impact on the financial position of the Group.
– AASB 2014-10 Amendments to AASs – Sale or Contribution of Assets between an Investor and its Associate or Joint
Venture.
– AASB 2020-1 and 2020-6 Amendments to AASs – Classification of Liabilities as Current or Non-current.
– AASB 2021-2 Amendments to AASB 108 – Disclosure of Accounting Policies and Definition of Accounting Estimates.
– AASB 2022-1 Amendments to AASs – Initial Application of AASB 17 and AASB 9 – Comparative Information.
– AASB 2021-5 Amendments to AASs – Deferred Tax related to Assets and Liabilities arising from a Single Transaction.
– AASB 2022-6 Amendments to Australian Accounting Standards – Non-current Liabilities with Covenants.
– AASB 2022-8 Amendments to Australian Accounting Standards – Insurance Contracts: Consequential Amendments.
– AASB 2022-9 Amendments to Australian Accounting Standards – Insurance Contracts in the Public Sector.
139
AUB GROUP ANNUAL REPORT 2023 DIRECTORS’ DECLARATION
YEAR ENDED 30 JUNE 2023
In accordance with a resolution of the directors of AUB Group Limited, we state that:
In the opinion of the directors:
a) the financial statements and notes of the consolidated entity are in accordance with the Corporations Act 2001 (Cth),
including:
i. giving a true and fair view of the consolidated entity’s financial position as at 30 June 2023 and of its performance for the
year ended on that date;
ii. complying with Australian Accounting Standard (including the Australian Accounting Interpretations) and the Corporations
Regulations 2001;
b) the financial statements and notes also comply with International Financial Reporting Standards as disclosed in Note 2.1; and
c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and
payable.
d) this declaration has been made after receiving the declarations required to be made to the Directors in accordance with
section 295A of the Corporations Act 2001 (Cth) for the financial year 30 June 2023.
On behalf of the Board
D.C. Clarke
Chair
M. P. C. Emmett
Chief Executive Officer and Managing Director
Sydney, 22 August 2023
Sydney, 22 August 2023
140
AUB GROUP ANNUAL REPORT 2023
INDEPENDENT AUDITOR’S REPORT
Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
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(cid:70)(cid:82)(cid:80)(cid:83)(cid:85)(cid:72)(cid:75)(cid:72)(cid:81)(cid:86)(cid:76)(cid:89)(cid:72)(cid:3)(cid:76)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:15)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:82)(cid:79)(cid:76)(cid:71)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:72)(cid:84)(cid:88)(cid:76)(cid:87)(cid:92)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:82)(cid:79)(cid:76)(cid:71)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:70)(cid:68)(cid:86)(cid:75)(cid:3)(cid:73)(cid:79)(cid:82)(cid:90)(cid:86)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
(cid:92)(cid:72)(cid:68)(cid:85)(cid:3) (cid:87)(cid:75)(cid:72)(cid:81)(cid:3)(cid:72)(cid:81)(cid:71)(cid:72)(cid:71)(cid:15)(cid:3) (cid:81)(cid:82)(cid:87)(cid:72)(cid:86)(cid:3) (cid:87)(cid:82)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3) (cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:15)(cid:3) (cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3) (cid:68)(cid:3) (cid:86)(cid:88)(cid:80)(cid:80)(cid:68)(cid:85)(cid:92)(cid:3) (cid:82)(cid:73)(cid:3) (cid:86)(cid:76)(cid:74)(cid:81)(cid:76)(cid:73)(cid:76)(cid:70)(cid:68)(cid:81)(cid:87)(cid:3) (cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3) (cid:83)(cid:82)(cid:79)(cid:76)(cid:70)(cid:76)(cid:72)(cid:86)(cid:15)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3)
directors’ declaration.(cid:3)
(cid:3)
(cid:44)(cid:81)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:82)(cid:83)(cid:76)(cid:81)(cid:76)(cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:76)(cid:81)(cid:74)(cid:3)(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:42)(cid:85)(cid:82)(cid:88)(cid:83)(cid:3)(cid:76)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:85)(cid:71)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:36)(cid:70)(cid:87)(cid:3)(cid:21)(cid:19)(cid:19)(cid:20)(cid:15)(cid:3)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:76)(cid:81)(cid:74)(cid:29)(cid:3)
(cid:3)
(cid:68)(cid:12)
(cid:42)(cid:76)(cid:89)(cid:76)(cid:81)(cid:74)(cid:3) (cid:68)(cid:3) (cid:87)(cid:85)(cid:88)(cid:72)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:73)(cid:68)(cid:76)(cid:85)(cid:3) (cid:89)(cid:76)(cid:72)(cid:90)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:70)(cid:82)(cid:81)(cid:86)(cid:82)(cid:79)(cid:76)(cid:71)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3) (cid:83)(cid:82)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:42)(cid:85)(cid:82)(cid:88)(cid:83)(cid:3) (cid:68)(cid:86)(cid:3) (cid:68)(cid:87)(cid:3)(cid:22)(cid:19)(cid:3) (cid:45)(cid:88)(cid:81)(cid:72)(cid:3) (cid:21)(cid:19)(cid:21)(cid:22)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:82)(cid:73)(cid:3) (cid:76)(cid:87)(cid:86)(cid:3)
