Ensurance Limited Annual Report 2016

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FY2016 Annual Report · Ensurance Limited

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Annual Report
Ensurance Limited

15/16

Ensurance Limited

& Controlled Entities

Level 2/2 Glen St

Milsons Point NSW 2061

ABN: 80 148 142 634

ASX CODE: ENA

T: +61 (0)2 9806 2000

F: +61 (0)2 9806 2099

tABl e o F con t en t s

Managing directors’ report ....................................................................... 3

Directors’ report ............................................................................................ 6

Remuneration report ................................................................................11

Auditor’s independence declaration ..................................................17

Consolidated statement of profit or loss

and other comprehensive income ......................................................19

Consolidated statement of financial position ............................. 20

Consolidated statement of changes in equity ............................ 21

Consolidated statement of cash flows ......................................... 22

Notes to the consolidated financial statements ...................... 23

Directors’ declaration ............................................................................... 58

Independent auditor’s report ............................................................... 59

Corporate governance statement ..................................................... 62

Additional information for listed public companies .................. 68

Corporate directory ................................................................................... 70

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ENA
Managing Director’s Report

Dear Shareholder,

Ensurance has made significant progress over the past twelve

months to become the go-to destination for those looking for a

fast and efficient way to obtain insurance quotes from multiple

insurers. The company’s strategies are now attracting insurers,

consumer groups and white label clients to offer products

without the heavy investment in an online infrastructure.

Australian consumers continue to demand the innovated services

and product platforms that Ensurance has on offer. The company

continues to locally expand its range of products and insurers

on the digital platforms. The company is now attracting global

attention with Ensurance strongly featuring in many international

publications for being a significant disrupter and leader of change

for the insurance industry.

As a result of the company’s diversity and appeal, Ensurance

is now in the process of setting up operations in the UK, with

existing ‘passporting’ abilities throughout the European Union.

We expect that UK operations will have a material impact on the

business for FY2018.

The company is now firmly focused on increasing sales and

taking advantage of first-to-market initiatives.

Disrupting
insurance
Our perspective

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managing Director’s Report cont.

“...we maintain that the disrupter models
that Ensurance has developed should see
the Group’s sales increase significantly
over FY17 and FY18... “

Performance
highlights.

White label clients continue to increase during the financial
year. We started the year with 1 and finished with 13 white label

Sales growth occurred during the financial year with operating
revenue up 13% to just over $3.0m. We were pleased to see

Ensurance Underwriting Agency experience growth of 126% in

sales for the financial year. This company will be a significant

contributor to the company’s revenue and sales going forward.

Experiencing organic growth of 13% is acceptable when compared

to the insurance industry that experienced flat if not declining

growth. However, we maintain that the disrupter models that

Ensurance has developed should see the Group’s sales increase

clients. The majority of these clients became partners in the

significantly over FY17 and FY18.

second half of the financial year.

We expect to see a significant increase in white label clients

Insurers and products experienced strong growth in FY16.
With the numbers of insurers increasing to 7 and the number of

signing up in the FY17, due to the take up seen in the second half

product classes growing to 25 from 14 in the previous financial

of FY16. In addition, Ensurance has now embarked on some large

year.

marketing campaigns that target white label clients in both the

mortgage broking and real estate industries. Early indications of

the campaigns are positive. Other financial industries continue to

be in the company’s sights as future targets.

As expected, when additional insurers and products were

included onto the IT platforms in FY16, the company found it

easier to attract more insurers with their products. We have

also found that the current insurers on the platform have also

White label clients are a key metric for the company as this allows

increase the number of products they wish to partner Ensurance

us to reach a wide range of clients without the significant spend

on our bespoke platforms.

on direct to consumer marketing. By partnering, this leverages

the trusted relationship that the white label client has with their

clients.

The company has posted an after tax loss of $1,777,430 for the

2016 financial year, which is line with expectations. The company

has continued to invest in adding infrastructure in finance, IT

White Labelling is the term used, when a third party uses our

development and new business sales staff. Ensurance is now

products on the digital platform and rebrands it to make it appear

sitting comfortably with an experienced infrastructure to execute

as if it is their offering.

its target strategies.

Clients reach through our completed partnerships have doubly
increased our consumer reach from just below 500,000 to

I and the entire Ensurance Group are extremely excited and look
forward to a positive 2017. We would like to take this opportunity

just below 1,000,000. Ensurance uses this as an important

to thank the hard work of our staff in achieving our objectives

measuring benchmark, as the ultimate goal is to reach every

for the company and shareholders in a encouraging and

household and business within Australia. We expect that this

eventful 2016.

number will increase significantly as new partners sign up to the

digital platforms.

Stefan Hicks

Managing Director

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Revenue of the
Disrupting insurance
Disrupting insurance
Our perspective
Our perspective
Group increased
to $3.033M.
This has been
driven by Ensurance
Underwriting which
more than doubled in
sales for that business.

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DiRec toRs Rep oR t

Your directors present their report on the consolidated entity, consisting

of Ensurance Limited (Ensurance or the Company) and its controlled

entities (collectively the Group), for the financial year ended 30 June 2016.

