Annual Report
2022
Enero Annual Report 2022 Contents
Further, Faster
03
Financial Report
25
A letter from our Chair
A letter from our CEO
Financial Highlights
Geographical Results
Client Analysis
Brand Transformation
Creative Technology and Data
Environmental, Social
and Governance
Board of Directors
04
05
06
07
08
10
16
21
22
Directors’ Report
(including the Remuneration Report) 26
Consolidated income statement 44
Consolidated statement
of comprehensive income
Consolidated statement
of changes in equity
Consolidated statement
of financial position
Consolidated statement
of cash flows
Notes to the consolidated
financial statements
Directors’ Declaration
Independent Auditor’s Report
Lead Auditor’s Independence
Declaration
ASX additional information
Corporate Directory
45
46
47
48
49
91
92
99
100
101
1
Enero Annual Report 2022 Further,
Faster
Enero is a specialist
collective of companies.
We accelerate brands and businesses using deep
expertise and knowledge in technology, healthcare
and high growth consumer verticals, to create
transformational customer experiences. We operate
in 11 countries and 15 cities, with over 750 employees.
As we set the benchmark for change, with informed
optimism, we provide deep functional expertise and
support through our global centres of excellence
in People and Culture, Finance, Technology, M&A
and Legal.
This enables our agency leaders to build deep and
enduring client relationships, driving repeatable revenue,
with almost 50% of our clients having a relationship
within the Enero group for six years or longer.
Our differentiated offering aims to set the benchmark
for the industry, and will continue to separate us
from our competitors; but most importantly deliver
groundbreaking and effective results for our clients.
3
And we are just getting started, as we go further, faster.
Each of the businesses within Enero support each other
to push the boundaries of Brand Transformation and
Creative Technology and Data. Our clarity of strategy
and ability to relentlessly execute are demonstrated
by consistent results delivered through our operating
framework and business portfolio. Ongoing refinement
of our business capabilities ensures we continually
deliver world-class expertise to our clients.
We consistently attract some of the finest minds
in the industry, whose creative ideas transform
customer and stakeholder experiences, connections,
and engagements with our clients’ brands.
Our NPS scores continue to increase, despite the
challenge of a highly competitive hiring environment,
reflecting our commitment to our team and our high
performance and flexible culture.
A letter from our Chair
Dear Shareholders,
I am pleased to present the Company’s 2022 Annual
Report. The 12 months ended 30 June 2022 (FY22)
was another outstanding year for the Enero Group.
Our strong portfolio of global businesses have again
delivered strong operational results with significant
growth across all key financial metrics:
• Net Revenue increasing 20% to $193.4 million
• Operating EBITDA increasing 36% to $62.2 million
• Net profit increasing 19% to $27.1 million
• Earnings per share increasing 17% to 30.9 cents.
These results contribute to the Company’s sustainable
growth trajectory over the past five years, which is an
impressive result.
Over recent years, businesses have needed to rapidly
evolve, become smarter and embrace the role of digital
transformation in order to futureproof and thrive. Enero
has benefited from its unique client facing proposition,
progressive capability and deep vertical expertise,
to accelerate clients’ digital transformation needs,
underpinning our strong growth across the Group’s
portfolio of companies.
During FY22, Enero’s leadership team continued to
relentlessly focus on the execution of a clear strategic
framework, in place for the second year. We remain
focused on two strategic segments with high growth
potential – Brand Transformation and Creative Technology
and Data.
We have delivered solid net revenue growth from
all agencies, with BMF delivering a record year and
celebrating a 25th birthday anniversary. The strong
results delivered from our Creative Technology and
Data segment were underpinned by organic growth
in OBMedia and Orchard, with OBMedia’s strong
performance reflecting our strong search engine
partnerships.
On 1 July 2022, Enero strengthened our global
network with the acquisition of ROI DNA and GetIT.
With the acquisition of ROI DNA and the acquisition
in 2021 of McDonald Butler, Hotwire is building scale
and strengthening capabilities in NA, Europe and Asia.
In FY22 we launched our ‘Reputation, Relationship,
Revenue’ service framework, as we continue to position
Hotwire as the pre-eminent global tech communications
consultancy.
With a strong balance sheet, Enero Group retains flexibility
to pursue its growth strategy as we look to continue to
capture market share in high growth verticals.
Reflecting on the Company’s growth in FY22, strong
balance sheet, and attractive growth opportunities,
the Board declared a total FY22 dividend of 12.5 cents
per share, fully franked, reflecting our commitment to
ensuring shareholders share in Enero’s success.
I would like to thank my fellow Board members for their
continued commitment to Enero throughout FY22. Their
expertise and independent judgement have been vital in
progressing the Company’s growth strategy. On behalf
of the Board, I would also like to thank our talented team
for their diligence and dedication to our clients and to
each other. I would also like to acknowledge the efforts
of Brent Scrimshaw and the executive team, who are
executing on our strategy and building a diversified
portfolio of marketing and communications agencies
with substantial scope to grow our businesses globally
in FY23 and beyond.
Finally, I would like to thank you, our shareholders,
for your continued support of Enero.
Yours sincerely,
Ann Sherry AO
Chair
Enero Annual Report 2022 A letter from our CEO
Dear Shareholders,
Progressing our strategic priorities
On behalf of the entire team I am proud to report that
Enero continued to thrive in FY22, delivering exceptional
results for our clients and our shareholders.
Our financial performance is a direct result of the
focused execution of our operating strategy. Pleasingly,
our growth was supported by our diversified revenue
base around the world and across our portfolio, with
all businesses in the Group contributing profit.
It was also rewarding to see the team’s efforts during
the year translate into strong financial results, continuing
our track record of sustainable growth.
Strong growth across portfolio businesses
With the deep expertise of our portfolio of specialist
agency brands, we continue to focus on accelerating
clients’ digital transformation in the high-growth global
verticals of technology, healthcare and consumer
through our two operating segments – Brand
Transformation, and Creative Technology and Data.
Revenue within Brand Transformation was up 11% to
$106.7 million. Hotwire benefited from its ‘Reputation
to Revenue’ service offering resonating across all
geographies and in its 25th year, BMF delivered a
number of high profile government COVID vaccine
campaigns in H1 FY22, as operating EBITDA margins
grew despite some wage pressure and the return of
travel in order to re-connect with our teams.
Creative Technology and Data revenue was up 34%
to $86.7 million. OBMedia experienced strong growth
from the continued enhancement of its media
buying capabilities, machine learning and additional
sophistication in its data science capabilities. Orchard
was also the most awarded agency at the 2021 PRIME
Healthcare Marketing Awards reflecting its innovative
thought leadership in the healthcare marketing space.
In FY22 the team made significant progress on the
four key priorities that continue to guide our global
growth ambition.
We continued to expand our capabilities and
transformed Hotwire’s unique offering through the
recent acquisitions of ROI DNA, a strategic B2B sales
and marketing agency, and GetIT, a specialist B2B
technology marketing agency – which provides a truly
global network for the Hotwire group from 1 July 2022.
As we continue to serve the needs of forward-thinking
brands, we also unlock the digital transformation and
analytics marketplace, which, when combined with the
traditional Marketing Services market, provides a total
addressable market of $1.2 trillion.
5
During FY22, we also continued to improve productivity
and profitability through the implementation of technology
and processes. This has been reflected in our strong
underlying operating EBITDA growth. We also retain
strategic flexibility with a net cash balance of $52.4 million,
to support our long-term growth and innovation plans.
Thank you
On behalf of Enero’s Executive Leadership team, I would
like to thank all of our 750 talented team members around
the world for their dedication throughout the year. I would
also like to express my gratitude to the Enero Executive
team and my appreciation to the Enero Board, led by
Ann Sherry AO, for its continued counsel and guidance
as we take the next step in accelerating our business
on a global scale. Finally, I would like to thank you, our
shareholders, for your ongoing support and confidence
in our strategic ambitions.
Having delivered another strong result in FY22 Enero
is well placed to continue its growth trajectory into
FY23 and beyond.
Yours sincerely,
Brent Scrimshaw
Chief Executive Officer
Financial Highlights
Net Revenue
up 20%
$193.4m
Operating EBITDA
up 36%
$62.2m
Operating
EBITDA margin
up 380bpt
32%
Net Profit
After Tax before
significant items
up 19%
$27.1m
Earnings per
Share before
significant items
up 17%
30.9CPS
FY22 Dividends
12.5CPS
Enero Annual Report 2022 Geographical Results
Enero has offices around the world;
with affiliates in key markets where
we have client relationships.
London
Madrid
Paris
Milan
Munich
Frankfurt
Amsterdam
Seoul
Taipei
Jakarta
Singapore
Tokyo
Hong Kong
Beijing
Shanghai
7
San Francisco
New York
Chicago
Houston
Minneapolis
Sao Paulo
Dubai
Includes 51% economic interest in OBMedia:
USA
UK and
Europe
Australia
36%
Net Revenue
FY22
22%
Net Revenue
FY22
42%
Net Revenue
FY22
30%
Net Revenue
FY21
25%
Net Revenue
FY21
45%
Net Revenue
FY21
58%
Operating
EBITDA FY22
16%
Operating
EBITDA FY22
26%
Operating
EBITDA FY22
Sydney
Melbourne
48%
Operating
EBITDA FY21
19%
Operating
EBITDA FY21
33%
Operating
EBITDA FY21
Client Analysis
Revenue Diversification
Enero revenue is diversified across both industry and
geography. Our largest share of revenue came from
the Information Technology sector, at 37% penetration
predominately B2B; Technology in sustainable growth
segments including cloud computing, security and digital
transformation. Other key areas of strategic focus include:
Digital Media (19%), Healthcare (12%) and Retail (12%).
In FY22 we invested in additional systems and
capability to support our global growth, which
is reflected in a balanced contribution from Brand
Transformation, up 11%; and Creative Technology
& Data, up 34% in net revenue year on year,
representing 20% growth as a Group.
We have minimised our exposure to a changing
marketplace, with a 50:50 project and retainer split
in FY22 across agencies. This is also reflective
of our deep and lasting relationships with clients,
66% of whom have been with the Enero Group for
four years or longer.
37% Information Technology
19% Digital Media
12% Health Care
12% Retail
10% Service
4% Transportation, Airlines and Auto
3% Finance
2% Consumer Goods
1% Other
Enero Annual Report 2022 9
Brand
Transformation
FY21 $95.9m
FY22 Net Revenue
up 11%
$106.7m
FY21 $21.3m
FY22 Operating EBITDA
up 14%
$24.2m
FY21 22%
FY22 Operating
EBITDA margin
up 100bpt
23%
Enero Annual Report 2022 Human generated ideas that
transform the way customers
and stakeholders connect
and engage with brands.
Brand Transformation drives business success by
creating thoughtful, distinctive ideation which supports
long-term and tactical business communication needs
for our clients.
Our Brand Transformation specialist teams are Hotwire,
BMF and CPR. Each leads rapid revolution of our clients
through world-class talent.
Human-led creative ideas
Hotwire creates Brand Transformation for the
worlds’ best tech clients, using the unique Revenue,
Relationship and Reputation services framework.
The team solves increasingly complex client problems
– transforming data into integrated communications
driven by distinctive narratives. Brand Identity,
Account Based Marketing, Data & Analytics, PR &
Communications and Digital Marketing programs ignite
innovative business outcomes for its global client base.
BMF delivers Brand Transformation by creating lasting
relationships between brands and consumers. Their
‘long ideas’ drive long-term commercial effectiveness,
social change, and enduring client relationships.
CPR drives transformation for Government relations and
strategic communications. Its unique expertise informs
every story, from media advisory from former journalists,
to political advice from former Ministerial advisers.
11
Meaningful connections and engagement
Awarded Brand Transformations
Hotwire has been recognised with campaign
and agency awards, including ITSMA Gold Award
for Marketing Excellence, and Finalist for PRovoke
North American Technology Agency of the Year.
BMF is consistently recognised as one of the world’s
top performing creative agencies, with awards including
2022 Spikes Asia Creative Effectiveness Grand Prix,
2021 WARC #1 Most Effective Creative Agency
in Australia, (#3 Globally), 2021 B&T NSW Agency
of the Year, 2021 Mumbrella Culture Award, and
the 2021 Platinum Tangrams Effectiveness Award.
CPR attracts hundreds of millions of dollars in
investment for clients at a Federal and State level,
ranging from funding to revive the tourism economy,
through to investment in local rapid antigen test
production, and air purifier procurement to support
a safe return to school and work.
Hotwire delivers meaningful connections in tech
centres globally. On the ground relationships with
media, influencers, analysts and target accounts
help clients drive engagement through tech expertise
including the Metaverse, NFTs, and cyber threats; and
corporate reputational topics like diversity, equity and
inclusion, ESG, and the future of work. Hotwire connects
clients to new revenue opportunities by helping them
take the lead on new technology narratives before they
become mainstream, through ongoing relationships
with tech C-Suite, influencers, media, analysts, emerging
VC-backed companies, and product developers in fast
growth businesses. Hotwire create engagement through
informed opinions on emerging innovations; knowing
which ones will break through – and how.
BMF specialists use neuroscience, behavioural
economics, communications strategy, creativity,
CxRM, customer experience and high quality
production, to deliver engaging advertising across
broadcast, digital and social screens. They drive long-
term connections with iconic brand advertising for
clients including Tourism Tasmania, REST Super,
ALDI Australia, The Australian Government, Tip Top,
and the Department of Social Services.
CPR intersects knowledge, networks and experience
across three core disciplines – Issues Management,
Government Relations, and Public Relations – to create
meaningful engagement with complex regulatory
conversations, which attract political and public
scrutiny. It supports global and Australian brands in
dynamic sectors including health and medical research,
technology, energy, education and financial services.
Enero Annual Report 2022 Case Study
Cloudera:
Driving Credibility for a Vital
Diversity and CSR Program
Challenge
Cloudera’s CEO Rob Bearden stated publicly that his
company’s commitment to take deliberate and decisive
action to address inequality in its workplaces and
communities is very important to him – both personally
and as the leader of a global organisation.
Strategy
As part of this commitment from the top, Cloudera’s
executive team looked within the organisation and
elevated the then Head of Diversity, Inclusion and
Learning, Sarah Shin, to the newly created position of
Chief Diversity Officer. Before the announcement of
Sarah’s promotion, Hotwire worked closely with her
to develop her thought leadership platform, personal
narrative, and internal and external communication
strategy, which enabled her to share her vision during
All Hands and Sales Kick Off meetings; and grow her
organisation.
Sarah and the Global Communications Team recognised
the impact of the pandemic on young students and their
learning. This led Cloudera to want to make AI more
accessible for young students.
Execution
Hotwire spent time with the CSR team to help evolve
and align their vision and activities globally, which led
to a successful ‘Global Day of Service’ for employees.
Hotwire introduced Cloudera to a well established
children’s STEAM author and publisher, Ready AI. The
two companies co-authored a book for 8-10-year-olds,
Fresh Squeeze on Data.
Hotwire also introduced Cloudera to the Boys & Girls
Club to sponsor a summer camp STEAM program and
share the book with camp attendees. The Hotwire
driven Cloudera CSR program has been a connected
thread through communications, programs and activities,
with a consistent narrative in messaging, content and
executive communications, both internally and externally.
The work also guided brand communications and
messaging within the global organisation and continues
to serve as a foundation of the CSR program today.
The Cloudera DE&I Program
July 2021:
75% complete
Pay Equity Study
Running a pay equity study to understand
where Cloudera relates to the trends present
in the industry, and addressing any gaps.
100% complete
Chief Diversity Office
Added a Chief Diversity Officer
to the executive leadership team.
Centre of Excellence Partnership
Partnered with the Boys & Girls Club
to sponsor an educational workspace for
under-represented high school minorities.
Diversity and Inclusion
External publishing of Cloudera’s
Diversity and Inclusion metrics.
13
The book has now been translated into
various languages and is available in:
48 different countries
586 school systems
across the globe
Case Study
Department of Social Services:
Stop It At The Start
Challenge
Execution
Phase 1
Recognise the link between disrespect
and end-stage violence.
Phase 2
Reconcile it to everyday behaviours that permit
and enable disrespect.
‘You’re teaching disrespect’
Phase 3
Respond in a moment of disrespect.
‘Unmute Yourself’
Phase 4
Reinforce respect – About how conversations around
dis/respect set up an enduring culture of respect.
‘Bring up Respect’
Violence against women is at epidemic proportions
in Australia.
• One-third of women have been a victim of physical
or sexual violence since the age of 15, by someone
known to them.
• One-quarter of young people are prepared to excuse
violence from a partner.
Research showed violence in men grows from attitudes
learned from a young age. To break this cycle in future
generations, we need to address the underlying cause
– the disrespect towards girls and women that can grow
into violence; and to target people who influence 10
to 17-year-old Australians – parents, teachers, sports
coaches and peers – to recognise the link between
gender inequality, disrespect and violence.
This task is made difficult by multiple barriers.
Firstly, influencers value ‘respect’ meaning they are
blind to how their ‘innocent’, everyday behaviours
permit disrespect that could result in violence later
on. Next, intervening in a moment of disrespect carries
social risk. The need is to increase self confidence to
intervene in a moment of disrespect by making it feel
normal. And, more recently, ongoing conversations
promoting respect can feel burdensome. BMF must
find a role for conversations around dis/respect that
feel everyday and natural. In some ways, it is the mother
of all the talks we all have in our formative years.
Strategy
A long-term, primary prevention, behaviour change
campaign targeting influencers and our children.
First, about stopping problem behaviours that lead
to disrespect and now evolving into starting positive
behaviours that build a culture of respect.
It is considered one of the Australian Federal
Government’s most successful campaigns, centred
around bridging The Value-Action Gap – a behaviour
change theory.
The Long Idea is: Stop It At The Start. This is a rallying
call to address violence against women at the seed
of the problem: disrespect. In order to get influencers
to understand the connection and act, BMF steps out
the change, over seven years.
Enero Annual Report 2022 Case Study
Tourism, Medical and Health Industries:
Engaging Government on policy,
regulation and funding
Challenge
During the pandemic, when public health-led decisions
on border closures and lockdowns radically disrupted
business and social outcomes, the ability to engage
with government became transformational; and
business critical.
Federal, State and local governments changed
and accelerated traditional policy and grant-making
processes to provide urgent support to individuals
and businesses in financial distress, and to capture
emerging opportunities to underpin a disrupted
economy.
The Federal Government’s economic response to COVID
was $291 billion in the 2021/22 Budget; while multi-
billion dollar allocations to support economic recovery
and revitalisation were made by State governments,
creating a lifeline for local businesses.
The Victorian tourism sector was one of the hardest
hit by COVID. Total tourism expenditure in Victoria was
$16.5 billion in March 2022, 45% below pre-COVID levels.
Strategy
Headquartered in Melbourne, which endured some of
the longest COVID lockdowns in the world, CPR helped
clients to connect to government decision makers and
influence policy development.
CPR worked closely with the Victoria Tourism Industry
Council to highlight challenges facing the sector, and
develop and publicise a range of recovery initiatives.
This helped inform a series of funding announcements,
including a Regional Tourism Support Package, and a
$200 million stimulus package to entice Victorians back
to food and hospitality venues.
CPR also worked with major health services including
Cancer Council Victoria and St John Ambulance to
engage with government about the knock-on effects
of COVID, such as delayed testing and diagnoses of
disease, major workforce shortages, hospital bed
shortages and health transport challenges.
15
Execution
As lockdowns lifted, CPR arranged face-to-face
meetings and site visits for clients with Ministers,
Shadow Ministers and Members of Parliament –
including the now Prime Minister, Anthony Albanese.
These bring industry and government closer together
to identify and unlock economic opportunities that drive
innovation and job creation.
CPR worked with Regional Cities Victoria, a peak group
representing the 10 largest Councils outside Melbourne,
in support of a successful bid for the 2026 Commonwealth
Games. In a world first, the Games will be dispersed
across regional locations rather than centralised.
This will deliver a boost to the Victorian economy of
$3 billion
and outside metropolitan Melbourne, a legacy of
affordable housing
+ new infrastructure
Creative
Technology
and Data
FY21 $64.7m
FY22 Net Revenue
up 34%
$86.7m
FY21 $31.8m
FY22 Operating EBITDA
up 53%
$48.6m
FY21 49%
FY22 Operating
EBITDA margin
up 700bpt
56%
Enero Annual Report 2022 Pioneering innovative technologies
Orchard continues to invest in critical business growth
areas across data analytics with deep specialisation
in key platforms including Salesforce, Adobe, Kentico
and Optimizely. Orchard delivers a unique business
transformation approach for brands who want a
consultancy mindset with the delivery efficiencies
of technology savvy and data-led outcome.
Winning Creative Technologies
Orchard continued its momentum in FY22 with 14 new
client wins and extensive industry recognition including
B&T and Mumbrella finalist nominations, Webby Awards
Honours, and winning the most awards of any healthcare
agency group at the most recent PRIME Awards; while
OBMedia won the Excellence in Quality award from
Microsoft for the second year in row.
17
High quality customer
experiences connected
through technology and
enabled by data.
Our Creative Technology specialists at Orchard and
OBMedia use technology to connect; and data to enable
cohesive narratives and consumer experiences. World-
class creative ideas deliver results from lead generation
to loyalty; through online and in-person experiences
that connect every moment on the customer journey.
Reimagining creative connections
Orchard’s channel agnostic teams pioneer innovative
ways to experience everything – from buying a car, to
connecting pharmaceutical companies with clinicians
and helping patients discover new treatments.
OBMedia’s media buyers are empowered by innovative
proprietary technology to effectively price and adjust
bids, in near real time on expertly selected ad placements
from sources including Facebook, TikTok, Google Display
Network and Taboola. This allows them to deliver ROI for
advertisers in a safe environment for partner brands and
end users to operate.
Case Study
Powering digital advertising
growth through ADTech
Challenge
Execution
Search-based advertisers continue to look for new
sources of growth. They seek cost-effective, high
intent audiences that deliver on business needs,
and to reduce the impact of fraudulent bot traffic.
OBMedia has unique and proprietary technology,
machine learning, automation and partnerships that
enable it to deliver outstanding value to advertisers
and publishers. Its key areas of differentiation are:
Strategy
OBMedia is a digital advertising technology platform
that drives high-quality and high-intent traffic to search-
based advertisers. OBMedia leverages its proprietary
technology, exclusive search partnerships and deep
data analytics expertise to fuel demand for advertisers.
OBMedia’s business is focused on:
• targeting high-value consumers from digital
publishers, ad networks and social channels
with dynamic, creative and relevant content
• qualifying the intent of those consumers
through proprietary data science techniques
• providing the most relevant search-based advertising
results that match consumers’ needs
OBMedia derives its revenue from quality audiences
delivered to advertiser websites.
Leading optimisation technology
Providing the most relevant ads for
target audiences
Unmatched fraud monitoring
Filtering bot traffic to protect value
for partners
Powerful technology stack
Real-time data, system resiliency
and rapid new product development
Deep data science
Powering responsive campaign
analytics, privacy compliance and
end-to-end conversion tracking
OBMedia continues to invest in capabilities that fuel
growth for partners and in turn OBMedia. In FY22
OBMedia enhanced campaign optimisation capabilities
and platform development to drive more informed traffic
acquisition. At the same time, OBMedia continued
to refine its fraud monitoring capabilities – critical to
maintaining OBMedia’s class-leading bot detection
rates and trusted status with key partners.
Results
OBMedia delivered outstanding results for advertising
partners in FY22, with a 30% increase in traffic conversion
and 120% increase in consumers delivered to advertisers:
285m consumers delivered
to advertisers’ websites
120% increase, compared to FY21
Enero Annual Report 2022 Case Study
Collaborative Care for COPD:
COPD Connect
Challenge
Chronic obstructive pulmonary disease (COPD)
is a major health burden in Australia and is the second
most common cause of potentially preventable
hospitalisations. It causes at least moderate
symptoms in 29% of Australians aged ≥75 years.
Boehringer Ingelheim wanted a fresh approach to
CPD-accredited COPD medical education with a highly
interactive series of 60 educational meetings for GPs
to bring new interest to a saturated education sphere.
Strategy
Rather than focusing solely on the role of the GP in
diagnosing and managing COPD, we focused instead
on how GPs were the hub of a much wider COPD care
team that included nurses, pharmacists, physiotherapists,
nutritionists, etc.
By considering how each member of the multidisciplinary
team connected and interacted with the GPs, we covered
the necessary COPD-X guidelines while also imparting
new and unique information. A modular approach using
guest speakers allowed the GPs to hear directly from the
wider COPD care team in their own words.
Execution
We developed the content in collaboration with a
steering committee made up of a respiratory specialist,
GP, specialist nurse and pharmacist, to reflect the
collaborative nature of the content while also meeting
RACGP requirements.
The meetings were highly interactive, with multiple
group discussions and online live polling; and also
highly practical, with information about accessing
relevant Medicare Items included throughout and
in post-meeting resources.
We used instructional design techniques to develop
content that was effective, appealing and inspiring
for the audience. A unique, refreshing design helped
combat ‘slide fatigue’ and brought a positive and
uplifting feel to the meetings.
A range of technological measures simplified meeting
registration and allowed remote administration of all
60 meetings.
Results
The activity was CPD accredited by the RACGP and
by ACRRM to serve GPs in both urban and rural/remote
areas. The meeting series has had outstanding feedback
from everyone involved, including the GPs, the RACGP,
the Steering Committee members and Boehringer
Ingelheim. Based on submitted RACGP evaluations:
19
99% of GPs felt their needs were met
across all five learning objectives.
87% reporting they were entirely met.
95% stated they were likely or very likely
to recommend the meeting to a peer.
GP confidence in coordinating
COPD patient care with other
healthcare professionals rose
from 47% to 89%
Confidence in implementing
COPD-X guidelines on early
diagnosis rose from
40% to 86%
Enero Annual Report 2022 Environmental,
Social and
Governance
Reconciliation Australia
HIPP
In November 2021, the Group received formal
endorsement of our Reconciliation Action Plan
from Reconciliation Australia. This was an important
milestone in Enero’s commitment to continue to learn
about and celebrate the rich culture and history of
Aboriginal and Torres Strait Islander peoples.
In forming our RAP committee with representation
from all Enero Group AU businesses, Enero held
the first meeting in December 2021 operating under
our Terms of Reference. Through our Supply Nation
membership, we connected with Indigenous owned
and operated businesses to secure a partner
organisation to act in a RAP Advisory capacity,
and provide the Group with cross-cultural training.
In the coming year, we will continue to work with
our RAP Advisory partner on further educational
opportunities, strategies and policies to meet our
RAP commitments including recruitment opportunities
to increase employment of Aboriginal and Torres Strait
Islander Peoples. We have also placed Supply Nation
at the heart of our procurement decisions as it relates
to training, catering and RAP consultancy. Teams
across Enero also attended the Supply Nation
Connect 22 Tradeshow to expand our procurement
networks and to create valuable connections.
Enero celebrated its fourth year of working with
CareerTrackers and welcomed another outstanding
student this year. CareerTrackers is a not-for-profit
organisation which connects partner organisations
and Indigenous university students with internship
opportunities with the idea of converting those
opportunities into full-time employment at the
completion of their studies.
Globally the Group remain committed to in-country
DEI initiatives, for example Hotwire launched its HIPP
program in February 2021 and committed US $1 million
globally in pro-bono Brand Marketing and Public
Relations services to tech or tech enabled organisations
which are led by or support people of colour and
other relevant groups. Since the launch, Hotwire has
successfully partnered with nine organisations globally
and continues to look for new partners for the program.
Environmental
The Group remain deeply committed to reducing the
impact we have on the environment, and in addition to
the many programs we have in place to minimise waste,
in June 2021 we joined the Work Waste Challenge with
ZeroCo (contributing to stopping the production of new
single-use plastic bags) and banned paper plates use
for our in-office events to reduce our reliance on single-
use plastics.
21
Ethical Conduct Training and Policies
At Enero we want our people to feel safe, empowered,
supported and able to bring their whole selves to work
in a truly inclusive environment. We are committed
to a workplace free from discrimination, a place where
our people can grow, develop and thrive regardless of
race, religion, sexual preference, gender, marital status
or disability.
We ensure we have clear policies in place, which we
support with a variety of training opportunities throughout
the year. These policies and training ensure we create a
respectful workplace with an emphasis on:
• Discrimination, harassment and bullying
• Modern Slavery
• Anti-Bribery and Corruption
• Environmental impacts
• Whistleblowing
Board of Directors
Ann Sherry AO
Independent
Non-Executive Director
Brent Scrimshaw
Chief Executive Officer
Anouk Darling
Independent
Non-Executive Director
Ann was appointed as Chair
and Non-Executive Director on
1 January 2020 and is a member
of the Remuneration and
Nomination Committee.
Ann is a Director of National
Australia Bank (ASX: NAB), Chair
of its Customer Committee and
a member of its Remuneration
Committee. Ann is Chancellor
of Queensland University of
Technology, Chair of UNICEF
Australia, Chair of Port of
Townsville, and a Director of
Infrastructure Victoria and the
Museum of Contemporary Art.
Ann is an Advisor, the former Chair
and was CEO of Carnival Australia
for a decade. Ann was at Westpac
for 12 years, CEO of Bank of
Melbourne and the CEO of Westpac
New Zealand and Pacific Banking.
Ann was named the overall winner
of the AFR 100 Women of Influence
in 2015.
Brent was appointed Chief
Executive Officer and Executive
Director on 1 July 2020.
Brent is a creative and brand
led business leader with specific
expertise in global consumer
brands, media and publishing,
technology, retail and sports.
Brent built his career at Nike Inc
around the world holding leadership
positions such as Vice President
and Chief Executive Western
Europe, Vice President and Chief
Marketing Officer EMEA based in
Amsterdam, The Netherlands, GM
Regional USA based in New York
City and Marketing Director Nike
Pacific in Australia.
Brent is currently a Non-Executive
Director of KMD Brands Ltd (ASX:
KMD) and Rhinomed Ltd (ASX: RNO)
and was previously a Non-Executive
Director of Catapult Group Ltd
(ASX: CAT) and Fox Head Inc in
California USA.
Anouk was appointed as a Non-
Executive Director on 6 February
2017 and is a member of the
Audit and Risk Committee and
the Remuneration and Nomination
Committee.
Anouk is a Director of Macquarie
Telecom Limited (ASX: MAQ) as
well as a member of its Audit and
Risk Committee and Chair of the
Remuneration and Nomination
Committee. Anouk is a Board
member of Discovery Holiday
Parks and Chair of its People
and Remuneration Committee.
Anouk is currently the Chief
Executive Officer for the Scape
Group. Previously Anouk held an
Executive role as Chair of Moon
Communications Group, a business
which she worked in for 12 years,
where she held the role of Strategy
Director and then served as Chief
Executive Officer.
Enero Annual Report 2022 Ian Rowden
Independent
Non-Executive Director
David Brain
Independent
Non-Executive Director
Louise Higgins
Independent
Non-Executive Director
Ian was appointed as a Non-
Executive Director on 21 November
2018 and is the Chair of the
Remuneration and Nomination
Committee.
Ian is an experienced CEO
and senior executive with
extensive experience in
Australian, regional and global
roles in commercial, strategy,
M&A, marketing and operational
leadership with companies
including The Coca-Cola Company,
The Callaway Golf Company,
Wendy’s International, Saatchi
& Saatchi and The Virgin Group.
Ian is currently a non-executive
director of Reliance Worldwide
Corporation (ASX: RWC),
DuluxGroup International (UK),
and was a director of QMS Media
Limited and Virgin Galactic.
Ian chairs the Murdoch Children’s
Research Institute Marketing Council,
is a partner and investment advisory
board member for Innovate Partners
(US based private equity/venture
capital) and a senior advisor to Bowery
Capital. He is based in the USA.
David was appointed as a Non-
Executive Director on 10 May 2018
and is a member of the Audit and
Risk Committee.
Louise was appointed as a Non-
Executive Director on 10 September
2021 and is the Chair of the Audit
and Risk Committee.
David has over 25 years’ experience
in public relations and integrated
communications. At Edelman
(world’s largest PR firm), David
was a Director of the Group
Supervisory Board and member
of its global management board.
During 13 years at Edelman,
he was CEO of the EMEA region
and latterly, CEO of APACMEA.
Prior to Edelman, David was
Co-CEO of Weber-Shandwick
UK and Managing Director at
Burson-Marsteller UK. He has
also worked in Corporate Affairs
at Visa International and as a
planner in advertising.
David is Chair of parking technology
company Parkable; Chair of child
poverty charity Share My Super;
Advisory Board member of The
Spinoff, and Co-Founder of research
start-up Stickybeak.
Louise is the CFO for Australia
at ANZ Bank (ASX: ANZ), covering
Retail, Commercial and Digital
Transformation.
23
Louise began her Executive career
in London with law firm Freshfields
Brushaus Deringer followed by
seven years at the BBC. Louise has
worked at Australia’s Macquarie
Bank as an Associate Director,
COO for Nova Entertainment with
responsibility for performance
of the Nova and Smooth radio
networks and as Chief Financial
and Strategy Officer for the Australian
Broadcasting Corporation (ABC)
to oversee significant technology
transformation. Her diverse non-
executive career includes service
with Commercial Radio Australia,
Visit Victoria, Qudos Bank and
Canteen Australia.
2
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F
i
Directors’ Report
Financial
Report
year ended 30 June 2022
25
Directors’ Report
The Directors present their report, together with the consolidated financial statements of Enero Group Limited (the
Company) and of the Group, being the Company and its controlled entities, for the year ended 30 June 2022; and the
independent auditor’s report thereon.
Directors
The Directors in office as at the date of this report are:
Name
Role
Independent
Appointed
Ann Sherry
Anouk Darling
Ian Rowden
David Brain
Louise Higgins
Brent Scrimshaw Executive Director
Non-Executive Chair
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Yes
Yes
Yes
Yes
Yes
No
1 January 2020
6 February 2017
21 November 2018
10 May 2018
10 September 2021
1 July 2020
Length of service
(at 30 June 2022)
2 years and 6 months
5 years and 4 months
3 years and 7 months
4 years and 1 month
9 months
2 years
The biographical details of the current Directors included on pages 22 and 23 set out information about the
Directors’ qualifications, experience, responsibilities and other directorships.
The following person was also a Director during the current financial year:
Name
Susan McIntosh
Role
Non-Executive Director
Independent
No
Appointed
Appointed 2 June 2000
and retired
21 October 2021
Length of service
21 years and
4 months
Company Secretary
Cathy Hoyle is the Group General Counsel and was appointed Company Secretary on 8 March 2021. Cathy is a practising
Solicitor in New South Wales Australia, a Graduate of the Australian Institute of Company Directors, and holds several
degrees including a Master of Laws from the Australian National University.
Committee Membership
At the date of this report, the Company has an Audit and Risk Committee and a Remuneration and Nomination Committee.
Members of these Committees were:
Audit and Risk Committee
Louise Higgins (Chair)
Anouk Darling
David Brain
Remuneration and Nomination Committee
Ian Rowden (Chair)
Ann Sherry
Anouk Darling
Principal activities
The principal activities of the Group during the course of
the financial year were integrated marketing and
communication services, including strategy, market
research and insights, advertising, public relations,
communications planning, design, events management,
direct marketing and programmatic media.
Corporate Governance
The Directors recognise the requirement for and have
adhered to the principles of corporate governance.
A copy of the Company’s full 2022 Corporate Governance
Statement, which provides detailed information about
governance, and a copy of the Company’s Appendix 4G
which sets out the Company’s compliance with the
recommendations in the fourth edition of the ASX
Corporate Governance Council’s Corporate Governance
Principles and Recommendations (ASX Principles), are
available on the corporate governance section of the
Company’s website at http://www.enero.com/investor-
centre/governance.
Directors’ interests
The relevant interests of each Director in the shares or
SARs issued by the Group, as notified by the Directors to
the Australian Securities Exchange in accordance with
section 205G(1) of the Corporations Act 2001, at the date
of this report, are as follows:
Director
Ann Sherry
Brent Scrimshaw
Anouk Darling
Ian Rowden
David Brain
Louise Higgins
Total
Ordinary
Appreciation
shares
18,750
216,877
19,607
75,000
75,000
Nil
Share
Rights
2,133,334
Nil
Nil
Nil
Nil
Nil
405,234
2,133,334
Events subsequent to balance date
Transactions or events subsequent to the balance date
Operating and Financial Review
Information relating to the operating and financial review of
the Company and its strategy is outlined on pages 30 to 35
and forms part of this Directors’ Report.
were:
•
Directors’ meetings
The number of Directors’ meetings (including meetings of
committees of Directors) and the number of meetings
attended by each of the Directors of the Company during
the financial year were:
Board
meetings
Audit and
Remuneration
Risk
Committee
meetings
and
Nomination
Committee
meetings
A
6
6
6
6
6
5
2
B
6
6
6
6
6
5
2
A
–
–
4
–
4
3
1
B
–
–
4
–
4
3
1
A
2
–
3
3
–
–
–
B
3
–
3
3
–
–
–
Ann Sherry
Brent Scrimshaw
Anouk Darling
Ian Rowden
David Brain
Louise Higgins
Susan McIntosh
A = Number of meetings attended.
B = Number of meetings held during the time the Director held office or
was a member of the Committee during the year.
on 1 July 2022, the Group acquired 100% of the
issued capital of ROI DNA Inc, a USA based
strategic B2B sales and marketing agency. The
purchase consideration was an upfront payment
of US$26,400,000 ($38,306,000) in cash and
US$6,600,000 ($9,577,000) of Enero Group
Limited shares with additional contingent
consideration linked to the achievement of
EBITDA targets over the next 3 years through to
30 June 2025. Refer to Note 22 Acquisitions for
details.
•
on 1 July 2022, the Group acquired 100% of the
issued capital of GetIT Pte Ltd, a Singapore
based specialist B2B technology marketing
agency with presence in India, Malaysia and
Japan. The purchase consideration was an
upfront payment of S$2,700,000 ($2,816,000) in
cash and S$1,800,000 ($1,877,000) of Enero
Group Limited shares with additional contingent
consideration linked to the achievement of EBIT
target over the next 3 years through to 30 June
2025. Refer to Note 22 Acquisitions for details.
•
the Directors have declared a final dividend, with
respect to ordinary shares, of 6.5 cents per share,
fully franked. The final dividend will have a record
date of 20 September 2022 and a payment date
of 4 October 2022.
Except for these events there has not arisen, in the
interval between the end of the financial year and the
date of this report, any item, transaction or event of a
material and unusual nature likely, in the opinion of the
Directors of the Company, to significantly affect the
operations of the Group, the results of those
operations, or the state of affairs of the Group in future
financial years.
26 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 27
Directors’ ReportFinancial report for year ended 30 June 2022
Directors’ Report
The Directors present their report, together with the consolidated financial statements of Enero Group Limited (the
Company) and of the Group, being the Company and its controlled entities, for the year ended 30 June 2022; and the
Name
Role
Independent
Appointed
independent auditor’s report thereon.
Directors
The Directors in office as at the date of this report are:
Ann Sherry
Anouk Darling
Ian Rowden
David Brain
Louise Higgins
Non-Executive Chair
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Brent Scrimshaw Executive Director
Yes
Yes
Yes
Yes
Yes
No
1 January 2020
6 February 2017
21 November 2018
10 May 2018
Length of service
(at 30 June 2022)
2 years and 6 months
5 years and 4 months
3 years and 7 months
4 years and 1 month
10 September 2021
9 months
1 July 2020
2 years
The biographical details of the current Directors included on pages 22 and 23 set out information about the
Directors’ qualifications, experience, responsibilities and other directorships.
The following person was also a Director during the current financial year:
Name
Role
Independent
Appointed
Length of service
Susan McIntosh
Non-Executive Director
No
Appointed 2 June 2000
21 years and
and retired
21 October 2021
4 months
Company Secretary
Cathy Hoyle is the Group General Counsel and was appointed Company Secretary on 8 March 2021. Cathy is a practising
Solicitor in New South Wales Australia, a Graduate of the Australian Institute of Company Directors, and holds several
degrees including a Master of Laws from the Australian National University.
Committee Membership
At the date of this report, the Company has an Audit and Risk Committee and a Remuneration and Nomination Committee.
Members of these Committees were:
Audit and Risk Committee
Louise Higgins (Chair)
Anouk Darling
David Brain
Remuneration and Nomination Committee
Ian Rowden (Chair)
Ann Sherry
Anouk Darling
Principal activities
The principal activities of the Group during the course of
the financial year were integrated marketing and
communication services, including strategy, market
research and insights, advertising, public relations,
communications planning, design, events management,
direct marketing and programmatic media.
Corporate Governance
The Directors recognise the requirement for and have
adhered to the principles of corporate governance.
A copy of the Company’s full 2022 Corporate Governance
Statement, which provides detailed information about
governance, and a copy of the Company’s Appendix 4G
which sets out the Company’s compliance with the
recommendations in the fourth edition of the ASX
Corporate Governance Council’s Corporate Governance
Principles and Recommendations (ASX Principles), are
available on the corporate governance section of the
Company’s website at http://www.enero.com/investor-
centre/governance.
Operating and Financial Review
Information relating to the operating and financial review of
the Company and its strategy is outlined on pages 30 to 35
and forms part of this Directors’ Report.
Directors’ meetings
The number of Directors’ meetings (including meetings of
committees of Directors) and the number of meetings
attended by each of the Directors of the Company during
the financial year were:
Board
meetings
Audit and
Risk
Committee
meetings
A
6
6
6
6
6
5
2
B
6
6
6
6
6
5
2
A
–
–
4
–
4
3
1
B
–
–
4
–
4
3
1
Remuneration
and
Nomination
Committee
meetings
B
A
2
3
–
–
3
3
3
3
–
–
–
–
–
–
Ann Sherry
Brent Scrimshaw
Anouk Darling
Ian Rowden
David Brain
Louise Higgins
Susan McIntosh
A = Number of meetings attended.
B = Number of meetings held during the time the Director held office or
was a member of the Committee during the year.
Directors’ interests
The relevant interests of each Director in the shares or
SARs issued by the Group, as notified by the Directors to
the Australian Securities Exchange in accordance with
section 205G(1) of the Corporations Act 2001, at the date
of this report, are as follows:
Director
Ann Sherry
Brent Scrimshaw
Anouk Darling
Ian Rowden
David Brain
Louise Higgins
Total
Ordinary
shares
18,750
216,877
19,607
75,000
75,000
Nil
405,234
Share
Appreciation
Rights
Nil
2,133,334
Nil
Nil
Nil
Nil
2,133,334
Events subsequent to balance date
Transactions or events subsequent to the balance date
were:
•
on 1 July 2022, the Group acquired 100% of the
issued capital of ROI DNA Inc, a USA based
strategic B2B sales and marketing agency. The
purchase consideration was an upfront payment
of US$26,400,000 ($38,306,000) in cash and
US$6,600,000 ($9,577,000) of Enero Group
Limited shares with additional contingent
consideration linked to the achievement of
EBITDA targets over the next 3 years through to
30 June 2025. Refer to Note 22 Acquisitions for
details.
on 1 July 2022, the Group acquired 100% of the
issued capital of GetIT Pte Ltd, a Singapore
based specialist B2B technology marketing
agency with presence in India, Malaysia and
Japan. The purchase consideration was an
upfront payment of S$2,700,000 ($2,816,000) in
cash and S$1,800,000 ($1,877,000) of Enero
Group Limited shares with additional contingent
consideration linked to the achievement of EBIT
target over the next 3 years through to 30 June
2025. Refer to Note 22 Acquisitions for details.
the Directors have declared a final dividend, with
respect to ordinary shares, of 6.5 cents per share,
fully franked. The final dividend will have a record
date of 20 September 2022 and a payment date
of 4 October 2022.
•
•
27
26 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 27
Except for these events there has not arisen, in the
interval between the end of the financial year and the
date of this report, any item, transaction or event of a
material and unusual nature likely, in the opinion of the
Directors of the Company, to significantly affect the
operations of the Group, the results of those
operations, or the state of affairs of the Group in future
financial years.
Directors’ Report
Likely developments
The Group will continue to focus on its strategy outlined in
the operating and financial review. The Group will
specifically focus on new business conversion and organic
revenue growth to increase net revenue. Additionally,
building scale and presence in the UK and USA markets to
seek a more evenly weighted geographic contribution from
net revenue and Operating EBITDA is a core element of
the Group’s strategic framework. The Group will also
continue to assess acquisition and capital deployment
opportunities as they arise to complement the key
operating business brands.
Indemnification and insurance of officers and auditors
Indemnification
The Company has agreed to indemnify the following
current Directors of the Company: Ann Sherry, Brent
Scrimshaw, Anouk Darling, Ian Rowden, David Brain,
Louise Higgins and Company Secretary Cathy Hoyle
against liabilities to another person (other than the
Company or a related body corporate) that may arise from
their positions as Directors, Secretaries or Executives of
the Company and its controlled entities, subject to the
Corporations Act 2001, except where the liability arises out
of conduct involving a lack of good faith. The agreement
stipulates that the Company will meet the full amount of
any liabilities, including costs and expenses. The Company
has also agreed to indemnify the current Directors and
Secretaries of its controlled entities for all liabilities to
another person (other than the Company or a related body
corporate) that may arise from their position, except where
the liability arises out of conduct involving a lack of good
faith. The agreements stipulate that the Company will meet
the full amount of any such liabilities, including costs and
expenses.
Insurance premiums
During the financial year, the Company has paid insurance
premiums in respect of Directors’ and Officers’ liabilities, for
current Directors and Officers, covering the following:
– costs and expenses incurred by the relevant officers in
defending proceedings, whether civil or criminal; and
– other liabilities that may arise from their position, with
the exception of conduct involving a willful breach of
duty or improper use of information or position to gain
a personal advantage.
The Directors have not included details of the amount of
the premium paid in respect of the Directors’ and Officers’
liability and legal expenses insurance contracts, as such
disclosure is prohibited under the terms of the contracts.
Issue of shares and Share Appreciation Rights (SARs)
Shares issued on exercise of SARs
On 15 September 2021, the Company issued 1,389,589
ordinary shares to employees exercising share
appreciation rights under the Company’s Share
Appreciation Rights Plan (SARP), which was approved by
shareholders at the Company’s Annual General Meeting
(AGM). The issue price of these shares was $3.17 and
these shares rank equally with existing shareholders.
Share Appreciation Rights
Share Appreciation Rights issued
During the year ended 30 June 2022, a total of 4,525,000
Share Appreciation Rights (30 June 2021: 3,900,000) were
issued to senior employees of the Group under the existing
Share Appreciation Rights Plan.
Unissued shares under Share Appreciation Rights Plan
At the date of this report, unissued shares of the Company
under the Share Appreciation Rights Plan are:
Expiry date
30 September 2022
30 September 2022
30 September 2022
30 September 2023
30 September 2023
30 September 2024
Total
Number of
SARs
416,670
1,033,330
1,508,330
1,033,340
1,508,332
1,508,338
7,008,340
Strike price VWAP
(for the 20 business
days prior to the
grant)
$2.13
$1.52
$3.02
$1.52
$3.02
$3.02
These SARs in the table above do not entitle the holder
to participate in any share issue of the Company.
Dividends
Dividends declared and paid by the Company to members
since the end of the previous financial year were:
Fully franked:
2021 Final dividend
2022 Interim dividend
Cents
per
share
Total
amount
AUD ’000
Date of
payment
4.4
6.0
3,874 6 October 2021
5,283 16 March 2022
Subsequent to the balance sheet date, the Directors have
declared a final dividend, with respect to ordinary shares,
of 6.5 cents per share – fully franked with a payment date
of 4 October 2022. The financial effect of this dividend has
not been brought to account in the consolidated financial
statements for the year ended 30 June 2022 but will be
recognised in the subsequent financial period.
For further details refer to Note 17 Capital and reserves in
this annual report.