(cid:70)(cid:82)(cid:81)(cid:86)(cid:82)(cid:79)(cid:76)(cid:71)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:83)(cid:72)(cid:85)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:3)(cid:72)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3)(cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:71)(cid:68)(cid:87)(cid:72)(cid:30)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)
(cid:69)(cid:12)
(cid:38)(cid:82)(cid:80)(cid:83)(cid:79)(cid:92)(cid:76)(cid:81)(cid:74)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:36)(cid:88)(cid:86)(cid:87)(cid:85)(cid:68)(cid:79)(cid:76)(cid:68)(cid:81)(cid:3)(cid:36)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:54)(cid:87)(cid:68)(cid:81)(cid:71)(cid:68)(cid:85)(cid:71)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:53)(cid:72)(cid:74)(cid:88)(cid:79)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:21)(cid:19)(cid:19)(cid:20)(cid:17)(cid:3)
(cid:37)(cid:68)(cid:86)(cid:76)(cid:86)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:82)(cid:83)(cid:76)(cid:81)(cid:76)(cid:82)(cid:81)(cid:3)
(cid:58)(cid:72)(cid:3)(cid:70)(cid:82)(cid:81)(cid:71)(cid:88)(cid:70)(cid:87)(cid:72)(cid:71)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:68)(cid:88)(cid:71)(cid:76)(cid:87)(cid:3)(cid:76)(cid:81)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:85)(cid:71)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:36)(cid:88)(cid:86)(cid:87)(cid:85)(cid:68)(cid:79)(cid:76)(cid:68)(cid:81)(cid:3)(cid:36)(cid:88)(cid:71)(cid:76)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:54)(cid:87)(cid:68)(cid:81)(cid:71)(cid:68)(cid:85)(cid:71)(cid:86)(cid:17)(cid:3)(cid:50)(cid:88)(cid:85)(cid:3)(cid:85)(cid:72)(cid:86)(cid:83)(cid:82)(cid:81)(cid:86)(cid:76)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:82)(cid:86)(cid:72)(cid:3)(cid:86)(cid:87)(cid:68)(cid:81)(cid:71)(cid:68)(cid:85)(cid:71)(cid:86)(cid:3)
(cid:68)(cid:85)(cid:72)(cid:3)(cid:73)(cid:88)(cid:85)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:71)(cid:72)(cid:86)(cid:70)(cid:85)(cid:76)(cid:69)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72) Auditor’s Responsibilities for the Audit of the Financial Report(cid:3) (cid:86)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:17)(cid:3)(cid:58)(cid:72)(cid:3)
(cid:68)(cid:85)(cid:72)(cid:3)(cid:76)(cid:81)(cid:71)(cid:72)(cid:83)(cid:72)(cid:81)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:42)(cid:85)(cid:82)(cid:88)(cid:83)(cid:3)(cid:76)(cid:81)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:85)(cid:71)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:88)(cid:71)(cid:76)(cid:87)(cid:82)(cid:85)(cid:3)(cid:76)(cid:81)(cid:71)(cid:72)(cid:83)(cid:72)(cid:81)(cid:71)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3)(cid:85)(cid:72)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:36)(cid:70)(cid:87)(cid:3)
(cid:21)(cid:19)(cid:19)(cid:20) and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 (cid:38)(cid:82)(cid:71)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)
(cid:40)(cid:87)(cid:75)(cid:76)(cid:70)(cid:86)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:51)(cid:85)(cid:82)(cid:73)(cid:72)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:68)(cid:79)(cid:3)(cid:36)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:68)(cid:81)(cid:87)(cid:86)(cid:3)(cid:11)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:44)(cid:81)(cid:71)(cid:72)(cid:83)(cid:72)(cid:81)(cid:71)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3)(cid:54)(cid:87)(cid:68)(cid:81)(cid:71)(cid:68)(cid:85)(cid:71)(cid:86)(cid:12) (cid:11)(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:71)(cid:72)(cid:12)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:85)(cid:72)(cid:79)(cid:72)(cid:89)(cid:68)(cid:81)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:68)(cid:88)(cid:71)(cid:76)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)
(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3)(cid:76)(cid:81)(cid:3)(cid:36)(cid:88)(cid:86)(cid:87)(cid:85)(cid:68)(cid:79)(cid:76)(cid:68)(cid:17)(cid:3)(cid:58)(cid:72)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:68)(cid:79)(cid:86)(cid:82)(cid:3)(cid:73)(cid:88)(cid:79)(cid:73)(cid:76)(cid:79)(cid:79)(cid:72)(cid:71)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:72)(cid:87)(cid:75)(cid:76)(cid:70)(cid:68)(cid:79)(cid:3)(cid:85)(cid:72)(cid:86)(cid:83)(cid:82)(cid:81)(cid:86)(cid:76)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:85)(cid:71)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:71)(cid:72)(cid:17)