Mr Adam Davey

Chairman

Mr Stefan Hicks

Managing Director

Mr Brett Graves

Executive Director

Mr Brian Thomas

Non-executive Director

(Resigned on 10 Sept. 2015)

Directors have been in office since

the start of the financial year to the

date of this report unless otherwise

stated. For additional information

of Directors including details of the

qualifications of Directors please

refer to paragraph 6 “Information

relating to the directors and company

secretary” of this Directors Report.

Mr Neil Pinner

Non-executive Director

Mr Grant Priest

Non-executive Director

(Appointed on 7 Sept. 2015)

Joint company secretaries

The following people held the joint position of

Company Secretary at the end of the financial year:

Mr Jay Stephenson

MBA, FCPA, CMA, FCIS, MAICD

Ms Julia Beckett

Certificate in Governance Practice and Administration

Mr Stephenson has been involved in business development for over 20 years

including the past 17 years as Director, Chief Financial Officer and Company

Secretary for various listed and unlisted entities in resources, manufacturing,

wine, hotels, and property. He has been involved in business acquisitions,

mergers, initial public offerings, capital raisings, business restructuring as well

managing all areas of finance for companies.

Ms Beckett is a Certificated member of the Governance Institute of Australia

and a corporate governance professional, having worked in corporate

administration and compliance for the past seven years. She has been involved

in business acquisitions, mergers, initial public offerings and capital raisings, as

well as statutory and financial reporting. Ms Beckett is also currently Company

Secretary of European Metals Holdings Limited.

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3. Dividends paid or recommended

There were no dividends paid or recommended during the financial year ended

30 June 2016.

4. Significant changes in the state of affairs

There were no significant changes in the state of affairs of the Group during

the financial year.

5. Operating and financial review

5.1 Nature of Operations Principal Activities

The Ensurance Group operates three distinct businesses in the insurance

industry consisting of a Sydney-based insurance brokerage, insurance

underwriting agency and an information technology company.

The insurance brokerage, Savill Hicks Corp Pty Ltd (SHC), has operated

nationally for over 24 years with the complementary underwriting agency

having been established in 2013. Ensurance IT Pty Ltd (Ensurance IT), the IT

business, has developed an online platform which has enabled the business

to execute real-time insurance sales online for the past 7 years. Ensurance IT

is now in the process of developing a new platform, taking advantage of its

knowledge, experience and the availability of improved technology to enable
the Ensurance Group to not only conduct its own existing insurance brokerage

business more efficiently but also to assist in marketing the platform to “white

label” clients. Once the new platform is operational, the Ensurance Group will

begin the process of migrating all existing products and clients to the new

platform, allowing the Ensurance Group to replace the existing platform with

the new one over time.

“White labelling” is the branding by the marketing company of a producer’s

products. It provides organisations with the ability to take advantage of market

opportunities by leveraging the capabilities of other businesses without the

need to develop these capabilities internally. This means they can avoid the

need to design and build systems with the attendant costs and logistical

Revenue of the Group increased to $3.033M. This has been driven by

Ensurance Underwriting which more than doubled in sales for that business.

The result underscores the strong market share gain experienced by the Group,

particularly in its underwriting and white label businesses.

The Company is currently in the process of raising $3.0M through via a

Convertible Notes issue. These funds will support the Group’s growth agenda

and global reach.

The financial statements have been prepared on a going concern basis, which

contemplates the continuity of normal business activity and the realisation

of assets and the settlement of liabilities in the ordinary course of business.

Details of the Company’s assessment in this regard can be found in Note 1a.ii

Basis of preparation: Going Concern.

Financial position

The net assets of the Group have decreased from 30 June 2015 by $1,756,721

to $842,066 at 30 June 2016 (2015: $2,598,787).

As at 30 June 2016, the Group’s cash and cash equivalents decreased from 30

June 2015 by $2,095,887 to $389,645 at 30 June 2016 (2015: $2,485,532)

and had a working capital deficit of $1,124,533 (2015: $1,587,629 working

capital).

5.3 Events Subsequent to Reporting Date

There are no other significant after balance date events that are not covered

in this Directors’ Report or within the financial statements at Note 28 Events

subsequent to reporting date.

5.4 Future Developments, Prospects and Business Strategies

Likely developments, future prospects and business strategies of the

operations of the Group and the expected results of those operations have not

been included in this report as the Directors believe that the inclusion of such

information would be likely to result in unreasonable prejudice to the Group.

difficulties associated with starting from scratch. In the insurance industry

5.5 Environmental Regulations

The Group’s operations are not subject to significant environmental regulations

in the jurisdictions it operates in, namely Australia.

The Directors have considered the enacted National Greenhouse and Energy

Reporting Act 2007 (the NGER Act) which introduced a single national reporting

framework for the reporting and dissemination of information about the

greenhouse gas emissions, greenhouse gas projects, and energy use and

production of corporations. At the current stage of development, the Directors

have determined that the NGER Act has no effect on the Company for the
current, nor subsequent, financial year. The Directors will reassess this position

as and when the need arises.

it allows institutions and large industry participants, such as the mortgage

broking industry, to label insurance products as their own and cross-sell

these to their existing client bases. This brings the benefits associated with

economies of scale into play.