Environmental regulation and performance
Auditor independence
The Board believes that the Group has adequate systems
The Lead Auditor’s independence declaration as required
in place for the management of its environmental
under section 307C of the Corporations Act 2001 is set out
requirements and is not aware of any significant breach of
on page 99, and forms part of the Directors’ Report for the
those requirements as they apply to the Group.
year ended 30 June 2022.
Non-audit services
Rounding off
During the year KPMG, the Group’s auditor, has performed
The Company is of a kind referred to in ASIC Corporations
certain other services in addition to the audit and review of
(Rounding in Financial/Directors’ Reports) Instrument
the consolidated financial statements.
The Board has considered the non-audit services provided
during the year by the auditor and, in accordance with
advice provided by resolution of the Audit and Risk
2016/191, dated 24 March 2016, and, in accordance with
that Class Order, amounts in the consolidated financial
statements and Directors’ Report have been rounded off to
the nearest thousand dollars, unless otherwise stated.
Committee, is satisfied that the provision of those non-audit
Remuneration Report
services during the year by the auditor is compatible with,
The Remuneration Report on pages 36 to 43 forms part of
and did not compromise, the auditor independence
this Directors’ Report.
requirements of the Corporations Act 2001 for the following
Signed on behalf of the Directors in accordance with a
resolution of the Directors:
Ann Sherry AO
Chair
Sydney, 8 September 2022
reasons:
– all non-audit services were subject to the corporate
governance procedures adopted by the Company and
have been reviewed by the Audit and Risk Committee
to ensure they do not impact the integrity and
objectivity of the auditor; and
– non-audit services provided do not undermine the
general principles relating to auditor independence as
set out in APES 110 Code of Ethics for Professional
Accountants, as they did not involve reviewing or
auditing the auditor’s own work, acting in a
management or decision-making capacity for the
Group, acting as an advocate for the Group, or jointly
sharing risks and rewards.
Details of the amounts paid to the auditor of the Company,
KPMG, and its related practices, for non-audit services
provided during the year, are set out below. In addition,
amounts paid to other auditors for the statutory audit have
been disclosed in Note 31 Auditor’s remuneration of the
notes to the consolidated financial statements.
Services other than statutory audit
Auditors of the Company
Taxation compliance services:
KPMG Australia
Overseas KPMG firms
Total services other than
statutory audit
2022
$
2021
$
–
295,000
26,000
286,000
295,000
312,000
28 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 29
Directors’ ReportFinancial report for year ended 30 June 2022
Directors’ Report
Likely developments
The Group will continue to focus on its strategy outlined in
the operating and financial review. The Group will
specifically focus on new business conversion and organic
revenue growth to increase net revenue. Additionally,
building scale and presence in the UK and USA markets to
seek a more evenly weighted geographic contribution from
net revenue and Operating EBITDA is a core element of
the Group’s strategic framework. The Group will also
continue to assess acquisition and capital deployment
opportunities as they arise to complement the key
operating business brands.
Indemnification and insurance of officers and auditors
Indemnification
The Company has agreed to indemnify the following
current Directors of the Company: Ann Sherry, Brent
Scrimshaw, Anouk Darling, Ian Rowden, David Brain,
Louise Higgins and Company Secretary Cathy Hoyle
against liabilities to another person (other than the
Company or a related body corporate) that may arise from
their positions as Directors, Secretaries or Executives of
the Company and its controlled entities, subject to the
Corporations Act 2001, except where the liability arises out
of conduct involving a lack of good faith. The agreement
stipulates that the Company will meet the full amount of
any liabilities, including costs and expenses. The Company
has also agreed to indemnify the current Directors and
Secretaries of its controlled entities for all liabilities to
another person (other than the Company or a related body
corporate) that may arise from their position, except where
the liability arises out of conduct involving a lack of good
faith. The agreements stipulate that the Company will meet
the full amount of any such liabilities, including costs and
expenses.
Insurance premiums
During the financial year, the Company has paid insurance
premiums in respect of Directors’ and Officers’ liabilities, for
current Directors and Officers, covering the following:
– costs and expenses incurred by the relevant officers in
defending proceedings, whether civil or criminal; and
– other liabilities that may arise from their position, with
the exception of conduct involving a willful breach of
duty or improper use of information or position to gain
a personal advantage.
The Directors have not included details of the amount of
the premium paid in respect of the Directors’ and Officers’
liability and legal expenses insurance contracts, as such
disclosure is prohibited under the terms of the contracts.
Issue of shares and Share Appreciation Rights (SARs)
Shares issued on exercise of SARs
On 15 September 2021, the Company issued 1,389,589
ordinary shares to employees exercising share
appreciation rights under the Company’s Share
Appreciation Rights Plan (SARP), which was approved by
shareholders at the Company’s Annual General Meeting
(AGM). The issue price of these shares was $3.17 and
these shares rank equally with existing shareholders.
Share Appreciation Rights
Share Appreciation Rights issued
During the year ended 30 June 2022, a total of 4,525,000
Share Appreciation Rights (30 June 2021: 3,900,000) were
issued to senior employees of the Group under the existing
Share Appreciation Rights Plan.
Unissued shares under Share Appreciation Rights Plan
At the date of this report, unissued shares of the Company
under the Share Appreciation Rights Plan are:
Strike price VWAP
(for the 20 business
Number of
days prior to the
Expiry date
30 September 2022
30 September 2022
30 September 2022
30 September 2023
30 September 2023
30 September 2024
Total
SARs
416,670
1,033,330
1,508,330
1,033,340
1,508,332
1,508,338
7,008,340
grant)
$2.13
$1.52
$3.02
$1.52
$3.02
$3.02
These SARs in the table above do not entitle the holder
to participate in any share issue of the Company.
Dividends
Dividends declared and paid by the Company to members
since the end of the previous financial year were:
Fully franked:
2021 Final dividend
2022 Interim dividend
Cents
Total
per
amount
share
AUD ’000
Date of
payment
4.4
6.0
3,874 6 October 2021
5,283 16 March 2022
Subsequent to the balance sheet date, the Directors have
declared a final dividend, with respect to ordinary shares,
of 6.5 cents per share – fully franked with a payment date
of 4 October 2022. The financial effect of this dividend has
not been brought to account in the consolidated financial
statements for the year ended 30 June 2022 but will be
recognised in the subsequent financial period.
For further details refer to Note 17 Capital and reserves in
this annual report.
Environmental regulation and performance
The Board believes that the Group has adequate systems
in place for the management of its environmental
requirements and is not aware of any significant breach of
those requirements as they apply to the Group.
Auditor independence
The Lead Auditor’s independence declaration as required
under section 307C of the Corporations Act 2001 is set out
on page 99, and forms part of the Directors’ Report for the
year ended 30 June 2022.
Rounding off
The Company is of a kind referred to in ASIC Corporations
(Rounding in Financial/Directors’ Reports) Instrument
2016/191, dated 24 March 2016, and, in accordance with
that Class Order, amounts in the consolidated financial
statements and Directors’ Report have been rounded off to
the nearest thousand dollars, unless otherwise stated.
Remuneration Report
The Remuneration Report on pages 36 to 43 forms part of
this Directors’ Report.
Signed on behalf of the Directors in accordance with a
resolution of the Directors:
Ann Sherry AO
Chair
Sydney, 8 September 2022
29
Non-audit services
During the year KPMG, the Group’s auditor, has performed
certain other services in addition to the audit and review of
the consolidated financial statements.
The Board has considered the non-audit services provided
during the year by the auditor and, in accordance with
advice provided by resolution of the Audit and Risk
Committee, is satisfied that the provision of those non-audit
services during the year by the auditor is compatible with,
and did not compromise, the auditor independence
requirements of the Corporations Act 2001 for the following
reasons:
– all non-audit services were subject to the corporate
governance procedures adopted by the Company and
have been reviewed by the Audit and Risk Committee
to ensure they do not impact the integrity and
objectivity of the auditor; and
– non-audit services provided do not undermine the
general principles relating to auditor independence as
set out in APES 110 Code of Ethics for Professional
Accountants, as they did not involve reviewing or
auditing the auditor’s own work, acting in a
management or decision-making capacity for the
Group, acting as an advocate for the Group, or jointly
sharing risks and rewards.
Details of the amounts paid to the auditor of the Company,
KPMG, and its related practices, for non-audit services
provided during the year, are set out below. In addition,
amounts paid to other auditors for the statutory audit have
been disclosed in Note 31 Auditor’s remuneration of the
notes to the consolidated financial statements.
Services other than statutory audit
Auditors of the Company
Taxation compliance services:
KPMG Australia
Overseas KPMG firms
Total services other than
statutory audit
2022
$
2021
$
–
295,000
26,000
286,000
295,000
312,000
28 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 29
Directors’ Report
Operating and financial review
The operating and financial review forms part of the Directors’ Report.
Strategy and operations of the Group
Enero Group is a global and diversified creative technology company, focused on delivering modern marketing services to
businesses around the world. The Group achieves this through an international network of marketing, communications and
advertising technology companies with over 750 employees (at the date of this report) in 11 countries.
Enero’s vision is to be a leading group of specialist marketing services businesses, famous for our progressive capabilities.
We achieve this through deep knowledge and experience in key industries, which delivers growth for our clients,
transforming their brands with creative, technology and data solutions. Our industries of focus are Technology, Healthcare
and Growth Consumer, all of which are supported by long-term positive macroeconomic growth trends. We differentiate
against our competitors through our integrated offering combined with our deep industry specialism, and our agility to
capitalise on new developments in our dynamic sector.
Our growth strategy is focused on both the continued evolution of the Group’s existing portfolio businesses supported by
Enero’s Centres of Excellence. We continue to invest to add transformational capabilities and geographies such as the
acquisitions of ROI DNA and GetIT Communications on 1 July 2022. We also continue to reshape the portfolio through
selective divestments, including the sale of The Leading Edge and The Digital Edge in FY22.
The Group is well positioned to continue to invest in growth opportunities in the current economic environment, and to
remain resilient to risks that face our business.
• COVID-19 has changed the nature of work, and despite wage inflation pressure and talent shortages across our
industry, Enero continues to benefit from our progressive workplace practices. For example, prior to the pandemic,
Hotwire built a reputation for ‘thoughtful working’, which allowed for flexible working arrangements. This enabled
Hotwire to proactively recruit high-performing staff during the pandemic, without the need to be located in major
metropolitan areas. We continue to evolve our employee value proposition to ensure we can attract and retain the
best talent across the Group.
• Economic uncertainty is impacting all industries, however Enero’s unique positioning and market offering makes us
well placed to outperform competitors:
In Technology, we primarily work with the world’s leading B2B Technology clients who are less volatile in
their allocation of marketing spend versus B2C Technology clients.
Healthcare is typically more resilient to macroeconomic volatility.
OB Media benefits from the correlation in the movement of advertising rates and the subsequent impact on
costs of traffic acquisition. Search advertising rates have also proven more resilient than other advertising
channels.
Enero Group remains optimistic about the growth opportunity of our business across all regions. We continue to look for
opportunities to invest to modernise our services in order to better serve our clients’ needs, whilst also maintaining the
delivery of strong margins across our diversified portfolio. We remain responsive to changing macroeconomic conditions,
and our long-term perspective will ensure that we capitalise on opportunities to evolve and transform the Group.
Enero Group considers the following to be the most relevant risks to the business achieving its strategic, operational and
financial targets:
Potential risk
COVID-19
pandemic
Risk description
Potential further lockdowns and
related restrictions in response to
the COVID-19 pandemic, resulting
in one or all of the following:
• Business continuity risk
from changed working
environments for
employees;
• Supply chain risk from
impacted suppliers;
and/or
Financial risk from
reduced advertising
spend.
•
Group’s mitigating actions
Business continuity: Over the course of the pandemic,
Enero has built robust processes to deal with risks
associated with lockdowns, including fully virtual team
collaboration tools, strengthened cyber security, WHSE
practices and investment in work-from-home people and
culture initiatives.
Supply chain risk: Our businesses maintain a diverse list of
suppliers (e.g. content production houses, media
companies), to ensure we are not significantly impacted by
over-reliance on a single supplier.
Financial risk: As we saw in FY020 and FY21, our
diversified business benefited from increased consumer
online activity driven by extended lockdowns. Any
decrease in advertising dollars spent on traditional
advertising is likely to be mitigated by increased demand
for digital transformation, performance marketing and
increased search advertising traffic.
Potential risk
Risk description
Group’s mitigating actions
Uncertain
economic
conditions
Global macroeconomic conditions
Enero Group is a diversified portfolio of businesses, both
may impact demand for marketing
geographically and in terms of the types of marketing
services and therefore reduce the
services offered. This helps us to remain resilient to
Group’s revenue performance.
economic volatility. The Group also owns businesses that
Evolving needs
Changing requirements of clients’
Enero Group continues to invest in the evolution of our
of clients
marketing needs may render our
capabilities, both through internal investment as well as
services redundant or unsuitable.
strategic acquisitions. The Enero Board and management
Supply chain
Suppliers no longer provide critical
Enero has a diversified portfolio of supplier relationships
services/products to the Group, for
with different contract maturity dates to mitigate the impact
commercial, financial (bankruptcy
of losing individual suppliers. Most of our suppliers are
etc.) or geopolitical reasons.
service providers with commoditised offerings, which
Employee
attraction and
retention
The Group finds it difficult to
As a talent-based business, Enero believes employee
attract and/or retain key talent. As
attraction and retention is a key source of competitive
a talent-based business, a
differentiation. As such, we actively invest in talent and
significant loss of key talent over a
culture, both through Enero’s global People and Culture
short period could impact the
Group’s financial performance.
have relatively low fixed costs, allowing us to manage the
cost base of the business in accordance with our revenue
performance. We are constantly monitoring and managing
our business to key internal cost ratios to ensure we can
deliver strong shareholder returns even in the face of
volatile market conditions. We also continue to develop
capabilities that differentiate us versus our competitors,
ensuring we are preferred suppliers, and enabling us to
augment and enhance client teams that may have been
impacted by cost reduction initiatives. Certain businesses
in the Group, such as OBMedia, may also have
countercyclical elements, where decreasing revenues may
be mitigated by decreasing costs of sales.
team monitor the evolution of the markets in which we
operate, dynamically adjusting the Group’s strategy as
required. We also work to limit customer concentration,
such that the loss of any single customer would not
significantly impact the Group’s financial performance.
ensures we are minimally exposed to market price
fluctuations and can find new suppliers with relative ease.
We can source suppliers globally (particularly in the
pandemic era of virtual working), limiting our geopolitical
risk. Our global scale makes us a valuable customer for
our suppliers, which also mitigates commercial risk to
these relationships. We regularly review our supplier
relationships to identify risks and ensure they remain
commercially attractive relationships.
Centre of Excellence, as well as within the individual
businesses of the Group. We empower each business in
the Group to develop a unique culture that suits the talent
market they operate in, ensuring each business is best
situated to achieve its People and Culture strategy and
goals. Enero invests heavily in in-house and external
recruitment capabilities, a global Learning and
Development platform, progressive and dynamic workplace
practices and a strong focus on Diversity, Equity and
Inclusion initiatives that are tailored to each market we
operate in. We conduct short-term and long-term
succession and organisational planning for key roles. We
also regularly measure the satisfaction of the Group’s
employees and seek feedback on areas of improvement.
The Nomination and Remuneration Committee of the
Board works closely with the CEO and Chief People and
Culture Officer on the development and execution of the
Group’s People and Culture strategy.
30 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 31
Directors’ ReportFinancial report for year ended 30 June 2022
Directors’ Report
Operating and financial review
The operating and financial review forms part of the Directors’ Report.
Strategy and operations of the Group
Enero Group is a global and diversified creative technology company, focused on delivering modern marketing services to
businesses around the world. The Group achieves this through an international network of marketing, communications and
advertising technology companies with over 750 employees (at the date of this report) in 11 countries.
Enero’s vision is to be a leading group of specialist marketing services businesses, famous for our progressive capabilities.
We achieve this through deep knowledge and experience in key industries, which delivers growth for our clients,
transforming their brands with creative, technology and data solutions. Our industries of focus are Technology, Healthcare
and Growth Consumer, all of which are supported by long-term positive macroeconomic growth trends. We differentiate
against our competitors through our integrated offering combined with our deep industry specialism, and our agility to
capitalise on new developments in our dynamic sector.
Our growth strategy is focused on both the continued evolution of the Group’s existing portfolio businesses supported by
Enero’s Centres of Excellence. We continue to invest to add transformational capabilities and geographies such as the
acquisitions of ROI DNA and GetIT Communications on 1 July 2022. We also continue to reshape the portfolio through
selective divestments, including the sale of The Leading Edge and The Digital Edge in FY22.
The Group is well positioned to continue to invest in growth opportunities in the current economic environment, and to
remain resilient to risks that face our business.
• COVID-19 has changed the nature of work, and despite wage inflation pressure and talent shortages across our
industry, Enero continues to benefit from our progressive workplace practices. For example, prior to the pandemic,
Hotwire built a reputation for ‘thoughtful working’, which allowed for flexible working arrangements. This enabled
Hotwire to proactively recruit high-performing staff during the pandemic, without the need to be located in major
metropolitan areas. We continue to evolve our employee value proposition to ensure we can attract and retain the
• Economic uncertainty is impacting all industries, however Enero’s unique positioning and market offering makes us
best talent across the Group.
well placed to outperform competitors:
In Technology, we primarily work with the world’s leading B2B Technology clients who are less volatile in
their allocation of marketing spend versus B2C Technology clients.
Healthcare is typically more resilient to macroeconomic volatility.
OB Media benefits from the correlation in the movement of advertising rates and the subsequent impact on
costs of traffic acquisition. Search advertising rates have also proven more resilient than other advertising
channels.
Enero Group remains optimistic about the growth opportunity of our business across all regions. We continue to look for
opportunities to invest to modernise our services in order to better serve our clients’ needs, whilst also maintaining the
delivery of strong margins across our diversified portfolio. We remain responsive to changing macroeconomic conditions,
and our long-term perspective will ensure that we capitalise on opportunities to evolve and transform the Group.
Enero Group considers the following to be the most relevant risks to the business achieving its strategic, operational and
financial targets:
COVID-19
pandemic
Potential risk
Risk description
Group’s mitigating actions
Potential further lockdowns and
Business continuity: Over the course of the pandemic,
related restrictions in response to
Enero has built robust processes to deal with risks
the COVID-19 pandemic, resulting
associated with lockdowns, including fully virtual team
in one or all of the following:
collaboration tools, strengthened cyber security, WHSE
• Business continuity risk
from changed working
environments for
employees;
• Supply chain risk from
impacted suppliers;
•
Financial risk from
reduced advertising
and/or
spend.
practices and investment in work-from-home people and
culture initiatives.
Supply chain risk: Our businesses maintain a diverse list of
suppliers (e.g. content production houses, media
companies), to ensure we are not significantly impacted by
over-reliance on a single supplier.
Financial risk: As we saw in FY020 and FY21, our
diversified business benefited from increased consumer
online activity driven by extended lockdowns. Any
decrease in advertising dollars spent on traditional
advertising is likely to be mitigated by increased demand
for digital transformation, performance marketing and
increased search advertising traffic.
Potential risk
Uncertain
economic
conditions
Risk description
Global macroeconomic conditions
may impact demand for marketing
services and therefore reduce the
Group’s revenue performance.
Evolving needs
of clients
Changing requirements of clients’
marketing needs may render our
services redundant or unsuitable.
Supply chain
Suppliers no longer provide critical
services/products to the Group, for
commercial, financial (bankruptcy
etc.) or geopolitical reasons.
Employee
attraction and
retention
The Group finds it difficult to
attract and/or retain key talent. As
a talent-based business, a
significant loss of key talent over a
short period could impact the
Group’s financial performance.
31
Group’s mitigating actions
Enero Group is a diversified portfolio of businesses, both
geographically and in terms of the types of marketing
services offered. This helps us to remain resilient to
economic volatility. The Group also owns businesses that
have relatively low fixed costs, allowing us to manage the
cost base of the business in accordance with our revenue
performance. We are constantly monitoring and managing
our business to key internal cost ratios to ensure we can
deliver strong shareholder returns even in the face of
volatile market conditions. We also continue to develop
capabilities that differentiate us versus our competitors,
ensuring we are preferred suppliers, and enabling us to
augment and enhance client teams that may have been
impacted by cost reduction initiatives. Certain businesses
in the Group, such as OBMedia, may also have
countercyclical elements, where decreasing revenues may
be mitigated by decreasing costs of sales.
Enero Group continues to invest in the evolution of our
capabilities, both through internal investment as well as
strategic acquisitions. The Enero Board and management
team monitor the evolution of the markets in which we
operate, dynamically adjusting the Group’s strategy as
required. We also work to limit customer concentration,
such that the loss of any single customer would not
significantly impact the Group’s financial performance.
Enero has a diversified portfolio of supplier relationships
with different contract maturity dates to mitigate the impact
of losing individual suppliers. Most of our suppliers are
service providers with commoditised offerings, which
ensures we are minimally exposed to market price
fluctuations and can find new suppliers with relative ease.
We can source suppliers globally (particularly in the
pandemic era of virtual working), limiting our geopolitical
risk. Our global scale makes us a valuable customer for
our suppliers, which also mitigates commercial risk to
these relationships. We regularly review our supplier
relationships to identify risks and ensure they remain
commercially attractive relationships.
As a talent-based business, Enero believes employee
attraction and retention is a key source of competitive
differentiation. As such, we actively invest in talent and
culture, both through Enero’s global People and Culture
Centre of Excellence, as well as within the individual
businesses of the Group. We empower each business in
the Group to develop a unique culture that suits the talent
market they operate in, ensuring each business is best
situated to achieve its People and Culture strategy and
goals. Enero invests heavily in in-house and external
recruitment capabilities, a global Learning and
Development platform, progressive and dynamic workplace
practices and a strong focus on Diversity, Equity and
Inclusion initiatives that are tailored to each market we
operate in. We conduct short-term and long-term
succession and organisational planning for key roles. We
also regularly measure the satisfaction of the Group’s
employees and seek feedback on areas of improvement.
The Nomination and Remuneration Committee of the
Board works closely with the CEO and Chief People and
Culture Officer on the development and execution of the
Group’s People and Culture strategy.
30 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 31
Directors’ Report
Potential risk
Business
continuity
Risk description
The Group may be exposed to a
range of different risks that may
adversely affect the day-to-day
operations of the business.
Acquisition
success
Acquisitions may not deliver
expected value to shareholders,
either through commercial
underperformance, integration
difficulty or operational issues.
Regulatory risk
The Group may be exposed to
certain regulatory risks where
policy or legal developments
impact our success.
Governance
processes
Legal risk
Insufficient governance and
oversight of the Group’s systems
and processes could create an
environment where we act or
perform in a way that does not
meet shareholder expectations.
The Group may be subjected to a
lawsuit that impacts business
operations or financial
performance.
IT and
Cybersecurity
risk
The Group may be subject to
cybersecurity breaches, or may
not operate in the way required by
certain IT regulations or business
practices, leading to financial, data
or business continuity impacts.
Group’s mitigating actions
Enero regularly reviews potential business continuity risks
such as Work, Health and Safety risks (WHS), IT and
Cybersecurity risks, and Regulatory and Governance risks.
We have developed plans to mitigate and minimise the
impact of all of these risks, as well as others. The Audit
and Risk Committee of the Board periodically reviews the
Group’s Business Continuity, Disaster Recovery and Crisis
Management plans.
As a portfolio business, Enero has extensive experience
acquiring and integrating new businesses into the Group.
We conduct extensive due diligence to minimise
commercial and operational risk, as well as developing
integration plans prior to closing M&A transactions, to
ensure we capitalise on the benefits of our acquisitions.
Where appropriate, we may appoint dedicated project
managers to assist with integration efforts. Enero reports
on the performance of acquired businesses and integration
progress to the Board.
Enero Group operates in a relatively low regulation industry
(marketing services), noting that we do not own or sell
media assets (at the time of this report). We regularly
monitor for regulatory changes in our operating markets,
and we engage with relevant regulators and industry
bodies as necessary.
As a publicly listed company, Enero Group has dedicated
resources that regularly review our systems and processes
to ensure we operate at the standard expected by
shareholders. We regularly conduct compliance training for
employees to ensure adherence to Group policies.
Enero Group has experienced and dedicated internal Legal
resources to ensure that all our businesses are operating
within the correct legal framework for their respective
jurisdictions. The Group’s Legal Centre of Excellence
provides both leadership and support in legal issues,
including dispute management, contracting, employment
matters and M&A.
Enero regularly reviews data and privacy regulations to
ensure our systems and processes are up to date with best
practice. We invest in modern cloud infrastructure and
backup systems to deliver consistently high levels of
service. Enero’s IT Centre of Excellence operates as a
central resource for the Group to provide thought
leadership, support and ensure best-practice operations.
The Group regularly conducts cybersecurity risk
assessments and training, and tracks progress against
outstanding issues until they are mitigated.
Financial performance for the year
The Group achieved Net Revenue of $193.4 million, an
increase of 20.4% (2021: $160.6 million) compared to the
prior reporting period. Net revenue growth was achieved in
all key geographic markets. The Group continues to have a
high proportion of client revenue exposure to its priority
verticals of Technology, Healthcare and Consumer sectors
which have increased or maintained business activity
levels. Net revenue on a constant currency basis was up
$31.2 million compared with the prior year. Net revenue
from continuing businesses after the impact of disposals
was up 25.6% at $191.6 million compared to $152.6 million
for the prior year.
A summary of the Group’s results is below:
In thousands of AUD
Net revenue
EBITDA
Depreciation of right-of-use assets
Operating EBITDA¹
Depreciation and amortisation
EBIT
Net finance (costs)/income
Present value interest charge
Profit before tax
Income tax expense
Profit after tax
2022
2021
193,426
160,634
66,196
(3,996)
62,200
(2,944)
59,256
(9)
(961)
58,286
(14,340)
43,946
49,904
(4,291)
45,613
(2,796)
42,817
20
(1,378)
41,459
(8,514)
32,945
The Group achieved Operating EBITDA¹ of $62.2 million,
an increase of 36.4% (2021: $45.6 million) compared to the
prior reporting period. The Operating EBITDA¹ margin
increased from 28.4% in 2021 to 32.2% in 2022. This
Non-controlling interests
(16,834)
(10,110)
Net profit after tax before significant
items
Significant items²
27,112
(1,725)
22,835
(23,237)
increase in the Operating EBITDA¹ margin was driven by:
Net profit/(loss) after tax attributable
to equity owners
25,387
(402)
• an increase in revenue and Operating EBITDA¹ in
the Group’s programmatic media platform
business, OBMedia, which connects publishers
with the world’s largest search engines. The
business functions as a platform and therefore
has achieved a higher margin than other
businesses in the Group;
Cents per share
Earnings per share (basic) – pre
significant items
Earnings per share (basic)
30.9
28.9
26.4
(0.5)
1. Operating EBITDA, as defined in the basis of preparation section
• while staff costs rose 13.6% in the current year, a
on page 34.
reduction in the staff cost ratio from 61.2% in
2021 to 57.8% in 2022 was achieved given the
increase in global headcount was relatively low as
compared to the revenue growth; and
tax
2. Significant items are explained on page 34.
Reconciliation of Operating EBITDA¹ to statutory profit after
• operating costs, particularly travel expenses,
In thousands of AUD
have increased as COVID-19 related restrictions
have eased. However, the increase in operating
costs has not resulted in a return to pre-
Net revenue
EBITDA
COVID-19 levels.
Depreciation of right-of-use assets
Operating EBITDA¹
The net profit after tax before significant items was $27.1
Depreciation of plant and equipment
million, compared to $22.8 million in the prior year,
primarily driven by growth in Operating EBITDA¹. The
statutory net profit after tax to equity owners was
Amortisation of intangibles
Net finance (costs)/income
Present value interest charge
$25.4 million, compared to a loss of $0.4 million in the prior
Gain/(loss) on sale of controlled
year. In the current year, the Group incurred incidental
entities²
acquisition costs of $1.3 million and recognised a fair value
Loss on disposal of dormant foreign
loss of $1.0 million relating to revaluation of future
contingent consideration, which were partially offset by a
gain of $0.6 million recognised on sale of TLE (2021: non-
subsidiaries²
Incidental acquisition costs²
Contingent consideration fair value
cash accounting loss of $23.0 million relating to disposal of
loss²
Frank PR and Foreign Currency Translation Reserve
(FCTR) transferred to the consolidated income statement
on disposal of dormant foreign subsidiaries and the Group
incurred incidental acquisition costs of $0.2 million).
Statutory profit before tax
Income tax expense
Statutory profit after tax
2022
2021
193,426
160,634
66,196
(3,996)
62,200
(1,722)
(1,222)
(9)
(961)
49,904
(4,291)
45,613
(1,922)
(874)
20
(1,378)
600
(9,878)
–
(13,157)
(1,324)
(202)
(1,001)
56,561
(14,340)
42,221
–
18,222
(8,514)
9,708
In the current year, the operating businesses generated
approximately 64% of their net revenue and 82% of their
Operating EBITDA1 from international markets.
1. Operating EBITDA, as defined in the basis of preparation section
on page 34.
2. Significant items are explained on page 34.
32 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 33
Directors’ ReportFinancial report for year ended 30 June 2022
Directors’ Report
Potential risk
Risk description
Group’s mitigating actions
The Group may be exposed to a
Enero regularly reviews potential business continuity risks
Business
continuity
range of different risks that may
adversely affect the day-to-day
operations of the business.
Acquisition
success
Acquisitions may not deliver
As a portfolio business, Enero has extensive experience
expected value to shareholders,
acquiring and integrating new businesses into the Group.
such as Work, Health and Safety risks (WHS), IT and
Cybersecurity risks, and Regulatory and Governance risks.
We have developed plans to mitigate and minimise the
impact of all of these risks, as well as others. The Audit
and Risk Committee of the Board periodically reviews the
Group’s Business Continuity, Disaster Recovery and Crisis
Management plans.
We conduct extensive due diligence to minimise
commercial and operational risk, as well as developing
integration plans prior to closing M&A transactions, to
ensure we capitalise on the benefits of our acquisitions.
Where appropriate, we may appoint dedicated project
managers to assist with integration efforts. Enero reports
on the performance of acquired businesses and integration
progress to the Board.
(marketing services), noting that we do not own or sell
media assets (at the time of this report). We regularly
monitor for regulatory changes in our operating markets,
and we engage with relevant regulators and industry
bodies as necessary.
either through commercial
underperformance, integration
difficulty or operational issues.
certain regulatory risks where
policy or legal developments
impact our success.
Regulatory risk
The Group may be exposed to
Enero Group operates in a relatively low regulation industry
Governance
processes
Insufficient governance and
As a publicly listed company, Enero Group has dedicated
oversight of the Group’s systems
resources that regularly review our systems and processes
and processes could create an
environment where we act or
perform in a way that does not
meet shareholder expectations.
to ensure we operate at the standard expected by
shareholders. We regularly conduct compliance training for
employees to ensure adherence to Group policies.
Legal risk
The Group may be subjected to a
Enero Group has experienced and dedicated internal Legal
lawsuit that impacts business
resources to ensure that all our businesses are operating
operations or financial
performance.
within the correct legal framework for their respective
jurisdictions. The Group’s Legal Centre of Excellence
provides both leadership and support in legal issues,
including dispute management, contracting, employment
matters and M&A.
Cybersecurity
cybersecurity breaches, or may
ensure our systems and processes are up to date with best
The Group may be subject to
Enero regularly reviews data and privacy regulations to
IT and
risk
not operate in the way required by
practice. We invest in modern cloud infrastructure and
certain IT regulations or business
backup systems to deliver consistently high levels of
practices, leading to financial, data
service. Enero’s IT Centre of Excellence operates as a
or business continuity impacts.
central resource for the Group to provide thought
leadership, support and ensure best-practice operations.
The Group regularly conducts cybersecurity risk
assessments and training, and tracks progress against
outstanding issues until they are mitigated.
Financial performance for the year
The Group achieved Net Revenue of $193.4 million, an
increase of 20.4% (2021: $160.6 million) compared to the
prior reporting period. Net revenue growth was achieved in
all key geographic markets. The Group continues to have a
high proportion of client revenue exposure to its priority
verticals of Technology, Healthcare and Consumer sectors
which have increased or maintained business activity
levels. Net revenue on a constant currency basis was up
$31.2 million compared with the prior year. Net revenue
from continuing businesses after the impact of disposals
was up 25.6% at $191.6 million compared to $152.6 million
for the prior year.
The Group achieved Operating EBITDA¹ of $62.2 million,
an increase of 36.4% (2021: $45.6 million) compared to the
prior reporting period. The Operating EBITDA¹ margin
increased from 28.4% in 2021 to 32.2% in 2022. This
increase in the Operating EBITDA¹ margin was driven by:
• an increase in revenue and Operating EBITDA¹ in
the Group’s programmatic media platform
business, OBMedia, which connects publishers
with the world’s largest search engines. The
business functions as a platform and therefore
has achieved a higher margin than other
businesses in the Group;
• while staff costs rose 13.6% in the current year, a
reduction in the staff cost ratio from 61.2% in
2021 to 57.8% in 2022 was achieved given the
increase in global headcount was relatively low as
compared to the revenue growth; and
• operating costs, particularly travel expenses,
have increased as COVID-19 related restrictions
have eased. However, the increase in operating
costs has not resulted in a return to pre-
COVID-19 levels.
The net profit after tax before significant items was $27.1
million, compared to $22.8 million in the prior year,
primarily driven by growth in Operating EBITDA¹. The
statutory net profit after tax to equity owners was
$25.4 million, compared to a loss of $0.4 million in the prior
year. In the current year, the Group incurred incidental
acquisition costs of $1.3 million and recognised a fair value
loss of $1.0 million relating to revaluation of future
contingent consideration, which were partially offset by a
gain of $0.6 million recognised on sale of TLE (2021: non-
cash accounting loss of $23.0 million relating to disposal of
Frank PR and Foreign Currency Translation Reserve
(FCTR) transferred to the consolidated income statement
on disposal of dormant foreign subsidiaries and the Group
incurred incidental acquisition costs of $0.2 million).
In the current year, the operating businesses generated
approximately 64% of their net revenue and 82% of their
Operating EBITDA1 from international markets.
A summary of the Group’s results is below:
In thousands of AUD
2022
Net revenue
EBITDA
Depreciation of right-of-use assets
Operating EBITDA¹
Depreciation and amortisation
EBIT
Net finance (costs)/income
Present value interest charge
Profit before tax
Income tax expense
Profit after tax
Non-controlling interests
Net profit after tax before significant
items
Significant items²
Net profit/(loss) after tax attributable
to equity owners
Cents per share
Earnings per share (basic) – pre
significant items
Earnings per share (basic)
193,426
66,196
(3,996)
62,200
(2,944)
59,256
(9)
(961)
58,286
(14,340)
43,946
(16,834)
2021
160,634
49,904
(4,291)
45,613
(2,796)
42,817
20
(1,378)
41,459
(8,514)
32,945
(10,110)
27,112
(1,725)
22,835
(23,237)
25,387
(402)
30.9
28.9
26.4
(0.5)
1. Operating EBITDA, as defined in the basis of preparation section
33
on page 34.
2. Significant items are explained on page 34.
Reconciliation of Operating EBITDA¹ to statutory profit after
tax
In thousands of AUD
2022
2021
Net revenue
EBITDA
Depreciation of right-of-use assets
Operating EBITDA¹
Depreciation of plant and equipment
Amortisation of intangibles
Net finance (costs)/income
Present value interest charge
Gain/(loss) on sale of controlled
entities²
Loss on disposal of dormant foreign
subsidiaries²
Incidental acquisition costs²
Contingent consideration fair value
loss²
Statutory profit before tax
Income tax expense
Statutory profit after tax
193,426
66,196
(3,996)
62,200
(1,722)
(1,222)
(9)
(961)
160,634
49,904
(4,291)
45,613
(1,922)
(874)
20
(1,378)
600
(9,878)
–
(1,324)
(13,157)
(202)
(1,001)
56,561
(14,340)
42,221
–
18,222
(8,514)
9,708
1. Operating EBITDA, as defined in the basis of preparation section
on page 34.
2. Significant items are explained on page 34.
32 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 33
Directors’ Report
Significant items
2022
• On 6 May 2022, the Group entered into a sale
agreement to sell the business assets of its strategic
data consultancy businesses, The Leading Edge
(TLE) and The Digital Edge (TDE), for consideration
of $1,350,000. The Group recognised an accounting
gain on sale of $600,000 in the consolidated income
statement for the year ended 30 June 2022.
• The Group recognised a contingent consideration fair
value loss of $1,001,000 relating to a change in the
best estimate of future contingent consideration
payable to the vendors of McDonald Butler
Associates.
• The Group incurred incidental costs of $1,324,000
relating to acquisition of ROI DNA Inc. and GetIT Pte
Ltd.
2021
• On 2 March 2021, the Group entered into a sale
agreement to sell its entire shareholding in Frank PR
(75% issued capital) for consideration of £915,000
($1,647,000). The Group recognised an accounting
loss on sale of $9,878,000 in the consolidated income
statement for the year ended 30 June 2021.
• The Group disposed of 12 dormant foreign
subsidiaries and recognised an accounting loss of
$13,157,000 as it transferred the Foreign Currency
Translation Reserve (FCTR) relating to these
subsidiaries to the consolidated income statement for
the year ended 30 June 2021.
• The Group incurred incidental costs of $202,000
relating to acquisition of McDonald Butler Associates.
Geographical performance
In thousands of AUD
Net revenue
Australia
UK and Europe
USA
Total Operating units
Operating EBITDA
Australia
UK and Europe
USA
Total Operating units
Support office
Share-based payments charge
Total Group
Operating EBITDA margin
Australia
UK and Europe
USA
Total Operating units
Total Group
2022
2021
68,776
36,622
88,028
193,426
65,043
35,504
60,087
160,634
13,325
8,009
51,497
72,831
(8,729)
(1,902)
62,200
13,129
7,597
32,345
53,071
(6,466)
(992)
45,613
19.4%
21.9%
58.5%
37.7%
32.2%
20.2%
21.4%
53.8%
33.0%
28.4%
Acquisitions
2022
No acquisitions were completed in the current year,
however the Group completed the acquisition of ROI DNA
Inc. and GetIT Pte Ltd on 1 July 2022. Refer to Note 22
Acquisitions for details.
2021
On 26 April 2021, the Group acquired 100% of the issued
capital of McDonald Butler Associates, a UK based
technology public relations agency. The purchase
consideration was an upfront payment of £3,500,000
($6,272,000) in addition to contingent consideration of
£5,450,000 ($9,766,000) tied to the net revenue target
through to the period 30 June 2024. Refer to Note 22
Acquisitions for details.
Disposals
2022
On 6 May 2022, the Group entered into a sale agreement
to sell the business assets of its strategic data consultancy
businesses, The Leading Edge (TLE) and The Digital Edge
(TDE), for consideration of $1,350,000. The Group
recognised an accounting gain on sale of $600,000 in the
consolidated income statement for the year ended 30 June
2022. Refer to Note 23 Disposals for details.
2021
On 2 March 2021, the Group entered into a sale agreement
to sell its entire shareholding in Frank PR (75% issued
capital) for consideration of £915,000 ($1,647,000). The
Group recognised a loss on sale of $9,878,000 in the
consolidated income statement for the year ended 30 June
2021. Refer to Note 23 Disposals for details.
The Group disposed of 12 dormant foreign subsidiaries
and recognised an accounting loss of $13,157,000 as it
transferred the Foreign Currency Translation Reserve
(FCTR) relating to these subsidiaries to the consolidated
income statement for the year ended 30 June 2021. Refer
to Note 23 Disposals for details.
Basis of preparation
The Directors’ Report includes Operating EBITDA, a
measure used by the Directors and management in
assessing the ongoing performance of the Group.
Operating EBITDA is a non-IFRS measure and has not
been audited or reviewed.
Operating EBITDA is calculated as profit before interest,
taxes, depreciation of plant and equipment (excluding
depreciation of right-of-use assets), amortisation of
intangibles, impairment of intangibles, gain/(loss) on
disposal of controlled entities and contingent consideration
fair value gain/(loss). Operating EBITDA, reconciled in the
table on page 33, is the primary measure used by
management and the Directors in assessing the
performance of the Group. It provides information on the
Group’s cash flow generation excluding significant
transactions and non-cash items which are not
representative of the Group’s ongoing operations.
Cash and Debt
In thousands of AUD
Cash and cash equivalents
Interest bearing liabilities
Contingent consideration liabilities
Net cash¹
2022
98,742
(36,275)
(10,113)
2021
50,718
–
(20,126)
52,354
30,592
1. Net cash excludes lease liabilities recognised as a result of the
adoption of AASB16 Leases as they are considered operational
liabilities.
The Group had $52.4 million in net cash as at
30 June 2022. Interest bearing liabilities drawn were held in
cash and cash equivalents as at 30 June 2022, which were
subsequently disbursed on 1 July 2022 to fund the
acquisitions completed on that date.
Capital management
The Group’s capital management strategy aims to balance
returns to shareholders through dividends, funding
acquisition and investment opportunities, as well as
maintaining adequate cash reserves for existing
businesses. The Group continues to seek acquisition
geographical or expansion of services perspective.
Cash flow – Operating activities
Cash inflows from operating activities was $48.8 million
(2021: $53.2 million). The decrease in inflows is primarily
attributable to higher income tax payments of $14.9 million
as compared to $7.1 million in the prior year. The Group
converted 96% of EBITDA to cash for the year ended
30 June 2022 (2021: 121%).
Cash flow – Investing activities
Cash outflows from investing activities was $11.1 million
(2021: $21.2 million). The decrease in outflows was due to
lower contingent consideration payments and no
acquisitions were completed during the current year.
Cash flow – Financing activities
Net cash inflows from financing activities was $8.4 million,
primarily due to $36.3 million in loans drawn and held in
cash and cash equivalents as at 30 June 2022, which were
subsequently disbursed on 1 July 2022 to fund the
acquisitions completed on that date. Excluding the
proceeds received from bank loans, cash outflow increased
from $26.7 million in the prior year to $27.8 million in the
current year. During the current year, $9.1 million (2021:
$12.1 million) in dividends were paid to Enero Group
Limited shareholders in addition to $13.0 million
(2021: $8.4 million) in dividends paid to minority
shareholders of controlled entities.
Contingent consideration liabilities
The Company entered into contingent consideration
arrangements in relation to its acquisition of McDonald
Butler Associates on 26 April 2021.
As at 30 June 2022, the Company’s estimated contingent
consideration liability is $10.1 million.
consideration payable:
In thousands of AUD
30 June 2021
Payments made
Fair value loss recognised in relation to
McDonald Butler Associates
Present value interest unwind and foreign
exchange movements
30 June 2022
Maturity profile (at present value):
FY2023
FY2024
FY2025
Total
20,126
(11,000)
1,001
(14)
10,113
2,711
2,461
4,941
10,113
Refer to Note 22 Acquisitions for further information
regarding management's best estimate of contingent
consideration relating to acquisitions completed after
balance date.
opportunities that are aligned with Group strategy from a
Reconciliation of carrying amounts of contingent
34 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 35
Directors’ ReportFinancial report for year ended 30 June 2022
Directors’ Report
Significant items
2022
Acquisitions
2022
• On 6 May 2022, the Group entered into a sale
agreement to sell the business assets of its strategic
data consultancy businesses, The Leading Edge
(TLE) and The Digital Edge (TDE), for consideration
of $1,350,000. The Group recognised an accounting
gain on sale of $600,000 in the consolidated income
statement for the year ended 30 June 2022.
• The Group recognised a contingent consideration fair
value loss of $1,001,000 relating to a change in the
best estimate of future contingent consideration
payable to the vendors of McDonald Butler
Associates.
No acquisitions were completed in the current year,
however the Group completed the acquisition of ROI DNA
Inc. and GetIT Pte Ltd on 1 July 2022. Refer to Note 22
Acquisitions for details.
2021
On 26 April 2021, the Group acquired 100% of the issued
capital of McDonald Butler Associates, a UK based
technology public relations agency. The purchase
consideration was an upfront payment of £3,500,000
($6,272,000) in addition to contingent consideration of
£5,450,000 ($9,766,000) tied to the net revenue target
through to the period 30 June 2024. Refer to Note 22
• The Group incurred incidental costs of $1,324,000
relating to acquisition of ROI DNA Inc. and GetIT Pte
Acquisitions for details.
Ltd.
2021
Disposals
2022
• On 2 March 2021, the Group entered into a sale
agreement to sell its entire shareholding in Frank PR
(75% issued capital) for consideration of £915,000
($1,647,000). The Group recognised an accounting
loss on sale of $9,878,000 in the consolidated income
statement for the year ended 30 June 2021.
• The Group disposed of 12 dormant foreign
subsidiaries and recognised an accounting loss of
$13,157,000 as it transferred the Foreign Currency
Translation Reserve (FCTR) relating to these
subsidiaries to the consolidated income statement for
the year ended 30 June 2021.
• The Group incurred incidental costs of $202,000
relating to acquisition of McDonald Butler Associates.
On 6 May 2022, the Group entered into a sale agreement
to sell the business assets of its strategic data consultancy
businesses, The Leading Edge (TLE) and The Digital Edge
(TDE), for consideration of $1,350,000. The Group
recognised an accounting gain on sale of $600,000 in the
consolidated income statement for the year ended 30 June
2022. Refer to Note 23 Disposals for details.
2021
On 2 March 2021, the Group entered into a sale agreement
to sell its entire shareholding in Frank PR (75% issued
capital) for consideration of £915,000 ($1,647,000). The
Group recognised a loss on sale of $9,878,000 in the
consolidated income statement for the year ended 30 June
2021. Refer to Note 23 Disposals for details.
Geographical performance
In thousands of AUD
Net revenue
Australia
UK and Europe
USA
2022
2021
68,776
36,622
88,028
65,043
35,504
60,087
The Group disposed of 12 dormant foreign subsidiaries
and recognised an accounting loss of $13,157,000 as it
transferred the Foreign Currency Translation Reserve
(FCTR) relating to these subsidiaries to the consolidated
income statement for the year ended 30 June 2021. Refer
to Note 23 Disposals for details.
Basis of preparation
Total Operating units
193,426
160,634
The Directors’ Report includes Operating EBITDA, a
Operating EBITDA
Australia
UK and Europe
USA
Total Operating units
Support office
Share-based payments charge
Total Group
Operating EBITDA margin
Australia
UK and Europe
USA
Total Operating units
Total Group
13,325
8,009
51,497
72,831
(8,729)
(1,902)
62,200
13,129
7,597
32,345
53,071
(6,466)
(992)
45,613
19.4%
21.9%
58.5%
37.7%
32.2%
20.2%
21.4%
53.8%
33.0%
28.4%
measure used by the Directors and management in
assessing the ongoing performance of the Group.
Operating EBITDA is a non-IFRS measure and has not
been audited or reviewed.
Operating EBITDA is calculated as profit before interest,
taxes, depreciation of plant and equipment (excluding
depreciation of right-of-use assets), amortisation of
intangibles, impairment of intangibles, gain/(loss) on
disposal of controlled entities and contingent consideration
fair value gain/(loss). Operating EBITDA, reconciled in the
table on page 33, is the primary measure used by
management and the Directors in assessing the
performance of the Group. It provides information on the
Group’s cash flow generation excluding significant
transactions and non-cash items which are not
representative of the Group’s ongoing operations.
Cash and Debt
In thousands of AUD
Cash and cash equivalents
Interest bearing liabilities
Contingent consideration liabilities
Net cash¹
2022
98,742
(36,275)
(10,113)
52,354
2021
50,718
–
(20,126)
30,592
1. Net cash excludes lease liabilities recognised as a result of the
adoption of AASB16 Leases as they are considered operational
liabilities.
The Group had $52.4 million in net cash as at
30 June 2022. Interest bearing liabilities drawn were held in
cash and cash equivalents as at 30 June 2022, which were
subsequently disbursed on 1 July 2022 to fund the
acquisitions completed on that date.