(cid:58)(cid:72)(cid:3)(cid:69)(cid:72)(cid:79)(cid:76)(cid:72)(cid:89)(cid:72)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:88)(cid:71)(cid:76)(cid:87)(cid:3)(cid:72)(cid:89)(cid:76)(cid:71)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3)(cid:90)(cid:72)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:82)(cid:69)(cid:87)(cid:68)(cid:76)(cid:81)(cid:72)(cid:71)(cid:3)(cid:76)(cid:86)(cid:3)(cid:86)(cid:88)(cid:73)(cid:73)(cid:76)(cid:70)(cid:76)(cid:72)(cid:81)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:83)(cid:83)(cid:85)(cid:82)(cid:83)(cid:85)(cid:76)(cid:68)(cid:87)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:3)(cid:68)(cid:3)(cid:69)(cid:68)(cid:86)(cid:76)(cid:86)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:82)(cid:83)(cid:76)(cid:81)(cid:76)(cid:82)(cid:81)(cid:17)(cid:3)
(cid:3)
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A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
141
AUB GROUP ANNUAL REPORT 2023
INDEPENDENT AUDITOR’S REPORT
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WWhhyy ssiiggnniiffiiccaanntt
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Group (‘Tysers) at 30 September 2022 for GBP 520m
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(cid:44)(cid:81)(cid:86)(cid:83)(cid:72)(cid:70)(cid:87)(cid:72)(cid:71) the Sale and Purchase Agreement (‘SPA’)
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(cid:68)(cid:86)(cid:86)(cid:72)(cid:86)(cid:86)(cid:72)(cid:71)(cid:3)management’s (cid:69)(cid:68)(cid:86)(cid:76)(cid:86)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:85)(cid:72)(cid:70)(cid:82)(cid:74)(cid:81)(cid:76)(cid:86)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:75)(cid:72)
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(cid:87)(cid:75)(cid:72)(cid:76)(cid:85)(cid:3)(cid:73)(cid:82)(cid:85)(cid:72)(cid:70)(cid:68)(cid:86)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:88)(cid:87)(cid:88)(cid:85)(cid:72)(cid:3)(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:83)(cid:72)(cid:85)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:82)(cid:73)
(cid:55)(cid:92)(cid:86)(cid:72)(cid:85)(cid:86)(cid:17)
(cid:36)(cid:86)(cid:86)(cid:72)(cid:86)(cid:86)(cid:72)(cid:71)(cid:3)the Group’s determination of the fair value
(cid:82)(cid:73)(cid:3)(cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:79)(cid:76)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:75)(cid:72)
Group’s basis for determination of identified
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(cid:58)(cid:76)(cid:87)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:86)(cid:86)(cid:76)(cid:86)(cid:87)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:40)(cid:60)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:86)(cid:83)(cid:72)(cid:70)(cid:76)(cid:68)(cid:79)(cid:76)(cid:86)(cid:87)(cid:86)(cid:15)(cid:3)(cid:90)(cid:72)
reviewed management’s assessment of the fair value
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expert’s valuation report.
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(cid:54)(cid:87)(cid:68)(cid:81)(cid:71)(cid:68)(cid:85)(cid:71)(cid:86)(cid:17)
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
142
AUB GROUP ANNUAL REPORT 2023 INDEPENDENT AUDITOR’S REPORT
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(cid:36)(cid:86)(cid:3)(cid:68)t 30 June 2023, the Group’s statement of financial
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(cid:69)(cid:85)(cid:82)(cid:78)(cid:76)(cid:81)(cid:74)(cid:3)(cid:85)(cid:72)(cid:74)(cid:76)(cid:86)(cid:87)(cid:72)(cid:85)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:69)(cid:85)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:85)(cid:76)(cid:86)(cid:76)(cid:81)(cid:74)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)
(cid:69)(cid:88)(cid:86)(cid:76)(cid:81)(cid:72)(cid:86)(cid:86)(cid:3)(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:71)(cid:88)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:3)(cid:83)(cid:85)(cid:76)(cid:81)(cid:70)(cid:76)(cid:83)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3)(cid:71)(cid:88)(cid:72)(cid:3)
(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:55)(cid:92)(cid:86)(cid:72)(cid:85)(cid:86)(cid:17)(cid:3)
(cid:3)
(cid:36)(cid:81)(cid:3)(cid:76)(cid:80)(cid:83)(cid:68)(cid:76)(cid:85)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:81)(cid:86)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:7)(cid:25)(cid:17)(cid:22)(cid:3)(cid:80)(cid:76)(cid:79)(cid:79)(cid:76)(cid:82)(cid:81)(cid:3)(cid:90)(cid:68)(cid:86)(cid:3)
(cid:85)(cid:72)(cid:70)(cid:82)(cid:74)(cid:81)(cid:76)(cid:86)(cid:72)(cid:71)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:3)(cid:72)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3)(cid:22)(cid:19)(cid:3)(cid:45)(cid:88)(cid:81)(cid:72)(cid:3)(cid:21)(cid:19)(cid:21)(cid:22)(cid:17)(cid:3)(cid:3)
(cid:3)
(cid:44)(cid:81)(cid:3)(cid:68)(cid:86)(cid:86)(cid:72)(cid:86)(cid:86)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:85)(cid:72)(cid:70)(cid:82)(cid:89)(cid:72)(cid:85)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:82)(cid:73)(cid:3)(cid:74)(cid:82)(cid:82)(cid:71)(cid:90)(cid:76)(cid:79)(cid:79)(cid:15)(cid:3)(cid:76)(cid:81)(cid:86)(cid:88)(cid:85)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)