5.2 Financial Review

a. Operating results

The Group delivered a FY16 loss after tax of $1.777M, representing an

improvement on the prior year loss of $3.765M which included a $2.739M

Corporate Transaction Accounting Expense. The normalised loss after tax of

the group increased from $1.026M to $1.777M. The increase in the loss of the

group was due to several main factors:

•

Increase in Employment Costs (predominately in sales &

software development);

•

Increase in Business development costs (principally in increased

marketing activities)

•

The establishment of an office in Melbourne contributed to an

increase in Occupancy, Computers and Communications Costs.

Additional sales personnel and additional targeted marketing activities

have allowed the Group to secure 12 new white label clients in FY16 with

significantly more signups expected in the FY17. The number of insurers on

the Ensurance platform have increased to seven and product classes have

increased to 25.

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Information relating to the directors and company secretary

managing relationships with insurers, advising Government boards on the

Mr Adam Davey: Independent Non-Executive Chairman

Length of service: 3 years, 11 months from appointment 20 August 2012
(last re-elected 28 November 2014)

Qualifications: Professional Diploma in Stockbroking

Experience: Mr Davey has had experience in the securities industry over the
past 25 years. He has served as a Non-Executive Director of a number of

implementation and strategy of legislative insurance products, management

of current binder arrangements, compliance management including risk

management, human resources management, budgeting / business planning

and corporate client management.

Mr Graves previously held various senior national positions in AAI Limited

trading as Vero Insurance (Sydney and Melbourne), including National

Underwriting Manager for Home Warranty and Construction and is a Fellow of

industrial and mining companies. He has significant experience in capital

Australian and New Zealand Institute of Insurance and Finance.

raisings, mergers and acquisitions. Mr Davey also serves as Chairman of the

non-for-profit organisation Teen Challenge Foundation.

Special responsibilities: Chairman of the Board, Chairman of the Remuneration
& Nominations Committee and a member of the Audit & Risk Committee.

Interest in Shares and Options: 520,000 ordinary shares in Ensurance Limited
4,000,000 partly paid shares in Ensurance Limited

250,000 options in Ensurance Limited

Special responsibilities: Member of Audit & Risk Committee.

Interest in Shares and Options: 10,000 ordinary shares in Ensurance Limited
(direct) and 2,884,994 ordinary shares in Ensurance Limited (indirect)

Directorships held in other listed entities: None

Mr Neil Pinner: Independent Non-Executive Director

Directorships held in other listed entities: Non-executive director of Minquest
Limited

Length of service: 1 year, 4 months from appointment 6 May 2015
(last re-elected 25 November 2014)

Mr Stefan Hicks: Managing Director

Length of service: 1 year, 4 months from appointment 6 May 2015
(last re-elected 25 Novem

Experience: Mr Pinner has spent the past 43 years in the banking and finance
industry. After 18 years with the Commonwealth Bank, Mr Pinner co-founded

Mortgage Force Australia which later became Smartline Personal Mortgage

Advisers and is now one of Australia’s leading mortgage broking firms.

Smartline has around 300 franchisees Australia wide and funds in excess of

Qualifications: MAICD, Diploma Financial Services

five billion per annum in home mortgage lending.

Experience: Mr Hicks is currently the managing director of Ensurance, a founder
and director of Savill Hicks Corp Pty Ltd (SHC), a director of Ensurance Capital

Mr Pinner is one of the original pioneers of the mortgage industry, and has

helped shape the industry, not only in his role as a director of Mortgage Force

Pty Ltd, Ensurance Life, Ensurance Underwriting, Ensurance IT and Savill Hicks

and Smartline, but he has also played an active role in the Mortgage Finance

Corp (NSW) Pty Ltd (a wholly owned subsidiary of SHC). Mr Hicks has previously

Association of Australasia. He was on the first ever Mortgage Originator

held senior insurance positions in Alexander Stenhouse (Aon), Perth; Willis

Committee of Western Australia and then in later years on the National

Faber Johnson and Higgins (Willis), Melbourne; and stockbroker position with

Brokering Industry Board. Mr Pinner brings an extensive network of mortgage

Perth based boutique corporate advisory firm Montagu Stockbrokers. He is a

broking and banking industry contacts to Parker and its Board.

Mr Pinner was recently appointed to the board of Perth Racing which

complements his many years following his passion for the thoroughbred

industry as a breeder and owner

Special responsibilities: Member of Remuneration & Nominations Committee

Interest in Shares and Options: 10,000 ordinary shares in Ensurance Limited
(direct) and 517,500 ordinary shares in Ensurance Limited (indirect)

Directorships held in other listed entities: None

member of the Australian Institute of Company Directors and holds a Diploma

of Financial Services.