Capital management
The Group’s capital management strategy aims to balance
returns to shareholders through dividends, funding
acquisition and investment opportunities, as well as
maintaining adequate cash reserves for existing
businesses. The Group continues to seek acquisition
opportunities that are aligned with Group strategy from a
geographical or expansion of services perspective.
Cash flow – Operating activities
Cash inflows from operating activities was $48.8 million
(2021: $53.2 million). The decrease in inflows is primarily
attributable to higher income tax payments of $14.9 million
as compared to $7.1 million in the prior year. The Group
converted 96% of EBITDA to cash for the year ended
30 June 2022 (2021: 121%).
Cash flow – Investing activities
Cash outflows from investing activities was $11.1 million
(2021: $21.2 million). The decrease in outflows was due to
lower contingent consideration payments and no
acquisitions were completed during the current year.
Cash flow – Financing activities
Net cash inflows from financing activities was $8.4 million,
primarily due to $36.3 million in loans drawn and held in
cash and cash equivalents as at 30 June 2022, which were
subsequently disbursed on 1 July 2022 to fund the
acquisitions completed on that date. Excluding the
proceeds received from bank loans, cash outflow increased
from $26.7 million in the prior year to $27.8 million in the
current year. During the current year, $9.1 million (2021:
$12.1 million) in dividends were paid to Enero Group
Limited shareholders in addition to $13.0 million
(2021: $8.4 million) in dividends paid to minority
shareholders of controlled entities.
Contingent consideration liabilities
The Company entered into contingent consideration
arrangements in relation to its acquisition of McDonald
Butler Associates on 26 April 2021.
As at 30 June 2022, the Company’s estimated contingent
consideration liability is $10.1 million.
Reconciliation of carrying amounts of contingent
consideration payable:
In thousands of AUD
30 June 2021
Payments made
Fair value loss recognised in relation to
McDonald Butler Associates
Present value interest unwind and foreign
exchange movements
30 June 2022
Maturity profile (at present value):
FY2023
FY2024
FY2025
Total
20,126
(11,000)
35
1,001
(14)
10,113
2,711
2,461
4,941
10,113
Refer to Note 22 Acquisitions for further information
regarding management's best estimate of contingent
consideration relating to acquisitions completed after
balance date.
34 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 35
Directors’ Report
Remuneration Report – Audited
Contents
1 Introduction
2 Key Management Personnel (KMP) disclosed in this
report
3 Remuneration Governance
4 Executive Remuneration policy and framework
5 Executive service agreements
6 Non-Executive Directors
7 Directors’ and Executive Officers’ remuneration
8 Share-based payments
9 Directors’ and Executive Officers’ holdings of shares
10 Loans to Key Management Personnel
11 Remuneration and Group performance
1 Introduction
The Directors of Enero Group Limited present this
Remuneration Report for the Group for the year ended
30 June 2022. The information provided in the
Remuneration Report has been audited as required by
section 308(3C) of the Corporations Act 2001 and forms
part of the Directors’ Report.
The Remuneration Report outlines practices and specific
remuneration arrangements that apply to Key Management
Personnel (KMP) in accordance with the requirements of
the Corporations Act 2001 and explains how the
Company’s financial performance has driven remuneration
outcomes.
2 Key Management Personnel (KMP) disclosed in this
report
KMP comprise the Directors of the Company and
Executives. The KMP covered in this Remuneration Report
are those people having authority and responsibility for
planning, directing and controlling the activities of the
Group, directly or indirectly. The table below outlines the
KMP at any time during the financial year; and unless
otherwise indicated, they were KMP for the entire year.
Name
Non-Executive
Directors
Ann Sherry
Anouk Darling
Ian Rowden
David Brain
Louise Higgins(i)
Susan McIntosh(ii)
Role
Non-Executive Director (Chair)
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Executives
Brent Scrimshaw
Carla Webb-Sear
Fiona Chilcott
(i) Louise Higgins was appointed as a Non-Executive Director
Chief Executive Officer
Chief Financial Officer
Chief People and Culture Officer
effective 10 September 2021.
(ii) Susan McIntosh retired as a Non-Executive Director effective
21 October 2021.
3 Remuneration Governance
The Board has established the Remuneration and
Nominations Committee (‘Committee’). It is responsible for
making recommendations on remuneration matters to the
Board on:
–
– operation of the incentive plans which apply to
the over-arching executive remuneration framework;
Executives including key performance indicators and
performance hurdles;
–
remuneration levels of Company Executives;
– appointment of the Chief Executive Officer, senior
Executives and Directors themselves; and
– Non-Executive Director fees.
The Committee’s objective is to ensure that remuneration
policies and structures are fair, competitive to attract
suitably qualified candidates, reward the achievement of
strategic short-term and long-term objectives and achieve
long-term value creation for shareholders.
The Corporate Governance Statement (available in the
Corporate Governance section of the Company’s website)
provides further information on the role of the Committee.
The Remuneration and Nomination Committee operates
independently of the Enero Executive team and engages
directly with remuneration advisers.
During the year ended 30 June 2022, the Remuneration
and Nomination Committee engaged Ernst & Young as a
remuneration consultant to provide recommendations with
regards to the Company’s long-term incentives scheme
and a benchmarking analysis of the Company’s Executive
remuneration. A fee of $28,325 was paid to Ernst & Young
for this advice.
During this engagement, Ernst & Young reported directly to
the Remuneration and Nomination Committee, including
prohibiting Ernst & Young providing recommendations to
the Company’s Executives before the recommendations
were given to the Remuneration and Nomination
Committee. The Board is satisfied that the
recommendations made by Ernst & Young were free from
undue influence by the Company’s Executives.
4 Executive Remuneration policy and framework
The objective of the Group’s executive reward framework is
to attract, motivate and retain employees with the required
capabilities and experience to ensure the delivery of
business strategy aligning with the interests of
shareholders.
For Company Executives, the remuneration framework
Remuneration and Nomination Committee through a
currently has the following components:
–
fixed remuneration: comprising base pay, benefits and
– short-term incentive: comprising an annual cash bonus;
process that considers the responsibility, performance and
experience of the individual and the overall performance of
the Group and ensures competitive market salaries are
provided. An Executive’s remuneration may also be
reviewed on promotion.
–
long-term incentive: equity-based Share Appreciation
There are no guaranteed fixed remuneration increases
superannuation;
and
Rights Plan.
In structuring the remuneration mix for each role, the Board
aims to balance fixed and variable remuneration to best
achieve short-term and long-term performance outcomes.
4(a) Fixed remuneration
Fixed remuneration consists of base remuneration (which
is calculated on a total cost-to-Company basis and includes
fringe benefits tax charges related to employee benefits),
as well as employer contributions to superannuation and
targets.
pension funds.
included in any Executive contracts.
4(b) Performance-linked remuneration
Performance-linked remuneration includes both short-term
incentives (STI) and long-term incentives (LTI) and is
designed to reward KMPs, Executives and key leadership
for meeting or exceeding financial, strategic and personal
The STI for the CEO and Company Executives align
Executives with the creation of shareholder value through
driving top-line revenue growth along with Operating
EBITDA margin improvements.
Remuneration levels are reviewed annually by the
Short-term incentives (STI):
as assessed against financial and non-financial measures.
Participant
Performance measures and rationale
The purpose of STI is to motivate and reward Executives for contributing to the delivery of annual business performance
CEO and Company
The STI is an annual cash-based maximum short-term incentive payment of 70% of the
Executive
fixed remuneration determined by the achievement of Operating EBITDA hurdles and
Earnings Per Share pre significant items (EPS) growth hurdles set by the Remuneration
and Nomination Committee. The hurdles are set each financial year determined by
reference to business priorities. A component of the STI is also subject to the achievement
of pre-determined KPIs for the individual.
The STIs are paid in cash following the end of the financial year and approval from the Remuneration and Nomination
Committee. The Company Executives are not contractually entitled to the STI in their respective employment agreements
and the Remuneration and Nomination Committee retains discretion to withdraw or amend the STI at any time.
The Remuneration and Nomination Committee has the discretion to take into account any significant items in determining
whether the financial KPIs have been achieved, where it is considered appropriate for linking remuneration reward to
Company performance.
–
–
The framework aligns executive reward with the
achievement of strategic objectives resulting in
remuneration structures taking into account:
–
the responsibility, performance and experience of key
management personnel;
the Key Management Personnel’s ability to control the
relevant Company’s performance; and
the Group’s performance, including:
–
the Group’s earnings with profit a core component
of remuneration design;
the growth in share price and delivering constant
returns on shareholder wealth; and
the Group’s achievement of strategic objectives.
–
–
36 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 37
Directors’ ReportFinancial report for year ended 30 June 2022
Directors’ Report
Remuneration Report – Audited
3 Remuneration Governance
Contents
1 Introduction
report
2 Key Management Personnel (KMP) disclosed in this
Board on:
3 Remuneration Governance
4 Executive Remuneration policy and framework
5 Executive service agreements
6 Non-Executive Directors
7 Directors’ and Executive Officers’ remuneration
8 Share-based payments
9 Directors’ and Executive Officers’ holdings of shares
10 Loans to Key Management Personnel
11 Remuneration and Group performance
1 Introduction
The Directors of Enero Group Limited present this
Remuneration Report for the Group for the year ended
30 June 2022. The information provided in the
Remuneration Report has been audited as required by
section 308(3C) of the Corporations Act 2001 and forms
part of the Directors’ Report.
The Remuneration Report outlines practices and specific
remuneration arrangements that apply to Key Management
Personnel (KMP) in accordance with the requirements of
the Corporations Act 2001 and explains how the
Company’s financial performance has driven remuneration
outcomes.
report
2 Key Management Personnel (KMP) disclosed in this
are those people having authority and responsibility for
planning, directing and controlling the activities of the
Group, directly or indirectly. The table below outlines the
KMP at any time during the financial year; and unless
otherwise indicated, they were KMP for the entire year.
Role
Name
Non-Executive
Directors
Ann Sherry
Anouk Darling
Ian Rowden
David Brain
Louise Higgins(i)
Susan McIntosh(ii)
Executives
Brent Scrimshaw
Carla Webb-Sear
Fiona Chilcott
Non-Executive Director (Chair)
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Chief Executive Officer
Chief Financial Officer
Chief People and Culture Officer
(i) Louise Higgins was appointed as a Non-Executive Director
effective 10 September 2021.
(ii) Susan McIntosh retired as a Non-Executive Director effective
21 October 2021.
The Board has established the Remuneration and
Nominations Committee (‘Committee’). It is responsible for
making recommendations on remuneration matters to the
–
the over-arching executive remuneration framework;
– operation of the incentive plans which apply to
Executives including key performance indicators and
performance hurdles;
–
remuneration levels of Company Executives;
– appointment of the Chief Executive Officer, senior
Executives and Directors themselves; and
– Non-Executive Director fees.
The Committee’s objective is to ensure that remuneration
policies and structures are fair, competitive to attract
suitably qualified candidates, reward the achievement of
strategic short-term and long-term objectives and achieve
long-term value creation for shareholders.
The Corporate Governance Statement (available in the
Corporate Governance section of the Company’s website)
provides further information on the role of the Committee.
The Remuneration and Nomination Committee operates
independently of the Enero Executive team and engages
directly with remuneration advisers.
During the year ended 30 June 2022, the Remuneration
and Nomination Committee engaged Ernst & Young as a
remuneration consultant to provide recommendations with
regards to the Company’s long-term incentives scheme
and a benchmarking analysis of the Company’s Executive
remuneration. A fee of $28,325 was paid to Ernst & Young
During this engagement, Ernst & Young reported directly to
the Remuneration and Nomination Committee, including
prohibiting Ernst & Young providing recommendations to
the Company’s Executives before the recommendations
were given to the Remuneration and Nomination
Committee. The Board is satisfied that the
recommendations made by Ernst & Young were free from
undue influence by the Company’s Executives.
4 Executive Remuneration policy and framework
The objective of the Group’s executive reward framework is
to attract, motivate and retain employees with the required
capabilities and experience to ensure the delivery of
business strategy aligning with the interests of
shareholders.
The framework aligns executive reward with the
achievement of strategic objectives resulting in
remuneration structures taking into account:
–
–
–
the responsibility, performance and experience of key
management personnel;
the Key Management Personnel’s ability to control the
relevant Company’s performance; and
the Group’s performance, including:
–
–
–
the Group’s earnings with profit a core component
of remuneration design;
the growth in share price and delivering constant
returns on shareholder wealth; and
the Group’s achievement of strategic objectives.
KMP comprise the Directors of the Company and
Executives. The KMP covered in this Remuneration Report
for this advice.
For Company Executives, the remuneration framework
currently has the following components:
–
fixed remuneration: comprising base pay, benefits and
superannuation;
– short-term incentive: comprising an annual cash bonus;
and
Remuneration and Nomination Committee through a
process that considers the responsibility, performance and
experience of the individual and the overall performance of
the Group and ensures competitive market salaries are
provided. An Executive’s remuneration may also be
reviewed on promotion.
–
long-term incentive: equity-based Share Appreciation
Rights Plan.
There are no guaranteed fixed remuneration increases
included in any Executive contracts.
In structuring the remuneration mix for each role, the Board
aims to balance fixed and variable remuneration to best
achieve short-term and long-term performance outcomes.
4(a) Fixed remuneration
Fixed remuneration consists of base remuneration (which
is calculated on a total cost-to-Company basis and includes
fringe benefits tax charges related to employee benefits),
as well as employer contributions to superannuation and
pension funds.
Remuneration levels are reviewed annually by the
4(b) Performance-linked remuneration
Performance-linked remuneration includes both short-term
incentives (STI) and long-term incentives (LTI) and is
designed to reward KMPs, Executives and key leadership
for meeting or exceeding financial, strategic and personal
targets.
The STI for the CEO and Company Executives align
Executives with the creation of shareholder value through
driving top-line revenue growth along with Operating
EBITDA margin improvements.
Short-term incentives (STI):
The purpose of STI is to motivate and reward Executives for contributing to the delivery of annual business performance
as assessed against financial and non-financial measures.
Participant
CEO and Company
Executive
Performance measures and rationale
The STI is an annual cash-based maximum short-term incentive payment of 70% of the
fixed remuneration determined by the achievement of Operating EBITDA hurdles and
Earnings Per Share pre significant items (EPS) growth hurdles set by the Remuneration
and Nomination Committee. The hurdles are set each financial year determined by
reference to business priorities. A component of the STI is also subject to the achievement
of pre-determined KPIs for the individual.
37
The STIs are paid in cash following the end of the financial year and approval from the Remuneration and Nomination
Committee. The Company Executives are not contractually entitled to the STI in their respective employment agreements
and the Remuneration and Nomination Committee retains discretion to withdraw or amend the STI at any time.
The Remuneration and Nomination Committee has the discretion to take into account any significant items in determining
whether the financial KPIs have been achieved, where it is considered appropriate for linking remuneration reward to
Company performance.
36 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 37
Directors’ Report
Long-term incentives (LTI):
The purpose of the LTI is to align Executive remuneration with long-term shareholder value and the performance of the
Group. The LTI is provided as an equity-based incentive in the Company under the terms of the Share Appreciation Rights
Plan (SARP).
Description
The SAR Plan grants rights to shares in the Company on the achievement of appreciation
in the Company’s share price over the vesting period.
Eligibility
Performance period
Rights
Enero’s Board may determine whether or not the grant of rights is conditional on the
achievement of performance hurdles (including service conditions), and if so the nature of
those hurdles.
No dividends or voting rights are attached to the SARs.
The plan allows for the Board to determine who is entitled to participate in the SARP and it
may grant rights accordingly.
The performance period for the LTI is generally three years, with SAR vesting in equal
tranches of 1/3 each year over the performance period.
The exercise of each right will entitle the rights holder to receive a fraction of an ordinary
share based on a conversion formula of E = (A – B) / A, where:
– E is the share right entitlement;
– A is the volume weighted average price (VWAP) for the Company’s shares for the 20
business days prior to the vesting date of the rights; and
– B is the VWAP for the Company’s shares for the 20 business days before the rights
were granted.
If A – B is less than or equal to zero, the share right will not vest and will immediately lapse
on the applicable vesting date.
The number of shares to be granted will equal the number of SARs awarded multiplied by
the above conversion formula.
Other conditions
Rights expire at 15 business days after the relevant vesting date or the termination of the
individual’s employment.
Cessation of employment will result in the lapsing of any unvested SARs.
One share right shall never convert into more than one share in the capital of the Company.
The Board may exercise discretion on early vesting of rights in the event of a change of
control of the Group.
Refer to the table below for a summary of SARs on issue.
Refer to Section 8 (Share-based payments) of the Remuneration Report for further information regarding the SARs.
Summary of Share Appreciation Rights on issue:
Issue date
SARs issued
Participants
VWAP for the 20 business days prior to the
grant (B)
Vesting dates:
20 business days after the release of the
Group financial report for the year ended:
Tranche 1 (1/3)
Tranche 2 (1/3)
Tranche 3 (1/3)
Last expiry date
Outstanding SARs as at 30 June 2022
24 October 2019
2,450,000
Senior Executives
21 October 2020
3,900,000
Senior Executives
21 October 2021
4,525,000
Senior Executives
$2.13
$1.52
$3.02
30 June 2020
30 June 2021
30 June 2022
30 September 2022
416,670
30 June 2021
30 June 2022
30 June 2023
30 September 2023
2,066,670
30 June 2022
30 June 2023
30 June 2024
30 September 2024
4,525,000
5 Executive service agreements
It is the Group’s policy that service contracts for Key Management Personnel are in force either for a fixed period, with an
extension period negotiable after completion of the initial term, or on a rolling basis. The agreements are capable of
termination, acknowledging appropriate notice periods, and the Group retains the right to terminate the contract
immediately for contractual breach by the Executive or by making payment in lieu of notice.
The service agreements outline the components of remuneration paid to the Key Management Personnel. Remuneration
levels are reviewed annually by the Remuneration and Nomination Committee or in accordance with the terms of the
service agreements.
Summary terms for current service agreements for Key Management Personnel:
Key Management Personnel
Duration of contract
Chief Executive
30 June 2023
Notice period on
termination by
Group
6 months
Notice period
on resignation by
Key Management
Personnel
Termination payment
Termination payment on
on termination by
resignation by Key
Group
Management Personnel
(i) (ii) (iii) (iv)
(i) (ii) (iv)
6 months 6 months base salary 6 months base salary
Rolling
6 months
6 months 6 months base salary 6 months base salary
Rolling
3 months
3 months 3 months base salary 3 months base salary
Officer
Officer
Chief Financial
Chief People and
Culture Officer
(i)
In addition to termination payments, Key Management Personnel are also entitled to receive, on termination of their employment, their statutory
entitlements of accrued annual and long service leave, together with any superannuation benefits.
(ii)
Includes any payment in lieu of notice.
(iii) No termination payment is due if termination is for serious misconduct.
(iv) Executives are entitled to a pro-rata STI payment on termination, except for termination for serious misconduct.
Remuneration details of Executives are set out in Section 7 Directors’ and Executive Officers’ remuneration.
6 Non-Executive Directors
The Company’s Constitution provides that the Non-Executive Directors are each entitled to be paid such remuneration
from the Company as the Directors decide for their services as Director, but the total amount provided to all Non-Executive
Directors for their services must not exceed in aggregate in any financial year the amount fixed by the Company in a
general meeting. This amount has been fixed by the Company at $750,000 for the financial year ended 30 June 2022.
Total remuneration paid to Non-Executive Directors for the year ending 30 June 2022 amounted to $450,577
(30 June 2021: $440,000), which is 60.1% of the annual aggregate cap.
The remuneration of Non-Executive Directors does not include any performance-based pay and they do not participate in
any equity-based incentive plans. Directors may be reimbursed for travelling and other expenses incurred in attending to
the Company’s affairs. Directors may be paid such additional or special remuneration as the Directors decide is
appropriate where a Director performs extra services or makes special exertions for the benefit of the Company.
The following Non-Executive Director fees (inclusive of superannuation) have been applied in the years ended
30 June 2022 and 30 June 2021:
Base fees – annual
Chair
Other Non-Executive Directors
Committee fees – annual
Audit and Risk Committee – Chair
Remuneration and Nomination Committee – Chair
2022
$
120,000
75,000
2021
S
120,000
75,000
10,000
10,000
10,000
10,000
Remuneration details of Non-Executive Directors are set out in Section 7 Directors’ and Executive Officers’ remuneration.
38 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 39
Directors’ ReportFinancial report for year ended 30 June 2022
Directors’ Report
Long-term incentives (LTI):
Plan (SARP).
Description
The purpose of the LTI is to align Executive remuneration with long-term shareholder value and the performance of the
Group. The LTI is provided as an equity-based incentive in the Company under the terms of the Share Appreciation Rights
The SAR Plan grants rights to shares in the Company on the achievement of appreciation
in the Company’s share price over the vesting period.
Enero’s Board may determine whether or not the grant of rights is conditional on the
achievement of performance hurdles (including service conditions), and if so the nature of
those hurdles.
No dividends or voting rights are attached to the SARs.
may grant rights accordingly.
Eligibility
The plan allows for the Board to determine who is entitled to participate in the SARP and it
Performance period
The performance period for the LTI is generally three years, with SAR vesting in equal
tranches of 1/3 each year over the performance period.
Rights
The exercise of each right will entitle the rights holder to receive a fraction of an ordinary
share based on a conversion formula of E = (A – B) / A, where:
– E is the share right entitlement;
– A is the volume weighted average price (VWAP) for the Company’s shares for the 20
business days prior to the vesting date of the rights; and
– B is the VWAP for the Company’s shares for the 20 business days before the rights
were granted.
on the applicable vesting date.
If A – B is less than or equal to zero, the share right will not vest and will immediately lapse
The number of shares to be granted will equal the number of SARs awarded multiplied by
the above conversion formula.
Other conditions
Cessation of employment will result in the lapsing of any unvested SARs.
Rights expire at 15 business days after the relevant vesting date or the termination of the
individual’s employment.
One share right shall never convert into more than one share in the capital of the Company.
The Board may exercise discretion on early vesting of rights in the event of a change of
control of the Group.
Refer to the table below for a summary of SARs on issue.
Refer to Section 8 (Share-based payments) of the Remuneration Report for further information regarding the SARs.
Summary of Share Appreciation Rights on issue:
VWAP for the 20 business days prior to the
20 business days after the release of the
Group financial report for the year ended:
Issue date
SARs issued
Participants
grant (B)
Vesting dates:
Tranche 1 (1/3)
Tranche 2 (1/3)
Tranche 3 (1/3)
Last expiry date
24 October 2019
21 October 2020
21 October 2021
2,450,000
3,900,000
4,525,000
Senior Executives
Senior Executives
Senior Executives
$2.13
$1.52
$3.02
30 June 2020
30 June 2021
30 June 2022
30 June 2021
30 June 2022
30 June 2023
30 June 2022
30 June 2023
30 June 2024
30 September 2022
30 September 2023
30 September 2024
Outstanding SARs as at 30 June 2022
416,670
2,066,670
4,525,000
5 Executive service agreements
It is the Group’s policy that service contracts for Key Management Personnel are in force either for a fixed period, with an
extension period negotiable after completion of the initial term, or on a rolling basis. The agreements are capable of
termination, acknowledging appropriate notice periods, and the Group retains the right to terminate the contract
immediately for contractual breach by the Executive or by making payment in lieu of notice.
The service agreements outline the components of remuneration paid to the Key Management Personnel. Remuneration
levels are reviewed annually by the Remuneration and Nomination Committee or in accordance with the terms of the
service agreements.
Summary terms for current service agreements for Key Management Personnel:
Duration of contract
30 June 2023
Notice period on
termination by
Group
6 months
Notice period
on resignation by
Key Management
Personnel
Termination payment on
Termination payment
resignation by Key
on termination by
Management Personnel
Group
(i) (ii) (iv)
(i) (ii) (iii) (iv)
6 months 6 months base salary 6 months base salary
Rolling
6 months
6 months 6 months base salary 6 months base salary
Rolling
3 months
3 months 3 months base salary 3 months base salary
Key Management Personnel
Chief Executive
Officer
Chief Financial
Officer
Chief People and
Culture Officer
(i)
In addition to termination payments, Key Management Personnel are also entitled to receive, on termination of their employment, their statutory
entitlements of accrued annual and long service leave, together with any superannuation benefits.
(ii)
Includes any payment in lieu of notice.
(iii) No termination payment is due if termination is for serious misconduct.
(iv) Executives are entitled to a pro-rata STI payment on termination, except for termination for serious misconduct.
Remuneration details of Executives are set out in Section 7 Directors’ and Executive Officers’ remuneration.
39
6 Non-Executive Directors
The Company’s Constitution provides that the Non-Executive Directors are each entitled to be paid such remuneration
from the Company as the Directors decide for their services as Director, but the total amount provided to all Non-Executive
Directors for their services must not exceed in aggregate in any financial year the amount fixed by the Company in a
general meeting. This amount has been fixed by the Company at $750,000 for the financial year ended 30 June 2022.
Total remuneration paid to Non-Executive Directors for the year ending 30 June 2022 amounted to $450,577
(30 June 2021: $440,000), which is 60.1% of the annual aggregate cap.
The remuneration of Non-Executive Directors does not include any performance-based pay and they do not participate in
any equity-based incentive plans. Directors may be reimbursed for travelling and other expenses incurred in attending to
the Company’s affairs. Directors may be paid such additional or special remuneration as the Directors decide is
appropriate where a Director performs extra services or makes special exertions for the benefit of the Company.
The following Non-Executive Director fees (inclusive of superannuation) have been applied in the years ended
30 June 2022 and 30 June 2021:
Base fees – annual
Chair
Other Non-Executive Directors
Committee fees – annual
Audit and Risk Committee – Chair
Remuneration and Nomination Committee – Chair
2022
$
120,000
75,000
2021
S
120,000
75,000
10,000
10,000
10,000
10,000
Remuneration details of Non-Executive Directors are set out in Section 7 Directors’ and Executive Officers’ remuneration.
38 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 39
Directors’ Report
7 Directors’ and Executive Officers’ remuneration
7(a) Directors’ and Executive Officers’ short-term cash benefits, post-employment benefits, other long-term remuneration
and equity-based remuneration
Details of the nature and amount of each element of the remuneration of each Director of the Company, and each of the
Executives of the Company who are KMPs, are shown in the table below:
Short-term benefits
Post-
employment
Long-term
benefits
Share-based
payments
Cash
STI(i)
$
Annual
leave(ii) Superannuation
$
$
Long service
leave(ii)
$
Termination
benefit
$
Value of
Share
Appreciation
Rights (LTI)(iii)
$
Non-Executive Directors
Ann Sherry (viii)
Anouk Darling (ix)
Ian Rowden (viii)
David Brain
Louise Higgins(v) (ix)
Susan McIntosh(vi)
Executive Director
Brent Scrimshaw
Director and CEO
Executives
Carla Webb-Sear(vii)
Chief Financial Officer
Executives
Fiona Chilcott
Chief People and
Culture Officer
Salary
and fees
$
120,833
130,000
78,523
77,626
84,167
75,000
75,000
75,000
66,410
–
22,727
68,493
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2022
2021
800,432
576,800
778,306
560,000
42,667
39,822
2022
396,432
294,000
12,325
2021
127,151
94,067
11,123
2022
2021
374,500
278,648
18,804
350,000
260,186
9,219
Proportion of
total
remuneration
performance
related(iv)
%
–
–
–
–
–
–
–
–
–
–
–
–
56.68
48.67
53.53
39.25
54.18
49.23
Total
$
120,833
130,000
79,167
85,000
84,167
75,000
75,000
75,000
66,410
–
25,000
75,000
–
–
–
–
–
–
–
–
–
–
–
–
560,419
2,006,399
236,982
1,637,422
205,028
932,300
–
239,674
219,438
919,308
111,013
753,960
–
–
644
7,374
–
–
–
–
–
–
2,273
6,507
23,568
21,694
23,568
7,231
23,568
21,694
–
–
–
–
–
–
–
–
–
–
–
–
2,513
618
947
102
4,350
1,848
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(i) The short-term incentive bonus is for performance during the 30 June 2022 financial year using the criteria set out on page 37. The table above includes
the expense incurred during the financial year for the bonuses awarded. Refer to the table on page 41 for the bonuses awarded.
(ii) Amounts represent movements in employee leave entitlements, with a negative balance representing an overall reduction in the employee leave provision
compared with the prior year.
(iii) Share Appreciation Rights are calculated at the date of grant using the Monte Carlo simulation model. The fair value is allocated to each reporting period on
a straight-line basis over the period from the grant date (or service commencement date) to the vesting date.
(iv) Percentages are based on total remuneration, including equity, cash, post-employment benefits and other compensation.
(v) Louise Higgins was appointed as a Non-Executive Director on 10 September 2021.
(vi) Susan McIntosh retired as a Non-Executive Director effective 21 October 2021.
(vii) Carla Webb-Sear was appointed as CFO on 8 March 2021.
(viii) During the current year, Ann Sherry and Ian Rowden were chair of the Remuneration and Nomination Committee from 1 July 2021 to 31 July 2021 and
from 1 August 2021 to 30 June 2022 respectively. Ann Sherry was chair of the Remuneration and Nomination Committee during the prior reporting period.
(ix) During the current year, Anouk Darling and Louise Higgins were chair of the Audit and Risk Committee from 1 July 2021 to 30 November 2021 and from
1 December 2021 to 30 June 2022 respectively. Anouk Darling was chair of the Audit and Risk Committee during the prior reporting period.
(x) Executives receive salary continuance insurance cover. There are no other benefits offered by the Company.
7(b) Performance-related remuneration
Details of the Company’s policy in relation to the proportion of remuneration that is performance-based are discussed
on page 37.
40 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 41
7(c) STI included in remuneration
Details of the vesting profile of the short-term incentive bonuses awarded as remuneration to each Executive of the
Company and the Group, who are classified Key Management Personnel, are discussed below.
Short-term incentive bonus(i)
Maximum
Actual STI included in
Actual STI as %
STI forfeited
Actual STI as a %
STI
$
remuneration
of maximum
as % of
$(iii)
STI
maximum STI
of fixed
remuneration(ii)
Company Executives
Brent Scrimshaw
Carla Webb-Sear
Fiona Chilcott
576,800
294,000
278,648
576,800
294,000
278,648
100%
100%
100%
–
–
–
70%
70%
70%
(i) Amounts included in remuneration for the financial year represent the amount that vested in the financial year based on the achievement of
specified performance criteria as discussed in Section 4(b) Performance-linked remuneration and are approved following the completion of the
reporting period audit.
(ii) Fixed remuneration is salary plus superannuation.
(iii) Actual STI included in remuneration includes any superannuation contribution amounts.
Annual performance for Company Executives is assessed against the following measures in determining the percentage of
fixed remuneration payable as STI:
Weighting
Target
Outcome
Outcome as % of
Measure
Financial
Operating EBITDA
EPS Growth
Non-financial
Strategy and Culture
as follows:
Company Executives
Brent Scrimshaw
Carla Webb-Sear
Fiona Chilcott
30 September each year.
48%
32%
$47.0 million
$62.2 million
10%
20%
Delivery of measure
17%
Met
8 Share-based payments
8(a) Share-based payment arrangements granted as remuneration
Details of SARs that were granted as compensation to each Key Management Personnel during the reporting period are
Type of
rights
Number of
granted
rights granted
during 2022
during 2022
VWAP (for the 20
Fair value per
business days prior
right at grant date
to the grant)
Grant date
$
$
Expiry date (i)
SAR
SAR
SAR
1,300,000
650,000
550,000
21 Oct 2021
21 Oct 2021
21 Oct 2021
0.64 – 0.85
0.64 – 0.85
0.64 – 0.85
3.02
3.02
3.02
30 Sept 2024
30 Sept 2024
30 Sept 2024
(i) The expiry dates reflected in the table above represent the last vesting date for the SAR grant. The vesting date of the SARs is 20 business days
after the release of the Group’s preliminary financial report for the relevant financial year. This is estimated to be around, but no later than,
%
vested
in year
100%
100%
100%
target
132%
170%
–
Directors’ ReportFinancial report for year ended 30 June 2022
Directors’ Report
7 Directors’ and Executive Officers’ remuneration
7(a) Directors’ and Executive Officers’ short-term cash benefits, post-employment benefits, other long-term remuneration
and equity-based remuneration
Details of the nature and amount of each element of the remuneration of each Director of the Company, and each of the
Executives of the Company who are KMPs, are shown in the table below:
Short-term benefits
employment
benefits
Post-
Long-term
Cash
STI(i)
Annual
Long service
Termination
leave(ii) Superannuation
leave(ii)
benefit
Share-based
payments
Value of
Share
Appreciation
Rights (LTI)(iii)
Proportion of
total
remuneration
performance
related(iv)
%
Non-Executive Directors
Ann Sherry (viii)
Anouk Darling (ix)
Ian Rowden (viii)
David Brain
Louise Higgins(v) (ix)
Susan McIntosh(vi)
Executive Director
Brent Scrimshaw
Director and CEO
Executives
Carla Webb-Sear(vii)
Chief Financial Officer
Executives
Fiona Chilcott
Chief People and
Culture Officer
Salary
and fees
$
120,833
130,000
78,523
77,626
84,167
75,000
75,000
75,000
66,410
–
22,727
68,493
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
$
–
–
–
–
–
–
–
–
–
–
–
–
$
–
–
–
–
–
–
–
–
–
–
–
–
2022
2021
800,432
576,800
778,306
560,000
42,667
39,822
2022
396,432
294,000
12,325
2021
127,151
94,067
11,123
2022
2021
374,500
278,648
18,804
350,000
260,186
9,219
644
7,374
$
–
–
–
–
–
–
–
–
2,273
6,507
23,568
21,694
23,568
7,231
23,568
21,694
$
–
–
–
–
–
–
–
–
–
–
–
–
2,513
618
947
102
4,350
1,848
Total
$
120,833
130,000
79,167
85,000
84,167
75,000
75,000
75,000
66,410
–
25,000
75,000
$
–
–
–
–
–
–
–
–
–
–
–
–
560,419
2,006,399
236,982
1,637,422
205,028
932,300
–
239,674
219,438
919,308
111,013
753,960
$
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
56.68
48.67
53.53
39.25
54.18
49.23
(i) The short-term incentive bonus is for performance during the 30 June 2022 financial year using the criteria set out on page 37. The table above includes
the expense incurred during the financial year for the bonuses awarded. Refer to the table on page 41 for the bonuses awarded.
(ii) Amounts represent movements in employee leave entitlements, with a negative balance representing an overall reduction in the employee leave provision
compared with the prior year.
(iii) Share Appreciation Rights are calculated at the date of grant using the Monte Carlo simulation model. The fair value is allocated to each reporting period on
a straight-line basis over the period from the grant date (or service commencement date) to the vesting date.
(iv) Percentages are based on total remuneration, including equity, cash, post-employment benefits and other compensation.
(v) Louise Higgins was appointed as a Non-Executive Director on 10 September 2021.
(vi) Susan McIntosh retired as a Non-Executive Director effective 21 October 2021.
(vii) Carla Webb-Sear was appointed as CFO on 8 March 2021.
(viii) During the current year, Ann Sherry and Ian Rowden were chair of the Remuneration and Nomination Committee from 1 July 2021 to 31 July 2021 and
from 1 August 2021 to 30 June 2022 respectively. Ann Sherry was chair of the Remuneration and Nomination Committee during the prior reporting period.
(ix) During the current year, Anouk Darling and Louise Higgins were chair of the Audit and Risk Committee from 1 July 2021 to 30 November 2021 and from
1 December 2021 to 30 June 2022 respectively. Anouk Darling was chair of the Audit and Risk Committee during the prior reporting period.
(x) Executives receive salary continuance insurance cover. There are no other benefits offered by the Company.
7(b) Performance-related remuneration
on page 37.
Details of the Company’s policy in relation to the proportion of remuneration that is performance-based are discussed
7(c) STI included in remuneration
Details of the vesting profile of the short-term incentive bonuses awarded as remuneration to each Executive of the
Company and the Group, who are classified Key Management Personnel, are discussed below.
Short-term incentive bonus(i)
Company Executives
Brent Scrimshaw
Carla Webb-Sear
Fiona Chilcott
Maximum
STI
$
Actual STI included in
remuneration
$(iii)
Actual STI as %
of maximum
STI
STI forfeited
as % of
maximum STI
Actual STI as a %
of fixed
remuneration(ii)
%
vested
in year
576,800
294,000
278,648
576,800
294,000
278,648
100%
100%
100%
–
–
–
70%
70%
70%
100%
100%
100%
(i) Amounts included in remuneration for the financial year represent the amount that vested in the financial year based on the achievement of
specified performance criteria as discussed in Section 4(b) Performance-linked remuneration and are approved following the completion of the
reporting period audit.
(ii) Fixed remuneration is salary plus superannuation.
(iii) Actual STI included in remuneration includes any superannuation contribution amounts.
Annual performance for Company Executives is assessed against the following measures in determining the percentage of
fixed remuneration payable as STI:
Measure
Weighting
Target
Outcome
Outcome as % of
target
Financial
Operating EBITDA
EPS Growth
Non-financial
Strategy and Culture
48%
32%
$47.0 million
$62.2 million
10%
20%
Delivery of measure
17%
Met
132%
170%
–
41
8 Share-based payments
8(a) Share-based payment arrangements granted as remuneration
Details of SARs that were granted as compensation to each Key Management Personnel during the reporting period are
as follows:
Type of
rights
granted
during 2022
Number of
rights granted
during 2022
Fair value per
right at grant date
$
Grant date
VWAP (for the 20
business days prior
to the grant)
$
Expiry date (i)
SAR
SAR
SAR
1,300,000
650,000
550,000
21 Oct 2021
21 Oct 2021
21 Oct 2021
0.64 – 0.85
0.64 – 0.85
0.64 – 0.85
3.02
3.02
3.02
30 Sept 2024
30 Sept 2024
30 Sept 2024
Company Executives
Brent Scrimshaw
Carla Webb-Sear
Fiona Chilcott
(i) The expiry dates reflected in the table above represent the last vesting date for the SAR grant. The vesting date of the SARs is 20 business days
after the release of the Group’s preliminary financial report for the relevant financial year. This is estimated to be around, but no later than,
30 September each year.
40 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 41
Directors’ Report
8(b) Analysis of share-based payments granted as remuneration
Details of the vesting profiles of the rights granted as remuneration to a Director of the Company, and each of the KMPs,
are shown below:
Number of
rights
granted
Type of
rights
granted
Grant date
%
vested
in year
%
forfeited
in year
%
exercised
in year
%
remaining
to vest
Vesting date(i)
Company Executives
Brent Scrimshaw
1,250,000 SAR
21 Oct 2020
33
1,300,000 SAR
21 Oct 2021
Carla Webb-Sear
650,000 SAR
21 Oct 2021
Fiona Chilcott
900,000 SAR
18 Oct 2018
350,000 SAR
24 Oct 2019
100,000 SAR
21 Oct 2020
550,000 SAR
21 Oct 2021
–
–
33
33
33
–
–
–
–
–
–
–
–
33
–
–
33
33
33
–
66 30 Sep 2021, 30 Sep 2022 and
30 Sep 2023
100 30 Sep 2022, 30 Sep 2023 and
30 Sep 2024
100 30 Sep 2022, 30 Sep 2023 and
30 Sep 2024
30 Sep 2021
–
33
30 Sep 2021 and
30 Sep 2022
66 30 Sep 2021, 30 Sep 2022 and
30 Sep 2023
100 30 Sep 2022, 30 Sep 2023 and
30 Sep 2024
(i) The expiry dates reflected in the table above represent all of the vesting dates for each remaining tranche of rights. The vesting date of the
SARs is 20 business days after the release of the Group’s preliminary financial report for the relevant financial year. This is estimated to be
around 30 September each year.
8(c) Analysis of movements in rights and value of rights exercised
The movement during the reporting period in the number of rights over ordinary shares in Enero Group Limited held,
directly, indirectly or beneficially, by each KMP, including their related entities, and value of rights exercised during the
year, is as follows:
Granted
held at
1 Jul 2021
Granted as
remuneration
in year
1,250,000
1,300,000
–
633,333
650,000
550,000
Director
Brent Scrimshaw
Executives
Carla Webb-Sear
Fiona Chilcott
Expired
Cancelled Exercised
Granted
held at
30 Jun 2022
Vested
during
the year
Vested and
exercisable at
30 Jun 2022
Value of
rights
granted
during
the year
$
Value of
rights
exercised
during the
year
$
–
–
–
–
(416,666)
2,133,334 416,666
– 979,463
145,000
–
–
–
(450,000)
650,000
–
733,333 450,000
– 489,732
– 414,388
–
148,350
No share-based payments held by KMP are vested but not exercisable at 30 June 2022.
No share-based payments were held by KMP related parties.
No terms of equity-settled share-based payment transactions (including rights granted as compensation to Key
Management Personnel) have been altered or modified by the issuing entity during the reporting period or the prior period.
9 Directors’ and Executive Officers’ holdings of shares
The movement during the reporting period in the number of ordinary shares in Enero Group Limited, held directly, indirectly
or beneficially, by each KMP, including their related parties, is as follows:
Directors
Ann Sherry
Brent Scrimshaw
Anouk Darling
Ian Rowden
David Brain
Susan McIntosh(i)
Executives
Fiona Chilcott
Held at
1 July 2021
Purchases
Issued as
remuneration
Received on
exercise of
rights
Sales
Held at
30 June 2022
18,750
–
19,607
75,000
75,000
122,223
41,536
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
216,877
–
–
–
–
–
–
–
–
–
–
18,750
216,877
19,607
75,000
75,000
122,223
239,222
(72,252)
208,506
(i) Closing balance represents shares held at the date of retirement as Non-Executive Director.
42 Enero Group Limited Annual Report 2022
No loans to Key Management Personnel and their related parties were made during the year or were outstanding at the
10 Loans to Key Management Personnel
reporting date.
11 Remuneration and Group performance
The Remuneration and Nomination Committee has given consideration to the Group’s performance and consequences on
shareholder wealth in the current financial year and the four previous financial years. Financial performance from
operations of the current and last four financial years is indicated in the following table:
Metric
Net revenue ($’000)
Operating EBITDA1 ($’000)
Operating EBITDA1 margin (%)
Net profit/(loss) to equity holders ($’000)
Net profit to equity holders pre significant
items ($’000)
Earnings Per Share pre significant items
Earnings Per Share pre significant items
(cps)
growth (%)
Earnings Per Share basic (cps)
Total Dividends Per Share (cps)
Opening share price (1 July) ($)
Closing share price (30 June) ($)
30 June
30 June
30 June
30 June
30 June
2022
2021
2020
2019
2018
193,426
62,200
32.2%
25,387
160,634
45,613
28.4%
(402)
135,825
24,381
18.0%
10,707
129,535
20,722
16.0%
5,661
103,685
13,513
13.0%
8,473
27,112
22,835
12,881
12,051
7,846
30.9
17%
28.9
12.5
2.56
2.90
26.4
76%
(0.5)
14.9
1.36
2.51
15.0
6%
12.5
6.0
1.49
1.40
14.2
53%
6.7
5.5
1.06
1.42
9.3
58%
10.1
4.0
1.03
1.06
1. Operating EBITDA, as defined in the basis of preparation section on page 34.
The Remuneration and Nomination Committee has determined appropriate remuneration structures which correlate
remuneration of KMPs with future shareholder wealth.
The Remuneration and Nomination Committee considers the achievement of financial targets (Operating EBITDA hurdles
and EPS growth hurdles) as well as non-financial measures (strategic objectives) in setting the short-term incentives.
Short-term incentives have been set by the Remuneration and Nomination Committee based on achievement of certain
Operating EBITDA and EPS targets, which align remuneration with increases in profitability. The non-financial measures of
the short-term incentives require achievement of financial targets before being assessed for payment.
Longer-term profitability, changes in share price and return of capital are factors the Remuneration and Nomination
Committee takes into account in assessing the LTI. The SAR plan aligns remuneration with share price performance
because it only rewards KMPs for increases in the share price over the vesting period in addition to completing a service
period.
The Remuneration and Nomination Committee has reviewed both the financial performance in the current financial year as
well as the achievement of strategic activities which took place during the current financial year. The Remuneration and
Nomination Committee believes the current year achievements of:
• Net revenue, Operating EBITDA and Operating EBITDA margin increases;
a 17% increase in EPS (pre significant items) year on year;
increase in USA market presence, which was identified as a key strategic objective; and
the improvements to the integration of the network across the Operating Businesses through increased sharing
are aligned with the achievement of future shareholder wealth and therefore confirm the Executive Remuneration policy
•
•
•
of clients,
and framework.
End of Remuneration Report.
Enero Group Limited Annual Report 2022 43
Directors’ ReportFinancial report for year ended 30 June 2022
Directors’ Report
8(b) Analysis of share-based payments granted as remuneration
Details of the vesting profiles of the rights granted as remuneration to a Director of the Company, and each of the KMPs,
are shown below:
Company Executives
Number of
Type of
rights
rights
granted
granted
%
%
%
%
vested
forfeited
exercised
remaining
Grant date
in year
in year
in year
to vest
Vesting date(i)
Brent Scrimshaw
1,250,000 SAR
21 Oct 2020
33
33
66 30 Sep 2021, 30 Sep 2022 and
1,300,000 SAR
21 Oct 2021
100 30 Sep 2022, 30 Sep 2023 and
Carla Webb-Sear
650,000 SAR
21 Oct 2021
100 30 Sep 2022, 30 Sep 2023 and
Fiona Chilcott
900,000 SAR
18 Oct 2018
350,000 SAR
24 Oct 2019
–
33
100,000 SAR
21 Oct 2020
66 30 Sep 2021, 30 Sep 2022 and
550,000 SAR
21 Oct 2021
100 30 Sep 2022, 30 Sep 2023 and
–
–
–
–
–
–
–
–
–
33
33
33
–
–
–
33
33
33
–
(i) The expiry dates reflected in the table above represent all of the vesting dates for each remaining tranche of rights. The vesting date of the
SARs is 20 business days after the release of the Group’s preliminary financial report for the relevant financial year. This is estimated to be
around 30 September each year.
8(c) Analysis of movements in rights and value of rights exercised
The movement during the reporting period in the number of rights over ordinary shares in Enero Group Limited held,
directly, indirectly or beneficially, by each KMP, including their related entities, and value of rights exercised during the
year, is as follows:
30 Sep 2023
30 Sep 2024
30 Sep 2024
30 Sep 2021
30 Sep 2021 and
30 Sep 2022
30 Sep 2023
30 Sep 2024
Value of
Value of
rights
rights
granted
exercised
Granted
Granted as
held at
remuneration
1 Jul 2021
in year
Expired
Cancelled Exercised
30 Jun 2022
the year
30 Jun 2022
$
Granted
held at
Vested
Vested and
during
during the
during
exercisable at
the year
year
$
Brent Scrimshaw
1,250,000
1,300,000
–
(416,666)
2,133,334 416,666
– 979,463
145,000
Director
Executives
Carla Webb-Sear
–
Fiona Chilcott
633,333
650,000
550,000
–
–
–
650,000
–
(450,000)
733,333 450,000
– 489,732
–
– 414,388
148,350
No share-based payments held by KMP are vested but not exercisable at 30 June 2022.
No share-based payments were held by KMP related parties.
No terms of equity-settled share-based payment transactions (including rights granted as compensation to Key
Management Personnel) have been altered or modified by the issuing entity during the reporting period or the prior period.