(cid:69)(cid:85)(cid:82)(cid:78)(cid:76)(cid:81)(cid:74)(cid:3)(cid:85)(cid:72)(cid:74)(cid:76)(cid:86)(cid:87)(cid:72)(cid:85)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:69)(cid:85)(cid:68)(cid:81)(cid:71)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:42)(cid:85)(cid:82)(cid:88)(cid:83)(cid:3)(cid:83)(cid:72)(cid:85)(cid:73)(cid:82)(cid:85)(cid:80)(cid:86)(cid:3)(cid:68)(cid:81)(cid:3)
(cid:68)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:3)(cid:76)(cid:80)(cid:83)(cid:68)(cid:76)(cid:85)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:68)(cid:86)(cid:86)(cid:72)(cid:86)(cid:86)(cid:80)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3)(cid:82)(cid:85)(cid:3)(cid:80)(cid:82)(cid:85)(cid:72)(cid:3)(cid:73)(cid:85)(cid:72)(cid:84)(cid:88)(cid:72)(cid:81)(cid:87)(cid:79)(cid:92)(cid:15)(cid:3)(cid:76)(cid:73)(cid:3)
(cid:76)(cid:80)(cid:83)(cid:68)(cid:76)(cid:85)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:76)(cid:81)(cid:71)(cid:76)(cid:70)(cid:68)(cid:87)(cid:82)(cid:85)(cid:86)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:83)(cid:85)(cid:72)(cid:86)(cid:72)(cid:81)(cid:87)(cid:17)(cid:3)(cid:3)
(cid:3)
The Group’s impairment(cid:3)(cid:68)(cid:86)(cid:86)(cid:72)(cid:86)(cid:86)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:76)(cid:81)(cid:89)(cid:82)(cid:79)(cid:89)(cid:72)(cid:86)(cid:3)
(cid:86)(cid:76)(cid:74)(cid:81)(cid:76)(cid:73)(cid:76)(cid:70)(cid:68)(cid:81)(cid:87)(cid:3)(cid:77)(cid:88)(cid:71)(cid:74)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:72)(cid:86)(cid:87)(cid:76)(cid:80)(cid:68)(cid:87)(cid:72)(cid:86)(cid:3)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:76)(cid:81)(cid:74)(cid:29)(cid:3)
(cid:39)(cid:72)(cid:87)(cid:72)(cid:85)(cid:80)(cid:76)(cid:81)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:38)(cid:68)(cid:86)(cid:75)(cid:3)(cid:42)(cid:72)(cid:81)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:56)(cid:81)(cid:76)(cid:87)(cid:86)(cid:3)
(‘CGUs’)(cid:3)
(cid:36)(cid:83)(cid:83)(cid:79)(cid:76)(cid:70)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:53)(cid:72)(cid:89)(cid:72)(cid:81)(cid:88)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:40)(cid:68)(cid:85)(cid:81)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:37)(cid:72)(cid:73)(cid:82)(cid:85)(cid:72)(cid:3)
(cid:44)(cid:81)(cid:87)(cid:72)(cid:85)(cid:72)(cid:86)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:55)(cid:68)(cid:91)(cid:3)(cid:11)(cid:40)(cid:37)(cid:44)(cid:55)(cid:12)(cid:3)(cid:80)(cid:88)(cid:79)(cid:87)(cid:76)(cid:83)(cid:79)(cid:72)(cid:86)(cid:3)
(cid:39)(cid:76)(cid:86)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3)(cid:85)(cid:68)(cid:87)(cid:72)(cid:86)(cid:15)(cid:3)(cid:87)(cid:72)(cid:85)(cid:80)(cid:76)(cid:81)(cid:68)(cid:79)(cid:3)(cid:74)(cid:85)(cid:82)(cid:90)(cid:87)(cid:75)(cid:3)(cid:85)(cid:68)(cid:87)(cid:72)(cid:86)(cid:3)(cid:68)(cid:86)(cid:3)(cid:90)(cid:72)(cid:79)(cid:79)(cid:3)
(cid:68)(cid:86)(cid:3)(cid:85)(cid:72)(cid:89)(cid:72)(cid:81)(cid:88)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:81)(cid:86)(cid:72)(cid:3)(cid:68)(cid:86)(cid:86)(cid:88)(cid:80)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:76)(cid:81)(cid:3)
(cid:39)(cid:76)(cid:86)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:72)(cid:71)(cid:3)(cid:38)(cid:68)(cid:86)(cid:75)(cid:73)(cid:79)(cid:82)(cid:90)(cid:3)(cid:11)(cid:39)(cid:38)(cid:41)(cid:12)(cid:3)(cid:80)(cid:82)(cid:71)(cid:72)(cid:79)(cid:86)(cid:15)(cid:3)(cid:90)(cid:75)(cid:72)(cid:85)(cid:72)(cid:3)
(cid:85)(cid:72)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:71)(cid:17)(cid:3)
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(cid:55)(cid:75)(cid:72)(cid:86)(cid:72)(cid:3)(cid:68)(cid:86)(cid:86)(cid:88)(cid:80)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:86)(cid:88)(cid:69)(cid:77)(cid:72)(cid:70)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:72)(cid:86)(cid:87)(cid:76)(cid:80)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)
(cid:88)(cid:81)(cid:70)(cid:72)(cid:85)(cid:87)(cid:68)(cid:76)(cid:81)(cid:87)(cid:92)(cid:15)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:83)(cid:82)(cid:87)(cid:72)(cid:81)(cid:87)(cid:76)(cid:68)(cid:79)(cid:3)(cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:68)(cid:86)(cid:86)(cid:88)(cid:80)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)
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(cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:86)(cid:17)(cid:3)(cid:36)(cid:70)(cid:70)(cid:82)(cid:85)(cid:71)(cid:76)(cid:81)(cid:74)(cid:79)(cid:92)(cid:15)(cid:3)(cid:90)(cid:72)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:76)(cid:71)(cid:72)(cid:85)(cid:72)(cid:71)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:69)(cid:72)(cid:3)(cid:68)(cid:3)(cid:78)(cid:72)(cid:92)(cid:3)
(cid:68)(cid:88)(cid:71)(cid:76)(cid:87)(cid:3)(cid:80)(cid:68)(cid:87)(cid:87)(cid:72)(cid:85)(cid:17)(cid:3)(cid:3)
(cid:3)