Special responsibilities: Managing Director

Interest in Shares and Options: 16,369,044 ordinary shares in Ensurance Limited
(direct) and 9,515,962 ordinary shares in Ensurance Limited (indirect)

Directorships held in other listed entities: None

Mr Brett Graves: Executive Director

Length of service: 1 year, 4 months from appointment 6 May 2015
(last re-elected 25 November 2014)

Qualifications: ANZIIF (Fellow) CIP

Experience: Mr Graves is a director and the CEO of Savill Hicks Corp Pty Ltd. He
is also a director of Ensurance Capital Pty Ltd, Ensurance Underwriting Pty Ltd,

Ensurance IT Pty Ltd, Ensurance Life Pty Ltd, Savill Hicks Corp Pty Ltd (SHC)

and Savill Hicks Corp (NSW) Pty Ltd (a wholly owned subsidiary of SHC). Mr

Graves’ expertise includes implementation of growth strategies, oversight and

management of national online solutions and partner program (white labelling),

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Mr Grant Priest: Independent Non-Executive Director
(appointed on 7 September 2015)

Length of service: 1 year, 1 month from appointment 7 September 2015
(last re-elected 25 November 2014)

Qualifications: BBus, Diploma of Financial Services, FCA, CTA

Experience: Mr Priest is a director of the Perth Chartered Accounting firm
Sothertons. He has been with Sothertons since 1982 and was appointed a

director in 1988. He was a director of the Board of the National Sothertons

Group from 1994 to 2001 and was Chairman of the board from 1998 to 2000.

Mr Priest has extensive experience in commercial transactions involving

equity placement, enterprise sale and purchase, relationship and service

arrangements, granting of licencing rights, transaction structuring and strategy,

risk mitigation, due diligence and investigative analysis and finance strategies.

These skills and experiences have been gained during Mr Priest’s 33 years in

public Chartered Accountancy practice, his various roles with listed and unlisted
funds and companies, as well as representing the interests of a number of

large family estates. Mr Priest also has extensive experience in the audit of

AFSL holders in the Insurance brokerage industry.

Mr Priest was a founding non-executive director of Paladin Australia Ltd from

1994 to 1999, Chairman of Carpathian Resources Ltd from 2004 to 2006 and

has been Chairman of Life Plan Recreation and Leisure Association Inc. since

1999. He is currently as a director and company secretary to AFSL licence

holder of Knights Capital Management Pty Ltd. Grant sits on the Human

Research Ethics Committee at Princess Margaret Hospital.

Special responsibilities: Chairman of the Audit & Risk Committee and member
of Remuneration & Nominations Committee.

Interest in Shares and Options: 50,000 ordinary shares in Ensurance Limited
(indirect)

Directorships held in other listed entities: None

Mr Brian Thomas: Non-Executive Director (resigned 10 September 2015)

Qualifications: BSc, MBA, SAFin, MAusIMM, MAICD

Experience: Mr Brian Thomas is a geologist and mineral economist with
extensive experience as both an executive and non-executive director of small

to mid-market capitalisation publicly listed resources companies. He was

previously in a senior business development role with a major Australian bank

sourcing energy and resources financing opportunities, which followed a period

with a global investment banking group. This was preceded by a period as a

corporate stockbroker with two major Australian based firms. The shift to the

finance industry followed over 20 years in both production and exploration

operational management roles in the resources sector.

Special responsibilities: Member of all the Committees

Interest in Shares and Options: 30,001 ordinary shares in Ensurance Limited

Directorships held in other listed entities: Currently a Non-Executive Director of
Orinoco Gold Ltd (previously Strickland Resources Ltd), During the past four

years, he was a Non-Executive Director of Potash Minerals Ltd (Formerly

Transit Holding Ltd), Noble Mineral Resources Ltd, Condoto Platinum NL,

Charter Pacific Corporation Limited, Aragon Resources Limited.

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7. Meetings of directors and committees

DIRECTORS'
MEETINGS

AUDIT & RISK
COMMITTEE

REMUNERATION & NOMINATIONS
COMMITTEE

Number eligible to
attend

Number Attended

Number eligible to
attend

Number Attended

Number eligible to
attend

Number Attended

Adam Davey

Stefan Hicks

Brett Graves

Neil Pinner

Grant Priest

Brian Thomas

Nil

N/A

At the date of this report, the

Remuneration & Nominations

Committees have been combined into one

Committee, namely, the Remuneration &

Nominations Committee. During the

financial year, the full Board performed

the duties of these committees.

Accordingly, all matters capable of

delegation to such committees were

considered by the full Board of Directors.

Indemnifying officers or auditor

8.2. Insurance premiums

8.1. Indemnification

The Company has entered an Indemnity, Insurance and Access Deed with each

Director. Pursuant to the Deed:

During the year the Company paid insurance premiums to insure directors and

officers against certain liabilities arising out of their conduct while acting as an

officer of the Group.

The Director is indemnified by the Company against any liability incurred

9. Options

in that capacity as an officer of the Company to the maximum extent

permitted by law subject to certain exclusions.

9.1. Unissued shares under option

At the date of this report, Ensurance Limited has no un-issued ordinary shares

The Company must keep a complete set of company documents until the

under option (listed and unlisted).

later of:

The date which is seven years after the Director ceases to be an

officer of the Company; and

The date after a final judgment or order has been made in

relation to any hearing, conference, dispute, enquiry or

investigation in which the Director is involved as a party,

witness or otherwise because the Director is or was an officer

of the Company (Relevant Proceedings).

9.2. Shares issued on exercise of options

No ordinary shares were issued by the Company as a result of the exercise of

options during or since the end of the financial year.