9 Directors’ and Executive Officers’ holdings of shares
The movement during the reporting period in the number of ordinary shares in Enero Group Limited, held directly, indirectly
or beneficially, by each KMP, including their related parties, is as follows:
–
–
–
Directors
Ann Sherry
Brent Scrimshaw
Anouk Darling
Ian Rowden
David Brain
Susan McIntosh(i)
Executives
Fiona Chilcott
1 July 2021
Purchases
remuneration
rights
Sales
30 June 2022
Issued as
Received on
exercise of
–
–
–
–
–
–
–
–
–
–
–
–
–
–
216,877
–
–
–
–
–
–
–
–
–
–
–
239,222
(72,252)
208,506
Held at
18,750
216,877
19,607
75,000
75,000
122,223
Held at
18,750
–
19,607
75,000
75,000
122,223
41,536
(i) Closing balance represents shares held at the date of retirement as Non-Executive Director.
42 Enero Group Limited Annual Report 2022
10 Loans to Key Management Personnel
No loans to Key Management Personnel and their related parties were made during the year or were outstanding at the
reporting date.
11 Remuneration and Group performance
The Remuneration and Nomination Committee has given consideration to the Group’s performance and consequences on
shareholder wealth in the current financial year and the four previous financial years. Financial performance from
operations of the current and last four financial years is indicated in the following table:
Metric
Net revenue ($’000)
Operating EBITDA1 ($’000)
Operating EBITDA1 margin (%)
Net profit/(loss) to equity holders ($’000)
Net profit to equity holders pre significant
items ($’000)
Earnings Per Share pre significant items
(cps)
Earnings Per Share pre significant items
growth (%)
Earnings Per Share basic (cps)
Total Dividends Per Share (cps)
Opening share price (1 July) ($)
Closing share price (30 June) ($)
30 June
2022
30 June
2021
30 June
2020
30 June
2019
30 June
2018
193,426
62,200
32.2%
25,387
160,634
45,613
28.4%
(402)
135,825
24,381
18.0%
10,707
129,535
20,722
16.0%
5,661
103,685
13,513
13.0%
8,473
27,112
22,835
12,881
12,051
7,846
30.9
17%
28.9
12.5
2.56
2.90
26.4
76%
(0.5)
14.9
1.36
2.51
15.0
6%
12.5
6.0
1.49
1.40
14.2
53%
6.7
5.5
1.06
1.42
9.3
58%
10.1
4.0
1.03
1.06
43
1. Operating EBITDA, as defined in the basis of preparation section on page 34.
The Remuneration and Nomination Committee has determined appropriate remuneration structures which correlate
remuneration of KMPs with future shareholder wealth.
The Remuneration and Nomination Committee considers the achievement of financial targets (Operating EBITDA hurdles
and EPS growth hurdles) as well as non-financial measures (strategic objectives) in setting the short-term incentives.
Short-term incentives have been set by the Remuneration and Nomination Committee based on achievement of certain
Operating EBITDA and EPS targets, which align remuneration with increases in profitability. The non-financial measures of
the short-term incentives require achievement of financial targets before being assessed for payment.
Longer-term profitability, changes in share price and return of capital are factors the Remuneration and Nomination
Committee takes into account in assessing the LTI. The SAR plan aligns remuneration with share price performance
because it only rewards KMPs for increases in the share price over the vesting period in addition to completing a service
period.
The Remuneration and Nomination Committee has reviewed both the financial performance in the current financial year as
well as the achievement of strategic activities which took place during the current financial year. The Remuneration and
Nomination Committee believes the current year achievements of:
• Net revenue, Operating EBITDA and Operating EBITDA margin increases;
•
•
•
a 17% increase in EPS (pre significant items) year on year;
increase in USA market presence, which was identified as a key strategic objective; and
the improvements to the integration of the network across the Operating Businesses through increased sharing
of clients,
are aligned with the achievement of future shareholder wealth and therefore confirm the Executive Remuneration policy
and framework.
End of Remuneration Report.
Enero Group Limited Annual Report 2022 43
Consolidated income statement
Consolidated income statement
for the year ended 30 June 2022
for the year ended 30 June 2022
Consolidated statement of comprehensive income
for the year ended 30 June 2022
In thousands of AUD
Gross revenue
Directly attributable costs of sales
Gross profit
Other income
Employee expenses
Occupancy costs
Travel expenses
Communication expenses
Compliance expenses
Depreciation and amortisation expenses
Administration expenses
Gain/(loss) on disposal of controlled entities
Incidental acquisition costs
Contingent consideration fair value loss
Finance income
Finance costs
Profit before income tax
Income tax expense
Profit for the year
Attributable to:
Equity holders of the parent
Non-controlling interests
Basic earnings per share (AUD cents)
Diluted earnings per share (AUD cents)
Note
3
23
22
13
4
5
18
18
2022
522,124
(328,698)
193,426
259
(111,716)
(1,424)
(1,565)
(1,732)
(2,032)
(6,940)
(9,020)
600
(1,324)
(1,001)
20
(990)
56,561
(14,340)
42,221
25,387
16,834
42,221
28.9
28.2
2021
402,478
(241,844)
160,634
1,631
(98,360)
(1,658)
(201)
(1,965)
(2,588)
(7,087)
(7,589)
(23,035)
(202)
–
46
(1,404)
18,222
(8,514)
9,708
(402)
10,110
9,708
(0.5)
(0.5)
The notes on pages 49 to 90 are an integral part of these consolidated financial statements.
In thousands of AUD
Profit for the year
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss:
Foreign currency translation differences for disposed foreign operations
Reserve change in ownership interest – partially owned subsidiary
disposed during the year
Total items that will not be reclassified subsequently to profit or loss
Items that may be reclassified subsequently to profit or loss:
Foreign currency translation differences for foreign operations
Total items that may be reclassified subsequently to profit or loss
Note
23
23
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Attributable to:
Equity holders of the parent
Non-controlling interests
The notes on pages 49 to 90 are an integral part of these consolidated financial statements.
2022
42,221
–
–
–
1,231
1,231
1,231
43,452
26,077
17,375
43,452
2021
9,708
16,331
1,417
17,748
(585)
(585)
17,163
26,871
16,840
10,031
26,871
44 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 45
Financial report for year ended 30 June 2022
Consolidated income statement
for the year ended 30 June 2022
In thousands of AUD
Gross revenue
Directly attributable costs of sales
Gross profit
Other income
Employee expenses
Occupancy costs
Travel expenses
Communication expenses
Compliance expenses
Depreciation and amortisation expenses
Administration expenses
Gain/(loss) on disposal of controlled entities
Incidental acquisition costs
Contingent consideration fair value loss
Finance income
Finance costs
Profit before income tax
Income tax expense
Profit for the year
Attributable to:
Equity holders of the parent
Non-controlling interests
Basic earnings per share (AUD cents)
Diluted earnings per share (AUD cents)
The notes on pages 49 to 90 are an integral part of these consolidated financial statements.
Note
3
23
22
13
4
5
18
18
2022
522,124
(328,698)
193,426
259
(111,716)
(1,424)
(1,565)
(1,732)
(2,032)
(6,940)
(9,020)
600
(1,324)
(1,001)
20
(990)
56,561
(14,340)
42,221
25,387
16,834
42,221
28.9
28.2
2021
402,478
(241,844)
160,634
1,631
(98,360)
(1,658)
(201)
(1,965)
(2,588)
(7,087)
(7,589)
(23,035)
(202)
–
46
(1,404)
18,222
(8,514)
9,708
(402)
10,110
9,708
(0.5)
(0.5)
Consolidated statement of comprehensive income
for the year ended 30 June 2022
Consolidated statement of comprehensive income
for the year ended 30 June 2022
In thousands of AUD
Profit for the year
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss:
Foreign currency translation differences for disposed foreign operations
Reserve change in ownership interest – partially owned subsidiary
disposed during the year
Total items that will not be reclassified subsequently to profit or loss
Items that may be reclassified subsequently to profit or loss:
Foreign currency translation differences for foreign operations
Total items that may be reclassified subsequently to profit or loss
Note
23
23
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Attributable to:
Equity holders of the parent
Non-controlling interests
2022
42,221
–
–
–
1,231
1,231
1,231
43,452
26,077
17,375
43,452
2021
9,708
16,331
1,417
17,748
(585)
(585)
17,163
26,871
16,840
10,031
26,871
The notes on pages 49 to 90 are an integral part of these consolidated financial statements.
45
44 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 45
Consolidated statement of changes in equity
for the year ended 30 June 2022
Consolidated statement of changes in equity
for the year ended 30 June 2022
Consolidated statement of financial position
as at 30 June 2022
Attributable to owners of the Company
Retained
profits/
(Accumulated
losses)
Profit
appropriation
reserve
Share-
based
payment
reserve
Reserve
change in
ownership
interest in
subsidiary
Foreign
currency
translation
reserve
Non-
controlling
interests
Total
Total
equity
(383)
(402)
–
(402)
33,209
10,541
(1,417)
(18,843) 122,622
2,355 124,977
–
–
–
–
–
–
–
–
(402)
10,110
9,708
1,417
15,825
17,242
(79)
17,163
1,417
15,825
16,840
10,031
26,871
Share
capital
99,515
–
–
–
In thousands of AUD
Note
Opening balance at 1 July 2020
(Loss)/profit for the year
Other comprehensive income for
the year, net of tax
Total comprehensive income for
the year
Transactions with owners
recorded directly in equity:
Shares issued to employees on
exercise of Share Appreciation
Rights
Transfer to profit appropriation
reserve
Dividends paid to equity holders
Disposal of controlling interest in
partially owned subsidiaries
Share-based payment expense
17
941
–
–
(941)
17
23
–
–
–
–
(15,770)
–
15,770
(12,132)
–
–
–
–
–
–
–
992
Closing balance at 30 June 2021
100,456
(16,555)
36,847
10,592
Opening balance at 1 July 2021
100,456
(16,555)
36,847
10,592
Profit for the year
Other comprehensive income for
the year, net of tax
Total comprehensive income for
the year
Transactions with owners
recorded directly in equity:
Shares issued to employees on
exercise of Share Appreciation
Rights
Dividends paid to equity holders
Share-based payment expense
–
–
–
25,387
–
25,387
–
–
–
–
–
–
17
17
4,405
–
–
–
–
–
–
(9,157)
–
(4,405)
–
1,902
Closing balance at 30 June 2022
104,861
8,832
27,690
8,089
The notes on pages 49 to 90 are an integral part of these consolidated financial statements.
In thousands of AUD
Assets
Cash and cash equivalents
Trade and other receivables
Other assets
Income tax receivable
Total current assets
Deferred tax assets
Plant and equipment
Right-of-use assets
Other assets
Intangible assets
Total non-current assets
Total assets
Liabilities
Trade and other payables
Contingent consideration payable
Lease liabilities
Employee benefits
Income tax payable
Total current liabilities
Contingent consideration payable
Lease liabilities
Employee benefits
Interest bearing liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Other reserves
6
7
8
5
5
9
10
8
11
12
13
14
15
5
13
14
15
16
17
Note
2022
2021
169,071
102,584
98,742
63,995
6,112
222
2,020
3,200
5,950
162
114,664
125,996
295,067
76,496
2,711
5,841
5,679
1,798
92,525
7,402
2,756
783
36,275
47,216
139,741
155,326
104,861
5,761
27,690
8,832
147,144
8,182
155,326
50,718
46,941
4,925
–
2,038
3,796
7,979
164
118,156
132,133
234,717
63,161
10,886
5,589
4,586
2,155
86,377
9,240
6,262
755
–
16,257
102,634
132,083
100,456
7,574
36,847
(16,555)
128,322
3,761
132,083
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
– (12,132)
–
–
(8,359) (20,491)
–
–
–
992
(266)
–
(266)
992
(3,018) 128,322
3,761 132,083
(3,018) 128,322
3,761 132,083
–
25,387
16,834
42,221
690
690
541
1,231
690
26,077
17,375
43,452
–
–
–
–
(9,157)
1,902
–
–
(12,954) (22,111)
1,902
–
(2,328) 147,144
8,182 155,326
Profit appropriation reserve
Retained earnings/(Accumulated losses)
Total equity attributable to equity holders of the parent
Non-controlling interests
Total equity
The notes on pages 49 to 90 are an integral part of these consolidated financial statements.
46 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 47
Financial report for year ended 30 June 2022
Consolidated statement of changes in equity
for the year ended 30 June 2022
Consolidated statement of financial position
as at 30 June 2022
Consolidated statement of financial position
as at 30 June 2022
Retained
profits/
Profit
Attributable to owners of the Company
Share-
based
Reserve
change in
ownership
Foreign
currency
Share
(Accumulated
appropriation
payment
interest in
translation
In thousands of AUD
Note
capital
losses)
reserve
reserve
subsidiary
reserve
Total
Opening balance at 1 July 2020
99,515
33,209
10,541
(1,417)
(18,843) 122,622
2,355 124,977
Non-
controlling
interests
Total
equity
–
–
(402)
10,110
9,708
1,417
15,825
17,242
(79)
17,163
1,417
15,825
16,840
10,031
26,871
17
941
–
(941)
(15,770)
15,770
(12,132)
(Loss)/profit for the year
Other comprehensive income for
the year, net of tax
Total comprehensive income for
the year
Transactions with owners
recorded directly in equity:
Shares issued to employees on
exercise of Share Appreciation
Transfer to profit appropriation
Rights
reserve
Dividends paid to equity holders
Disposal of controlling interest in
partially owned subsidiaries
Share-based payment expense
17
23
Profit for the year
Other comprehensive income for
the year, net of tax
Total comprehensive income for
the year
Transactions with owners
recorded directly in equity:
Shares issued to employees on
exercise of Share Appreciation
Rights
Dividends paid to equity holders
Share-based payment expense
(383)
(402)
–
(402)
–
–
–
–
–
–
–
–
25,387
25,387
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
992
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Closing balance at 30 June 2022
104,861
8,832
27,690
(2,328) 147,144
8,182 155,326
4,405
17
17
(9,157)
–
–
(4,405)
–
1,902
8,089
–
–
–
–
1,902
(9,157)
(12,954) (22,111)
–
–
–
1,902
The notes on pages 49 to 90 are an integral part of these consolidated financial statements.
–
–
–
–
–
–
– (12,132)
(8,359) (20,491)
–
992
(266)
–
(266)
992
–
–
–
–
–
25,387
16,834
42,221
690
690
541
1,231
690
26,077
17,375
43,452
Closing balance at 30 June 2021
100,456
(16,555)
36,847
10,592
(3,018) 128,322
3,761 132,083
Opening balance at 1 July 2021
100,456
(16,555)
36,847
10,592
(3,018) 128,322
3,761 132,083
In thousands of AUD
Assets
Cash and cash equivalents
Trade and other receivables
Other assets
Income tax receivable
Total current assets
Deferred tax assets
Plant and equipment
Right-of-use assets
Other assets
Intangible assets
Total non-current assets
Total assets
Liabilities
Trade and other payables
Contingent consideration payable
Lease liabilities
Employee benefits
Income tax payable
Total current liabilities
Contingent consideration payable
Lease liabilities
Employee benefits
Interest bearing liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Other reserves
Profit appropriation reserve
Retained earnings/(Accumulated losses)
Total equity attributable to equity holders of the parent
Non-controlling interests
Total equity
The notes on pages 49 to 90 are an integral part of these consolidated financial statements.
Note
2022
2021
6
7
8
5
5
9
10
8
11
12
13
14
15
5
13
14
15
16
17
98,742
63,995
6,112
222
50,718
46,941
4,925
–
169,071
102,584
2,020
3,200
5,950
162
114,664
125,996
295,067
76,496
2,711
5,841
5,679
1,798
92,525
7,402
2,756
783
36,275
47,216
139,741
155,326
104,861
5,761
27,690
8,832
147,144
8,182
155,326
47
2,038
3,796
7,979
164
118,156
132,133
234,717
63,161
10,886
5,589
4,586
2,155
86,377
9,240
6,262
755
–
16,257
102,634
132,083
100,456
7,574
36,847
(16,555)
128,322
3,761
132,083
46 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 47
Consolidated statement of cash flows
for the year ended 30 June 2022
Consolidated statement of cash flows
for the year ended 30 June 2022
Notes to the consolidated financial statements
for the year ended 30 June 2022
In thousands of AUD
Cash flows from operating activities
Cash receipts from customers
Cash paid to suppliers and employees
Cash generated from operations
Interest received
Income taxes paid
Interest paid
Net cash from operating activities
Cash flows from investing activities
Proceeds from sale of plant and equipment
Acquisition of plant and equipment
Acquisition of a business, net of cash acquired
Sale of controlled entities, net of cash disposed
Contingent consideration paid
Net cash used in investing activities
Cash flows from financing activities
Payment of lease liabilities
Proceeds received from bank loans
Dividends paid to equity holders of the parent
Dividends paid to non-controlling interests in controlled entities
Net cash from/(used in) financing activities
Net increase in cash and cash equivalents
Effect of exchange rate fluctuations on cash held
Cash and cash equivalents at 1 July
Cash and cash equivalents at 30 June
The notes on pages 49 to 90 are an integral part of these consolidated financial statements.
Note
2022
2021
524,510
(460,748)
63,762
20
(14,933)
(29)
48,820
6
(1,148)
–
1,018
(11,000)
(11,124)
(5,732)
36,275
(9,157)
(12,954)
8,432
46,128
1,896
50,718
98,742
408,956
(348,666)
60,290
46
(7,108)
(26)
53,202
–
(995)
(4,556)
(740)
(14,885)
(21,176)
(6,162)
–
(12,132)
(8,359)
(26,653)
5,373
(2,236)
47,581
50,718
6
9
22
23
13
14
16
17
6
Basis of preparation
1. Basis of preparation
Key numbers
2. Operating segments
3. Revenue
4. Finance costs
5. Income tax expense and deferred tax
6. Cash and cash equivalents
7. Trade and other receivables
8. Other assets
9. Plant and equipment
10. Right-of-use assets
11. Intangible assets
12. Trade and other payables
13. Contingent consideration payable
14. Lease liabilities
15. Employee benefits
Capital
16. Interest bearing liabilities
17. Capital and reserves
18. Earnings per share
Risk
Group structure
21. Controlled entities
22. Acquisitions
23. Disposals
24. Parent entity disclosures
25. Deed of Cross Guarantee
Unrecognised items
26. Commitments
27. Contingencies
Other items
28. Subsequent events
30. Share-based payments
31. Auditor’s remuneration
19. Financial risk management/financial instruments
20. Impairment of non-financial assets
29. Key Management Personnel and other related party disclosures
Page
50
52
55
57
58
60
61
61
62
63
64
66
66
67
68
69
70
71
72
77
79
81
83
85
86
87
87
87
87
88
90
48 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 49
Financial report for year ended 30 June 2022
Consolidated statement of cash flows
for the year ended 30 June 2022
Notes to the consolidated financial statements
for the year ended 30 June 2022
Notes to the consolidated financial statements
for the year ended 30 June 2022
In thousands of AUD
Cash flows from operating activities
Cash receipts from customers
Cash paid to suppliers and employees
Cash generated from operations
Interest received
Income taxes paid
Interest paid
Net cash from operating activities
Cash flows from investing activities
Proceeds from sale of plant and equipment
Acquisition of plant and equipment
Acquisition of a business, net of cash acquired
Sale of controlled entities, net of cash disposed
Contingent consideration paid
Net cash used in investing activities
Cash flows from financing activities
Payment of lease liabilities
Proceeds received from bank loans
Dividends paid to equity holders of the parent
Dividends paid to non-controlling interests in controlled entities
Net cash from/(used in) financing activities
Net increase in cash and cash equivalents
Effect of exchange rate fluctuations on cash held
Cash and cash equivalents at 1 July
Cash and cash equivalents at 30 June
The notes on pages 49 to 90 are an integral part of these consolidated financial statements.
Note
2022
2021
524,510
(460,748)
63,762
20
(14,933)
(29)
48,820
(1,148)
6
–
1,018
(11,000)
(11,124)
(5,732)
36,275
(9,157)
(12,954)
8,432
46,128
1,896
50,718
98,742
408,956
(348,666)
60,290
46
(7,108)
(26)
53,202
–
(995)
(4,556)
(740)
(14,885)
(21,176)
(6,162)
–
(12,132)
(8,359)
(26,653)
5,373
(2,236)
47,581
50,718
6
9
22
23
13
14
16
17
6
Basis of preparation
1. Basis of preparation
Key numbers
2. Operating segments
3. Revenue
4. Finance costs
5. Income tax expense and deferred tax
6. Cash and cash equivalents
7. Trade and other receivables
8. Other assets
9. Plant and equipment
10. Right-of-use assets
11. Intangible assets
12. Trade and other payables
13. Contingent consideration payable
14. Lease liabilities
15. Employee benefits
Capital
16. Interest bearing liabilities
17. Capital and reserves
18. Earnings per share
Risk
19. Financial risk management/financial instruments
20. Impairment of non-financial assets
Group structure
21. Controlled entities
22. Acquisitions
23. Disposals
24. Parent entity disclosures
25. Deed of Cross Guarantee
Unrecognised items
26. Commitments
27. Contingencies
Other items
28. Subsequent events
29. Key Management Personnel and other related party disclosures
30. Share-based payments
31. Auditor’s remuneration
49
Page
50
52
55
57
58
60
61
61
62
63
64
66
66
67
68
69
70
71
72
77
79
81
83
85
86
87
87
87
87
88
90
48 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 49
Notes to the consolidated financial statements
for the year ended 30 June 2022
The estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimate is
revised and in any future periods if affected.
Further information about critical accounting estimates and
judgements made is included in the following notes:
• 5. Income tax expense and deferred tax
• 13. Contingent consideration payable
• 20. Impairment of non-financial assets
(iv) Measurement of fair values
A number of the Group’s accounting policies and
disclosures require the measurement of fair values, for
both financial and non-financial assets and liabilities.
When measuring the fair value of an asset or liability, the
Group uses market observable data as far as possible. Fair
values are categorised into different levels in a fair value
hierarchy based on the inputs used in the valuation
techniques as follows:
Level 1: quoted prices (unadjusted) in active markets for
identical assets or liabilities;
Level 2: inputs other than quoted prices included in Level 1
that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices); and
Level 3: inputs for the asset or liability that are not based
on observable market data (unobservable inputs).
If the inputs used to measure the fair value of an asset or a
liability might be categorised in different levels of the fair
value hierarchy, then the fair value measurement is
categorised in its entirety in the same level of the fair value
hierarchy as the lowest level of input that is significant to
the entire measurement.
The Group recognises transfers between levels of the fair
value hierarchy at the end of the reporting period during
which the change has occurred.
Further information about the assumptions made in
measuring fair values is included in the following notes:
• 19. Financial instruments
(Contingent consideration payable)
• 30. Share-based payments
(d) Foreign currency
(i) Functional and presentation currency
The consolidated financial statements are presented in
Australian dollars, which is the Company’s functional
currency.
1. Basis of preparation
In preparing these consolidated financial statements, the
notes have been grouped into sections under certain key
headings. Each section sets out the accounting policies
applied together with any key judgements and estimates
used.
(a) Reporting entity
Enero Group Limited (the Company) is a for-profit
Company domiciled in Australia. The consolidated financial
statements of the Company as at and for the year ended
30 June 2022 comprise the Company and its subsidiaries
(together referred to as the ‘Group’).
The consolidated financial statements for the year ended
30 June 2022 were authorised for issue in accordance with
a resolution of the Directors on 8 September 2022.
(b) Statement of compliance
The consolidated financial statements are a general
purpose financial report which has been prepared in
accordance with Australian Accounting Standards
(‘AASBs’) (including Australian Interpretations) adopted by
the Australian Accounting Standards Board (‘AASB’) and
the Corporations Act 2001. The consolidated financial
statements comply with International Financial Reporting
Standards (IFRS) and interpretations (IFRICs) adopted by
the International Accounting Standards Board (IASB).
(c) Basis of preparation
(i) Basis of measurement
The consolidated financial statements are prepared on the
historical cost basis except for the items as described in
Note 1(c)(iv).
The Company is of a kind referred to in ASIC Corporations
(Rounding in Financial/Directors’ Reports) Instrument
2016/191 and, in accordance with that Class Order,
amounts in the consolidated financial statements and
Directors’ Report have been rounded off to the nearest
thousand dollars, unless otherwise stated.
(ii) Going concern
The consolidated financial statements have been prepared
on a going concern basis which assumes the Group will
continue its operations and be able to meet its obligations
as and when they become due and payable. This
assumption is based on an analysis of the Group’s ability to
meet its future cash flow requirements using its projected
cash flows from operations and existing cash reserves held
as at 30 June 2022.
(iii) Use of estimates and judgements
The preparation of consolidated financial statements in
conformity with AASBs requires management to make
judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and
liabilities, income and expenses. Actual results may differ
from these estimates. The estimates and associated
assumptions are based on historical experience and
various other factors that are believed to be reasonable
under the circumstances, the results of which form the
basis of making the judgements about carrying values of
assets and liabilities that are not readily apparent from
other sources.
50 Enero Group Limited Annual Report 2022
(ii) Foreign currency transactions
(f) Changes in accounting policies
Transactions in foreign currencies are translated to the
respective functional currencies of Group at the foreign
exchange rates ruling at the dates of the transactions.
Monetary assets and liabilities denominated in foreign
currencies at the reporting date are translated to the
respective functional currencies of the Group at the foreign
exchange rate ruling at that date. Foreign exchange
differences arising on retranslation are recognised in the
consolidated income statement. Non-monetary assets and
liabilities that are measured in terms of historical cost in a
foreign currency are translated using the exchange rate at
the date of the transaction. Non-monetary assets and
liabilities denominated in foreign currencies that are stated
at fair value are translated to the functional currency at
foreign exchange rates ruling at the dates the fair value
was determined.
(iii) Foreign operations
The assets and liabilities of foreign operations, including
goodwill and fair value adjustments arising on
consolidation, are translated to Australian dollars at foreign
exchange rates prevailing at the reporting date. The
income and expenses of foreign operations are translated
to Australian dollars at rates approximating the foreign
exchange rates ruling at the dates of the transactions.
Foreign currency differences are recognised in other
comprehensive income and presented in the foreign
currency translation reserve (FCTR) in equity. When a
foreign operation is disposed of, in part or in full, the
relevant amount in the FCTR is transferred to the
consolidated income statement as part of the profit or loss
on disposal.
Foreign exchange gains and losses arising from a
monetary item receivable from or payable to a foreign
operation, the settlement of which is neither planned nor
likely in the foreseeable future, are considered to form
part of a net investment in a foreign operation and are
recognised in other comprehensive income, and are
presented within equity in the FCTR.
(e) Goods and services tax (GST)
Revenue, expenses and assets are recognised net of the
amount of GST, unless GST incurred is not recoverable
from the taxation authority. In this case it is recognised as
part of the cost of acquisition of the asset or as part of the
expense.
Receivables and payables are stated with the amount of
GST included. The net amount of GST recoverable from,
or payable to, the taxation authority, is included as a
current asset or liability in the consolidated statement of
financial position.
Cash flows are presented on a gross basis. The GST
components of cash flows arising from investing or
financing activities, which are recoverable from or payable
to the taxation authority, are presented as operating cash
flows.
The accounting policies provided throughout Notes 1 to 31
of this report have been applied consistently to all periods
presented in the consolidated financial statements.
(g) New standards and interpretations not yet adopted
A number of new standards, amendments to standards and
interpretations are effective for annual periods beginning
after 1 July 2022 and have not been applied in preparing
these consolidated financial statements. None of these are
expected to have a significant effect on the Group’s
financial statements.
(h) The notes to the consolidated financial statements
The notes include information which is required to
understand the consolidated financial statements and is
material and relevant to the operations, financial position
and performance of the Group. Information is considered
material and relevant if, for example:
the amount in question is significant because of its
size or nature;
Group;
it is important for understanding the results of the
it helps to explain the impact of significant changes
in the Group’s business – for example, acquisitions
and impairment write-downs; or
it relates to an aspect of the Group’s operations that
is important to its future performance.
The notes are organised into the following sections:
Key numbers: provides a breakdown of individual
line items in the consolidated financial statements
that the Directors consider most relevant and
summarises the accounting policies, judgements
and estimates relevant to understanding these line
items;
Capital: provides information about the capital
management practices of the Group and
shareholder returns for the year;
Risk: discusses the Group’s exposure to various
financial risks, explains how these affect the
Group’s financial position and performance and
outlines what the Group does to manage these
risks;
Group structure: explains aspects of the Group
structure and changes during the year;
Unrecognised items: provides information about
items that are not recognised in the consolidated
financial statements but could potentially have a
significant impact on the Group’s financial position
and performance; and
•
Other items: provides information on items which
require disclosure to comply with Australian
Accounting Standards and other regulatory
pronouncements; however are not considered
critical in understanding the financial performance
or position of the Group.
•
•
•
•
•
•
•
•
•
Enero Group Limited Annual Report 2022 51
Notes to the consolidated financial statements for the year ended 30 June 2022Financial report for year ended 30 June 2022
Notes to the consolidated financial statements
for the year ended 30 June 2022
The estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimate is
revised and in any future periods if affected.
Further information about critical accounting estimates and
judgements made is included in the following notes:
• 5. Income tax expense and deferred tax
• 13. Contingent consideration payable
• 20. Impairment of non-financial assets
(iv) Measurement of fair values
A number of the Group’s accounting policies and
disclosures require the measurement of fair values, for
both financial and non-financial assets and liabilities.
When measuring the fair value of an asset or liability, the
Group uses market observable data as far as possible. Fair
values are categorised into different levels in a fair value
hierarchy based on the inputs used in the valuation
techniques as follows:
Level 1: quoted prices (unadjusted) in active markets for
identical assets or liabilities;
Level 2: inputs other than quoted prices included in Level 1
that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices); and
Level 3: inputs for the asset or liability that are not based
on observable market data (unobservable inputs).
If the inputs used to measure the fair value of an asset or a
liability might be categorised in different levels of the fair
value hierarchy, then the fair value measurement is
categorised in its entirety in the same level of the fair value
hierarchy as the lowest level of input that is significant to
the entire measurement.
The Group recognises transfers between levels of the fair
value hierarchy at the end of the reporting period during
which the change has occurred.
Further information about the assumptions made in
measuring fair values is included in the following notes:
• 19. Financial instruments
(Contingent consideration payable)
• 30. Share-based payments
(d) Foreign currency
(i) Functional and presentation currency
The consolidated financial statements are presented in
Australian dollars, which is the Company’s functional
currency.
1. Basis of preparation
In preparing these consolidated financial statements, the
notes have been grouped into sections under certain key
headings. Each section sets out the accounting policies
applied together with any key judgements and estimates
used.
(a) Reporting entity
Enero Group Limited (the Company) is a for-profit
Company domiciled in Australia. The consolidated financial
statements of the Company as at and for the year ended
30 June 2022 comprise the Company and its subsidiaries
(together referred to as the ‘Group’).
The consolidated financial statements for the year ended
30 June 2022 were authorised for issue in accordance with
a resolution of the Directors on 8 September 2022.
(b) Statement of compliance
The consolidated financial statements are a general
purpose financial report which has been prepared in
accordance with Australian Accounting Standards
(‘AASBs’) (including Australian Interpretations) adopted by
the Australian Accounting Standards Board (‘AASB’) and
the Corporations Act 2001. The consolidated financial
statements comply with International Financial Reporting
Standards (IFRS) and interpretations (IFRICs) adopted by
the International Accounting Standards Board (IASB).
(c) Basis of preparation
(i) Basis of measurement
The consolidated financial statements are prepared on the
historical cost basis except for the items as described in
Note 1(c)(iv).
The Company is of a kind referred to in ASIC Corporations
(Rounding in Financial/Directors’ Reports) Instrument
2016/191 and, in accordance with that Class Order,
amounts in the consolidated financial statements and
Directors’ Report have been rounded off to the nearest
thousand dollars, unless otherwise stated.
(ii) Going concern
The consolidated financial statements have been prepared
on a going concern basis which assumes the Group will
continue its operations and be able to meet its obligations
as and when they become due and payable. This
assumption is based on an analysis of the Group’s ability to
meet its future cash flow requirements using its projected
cash flows from operations and existing cash reserves held
as at 30 June 2022.
(iii) Use of estimates and judgements
The preparation of consolidated financial statements in
conformity with AASBs requires management to make
judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and
liabilities, income and expenses. Actual results may differ
from these estimates. The estimates and associated
assumptions are based on historical experience and
various other factors that are believed to be reasonable
under the circumstances, the results of which form the
basis of making the judgements about carrying values of
assets and liabilities that are not readily apparent from
other sources.
50 Enero Group Limited Annual Report 2022
(ii) Foreign currency transactions
Transactions in foreign currencies are translated to the
respective functional currencies of Group at the foreign
exchange rates ruling at the dates of the transactions.
Monetary assets and liabilities denominated in foreign
currencies at the reporting date are translated to the
respective functional currencies of the Group at the foreign
exchange rate ruling at that date. Foreign exchange
differences arising on retranslation are recognised in the
consolidated income statement. Non-monetary assets and
liabilities that are measured in terms of historical cost in a
foreign currency are translated using the exchange rate at
the date of the transaction. Non-monetary assets and
liabilities denominated in foreign currencies that are stated
at fair value are translated to the functional currency at
foreign exchange rates ruling at the dates the fair value
was determined.
(iii) Foreign operations
The assets and liabilities of foreign operations, including
goodwill and fair value adjustments arising on
consolidation, are translated to Australian dollars at foreign
exchange rates prevailing at the reporting date. The
income and expenses of foreign operations are translated
to Australian dollars at rates approximating the foreign
exchange rates ruling at the dates of the transactions.
Foreign currency differences are recognised in other
comprehensive income and presented in the foreign
currency translation reserve (FCTR) in equity. When a
foreign operation is disposed of, in part or in full, the
relevant amount in the FCTR is transferred to the
consolidated income statement as part of the profit or loss
on disposal.
Foreign exchange gains and losses arising from a
monetary item receivable from or payable to a foreign
operation, the settlement of which is neither planned nor
likely in the foreseeable future, are considered to form
part of a net investment in a foreign operation and are
recognised in other comprehensive income, and are
presented within equity in the FCTR.
(e) Goods and services tax (GST)
Revenue, expenses and assets are recognised net of the
amount of GST, unless GST incurred is not recoverable
from the taxation authority. In this case it is recognised as
part of the cost of acquisition of the asset or as part of the
expense.
Receivables and payables are stated with the amount of
GST included. The net amount of GST recoverable from,
or payable to, the taxation authority, is included as a
current asset or liability in the consolidated statement of
financial position.
Cash flows are presented on a gross basis. The GST
components of cash flows arising from investing or
financing activities, which are recoverable from or payable
to the taxation authority, are presented as operating cash
flows.
(f) Changes in accounting policies
The accounting policies provided throughout Notes 1 to 31
of this report have been applied consistently to all periods
presented in the consolidated financial statements.
(g) New standards and interpretations not yet adopted
A number of new standards, amendments to standards and
interpretations are effective for annual periods beginning
after 1 July 2022 and have not been applied in preparing
these consolidated financial statements. None of these are
expected to have a significant effect on the Group’s
financial statements.
(h) The notes to the consolidated financial statements
The notes include information which is required to
understand the consolidated financial statements and is
material and relevant to the operations, financial position
and performance of the Group. Information is considered
material and relevant if, for example:
•
•
•
•
the amount in question is significant because of its
size or nature;
it is important for understanding the results of the
Group;
it helps to explain the impact of significant changes
in the Group’s business – for example, acquisitions
and impairment write-downs; or
it relates to an aspect of the Group’s operations that
is important to its future performance.
The notes are organised into the following sections:
•
•
•
•
•
•
Key numbers: provides a breakdown of individual
line items in the consolidated financial statements
that the Directors consider most relevant and
summarises the accounting policies, judgements
and estimates relevant to understanding these line
items;
Capital: provides information about the capital
management practices of the Group and
shareholder returns for the year;
Risk: discusses the Group’s exposure to various
financial risks, explains how these affect the
Group’s financial position and performance and
outlines what the Group does to manage these
risks;
Group structure: explains aspects of the Group
structure and changes during the year;
Unrecognised items: provides information about
items that are not recognised in the consolidated
financial statements but could potentially have a
significant impact on the Group’s financial position
and performance; and
Other items: provides information on items which
require disclosure to comply with Australian
Accounting Standards and other regulatory
pronouncements; however are not considered
critical in understanding the financial performance
or position of the Group.
51
Enero Group Limited Annual Report 2022 51
Notes to the consolidated financial statements
for the year ended 30 June 2022
2. Operating segments
The Group defines its operating segments based on the
manner in which services are provided in the operational
geographies and on internal reporting regularly reviewed
by the Enero Executive team on a monthly basis, who are
the Group’s chief operating decision makers (CODM).
Revenues are all derived from services which are similar in
the nature and outputs, operate in similar economic
environments and have a comparable customer mix. The
Group’s service offering includes integrated marketing and
communication services, including strategy, market
research and insights, advertising, public relations,
communications planning, design, events management,
direct marketing, and programmatic media. The Group
includes Hotwire, BMF, CPR, Orchard and OBMedia.
Following management’s review of the business portfolio at
the beginning of the current reporting period, a new global
operating model was implemented by the Group. The
portfolio was separated into the following two segments to
better assess its performance, make decisions on resource
allocation and report both to the CODM and to the Board:
•
Brand Transformation: human generated creative
ideas to transform the way customers and
stakeholders connect and engage with brands.
This includes public relations and
communications consultancy Hotwire and CPR
and creative agency BMF.
• Creative Technology and Data: high quality
customer experience connected by technology
and enabled by data. This includes digital agency
Orchard and advertising technology platform
OBMedia.
The measure of reporting to the Enero Executive team is
on an Operating EBITDA basis (defined below), which
excludes significant items which are separately presented
because of their nature, size and expected infrequent
occurrence and does not reflect the underlying trading of
the operations.
In relation to segment reporting, the following definitions
apply to operating segments:
Operating EBITDA: is calculated as profit before interest,
taxes, depreciation of plant and equipment (excluding
depreciation of right-of-use assets), amortisation of
intangibles, impairment of intangibles, gain/(loss) on
disposal of controlled entities and contingent consideration
fair value gain/(loss).
2022
In thousands of AUD
Gross revenue
Directly attributable costs of sales
Gross profit
Other income
Operating expenses
EBITDA
Depreciation of right-of-use assets
Operating EBITDA
Depreciation of plant and equipment and
amortisation of intangibles
Contingent consideration fair value loss
Gain on disposal of business
Incidental acquisition costs
Net finance costs
Profit before income tax
Income tax expense
Profit for the year
Goodwill
Other intangibles
Assets excluding intangibles
Total assets
Liabilities
Total liabilities
Amortisation of intangibles
Depreciation
Capital expenditure
Brand
Transformation
142,476
Creative
Technology
and Data
380,046
Total
segments Unallocated Eliminations Consolidated
522,124
522,522
(398)
–
398
(328,698)
(35,756)
106,720
186
(293,340)
(329,096)
86,706
193,426
73
259
–
–
–
(79,139)
(37,256)
(116,395)
(11,094)
27,767
49,523
77,290
(11,094)
–
–
–
–
–
–
–
–
193,426
259
(127,489)
66,196
(3,996)
62,200
(2,944)
(1,001)
600
(1,324)
(970)
56,561
(14,340)
42,221
112,236
2,428
180,403
295,067
139,741
139,741
1,222
5,718
1,148
(1,001)
–
–
600
(1,001)
600
96,315
2,428
54,100
152,843
51,895
51,895
857
4,373
825
15,921
112,236
–
64,734
80,655
40,320
40,320
365
1,077
220
2,428
118,834
233,498
92,215
92,215
1,222
5,450
1,045
–
–
–
–
76,366
76,366
62,323
62,323
–
268
103
(14,797)
(14,797)
(14,797)
(14,797)
–
–
–
(778)
402,478
778
(241,844)
–
–
–
–
–
–
–
–
–
–
–
(8,862)
(8,862)
(8,862)
(8,862)
160,634
1,631
(112,361)
49,904
(4,291)
45,613
(2,796)
(23,035)
(202)
(1,358)
18,222
(8,514)
9,708
114,506
3,650
116,561
234,717
102,634
102,634
874
6,213
995
Transformation
and Data
segments Unallocated Eliminations Consolidated
2021 (restated)
In thousands of AUD
Gross revenue
Directly attributable costs of sales
Gross profit
Other income
Operating expenses
EBITDA
Depreciation of right-of-use assets
Operating EBITDA
Depreciation of plant and equipment and
amortisation of intangibles
Loss on disposal of controlled entities
Creative
Brand
Technology
Total
133,289
(37,396)
95,893
269,967
403,256
(205,226)
(242,622)
64,741
160,634
557
1,074
1,631
(71,362)
(33,135)
(104,497)
25,088
32,680
57,768
–
–
–
–
(7,864)
(7,864)
(9,878)
(202)
(9,878)
(13,157)
(202)
–
Incidental acquisition costs
Net finance costs
Profit before income tax
Income tax expense
Profit for the year
Goodwill
Other intangibles
Assets excluding intangibles
Total assets
Liabilities
Total liabilities
Amortisation of intangibles
Depreciation
Capital expenditure
Geographical segments
Geographical information
2022
Gross profit(iii)
Operating EBITDA
Operating EBITDA margin
97,729
3,285
42,926
143,940
62,163
62,163
248
4,783
755
16,777
114,506
365
38,243
55,385
36,887
36,887
626
1,020
110
3,650
81,169
199,325
99,050
99,050
874
5,803
865
–
–
44,254
44,254
12,446
12,446
–
410
130
The operating segments are managed on a world-wide basis. However, there are three geographic areas of operation.
In thousands of AUD
Australia
UK and
Europe
36,622
8,009
21.9%
UK and
Europe
35,504
7,597
21.4%
USA
88,028
51,497
58.5%
USA
60,087
32,345
53.8%
68,776
13,325
19.4%
65,043
13,129
20.2%
Support
Office(i)
Unallocated
intangibles(ii)
(10,631)
Support
Office(i)
Unallocated
intangibles(ii)
–
–
–
–
–
–
(7,458)
Total
193,426
62,200
32.2%
Total
160,634
45,613
28.4%
–
–
–
–
–
–
In thousands of AUD
Australia
2021
Gross profit(iii)
Operating EBITDA
Operating EBITDA margin
Non-current assets
6,519
3,028
1,785
114,664
125,996
Non-current assets
9,106
3,184
1,687
118,156
132,133
(i) Support office includes the share-based payment charge in the consolidated income statement.
(ii) Goodwill and other intangibles are allocated to the reportable segments. However, as the reportable segments are managed at a global
level they cannot be allocated across geographical segments.
(iii) Gross profit represents net revenue, which is gross revenue less directly attributable costs of sales.
52 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 53
Notes to the consolidated financial statements for the year ended 30 June 2022Financial report for year ended 30 June 2022
Notes to the consolidated financial statements
for the year ended 30 June 2022
2. Operating segments
The Group defines its operating segments based on the
manner in which services are provided in the operational
geographies and on internal reporting regularly reviewed
by the Enero Executive team on a monthly basis, who are
the Group’s chief operating decision makers (CODM).
This includes public relations and
communications consultancy Hotwire and CPR
and creative agency BMF.
• Creative Technology and Data: high quality
customer experience connected by technology
and enabled by data. This includes digital agency
Orchard and advertising technology platform
Revenues are all derived from services which are similar in
the nature and outputs, operate in similar economic
OBMedia.
environments and have a comparable customer mix. The
The measure of reporting to the Enero Executive team is
Group’s service offering includes integrated marketing and
on an Operating EBITDA basis (defined below), which
communication services, including strategy, market
research and insights, advertising, public relations,
excludes significant items which are separately presented
because of their nature, size and expected infrequent
communications planning, design, events management,
occurrence and does not reflect the underlying trading of
direct marketing, and programmatic media. The Group
the operations.
includes Hotwire, BMF, CPR, Orchard and OBMedia.
Following management’s review of the business portfolio at
apply to operating segments:
In relation to segment reporting, the following definitions
the beginning of the current reporting period, a new global
operating model was implemented by the Group. The
portfolio was separated into the following two segments to
better assess its performance, make decisions on resource
allocation and report both to the CODM and to the Board:
•
Brand Transformation: human generated creative
ideas to transform the way customers and
stakeholders connect and engage with brands.
Operating EBITDA: is calculated as profit before interest,
taxes, depreciation of plant and equipment (excluding
depreciation of right-of-use assets), amortisation of
intangibles, impairment of intangibles, gain/(loss) on
disposal of controlled entities and contingent consideration
fair value gain/(loss).
Transformation
and Data
segments Unallocated Eliminations Consolidated
2022
In thousands of AUD
Gross revenue
Directly attributable costs of sales
Gross profit
Other income
Operating expenses
EBITDA
Depreciation of right-of-use assets
Operating EBITDA
Depreciation of plant and equipment and
amortisation of intangibles
Contingent consideration fair value loss
Gain on disposal of business
Incidental acquisition costs
Net finance costs
Profit before income tax
Income tax expense
Profit for the year
Goodwill
Other intangibles
Assets excluding intangibles
Total assets
Liabilities
Total liabilities
Amortisation of intangibles
Depreciation
Capital expenditure
Creative
Brand
Technology
Total
142,476
(35,756)
106,720
186
380,046
522,522
(293,340)
(329,096)
86,706
193,426
73
259
(79,139)
(37,256)
(116,395)
(11,094)
27,767
49,523
77,290
(11,094)
(1,001)
–
–
600
(1,001)
600
96,315
2,428
54,100
152,843
51,895
51,895
857
4,373
825
15,921
112,236
–
64,734
80,655
40,320
40,320
365
1,077
220
2,428
118,834
233,498
92,215
92,215
1,222
5,450
1,045
(14,797)
(14,797)
(14,797)
(14,797)
76,366
76,366
62,323
62,323
–
268
103
–
–
–
–
–
–
–
–
(398)
522,124
398
(328,698)
–
–
–
–
–
–
–
–
–
–
–
193,426
259
(127,489)
66,196
(3,996)
62,200
(2,944)
(1,001)
600
(1,324)
(970)
56,561
(14,340)
42,221
112,236
2,428
180,403
295,067
139,741
139,741
1,222
5,718
1,148
2021 (restated)
In thousands of AUD
Gross revenue
Brand
Transformation
133,289
Creative
Technology
and Data
269,967
Total
segments Unallocated Eliminations Consolidated
402,478
403,256
(778)
–
Directly attributable costs of sales
(37,396)
(205,226)
(242,622)
Gross profit
Other income
Operating expenses
EBITDA
Depreciation of right-of-use assets
Operating EBITDA
Depreciation of plant and equipment and
amortisation of intangibles
Loss on disposal of controlled entities
Incidental acquisition costs
Net finance costs
Profit before income tax
Income tax expense
Profit for the year
Goodwill
Other intangibles
Assets excluding intangibles
Total assets
Liabilities
Total liabilities
Amortisation of intangibles
Depreciation
Capital expenditure
95,893
557
64,741
160,634
1,074
1,631
(71,362)
(33,135)
(104,497)
25,088
32,680
57,768
–
–
–
(7,864)
(7,864)
(9,878)
(202)
(9,878)
(13,157)
(202)
–
97,729
3,285
42,926
143,940
62,163
62,163
248
4,783
755
16,777
114,506
365
38,243
55,385
36,887
36,887
626
1,020
110
3,650
81,169
199,325
99,050
99,050
874
5,803
865
–
–
44,254
44,254
12,446
12,446
–
410
130
778
(241,844)
–
–
–
–
–
–
–
–
(8,862)
(8,862)
(8,862)
(8,862)
–
–
–
160,634
1,631
(112,361)
49,904
(4,291)
45,613
(2,796)
(23,035)
(202)
(1,358)
18,222
(8,514)
9,708
114,506
3,650
116,561
234,717
102,634
102,634
874
6,213
995
53
Geographical segments
The operating segments are managed on a world-wide basis. However, there are three geographic areas of operation.