(cid:55)(cid:75)(cid:72)(cid:3)(cid:42)(cid:85)(cid:82)(cid:88)(cid:83)(cid:3)(cid:75)(cid:68)(cid:86)(cid:3)(cid:71)(cid:76)(cid:86)(cid:70)(cid:79)(cid:82)(cid:86)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:49)(cid:82)(cid:87)(cid:72)(cid:3)(cid:21)(cid:17)(cid:20)(cid:11)(cid:71)(cid:12)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:49)(cid:82)(cid:87)(cid:72)(cid:3)(cid:20)(cid:23)(cid:3)
(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:80)(cid:72)(cid:87)(cid:75)(cid:82)(cid:71)(cid:82)(cid:79)(cid:82)(cid:74)(cid:92)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)
(cid:86)(cid:76)(cid:74)(cid:81)(cid:76)(cid:73)(cid:76)(cid:70)(cid:68)(cid:81)(cid:87)(cid:3)(cid:68)(cid:86)(cid:86)(cid:88)(cid:80)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:88)(cid:86)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:76)(cid:80)(cid:83)(cid:68)(cid:76)(cid:85)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)
(cid:68)(cid:86)(cid:86)(cid:72)(cid:86)(cid:86)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:74)(cid:82)(cid:82)(cid:71)(cid:90)(cid:76)(cid:79)(cid:79)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:85)(cid:72)(cid:86)(cid:88)(cid:79)(cid:87)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
(cid:76)(cid:80)(cid:83)(cid:68)(cid:76)(cid:85)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:68)(cid:86)(cid:86)(cid:72)(cid:86)(cid:86)(cid:80)(cid:72)(cid:81)(cid:87)(cid:17)
(cid:36)(cid:86)(cid:86)(cid:72)(cid:86)(cid:86)(cid:72)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:42)(cid:56)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:70)(cid:82)(cid:81)(cid:73)(cid:76)(cid:85)(cid:80)(cid:72)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:76)(cid:85)(cid:3)(cid:88)(cid:86)(cid:72)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
(cid:76)(cid:80)(cid:83)(cid:68)(cid:76)(cid:85)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:80)(cid:82)(cid:71)(cid:72)(cid:79)(cid:15)(cid:3)(cid:69)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3)(cid:82)(cid:81)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:86)(cid:87)(cid:68)(cid:81)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
nature of the Group’s business and management’s
(cid:76)(cid:81)(cid:87)(cid:72)(cid:85)(cid:81)(cid:68)(cid:79)(cid:3)(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:81)(cid:74)(cid:17)(cid:3)
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(cid:68)(cid:69)(cid:82)(cid:89)(cid:72)(cid:3)(cid:46)(cid:36)(cid:48)(cid:15)(cid:3)(cid:90)(cid:72)(cid:3)(cid:68)(cid:86)(cid:86)(cid:72)(cid:86)(cid:86)(cid:72)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:71)(cid:72)(cid:87)(cid:72)(cid:85)(cid:80)(cid:76)(cid:81)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
(cid:76)(cid:81)(cid:76)(cid:87)(cid:76)(cid:68)(cid:79)(cid:3)(cid:85)(cid:72)(cid:70)(cid:82)(cid:74)(cid:81)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:74)(cid:82)(cid:82)(cid:71)(cid:90)(cid:76)(cid:79)(cid:79)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:76)(cid:81)(cid:87)(cid:68)(cid:81)(cid:74)(cid:76)(cid:69)(cid:79)(cid:72)(cid:3)(cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:86)(cid:3)
(cid:68)(cid:85)(cid:76)(cid:86)(cid:76)(cid:81)(cid:74)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)(cid:69)(cid:88)(cid:86)(cid:76)(cid:81)(cid:72)(cid:86)(cid:86)(cid:3)(cid:70)(cid:82)(cid:80)(cid:69)(cid:76)(cid:81)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:71)(cid:88)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:17)(cid:3)(cid:3)
(cid:40)valuated the Group’s process regarding impairment
(cid:68)(cid:86)(cid:86)(cid:72)(cid:86)(cid:86)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:74)(cid:82)(cid:82)(cid:71)(cid:90)(cid:76)(cid:79)(cid:79)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:76)(cid:81)(cid:86)(cid:88)(cid:85)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:69)(cid:85)(cid:82)(cid:78)(cid:76)(cid:81)(cid:74)(cid:3)
(cid:85)(cid:72)(cid:74)(cid:76)(cid:86)(cid:87)(cid:72)(cid:85)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:71)(cid:72)(cid:87)(cid:72)(cid:85)(cid:80)(cid:76)(cid:81)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:81)(cid:92)(cid:3)(cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:3)
(cid:76)(cid:80)(cid:83)(cid:68)(cid:76)(cid:85)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:88)(cid:87)(cid:70)(cid:82)(cid:80)(cid:72)(cid:86)(cid:17)(cid:3)(cid:3)
(cid:36)(cid:86)(cid:86)(cid:72)(cid:86)(cid:86)(cid:72)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:72)(cid:87)(cid:72)(cid:81)(cid:70)(cid:72)(cid:15)(cid:3)(cid:70)(cid:68)(cid:83)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:82)(cid:69)(cid:77)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:76)(cid:87)(cid:92)(cid:3)
of management’s expert who advised management
on EBIT multiples across the Group’s operating
(cid:86)(cid:72)(cid:74)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:15)(cid:3)(cid:74)(cid:72)(cid:82)(cid:74)(cid:85)(cid:68)(cid:83)(cid:75)(cid:76)(cid:70)(cid:68)(cid:79)(cid:3)(cid:85)(cid:72)(cid:74)(cid:76)(cid:82)(cid:81)(cid:86)(cid:15)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:38)(cid:42)(cid:56)(cid:86)(cid:17)(cid:3)(cid:3)