10. Non-audit services

During the year, Mazars Risk and Assurance Pty Limited (Mazars) (formerly

Duncan Dovico Risk and Assurance Pty Limited) the Company’s auditor,

provided taxation compliance assistance amounting to $10,800 (2015: nil).

The Director has the right to inspect and copy a Company document in

Details of remuneration paid to the auditor can be found within the financial

connection with any relevant proceedings during the period referred to above.

statements at Note 6 Auditor’s Remuneration.

Subject to the next sentence, the Company must maintain an insurance policy

The Board has established certain procedures to ensure that the provision

insuring the Director against liability as a director and officer of the Company

of non-audit services are compatible with, and do not compromise, the

while the Director is an officer of the Company and until the later of:

auditor independence requirements of the Corporations Act 2001 (Cth). These

The date which is seven years after the Director ceases to be

an officer of the Company; and

The date any Relevant Proceedings commenced before the

date referred to above have been finally resolved.

The Company may cease to maintain the insurance policy if the Company

reasonably determines that the type of coverage is no longer available.

The Company has not entered into any agreement with its current auditors

indemnifying them against any claims by third parties arising from their report

on the financial report.

procedures include:

non-audit services will be subject to the corporate governance procedures

adopted by the Company and will be reviewed by the Board to ensure they do

not impact the integrity and objectivity of the auditor; and

ensuring non-audit services do not involve reviewing or auditing the auditor’s

own work, acting in a management or decision making capacity for the

Company, acting as an advocate for the Company or jointly sharing risks and

rewards.

The Directors are satisfied that the provision of non-audit services during the

year by the auditor (or by another person or firm on the auditor’s behalf) is

compatible with the general standard of independence for auditors imposed by

the Corporations Act 2001 (Cth).

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11. Proceedings on behalf of company

No person has applied for leave of Court to bring proceedings on behalf of the

Company or intervene in any proceedings to which the Company is a party for

the purpose of taking responsibility on behalf of the Company for all or any part

of those proceedings.

The Company was not a party to any such proceedings during the year.

Executive Directors and other Senior Executives

a.
Executives receive a base salary (which is based on factors such as length

of service and experience), retirement benefits, options and performance

incentives. The Board reviews Executive packages annually by reference to the

Company’s performance, executive performance, and comparable information

from industry sectors and other listed companies in similar industries.

Executives are also entitled to participate in the employee share and option

12. Auditor’s independence declaration

arrangement.

The auditor’s independence declaration under section 307C of the

Corporations Act 2001 (Cth) for the year ended 30 June 2016 has been

b. Non-Executive Directors
The Company’s Constitution provides that Directors are entitled to be

received and can be found on page 15 of the annual report.

remunerated for their services as follows:

13. Remuneration report (audited)

The information in this remuneration report has been audited as required by

s308(3C) of the Corporations Act 2001.

13.1 Key management personnel (KMP)

KMP have authority and responsibility for planning, directing and controlling the

activities of the Group. KMP comprise the directors of the Company and key

executive personnel:

Mr Adam Davey

Chairman

Mr Stefan Hicks

Managing Director

Mr Brett Graves

Executive Director, Chief Operating Officer

Mr Neil Pinner

Non-executive Director

Mr Grant Priest

Non-executive Director (Appointed on 7 Sep 2015)

Mr Brian Thomas

Non-executive Director (Resigned on 10 Sep 2015)

Mr Michael Huntly

CEO of Ensurance Underwriting

Peter Fielding

COO of Ensurance IT

Sam Hallab

Chief Financial Officer

13.2 Principles used to determine the nature

and amount of remuneration

•

The total aggregate fixed sum per annum to be paid to the Directors

(excluding salaries of executive Directors) from time to

time will not exceed the sum determined by the

Shareholders in general meeting and the total aggregate

fixed sum will be divided between the Directors as the

Directors shall determine and, in default of agreement

between them, then in equal shares.

The Directors’ remuneration accrues from day to day.

The total aggregate fixed sum per annum which may be paid to

non-executive Directors is $250,000. This amount

cannot be increased without the approval of the

Company’s Shareholders.

•

The Directors are entitled to be paid reasonable travelling, accommodation and

other expenses incurred by them respectively in or about the performance of

their duties as Directors.

Fixed Remuneration

c.
Other than statutory superannuation contributions, no retirement benefits are

provided for Executive and Non-Executive Directors of the Company. To align

Directors’ interests with shareholder interests, the Directors are encouraged to

The remuneration policy of the Company has been designed to ensure reward

hold shares in the company.

for performance is competitive and appropriate to the result delivered. The

framework aligns executive reward with the creation of value for shareholders,

and conforms to market best practice. The Board ensures that Director

and executive reward satisfies the following key criteria for good reward
government practices:

Competitiveness and reasonableness;

Acceptability to the shareholder;

Performance;

Transparency and Capital management.