Geographical information
In thousands of AUD
2022
Gross profit(iii)
Operating EBITDA
Operating EBITDA margin
Australia
68,776
13,325
19.4%
UK and
Europe
36,622
8,009
21.9%
USA
88,028
51,497
58.5%
Support
Office(i)
Unallocated
intangibles(ii)
–
(10,631)
–
–
–
–
Total
193,426
62,200
32.2%
Non-current assets
6,519
3,028
1,785
–
114,664
125,996
In thousands of AUD
2021
Gross profit(iii)
Operating EBITDA
Operating EBITDA margin
Australia
65,043
13,129
20.2%
UK and
Europe
35,504
7,597
21.4%
USA
60,087
32,345
53.8%
Support
Office(i)
Unallocated
intangibles(ii)
–
(7,458)
–
–
–
–
Total
160,634
45,613
28.4%
Non-current assets
9,106
3,184
1,687
–
118,156
132,133
(i) Support office includes the share-based payment charge in the consolidated income statement.
(ii) Goodwill and other intangibles are allocated to the reportable segments. However, as the reportable segments are managed at a global
level they cannot be allocated across geographical segments.
(iii) Gross profit represents net revenue, which is gross revenue less directly attributable costs of sales.
52 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 53
Notes to the consolidated financial statements
for the year ended 30 June 2022
2. Operating segments (continued)
19.9
21.7
2022
–
2021
10.1
Major Customer
Revenue from a customer (2020: 2 customers) represents more than 10% of Group’s total revenue, with a breakdown by
segment provided below:
Percentage of Group’s total revenue
Brand Transformation
Creative Technology and Data
3. Revenue
Nature of our services
The Group provides marketing and communication services to a broad range of customers across three key geographic
locations – Australia, UK & Europe, and USA. The Group is a fee-for-service business where each operating business
generates revenue from time spent on a particular project or delivering to agreed outcomes. The Group provides a
comprehensive range of services across its continuing businesses, with its advertising technology platform and digital
advertising and marketing services capabilities delivered through the Creative Data and Technology segment and
technology communications consultancy, brand transformation consultancy, and public affairs and communications
consultancy delivered through the Brand Transformation segment. With the divestment of the TLE and TDE businesses
disclosed in Note 23, the Group no longer provides strategic data consultancy and online research and data delivery
The duration of the Group’s time or project-based customer contracts is typically from one up to five months, with stand-
ready (“retainer”) contracts typically lasting up to one year and which may be cancelled with notice periods in accordance
with respective contracts. In substantially all cases, the Group is the principal in the arrangements with its customers. In
one customer arrangement, we act as an agent and arrange, at the customer’s direction, for third parties to perform certain
services.
services.
2022
522,124
(328,698)
193,426
2021
402,478
(241,844)
160,634
In thousands of AUD
Gross revenue from the rendering of services
Directly attributable costs of sales
Gross profit
Disaggregation of revenue
Revenue is disaggregated by:
•
•
contracts.
the type of contract (fixed fees for specific projects or time recovered on a rate per hour basis plus reimbursable
costs), with 50% (2021: 46%) of the Group’s consulting revenue (excluding revenue from advertising technology
platform) generated from fixed fee projects and 50% (2021: 54%) from time and cost recovery and retainer
the timing of performance obligation satisfaction (point in time or over time), with 66% (2021: 58%) of the Group’s
revenue recognised at a point in time and 34% (2021: 42%) revenue recognised over time.
Revenue is disaggregated by service type across reportable segments in Note 2.
Revenue is further disaggregated by primary geographical markets in the following table, which reconciles to the revenue
of the Group’s segments (see Note 2).
In thousands of AUD
Australia
UK and Europe
USA
Total reportable segments
Contract balances
customers.
The following table provides information about receivables, contract assets and contract liabilities from contracts with
In thousands of AUD
Trade receivables
Contract assets – Work in progress
Contract liabilities – Unearned revenue
Note
7
8
12
2022
94,405
46,235
381,484
522,124
2022
64,196
3,293
(17,440)
50,049
2021
95,270
45,330
261,878
402,478
2021
47,154
2,758
(16,507)
33,405
21.7
30.0
Accounting policy
The Group determines and presents operating segments based on the information that is provided internally to the Enero
Executive team, who are the Group’s chief operating decision makers (CODM).
An operating segment is a component of the Group that engages in business activities from which it may earn revenues
and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other
components. All operating segments’ results are regularly reviewed by the Group’s CODM to make decisions about
resources to be allocated to the segment and assess its performance, and for which discrete financial information is
available.
Segment results that are reported to the CODM include items directly attributable to a segment, as well as those that can
be allocated on a reasonable basis.
Unallocated items comprise corporate overheads: costs associated with the centralised management and governance of
Enero Group Limited, such as share-based payments charge, interest-bearing loans, costs of borrowings and related
expenses, and corporate head office assets and expenses.
Segment capital expenditure is the total cost incurred during the period to acquire assets that are expected to be used for
more than one period.
54 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 55
Notes to the consolidated financial statements for the year ended 30 June 2022Financial report for year ended 30 June 2022
Notes to the consolidated financial statements
for the year ended 30 June 2022
Revenue from a customer (2020: 2 customers) represents more than 10% of Group’s total revenue, with a breakdown by
2. Operating segments (continued)
Major Customer
segment provided below:
Percentage of Group’s total revenue
Brand Transformation
Creative Technology and Data
2022
–
21.7
21.7
2021
10.1
19.9
30.0
Accounting policy
The Group determines and presents operating segments based on the information that is provided internally to the Enero
Executive team, who are the Group’s chief operating decision makers (CODM).
An operating segment is a component of the Group that engages in business activities from which it may earn revenues
and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other
components. All operating segments’ results are regularly reviewed by the Group’s CODM to make decisions about
resources to be allocated to the segment and assess its performance, and for which discrete financial information is
available.
be allocated on a reasonable basis.
Segment results that are reported to the CODM include items directly attributable to a segment, as well as those that can
Unallocated items comprise corporate overheads: costs associated with the centralised management and governance of
Enero Group Limited, such as share-based payments charge, interest-bearing loans, costs of borrowings and related
expenses, and corporate head office assets and expenses.
Segment capital expenditure is the total cost incurred during the period to acquire assets that are expected to be used for
more than one period.
3. Revenue
Nature of our services
The Group provides marketing and communication services to a broad range of customers across three key geographic
locations – Australia, UK & Europe, and USA. The Group is a fee-for-service business where each operating business
generates revenue from time spent on a particular project or delivering to agreed outcomes. The Group provides a
comprehensive range of services across its continuing businesses, with its advertising technology platform and digital
advertising and marketing services capabilities delivered through the Creative Data and Technology segment and
technology communications consultancy, brand transformation consultancy, and public affairs and communications
consultancy delivered through the Brand Transformation segment. With the divestment of the TLE and TDE businesses
disclosed in Note 23, the Group no longer provides strategic data consultancy and online research and data delivery
services.
The duration of the Group’s time or project-based customer contracts is typically from one up to five months, with stand-
ready (“retainer”) contracts typically lasting up to one year and which may be cancelled with notice periods in accordance
with respective contracts. In substantially all cases, the Group is the principal in the arrangements with its customers. In
one customer arrangement, we act as an agent and arrange, at the customer’s direction, for third parties to perform certain
services.
In thousands of AUD
Gross revenue from the rendering of services
Directly attributable costs of sales
Gross profit
Disaggregation of revenue
Revenue is disaggregated by:
2022
522,124
(328,698)
193,426
2021
402,478
(241,844)
160,634
•
•
the type of contract (fixed fees for specific projects or time recovered on a rate per hour basis plus reimbursable
costs), with 50% (2021: 46%) of the Group’s consulting revenue (excluding revenue from advertising technology
platform) generated from fixed fee projects and 50% (2021: 54%) from time and cost recovery and retainer
contracts.
55
the timing of performance obligation satisfaction (point in time or over time), with 66% (2021: 58%) of the Group’s
revenue recognised at a point in time and 34% (2021: 42%) revenue recognised over time.
Revenue is disaggregated by service type across reportable segments in Note 2.
Revenue is further disaggregated by primary geographical markets in the following table, which reconciles to the revenue
of the Group’s segments (see Note 2).
In thousands of AUD
Australia
UK and Europe
USA
Total reportable segments
2022
94,405
46,235
381,484
522,124
2021
95,270
45,330
261,878
402,478
Contract balances
The following table provides information about receivables, contract assets and contract liabilities from contracts with
customers.
In thousands of AUD
Trade receivables
Contract assets – Work in progress
Contract liabilities – Unearned revenue
Note
7
8
12
2022
64,196
3,293
(17,440)
50,049
2021
47,154
2,758
(16,507)
33,405
54 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 55
Notes to the consolidated financial statements
for the year ended 30 June 2022
3. Revenue (continued)
Contract assets:
The contract assets relate to the Group’s work in progress for accrued fees recognised upon satisfaction of performance
obligations and rechargeable disbursements at the period end which are not invoiced. The contract assets are transferred
to receivables upon invoicing to the customer. There were no significant impairment losses to contract assets recorded in
either the current or prior year.
Contract liabilities:
The contract liabilities relate to the Group’s unearned revenue for consideration received from advance billings to
customers prior to the satisfaction of performance obligations in accordance with the terms of the customer contracts.
Given the short-term nature of customer contracts in the Group, it is expected that both contract assets will be recovered
and contract liabilities will be settled within 12 months from reporting date. Revenue recognised in the current year that
was included in the contract liability balance as at 30 June 2021 amounted to $16,507,000. Revenue recognised in the
current year from performance obligations satisfied (or partially satisfied) as at prior year end was not material.
Accounting policy
Revenue is recognised when a customer obtains control of promised goods or services (the performance obligation) in an
amount that reflects the consideration we expect to receive in exchange for those goods or services (the transaction price).
We measure revenue by estimating the transaction price based on the consideration specified in the customer
arrangement. Revenue is recognised as the performance obligations are satisfied. Our customer contracts are primarily
fees for service on either a project or a rate per hour basis. Revenue is recorded net of sales, use and value added taxes.
Performance obligations
In substantially all our service categories, the performance obligation is to provide advisory and consulting services at an
agreed-upon level of effort to accomplish the specified engagement. Our customer contracts are comprised of diverse
arrangements involving fees based on an agreed fee or rate per hour for the level of effort expended by our employees
and reimbursement for third-party costs that we are required to include in revenue when we control the vendor services
related to these costs and we act as principal.
The transaction price of a contract is allocated to each distinct performance obligation based on its relative stand-alone
selling price and is recognised as revenue when, or as, the customer receives the benefit of the performance obligation.
Customers typically receive and consume the benefit of our services as they are performed. Substantially all our customer
contracts provide that we are compensated for services performed to date and allow for cancellation by either party on
short notice, typically 1 to 3 months, without penalty.
Generally, our short-term contracts, which normally take 1 to 3 months to complete, are performed by a single agency and
consist of a single performance obligation. As a result, we do not consider the underlying services as separate or distinct
performance obligations because our services are highly interrelated, occur in close proximity, and the integration of the
various components of a marketing message is essential to overall service. In certain of our long-term customer contracts,
which have a term of up to one year, the performance obligation is a stand-ready obligation, because we provide a
constant level of similar services over the term of the contract.
Revenue recognition methods
A substantial portion of our revenue is recognised over time, as the services are performed, because the customer
receives and consumes the benefit of our performance throughout the contract period, or we create an asset with no
alternative use and are contractually entitled to payment for our performance to date in the event the customer terminates
the contract for convenience. For these customer contracts, other than when we have a stand-ready obligation to perform
services, revenue is recognised over time using input measures that correspond to the level of staff effort expended to
satisfy the performance obligation on a rate per hour or equivalent basis or output measures that correspond to the stage
of completion of the deliverables. For customer contracts when we have a stand-ready obligation to perform services on an
ongoing basis over the life of the contract, typically for periods up to one year, where the scope of these arrangements is
broad and there are no significant gaps in performing the services, we recognise revenue using a time-based measure
resulting in a straight-line revenue recognition. From time to time, there may be changes in the customer service
requirements during the term of a contract and the changes could be significant. These changes are typically negotiated as
new contracts covering the additional requirements and the associated costs, as well as additional fees for the incremental
work to be performed. As a result, the Group’s customer arrangements do not typically include variable consideration
provisions and therefore, variable consideration amounts do not need to be estimated when determining the transaction
price for its contracts.
Principal vs agent
The Group incurs a number of third party out-of-pocket costs on behalf of customers, including direct costs and incidental,
or out-of-pocket costs. Third-party direct costs incurred in connection with the creation and delivery of advertising or
marketing communication services include, among others: purchased media, studio production services, specialised talent,
including artists and other freelance labour, event marketing supplies, materials and services, promotional items, market
research and third-party data and other related expenditures. Out-of-pocket costs include, among others: transportation,
hotel, meals and telecommunication charges incurred by us in the course of providing our services.
Billings related to out-of-pocket costs are included in revenue since we control the goods or services prior to delivery to the
customer. However, the inclusion of billings related to third-party direct costs in revenue depends on whether we act as a
principal or as an agent in the customer contract.
In substantially all of our customer arrangements, we act as principal when contracting for third-party services on behalf of
our customers because we control the specified goods or services before they are transferred to the customer and we are
responsible for providing the specified goods or services, or we are responsible for directing and integrating third-party
vendors to fulfill our performance obligation at the agreed upon contractual price. In such arrangements, we also take
pricing risk under the terms of the customer contract. When we act as principal, we include billable amounts related to
third-party costs in the transaction price and record revenue over time at the gross amount billed, including out-of-pocket
costs, consistent with the manner that we recognise revenue for the underlying services contract.
When we act as an agent and arrange, at the customer’s direction, for third parties to perform certain services, we do not
control the goods or services prior to the transfer to the customer. As a result, revenue is recorded net of these costs,
equal to the amount retained for our fee or commission.
4. Finance costs
In thousands of AUD
Interest and finance costs
Lease present value interest
Finance costs
Contingent consideration present value interest
2022
29
441
520
990
2021
26
642
736
1,404
Foreign exchange gain of $376,000 (2021: loss of $418,000) has been recognised in the consolidated income statement
and has been included in administration expenses.
Accounting policy
(i) Interest income
(ii) Interest and finance costs
Interest income is recognised as it accrues to the related financial asset using the effective interest method.
Finance costs are recognised in the consolidated income statement using the effective interest method. They include
interest on financial guarantees, amortisation of ancillary costs incurred in connection with financing arrangements and
finance lease interest.
(iii) Contingent consideration present value interest
Present value interest is recognised in the consolidated income statement using the effective interest method and includes
the effective interest cost relating to contingent consideration liabilities recognised in business combinations.
(iv) Lease present value interest
Present value interest is recognised in the consolidated income statement using the effective interest method and includes
the effective interest cost relating to lease liabilities recognised for contracts that contain leases.
56 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 57
Notes to the consolidated financial statements for the year ended 30 June 2022Financial report for year ended 30 June 2022
Notes to the consolidated financial statements
for the year ended 30 June 2022
3. Revenue (continued)
Contract assets:
either the current or prior year.
Contract liabilities:
The contract assets relate to the Group’s work in progress for accrued fees recognised upon satisfaction of performance
obligations and rechargeable disbursements at the period end which are not invoiced. The contract assets are transferred
to receivables upon invoicing to the customer. There were no significant impairment losses to contract assets recorded in
The contract liabilities relate to the Group’s unearned revenue for consideration received from advance billings to
customers prior to the satisfaction of performance obligations in accordance with the terms of the customer contracts.
Given the short-term nature of customer contracts in the Group, it is expected that both contract assets will be recovered
and contract liabilities will be settled within 12 months from reporting date. Revenue recognised in the current year that
was included in the contract liability balance as at 30 June 2021 amounted to $16,507,000. Revenue recognised in the
current year from performance obligations satisfied (or partially satisfied) as at prior year end was not material.
Accounting policy
Revenue is recognised when a customer obtains control of promised goods or services (the performance obligation) in an
amount that reflects the consideration we expect to receive in exchange for those goods or services (the transaction price).
We measure revenue by estimating the transaction price based on the consideration specified in the customer
arrangement. Revenue is recognised as the performance obligations are satisfied. Our customer contracts are primarily
fees for service on either a project or a rate per hour basis. Revenue is recorded net of sales, use and value added taxes.
Performance obligations
In substantially all our service categories, the performance obligation is to provide advisory and consulting services at an
agreed-upon level of effort to accomplish the specified engagement. Our customer contracts are comprised of diverse
arrangements involving fees based on an agreed fee or rate per hour for the level of effort expended by our employees
and reimbursement for third-party costs that we are required to include in revenue when we control the vendor services
related to these costs and we act as principal.
The transaction price of a contract is allocated to each distinct performance obligation based on its relative stand-alone
selling price and is recognised as revenue when, or as, the customer receives the benefit of the performance obligation.
Customers typically receive and consume the benefit of our services as they are performed. Substantially all our customer
contracts provide that we are compensated for services performed to date and allow for cancellation by either party on
short notice, typically 1 to 3 months, without penalty.
Generally, our short-term contracts, which normally take 1 to 3 months to complete, are performed by a single agency and
consist of a single performance obligation. As a result, we do not consider the underlying services as separate or distinct
performance obligations because our services are highly interrelated, occur in close proximity, and the integration of the
various components of a marketing message is essential to overall service. In certain of our long-term customer contracts,
which have a term of up to one year, the performance obligation is a stand-ready obligation, because we provide a
constant level of similar services over the term of the contract.
Revenue recognition methods
A substantial portion of our revenue is recognised over time, as the services are performed, because the customer
receives and consumes the benefit of our performance throughout the contract period, or we create an asset with no
alternative use and are contractually entitled to payment for our performance to date in the event the customer terminates
the contract for convenience. For these customer contracts, other than when we have a stand-ready obligation to perform
services, revenue is recognised over time using input measures that correspond to the level of staff effort expended to
satisfy the performance obligation on a rate per hour or equivalent basis or output measures that correspond to the stage
of completion of the deliverables. For customer contracts when we have a stand-ready obligation to perform services on an
ongoing basis over the life of the contract, typically for periods up to one year, where the scope of these arrangements is
broad and there are no significant gaps in performing the services, we recognise revenue using a time-based measure
resulting in a straight-line revenue recognition. From time to time, there may be changes in the customer service
requirements during the term of a contract and the changes could be significant. These changes are typically negotiated as
new contracts covering the additional requirements and the associated costs, as well as additional fees for the incremental
work to be performed. As a result, the Group’s customer arrangements do not typically include variable consideration
provisions and therefore, variable consideration amounts do not need to be estimated when determining the transaction
price for its contracts.
Principal vs agent
The Group incurs a number of third party out-of-pocket costs on behalf of customers, including direct costs and incidental,
or out-of-pocket costs. Third-party direct costs incurred in connection with the creation and delivery of advertising or
marketing communication services include, among others: purchased media, studio production services, specialised talent,
including artists and other freelance labour, event marketing supplies, materials and services, promotional items, market
research and third-party data and other related expenditures. Out-of-pocket costs include, among others: transportation,
hotel, meals and telecommunication charges incurred by us in the course of providing our services.
Billings related to out-of-pocket costs are included in revenue since we control the goods or services prior to delivery to the
customer. However, the inclusion of billings related to third-party direct costs in revenue depends on whether we act as a
principal or as an agent in the customer contract.
In substantially all of our customer arrangements, we act as principal when contracting for third-party services on behalf of
our customers because we control the specified goods or services before they are transferred to the customer and we are
responsible for providing the specified goods or services, or we are responsible for directing and integrating third-party
vendors to fulfill our performance obligation at the agreed upon contractual price. In such arrangements, we also take
pricing risk under the terms of the customer contract. When we act as principal, we include billable amounts related to
third-party costs in the transaction price and record revenue over time at the gross amount billed, including out-of-pocket
costs, consistent with the manner that we recognise revenue for the underlying services contract.
When we act as an agent and arrange, at the customer’s direction, for third parties to perform certain services, we do not
control the goods or services prior to the transfer to the customer. As a result, revenue is recorded net of these costs,
equal to the amount retained for our fee or commission.
4. Finance costs
In thousands of AUD
Interest and finance costs
Contingent consideration present value interest
Lease present value interest
Finance costs
2022
29
441
520
990
57
2021
26
642
736
1,404
Foreign exchange gain of $376,000 (2021: loss of $418,000) has been recognised in the consolidated income statement
and has been included in administration expenses.
Accounting policy
(i) Interest income
Interest income is recognised as it accrues to the related financial asset using the effective interest method.
(ii) Interest and finance costs
Finance costs are recognised in the consolidated income statement using the effective interest method. They include
interest on financial guarantees, amortisation of ancillary costs incurred in connection with financing arrangements and
finance lease interest.
(iii) Contingent consideration present value interest
Present value interest is recognised in the consolidated income statement using the effective interest method and includes
the effective interest cost relating to contingent consideration liabilities recognised in business combinations.
(iv) Lease present value interest
Present value interest is recognised in the consolidated income statement using the effective interest method and includes
the effective interest cost relating to lease liabilities recognised for contracts that contain leases.
56 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 57
Notes to the consolidated financial statements
for the year ended 30 June 2022
5. Income tax expense and deferred tax
Income tax expense
Recognised in the consolidated income statement
In thousands of AUD
Current tax expense
Current year
Adjustments for prior years
Deferred tax expense
Origination and reversal of temporary differences
Income tax expense in the consolidated income statement
Numerical reconciliation between tax expense and pre-tax accounting profit
Profit for the year
Income tax expense
Profit before income tax
Income tax expense using the Company’s domestic tax rate of 30% (2021: 30%)
Increase/(decrease) in income tax expense due to:
Share-based payment expense
Unwind of present value interest
Contingent consideration fair value loss
Incidental acquisition costs
(Gain)/loss on disposal of controlled entities
Effect of losses not previously recognised
Effect of lower tax rate on overseas incomes
(Over)/under provision for tax in previous years
Other (non-assessable)/non-deductible items
Income tax expense on pre-tax net profit
2022
14,370
(66)
14,304
36
36
14,340
42,221
14,340
56,561
16,968
571
132
300
397
(180)
–
(3,607)
(66)
(175)
14,340
Current taxes
The Group has a net current tax payable of $1,576,000 (tax payable $1,798,000 and tax receivable $222,000) at
30 June 2022 (2021: current tax payable $2,155,000).
Deferred taxes
Recognised deferred tax assets and liabilities are attributable to the following:
In thousands of AUD
Deferred tax assets
Tax losses carried forward
Employee benefits
Accruals and income in advance
Leases
Plant and equipment
Others
Gross deferred tax assets
Deferred tax liabilities
Fair value gain
Identifiable intangibles
Plant and equipment
Work in progress
Others
Gross deferred tax liabilities
Net deferred tax asset
2022
3,653
1,613
1,076
695
10
66
7,113
3,653
729
171
469
71
5,093
2,020
Movement in deferred tax balances
The movement in deferred tax balances during the year was all recognised in the consolidated income statement.
2021
8,738
237
8,975
(461)
(461)
8,514
9,708
8,514
18,222
5,467
298
193
–
61
6,910
(1,863)
(2,423)
237
(366)
8,514
2021
3,653
1,303
1,000
1,032
21
62
7,071
3,653
1,095
214
71
–
5,033
2,038
Deferred tax assets not recognised
Deferred tax assets have not been recognised in respect of the following items because it is not probable that future taxable profit
will be available against which the Group can utilise the benefits:
In thousands of AUD
Revenue losses
Capital losses
Gross tax losses carried forward
These tax losses do not have an expiry date.
Accounting policy
2022
3,152
235,324
238,476
2021
2,996
207,486
210,482
Income tax on the profit or loss for the year comprises current and deferred tax. Current and deferred tax is recognised in
the consolidated income statement except to the extent that it relates to a business combination, or items recognised
directly in equity or in other comprehensive income.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not
provided for: goodwill, the initial recognition of assets or liabilities that affect neither the accounting nor the taxable profit,
and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable
future.
The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount
of assets and liabilities, using tax rates enacted or substantively enacted at the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets,
and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different taxable entities,
but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available, against
which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related
simultaneously.
tax benefit will be realised.
Key judgements
The Group operates in multiple overseas jurisdictions and from time to time is subject to tax reviews, audits and
investigations. The Group currently is not subject to any significant reviews, audits or investigations by a tax authority and
there are no significant uncertain tax positions in any of the jurisdictions in which the Group operates.
The Group has recognised a deferred tax liability of $3,653,000 arising from the recognition of contingent consideration fair
value gains in 2011 resulting in a potential future taxable capital gain. A deferred tax asset of $3,653,000 has been
recognised on tax capital losses in the same jurisdiction arising from disposed subsidiaries.
58 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 59
Notes to the consolidated financial statements for the year ended 30 June 2022Financial report for year ended 30 June 2022
Notes to the consolidated financial statements
for the year ended 30 June 2022
5. Income tax expense and deferred tax
Income tax expense
Recognised in the consolidated income statement
In thousands of AUD
Current tax expense
Current year
Adjustments for prior years
Deferred tax expense
Origination and reversal of temporary differences
Income tax expense in the consolidated income statement
Numerical reconciliation between tax expense and pre-tax accounting profit
Profit for the year
Income tax expense
Profit before income tax
Income tax expense using the Company’s domestic tax rate of 30% (2021: 30%)
Increase/(decrease) in income tax expense due to:
Share-based payment expense
Unwind of present value interest
Contingent consideration fair value loss
Incidental acquisition costs
(Gain)/loss on disposal of controlled entities
Effect of losses not previously recognised
Effect of lower tax rate on overseas incomes
(Over)/under provision for tax in previous years
Other (non-assessable)/non-deductible items
Income tax expense on pre-tax net profit
Current taxes
Deferred taxes
In thousands of AUD
Deferred tax assets
Tax losses carried forward
Employee benefits
Accruals and income in advance
Leases
Others
Plant and equipment
Gross deferred tax assets
Deferred tax liabilities
Fair value gain
Identifiable intangibles
Plant and equipment
Work in progress
Others
Gross deferred tax liabilities
Net deferred tax asset
2022
14,370
(66)
14,304
36
36
14,340
42,221
14,340
56,561
16,968
571
132
300
397
(180)
–
(3,607)
(66)
(175)
14,340
2022
3,653
1,613
1,076
695
10
66
7,113
3,653
729
171
469
71
5,093
2,020
2021
8,738
237
8,975
(461)
(461)
8,514
9,708
8,514
18,222
5,467
298
193
–
61
6,910
(1,863)
(2,423)
237
(366)
8,514
2021
3,653
1,303
1,000
1,032
21
62
7,071
3,653
1,095
214
71
–
5,033
2,038
The Group has a net current tax payable of $1,576,000 (tax payable $1,798,000 and tax receivable $222,000) at
30 June 2022 (2021: current tax payable $2,155,000).
Recognised deferred tax assets and liabilities are attributable to the following:
Movement in deferred tax balances
The movement in deferred tax balances during the year was all recognised in the consolidated income statement.
Deferred tax assets not recognised
Deferred tax assets have not been recognised in respect of the following items because it is not probable that future taxable profit
will be available against which the Group can utilise the benefits:
In thousands of AUD
Revenue losses
Capital losses
Gross tax losses carried forward
These tax losses do not have an expiry date.
2022
3,152
235,324
238,476
2021
2,996
207,486
210,482
Accounting policy
Income tax on the profit or loss for the year comprises current and deferred tax. Current and deferred tax is recognised in
the consolidated income statement except to the extent that it relates to a business combination, or items recognised
directly in equity or in other comprehensive income.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not
provided for: goodwill, the initial recognition of assets or liabilities that affect neither the accounting nor the taxable profit,
and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable
future.
The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount
of assets and liabilities, using tax rates enacted or substantively enacted at the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets,
and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different taxable entities,
but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised
simultaneously.
59
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available, against
which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related
tax benefit will be realised.
Key judgements
The Group operates in multiple overseas jurisdictions and from time to time is subject to tax reviews, audits and
investigations. The Group currently is not subject to any significant reviews, audits or investigations by a tax authority and
there are no significant uncertain tax positions in any of the jurisdictions in which the Group operates.
The Group has recognised a deferred tax liability of $3,653,000 arising from the recognition of contingent consideration fair
value gains in 2011 resulting in a potential future taxable capital gain. A deferred tax asset of $3,653,000 has been
recognised on tax capital losses in the same jurisdiction arising from disposed subsidiaries.
58 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 59
Notes to the consolidated financial statements
for the year ended 30 June 2022
6. Cash and cash equivalents
In thousands of AUD
Cash at bank and on hand
Bank short-term deposits
Cash and cash equivalents in the consolidated statement of financial position
and the consolidated statement of cash flows
2022
96,618
2,124
98,742
2021
33,630
17,088
50,718
For cash flow presentation purposes, cash and cash equivalents include cash on hand, and short-term deposits with
original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to
an insignificant risk of change in value. The Group has pledged short-term deposits amounting to $624,000 for indemnity
guarantee facilities (see Note 16 Interest bearing liabilities). The remaining bank short-term deposits are unrestricted.
The Group’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in
Note 19 Financial risk management/financial instruments.
Reconciliation of cash flows from operating activities
(i) Reconciliation of cash
For the purpose of the consolidated statement of cash flows, cash includes cash on hand and at bank and short-term
deposits at call, net of outstanding bank overdrafts. Cash at the end of the financial year as shown in the Consolidated
statement of cash flows is reconciled to the related items in the consolidated statement of financial position as follows:
In thousands of AUD
Cash assets
(ii) Reconciliation of profit after income tax to net cash provided by
operating activities
Profit after income tax
2022
98,742
2021
50,718
42,221
9,708
Add/(less) non-cash items:
(Gain)/loss on disposal of controlled entities
Loss on sale of plant and equipment
Share-based payments expense
Depreciation of plant and equipment
Depreciation of right-of-use assets
Amortisation of identifiable intangibles
Contingent consideration fair value loss
Contingent consideration present value interest
Lease present value interest
(Decrease)/increase in income taxes payable (net)
Decrease/(increase) in deferred tax (net)
Net cash provided by operating activities before changes in
assets and liabilities
Changes in assets and liabilities:
Increase in trade and other receivables
Increase in work in progress
Increase in prepayments
Decrease in other assets
Increase in payables and accruals
Increase in unearned income
Increase in employee benefits
Net cash from operating activities
(600)
8
1,902
1,722
3,996
1,222
1,001
441
520
(579)
18
51,872
(17,275)
(535)
(692)
24
13,040
1,030
1,356
48,820
23,035
52
992
1,922
4,291
874
–
642
736
2,033
(440)
43,845
(13,533)
(1,276)
(177)
199
18,366
4,915
863
53,202
Less: provision for impairment loss
19
Note
2022
2021
No interest is charged on trade receivables. The Group’s exposure to credit and currency risk and impairment losses
related to trade and other receivables is disclosed in Note 19 Financial risk management/financial instruments.
7. Trade and other receivables
In thousands of AUD
Current
Trade receivables
Other receivables
Total trade and other receivables
8. Other assets
In thousands of AUD
Current
Work in progress
Prepayments
Other current assets
Non-current
Deposits
64,196
(225)
63,971
24
63,995
2022
3,293
2,812
7
6,112
162
162
47,154
(232)
46,922
19
46,941
2021
2,758
2,138
29
4,925
164
164
60 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 61
Notes to the consolidated financial statements for the year ended 30 June 2022Financial report for year ended 30 June 2022
Notes to the consolidated financial statements
for the year ended 30 June 2022
6. Cash and cash equivalents
In thousands of AUD
Cash at bank and on hand
Bank short-term deposits
2022
96,618
2,124
98,742
2021
33,630
17,088
50,718
Cash and cash equivalents in the consolidated statement of financial position
and the consolidated statement of cash flows
For cash flow presentation purposes, cash and cash equivalents include cash on hand, and short-term deposits with
original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to
an insignificant risk of change in value. The Group has pledged short-term deposits amounting to $624,000 for indemnity
guarantee facilities (see Note 16 Interest bearing liabilities). The remaining bank short-term deposits are unrestricted.
The Group’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in
Note 19 Financial risk management/financial instruments.
Reconciliation of cash flows from operating activities
(i) Reconciliation of cash
For the purpose of the consolidated statement of cash flows, cash includes cash on hand and at bank and short-term
deposits at call, net of outstanding bank overdrafts. Cash at the end of the financial year as shown in the Consolidated
statement of cash flows is reconciled to the related items in the consolidated statement of financial position as follows:
(ii) Reconciliation of profit after income tax to net cash provided by
In thousands of AUD
Cash assets
operating activities
Profit after income tax
Add/(less) non-cash items:
(Gain)/loss on disposal of controlled entities
Loss on sale of plant and equipment
Share-based payments expense
Depreciation of plant and equipment
Depreciation of right-of-use assets
Amortisation of identifiable intangibles
Contingent consideration fair value loss
Contingent consideration present value interest
Lease present value interest
(Decrease)/increase in income taxes payable (net)
Decrease/(increase) in deferred tax (net)
Net cash provided by operating activities before changes in
assets and liabilities
Changes in assets and liabilities:
Increase in trade and other receivables
Increase in work in progress
Increase in prepayments
Decrease in other assets
Increase in payables and accruals
Increase in unearned income
Increase in employee benefits
Net cash from operating activities
2022
98,742
2021
50,718
42,221
9,708
(600)
8
1,902
1,722
3,996
1,222
1,001
441
520
(579)
18
51,872
(17,275)
(535)
(692)
24
13,040
1,030
1,356
48,820
23,035
52
992
1,922
4,291
874
–
642
736
2,033
(440)
43,845
(13,533)
(1,276)
(177)
199
18,366
4,915
863
53,202
7. Trade and other receivables
In thousands of AUD
Current
Trade receivables
Less: provision for impairment loss
Other receivables
Total trade and other receivables
Note
2022
2021
19
64,196
(225)
63,971
24
63,995
47,154
(232)
46,922
19
46,941
No interest is charged on trade receivables. The Group’s exposure to credit and currency risk and impairment losses
related to trade and other receivables is disclosed in Note 19 Financial risk management/financial instruments.
8. Other assets
In thousands of AUD
Current
Work in progress
Prepayments
Other current assets
Non-current
Deposits
2022
3,293
2,812
7
6,112
162
162
2021
2,758
2,138
29
4,925
164
164
61
60 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 61
Notes to the consolidated financial statements
for the year ended 30 June 2022
9. Plant and equipment
In thousands of AUD
2022
Cost
Accumulated depreciation
Net carrying amount
Reconciliations of the carrying amounts of
each class of plant and equipment:
Carrying amount at the beginning of the year
Additions
Transfers
Disposal of controlled businesses
Depreciation
Effect of movements in exchange rates
Disposals
Carrying amount at the end of the year
2021
Cost
Accumulated depreciation
Net carrying amount
Reconciliations of the carrying amounts of
each class of plant and equipment:
Carrying amount at the beginning of the year
Additions
Acquired through business combination
Disposal of controlled entities
Depreciation
Effect of movements in exchange rates
Disposals
Carrying amount at the end of the year
Computer
equipment
Office
furniture
and
equipment
Plant and
equipment
Leasehold
improvements
Total
4,528
(2,953)
1,575
2,055
(1,789)
266
228
(221)
7
6,302
(4,950)
1,352
1,254
1,041
33
(17)
(736)
8
(8)
1,575
445
52
(33)
–
(201)
3
–
266
9
–
–
–
(3)
1
–
7
2,088
55
–
–
(782)
(4)
(5)
1,352
4,001
(2,747)
1,254
2,009
(1,564)
445
229
(220)
9
6,308
(4,220)
2,088
1,476
734
31
(139)
(828)
(20)
–
1,254
605
123
–
(3)
(266)
(12)
(2)
445
16
–
–
–
(7)
–
–
9
2,854
138
–
(13)
(821)
(20)
(50)
2,088
13,113
(9,913)
3,200
3,796
1,148
–
(17)
(1,722)
8
(13)
3,200
12,547
(8,751)
3,796
4,951
995
31
(155)
(1,922)
(52)
(52)
3,796
Accounting policy
(i) Recognition and measurement
Plant and equipment are stated at cost less accumulated depreciation (see below) and impairment losses (see Note 20
Impairment of non-financial assets). The cost of the asset also includes the cost of replacing parts on an item of plant and
equipment when it is probable that the future economic benefits embodied within the item will flow to the Group and the
cost of the item can be measured reliably.
All other costs are charged to the consolidated income statement as incurred. Cost includes expenditure that is directly
attributable to the acquisition of the asset. Purchased software that is integral to the functionality of the related equipment
is capitalised as part of that equipment. Where parts of an item of plant and equipment have different useful lives, they are
accounted for as separate items of plant and equipment.
(ii) Derecognition
An item of property, plant and equipment is derecognised when it is sold or otherwise disposed of, or when its use is
expected to bring no future economic benefits. Gains and losses on derecognition are determined by comparing the
proceeds with the carrying amount and recognised within ‘Administration expenses’ in the consolidated income statement.
(iii) Depreciation
Depreciation is charged to the consolidated income statement on a straight-line basis over the assets’ estimated useful
lives. The major categories of plant and equipment were depreciated in the current and, where applicable, comparative
period as follows:
Computer equipment
Office furniture and equipment
Plant and equipment
Leasehold improvements
25% to 40%
10% to 25%
10% to 25%
Life of lease
Depreciation methods, useful lives and residual values are reviewed at each financial year end and adjusted if appropriate.
Reconciliations of the carrying amounts of right-of-use assets:
Carrying amount at the beginning of the year
7,979
11,759
10. Right-of-use assets
In thousands of AUD
Property leases
Cost
Accumulated depreciation
Net carrying amount
Additions
Disposal of controlled entities
Re-measurement of lease liabilities
Disposals
Depreciation
Effect of movements in exchange rates
Carrying amount at the end of the year
2022
2021
17,300
(11,350)
5,950
–
–
–
1,945
(3,996)
22
5,950
15,279
(7,300)
7,979
839
(108)
–
(55)
(4,291)
(165)
7,979
During the current year, the Group recognised $91,000 (2021: $222,000) occupancy costs in the consolidated income
statement in relation short-term leases that have a lease term of 12 months or less.
Accounting policy
The Group leases many assets, including properties and office equipment. At the inception of a contract, the Group
assesses whether a contract is, or contains, a lease based on whether the contract conveys the right to control the use of an
identified asset for a period of time in exchange for consideration. The Group assesses if a contract conveys the right to
control the use of an identified asset if:
the contract involves the use of an identified asset;
period of use; and
the Group has the right to direct the use of the asset.
•
•
•
the Group has the right to obtain substantially all of the economic benefits from use of the asset throughout the
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is
initially measured at cost, which comprises the initial amount of lease liability adjusted for any lease payments made at or
before the commencement date, plus any initial direct costs incurred and an estimate of cost to dismantle and remove the
underlying asset less any lease incentive received. The right-of-use asset is subsequently measured at cost less any
accumulated depreciation and impairment losses (see Note 20 Impairment of non-financial assets) and adjusted for certain
re-measurements of lease liability. The assets are depreciated over the term of the lease on a straight-line basis.
The lease liability is initially measured at the present value of the lease payments (fixed payments less any lease
incentives receivable and variable lease payments) that are not paid at the commencement date, discounted using the
interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate for the
same term as the underlying lease. Generally, the Group uses its incremental borrowing rate as the discount rate. Lease
liability is re-measured when there is a change in future lease payments arising from a change in an index rate, changes in
the assessment of whether a purchase or extension option is reasonably certain to be exercised or a termination option is
reasonably certain not to be exercised. When the lease liability is re-measured in this way, a corresponding adjustment is
made to the carrying amount of the right-of-use asset, or is recorded in the consolidated income statement if the carrying
amount of the right-of-use asset has been reduced to zero.
The Group has elected to use the exemption not to recognise right-of-use assets and lease liabilities for short-term leases
that have a lease term of 12 months or less and leases of low-value assets. The payments associated with these leases
are recognised as occupancy costs on a straight-line basis over the lease term.
62 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 63
Notes to the consolidated financial statements for the year ended 30 June 2022Financial report for year ended 30 June 2022
Notes to the consolidated financial statements
for the year ended 30 June 2022
9. Plant and equipment
In thousands of AUD
2022
Cost
Accumulated depreciation
Net carrying amount
Reconciliations of the carrying amounts of
each class of plant and equipment:
Carrying amount at the beginning of the year
Additions
Transfers
Depreciation
Disposals
Disposal of controlled businesses
Effect of movements in exchange rates
Carrying amount at the end of the year
2021
Cost
Accumulated depreciation
Net carrying amount
Reconciliations of the carrying amounts of
each class of plant and equipment:
Carrying amount at the beginning of the year
Additions
Acquired through business combination
Disposal of controlled entities
Effect of movements in exchange rates
Depreciation
Disposals
Carrying amount at the end of the year
Accounting policy
(i) Recognition and measurement
Computer
equipment
Office
Plant and
Leasehold
Total
furniture
equipment
improvements
and
equipment
4,528
(2,953)
1,575
2,055
(1,789)
266
228
(221)
6,302
(4,950)
1,352
13,113
(9,913)
3,200
(201)
(3)
(782)
(1,722)
1,254
1,041
33
(17)
(736)
8
(8)
1,575
1,476
734
31
(139)
(828)
(20)
–
1,254
445
52
(33)
–
3
–
266
605
123
–
(3)
(266)
(12)
(2)
445
7
9
–
–
–
1
–
7
16
(7)
–
–
–
–
–
9
4,001
(2,747)
1,254
2,009
(1,564)
445
229
(220)
9
6,308
(4,220)
2,088
2,088
55
–
–
(4)
(5)
1,352
2,854
138
–
(13)
(821)
(20)
(50)
2,088
3,796
1,148
–
(17)
8
(13)
3,200
12,547
(8,751)
3,796
4,951
995
31
(155)
(1,922)
(52)
(52)
3,796
Plant and equipment are stated at cost less accumulated depreciation (see below) and impairment losses (see Note 20
Impairment of non-financial assets). The cost of the asset also includes the cost of replacing parts on an item of plant and
equipment when it is probable that the future economic benefits embodied within the item will flow to the Group and the
cost of the item can be measured reliably.
All other costs are charged to the consolidated income statement as incurred. Cost includes expenditure that is directly
attributable to the acquisition of the asset. Purchased software that is integral to the functionality of the related equipment
is capitalised as part of that equipment. Where parts of an item of plant and equipment have different useful lives, they are
accounted for as separate items of plant and equipment.
(ii) Derecognition
An item of property, plant and equipment is derecognised when it is sold or otherwise disposed of, or when its use is
expected to bring no future economic benefits. Gains and losses on derecognition are determined by comparing the
proceeds with the carrying amount and recognised within ‘Administration expenses’ in the consolidated income statement.
Depreciation is charged to the consolidated income statement on a straight-line basis over the assets’ estimated useful
lives. The major categories of plant and equipment were depreciated in the current and, where applicable, comparative
(iii) Depreciation
period as follows:
Computer equipment
Office furniture and equipment
Plant and equipment
Leasehold improvements
25% to 40%
10% to 25%
10% to 25%
Life of lease
Depreciation methods, useful lives and residual values are reviewed at each financial year end and adjusted if appropriate.
10. Right-of-use assets
In thousands of AUD
Property leases
Cost
Accumulated depreciation
Net carrying amount
Reconciliations of the carrying amounts of right-of-use assets:
Carrying amount at the beginning of the year
Additions
Disposal of controlled entities
Re-measurement of lease liabilities
Disposals
Depreciation
Effect of movements in exchange rates
Carrying amount at the end of the year
2022
2021
17,300
(11,350)
5,950
7,979
–
–
1,945
–
(3,996)
22
5,950
15,279
(7,300)
7,979
11,759
839
(108)
–
(55)
(4,291)
(165)
7,979
During the current year, the Group recognised $91,000 (2021: $222,000) occupancy costs in the consolidated income
statement in relation short-term leases that have a lease term of 12 months or less.
Accounting policy
The Group leases many assets, including properties and office equipment. At the inception of a contract, the Group
assesses whether a contract is, or contains, a lease based on whether the contract conveys the right to control the use of an
identified asset for a period of time in exchange for consideration. The Group assesses if a contract conveys the right to
control the use of an identified asset if:
63
•
•
•
the contract involves the use of an identified asset;
the Group has the right to obtain substantially all of the economic benefits from use of the asset throughout the
period of use; and
the Group has the right to direct the use of the asset.
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is
initially measured at cost, which comprises the initial amount of lease liability adjusted for any lease payments made at or
before the commencement date, plus any initial direct costs incurred and an estimate of cost to dismantle and remove the
underlying asset less any lease incentive received. The right-of-use asset is subsequently measured at cost less any
accumulated depreciation and impairment losses (see Note 20 Impairment of non-financial assets) and adjusted for certain
re-measurements of lease liability. The assets are depreciated over the term of the lease on a straight-line basis.
The lease liability is initially measured at the present value of the lease payments (fixed payments less any lease
incentives receivable and variable lease payments) that are not paid at the commencement date, discounted using the
interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate for the
same term as the underlying lease. Generally, the Group uses its incremental borrowing rate as the discount rate. Lease
liability is re-measured when there is a change in future lease payments arising from a change in an index rate, changes in
the assessment of whether a purchase or extension option is reasonably certain to be exercised or a termination option is
reasonably certain not to be exercised. When the lease liability is re-measured in this way, a corresponding adjustment is
made to the carrying amount of the right-of-use asset, or is recorded in the consolidated income statement if the carrying
amount of the right-of-use asset has been reduced to zero.
The Group has elected to use the exemption not to recognise right-of-use assets and lease liabilities for short-term leases
that have a lease term of 12 months or less and leases of low-value assets. The payments associated with these leases
are recognised as occupancy costs on a straight-line basis over the lease term.
62 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 63
Notes to the consolidated financial statements
for the year ended 30 June 2022
11. Intangible assets
In thousands of AUD
2022
Cost
Accumulated amortisation
Net carrying amount
Reconciliations of the carrying amounts of intangibles:
Carrying amount at the beginning of the year
Disposal of controlled businesses
Amortisation
Effect of movements in exchange rates
Carrying amount at the end of the year
2021
Cost
Accumulated amortisation
Net carrying amount
Reconciliations of the carrying amounts of intangibles:
Carrying amount at the beginning of the year
Acquired through business combination
Disposal of controlled entities
Amortisation
Effect of movements in exchange rates
Carrying amount at the end of the year
Goodwill
Contracts and
customer
relationships
112,236
–
112,236
114,506
(856)
–
(1,414)
112,236
114,506
–
114,506
107,997
12,316
(6,136)
–
329
114,506
7,759
(5,331)
2,428
3,650
–
(1,222)
–
2,428
7,609
(3,959)
3,650
1,105
3,428
–
(874)
(9)
3,650
Total
119,995
(5,331)
114,664
118,156
(856)
(1,222)
(1,414)
114,664
122,115
(3,959)
118,156
109,102
15,744
(6,136)
(874)
320
118,156
Amortisation charge
The amortisation charge of $1,222,000 (2021: $874,000) is recognised in the depreciation and amortisation expense in the
consolidated income statement.
Goodwill CGU group allocation
In thousands of AUD
Cash Generating Unit (CGU):
Brand Transformation
Creative Technology and Data
Search Marketing
Net carrying amount
2022
96,315
15,921
–
112,236
2021
(restated)
97,729
16,777
–
114,506
The Group implemented a new global operating model resulting in change in composition of its CGU group. Accordingly,
carrying value of goodwill (previously fully allocated to Operating Brands CGU) was reallocated across Brand Transformation
CGU and Creative Technology and Data CGU using a relative value approach. Under this approach, relative value of
goodwill is determined by reference to value-in-use of CGUs as at the date of the re-organisation. The Group completed an
assessment for impairment before the reallocation of goodwill using the same assumptions as those applied by the Group in
its consolidated annual financial report as at and for the year ended 30 June 2021 and concluded that the recoverable
amount of CGUs exceeded the carrying value.
The re-organisation had no impact on the Search Marketing CGU, which does not obtain synergies with businesses within
the Creative Technology and Data segment and has no carrying value.
Accounting policy
(i) Goodwill
Goodwill acquired in a business combination is initially measured at cost. Cost is measured as the cost of the business
combination minus the net fair value of the acquired and identifiable assets, liabilities and contingent liabilities.