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(cid:68)(cid:86)(cid:86)(cid:72)(cid:86)(cid:86)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:83)(cid:83)(cid:85)(cid:82)(cid:83)(cid:85)(cid:76)(cid:68)(cid:87)(cid:72)(cid:81)(cid:72)(cid:86)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:80)(cid:72)(cid:87)(cid:75)(cid:82)(cid:71)(cid:82)(cid:79)(cid:82)(cid:74)(cid:92)(cid:3)
(cid:88)(cid:86)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:80)(cid:68)(cid:81)(cid:68)(cid:74)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:83)(cid:83)(cid:79)(cid:76)(cid:70)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:40)(cid:37)(cid:44)(cid:55)(cid:3)
(cid:80)(cid:88)(cid:79)(cid:87)(cid:76)(cid:83)(cid:79)(cid:72)(cid:86)(cid:3)(cid:88)(cid:86)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:88)(cid:85)(cid:85)(cid:72)(cid:81)(cid:87)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:3)(cid:76)(cid:80)(cid:83)(cid:68)(cid:76)(cid:85)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)
(cid:70)(cid:68)(cid:79)(cid:70)(cid:88)(cid:79)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:17)(cid:3)(cid:3)
(cid:55)(cid:72)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:80)(cid:68)(cid:87)(cid:75)(cid:72)(cid:80)(cid:68)(cid:87)(cid:76)(cid:70)(cid:68)(cid:79)(cid:3)(cid:68)(cid:70)(cid:70)(cid:88)(cid:85)(cid:68)(cid:70)(cid:92)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:76)(cid:80)(cid:83)(cid:68)(cid:76)(cid:85)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)
(cid:80)(cid:82)(cid:71)(cid:72)(cid:79)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:74)(cid:85)(cid:72)(cid:72)(cid:71)(cid:3)(cid:85)(cid:72)(cid:79)(cid:72)(cid:89)(cid:68)(cid:81)(cid:87)(cid:3)(cid:71)(cid:68)(cid:87)(cid:68)(cid:3)(cid:69)(cid:68)(cid:70)(cid:78)(cid:3)(cid:87)(cid:82)(cid:3)
management’s forecasts, audited year end results
(cid:68)(cid:81)(cid:71)(cid:3)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:86)(cid:88)(cid:83)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:71)(cid:82)(cid:70)(cid:88)(cid:80)(cid:72)(cid:81)(cid:87)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:17)(cid:3)
(cid:36)(cid:86)(cid:86)(cid:72)(cid:86)(cid:86)(cid:72)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:85)(cid:72)(cid:68)(cid:86)(cid:82)(cid:81)(cid:68)(cid:69)(cid:79)(cid:72)(cid:81)(cid:72)(cid:86)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:86)(cid:87)(cid:76)(cid:80)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:88)(cid:86)(cid:72)(cid:73)(cid:88)(cid:79)(cid:3)
(cid:79)(cid:76)(cid:73)(cid:72)(cid:3)(cid:68)(cid:87)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:76)(cid:73)(cid:76)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:76)(cid:81)(cid:86)(cid:88)(cid:85)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:69)(cid:85)(cid:82)(cid:78)(cid:76)(cid:81)(cid:74)(cid:3)
(cid:85)(cid:72)(cid:74)(cid:76)(cid:86)(cid:87)(cid:72)(cid:85)(cid:3)(cid:76)(cid:81)(cid:87)(cid:68)(cid:81)(cid:74)(cid:76)(cid:69)(cid:79)(cid:72)(cid:3)(cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:86)(cid:17)(cid:3)
(cid:36)ssessed the Group’s sensitivity analysis and
(cid:72)(cid:89)(cid:68)(cid:79)(cid:88)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:90)(cid:75)(cid:72)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:68)(cid:81)(cid:92)(cid:3)(cid:85)(cid:72)(cid:68)(cid:86)(cid:82)(cid:81)(cid:68)(cid:69)(cid:79)(cid:92)(cid:3)(cid:73)(cid:82)(cid:85)(cid:72)(cid:86)(cid:72)(cid:72)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)
(cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:3)(cid:76)(cid:81)(cid:3)(cid:68)(cid:86)(cid:86)(cid:88)(cid:80)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:70)(cid:82)(cid:88)(cid:79)(cid:71)(cid:3)(cid:79)(cid:72)(cid:68)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:68)(cid:81)(cid:3)(cid:76)(cid:80)(cid:83)(cid:68)(cid:76)(cid:85)(cid:80)(cid:72)(cid:81)(cid:87)(cid:17)(cid:3)(cid:3)
(cid:36)(cid:86)(cid:86)(cid:72)(cid:86)(cid:86)(cid:72)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:71)(cid:72)(cid:84)(cid:88)(cid:68)(cid:70)(cid:92)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:71)(cid:76)(cid:86)(cid:70)(cid:79)(cid:82)(cid:86)(cid:88)(cid:85)(cid:72)(cid:86)(cid:3)(cid:68)(cid:86)(cid:86)(cid:82)(cid:70)(cid:76)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)
(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:76)(cid:80)(cid:83)(cid:68)(cid:76)(cid:85)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:68)(cid:86)(cid:86)(cid:72)(cid:86)(cid:86)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:49)(cid:82)(cid:87)(cid:72)(cid:3)
(cid:21)(cid:17)(cid:20)(cid:11)(cid:71)(cid:12)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:20)(cid:23)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:17)(cid:3)(cid:3)
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