The remuneration policy has been tailored to increase the direct positive

relationship between shareholders’ investment objectives and Directors’ and

Executives’ performance. Currently, this is facilitated through the issues of

options to the majority of Directors and Executives to encourage the alignment

of personal and shareholder interests. The Company believes this policy will be

effective in increasing shareholder wealth. The Board’s policy for determining

the nature and amount of remuneration for Board members and Senior

Executive of the Company is as follows:

d. Performance Based Remuneration – Short-term and long-term

incentive structure

The Board will review short-term and long-term incentive structures from time

to time. Any incentive structure will be aligned with shareholders’ interests.

short-term incentives
No short-term incentives in the form of cash bonuses were granted

during the year.

long-term incentives
The Board has a policy of granting incentive options to executives with

exercise prices above market share price. As such, incentive options

granted to executives will generally only be of benefit if the executives

perform to the level whereby the value of the Group increases sufficiently

to warrant exercising the incentive options granted.

The directors of the Company are not eligible to participate in the

“Ensurance Limited Employee Incentive Option Plan”.

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Service Contracts

Remuneration and other terms of employment for the directors, KMP and the

company secretary are formalised in contracts of employment.

Engagement of Remuneration Consultants

During the financial year, the Company did not engage any

remuneration consultants.

g. Relationship between Remuneration of KMP and Earnings

The Board does not consider earnings in determining the nature and amount of

remuneration of KMP.

13.3

Remuneration Details for the Year Ended 30 June 2016

Details of the remuneration of the key management personnel are set out in the following table:-

2016

Group Key Management
Person

Short-term benefits

Salary, fees
and leave
$

88,333

278,502

190,719

45,625

39,838

5,000

Profit share
and bonuses

Adam Davey

Stefan Hicks

Brett Graves

Grant Priest

Neil Pinner

Brian Thomas

Michael Huntly

179,481

10,000

Peter Fielding

Sam Hallab

186,218

12,692

Non-
monetary (2)
$

40,216

11,216

1,026,408

10,000

51,432

Other

2015

Group Key Management
Person

Short-term benefits

Salary, fees
and leave
$

42,736

27,333

15,000

55,000

1,172

25,000

Profit share
and bonuses

4,167

Non -
monetary (2)
$

Other (1)

1,821

7,625

179

1,821

179

Adam Davey

Stefan Hicks

Brett Graves

Brian Thomas

Neil Pinner

Michael Huntly

Post-
employment
benefits
Super -
annuation
$

8,392

26,458

18,118

3,785

475

18,001

15,466

1,206

91,901

Post-
employment
benefits
Super -
annuation
$

2,597

1,425

5,225

143

2,375

166,241

4,167

4,179

7,625

11,765

Long-term
benefits

Equity-settled share -
based payments

Total

Other

Equity

Options /
Rights
$

5,468

102,193

2,554

347,730

638

160

220,691

45,785

43,783

5,475

207,482

201,684

13,898

8,980 1,188,721

Long-term
benefits

Equity -settled share -
based payments

Total

Other

Equity

Options

52,182

34,276

16,604

62,046

1,494

27,375

193,977

(1) Amounts paid to A Davey relate to consultancy fees incurred in respect to the reverse acquisition of Ensurance Capital Pty
(2) Directors ' and officers ' insurance paid by the company

Ltd.

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13.4 Service Agreements

a. Non-executive Director appointment letter with Adam Davey
The Company has entered into an appointment letter with Mr Adam Davey, on

standard terms for agreements of this nature. Subsequent to the acquisition

of Ensurance Capital, Mr Davey was appointed as Non-Executive Chairman.

Mr Davey’s annual remuneration was consequently increased to $100,000 per

annum plus superannuation, effective 1 August 2015.

Executive services contract (ESC) with Stefan Hicks

b.
The Company has entered into an executive services contract with

Mr Stefan Hicks on the following terms:

•

Mr Hicks is employed by the Company as the Managing Director

under an ESC that commenced 5 May 2015.

continued as a Non-Executive Director. Mr Thomas’ annual remuneration was

consequently reduced to $30,000 per annum plus superannuation. Mr Thomas

resigned on 10 September 2015.

13.5 Share-based compensation

Securities Received that are not performance-related
a.
No members of KMP are entitled to receive securities that are not

performance-based as part of their remuneration package.

b. Options and Rights Granted as Remuneration
As referred to in Note 26 Share-based payments and paragraph 13.6.c of this

Remuneration Report, 6,500,000 Performance Rights Class A (Note 26a.i) and

500,000 Performance Rights Class B (Note 26a.ii) were issued to Directors of

the Company. No options were granted to the Directors during the year ended

•

The gross annual remuneration package (including superannuation)

30 June 2016.

is $345,000 per annum, payable in fortnightly instalments;

There were no equity instruments issued during the year to Directors as result

•

Should Mr Hicks hold any office or directorship with any other Group
company, he will not be entitled to any additional remuneration in

of performance rights converting or options being exercised that had previously
been granted as compensation.

respect of those appointments.

•

The remuneration will be reviewed by the Board annually in

accordance with the Company’s policies and procedures.

•

The ESC may be terminated by either party by providing

six months’ notice.

Executive services contract (ESC) with Director Brett Graves
c.
The Company has entered into an ESC with Mr Brett Graves on the

following terms:

•

Mr Graves is employ by the Company as an Executive Director under

an ESC that commenced 5 May 2015.

•

The gross annual remuneration package (including superannuation)

is $220,000 per annum, payable in fortnightly instalments;

•

Should Mr Graves hold any office or directorship with any other

Group company, he will not be entitled to any additional

remuneration in respect of those appointments.