Following initial recognition, goodwill is measured at cost less any accumulated impairment losses.
Goodwill is allocated to cash-generating units expected to benefit from synergies created by the business combination.
Goodwill is not amortised, but instead is reviewed for impairment annually or more frequently if events or changes in
circumstances indicate that the carrying value may be impaired.
(ii) Other intangible assets
Other intangible assets acquired separately are measured on initial recognition at cost. The other intangible assets
acquired in business combinations are mainly customer relationships and customer contracts. The cost of these assets is
their fair value at date of acquisition based on valuation techniques generally using the excess earnings method. Following
initial recognition, intangible assets are carried at cost less amortisation and any impairment losses.
Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic benefits
embodied in the specific asset to which it relates. All other expenditure is expensed as incurred.
Subsequent expenditure
(iii) Amortisation
Intangible assets other than goodwill are amortised on a straight-line basis over their estimated useful lives from the date
they are available for use. Customer contracts and relationships are amortised over a four-year period.
Amortisation methods, useful lives and residual values are reviewed at each financial year end and adjusted if appropriate.
(iv) Impairment
Refer to Note 20 Impairment of non-financial assets for further details on impairment.
64 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 65
Notes to the consolidated financial statements for the year ended 30 June 2022Financial report for year ended 30 June 2022
Notes to the consolidated financial statements
for the year ended 30 June 2022
11. Intangible assets
In thousands of AUD
2022
Cost
Accumulated amortisation
Net carrying amount
Reconciliations of the carrying amounts of intangibles:
Carrying amount at the beginning of the year
Disposal of controlled businesses
Amortisation
Effect of movements in exchange rates
Carrying amount at the end of the year
2021
Cost
Accumulated amortisation
Net carrying amount
Reconciliations of the carrying amounts of intangibles:
Carrying amount at the beginning of the year
Acquired through business combination
Disposal of controlled entities
Amortisation
Effect of movements in exchange rates
Carrying amount at the end of the year
Amortisation charge
consolidated income statement.
Goodwill CGU group allocation
In thousands of AUD
Cash Generating Unit (CGU):
Brand Transformation
Creative Technology and Data
Search Marketing
Net carrying amount
Goodwill
Contracts and
Total
customer
relationships
112,236
–
112,236
114,506
(856)
–
(1,414)
112,236
114,506
–
114,506
107,997
12,316
(6,136)
–
329
114,506
7,759
(5,331)
2,428
3,650
(1,222)
–
–
2,428
7,609
(3,959)
3,650
1,105
3,428
–
(874)
(9)
3,650
119,995
(5,331)
114,664
118,156
(856)
(1,222)
(1,414)
114,664
122,115
(3,959)
118,156
109,102
15,744
(6,136)
(874)
320
118,156
2022
96,315
15,921
–
112,236
2021
(restated)
97,729
16,777
–
114,506
The amortisation charge of $1,222,000 (2021: $874,000) is recognised in the depreciation and amortisation expense in the
The Group implemented a new global operating model resulting in change in composition of its CGU group. Accordingly,
carrying value of goodwill (previously fully allocated to Operating Brands CGU) was reallocated across Brand Transformation
CGU and Creative Technology and Data CGU using a relative value approach. Under this approach, relative value of
goodwill is determined by reference to value-in-use of CGUs as at the date of the re-organisation. The Group completed an
assessment for impairment before the reallocation of goodwill using the same assumptions as those applied by the Group in
its consolidated annual financial report as at and for the year ended 30 June 2021 and concluded that the recoverable
amount of CGUs exceeded the carrying value.
The re-organisation had no impact on the Search Marketing CGU, which does not obtain synergies with businesses within
the Creative Technology and Data segment and has no carrying value.
Accounting policy
(i) Goodwill
Goodwill acquired in a business combination is initially measured at cost. Cost is measured as the cost of the business
combination minus the net fair value of the acquired and identifiable assets, liabilities and contingent liabilities.
Following initial recognition, goodwill is measured at cost less any accumulated impairment losses.
Goodwill is allocated to cash-generating units expected to benefit from synergies created by the business combination.
Goodwill is not amortised, but instead is reviewed for impairment annually or more frequently if events or changes in
circumstances indicate that the carrying value may be impaired.
(ii) Other intangible assets
Other intangible assets acquired separately are measured on initial recognition at cost. The other intangible assets
acquired in business combinations are mainly customer relationships and customer contracts. The cost of these assets is
their fair value at date of acquisition based on valuation techniques generally using the excess earnings method. Following
initial recognition, intangible assets are carried at cost less amortisation and any impairment losses.
Subsequent expenditure
Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic benefits
embodied in the specific asset to which it relates. All other expenditure is expensed as incurred.
(iii) Amortisation
Intangible assets other than goodwill are amortised on a straight-line basis over their estimated useful lives from the date
they are available for use. Customer contracts and relationships are amortised over a four-year period.
Amortisation methods, useful lives and residual values are reviewed at each financial year end and adjusted if appropriate.
(iv) Impairment
Refer to Note 20 Impairment of non-financial assets for further details on impairment.
65
64 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 65
Notes to the consolidated financial statements
for the year ended 30 June 2022
12. Trade and other payables
In thousands of AUD
Current
Trade payables
Other payables and accrued expenses
Unearned revenue
2022
41,026
18,030
17,440
76,496
2021
29,543
17,111
16,507
63,161
The Group’s exposure to currency and liquidity risk related to trade and other payables is disclosed in Note 19 Financial
risk management/financial instruments.
13. Contingent consideration payable
In thousands of AUD
Current
Contingent consideration payable
Non-current
Contingent consideration payable
Reconciliations of the carrying amounts of
contingent consideration payable:
Carrying amount at the beginning of the year
Recognised in business combination
Re-assessment of contingent consideration
Unwind of present value interest
Effect of movements in exchange rates
Contingent consideration paid
Carrying amount at the end of the year
2022
2,711
7,402
20,126
–
1,001
441
(455)
(11,000)
10,113
2021
10,886
9,240
25,553
8,931
–
642
(115)
(14,885)
20,126
During the current year, the Group recognised a contingent consideration fair value loss of $1,001,000 relating to a change
in the best estimate of future contingent consideration payable to the vendors of McDonald Butler Associates.
Accounting policy
Contingent consideration payable is initially recognised at fair value in connection with a business combination. The liability
is discounted using a market interest rate for the liability and a present value interest charge is recognised in the
consolidated income statement as the discount unwinds. Any change in estimate of contingent consideration payable is
recognised in the consolidated income statement as a fair value gain or loss during the period when the estimate is
revised.
Key estimates
There is uncertainty around the actual payments that will be made as the payments are subject to the performance of
McDonald Butler Associates subsequent to the reporting date. Factors which could vary the amount of contingent
consideration payable due include a net revenue threshold for future payments, the basis of the average net revenue over
the contingent consideration period and purchase price floor/cap. Actual future payments may differ from the estimated
liability. A sensitivity analysis for Contingent consideration payable is disclosed in Note 19 Financial risk
management/financial instruments.
This note provides information about the contractual terms of the Group’s leases. For more information about the Group’s
exposure to interest rate risk, liquidity risk and foreign currency risk, see Note 19 Financial risk management/financial
14. Lease liabilities
instruments.
In thousands of AUD
Current
Lease liabilities
Non-current
Lease liabilities
Total
Reconciliations of the carrying amounts of lease
Carrying amount at the beginning of the year
liabilities:
Additions
Disposal of controlled entities
Other disposals
Re-measurement of lease liabilities
Repayments
Present value interest relating to lease liabilities
Effect of movements in exchange rates
Carrying amount at the end of the period
Accounting policy
Refer to Note 10.
2022
5,841
2,756
8,597
11,851
–
–
–
1,945
(5,732)
520
13
8,597
2021
5,589
6,262
11,851
16,907
839
(225)
(61)
–
(6,162)
736
(183)
11,851
66 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 67
Notes to the consolidated financial statements for the year ended 30 June 2022Financial report for year ended 30 June 2022
The Group’s exposure to currency and liquidity risk related to trade and other payables is disclosed in Note 19 Financial
Notes to the consolidated financial statements
for the year ended 30 June 2022
12. Trade and other payables
In thousands of AUD
Current
Trade payables
Other payables and accrued expenses
Unearned revenue
risk management/financial instruments.
13. Contingent consideration payable
In thousands of AUD
Current
Contingent consideration payable
Non-current
Contingent consideration payable
Reconciliations of the carrying amounts of
contingent consideration payable:
Carrying amount at the beginning of the year
Recognised in business combination
Re-assessment of contingent consideration
Unwind of present value interest
Effect of movements in exchange rates
Contingent consideration paid
Carrying amount at the end of the year
2022
41,026
18,030
17,440
76,496
2021
29,543
17,111
16,507
63,161
2022
2,711
7,402
20,126
–
1,001
441
(455)
(11,000)
10,113
2021
10,886
9,240
25,553
8,931
–
642
(115)
(14,885)
20,126
During the current year, the Group recognised a contingent consideration fair value loss of $1,001,000 relating to a change
in the best estimate of future contingent consideration payable to the vendors of McDonald Butler Associates.
Contingent consideration payable is initially recognised at fair value in connection with a business combination. The liability
is discounted using a market interest rate for the liability and a present value interest charge is recognised in the
consolidated income statement as the discount unwinds. Any change in estimate of contingent consideration payable is
recognised in the consolidated income statement as a fair value gain or loss during the period when the estimate is
Accounting policy
revised.
Key estimates
There is uncertainty around the actual payments that will be made as the payments are subject to the performance of
McDonald Butler Associates subsequent to the reporting date. Factors which could vary the amount of contingent
consideration payable due include a net revenue threshold for future payments, the basis of the average net revenue over
the contingent consideration period and purchase price floor/cap. Actual future payments may differ from the estimated
liability. A sensitivity analysis for Contingent consideration payable is disclosed in Note 19 Financial risk
management/financial instruments.
14. Lease liabilities
This note provides information about the contractual terms of the Group’s leases. For more information about the Group’s
exposure to interest rate risk, liquidity risk and foreign currency risk, see Note 19 Financial risk management/financial
instruments.
In thousands of AUD
Current
Lease liabilities
Non-current
Lease liabilities
Total
Reconciliations of the carrying amounts of lease
liabilities:
Carrying amount at the beginning of the year
Additions
Disposal of controlled entities
Other disposals
Re-measurement of lease liabilities
Repayments
Present value interest relating to lease liabilities
Effect of movements in exchange rates
Carrying amount at the end of the period
Accounting policy
Refer to Note 10.
2022
5,841
2,756
8,597
11,851
–
–
–
1,945
(5,732)
520
13
8,597
2021
5,589
6,262
11,851
16,907
839
(225)
(61)
–
(6,162)
736
(183)
11,851
67
66 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 67
Notes to the consolidated financial statements
for the year ended 30 June 2022
15. Employee benefits
In thousands of AUD
Aggregate liability for employee benefits, including on-costs
Current
Annual leave
Long service leave
Non-current
Long service leave
2022
2021
4,442
1,237
5,679
783
3,414
1,172
4,586
755
The Group has recognised $2,315,000 (2021: $2,140,000) as an expense in the consolidated income statement for
defined contribution plans during the reporting period.
Accounting policy
Provision is made for employee benefits including annual leave and long service leave for employees.
(i) Long-term employee benefits
The Group’s net obligation in respect of long-term service benefits, other than superannuation and pension plans, is the
amount of future benefit that employees have earned in return for their service provided up to the reporting date. The
obligation is calculated using expected future increases in wage and salary rates, including related on-costs and expected
settlement dates, and is discounted using the rates attached to the Corporate bonds which have maturity dates
approximating to the terms of the Group’s obligations.
(ii) Wages, salaries, annual leave and non-monetary benefits
Liabilities for employee benefits for wages, salaries and annual leave, that are due to be settled within 12 months of the
reporting date, represent present obligations resulting from employees’ services provided to reporting date and are
calculated at undiscounted amounts based on remuneration wage and salary rates that the Group expects to pay as at
reporting date, including related on-costs.
A provision is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the
Group has a present legal or constructive obligation to pay this amount as a result of past services provided by the
employee and the obligation can be reliably estimated.
(iii) Termination benefits
Termination benefits are charged to the consolidated income statement when the Group is demonstrably committed,
without realistic possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal
retirement date, or to provide termination benefits as a result of an offer made to encourage voluntary redundancy.
Termination benefits for voluntary redundancies are charged to the consolidated income statement if the Group has made
an offer encouraging voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances
can be estimated reliably.
16. Interest bearing liabilities
In thousands of AUD
Non-current
Unsecured bank loan
Financing arrangements
The Group has access to the following lines of credit:
2022
2021
36,275
–
In thousands of AUD
Bank loan (cash advance)
Indemnity guarantee
Credit card
2022
Available
50,000
3,618
1,575
55,193
2022
Utilised
36,275
2,103
321
38,699
2021
Available
2021
Utilised
–
3,582
1,565
5,147
–
2,067
216
2,283
The proceeds from the bank loan drawn on 29 June 2022 were held in cash and cash equivalents as at 30 June 2022,
which were subsequently disbursed on 1 July 2022 in order to fund the acquisitions completed on that date. The Group
was in compliance with all covenants as at 30 June 2022.
All finance facilities are negotiated by the Company on behalf of the Group. The carrying amount of amounts drawn on
facilities as at the reporting date equates to face value.
The cash advance facility is an unsecured revolving multi-currency general-purpose facility with Westpac Banking
Corporation (Westpac), maturing in June 2025 at a commercial interest rate (Bank Bill Swap Bid Rate plus margin).
Cash advance facility
Indemnity guarantee facility
The indemnity guarantee facility is in place to support financial guarantees for property rental and other obligations. The
indemnity guarantees issued by banks other than Westpac are secured by cash deposits held by the issuing bank. The
Group has pledged short-term deposits amounting to $624,000 for indemnity guarantee facilities at 30 June 2022.
Credit card facility
company’s standard terms and conditions.
The credit card facility is subject to annual review and is subject to application approval and the bank or financial services
The Group’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in
Note 19 Financial risk management/financial instruments.
Accounting policy
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured
at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is
recognised in profit or loss over the period of the borrowings using the effective interest method. Borrowings are classified
as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months
after the balance sheet date.
68 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 69
Notes to the consolidated financial statements for the year ended 30 June 2022Financial report for year ended 30 June 2022
Notes to the consolidated financial statements
for the year ended 30 June 2022
Aggregate liability for employee benefits, including on-costs
15. Employee benefits
In thousands of AUD
Current
Annual leave
Long service leave
Non-current
Long service leave
2022
2021
4,442
1,237
5,679
783
3,414
1,172
4,586
755
The Group has recognised $2,315,000 (2021: $2,140,000) as an expense in the consolidated income statement for
defined contribution plans during the reporting period.
Provision is made for employee benefits including annual leave and long service leave for employees.
Accounting policy
(i) Long-term employee benefits
The Group’s net obligation in respect of long-term service benefits, other than superannuation and pension plans, is the
amount of future benefit that employees have earned in return for their service provided up to the reporting date. The
obligation is calculated using expected future increases in wage and salary rates, including related on-costs and expected
settlement dates, and is discounted using the rates attached to the Corporate bonds which have maturity dates
approximating to the terms of the Group’s obligations.
(ii) Wages, salaries, annual leave and non-monetary benefits
Liabilities for employee benefits for wages, salaries and annual leave, that are due to be settled within 12 months of the
reporting date, represent present obligations resulting from employees’ services provided to reporting date and are
calculated at undiscounted amounts based on remuneration wage and salary rates that the Group expects to pay as at
reporting date, including related on-costs.
A provision is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the
Group has a present legal or constructive obligation to pay this amount as a result of past services provided by the
employee and the obligation can be reliably estimated.
(iii) Termination benefits
Termination benefits are charged to the consolidated income statement when the Group is demonstrably committed,
without realistic possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal
retirement date, or to provide termination benefits as a result of an offer made to encourage voluntary redundancy.
Termination benefits for voluntary redundancies are charged to the consolidated income statement if the Group has made
an offer encouraging voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances
can be estimated reliably.
16. Interest bearing liabilities
In thousands of AUD
Non-current
Unsecured bank loan
Financing arrangements
The Group has access to the following lines of credit:
2022
2021
36,275
–
In thousands of AUD
Bank loan (cash advance)
Indemnity guarantee
Credit card
2022
Available
50,000
3,618
1,575
55,193
2022
Utilised
36,275
2,103
321
38,699
2021
Available
–
3,582
1,565
5,147
2021
Utilised
–
2,067
216
2,283
The proceeds from the bank loan drawn on 29 June 2022 were held in cash and cash equivalents as at 30 June 2022,
which were subsequently disbursed on 1 July 2022 in order to fund the acquisitions completed on that date. The Group
was in compliance with all covenants as at 30 June 2022.
All finance facilities are negotiated by the Company on behalf of the Group. The carrying amount of amounts drawn on
facilities as at the reporting date equates to face value.
Cash advance facility
The cash advance facility is an unsecured revolving multi-currency general-purpose facility with Westpac Banking
Corporation (Westpac), maturing in June 2025 at a commercial interest rate (Bank Bill Swap Bid Rate plus margin).
69
Indemnity guarantee facility
The indemnity guarantee facility is in place to support financial guarantees for property rental and other obligations. The
indemnity guarantees issued by banks other than Westpac are secured by cash deposits held by the issuing bank. The
Group has pledged short-term deposits amounting to $624,000 for indemnity guarantee facilities at 30 June 2022.
Credit card facility
The credit card facility is subject to annual review and is subject to application approval and the bank or financial services
company’s standard terms and conditions.
The Group’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in
Note 19 Financial risk management/financial instruments.
Accounting policy
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured
at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is
recognised in profit or loss over the period of the borrowings using the effective interest method. Borrowings are classified
as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months
after the balance sheet date.
68 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 69
Notes to the consolidated financial statements
for the year ended 30 June 2022
17. Capital and reserves
In thousands of AUD
Share capital
Ordinary shares, fully paid
2022
2021
104,861
100,456
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share
options are recognised as a deduction from equity, net of tax effects.
The Company does not have authorised capital or par value in respect of its shares.
Dividends are recognised as a liability in the period in which they are declared.
Movement in ordinary shares
Balance at beginning of year
Shares issued to the employees of the Group on
exercise of Share Appreciation Rights(i)
Balance at end of year
2022
Shares
86,655,518
2022
In thousands
of AUD
100,456
2021
Shares
86,074,859
2021
In thousands
of AUD
99,515
1,389,589
88,045,107
4,405
104,861
580,659
86,655,518
941
100,456
(i) Share capital recognised during the year on the exercise of Share Appreciation Rights is based on the VWAP of the Company’s shares for the 20 business days prior to
the vesting date of the rights of $3.17 (2021: $1.62).
Profit/(loss) for the year attributable to equity holders of the parent
Transaction costs of an equity transaction are accounted for as a deduction from equity, net of any related income tax
Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per
share at shareholder meetings.
Profit appropriation reserve
The profit appropriation reserve comprises profits appropriated by the parent entity.
Foreign currency translation reserve
The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of
foreign operations.
Share-based payment reserve
The share-based payment reserve comprises the cumulative expense relating to the fair value of options, rights and equity
plans on issue to Key Management Personnel, senior Executives and employees of the Group less amounts transferred to
share capital on exercise of options, rights and equity plans.
Dividends
Dividend declared and/(or) paid by the Company to its members:
During the year ended 30 June 2022
Fully franked final dividend – 2021
Fully franked interim dividend – 2022
Subsequent to the balance sheet date, at the date of this report
Fully franked final dividend – 2022
During the year ended 30 June 2021
Fully franked final dividend – 2020
Fully franked interim dividend – 2021
Cents per
share
4.4
6.0
6.5
3.5
10.5
Total amount
in thousands of
AUD Date of payment
3,874
5,283
6 October 2021
16 March 2022
5,974
4 October 2022
3,033
9,099
2 October 2020
16 March 2021
Dividend franking account
In thousands of AUD
Franking credits available for future years at 30% to shareholders of Enero Group Limited
2022
9,934
2021
11,732
The above amounts represent the balance of the franking account at the end of the financial year adjusted for:
•
•
•
•
franking credits that will arise from the payment of the current tax liability;
franking debits that will arise from the payment of dividends recognised as a liability at year end;
franking credits that will arise from the receipt of dividends recognised as receivables at year end; and
franking credits that may be prevented from being distributed in subsequent years.
The ability to utilise the franking credits is dependent upon there being sufficient available profits to declare dividends and
any restrictions to paying dividends.
Accounting policy
(i) Ordinary shares
(ii) Dividends
(iii) Transaction costs
benefit.
18. Earnings per share
In thousands of AUD
Profit for the year
Non-controlling interests
Earnings per share
In AUD cents
Basic
Diluted
Accounting policy
Profit attributable to equity holders of the parent
Weighted average number of ordinary shares
In thousands of shares
Weighted average number of ordinary shares – basic
Shares issuable under equity-based compensation plans
Weighted average number of ordinary shares – diluted
2022
42,221
(16,834)
25,387
2022
87,756
2,257
90,013
2022
28.9
28.2
2021
9,708
(10,110)
(402)
2021
86,541
1,738
88,279
2021
(0.5)
(0.5)
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by
dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary
shares outstanding during the period. Diluted EPS is determined by adjusting the profit and loss attributable to ordinary
shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential
ordinary shares, which comprise share rights granted to employees.
70 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 71
Notes to the consolidated financial statements for the year ended 30 June 2022Financial report for year ended 30 June 2022
Notes to the consolidated financial statements
for the year ended 30 June 2022
17. Capital and reserves
In thousands of AUD
Share capital
Ordinary shares, fully paid
Movement in ordinary shares
2022
2021
104,861
100,456
The Company does not have authorised capital or par value in respect of its shares.
2022
2022
2021
2021
Shares
In thousands
Shares
In thousands
of AUD
of AUD
99,515
Balance at beginning of year
86,655,518
100,456
86,074,859
Shares issued to the employees of the Group on
exercise of Share Appreciation Rights(i)
Balance at end of year
1,389,589
88,045,107
4,405
580,659
941
104,861
86,655,518
100,456
(i) Share capital recognised during the year on the exercise of Share Appreciation Rights is based on the VWAP of the Company’s shares for the 20 business days prior to
the vesting date of the rights of $3.17 (2021: $1.62).
Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per
share at shareholder meetings.
Profit appropriation reserve
Foreign currency translation reserve
foreign operations.
Share-based payment reserve
The profit appropriation reserve comprises profits appropriated by the parent entity.
The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of
The share-based payment reserve comprises the cumulative expense relating to the fair value of options, rights and equity
plans on issue to Key Management Personnel, senior Executives and employees of the Group less amounts transferred to
share capital on exercise of options, rights and equity plans.
Dividends
Dividend declared and/(or) paid by the Company to its members:
Subsequent to the balance sheet date, at the date of this report
During the year ended 30 June 2022
Fully franked final dividend – 2021
Fully franked interim dividend – 2022
Fully franked final dividend – 2022
During the year ended 30 June 2021
Fully franked final dividend – 2020
Fully franked interim dividend – 2021
Dividend franking account
In thousands of AUD
Cents per
in thousands of
Total amount
share
AUD Date of payment
4.4
6.0
6.5
3.5
10.5
3,874
5,283
6 October 2021
16 March 2022
5,974
4 October 2022
3,033
9,099
2 October 2020
16 March 2021
2022
9,934
2021
11,732
Franking credits available for future years at 30% to shareholders of Enero Group Limited
The above amounts represent the balance of the franking account at the end of the financial year adjusted for:
•
•
•
•
franking credits that will arise from the payment of the current tax liability;
franking debits that will arise from the payment of dividends recognised as a liability at year end;
franking credits that will arise from the receipt of dividends recognised as receivables at year end; and
franking credits that may be prevented from being distributed in subsequent years.
The ability to utilise the franking credits is dependent upon there being sufficient available profits to declare dividends and
any restrictions to paying dividends.
Accounting policy
(i) Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share
options are recognised as a deduction from equity, net of tax effects.
(ii) Dividends
Dividends are recognised as a liability in the period in which they are declared.
(iii) Transaction costs
Transaction costs of an equity transaction are accounted for as a deduction from equity, net of any related income tax
benefit.
18. Earnings per share
Profit attributable to equity holders of the parent
In thousands of AUD
Profit for the year
Non-controlling interests
Profit/(loss) for the year attributable to equity holders of the parent
Weighted average number of ordinary shares
In thousands of shares
Weighted average number of ordinary shares – basic
Shares issuable under equity-based compensation plans
Weighted average number of ordinary shares – diluted
Earnings per share
In AUD cents
Basic
Diluted
2022
42,221
(16,834)
25,387
2022
87,756
2,257
90,013
2022
28.9
28.2
2021
9,708
(10,110)
(402)
2021
86,541
1,738
88,279
2021
(0.5)
(0.5)
71
Accounting policy
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by
dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary
shares outstanding during the period. Diluted EPS is determined by adjusting the profit and loss attributable to ordinary
shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential
ordinary shares, which comprise share rights granted to employees.
70 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 71
Notes to the consolidated financial statements
for the year ended 30 June 2022
19. Financial risk management/financial instruments
The Group’s exposure to financial risks, objectives, policies
and processes for managing the risks including methods
used to measure the risks, and the management of capital,
are presented below.
The Group’s activities expose it to the following financial
risks:
•
•
•
liquidity risk; and
market risk.
credit risk;
The Group’s principal financial instruments comprise cash,
receivables, payables, interest-bearing liabilities,
contingent consideration payable and other financial
liabilities.
The Board has overall responsibility for the oversight of the
risk management framework. Risk management policies
are established to identify and analyse the risks faced by
the Group, to set appropriate risk limits and controls, and to
monitor risks and adherence to limits. Risk management
policies and systems are reviewed regularly and modified
as appropriate to reflect changes in market conditions and
the Group’s activities.
The Group considers that there are no changes to the
objectives, policies and processes to managing risk and
the exposure to risks from the prior reporting period.
Credit risk
Exposure to credit risk
Credit risk is the risk of financial loss to the Group if a
customer or counterparty to a financial instrument fails to
meet its contractual obligation, and arises principally from
the Group’s receivables from customers.
Each subsidiary performs credit analysis of a new
customer and standard payment terms are offered only to
creditworthy customers.
During the year ended 30 June 2022, the Group entered
into transactions with approximately 400 unique customers.
The 10 largest customers accounted for 55% of net
revenue for the year ended 30 June 2022, with no one
customer accounting for more than 22% of net revenue.
There are no material credit exposures relating to a single
receivable or groups of receivables.
The maximum exposure to credit risk is net of any
provisions for impairment of those assets, as disclosed in
the consolidated statement of financial position.
The carrying amount of financial assets and contract
assets represents the maximum credit exposure. The
maximum credit exposure to credit risk at the reporting
date was:
In thousands of AUD
Cash and cash
equivalents
Trade and other
receivables
Work in progress
Deposits
Note
Carrying amount
2021
2022
6
98,742
50,718
7
8
8
63,995
3,293
162
46,941
2,758
164
166,192 100,581
The Group’s maximum exposure to trade receivables credit
risk at the reporting date was:
In thousands of AUD
Trade receivables
Note
7
Carrying amount
2021
46,922
2022
63,971
The Group’s credit risk exposure is consistent across the
geographic and business segments in which the Group
operates.
The movement in the allowance for impairment in respect
of trade receivables during the year was as follows:
In thousands of AUD
Balance at 1 July
Impairment loss recognised in
the consolidated income
statement
Provision used during year
Balance at 30 June
2022
232
2021
261
19
(26)
225
11
(40)
232
Average credit loss for year(i)
Credit loss provision at balance
date(ii)
–
–
0.4%
0.5%
(i) Average credit loss for year is calculated by dividing impairment loss recognised
for the year by the gross trade receivables balance.
(ii) Credit loss provision at balance date is calculated by dividing the provision by
the gross trade receivable balance.
The average credit loss was assessed at 30 June 2022
and the Group continues to provide for expected credit
losses higher than the average credit loss for each financial
year.
Impairment losses
The ageing of the Group’s trade receivables at the
reporting date was:
In thousands of AUD
Not past due
Past due and less than 90 days
Past due and more than 90 days
Past due, more than 90 days
and impaired
Gross trade receivables
Less: Impairment(i)
Net trade receivables
2022
61,318
2,430
223
225
64,196
(225)
63,971
2021
44,311
2,588
23
232
47,154
(232)
46,922
(i) Impairment includes trade receivables specifically impaired of $35,000 (2021:
$42,000) plus expected credit losses of $190,000 (2021: $190,000).
Currency risk
Currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in
foreign exchange rates. The source and nature of this risk arises from operations and translation risks.
The operating businesses generated approximately 64% of the Group’s gross profit and 82% of its Operating EBITDA
during the year ended 30 June 2022 from outside Australia. The Group’s reporting currency is Australian dollars. However,
the international operations give rise to an exposure to changes in foreign exchange rates, as the majority of its revenues
from outside Australia are denominated in currencies other than Australian dollars, most significantly Great British pound
(GBP) and US dollar (USD).
The Group’s currency risk exposure is predominantly to consolidated Australian dollar translation risk as the majority of
transactions denominated in foreign currencies are transacted by entities within the Group with the same functional
currency as the relevant transaction. Additionally, as at 30 June 2022, the Group held USD denominated banks loans of
$36,275,000 (USD 25,000,000) which were drawn in order to fund the acquisition of ROI DNA Inc., a USA based agency.
In future financial reporting periods, the Group intends to hedge its exposure to changes in the value of its net investment
in its US foreign operations through these borrowings as they are denominated in the same currency as the foreign
operation’s functional currency.
Market risk
Market risk is the risk relating to changes in market prices, such as foreign exchange rates, interest rates and equity
prices, which will affect the Group’s income or the value of its holding of financial instruments. The objective of market risk
management is to manage and control market risk exposure within acceptable parameters, while optimising the return.
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they become due. The Group’s
approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its
Liquidity risk
liabilities when due.
The Group manages liquidity risk by monitoring forecast operating cash flows and committed unutilised facilities (refer to
Note 16); and re-estimating the value of contingent consideration liabilities semi-annually.
The following are the contractual maturities of financial liabilities, including estimated interest payments.
Carrying
amount
Contractual
cash flows
Less than
1 year
1 to 5 years Over 5 years
2022
In thousands of AUD
Non-derivative financial liabilities
Lease liabilities
Trade and other payables
(excluding unearned revenue)
Contingent consideration payable
Interest bearing liabilities1
2021
In thousands of AUD
Non-derivative financial liabilities
Lease liabilities
Trade and other payables
(excluding unearned revenue)
Contingent consideration payable
8,597
9,045
5,899
2,985
59,056
10,113
36,275
114,041
59,056
10,575
40,060
118,736
59,056
2,732
1,262
68,949
–
7,843
38,798
49,626
Carrying
amount
Contractual
cash flows
Less than
1 year
1 to 5 years Over 5 years
11,851
46,654
20,126
78,631
12,654
46,654
21,045
80,353
5,600
7,054
46,654
11,000
63,254
–
10,045
17,099
161
–
–
161
–
–
–
–
It is not expected that the cash flows included in the maturity analysis could occur significantly earlier or at significantly
different amounts.
1. Interest in respect of interest-bearing liabilities was not significant as at 30 June 2022 given the close proximity of
entering into the financing arrangement relative to balance date.
Liquidity risk in relation to contingent consideration liabilities
There are critical accounting estimates and judgements in relation to contingent consideration liabilities. Refer to Note 13
Contingent consideration payable for further details.
There are no other significant uncertainties in the timing or amounts of contractual liabilities.
72 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 73
Notes to the consolidated financial statements for the year ended 30 June 2022Financial report for year ended 30 June 2022
Notes to the consolidated financial statements
for the year ended 30 June 2022
19. Financial risk management/financial instruments
The Group’s exposure to financial risks, objectives, policies
and processes for managing the risks including methods
used to measure the risks, and the management of capital,
are presented below.
The Group’s activities expose it to the following financial
The Group’s maximum exposure to trade receivables credit
risk at the reporting date was:
In thousands of AUD
Trade receivables
Carrying amount
Note
7
2022
63,971
2021
46,922
The Group’s credit risk exposure is consistent across the
geographic and business segments in which the Group
operates.
The movement in the allowance for impairment in respect
of trade receivables during the year was as follows:
In thousands of AUD
Balance at 1 July
Impairment loss recognised in
the consolidated income
statement
Provision used during year
Balance at 30 June
2022
232
2021
261
19
(26)
225
11
(40)
232
Average credit loss for year(i)
Credit loss provision at balance
date(ii)
–
–
0.4%
0.5%
(i) Average credit loss for year is calculated by dividing impairment loss recognised
for the year by the gross trade receivables balance.
(ii) Credit loss provision at balance date is calculated by dividing the provision by
the gross trade receivable balance.
The average credit loss was assessed at 30 June 2022
and the Group continues to provide for expected credit
losses higher than the average credit loss for each financial
The ageing of the Group’s trade receivables at the
year.
Impairment losses
reporting date was:
In thousands of AUD
Not past due
Past due and less than 90 days
Past due and more than 90 days
Past due, more than 90 days
and impaired
Gross trade receivables
Less: Impairment(i)
Net trade receivables
2022
61,318
2,430
223
225
64,196
(225)
63,971
2021
44,311
2,588
23
232
47,154
(232)
46,922
(i) Impairment includes trade receivables specifically impaired of $35,000 (2021:
$42,000) plus expected credit losses of $190,000 (2021: $190,000).
risks:
•
•
•
credit risk;
liquidity risk; and
market risk.
The Group’s principal financial instruments comprise cash,
receivables, payables, interest-bearing liabilities,
contingent consideration payable and other financial
liabilities.
The Board has overall responsibility for the oversight of the
risk management framework. Risk management policies
are established to identify and analyse the risks faced by
the Group, to set appropriate risk limits and controls, and to
monitor risks and adherence to limits. Risk management
policies and systems are reviewed regularly and modified
as appropriate to reflect changes in market conditions and
the Group’s activities.
The Group considers that there are no changes to the
objectives, policies and processes to managing risk and
the exposure to risks from the prior reporting period.
Credit risk
Exposure to credit risk
Credit risk is the risk of financial loss to the Group if a
customer or counterparty to a financial instrument fails to
meet its contractual obligation, and arises principally from
the Group’s receivables from customers.
Each subsidiary performs credit analysis of a new
customer and standard payment terms are offered only to
creditworthy customers.
During the year ended 30 June 2022, the Group entered
into transactions with approximately 400 unique customers.
The 10 largest customers accounted for 55% of net
revenue for the year ended 30 June 2022, with no one
customer accounting for more than 22% of net revenue.
There are no material credit exposures relating to a single
receivable or groups of receivables.
The maximum exposure to credit risk is net of any
provisions for impairment of those assets, as disclosed in
the consolidated statement of financial position.
The carrying amount of financial assets and contract
assets represents the maximum credit exposure. The
maximum credit exposure to credit risk at the reporting
In thousands of AUD
Note
2022
2021
Carrying amount
date was:
Cash and cash
equivalents
Trade and other
receivables
Work in progress
Deposits
6
98,742
50,718
7
8
8
63,995
3,293
162
46,941
2,758
164
166,192 100,581
Currency risk
Currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in
foreign exchange rates. The source and nature of this risk arises from operations and translation risks.
The operating businesses generated approximately 64% of the Group’s gross profit and 82% of its Operating EBITDA
during the year ended 30 June 2022 from outside Australia. The Group’s reporting currency is Australian dollars. However,
the international operations give rise to an exposure to changes in foreign exchange rates, as the majority of its revenues
from outside Australia are denominated in currencies other than Australian dollars, most significantly Great British pound
(GBP) and US dollar (USD).
The Group’s currency risk exposure is predominantly to consolidated Australian dollar translation risk as the majority of
transactions denominated in foreign currencies are transacted by entities within the Group with the same functional
currency as the relevant transaction. Additionally, as at 30 June 2022, the Group held USD denominated banks loans of
$36,275,000 (USD 25,000,000) which were drawn in order to fund the acquisition of ROI DNA Inc., a USA based agency.
In future financial reporting periods, the Group intends to hedge its exposure to changes in the value of its net investment
in its US foreign operations through these borrowings as they are denominated in the same currency as the foreign
operation’s functional currency.
Market risk
Market risk is the risk relating to changes in market prices, such as foreign exchange rates, interest rates and equity
prices, which will affect the Group’s income or the value of its holding of financial instruments. The objective of market risk
management is to manage and control market risk exposure within acceptable parameters, while optimising the return.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they become due. The Group’s
approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due.
The Group manages liquidity risk by monitoring forecast operating cash flows and committed unutilised facilities (refer to
Note 16); and re-estimating the value of contingent consideration liabilities semi-annually.
73
The following are the contractual maturities of financial liabilities, including estimated interest payments.
2022
In thousands of AUD
Non-derivative financial liabilities
Lease liabilities
Trade and other payables
(excluding unearned revenue)
Contingent consideration payable
Interest bearing liabilities1
2021
In thousands of AUD
Non-derivative financial liabilities
Lease liabilities
Trade and other payables
(excluding unearned revenue)
Contingent consideration payable
Carrying
amount
Contractual
cash flows
Less than
1 year
1 to 5 years Over 5 years
8,597
9,045
5,899
2,985
59,056
10,113
36,275
114,041
59,056
10,575
40,060
118,736
59,056
2,732
1,262
68,949
–
7,843
38,798
49,626
161
–
–
161
Carrying
amount
Contractual
cash flows
Less than
1 year
1 to 5 years Over 5 years
11,851
46,654
20,126
78,631
12,654
46,654
21,045
80,353
5,600
7,054
46,654
11,000
63,254
–
10,045
17,099
–
–
–
–
It is not expected that the cash flows included in the maturity analysis could occur significantly earlier or at significantly
different amounts.
1. Interest in respect of interest-bearing liabilities was not significant as at 30 June 2022 given the close proximity of
entering into the financing arrangement relative to balance date.
Liquidity risk in relation to contingent consideration liabilities
There are critical accounting estimates and judgements in relation to contingent consideration liabilities. Refer to Note 13
Contingent consideration payable for further details.
There are no other significant uncertainties in the timing or amounts of contractual liabilities.
72 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 73
Notes to the consolidated financial statements
for the year ended 30 June 2022
19. Financial risk management/financial instruments (continued)
Interest rate risk
Interest rate risk refers to the risk that the fair value of the future cash flows of financial instruments will fluctuate
because of changes in market interest rates. The Group’s borrowings which have a variable interest rate attached give
rise to cash flow interest rate risk, as do the Group’s lease liabilities. Whilst there is no formal policy in place mandating
hedging levels, the Group may hedge the interest rate risk by taking out floating to fixed rate swaps on drawn debt. Such
interest rate swaps have the economic effect of converting borrowings from variable rates to fixed rates.
The following considerations are made to material interest rate transactions to ensure that the Group:
•
is afforded some protection from significant increases in interest rates, thereby adding some degree of certainty
to the financial budgeting process; and
• maintains sufficient interest rate flexibility to participate in normal yield curve environments without unduly paying
up for term interest rate hedges; repay debt without significant swap (fixed rate) break costs; and undertake
interest rate maturity extension trades as appropriate.
As at 30 June 2022, the Group has not entered into any interest rate swaps to convert the borrowings from variable rate
to fixed rates. Accordingly, the Group’s interest-bearing liabilities of $36,275,000 at 30 June 2022 are variable rate
financial instruments.
As the cash advance debt facility was first drawn on 29 June 2022, a reasonably possible change in interest rates would
not have a material impact on the finance costs incurred by the Group.
Capital management
The Group’s key sources of capital are available committed facilities and share capital. The Board seeks to maintain a
balance between higher returns that might be possible with higher levels of gearing and the advantages afforded by a
prudent capital position. The Group also has contingent consideration payable as described in Note 13 Contingent
consideration payable.
Fair values
Fair values versus carrying amounts
The fair values of financial assets and liabilities, together with the carrying amounts shown in the consolidated statement
of financial position, are as follows:
Consolidated
In thousands of AUD
Cash at bank and on hand
Bank short-term deposits
Trade receivables
Trade and other payables
Contingent consideration payable
Lease liabilities
Interest bearing liabilities
Fair value measurement:
Carrying
amount
96,618
2,124
63,971
(59,056)
(10,113)
(8,597)
(36,275)
2022
Fair value
96,618
2,124
63,971
(59,056)
(10,113)
(8,597)
(36,275)
Carrying
amount
33,630
17,088
46,922
(46,654)
(20,126)
(11,851)
–
2021
Fair value
33,630
17,088
46,922
(46,654)
(20,126)
(11,851)
–
Level 3 fair values
The following tables show the valuation techniques used in measuring Level 3 fair values for financial instruments
measured at fair value in the consolidated statement of financial position, as well as the significant unobservable inputs
used.
for receivables.
(ii) Cash and cash equivalents
Type
Contingent
consideration
payable
Valuation technique
Discounted cash flows: The valuation model
considers the present value of expected
floor/capped payment (payable over three
years), discounted using a risk-adjusted
discount rate. The expected payment is
determined by considering the possible
scenarios of forecast average net revenue,
the amount to be paid under each scenario
and the probability of each scenario.
Significant unobservable
inputs
– Forecast average net
revenue.
– Risk-adjusted
discount rate: 3.12%.
Inter-relationship between
significant unobservable
inputs and fair value
measurement
The estimated fair value
would increase (decrease) if:
–
the forecast average net
revenue is higher (lower);
or
–
the risk-adjusted discount
rate were lower (higher).
74 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 75
Refer to Note 13 Contingent consideration payable for a reconciliation of the opening and closing carrying amounts of
Reasonably possible changes after 30 June 2022 to one of the significant unobservable inputs, holding other inputs
constant, would have the following effects on the fair values of contingent consideration:
Reconciliation of Level 3 fair values
contingent consideration payable.
Sensitivity analysis
In thousands of AUD
Movement of 5% in forecast average net revenue
Movement of 7.5% in forecast average net revenue
Movement of 0.5% in risk-adjusted discount rate
Other items
Increase
Decrease
–
988
(69)
(1,647)
(1,647)
70
The carrying amounts of cash and cash equivalents, trade and other receivables, trade and other payables, interest
bearing liabilities and lease liabilities approximates their fair value. The fair value which is determined for disclosure
Trade receivables: is the present value of future cash flows, discounted at the market rate of interest at the
Trade and other payables and lease liabilities: is the present value of future principal and interest cash flows,
discounted at the market rate of interest at the reporting date. For leases, the market rate of interest is determined
by reference to the Group’s incremental borrowing rate on the same term as the underlying lease.
purposes only is calculated as:
•
•
reporting date.
Accounting policy
Non-derivative financial assets
Non-derivative financial assets are recognised on the date that they are originated. All other financial assets (including
assets designated as fair value through the profit and loss) are recognised initially on the trade date at which the Group
becomes a party to the contractual provisions of the instrument.
Non-derivative financial assets are derecognised when the rights to receive cash flows from the financial assets have
expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.
Financial assets and liabilities are offset and the net amount presented in the consolidated statement of financial position
when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to
realise the asset and settle the liability simultaneously.
The Group has the following non-derivative financial assets:
(i) Trade and other receivables
Trade and other receivables are financial assets with fixed or determinable payments that are not quoted in an active
market. They arise when the Group provides money or services directly to a debtor with no intention of selling the
receivable.
Trade and other receivables are recognised initially at fair value, plus any directly attributable transaction costs.
Subsequent to initial recognition, trade and other receivables are measured at amortised cost using the effective interest
method, less a loss allowance equal to the expected credit loss determined under the expected credit loss assessment
Cash and cash equivalents comprise cash balances and call deposits with original maturities of three months or less.
Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included
as a component of cash and cash equivalents for the purpose of the consolidated statement of cash flows.
Non-derivative financial liabilities
Non-derivative financial liabilities are recognised on the date they are originated. All other financial liabilities (including
liabilities designated at fair value through profit or loss) are recognised initially on the trade date at which the Group
becomes a party to the contractual provisions of the instrument.
Non-derivative financial liabilities are derecognised when the Group’s contractual obligations are discharged or
cancelled, or expire.
Notes to the consolidated financial statements for the year ended 30 June 2022Financial report for year ended 30 June 2022
Notes to the consolidated financial statements
for the year ended 30 June 2022
19. Financial risk management/financial instruments (continued)
Interest rate risk
Interest rate risk refers to the risk that the fair value of the future cash flows of financial instruments will fluctuate
because of changes in market interest rates. The Group’s borrowings which have a variable interest rate attached give
rise to cash flow interest rate risk, as do the Group’s lease liabilities. Whilst there is no formal policy in place mandating
hedging levels, the Group may hedge the interest rate risk by taking out floating to fixed rate swaps on drawn debt. Such
interest rate swaps have the economic effect of converting borrowings from variable rates to fixed rates.
The following considerations are made to material interest rate transactions to ensure that the Group:
•
is afforded some protection from significant increases in interest rates, thereby adding some degree of certainty
to the financial budgeting process; and
• maintains sufficient interest rate flexibility to participate in normal yield curve environments without unduly paying
up for term interest rate hedges; repay debt without significant swap (fixed rate) break costs; and undertake
interest rate maturity extension trades as appropriate.
As at 30 June 2022, the Group has not entered into any interest rate swaps to convert the borrowings from variable rate
to fixed rates. Accordingly, the Group’s interest-bearing liabilities of $36,275,000 at 30 June 2022 are variable rate
As the cash advance debt facility was first drawn on 29 June 2022, a reasonably possible change in interest rates would
not have a material impact on the finance costs incurred by the Group.
The Group’s key sources of capital are available committed facilities and share capital. The Board seeks to maintain a
balance between higher returns that might be possible with higher levels of gearing and the advantages afforded by a
prudent capital position. The Group also has contingent consideration payable as described in Note 13 Contingent
The fair values of financial assets and liabilities, together with the carrying amounts shown in the consolidated statement
Carrying
amount
96,618
2,124
63,971
(59,056)
(10,113)
(8,597)
(36,275)
2022
Fair value
96,618
2,124
63,971
(59,056)
(10,113)
(8,597)
(36,275)
Carrying
amount
33,630
17,088
46,922
(46,654)
(20,126)
(11,851)
–
2021
Fair value
33,630
17,088
46,922
(46,654)
(20,126)
(11,851)
–
financial instruments.
Capital management
consideration payable.
Fair values
Fair values versus carrying amounts
of financial position, are as follows:
Consolidated
In thousands of AUD
Cash at bank and on hand
Bank short-term deposits
Trade receivables
Trade and other payables
Lease liabilities
Interest bearing liabilities
Fair value measurement:
Level 3 fair values
Contingent consideration payable
used.
The following tables show the valuation techniques used in measuring Level 3 fair values for financial instruments
measured at fair value in the consolidated statement of financial position, as well as the significant unobservable inputs
Type
Valuation technique
Contingent
Discounted cash flows: The valuation model
– Forecast average net
The estimated fair value
consideration
considers the present value of expected
payable
floor/capped payment (payable over three
revenue.
– Risk-adjusted
discount rate: 3.12%.
Inter-relationship between
significant unobservable
Significant unobservable
inputs and fair value
inputs
measurement
would increase (decrease) if:
–
the forecast average net
revenue is higher (lower);
or
–
the risk-adjusted discount
rate were lower (higher).
years), discounted using a risk-adjusted
discount rate. The expected payment is
determined by considering the possible
scenarios of forecast average net revenue,
the amount to be paid under each scenario
and the probability of each scenario.
Reconciliation of Level 3 fair values
Refer to Note 13 Contingent consideration payable for a reconciliation of the opening and closing carrying amounts of
contingent consideration payable.