143
AUB GROUP ANNUAL REPORT 2023
INDEPENDENT AUDITOR’S REPORT
Information other than the Financial Report and Auditor’s Report(cid:3)
(cid:55)(cid:75)(cid:72)(cid:3)(cid:71)(cid:76)(cid:85)(cid:72)(cid:70)(cid:87)(cid:82)(cid:85)(cid:86)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:85)(cid:72)(cid:86)(cid:83)(cid:82)(cid:81)(cid:86)(cid:76)(cid:69)(cid:79)(cid:72)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:76)(cid:81)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:17)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:76)(cid:81)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:85)(cid:76)(cid:86)(cid:72)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:76)(cid:81)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)
the Group’s 2023 Annual Report but does not include the financial report and our auditor’s report thereon.(cid:3)
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In preparing the financial report, the directors are responsible for assessing the Group’s ability to continue as a going
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misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
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Group’s internal control.(cid:3)
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
144
AUB GROUP ANNUAL REPORT 2023
INDEPENDENT AUDITOR’S REPORT
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Conclude on the appropriateness of the directors’ use of the going concern basi(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:68)(cid:81)(cid:71)(cid:15)(cid:3)(cid:69)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3)(cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
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significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertain(cid:87)(cid:92)(cid:3)
exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report
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(cid:82)(cid:69)(cid:87)(cid:68)(cid:76)(cid:81)(cid:72)(cid:71)(cid:3)(cid:88)(cid:83)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:71)(cid:68)(cid:87)(cid:72)(cid:3)(cid:82)f our auditor’s report. However, future events or conditions may cause the Group to
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(cid:68)(cid:88)(cid:71)(cid:76)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:88)(cid:85)(cid:85)(cid:72)(cid:81)(cid:87)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:85)(cid:72)(cid:73)(cid:82)(cid:85)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:78)(cid:72)(cid:92)(cid:3)(cid:68)(cid:88)(cid:71)(cid:76)(cid:87)(cid:3)(cid:80)(cid:68)(cid:87)(cid:87)(cid:72)(cid:85)(cid:86)(cid:17)(cid:3)(cid:58)(cid:72)(cid:3)(cid:71)(cid:72)(cid:86)(cid:70)(cid:85)(cid:76)(cid:69)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:86)(cid:72)(cid:3)(cid:80)(cid:68)(cid:87)(cid:87)(cid:72)(cid:85)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)
our auditor’s report unless law or regulation preclud(cid:72)(cid:86)(cid:3)(cid:83)(cid:88)(cid:69)(cid:79)(cid:76)(cid:70)(cid:3)(cid:71)(cid:76)(cid:86)(cid:70)(cid:79)(cid:82)(cid:86)(cid:88)(cid:85)(cid:72)(cid:3)(cid:68)(cid:69)(cid:82)(cid:88)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:80)(cid:68)(cid:87)(cid:87)(cid:72)(cid:85)(cid:3)(cid:82)(cid:85)(cid:3)(cid:90)(cid:75)(cid:72)(cid:81)(cid:15)(cid:3)(cid:76)(cid:81)(cid:3)(cid:72)(cid:91)(cid:87)(cid:85)(cid:72)(cid:80)(cid:72)(cid:79)(cid:92)(cid:3)(cid:85)(cid:68)(cid:85)(cid:72)(cid:3)
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A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
145
AUB GROUP ANNUAL REPORT 2023
INDEPENDENT AUDITOR’S REPORT
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(cid:58)(cid:72)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:68)(cid:88)(cid:71)(cid:76)(cid:87)(cid:72)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:53)(cid:72)(cid:80)(cid:88)(cid:81)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:83)(cid:68)(cid:74)(cid:72)(cid:86)(cid:3)(cid:21)(cid:25)(cid:3)(cid:87)(cid:82)(cid:3)(cid:24)(cid:20)(cid:3)of the Directors’ Report for the year ended 30
(cid:45)(cid:88)(cid:81)(cid:72)(cid:3)(cid:21)(cid:19)(cid:21)(cid:22)(cid:17)(cid:3)
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Ernst & Young
Ernst & Young
Michael Wright
Partner
Sydney
22 August 2023
Stacey Hooper
Partner
Sydney
22 August 2023
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
146
AUB GROUP ANNUAL REPORT 2023 ASX ADDITIONAL INFORMATION
YEAR ENDED 30 JUNE 2023
Additional information required by the ASX and not shown elsewhere in this report is as follows. The information is current as at
28 July 2023.
A) DISTRIBUTION OF EQUITY SECURITIES
Ordinary share capital
– 108,405,620 fully paid ordinary shares are held by 4,314 individual shareholders. All issued shares carry one vote per share
and carry the rights to dividends.
– 9,018,974 fully paid ordinary shares are subject to voluntary escrow until 30 September 2024.