•

The remuneration will be reviewed by the Board annually in

accordance with the Company’s policies and procedures.

•

The ESC may be terminated by either party by providing

six months’ notice.

d. Non-executive Director appointment letter with Neil Pinner
The Company has entered into an appointment letter with Mr Neil Pinner, on

standard terms for agreements of this nature, under which he will be entitled

to director fees of $50,000 per annum, plus superannuation, effective

1 August 2015.

e. Non-executive Director appointment letter with Grant Priest
The Company appointed Mr Grant Priest as non-executive director, on

standard terms for agreements of this nature, under which he is be entitled to

director fees of $50,000 per annum, plus superannuation.

f. Non-executive Director appointment letter with Brian Thomas
The Company entered into an appointment letter with Mr Brian Thomas, on

standard terms for agreements of this nature. Subsequent to the acquisition of

Ensurance Capital, Mr Thomas stepped down as Non-Executive Chairman and

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13.6 Key Management Personnel equity holdings

Fully paid ordinary shares of Ensurance Limited held by each Key Management Person

2016

Group Key Management Person

Adam Davey (1)

Stefan Hicks(2)

Brett Graves

Grant Priest (3)

Neil Pinner

Brian Thomas (4)

Michael Huntly

Peter Fielding

Sam Hallab

Balance at
start of year
No.

4,520,000

25,980,006

2,894,994

50,000

527,500

30,001

1,250,000

35,252,501

Received during
the year as
compensatio n
No.

Received during
the year on the
exercise of options
No.

Other changes
during the year
No.

Balance at
end of year
No.

4,520,000

(50,000)

25,930,006

(30,001)

(27,139)

2,894,994

50,000

527,500

1,222,861

(107,140)

35,145,361

(1) Mr Davey's shares include 4,000,000 partly -paid ordinary shares held by Mr Davey and h is related parties.
(2) Mr Hick's change relates to a change in control of the holder of the shares.
(3)
(4)

Balance at the start of the year represents Mr Priest's existing relevant interests at the time of becoming a director.
Other changes during the year relate to

the number of shares held at the time of ceasing to be a director.

2015

Group Key Management Person

Adam Davey (1)

Stefan Hicks (2) (3)

Brett Graves (2) (3)

Neil Pinner (3)

Brian Thomas

Michael Huntly

Balance at
start of year
No.

4,520,000

105,000

20,000

527,500

30,001

5,202,501

Received during
the year as
compensation
No.

Received during
the year on the
exercise of options
No.

Other changes
during the year
No.

Balance at
end of year
No.

4,520,000

25,875,006

25,980,006

2,874,994

2,894,994

527,500

30,001

1,250,000

30,000,000

35,202,501

(1) Mr Davey's shares include 4,000,000 partly - paid ordinary shares held b y Mr Davey and his related parties.
(2)
(3)

Balance at the start of the year represents Messrs Hicks, Graves, and Pinners existing relevant interests at the time of becoming directors.
Other changes during the year relate to the issue of shares to Messrs Hicks and
Graves and their related parties, as part consideration for
the acquisition by the Company of the Ensurance Capital shares currently held by said parties. Shareholders approved the issue of these
Consideration Shares at the General Meeting.

b. Options in Ensurance Limited held by each Key Management Person

2016 – Group

Group Key
Management Person

Adam Davey

Stefan Hicks

Brett Graves

Grant Priest

Neil Pinner

Brian Thomas

Michael Huntly

Peter Fielding

Sam Hallab

Balance at
start of year
No.

250,000

Granted as
Remuneration
during the year
No.

Exercised
during the year
No.

Other changes
during the year
No.

Balance at
end of year
No.

250,000

Vested and
Exercisable
No.

Not Vested
No.

250,000

250,000
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250,000
2016 A n n u A l R e p o R t

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2015 – Group

Group Key

Managemen t Person

Balance at

Granted as
Remuneration

Exercised

Other changes

Balance at

Vested and

Exercisable

start of year

during the year

end of year

Not Vested

No.

250,000

Adam Davey

Stefan Hicks

Brett Graves

Brian Thomas

Neil Pinner

Michael Huntly

250,000

2015

Group Key Management Person

Adam Davey (1)

Stefan Hicks (2) (3)

Brett Graves (2) (3)

Neil Pinner (3)

Balance at

start of year

No.

4,520,000

105,000

20,000

527,500

DiRec toR s Rep oR t c on t.

Brian Thomas

30,001

Michael Huntly

5,202,501

Received during

the year as

the year on the

compensation

exercise of options

Other changes

during the year

No.

Balance at

end of year

No.

4,520,000

No.

25,875,006

25,980,006

2,874,994

2,894,994

527,500

30,001

1,250,000

30,000,000

35,202,501

(1) Mr Davey's shares include 4,000,000 partly - paid ordinary shares held b y Mr Davey and his related parties.
(2)
(3)

b. Options in Ensurance Limited held by each Key Management Person

2016 – Group

Group Key
Management Person

Adam Davey

Stefan Hicks

Brett Graves

Grant Priest

Neil Pinner

Brian Thomas

Michael Huntly

Peter Fielding

Sam Hallab

2015 – Group

Group Key
Managemen t Person

Adam Davey

Stefan Hicks

Brett Graves

Brian Thomas

Neil Pinner

Michael Huntly

Balance at
start of year
No.