Sensitivity analysis
Reasonably possible changes after 30 June 2022 to one of the significant unobservable inputs, holding other inputs
constant, would have the following effects on the fair values of contingent consideration:
In thousands of AUD
Movement of 5% in forecast average net revenue
Movement of 7.5% in forecast average net revenue
Movement of 0.5% in risk-adjusted discount rate
Increase
–
988
(69)
Decrease
(1,647)
(1,647)
70
Other items
The carrying amounts of cash and cash equivalents, trade and other receivables, trade and other payables, interest
bearing liabilities and lease liabilities approximates their fair value. The fair value which is determined for disclosure
purposes only is calculated as:
•
Trade receivables: is the present value of future cash flows, discounted at the market rate of interest at the
reporting date.
•
Trade and other payables and lease liabilities: is the present value of future principal and interest cash flows,
discounted at the market rate of interest at the reporting date. For leases, the market rate of interest is determined
by reference to the Group’s incremental borrowing rate on the same term as the underlying lease.
Accounting policy
Non-derivative financial assets
Non-derivative financial assets are recognised on the date that they are originated. All other financial assets (including
assets designated as fair value through the profit and loss) are recognised initially on the trade date at which the Group
becomes a party to the contractual provisions of the instrument.
75
Non-derivative financial assets are derecognised when the rights to receive cash flows from the financial assets have
expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.
Financial assets and liabilities are offset and the net amount presented in the consolidated statement of financial position
when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to
realise the asset and settle the liability simultaneously.
The Group has the following non-derivative financial assets:
(i) Trade and other receivables
Trade and other receivables are financial assets with fixed or determinable payments that are not quoted in an active
market. They arise when the Group provides money or services directly to a debtor with no intention of selling the
receivable.
Trade and other receivables are recognised initially at fair value, plus any directly attributable transaction costs.
Subsequent to initial recognition, trade and other receivables are measured at amortised cost using the effective interest
method, less a loss allowance equal to the expected credit loss determined under the expected credit loss assessment
for receivables.
(ii) Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with original maturities of three months or less.
Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included
as a component of cash and cash equivalents for the purpose of the consolidated statement of cash flows.
Non-derivative financial liabilities
Non-derivative financial liabilities are recognised on the date they are originated. All other financial liabilities (including
liabilities designated at fair value through profit or loss) are recognised initially on the trade date at which the Group
becomes a party to the contractual provisions of the instrument.
Non-derivative financial liabilities are derecognised when the Group’s contractual obligations are discharged or
cancelled, or expire.
74 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 75
Notes to the consolidated financial statements
for the year ended 30 June 2022
19. Financial risk management/financial instruments (continued)
The Group has the following non-derivative financial liabilities: lease liabilities, trade, other payables and contingent
consideration payable.
Non-derivative financial liabilities, other than contingent consideration payable, are recognised initially at fair value, plus
any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at
amortised cost using the effective interest rate method.
Contingent consideration payable is classified as a financial liability and is measured at fair value through profit or loss.
Contingent consideration relating to acquisition of subsidiaries is recognised based on management’s best estimate of the
liability (up to any relevant cap) at the reporting date. The liability is discounted using a market interest rate for the liability
and a present value interest charge is recognised in the consolidated income statement as the discount unwinds. Any
change in estimate of contingent consideration payable is recognised in the consolidated income statement as a fair value
gain or loss during the period when the estimate is revised.
Impairment of Financial assets (including receivables)
A financial asset not carried at fair value through profit or loss is assessed on a monthly basis to determine whether there
is any objective evidence that it is impaired. A financial asset is considered to be impaired if objective evidence indicates
that one or more events have had a negative effect on the estimated future cash flows of that asset that can be estimated
reliably.
Objective evidence that financial assets are impaired can include default or delinquency by a debtor, restructuring of an
amount due to the Group on terms that the Group would not consider otherwise, and/or indications that a debtor or issuer
will enter bankruptcy.
Expected credit loss assessment for receivables and contract assets
In addition to identifying impairment for specific financial assets, at each reporting date the Group also predicts the
expected credit loss based on actual credit loss experience of the past three years. Expected credit losses are recognised
in the consolidated income statement and reflected in an allowance account against receivables. An impairment loss in
respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the
present value of the estimated future cash flows discounted at the original effective interest rate.
Key estimates
Trade receivables are carried at amortised cost less impairment. The impairment of these receivables is an estimate
based on:
•
evidence suggesting that an event has occurred leading to a negative effect on the estimated future cash inflow;
and
•
prediction of expected credit loss based on actual credit loss experience of the past three years.
Events subsequent to the reporting date but prior to the signing of the consolidated financial statements which indicate a
negative effect are taken into account in the calculation of impairment. Future events may occur which change these
estimates of the future cash inflows related to impaired trade receivables.
20. Impairment of non-financial assets
The process of impairment testing is to estimate the recoverable amount of the assets concerned and recognise an
impairment loss in the consolidated income statement whenever the carrying amount of those assets exceeds the
recoverable amount.
Impairment tests for cash-generating units (CGUs) goodwill
For impairment testing, goodwill is allocated to the Group’s operating business units that represent the lowest level within
the Group at which goodwill is monitored for internal management purposes and synergies obtained by the business unit.
During the current year, the Group implemented a new global operating model resulting in change in composition of its
CGU group. Accordingly, carrying value of goodwill (previously fully allocated to the Operating Brands CGU) was
reallocated across the Brand Transformation CGU and the Creative Technology and Data CGU using a relative value
approach.
The aggregation of assets in the CGU continues to be based upon the interdependency of the cash inflows generated from
the service offering and synergies obtained by the business unit. The Search Marketing businesses do not form part of the
Creative Technology and Data CGU as they does not obtain synergies with businesses within the Creative Technology
and Data segment and has no carrying value.
The recoverable amount of the CGUs was based on value in use in both the current and prior year. The methodologies
and assumptions used for calculating value in use for all of the CGUs have remained materially consistent with those
Key assumptions used in the value in use approach to test for impairment relate to projected cash flows, the discount rates
and the medium-term and long-term growth rates applied to projected cash flows.
The projected first year of cash flows is derived from next financial year’s Board approved budgets. This reflects the best
estimate of the CGU’s future cash flows at the reporting date. Projected cash flows can differ from future actual cash flows
applied in prior years.
Key assumptions
Projected cash flows
and results of operations.
Discount rates
Discount rates are based on the Group’s pre-tax weighted average cost of capital (WACC) adjusted if necessary to reflect
the specific characteristics of each CGU group and to obtain a post-tax discount rate. Discount rates used are appropriate
for the currency in which cash flows are generated and are adjusted to reflect the current view on the appropriate debt
equity ratio and risks inherent in assessing future cash flows.
Growth rate
Projected cash flows for the first forecast year reflect the growth each CGU is expected to achieve over the current year’s
actual EBITDA results. Projected cash flows for year two onwards have then been determined using a constant growth
rate which is considered modest compared to the growth each CGU achieved in both the current year and that which is
Long-term growth rate is used into perpetuity, based on the expected long-range growth rate for the industry.
expected to be achieved next year.
Long-term growth rate into perpetuity
Impairment testing key assumptions:
Post-tax discount rate %
Pre-tax discount rate %
Growth rate (CAGR) %
Long-term perpetuity growth rate %
Brand Transformation
Creative Technology and Data
Operating Brands
2022
9.1 – 10.5
12.0 – 15.2
4.9
2.5
2022
10.5
14.3
8.0
2.5
2021
8.7 – 9.6
10.5 – 13.1
2.4
2.5
76 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 77
Notes to the consolidated financial statements for the year ended 30 June 2022Financial report for year ended 30 June 2022
Notes to the consolidated financial statements
for the year ended 30 June 2022
19. Financial risk management/financial instruments (continued)
The Group has the following non-derivative financial liabilities: lease liabilities, trade, other payables and contingent
consideration payable.
Non-derivative financial liabilities, other than contingent consideration payable, are recognised initially at fair value, plus
any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at
amortised cost using the effective interest rate method.
Contingent consideration payable is classified as a financial liability and is measured at fair value through profit or loss.
Contingent consideration relating to acquisition of subsidiaries is recognised based on management’s best estimate of the
liability (up to any relevant cap) at the reporting date. The liability is discounted using a market interest rate for the liability
and a present value interest charge is recognised in the consolidated income statement as the discount unwinds. Any
change in estimate of contingent consideration payable is recognised in the consolidated income statement as a fair value
gain or loss during the period when the estimate is revised.
Impairment of Financial assets (including receivables)
A financial asset not carried at fair value through profit or loss is assessed on a monthly basis to determine whether there
is any objective evidence that it is impaired. A financial asset is considered to be impaired if objective evidence indicates
that one or more events have had a negative effect on the estimated future cash flows of that asset that can be estimated
Objective evidence that financial assets are impaired can include default or delinquency by a debtor, restructuring of an
amount due to the Group on terms that the Group would not consider otherwise, and/or indications that a debtor or issuer
Expected credit loss assessment for receivables and contract assets
In addition to identifying impairment for specific financial assets, at each reporting date the Group also predicts the
expected credit loss based on actual credit loss experience of the past three years. Expected credit losses are recognised
in the consolidated income statement and reflected in an allowance account against receivables. An impairment loss in
respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the
present value of the estimated future cash flows discounted at the original effective interest rate.
Trade receivables are carried at amortised cost less impairment. The impairment of these receivables is an estimate
evidence suggesting that an event has occurred leading to a negative effect on the estimated future cash inflow;
prediction of expected credit loss based on actual credit loss experience of the past three years.
Events subsequent to the reporting date but prior to the signing of the consolidated financial statements which indicate a
negative effect are taken into account in the calculation of impairment. Future events may occur which change these
estimates of the future cash inflows related to impaired trade receivables.
reliably.
will enter bankruptcy.
Key estimates
based on:
and
•
•
20. Impairment of non-financial assets
The process of impairment testing is to estimate the recoverable amount of the assets concerned and recognise an
impairment loss in the consolidated income statement whenever the carrying amount of those assets exceeds the
recoverable amount.
Impairment tests for cash-generating units (CGUs) goodwill
For impairment testing, goodwill is allocated to the Group’s operating business units that represent the lowest level within
the Group at which goodwill is monitored for internal management purposes and synergies obtained by the business unit.
During the current year, the Group implemented a new global operating model resulting in change in composition of its
CGU group. Accordingly, carrying value of goodwill (previously fully allocated to the Operating Brands CGU) was
reallocated across the Brand Transformation CGU and the Creative Technology and Data CGU using a relative value
approach.
The aggregation of assets in the CGU continues to be based upon the interdependency of the cash inflows generated from
the service offering and synergies obtained by the business unit. The Search Marketing businesses do not form part of the
Creative Technology and Data CGU as they does not obtain synergies with businesses within the Creative Technology
and Data segment and has no carrying value.
The recoverable amount of the CGUs was based on value in use in both the current and prior year. The methodologies
and assumptions used for calculating value in use for all of the CGUs have remained materially consistent with those
applied in prior years.
Key assumptions
Key assumptions used in the value in use approach to test for impairment relate to projected cash flows, the discount rates
and the medium-term and long-term growth rates applied to projected cash flows.
Projected cash flows
The projected first year of cash flows is derived from next financial year’s Board approved budgets. This reflects the best
estimate of the CGU’s future cash flows at the reporting date. Projected cash flows can differ from future actual cash flows
and results of operations.
77
Discount rates
Discount rates are based on the Group’s pre-tax weighted average cost of capital (WACC) adjusted if necessary to reflect
the specific characteristics of each CGU group and to obtain a post-tax discount rate. Discount rates used are appropriate
for the currency in which cash flows are generated and are adjusted to reflect the current view on the appropriate debt
equity ratio and risks inherent in assessing future cash flows.
Growth rate
Projected cash flows for the first forecast year reflect the growth each CGU is expected to achieve over the current year’s
actual EBITDA results. Projected cash flows for year two onwards have then been determined using a constant growth
rate which is considered modest compared to the growth each CGU achieved in both the current year and that which is
expected to be achieved next year.
Long-term growth rate into perpetuity
Long-term growth rate is used into perpetuity, based on the expected long-range growth rate for the industry.
Impairment testing key assumptions:
Post-tax discount rate %
Pre-tax discount rate %
Growth rate (CAGR) %
Long-term perpetuity growth rate %
Brand Transformation
2022
9.1 – 10.5
Creative Technology and Data
2022
10.5
Operating Brands
2021
8.7 – 9.6
12.0 – 15.2
4.9
2.5
14.3
8.0
2.5
10.5 – 13.1
2.4
2.5
76 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 77
Notes to the consolidated financial statements
for the year ended 30 June 2022
20. Impairment of non-financial assets (continued)
Sensitivity range for impairment testing assumptions
As long as the COVID-19 pandemic, including any existing or new variants, remains a public health threat, global
economic conditions will continue to be volatile and such uncertainty cuts across all clients, industries and geographies.
Notwithstanding this, given the significant recoveries achieved by the CGUs in the current year as a result of the Group’s
high sector exposure to technology, healthcare and consumer staples customers, management has not assumed a decline
in projected cash flows as a direct result of the COVID-19 pandemic.
Whilst it is management’s view that the assumptions used for growth rates over the forecast period and the long-term and
discount rates are reasonable, a sensitivity analysis was performed for each CGU taking into consideration the possible
impacts of adverse economic conditions over the forecast period. Specifically, the impact that severe and sustained
inflation in key geographies, supply chain issues affecting the distribution of customers’ products, or a disruption in the
credit markets may have on the key assumptions used in determining each CGU’s recoverable amount, being:
•
•
•
lower projected cash inflows as result of reductions, deferrals or cancellations by customers in terms of their
spending on advertising, marketing and corporate communications projects;
increased operating costs, including those to attract and retain the talent needed to grow revenues at forecast
levels; or
higher discount rates.
The results of this sensitivity analysis were such that any reasonably possible change in these key assumptions upon
which each CGU’s recoverable amounts were based would not cause either CGU’s carrying amount to exceed its
recoverable amount.
Accounting policy
The carrying amounts of the Group’s non-financial assets, other than deferred tax assets, are reviewed at each reporting
date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable
amount is estimated. Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and
are tested annually for impairment or more frequently if events or changes in circumstances indicate that they might be
impaired.
An impairment loss is recognised if the carrying amount of an asset exceeds its recoverable amount. The recoverable
amount is the higher of an asset’s value in use and fair value less costs to sell. In assessing value in use, the estimated
future post-tax cash flows are discounted to their present value using a post-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset.
For the purpose of assessing impairment, assets are grouped together into the smallest group of assets that generates
cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the
‘cash-generating unit’).
Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of goodwill and then to
reduce the carrying amount of the other assets on a pro-rata basis.
At each reporting date, the Group reviews non-financial assets other than goodwill that have been previously impaired for
indications that the conditions that resulted in the impairment have reversed.
21. Controlled entities
Particulars in relation to controlled entities:
Name
Parent entity
Enero Group Limited
Controlled entities
Enero Group UK Holdings Pty Limited
– Enero Group UK Limited
Enero Group (US) Pty Limited
– Enero Group (US) Inc.
BMF Holdco Pty Limited
BMF Advertising Pty Limited (Trustee of The BMF Unit Trust)
The BMF Unit Trust
Hotwire Integrated Communications Pty Limited
Naked Communications Australia Pty Limited
CPR Communications and Public Relations Pty Limited
Hotwire Australia Pty Limited
Orchard Marketing Pty Ltd
Alfie Agency Pty Ltd
Enero Group Finance Pty Limited
Domain Active Holdco Pty Limited
– Domain Active Pty Limited
The Leading Edge Market Research Consultants Pty Limited
– Enero Group Singapore Pte Limited
The Digital Edge Online Consultants Pty Limited
Brigade Pty Limited
The Hotwire Public Relations Group Limited
– Hotwire Public Relations GMBH
– Hotwire Public Relations SARL
– Hotwire Public Relations SL
– Hotwire Public Relations SRL
– Hotwire Public Relations Limited
– McDonald Butler Associates Limited
OBMedia LLC
Domain Active LLC
IdealAds LLC¹
SiteMath LLC
– Clicksciences.com LLC
Orchard Creative Technology Inc.
Hotwire Public Relations Group LLC
1.
Incorporated during the year ended 30 June 2022.
Group interest
2022
%
2021
Country of
%
incorporation
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
51
51
51
51
51
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
51
51
–
51
51
100
100
Australia
UK
Australia
USA
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Singapore
Australia
Australia
UK
Germany
France
Spain
Italy
UK
UK
USA
USA
USA
USA
USA
USA
USA
78 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 79
Notes to the consolidated financial statements for the year ended 30 June 2022Financial report for year ended 30 June 2022
Notes to the consolidated financial statements
for the year ended 30 June 2022
20. Impairment of non-financial assets (continued)
Sensitivity range for impairment testing assumptions
As long as the COVID-19 pandemic, including any existing or new variants, remains a public health threat, global
economic conditions will continue to be volatile and such uncertainty cuts across all clients, industries and geographies.
Notwithstanding this, given the significant recoveries achieved by the CGUs in the current year as a result of the Group’s
high sector exposure to technology, healthcare and consumer staples customers, management has not assumed a decline
in projected cash flows as a direct result of the COVID-19 pandemic.
Whilst it is management’s view that the assumptions used for growth rates over the forecast period and the long-term and
discount rates are reasonable, a sensitivity analysis was performed for each CGU taking into consideration the possible
impacts of adverse economic conditions over the forecast period. Specifically, the impact that severe and sustained
inflation in key geographies, supply chain issues affecting the distribution of customers’ products, or a disruption in the
credit markets may have on the key assumptions used in determining each CGU’s recoverable amount, being:
lower projected cash inflows as result of reductions, deferrals or cancellations by customers in terms of their
spending on advertising, marketing and corporate communications projects;
increased operating costs, including those to attract and retain the talent needed to grow revenues at forecast
•
•
•
levels; or
higher discount rates.
The results of this sensitivity analysis were such that any reasonably possible change in these key assumptions upon
which each CGU’s recoverable amounts were based would not cause either CGU’s carrying amount to exceed its
recoverable amount.
Accounting policy
impaired.
The carrying amounts of the Group’s non-financial assets, other than deferred tax assets, are reviewed at each reporting
date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable
amount is estimated. Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and
are tested annually for impairment or more frequently if events or changes in circumstances indicate that they might be
An impairment loss is recognised if the carrying amount of an asset exceeds its recoverable amount. The recoverable
amount is the higher of an asset’s value in use and fair value less costs to sell. In assessing value in use, the estimated
future post-tax cash flows are discounted to their present value using a post-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset.
For the purpose of assessing impairment, assets are grouped together into the smallest group of assets that generates
cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the
‘cash-generating unit’).
Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of goodwill and then to
reduce the carrying amount of the other assets on a pro-rata basis.
At each reporting date, the Group reviews non-financial assets other than goodwill that have been previously impaired for
indications that the conditions that resulted in the impairment have reversed.
21. Controlled entities
Particulars in relation to controlled entities:
Name
Parent entity
Enero Group Limited
Group interest
2021
%
2022
%
Country of
incorporation
Controlled entities
Enero Group UK Holdings Pty Limited
– Enero Group UK Limited
Enero Group (US) Pty Limited
– Enero Group (US) Inc.
BMF Holdco Pty Limited
BMF Advertising Pty Limited (Trustee of The BMF Unit Trust)
The BMF Unit Trust
Hotwire Integrated Communications Pty Limited
Naked Communications Australia Pty Limited
Hotwire Australia Pty Limited
Orchard Marketing Pty Ltd
Alfie Agency Pty Ltd
CPR Communications and Public Relations Pty Limited
Enero Group Finance Pty Limited
Domain Active Holdco Pty Limited
– Domain Active Pty Limited
The Leading Edge Market Research Consultants Pty Limited
– Enero Group Singapore Pte Limited
The Digital Edge Online Consultants Pty Limited
Brigade Pty Limited
The Hotwire Public Relations Group Limited
– Hotwire Public Relations GMBH
– Hotwire Public Relations SARL
– Hotwire Public Relations SL
– Hotwire Public Relations SRL
– Hotwire Public Relations Limited
– McDonald Butler Associates Limited
OBMedia LLC
Domain Active LLC
IdealAds LLC¹
SiteMath LLC
– Clicksciences.com LLC
Orchard Creative Technology Inc.
Hotwire Public Relations Group LLC
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
51
51
51
51
51
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
51
51
–
51
51
100
100
Australia
UK
Australia
USA
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Singapore
Australia
Australia
UK
Germany
France
Spain
Italy
UK
UK
USA
USA
USA
USA
USA
USA
USA
79
1.
Incorporated during the year ended 30 June 2022.
78 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 79
Notes to the consolidated financial statements
for the year ended 30 June 2022
21. Controlled entities (continued)
Accounting policy
Basis of consolidation
(i) Business combinations
Business combinations are accounted for using the acquisition method. For every business combination, the Group
identifies the acquirer, which is the combining entity that obtains control of other combining entities or businesses. The
acquisition date is the date on which control is transferred to the acquirer. Judgement is applied in determining the
acquisition date and determining whether control is transferred from one party to another.
Goodwill arising from the business combination is measured at fair value of the consideration transferred including the
recognised amount of any non-controlling interests in the acquiree, less the net recognised amount (generally fair value) of
the identifiable assets acquired and liabilities assumed, all measured as of the acquisition date. Non-controlling interest is
measured at its proportionate interest in the identifiable net assets of the acquiree.
Consideration transferred includes the fair values of the assets transferred, liabilities incurred by the Group to the previous
owners of the acquiree, and equity interests issued by the Group. Consideration transferred also includes the fair value of
any contingent consideration and share-based payment awards of the acquiree that are replaced mandatorily in the
business combination.
A contingent liability of the acquiree assumed in a business combination is recognised only if such a liability represents a
present obligation and arises from a past event, and its fair value can be measured reliably.
Transaction costs incurred in connection with a business combination are expensed as incurred.
(ii) Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the
activities of the entity.
The financial statements of subsidiaries are included in the consolidated financial statements from the date on which
control commences until the date on which control ceases.
Intra-group balances, and any unrealised gains and losses or income and expenses arising from intra-group transactions,
are eliminated in preparing the consolidated financial statements.
Incidental acquisition costs of $1,324,000 relating to the acquisition of ROI DNA Inc. and GetIT Pte Ltd were recognised in
the consolidated income statement for the year ended 30 June 2022. These acquisitions were completed on 1 July 2022,
22. Acquisitions
2022
as discussed further below.
Acquisitions completed subsequent to balance date:
•
•
on 1 July 2022, the Group acquired 100% of the issued capital of ROI DNA Inc, a USA based strategic B2B sales
and marketing agency. The purchase consideration was an upfront payment of US$26,400,000 ($38,306,000) in
cash and US$6,600,000 ($9,577,000) of Enero Group Limited shares with additional contingent consideration
linked to the achievement of EBITDA targets over the next 3 years through to 30 June 2025.
on 1 July 2022, the Group acquired 100% of the issued capital of GetIT Pte Ltd, a Singapore based specialist
B2B technology marketing agency with presence in India, Malaysia and Japan. The purchase consideration was
an upfront payment of S$2,700,000 ($2,816,000) in cash and S$1,800,000 ($1,877,000) of Enero Group Limited
shares with additional contingent consideration linked to the achievement of EBIT target over the next 3 years
through to 30 June 2025.
Provisional value of the net identifiable assets and liabilities acquired at the date of acquisition were:
Provisional value
In thousands of AUD
Cash and cash equivalents
Trade and other receivables
Other assets
Property, plant and equipment
Trade and other payables
Unearned revenue
Employee benefits
Bank loans
Net identifiable assets
Provisionally determined value of intangibles (including goodwill)
In thousands of AUD
Initial consideration
Total consideration
Estimate of contingent consideration payable
Less: Provisional value of net identifiable assets
Provisionally determined value of intangibles (including goodwill)
12,975
6,154
799
279
(2,903)
(7,905)
(945)
(315)
8,139
52,576
53,467
106,043
(8,139)
97,904
As at the date of issuing this report, these acquisitions are still subject to further review by management as the Group
has 12 months from the date of acquisition to finalise its purchase price accounting. The initial accounting for these
business combinations will be recognised in the Group’s next financial reporting period, including the allocation of the
purchase price to goodwill and any other qualifying intangible assets. Further information about these business
combinations has not been disclosed on the basis that it is impracticable given the close proximity between the
completion dates of the acquisitions and the approval of these consolidated financial statements.
80 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 81
Notes to the consolidated financial statements for the year ended 30 June 2022Financial report for year ended 30 June 2022
Notes to the consolidated financial statements
for the year ended 30 June 2022
21. Controlled entities (continued)
Accounting policy
Basis of consolidation
(i) Business combinations
Business combinations are accounted for using the acquisition method. For every business combination, the Group
identifies the acquirer, which is the combining entity that obtains control of other combining entities or businesses. The
acquisition date is the date on which control is transferred to the acquirer. Judgement is applied in determining the
acquisition date and determining whether control is transferred from one party to another.
Goodwill arising from the business combination is measured at fair value of the consideration transferred including the
recognised amount of any non-controlling interests in the acquiree, less the net recognised amount (generally fair value) of
the identifiable assets acquired and liabilities assumed, all measured as of the acquisition date. Non-controlling interest is
measured at its proportionate interest in the identifiable net assets of the acquiree.
Consideration transferred includes the fair values of the assets transferred, liabilities incurred by the Group to the previous
owners of the acquiree, and equity interests issued by the Group. Consideration transferred also includes the fair value of
any contingent consideration and share-based payment awards of the acquiree that are replaced mandatorily in the
business combination.
A contingent liability of the acquiree assumed in a business combination is recognised only if such a liability represents a
present obligation and arises from a past event, and its fair value can be measured reliably.
Transaction costs incurred in connection with a business combination are expensed as incurred.
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the
(ii) Subsidiaries
activities of the entity.
The financial statements of subsidiaries are included in the consolidated financial statements from the date on which
control commences until the date on which control ceases.
Intra-group balances, and any unrealised gains and losses or income and expenses arising from intra-group transactions,
are eliminated in preparing the consolidated financial statements.
22. Acquisitions
2022
Incidental acquisition costs of $1,324,000 relating to the acquisition of ROI DNA Inc. and GetIT Pte Ltd were recognised in
the consolidated income statement for the year ended 30 June 2022. These acquisitions were completed on 1 July 2022,
as discussed further below.
Acquisitions completed subsequent to balance date:
•
•
on 1 July 2022, the Group acquired 100% of the issued capital of ROI DNA Inc, a USA based strategic B2B sales
and marketing agency. The purchase consideration was an upfront payment of US$26,400,000 ($38,306,000) in
cash and US$6,600,000 ($9,577,000) of Enero Group Limited shares with additional contingent consideration
linked to the achievement of EBITDA targets over the next 3 years through to 30 June 2025.
on 1 July 2022, the Group acquired 100% of the issued capital of GetIT Pte Ltd, a Singapore based specialist
B2B technology marketing agency with presence in India, Malaysia and Japan. The purchase consideration was
an upfront payment of S$2,700,000 ($2,816,000) in cash and S$1,800,000 ($1,877,000) of Enero Group Limited
shares with additional contingent consideration linked to the achievement of EBIT target over the next 3 years
through to 30 June 2025.
Provisional value of the net identifiable assets and liabilities acquired at the date of acquisition were:
In thousands of AUD
Provisional value
Cash and cash equivalents
Trade and other receivables
Other assets
Property, plant and equipment
Trade and other payables
Unearned revenue
Employee benefits
Bank loans
Net identifiable assets
Provisionally determined value of intangibles (including goodwill)
In thousands of AUD
Initial consideration
Estimate of contingent consideration payable
Total consideration
Less: Provisional value of net identifiable assets
Provisionally determined value of intangibles (including goodwill)
81
12,975
6,154
799
279
(2,903)
(7,905)
(945)
(315)
8,139
52,576
53,467
106,043
(8,139)
97,904
As at the date of issuing this report, these acquisitions are still subject to further review by management as the Group
has 12 months from the date of acquisition to finalise its purchase price accounting. The initial accounting for these
business combinations will be recognised in the Group’s next financial reporting period, including the allocation of the
purchase price to goodwill and any other qualifying intangible assets. Further information about these business
combinations has not been disclosed on the basis that it is impracticable given the close proximity between the
completion dates of the acquisitions and the approval of these consolidated financial statements.
80 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 81
Notes to the consolidated financial statements
for the year ended 30 June 2022
22. Acquisitions (continued)
2021
On 26 April 2021 the Group, via its subsidiary Hotwire Public Relations Limited, acquired 100% of the issued capital of
McDonald Butler Associates, a UK based technology public relations agency. The purchase consideration was an upfront
payment of £3,500,000 ($6,272,000) in addition to contingent consideration tied to the net revenue target through to the
period ended 30 June 2024. Future payments are subject to a minimum net revenue threshold and are capped based on
the average net revenue. The fair value of the future contingent consideration liability is estimated based on the
achievement of net revenue targets.
Following completion, the business operations of McDonald Butler Associates and Hotwire Public Relations Limited
merged together to operate under the Hotwire Public Relations brand, strengthening the offering and capabilities of
Hotwire Public Relations in the UK market.
This acquisition contributed $1,060,000 to net revenue and $214,000 to net profit after tax of the Group for the year ended
30 June 2021.
The net revenue and net profit after tax of the Group for the year ended 30 June 2021 would have been $166,119,000 and
$10,698,000 respectively, had the Group acquired McDonald Butler Associates at the beginning of the financial year.
Effect of acquisition for the year ended 30 June 2021 on the Group’s assets and liabilities.
The fair values of the net identifiable assets and liabilities acquired at the date of acquisition were:
In thousands of AUD
Cash and cash equivalents
Trade and other receivables
Other assets
Property, plant and equipment
Intangible assets
Trade and other payables
Unearned revenue
Employee benefits
Deferred tax liability
Other liabilities
Net identifiable assets
Goodwill on acquisition
In thousands of AUD
Total consideration
Less: Fair value of net identifiable assets
Goodwill
Fair value
3,308
1,497
818
30
3,428
(778)
(2,623)
(163)
(1,028)
(10)
4,479
16,795
(4,479)
12,316
Goodwill has arisen on the acquisition of entities during the year as some intangibles, such as key management and
technical employee relationships and certain customer relationships, did not meet the criteria for recognition as an
intangible asset at the date of acquisition. Considering the characteristics of marketing and communication services
companies, acquisitions do not usually have significant amounts of tangible assets as the principal asset typically acquired
is creative talent and know-how of people. As a result, a substantial proportion of the purchase price is allocated to
goodwill.
Total acquisition cash outflow for year ended 30 June 2021
In thousands of AUD
Total consideration
Less: Contingent consideration
Less: Cash acquired
Net cash paid
16,795
(8,931)
(3,308)
4,556
Incidental acquisition costs of $202,000 relating to acquisition of McDonald Butler Associates were recognised in the
consolidated income statement for the year ended 30 June 2021.
On 6 May 2022, the Group entered into a sale agreement to sell the business assets of its strategic data consultancy
businesses, The Leading Edge (TLE) and The Digital Edge (TDE), for consideration of $1,350,000. The Group recognised
an accounting gain on sale of $600,000 in the consolidated income statement for the year ended 30 June 2022.
Assets and liabilities and cash flow of disposed entities
The major classes of assets and liabilities of the disposed businesses are as follows:
Carrying amounts
23. Disposals
2022
In thousands of AUD
Assets
Trade and other receivables
Other assets
Plant and equipment
Total assets disposed
Liabilities
Trade and other payables
Employee benefits
Total liabilities disposed
Net liabilities disposed
Gain on sale
In thousands of AUD
Consideration received, net of working capital adjustment
Less: relative value of goodwill
Add: net liabilities disposed
Less: incidental cost
Gain on sale in the consolidated income statement
Net cash received
In thousands of AUD
Total consideration
Less: working capital adjustment
Less: incidental cost
Reflected in the consolidated statement of cash flows
220
18
17
255
(458)
(235)
(693)
(438)
1,144
(856)
438
(126)
600
1,350
(206)
(126)
1,018
82 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 83
Notes to the consolidated financial statements for the year ended 30 June 2022Financial report for year ended 30 June 2022
Notes to the consolidated financial statements
for the year ended 30 June 2022
22. Acquisitions (continued)
2021
On 26 April 2021 the Group, via its subsidiary Hotwire Public Relations Limited, acquired 100% of the issued capital of
McDonald Butler Associates, a UK based technology public relations agency. The purchase consideration was an upfront
payment of £3,500,000 ($6,272,000) in addition to contingent consideration tied to the net revenue target through to the
period ended 30 June 2024. Future payments are subject to a minimum net revenue threshold and are capped based on
the average net revenue. The fair value of the future contingent consideration liability is estimated based on the
achievement of net revenue targets.
Following completion, the business operations of McDonald Butler Associates and Hotwire Public Relations Limited
merged together to operate under the Hotwire Public Relations brand, strengthening the offering and capabilities of
Hotwire Public Relations in the UK market.
This acquisition contributed $1,060,000 to net revenue and $214,000 to net profit after tax of the Group for the year ended
30 June 2021.
The net revenue and net profit after tax of the Group for the year ended 30 June 2021 would have been $166,119,000 and
$10,698,000 respectively, had the Group acquired McDonald Butler Associates at the beginning of the financial year.
Effect of acquisition for the year ended 30 June 2021 on the Group’s assets and liabilities.
The fair values of the net identifiable assets and liabilities acquired at the date of acquisition were:
In thousands of AUD
Cash and cash equivalents
Trade and other receivables
Other assets
Property, plant and equipment
Intangible assets
Trade and other payables
Unearned revenue
Employee benefits
Deferred tax liability
Other liabilities
Net identifiable assets
Goodwill on acquisition
In thousands of AUD
Total consideration
Less: Fair value of net identifiable assets
Goodwill
Goodwill has arisen on the acquisition of entities during the year as some intangibles, such as key management and
technical employee relationships and certain customer relationships, did not meet the criteria for recognition as an
intangible asset at the date of acquisition. Considering the characteristics of marketing and communication services
companies, acquisitions do not usually have significant amounts of tangible assets as the principal asset typically acquired
is creative talent and know-how of people. As a result, a substantial proportion of the purchase price is allocated to
Total acquisition cash outflow for year ended 30 June 2021
goodwill.
In thousands of AUD
Total consideration
Less: Contingent consideration
Less: Cash acquired
Net cash paid
Incidental acquisition costs of $202,000 relating to acquisition of McDonald Butler Associates were recognised in the
consolidated income statement for the year ended 30 June 2021.
Fair value
3,308
1,497
818
30
3,428
(778)
(2,623)
(163)
(1,028)
(10)
4,479
16,795
(4,479)
12,316
16,795
(8,931)
(3,308)
4,556
23. Disposals
2022
On 6 May 2022, the Group entered into a sale agreement to sell the business assets of its strategic data consultancy
businesses, The Leading Edge (TLE) and The Digital Edge (TDE), for consideration of $1,350,000. The Group recognised
an accounting gain on sale of $600,000 in the consolidated income statement for the year ended 30 June 2022.
Assets and liabilities and cash flow of disposed entities
The major classes of assets and liabilities of the disposed businesses are as follows:
In thousands of AUD
Assets
Trade and other receivables
Other assets
Plant and equipment
Total assets disposed
Liabilities
Trade and other payables
Employee benefits
Total liabilities disposed
Net liabilities disposed
Gain on sale
In thousands of AUD
Consideration received, net of working capital adjustment
Less: relative value of goodwill
Add: net liabilities disposed
Less: incidental cost
Gain on sale in the consolidated income statement
Net cash received
In thousands of AUD
Total consideration
Less: working capital adjustment
Less: incidental cost
Reflected in the consolidated statement of cash flows
Carrying amounts
83
220
18
17
255
(458)
(235)
(693)
(438)
1,144
(856)
438
(126)
600
1,350
(206)
(126)
1,018
82 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 83
Notes to the consolidated financial statements
for the year ended 30 June 2022
23. Disposals (continued)
2021
On 2 March 2021, the Group entered into a sale agreement to sell its entire shareholding in Frank PR (75% issued capital)
for a consideration of £915,000 ($1,647,000). On 2 March 2021, the Group’s control over these businesses passed to the
acquirer. The proceeds from the disposal were received in March 2021. The Group recognised an accounting loss on sale
of $9,878,000 in the consolidated income statement for the year ended 30 June 2021.
Assets and liabilities and cash flow of disposed entities
The major classes of assets and liabilities of the disposed group are as follows:
In thousands of AUD
Assets
Cash and cash equivalents
Trade and other receivables
Other assets
Plant and equipment
Right-of-use asset
Deferred tax assets
Total assets disposed
Liabilities
Trade and other payables
Lease liability
Employee benefits
Income tax payable
Total liabilities disposed
Net assets disposed
Less: net assets attributable to non-controlling interest
Net assets attributable to equity holder of parent
Net cash disposed
In thousands of AUD
Total consideration
Less: cash and cash equivalents balance disposed
Reflected in the consolidated statement of cash flows
Loss on sale of Frank PR
In thousands of AUD
Consideration received
Less: relative value of goodwill
Less: net assets disposed
Less: reserve change in ownership interest transferred to the consolidated income
Less: foreign currency translation reserve transferred to the consolidated income
Loss on sale of Frank PR in the consolidated income statement
Carrying amounts
2,387
1,203
112
155
108
10
3,975
(2,377)
(225)
(73)
(236)
(2,911)
1,064
(266)
798
1,647
(2,387)
(740)
1,647
(6,136)
(798)
(1,417)
(3,174)
(9,878)
Disposal of dormant foreign subsidiaries
The Group disposed of 12 dormant foreign subsidiaries and recognised an accounting loss of $13,157,000 as it transferred
the Foreign Currency Translation Reserve (FCTR) relating to these subsidiaries to the consolidated income statement for
the year ended 30 June 2021.
Loss on disposal
In thousands of AUD
Loss on sale of Frank PR
Loss on disposal of dormant foreign subsidiaries
Total loss on disposal in the consolidated income statement
(9,878)
(13,157)
(23,035)
24. Parent entity disclosures
As at, and throughout, the financial year ended 30 June 2022, the parent company of the Group was Enero Group Limited.
The Company
2022
2021
(15,624)
–
(15,624)
15,553
129,144
23,539
28,663
100,481
104,861
8,089
27,690
(40,159)
100,481
15,770
–
15,770
25,349
156,486
25,298
33,126
123,360
100,456
10,592
36,847
(24,535)
123,360
In thousands of AUD
Result of the parent entity
(Loss)/profit for the year
Other comprehensive income
Total comprehensive (loss)/income for the year
Financial position of the parent entity at year end
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Total equity of the parent entity comprising:
Share capital
Share-based payment reserve
Profit appropriation reserve
Accumulated losses
Total equity
reserves.
respect of its subsidiaries.
Note 25 Deed of Cross Guarantee.
Contingent liabilities
Indemnities
For dividends declared and paid by the Company to members since the end of the previous financial year, refer to Note 17 Capital and
Parent entity guarantees in respect of debts of its subsidiaries
The parent entity has entered into a Deed of Cross Guarantee with the effect that the Company guarantees debts in
Further details of the Deed of Cross Guarantee, and the subsidiaries subject to the deed, are disclosed in
Indemnities have been provided to Directors and certain Executive Officers of the Company in respect of third parties
arising from their positions, except where the liability arises out of conduct involving lack of good faith. No monetary limit
applied to these agreements and there are no known obligations outstanding at 30 June 2022.
84 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 85
Notes to the consolidated financial statements for the year ended 30 June 2022Financial report for year ended 30 June 2022
On 2 March 2021, the Group entered into a sale agreement to sell its entire shareholding in Frank PR (75% issued capital)
for a consideration of £915,000 ($1,647,000). On 2 March 2021, the Group’s control over these businesses passed to the
acquirer. The proceeds from the disposal were received in March 2021. The Group recognised an accounting loss on sale
of $9,878,000 in the consolidated income statement for the year ended 30 June 2021.
Assets and liabilities and cash flow of disposed entities
The major classes of assets and liabilities of the disposed group are as follows:
Carrying amounts
Notes to the consolidated financial statements
for the year ended 30 June 2022
23. Disposals (continued)
2021
In thousands of AUD
Assets
Cash and cash equivalents
Trade and other receivables
Other assets
Plant and equipment
Right-of-use asset
Deferred tax assets
Total assets disposed
Liabilities
Trade and other payables
Lease liability
Employee benefits
Income tax payable
Total liabilities disposed
Net assets disposed
Less: net assets attributable to non-controlling interest
Net assets attributable to equity holder of parent
Net cash disposed
In thousands of AUD
Total consideration
Less: cash and cash equivalents balance disposed
Reflected in the consolidated statement of cash flows
Loss on sale of Frank PR
In thousands of AUD
Consideration received
Less: relative value of goodwill
Less: net assets disposed
Less: reserve change in ownership interest transferred to the consolidated income
Less: foreign currency translation reserve transferred to the consolidated income
Loss on sale of Frank PR in the consolidated income statement
Disposal of dormant foreign subsidiaries
The Group disposed of 12 dormant foreign subsidiaries and recognised an accounting loss of $13,157,000 as it transferred
the Foreign Currency Translation Reserve (FCTR) relating to these subsidiaries to the consolidated income statement for
the year ended 30 June 2021.
Loss on disposal
In thousands of AUD
Loss on sale of Frank PR
Loss on disposal of dormant foreign subsidiaries
Total loss on disposal in the consolidated income statement
2,387
1,203
112
155
108
10
3,975
(2,377)
(225)
(73)
(236)
(2,911)
1,064
(266)
798
1,647
(2,387)
(740)
1,647
(6,136)
(798)
(1,417)
(3,174)
(9,878)
(9,878)
(13,157)
(23,035)
24. Parent entity disclosures
As at, and throughout, the financial year ended 30 June 2022, the parent company of the Group was Enero Group Limited.
In thousands of AUD
Result of the parent entity
(Loss)/profit for the year
Other comprehensive income
Total comprehensive (loss)/income for the year
Financial position of the parent entity at year end
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Total equity of the parent entity comprising:
Share capital
Share-based payment reserve
Profit appropriation reserve
Accumulated losses
Total equity
The Company
2021
2022
(15,624)
–
(15,624)
15,553
129,144
23,539
28,663
100,481
104,861
8,089
27,690
(40,159)
100,481
15,770
–
15,770
25,349
156,486
25,298
33,126
123,360
100,456
10,592
36,847
(24,535)
123,360
85
For dividends declared and paid by the Company to members since the end of the previous financial year, refer to Note 17 Capital and
reserves.
Parent entity guarantees in respect of debts of its subsidiaries
The parent entity has entered into a Deed of Cross Guarantee with the effect that the Company guarantees debts in
respect of its subsidiaries.
Further details of the Deed of Cross Guarantee, and the subsidiaries subject to the deed, are disclosed in
Note 25 Deed of Cross Guarantee.
Contingent liabilities
Indemnities
Indemnities have been provided to Directors and certain Executive Officers of the Company in respect of third parties
arising from their positions, except where the liability arises out of conduct involving lack of good faith. No monetary limit
applied to these agreements and there are no known obligations outstanding at 30 June 2022.
84 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 85
Notes to the consolidated financial statements
for the year ended 30 June 2022
Statement of financial position
In thousands of AUD
Assets
Cash and cash equivalents
Trade and other receivables
Other assets
Total current assets
Receivables
Other financial assets
Deferred tax assets
Plant and equipment
Right-of-use assets
Intangible assets
Total non-current assets
Total assets
Liabilities
Trade and other payables
Contingent consideration payable
Lease liabilities
Employee benefits
Total current liabilities
Lease liabilities
Employee benefits
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Share-based payment reserve
Profit appropriation reserve
Accumulated losses
Total equity
2022
2021
14,930
7,354
1,131
23,415
53,752
30,493
1,945
1,626
2,800
15,531
26,200
8,923
858
35,981
60,763
30,558
2,078
2,300
4,780
16,387
106,147 116,866
129,562 152,847
17,230
–
3,375
2,484
23,089
1,347
389
1,736
24,825
17,093
10,886
3,240
2,154
33,373
4,392
371
4,763
38,136
104,737 114,711
8,089
27,690
104,861 100,456
10,592
36,847
(35,903) (33,184)
104,737 114,711
25. Deed of Cross Guarantee
Pursuant to ASIC Corporations (Wholly owned
Companies) Instrument 2016/785, the wholly owned
subsidiaries listed below are relieved from the
Corporations Act 2001 requirements for the preparation,
audit and lodgment of financial statements and a
Directors’ Report.
It is a condition of the Instrument that the Company
and each of the subsidiaries enter into a Deed of Cross
Guarantee. The effect of the Deed is that the Company
guarantees to each creditor payment in full of any debt
in the event of winding up of any of the subsidiaries
under certain provisions of the Corporations Act 2001. If
a winding up occurs under other provisions of the Act,
the Company will only be liable in the event that after six
months any creditor has not been paid in full. The
subsidiaries have also given similar guarantees in
the event that the Company is wound up.
The subsidiaries subject to the Deed are:
– The Leading Edge Market Research Consultants Pty
Limited; and
– BMF Holdco Pty Limited.
A consolidated income statement and consolidated
statement of financial position, comprising the Company
and controlled entities which are party to the Deed, after
eliminating all transactions between parties to the Deed
of Cross Guarantee, at 30 June 2022, is set out as
follows:
Income statement
In thousands of AUD
Gross revenue
Directly attributable costs of
sales
Gross profit
Other income
Employee expenses
Occupancy costs
Travel expenses
Communication expenses
Compliance expenses
Depreciation and amortisation
Administration expenses
Gain on disposal of business
Incidental acquisition costs
Finance income
Finance costs
Management fees received
from subsidiaries
Loan receivable impairment
Dividends received from
subsidiaries
(Loss)/profit before income tax
Income tax (expense)/benefit
(Loss)/profit for the year
Attributable to:
Equity holders of the Company
2022
55,995
2021
55,901
(22,283)
33,712
–
(31,733)
(205)
(505)
(388)
(799)
(2,055)
(2,608)
535
(89)
18
(466)
4,402
(4,144)
2,088
(2,237)
(482)
(2,719)
(26,215)
29,686
135
(27,580)
(221)
(67)
(419)
(506)
(2,182)
(2,125)
–
–
43
(982)
3,904
–
15,112
14,798
1,537
16,335
(2,719)
16,335
26. Commitments
Leases
Leases as lessee
Commitments for minimum lease payments
(undiscounted) in relation to non-cancellable low value
leases are payable as follows:
In thousands of AUD
Less than one year
Between one and five years
Over five years
2022
2021
96
11
–
107
42
9
–
51
The Group leases many assets, including properties and
office equipment, under non-cancellable low value
leases generally expiring in two to 10 years. Amounts
disclosed in the above table relate only to leases
exempt from AASB 16 recognition.
27. Contingencies
Contingent liabilities
Indemnities
Indemnities have been provided to Directors and certain
Executive Officers of the Company in respect of third
parties arising from their positions, except where the
liability arises out of conduct involving lack of good faith.
No monetary limit has been applied to these
agreements and there are no known obligations
outstanding at 30 June 2022.
28. Subsequent events
were:
•
on 1 July 2022, the Group acquired 100% of
the issued capital of ROI DNA Inc, a USA
based strategic B2B sales and marketing
agency. The purchase consideration was an
upfront payment of US$26,400,000
($38,306,000) in cash and US$6,600,000
($9,577,000) of Enero Group Limited shares
with additional contingent consideration linked
to the achievement of EBITDA targets over the
next 3 years through to 30 June 2025. Refer to
Note 22 Acquisitions for details.
•
on 1 July 2022, the Group acquired 100% of
the issued capital of GetIT Pte Ltd, a
Singapore based specialist B2B technology
marketing agency with presence in India,
Malaysia and Japan. The purchase
consideration was an upfront payment of
S$2,700,000 ($2,816,000) in cash and
S$1,800,000 ($1,877,000) of Enero Group
Limited shares with additional contingent
consideration linked to the achievement of
EBIT target over the next 3 years through to
30 June 2025. Refer to Note 22 Acquisitions
for details.
•
the Directors have declared a final dividend,
with respect to ordinary shares, of 6.5 cents
per share, fully franked. The final dividend will
have a record date of 20 September 2022 and
a payment date of 4 October 2022.