– 229,666 fully paid ordinary shares are subject to voluntary escrow until 20 July 2024.
Performance Share Rights (PSRs)
– 698,630 PSRs are held by 6 individual holders. PSRs do not carry a right to vote.
Share Appreciation Rights (SARs)
– 1,016,776 SARs are held by 3 individual holders. SARs do not carry a right to vote.
There is no current on-market buy-back.
The number of security holders, by size of holding, in each class are:
Range of shareholding
100,001 and over
10,001 – 100,000
5,001 – 10,000
1,001 – 5,000
1 – 1,000
Number of
shareholders
Fully paid
ordinary
shares
Fully paid
ordinary
shares (%)
28 100,294,003
93%
138
201
3,448,087
1,451,712
1,020
2,329,137
2,927
882,681
3%
1%
2%
1%
4,314
108,405,620
100%
Holding less than a marketable parcel
146
The number of PSRs and SARs holders, by size of holding, in each class are:
Range of holding
100,001 and over
10,001 – 100,000
5,001 – 10,000
1,001 – 5,000
1 – 1,000
Holders of
PSRs
Number of
PSRs
% of PSRs
Holders of
SARs
Number of
SARs
% of SARs
2
3
1
–
–
6
537,808
153,651
7,171
–
–
77%
22%
1%
–
–
698,630
100%
3
–
–
–
–
3
1,016,776
100%
–
–
–
–
–
–
–
–
1,016,776
100%
147
AUB GROUP ANNUAL REPORT 2023
ASX ADDITIONAL INFORMATION
YEAR ENDED 30 JUNE 2023
B) SUBSTANTIAL SHAREHOLDERS
The following organisations have disclosed a substantial shareholding notice to ASX.
Integro Parent Inc.
Challenger Limited
The Capital Group Companies, Inc
Date of Notice
Number
Fully Paid
Percentage
30 September 2022
9,018,974
5 October 2022
6,609,247
27 April 2022
3,726,876
8.88%
6.51%
5.01%
C) TWENTY LARGEST HOLDERS OF ORDINARY SHARES
Ordinary shareholders
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CITICORP NOMINEES PTY LIMITED
INTEGRO PARENT INC
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMINEES PTY LTD
WASHINGTON H SOUL PATTINSON & COMPANY LIMITED
AUSTRALIAN FOUNDATION INVESTMENT COMPANY LIMITED
BOND STREET CUSTODIANS LIMITED
MASFEN SECURITIES LIMITED
MIRRABOOKA INVESTMENTS LIMITED
NETWEALTH INVESTMENTS LIMITED
MRS GAELEEN ENID ROUVRAY
JACOBS FLORENTINE TRUSTEES LIMITED
DCRM PTY LTD
GOTTLIEB PTY LTD
PACIFIC CUSTODIANS PTY LIMITED
INVIA CUSTODIAN PTY LIMITED
MARKEY INVESTMENTS PTY LTD
MR STEPHEN SPENCE ROUVRAY
Number
Fully paid
Percentage
34,573,139
31.89%
23,681,637
21.85%
16,027,643
14.78%
9,018,974
6,139,245
4,498,490
1,839,810
1,662,309
732,730
602,088
439,500
356,343
236,723
229,666
210,669
210,669
209,562
206,251
148,709
147,805
8.32%
5.66%
4.15%
1.70%
1.53%
0.68%
0.56%
0.41%
0.33%
0.22%
0.21%
0.19%
0.19%
0.19%
0.19%
0.14%
0.14%
101,171,962
93.33%
148
AUB GROUP ANNUAL REPORT 2023
DIVIDEND DETAILS
YEAR ENDED 30 JUNE 2023
DIVIDEND DETAILS
Dividend
Interim
Final
Amount
Franking
Ex Date
Record Date
Payment Date
17.0c Fully Franked
1/03/2023
2/03/2023
4/04/2023
47.0c Fully Franked
7/09/2023
8/09/2023
9/10/2023
149
AUB GROUP ANNUAL REPORT 2023 CORPORATE INFORMATION
This annual report covers the consolidated entity comprising AUB Group Limited and its subsidiaries. The Group’s functional and
presentation currency is AUD($).
A description of the Group’s operations and of its principal activities is included in the operating and financial review in the
Directors’ report on pages 13-15.
DIRECTORS
D. C. Clarke (Chair)
M. P. C. Emmett (Chief Executive Officer and Managing Director)
R. D. Deutsch
P. G. Harmer
A. J. Kendrick
P. A. Lahiff
R. J. Low
C. L. Rogers
COMPANY SECRETARIES
R. H. Bell
E. M. McGregor
ANNUAL GENERAL MEETING
The Annual General Meeting of AUB Group Limited will be held on Thursday 2 November 2023 at 10.00am.
REGISTERED OFFICE AND PRINCIPAL PLACE OF BUSINESS
AUB Group Limited
Level 14, 141 Walker Street
North Sydney NSW 2060
P: + 61 2 9935 2222
W: www.aubgroup.com.au
ACN: 000 000 715
SHARE REGISTRY
Link Market Services Limited
Level 12, 680 George Street
Sydney NSW 2000
P: 1800 194 270
W: www.linkmarketservices.com.au
AUB Group Limited shares are listed on the Australian Securities Exchange (ASX: AUB)
AUDITOR
Ernst & Young
200 George Street
Sydney NSW 2000
150
AUB GROUP ANNUAL REPORT 2023 www.aubgroup.com.au