Except for these events there has not arisen, in the
interval between the end of the financial year and the
date of this report, any item, transaction or event of a
material and unusual nature likely, in the opinion of the
Directors of the Company, to significantly affect the
operations of the Group, the results of those operations,
or the state of affairs of the Group in future financial
years.
29. Key Management Personnel and other related
party disclosures
In addition to Executive and Non-Executive Directors,
the following were Key Management Personnel of the
Group at any time during the reporting period:
Name
Position
Carla Webb-Sear Chief Financial Officer
Fiona Chilcott
Chief People and Culture Officer
Other transactions with the Company or its controlled
entities
A number of the Key Management Personnel, or their
related entities, hold positions in other entities that result
in them having control or significant influence over the
There were no transactions with the Company or its
subsidiaries and Key Management Personnel in the
current or prior reporting period.
Director related party transactions
There were no related party transactions with any
Director during the current or prior reporting period.
Key Management Personnel compensation (including all
Short-term employee benefits
3,242,268 3,119,950
Directors) is as follows:
In AUD
Other long-term benefits
Post-employment benefits
Termination benefits
2022
2021
7,810
73,621
(4,945)
80,771
–
255,769
Share-based payments – Share
Appreciation Rights
Total Key Management
Personnel compensation
984,885
437,572
4,308,584 3,889,117
Transactions or events subsequent to the balance date,
financial or operating policies of those entities.
86 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 87
Notes to the consolidated financial statements for the year ended 30 June 2022Financial report for year ended 30 June 2022
Statement of financial position
In thousands of AUD
Assets
Cash and cash equivalents
Trade and other receivables
Other assets
Total current assets
Receivables
Other financial assets
Deferred tax assets
Plant and equipment
Right-of-use assets
Intangible assets
Total non-current assets
Total assets
Liabilities
Trade and other payables
Contingent consideration payable
Lease liabilities
Employee benefits
Total current liabilities
Lease liabilities
Employee benefits
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Share-based payment reserve
Profit appropriation reserve
Accumulated losses
Total equity
2022
2021
14,930
26,200
7,354
1,131
8,923
858
23,415
35,981
53,752
30,493
60,763
30,558
1,945
1,626
2,800
2,078
2,300
4,780
15,531
16,387
106,147 116,866
129,562 152,847
17,230
–
3,375
2,484
17,093
10,886
3,240
2,154
23,089
33,373
1,347
389
1,736
4,392
371
4,763
24,825
38,136
104,737 114,711
104,861 100,456
8,089
27,690
10,592
36,847
(35,903) (33,184)
104,737 114,711
Notes to the consolidated financial statements
for the year ended 30 June 2022
25. Deed of Cross Guarantee
Pursuant to ASIC Corporations (Wholly owned
Companies) Instrument 2016/785, the wholly owned
subsidiaries listed below are relieved from the
Corporations Act 2001 requirements for the preparation,
audit and lodgment of financial statements and a
Directors’ Report.
It is a condition of the Instrument that the Company
and each of the subsidiaries enter into a Deed of Cross
Guarantee. The effect of the Deed is that the Company
guarantees to each creditor payment in full of any debt
in the event of winding up of any of the subsidiaries
under certain provisions of the Corporations Act 2001. If
a winding up occurs under other provisions of the Act,
the Company will only be liable in the event that after six
months any creditor has not been paid in full. The
subsidiaries have also given similar guarantees in
the event that the Company is wound up.
The subsidiaries subject to the Deed are:
– The Leading Edge Market Research Consultants Pty
Limited; and
– BMF Holdco Pty Limited.
A consolidated income statement and consolidated
statement of financial position, comprising the Company
and controlled entities which are party to the Deed, after
eliminating all transactions between parties to the Deed
of Cross Guarantee, at 30 June 2022, is set out as
Directly attributable costs of
follows:
Income statement
In thousands of AUD
Gross revenue
sales
Gross profit
Other income
Employee expenses
Occupancy costs
Travel expenses
Communication expenses
Compliance expenses
Depreciation and amortisation
Administration expenses
Gain on disposal of business
Incidental acquisition costs
Finance income
Finance costs
Management fees received
from subsidiaries
Loan receivable impairment
Dividends received from
subsidiaries
(Loss)/profit before income tax
Income tax (expense)/benefit
(Loss)/profit for the year
Attributable to:
2022
55,995
2021
55,901
(22,283)
33,712
–
(26,215)
29,686
135
(31,733)
(27,580)
(205)
(505)
(388)
(799)
(2,055)
(2,608)
535
(89)
18
(466)
4,402
(4,144)
2,088
(2,237)
(482)
(2,719)
(221)
(67)
(419)
(506)
(2,182)
(2,125)
–
–
43
(982)
3,904
–
15,112
14,798
1,537
16,335
Equity holders of the Company
(2,719)
16,335
26. Commitments
Leases
Leases as lessee
Commitments for minimum lease payments
(undiscounted) in relation to non-cancellable low value
leases are payable as follows:
In thousands of AUD
Less than one year
Between one and five years
Over five years
2022
96
11
–
107
2021
42
9
–
51
The Group leases many assets, including properties and
office equipment, under non-cancellable low value
leases generally expiring in two to 10 years. Amounts
disclosed in the above table relate only to leases
exempt from AASB 16 recognition.
27. Contingencies
Contingent liabilities
Indemnities
Indemnities have been provided to Directors and certain
Executive Officers of the Company in respect of third
parties arising from their positions, except where the
liability arises out of conduct involving lack of good faith.
No monetary limit has been applied to these
agreements and there are no known obligations
outstanding at 30 June 2022.
28. Subsequent events
Transactions or events subsequent to the balance date,
were:
•
on 1 July 2022, the Group acquired 100% of
the issued capital of ROI DNA Inc, a USA
based strategic B2B sales and marketing
agency. The purchase consideration was an
upfront payment of US$26,400,000
($38,306,000) in cash and US$6,600,000
($9,577,000) of Enero Group Limited shares
with additional contingent consideration linked
to the achievement of EBITDA targets over the
next 3 years through to 30 June 2025. Refer to
Note 22 Acquisitions for details.
•
on 1 July 2022, the Group acquired 100% of
the issued capital of GetIT Pte Ltd, a
Singapore based specialist B2B technology
marketing agency with presence in India,
Malaysia and Japan. The purchase
consideration was an upfront payment of
S$2,700,000 ($2,816,000) in cash and
S$1,800,000 ($1,877,000) of Enero Group
Limited shares with additional contingent
consideration linked to the achievement of
EBIT target over the next 3 years through to
30 June 2025. Refer to Note 22 Acquisitions
for details.
•
the Directors have declared a final dividend,
with respect to ordinary shares, of 6.5 cents
per share, fully franked. The final dividend will
have a record date of 20 September 2022 and
a payment date of 4 October 2022.
Except for these events there has not arisen, in the
interval between the end of the financial year and the
date of this report, any item, transaction or event of a
material and unusual nature likely, in the opinion of the
Directors of the Company, to significantly affect the
operations of the Group, the results of those operations,
or the state of affairs of the Group in future financial
years.
29. Key Management Personnel and other related
party disclosures
In addition to Executive and Non-Executive Directors,
the following were Key Management Personnel of the
Group at any time during the reporting period:
Position
Name
Carla Webb-Sear Chief Financial Officer
Fiona Chilcott
Chief People and Culture Officer
87
Other transactions with the Company or its controlled
entities
A number of the Key Management Personnel, or their
related entities, hold positions in other entities that result
in them having control or significant influence over the
financial or operating policies of those entities.
There were no transactions with the Company or its
subsidiaries and Key Management Personnel in the
current or prior reporting period.
Director related party transactions
There were no related party transactions with any
Director during the current or prior reporting period.
Key Management Personnel compensation (including all
Directors) is as follows:
In AUD
Short-term employee benefits
Other long-term benefits
Post-employment benefits
Termination benefits
2021
3,242,268 3,119,950
(4,945)
80,771
255,769
7,810
73,621
–
2022
Share-based payments – Share
Appreciation Rights
Total Key Management
Personnel compensation
984,885
437,572
4,308,584 3,889,117
86 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 87
Notes to the consolidated financial statements
for the year ended 30 June 2022
30. Share-based payments
Equity-based plans
Long-term incentives (LTI) were provided as equity-
based incentives in the Company under the Share
Appreciation Rights Plan (SARP) in the current and prior
financial years.
Share Appreciation Rights (SARs)
The Share Appreciation Rights Plan is designed to
incentivise the Company’s Senior Executives and other
senior management of the Group.
The fair value of the SARs is measured using the Monte
Carlo simulation model. Measurement inputs include
share price on measurement date, exercise price of the
instruments, expected volatility (based on weighted
average historical volatility), weighted average expected
life of the instruments (based on historical experience
and general rights holder behaviour), expected
dividends, and the risk-free interest rate (based on
Government bonds). Service conditions attached to the
transactions are not taken into account in determining
fair value.
The plan allows for the Board to determine who is
entitled to participate in the SAR Plan, and it may grant
rights accordingly. Enero’s Board may determine
whether or not the grant of rights is conditional on the
achievement of performance hurdles; and if so, the
nature of those hurdles.
Summary of Share Appreciation Rights on issue:
The exercise of each right will entitle the rights holder to
receive a fraction of an ordinary share based on a
conversion formula of E = (A – B) / A, where:
– E is the share right entitlement;
– A is the volume weighted average price (VWAP) for
the Company’s shares for the 20 business days prior
to the vesting date of the rights; and
– B is the VWAP for the Company’s shares for the 20
business days before the rights were granted.
If A – B is less than or equal to zero, the share right will
not vest and will immediately lapse on the applicable
vesting date.
The number of shares to be granted will equal the
number of SARs awarded multiplied by the above
conversion formula.
One share right shall never convert into more than one
share in the capital of the Company. Rights expire at
15 business days after the relevant vesting date or the
termination of the individual’s employment. The Board
may exercise discretion on early vesting of rights in the
event of a change of control of the Group. Refer to the
table below for a summary of SARs on issue.
Issue date
SARs issued
Participants
VWAP for the 20 business days prior to the
grant (B)
Vesting dates:
20 business days after the release of the
Group financial report for the year ended:
Tranche 1 (1/3)
Tranche 2 (1/3)
Tranche 3 (1/3)
Last expiry date
Outstanding SARs as at 30 June 2022
24 October 2019
2,450,000
Senior Executives
21 October 2020
3,900,000
Senior Executives
21 October 2021
4,525,000
Senior Executives
$2.13
$1.52
$3.02
30 June 2020
30 June 2021
30 June 2022
30 September 2022
416,670
30 June 2021
30 June 2022
30 June 2023
30 September 2023
2,066,670
30 June 2022
30 June 2023
30 June 2024
30 September 2024
4,525,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Share Appreciation Rights (SARs)
Summary of rights over unissued ordinary shares
VWAP (for the
Weighted
Expiry
date
20 business
days prior to
the grant)
average
outstanding
exercise
at beginning
price
of year
Rights
granted
during
Number of
Rights
Rights
exercised
Rights
expired
Rights
forfeited
Rights at
year end
end
Proceeds
Date
year
during year
during year
during year
outstanding
vested
received
issued
Number of
Expected
shares
issued
life
(years)
Number of
of Rights
Number
at year
Grant date
2022
18 Oct 2018
24 Oct 2019
21 Oct 2020
21 Oct 2021
30 Sep
2021
30 Sep
2022
30 Sept
2023
30 Sept
2024
$1.23
$2.13
$1.52
$3.02
–
900,000
– 1,083,336
–
–
900,000
599,998
–
–
66,668
416,670
– 3,633,333
– 1,233,329
333,334
2,066,670
–
–
–
550,788
0.9–2.9
196,848
0.9–2.9
641,953
0.9–2.9
–
– 4,525,000
–
–
4,525,000
0.9–2.9
5,616,669 4,525,000 2,733,327
400,002
7,008,340
1,389,589
VWAP (for the
Weighted
Expiry
date
20 business
days prior to
the grant)
average
outstanding
exercise
at beginning
price
of year
Rights
granted
during
Number of
Rights
Rights
exercised
Rights
expired
Rights
forfeited
Rights at
year end
end
Proceeds
Date
year
during year
during year
during year
outstanding
vested
received
issued
Number of
Expected
shares
issued
life
(years)
Number of
of Rights
Number
at year
$1.04
$1.23
$2.13
$1.52
– 1,016,670
– 1,016,670
– 1,800,000
900,000
–
–
–
900,000
– 2,100,000
699,998
316,666
1,083,336
–
– 3,900,000
–
266,667
3,633,333
–
–
–
–
–
–
–
–
363,993
0.9–2.9
216,666
0.9–2.9
–
–
0.9–2.9
0.9–2.9
4,916,670 3,900,000 1,916,670
699,998
583,333
5,616,669
580,659
Grant date
2021
19 Oct 2017
18 Oct 2018
24 Oct 2019
21 Oct 2020
30 Sep
2020
30 Sep
2021
30 Sep
2022
30 Sept
2023
The number and weighted average exercise price of share rights is as follows:
VWAP (for the
20 business
days prior to
the grant) 2022
Weighted
average
exercise
$
price 2022
VWAP (for the
20 business
days prior to
rights
the grant) 2021
Weighted
average
exercise
price 2021
Number of
2022
5,616,669
(400,002)
–
(2,733,327)
4,525,000
7,008,340
–
–
–
–
–
–
–
–
$
1.58
1.85
2.13
1.13
1.52
1.59
–
Number of
rights
2021
4,916,670
(583,333)
(699,998)
(1,916,670)
3,900,000
5,616,669
–
–
–
–
–
–
–
–
Outstanding at 1 July
Forfeited during the
Expired during the
Exercised during the
Granted during the
period
period
period
period
Outstanding at 30 June
Exercisable at 30 June
1.59
1.62
–
1.56
3.02
2.52
–
The SARs outstanding at 30 June 2022 have a VWAP (for the 20 business days prior to the grant) range of $1.23 to $3.02
(30 June 2021: $1.23 to $2.13).
The SARs outstanding at 30 June 2022 have a weighted average contractual life of 1.05 years (30 June 2021: 0.98 years).
The fair value of services received in return for SARs granted is based on the fair value of SARs, measured using the
Monte Carlo simulation model.
were $1,902,000 (2021: $992,000).
The total net expenses recognised by the Group for the year ended 30 June 2022 for share-based payment transactions
The VWAP for the 20 business days prior the date of exercise of SARs on 15 September 2021 was $3.17.
88 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 89
Notes to the consolidated financial statements for the year ended 30 June 2022Financial report for year ended 30 June 2022
Notes to the consolidated financial statements
for the year ended 30 June 2022
30. Share-based payments
Equity-based plans
Long-term incentives (LTI) were provided as equity-
based incentives in the Company under the Share
Appreciation Rights Plan (SARP) in the current and prior
financial years.
Share Appreciation Rights (SARs)
The Share Appreciation Rights Plan is designed to
incentivise the Company’s Senior Executives and other
senior management of the Group.
The fair value of the SARs is measured using the Monte
Carlo simulation model. Measurement inputs include
share price on measurement date, exercise price of the
instruments, expected volatility (based on weighted
average historical volatility), weighted average expected
life of the instruments (based on historical experience
and general rights holder behaviour), expected
dividends, and the risk-free interest rate (based on
Government bonds). Service conditions attached to the
transactions are not taken into account in determining
fair value.
The plan allows for the Board to determine who is
entitled to participate in the SAR Plan, and it may grant
rights accordingly. Enero’s Board may determine
whether or not the grant of rights is conditional on the
achievement of performance hurdles; and if so, the
nature of those hurdles.
Summary of Share Appreciation Rights on issue:
The exercise of each right will entitle the rights holder to
receive a fraction of an ordinary share based on a
conversion formula of E = (A – B) / A, where:
– E is the share right entitlement;
– A is the volume weighted average price (VWAP) for
the Company’s shares for the 20 business days prior
to the vesting date of the rights; and
– B is the VWAP for the Company’s shares for the 20
business days before the rights were granted.
If A – B is less than or equal to zero, the share right will
not vest and will immediately lapse on the applicable
vesting date.
The number of shares to be granted will equal the
number of SARs awarded multiplied by the above
conversion formula.
One share right shall never convert into more than one
share in the capital of the Company. Rights expire at
15 business days after the relevant vesting date or the
termination of the individual’s employment. The Board
may exercise discretion on early vesting of rights in the
event of a change of control of the Group. Refer to the
table below for a summary of SARs on issue.
VWAP for the 20 business days prior to the
20 business days after the release of the
Group financial report for the year ended:
Issue date
SARs issued
Participants
grant (B)
Vesting dates:
Tranche 1 (1/3)
Tranche 2 (1/3)
Tranche 3 (1/3)
Last expiry date
24 October 2019
21 October 2020
21 October 2021
2,450,000
3,900,000
4,525,000
Senior Executives
Senior Executives
Senior Executives
$2.13
$1.52
$3.02
30 June 2020
30 June 2021
30 June 2022
30 June 2021
30 June 2022
30 June 2023
30 June 2022
30 June 2023
30 June 2024
30 September 2022
30 September 2023
30 September 2024
Outstanding SARs as at 30 June 2022
416,670
2,066,670
4,525,000
Share Appreciation Rights (SARs)
Summary of rights over unissued ordinary shares
Grant date
2022
18 Oct 2018
24 Oct 2019
21 Oct 2020
21 Oct 2021
Grant date
2021
19 Oct 2017
18 Oct 2018
24 Oct 2019
21 Oct 2020
VWAP (for the
20 business
days prior to
the grant)
Weighted
average
exercise
price
Expiry
date
Number of
Rights
outstanding
at beginning
of year
Rights
granted
during
year
Rights
exercised
during year
Rights
expired
during year
Rights
forfeited
during year
Number of
Rights at
year end
outstanding
Number
of Rights
at year
end
vested
Proceeds
received
Date
issued
Number of
shares
issued
Expected
life
(years)
30 Sep
2021
30 Sep
2022
30 Sept
2023
30 Sept
2024
$1.23
$2.13
$1.52
$3.02
–
900,000
– 1,083,336
–
–
900,000
599,998
– 3,633,333
– 1,233,329
–
– 4,525,000
–
5,616,669 4,525,000 2,733,327
–
–
–
–
–
–
–
66,668
416,670
333,334
2,066,670
–
4,525,000
400,002
7,008,340
–
–
–
–
–
–
–
–
–
–
–
550,788
0.9–2.9
196,848
0.9–2.9
641,953
0.9–2.9
0.9–2.9
1,389,589
VWAP (for the
20 business
days prior to
the grant)
Weighted
average
exercise
price
Expiry
date
Number of
Rights
outstanding
at beginning
of year
Rights
granted
during
year
Rights
exercised
during year
Rights
expired
during year
Rights
forfeited
during year
Number of
Rights at
year end
outstanding
Number
of Rights
at year
end
vested
Proceeds
received
Date
issued
Number of
shares
issued
Expected
life
(years)
30 Sep
2020
30 Sep
2021
30 Sep
2022
30 Sept
2023
$1.04
$1.23
$2.13
$1.52
– 1,016,670
– 1,016,670
– 1,800,000
– 2,100,000
–
–
–
– 3,900,000
900,000
–
–
–
–
–
–
–
900,000
699,998
316,666
1,083,336
–
266,667
3,633,333
4,916,670 3,900,000 1,916,670
699,998
583,333
5,616,669
–
–
–
–
–
–
–
–
–
–
–
–
–
–
363,993
0.9–2.9
216,666
0.9–2.9
–
–
0.9–2.9
0.9–2.9
580,659
89
The number and weighted average exercise price of share rights is as follows:
VWAP (for the
20 business
days prior to
the grant) 2022
$
1.59
Weighted
average
exercise
price 2022
–
1.62
–
1.56
3.02
2.52
–
–
–
–
–
–
–
Number of
rights
2022
5,616,669
(400,002)
–
(2,733,327)
4,525,000
7,008,340
–
Outstanding at 1 July
Forfeited during the
period
Expired during the
period
Exercised during the
period
Granted during the
period
Outstanding at 30 June
Exercisable at 30 June
VWAP (for the
20 business
days prior to
the grant) 2021
$
1.58
Weighted
average
exercise
price 2021
–
1.85
2.13
1.13
1.52
1.59
–
–
–
–
–
–
–
Number of
rights
2021
4,916,670
(583,333)
(699,998)
(1,916,670)
3,900,000
5,616,669
–
The SARs outstanding at 30 June 2022 have a VWAP (for the 20 business days prior to the grant) range of $1.23 to $3.02
(30 June 2021: $1.23 to $2.13).
The SARs outstanding at 30 June 2022 have a weighted average contractual life of 1.05 years (30 June 2021: 0.98 years).
The fair value of services received in return for SARs granted is based on the fair value of SARs, measured using the
Monte Carlo simulation model.
The total net expenses recognised by the Group for the year ended 30 June 2022 for share-based payment transactions
were $1,902,000 (2021: $992,000).
The VWAP for the 20 business days prior the date of exercise of SARs on 15 September 2021 was $3.17.
88 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 89
Notes to the consolidated financial statements
for the year ended 30 June 2022
Directors’ Declaration
30. Share-based payments (continued)
1. In the opinion of the Directors of Enero Group Limited (the Company):
Inputs for measurement of grant date fair value
The following factors and key assumptions were used in determining the fair value of the SARs on the grant date:
Expiry date
Value per
SAR
$
30 Sept 2022 0.26 – 0.46
30 Sept 2023 0.35 – 0.40
30 Sept 2024 0.64 – 0.85
VWAP (for the
20 business
days prior to
the grant)
$
2.13
1.52
3.02
Price of
shares
on grant
date
$
2.04
1.70
3.38
Risk-free
Expected
interest rate
volatility
%
%
40 0.73-0.76
35-55 0.07-0.25
40-50 0.01-0.36
Dividend
yield
%
Expected
life
(years)
2.0 0.9–2.9
4.7 0.9–2.9
5.0 0.9–2.9
Grant date
24 Oct 2019(i)
21 Oct 2020(ii)
21 Oct 2021(iii)
(i) Grant is in relation to SARs provided to senior employees of the Group which were issued on 24 October 2019. The last expiry date of the rights
is 20 business days after the release of the Group’s financial report for the year ended 30 June 2022, which is estimated to be around
30 September 2022.
(ii) Grant is in relation to SARs provided to senior employees of the Group which were issued on 21 October 2020. The last expiry date of the rights
is 20 business days after the release of the Group’s financial report for the year ended 30 June 2023, which is estimated to be around
30 September 2023.
(iii) Grant is in relation to SARs provided to senior employees of the Group which were issued on 21 October 2021. The last expiry date of the rights
is 20 business days after the release of the Group’s financial report for the year ended 30 June 2024, which is estimated to be around
30 September 2024.
Accounting policy
The grant date fair value of share-based payment awards granted to employees is recognised as an employee expense,
with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the awards.
The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-
market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on
the number of awards that meet the related services and non-market performance conditions at the vesting date. For
share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is
measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.
Fair value measurement and key estimates
The grant date fair value of employee share rights is measured using the Monte Carlo simulation model. This value is
determined by an appropriately qualified independent expert commissioned by the Directors. Inputs to the determination of
fair value are subjective and include the market value of the Company’s share price on the grant date, expected volatility
(based on weighted average historic volatility adjusted for changes expected due to publicly available information) of the
Company’s share price, the risk-free interest rate, the dividend yield, the expected life of the share rights, the probability of
occurrence of certain events and the exercise price. Service and non-market performance conditions attached to the
transactions are not taken into account in determining fair value. Certain of these inputs are estimates.
The Directors review the methodology used by the expert and make enquiries with management to satisfy themselves that
the factual information used by the expert is correct prior to relying on the expert’s opinion.
31. Auditor’s remuneration
In AUD
Audit services – auditors of the Company
KPMG Australia
Overseas KPMG firm
Other services – auditors of the Company
Taxation compliance services:
KPMG Australia
Overseas KPMG firm
2022
2021
357,000
136,000
493,000
–
295,000
295,000
356,000
119,000
475,000
26,000
286,000
312,000
(a) the consolidated financial statements and notes that are set out on pages 44 to 90 and the Remuneration Report
set out on pages 36 to 43 in the Directors’ Report, are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its performance for the
financial year ended on that date; and
Corporations Regulations 2001; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
2. There are reasonable grounds to believe the Company and entities identified in Note 25 will be able to meet any
obligations or liabilities to which they are or may become subject by virtue of the Deed of Cross Guarantee between
the Company and those entities pursuant to ASIC Corporations (Wholly owned Companies) Instrument 2016/785.
3. The Directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer for the
financial year ended 30 June 2022 pursuant to section 295A of the Corporations Act 2001.
4. The Directors draw attention to Note 1(b) to the consolidated financial statements, which includes a statement of
compliance with International Financial Reporting Standards.
Dated at Sydney this 8th day of September 2022.
Signed in accordance with a resolution of the Directors:
Ann Sherry AO
Chair
90 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 91
Notes to the consolidated financial statements for the year ended 30 June 2022Financial report for year ended 30 June 2022
Notes to the consolidated financial statements
for the year ended 30 June 2022
Directors’ Declaration
Directors’ Declaration
30. Share-based payments (continued)
Inputs for measurement of grant date fair value
The following factors and key assumptions were used in determining the fair value of the SARs on the grant date:
VWAP (for the
Price of
20 business
shares
SAR
$
Expiry date
30 Sept 2022 0.26 – 0.46
30 Sept 2023 0.35 – 0.40
30 Sept 2024 0.64 – 0.85
Value per
days prior to
on grant
Expected
Risk-free
Dividend
Expected
the grant)
date
volatility
interest rate
yield
life
$
2.13
1.52
3.02
$
2.04
1.70
3.38
%
%
40 0.73-0.76
35-55 0.07-0.25
40-50 0.01-0.36
%
(years)
2.0 0.9–2.9
4.7 0.9–2.9
5.0 0.9–2.9
(i) Grant is in relation to SARs provided to senior employees of the Group which were issued on 24 October 2019. The last expiry date of the rights
is 20 business days after the release of the Group’s financial report for the year ended 30 June 2022, which is estimated to be around
(ii) Grant is in relation to SARs provided to senior employees of the Group which were issued on 21 October 2020. The last expiry date of the rights
is 20 business days after the release of the Group’s financial report for the year ended 30 June 2023, which is estimated to be around
(iii) Grant is in relation to SARs provided to senior employees of the Group which were issued on 21 October 2021. The last expiry date of the rights
is 20 business days after the release of the Group’s financial report for the year ended 30 June 2024, which is estimated to be around
Grant date
24 Oct 2019(i)
21 Oct 2020(ii)
21 Oct 2021(iii)
30 September 2022.
30 September 2023.
30 September 2024.
Accounting policy
The grant date fair value of share-based payment awards granted to employees is recognised as an employee expense,
with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the awards.
The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-
market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on
the number of awards that meet the related services and non-market performance conditions at the vesting date. For
share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is
measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.
Fair value measurement and key estimates
The grant date fair value of employee share rights is measured using the Monte Carlo simulation model. This value is
determined by an appropriately qualified independent expert commissioned by the Directors. Inputs to the determination of
fair value are subjective and include the market value of the Company’s share price on the grant date, expected volatility
(based on weighted average historic volatility adjusted for changes expected due to publicly available information) of the
Company’s share price, the risk-free interest rate, the dividend yield, the expected life of the share rights, the probability of
occurrence of certain events and the exercise price. Service and non-market performance conditions attached to the
transactions are not taken into account in determining fair value. Certain of these inputs are estimates.
The Directors review the methodology used by the expert and make enquiries with management to satisfy themselves that
the factual information used by the expert is correct prior to relying on the expert’s opinion.
31. Auditor’s remuneration
In AUD
Audit services – auditors of the Company
KPMG Australia
Overseas KPMG firm
Other services – auditors of the Company
Taxation compliance services:
KPMG Australia
Overseas KPMG firm
2022
2021
357,000
136,000
493,000
–
295,000
295,000
356,000
119,000
475,000
26,000
286,000
312,000
1. In the opinion of the Directors of Enero Group Limited (the Company):
(a) the consolidated financial statements and notes that are set out on pages 44 to 90 and the Remuneration Report
set out on pages 36 to 43 in the Directors’ Report, are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its performance for the
financial year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the
Corporations Regulations 2001; and
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
2. There are reasonable grounds to believe the Company and entities identified in Note 25 will be able to meet any
obligations or liabilities to which they are or may become subject by virtue of the Deed of Cross Guarantee between
the Company and those entities pursuant to ASIC Corporations (Wholly owned Companies) Instrument 2016/785.
3. The Directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer for the
financial year ended 30 June 2022 pursuant to section 295A of the Corporations Act 2001.
4. The Directors draw attention to Note 1(b) to the consolidated financial statements, which includes a statement of
compliance with International Financial Reporting Standards.
Dated at Sydney this 8th day of September 2022.
Signed in accordance with a resolution of the Directors:
91
Ann Sherry AO
Chair
90 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 91
Independent Auditor’s Report
To the shareholders of Enero Group Limited
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of
Enero Group Limited (the Company).
In our opinion, the accompanying Financial
Report of the Company is in accordance
with the Corporations Act 2001, including:
•
•
giving a true and fair view of the
Group's financial position as at
30 June 2022 and of its financial
performance for the year ended on that
date; and
complying with Australian Accounting
Standards and the Corporations
Regulations 2001.
Basis for opinion
The Financial Report comprises:
• Consolidated statement of financial position as at
30 June 2022
• Consolidated income statement, Consolidated
statement of comprehensive income, Consolidated
statement of changes in equity, and Consolidated
statement of cash flows for the year then ended
• Notes including a summary of significant accounting
policies
• Directors’ Declaration.
The Group consists of the Company and the entities it
controlled at the year-end or from time to time during
the financial year.
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the
audit of the Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics
for Professional Accountants (including Independence Standards) (the Code) that are relevant to our
audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in
accordance with these requirements.
Key Audit Matters
The Key Audit Matters we identified are:
• Revenue recognition
• Annual impairment testing of goodwill
and intangible assets
Key Audit Matters are those matters that, in our
professional judgement, were of most significance in
our audit of the Financial Report of the current period.
These matters were addressed in the context of our
audit of the Financial Report as a whole, and in forming
our opinion thereon, and we do not provide a separate
opinion on these matters.
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member
firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights
reserved. The KPMG name and logo are trademarks used under license by the independent member firms of
the KPMG global organisation. Liability limited by a scheme approved under Professional Standards
Legislation.
Independent Auditor’s ReportFinancial report for year ended 30 June 2022 93
Revenue recognition ($522.1 million)
Refer to Note 3 to the Financial Report
The key audit matter
How the matter was addressed in our audit
The Group derives the majority of its revenue
from marketing and communication service fees
from customers, which requires analysis of
recognition over the related contractual term.
The Group’s policy is for consideration received
from advance billings to customers prior to the
satisfaction of performance obligations are
recognised as a contract liability and classified as
unearned revenue ($17.4 million).
Revenue from contracts with customers was a
key audit matter due to:
•
•
•
The quantum of service revenue earned
during the year and contract liabilities
recognised at the end of the year;
The different revenue recognition policies for
rendering of search marketing services (point
in time) and all other businesses (over time);
and
The advanced billing arrangements for the
rendering of services that require an
adjustment for contract liabilities at year end
to comply with the Group’s revenue
recognition policy. The contract liabilities
adjustment is prepared manually and is
prone to greater risk for bias, error and
inconsistent application. Additional audit
effort was required to evaluate the revenue
recognised.
Our procedures included:
• We obtained an understanding of the nature
of the various revenue streams and the
related revenue recording processes, systems
and key controls.
• We evaluated the appropriateness of the
Group’s accounting policies for revenue
recognition for each significant revenue
stream against the requirements of AASB 15
and our understanding of the business.
• We read a sample of signed customer
contracts for search marketing and consulting
services to understand the key terms of the
arrangements and the performance
obligations.
• We tested completeness and accuracy of the
underlying data within the Group’s revenue
and billing systems by tracing a sample of
contract information in the systems to signed
customer contracts and invoices.
• We tested point in time revenue transactions
recognised throughout the year by:
•
•
•
assessing existence of an underlying
arrangement with the customer;
comparing the timing of revenue
recognition and amounts invoiced to
customers to external user traffic reports
provided by search engines to the Group;
and
checking customer receipts to the
Group’s bank statements.
• We tested, on a sample basis, over time
revenue transactions with performance
obligations completely satisfied during the
year. This included:
•
assessing the relevant features of the
underlying contracts, including what the
Group identified as performance
obligations;
•
•
testing the amounts billed to customers
to underlying documentation such as
signed customer contracts, signed
customer statements of work, and/or
signed customer purchase orders; and
assessing the timing of revenue
recognition for each revenue contract
based on completed performance
obligations (evidence of completed
marketing or communication deliverables
such as a podcast, billboard materials,
press release) and the Group’s stated
revenue recognition policy.
• We assessed the manual contract liabilities
adjustment prepared by the Group for
compliance with Australian Accounting
Standards. On a sample basis, we tested the
accuracy of key inputs to the contract liabilities
adjustment by:
•
•
•
checking an underlying arrangement with
the customer existed;
checking the customer’s billing cycle and
pricing to customer agreed contractual
terms; and
obtaining evidence of the estimated
measure of progress of the contract (such
as timesheet reports or third-party
invoices for reimbursable purchases) to
assess the allocation between revenue
and unearned revenue liability.
• We assessed the disclosures in the financial
report against the requirements of the
accounting standard and using our
understanding obtained from our testing.
Annual impairment testing of goodwill ($112.2 million)
Refer to Notes 11 and 20 to the Financial Report
The key audit matter
How the matter was addressed in our audit
The Group’s annual testing of goodwill for
impairment is a key audit matter, given the size
of the balance (being 38% of total assets) and
the degree of judgement involved in the
significant forward-looking assumptions the
Group applied in their value in use models,
Our procedures included:
• We considered the appropriateness of the
value in use method applied by the Group to
perform the annual test of goodwill for
impairment against the requirements of the
Independent Auditor’s ReportFinancial report for year ended 30 June 2022 95
including:
accounting standards.
•
•
Forecast cash flows – there is uncertainty
around future cash flows due to the short
term, non-recurring nature of customer
contracts. There is also a heightened
uncertainty due to volatile economic
conditions caused by the COVID-19
pandemic, supply chain issues, rising
interest rates, and increasing employee
benefits costs. These conditions increase
the risk of inaccurate forecasts or a
significantly wider range of possible
outcomes for us to consider.
Forecast growth rates, including long-term
growth rates into perpetuity – in addition to
the uncertainties described above, the
Group’s models are highly sensitive to small
changes in these assumptions, reducing
available headroom. This drives additional
audit effort specific to their feasibility and
consistency of application to the Group’s
strategy.
• Discount rates – these are complex in nature
and vary according to the conditions and
environment the specific Cash Generating
Unit (CGU) is subject to from time to time.
We involve our valuations specialists with
the assessment.
The Group uses complex models to perform their
annual testing of goodwill for impairment. The
models are largely manually developed, use
adjusted historical performance, and a range of
internal and external sources as inputs to the
assumptions. Complex modelling, particularly
those containing judgemental allocations of
corporate assets and costs to CGUs, using
forward-looking assumptions tend to be prone to
greater risk for potential bias, error and
inconsistent application. These conditions
necessitate additional scrutiny by us, in particular
to address the objectivity of sources used for
assumptions, and their consistent application.
The Group implemented a new global operating
model resulting in a change in composition of its
CGUs during the year necessitating our
consideration of the Group’s determination of
CGUs, based on the smallest group of assets to
generate largely independent cash inflows. The
Group reorganised its segments and divested
two businesses during the year, necessitating
• We assessed the integrity of the value in use
models used, including the accuracy of
underlying calculation formulas.
• We compared the forecast cash flows
contained in the value in use models to Board-
approved forecasts.
• We assessed the accuracy of previous Group
forecasts to inform our evaluation of forecasts
incorporated in the models. We noted
previous trends where volatile conditions
existed and how they impacted the disposed
businesses for use in further testing.
• We assessed the Group’s underlying
methodology and documentation for the
allocation of corporate costs to the forecast
cash flows contained in the value in use
model, for consistency with our understanding
of the business and the criteria in the
accounting standards.
• We assessed the Group’s allocation of
corporate assets to CGUs for reasonableness
and consistency based on the requirements of
the accounting standards.
• We considered the Group’s determination of
their CGUs based on our understanding of the
operations of the Group’s business and how
independent cash inflows were generated
against the requirements of the accounting
standards.
• We analysed the divestment of The Leading
Edge and The Digital Edge, the reorganisation
of the Group’s segments, and the Group’s
internal reporting to assess the Group’s
monitoring and management of activities, and
the consistency of the allocation of goodwill to
CGUs.
• We checked the consistency of the growth
rates to the Group’s latest Board-approved
forecasts, past performance of the Group, and
our experience regarding the feasibility of
these in the industry and economic
environments in which the CGUs operate.
• Working with our valuation specialists, we
challenged the Group’s significant forecast
cash flow and growth assumptions in light of
our consideration of the Group’s allocation of
goodwill to the CGUs to which they belong
based on the management and monitoring of the
business.
the expected continuation of volatile economic
conditions in key geographies, supply chain
issues affecting the Group’s customers, rising
interest rates, and increasing employee
benefits costs. We assessed how the Group
had considered the impacts of these possible
events in the Board-approved plan and
strategy. We compared forecast growth rates
and long-term growth rates into perpetuity to
published studies of industry trends and
expectations, and considered differences for
the Group’s operations. We used our
knowledge of the Group, their past
performance, business and customers, and
our industry experience.
• Working with our valuation specialists, we
independently developed a discount rate
range considered comparable using publicly
available market data for comparable entities,
adjusted by risk factors specific to the Group
and the industry it operates in.
• We considered the sensitivity of the models
by varying key assumptions, such as forecast
growth rates, long-term growth rates into
perpetuity, and discount rates, within a
reasonably possible range. We did this to
identify those CGUs at higher risk of
impairment and those assumptions at a higher
risk of bias or inconsistency in application and
to focus our further procedures.
• We assessed the Group’s reconciliation of
differences between the year-end market
capitalisation and the carrying amount of the
net assets by comparing the implicit earnings
multiples from the models to market multiples
of comparable entities.
• We assessed the disclosures in the financial
report using our understanding obtained from
our testing and against the requirements of
the accounting standards.
Other Information
Other Information is financial and non-financial information in Enero Group Limited’s annual reporting
which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are
responsible for the Other Information.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not
express an audit opinion or any form of assurance conclusion thereon, with the exception of the
Remuneration Report and our related assurance opinion.
Independent Auditor’s ReportFinancial report for year ended 30 June 2022 In connection with our audit of the Financial Report, our responsibility is to read the Other Information.
In doing so, we consider whether the Other Information is materially inconsistent with the Financial
Report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
We are required to report if we conclude that there is a material misstatement of this Other
Information, and based on the work we have performed on the Other Information that we obtained
prior to the date of this Auditor’s Report we have nothing to report.
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
• preparing the Financial Report that gives a true and fair view in accordance with Australian
Accounting Standards and the Corporations Act 2001
•
•
implementing necessary internal control to enable the preparation of a Financial Report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error
assessing the Group and Company’s ability to continue as a going concern and whether the use
of the going concern basis of accounting is appropriate. This includes disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless they
either intend to liquidate the Group and Company or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
•
•
to obtain reasonable assurance about whether the Financial Report as a whole is free from
material misstatement, whether due to fraud or error; and
to issue an Auditor’s Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Australian Auditing Standards will always detect a material misstatement when it
exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of the Financial Report.
A further description of our responsibilities for the audit of the Financial Report is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf This description forms part of our
Auditor’s Report.
97
Report on the Remuneration Report
Opinion
Directors’ responsibilities
In our opinion, the Remuneration Report of
Enero Group Limited for the year ended 30
June 2022, complies with Section 300A of
the Corporations Act 2001.
The Directors of the Company are responsible for the
preparation and presentation of the Remuneration
Report in accordance with Section 300A of the
Corporations Act 2001.
Our responsibilities
We have audited the Remuneration Report included in
pages 36 to 43 of the Directors’ Report for the year
ended 30 June 2022.
Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
KPMG
Kristen Peterson
Partner
Sydney
8 September 2022
Independent Auditor’s ReportFinancial report for year ended 30 June 2022 Lead Auditor’s Independence Declaration
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of Enero Group Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of Enero Group Limited
for the financial year ended 30 June 2022 there have been:
i.
ii.
no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
99
KPMG
Kristen Peterson
Partner
Sydney
8 September 2022
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms
affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG
name and logo are trademarks used under license by the independent member firms of the KPMG global organisation.
Liability limited by a scheme approved under Professional Standards Legislation.
ASX additional information
ASX additional information
Additional information required by the Australian Securities Exchange Limited Listing Rules and not disclosed elsewhere in
this report is set out below. The shareholder information set out below was applicable at 12 July 2022.
Substantial shareholders
The number of ordinary shares held by substantial shareholders and their associates is set out below:
Shareholder
Regal Funds Management Pty Limited
Perpetual Limited
RG Capital Multimedia Limited
Wilson Asset Management
Perennial Value Management
Merrill Lynch International
UBS Group
Unquoted equity securities
Number
12,893,947
11,659,657
11,223,268
9,473,181
9,443,821
5,614,463
4,938,249
As at 12 July 2022 there were no options granted over unissued ordinary shares in the Company.
Voting rights
Ordinary shares – refer to Note 17 Capital and reserves.
Distribution of equity security holders:
Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Number of equity
security holders Ordinary shares
186,994
1,035,262
1,233,173
5,113,354
80,476,324
88,045,107
405
400
160
177
42
1,184
% of issued
capital
0.21
1.18
1.40
5.81
91.40
100.00
The number of shareholders holding less than a marketable parcel of ordinary shares is 96.
Twenty largest shareholders
Rank Name
1 CITICORP NOMINEES PTY LIMITED
2 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
3 NATIONAL NOMINEES LIMITED
4 UBS NOMINEES PTY LTD
5 IRISH GLOBAL EQUITY LIMITED
6 RG CAPITAL MULTIMEDIA LIMITED
7 BRISPOT NOMINEES PTY LTD
8 J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
9 CH GLOBAL PTY LTD
10 WARBONT NOMINEES PTY LTD
11 IRISH GLOBAL EQUITY LIMITED
12 MR FELICE TESTINI
13 MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
14 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED – A/C 2
15 RG CAPITAL MULTIMEDIA LIMITED
16 BNP PARIBAS NOMS PTY LTD
17 BETA GAMMA PTY LTD
18 MRS ANTONIA CAROLINE COLLOPY
19 NEWECONOMY COM AU NOMINEES PTY LIMITED
20 RG CAPITAL MULTIMEDIA LIMITED
Total
100 Enero Group Limited Annual Report 2022
Units
20,683,612
14,249,644
7,404,986
4,826,950
4,335,901
3,269,079
3,108,083
2,898,965
2,548,301
1,830,166
1,667,025
1,630,102
1,409,963
1,162,149
1,159,020
1,064,474
830,000
788,637
611,920
511,945
75,990,922
% of issued
capital
23.49
16.18
8.41
5.48
4.92
3.71
3.53
3.29
2.89
2.08
1.89
1.85
1.60
1.32
1.32
1.21
0.94
0.90
0.70
0.58
86.31
Corporate Directory
Company Secretary
Catherine Hoyle
Principal Registered Office
Enero Group Limited
Level 2, 100 Harris Street
Pyrmont NSW 2009 Australia
Telephone: +61 2 8213 3031
Email: companysecretary@enero.com
Share Registry
Link Market Services Limited
Locked Bag A14
Sydney South NSW 1235 Australia
Telephone: 1300 554 474
Outside Australia: +61 2 8280 7111
Facsimile: +61 2 9287 0303
Securities Exchange
The home exchange is Sydney.
Other Information
Solicitors
Gilbert + Tobin
International Towers Sydney 2
200 Barangaroo Avenue
Sydney NSW 2000 Australia
Auditors
KPMG
International Towers Sydney 3
300 Barangaroo Avenue
Sydney NSW 2000 Australia
The Company is listed on the Australian Securities Exchange (ASX Code: EGG).
Enero Group Limited, incorporated and domiciled in Australia, is a publicly listed company limited by shares.
Enero Group Limited Annual Report 2022 101
Financial report for year ended 30 June 2022
Corporate Directory
Corporate Directory
Company Secretary
Catherine Hoyle
Principal Registered Office
Enero Group Limited
Level 2, 100 Harris Street
Pyrmont NSW 2009 Australia
Telephone: +61 2 8213 3031
Email: companysecretary@enero.com
Share Registry
Link Market Services Limited
Locked Bag A14
Sydney South NSW 1235 Australia
Telephone: 1300 554 474
Outside Australia: +61 2 8280 7111
Facsimile: +61 2 9287 0303
Securities Exchange
The Company is listed on the Australian Securities Exchange (ASX Code: EGG).
The home exchange is Sydney.
Other Information
Enero Group Limited, incorporated and domiciled in Australia, is a publicly listed company limited by shares.
Solicitors
Gilbert + Tobin
International Towers Sydney 2
200 Barangaroo Avenue
Sydney NSW 2000 Australia
Auditors
KPMG
International Towers Sydney 3
300 Barangaroo Avenue
Sydney NSW 2000 Australia
101
ASX additional information
Substantial shareholders
Shareholder
Regal Funds Management Pty Limited
Perpetual Limited
RG Capital Multimedia Limited
Wilson Asset Management
Perennial Value Management
Merrill Lynch International
UBS Group
Unquoted equity securities
Additional information required by the Australian Securities Exchange Limited Listing Rules and not disclosed elsewhere in
this report is set out below. The shareholder information set out below was applicable at 12 July 2022.
The number of ordinary shares held by substantial shareholders and their associates is set out below:
Number
12,893,947
11,659,657
11,223,268
9,473,181
9,443,821
5,614,463
4,938,249
As at 12 July 2022 there were no options granted over unissued ordinary shares in the Company.
Voting rights
Ordinary shares – refer to Note 17 Capital and reserves.
Distribution of equity security holders:
Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Number of equity
security holders Ordinary shares
% of issued
capital
405
400
160
177
42
1,184
186,994
1,035,262
1,233,173
5,113,354
80,476,324
88,045,107
0.21
1.18
1.40
5.81
91.40
100.00
The number of shareholders holding less than a marketable parcel of ordinary shares is 96.
Twenty largest shareholders
Rank Name
1 CITICORP NOMINEES PTY LIMITED
2 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
3 NATIONAL NOMINEES LIMITED
4 UBS NOMINEES PTY LTD
5 IRISH GLOBAL EQUITY LIMITED
6 RG CAPITAL MULTIMEDIA LIMITED
7 BRISPOT NOMINEES PTY LTD
9 CH GLOBAL PTY LTD
10 WARBONT NOMINEES PTY LTD
11 IRISH GLOBAL EQUITY LIMITED
12 MR FELICE TESTINI
8 J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
13 MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
14 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED – A/C 2
15 RG CAPITAL MULTIMEDIA LIMITED
16 BNP PARIBAS NOMS PTY LTD
17 BETA GAMMA PTY LTD
18 MRS ANTONIA CAROLINE COLLOPY
19 NEWECONOMY COM AU NOMINEES PTY LIMITED
20 RG CAPITAL MULTIMEDIA LIMITED
Units
20,683,612
14,249,644
% of issued
capital
23.49
16.18
7,404,986
4,826,950
4,335,901
3,269,079
3,108,083
2,898,965
2,548,301
1,830,166
1,667,025
1,630,102
1,409,963
1,162,149
1,159,020
1,064,474
830,000
788,637
611,920
511,945
8.41
5.48
4.92
3.71
3.53
3.29
2.89
2.08
1.89
1.85
1.60
1.32
1.32
1.21
0.94
0.90
0.70
0.58
Total
75,990,922
86.31
100 Enero Group Limited Annual Report 2022
Enero Group Limited Annual Report 2022 101