250,000

Balance at
start of year
No.

250,000

Granted as
Remuneration
during the year
No.

Exercised
during the year
No.

Other changes
during the year
No.

Granted as
Remuneration
during the year
No.

Exercised
during the year
No.

Other changes
during the year
No.

Balance at
end of year
No.

250,000

Balance at
end of year
No.

250,000

c. Performance Rights of Ensurance Limited held by each Key Management Person

2016 – Group

Group Key
Management Person

Balance at
start of year
No.

Granted as
Remuneration
during the year
No.

Other changes
during the year
No.

Adam Davey

Stefan Hicks

Brett Graves

Grant Priest

Neil Pinner

Brian Thomas

Michael Huntly

Peter Fielding

Sam Hallab

2015: Nil.

1,500,000

4,000,000

1,000,000

250,000

7,000,000

Balance at
end of year
No.

1,500,000

4,000,000

1,000,000

250,000

7,000,000

Vested and
Exercisable
No.

Not Vested
No.

250,000

Not Vested
No.

250,000

Not Vested
No.

1,500,000

4,000,000

1,000,000

250,000

7,000,000

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13.7 Other Equity-related KMP Transactions

There have been no other transactions involving equity instruments other

than those described in the tables above relating to options, rights and

shareholdings.

13.8 Loans to Key Management Personnel

The Group current has a loan payable to Mr Hicks’ of $2,485 as at 30 June

2016 (2015: $2,485).

13.9 Other transactions with Key Management Personnel and

or their Related Parties

There have been no other transactions involving equity instruments other than

those described in the tables above. For details of other transactions with KMP,

refer Note 24 Related party transactions.

END OF REMUNERATION REPORT

This Report of the Directors, incorporating the Remuneration Report, is signed

in accordance with a resolution of directors made pursuant to s.298(2) of the

Corporations Act 2001 (Cth).

ADAM DAVEY

Chairman

Dated this Thursday, 29 September 2016

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2016 A n n u A l R e p o R t

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AuDi toR’s inDepenDence D ecl AR At ion

Auditor's independence declaration
Under Section 307c Of The Corporations Act 2001 (Cth)
To The Directors Of Ensurance Limited

I declare that, to the best of my knowledge and belief, during the year ended 30 June 2016 there have been:

i. No contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the

audit; and

ii. No contraventions of any applicable code of professional conduct in relation to the audit.

(insert date)

TO BE REPLACED BY AUDITORS

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2016 A n n u A l R e p o R t

017

Audited
Disrupting insurance
Disrupting insurance
Our perspective
Our perspective
financial report

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2016 A n n u A l R e p o R t

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AuDi t eD FinAnciAl Rep o R t c on t.
ANNUAL REPORT
30 June 2016

ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

Consolidated statement of profit or loss and other comprehensive income
for the year ended 30 June 2016

Continuing operations

Revenue

Other income

Business development

Compliance costs

Computers and communications

Corporate transaction accounting expense

Depreciation and amortisation

Employment costs

Finance costs

Legal and consulting fees

Occupancy costs

Share-based payments

Travel and accommodation

Other expenses

Loss before tax

Income tax benefit / (expense)

Net (loss) / profit for the year

Other comprehensive income, net of income tax

Items that will not be reclassified subsequently to profit or loss:

 Revaluation of assets

Items that may be reclassified subsequently to profit or loss:

Other comprehensive income for the year, net of tax

Note

2016
$

2015
(restated)
$

3,033,103

2,650,393

679,195

31,291

3,712,298

2,681,684

(603,698)

(177,559)

(327,478)

(242,553)

(135,341)

(257,482)

(2,738,961)

(448,778)

(350,379)

(3,300,569)

(1,994,551)

(18,242)

(73,683)

(274,707)

(8,980)

(140,677)

(187,338)

(110,608)

(110,697)

(181,810)

(176,414)

(116,598)

(1,849,411)

(3,733,710)

71,981

(31,548)

(1,777,430)

(3,765,258)

11,729

(2,313)

Total comprehensive income attributable to members of the parent entity

(1,765,701)

(3,767,571)

Profit/(loss) for the period attributable to:

Non-controlling interest

Owners of the parent

Total comprehensive income/(loss) attributable to:

Non-controlling interest

Owners of the parent

Earnings per share:

Basic and diluted loss per share (cents per share)

(36,522)

(1,777,430)

(3,728,736)

(36,522)

(1,765,701)

(3,731,049)

₵

(3.11)

₵

(10.91)

The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the accompanying notes.

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2016 A n n u A l R e p o R t

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AuDi t eD FinAnciAl Rep o R t c on t.
ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

Consolidated statement of financial position
as at 30 June 2016

Current assets
Cash and cash equivalents

Trade and other receivables

Trust account insurer assets

Current tax assets

Other current assets

Total current assets

Non-current assets
Financial assets

Plant and equipment

Intangible assets

Total non-current assets

Total assets

Current liabilities

Trade and other payables

Trust account insurer liabilities

Current tax liabilities

Provisions

Borrowings

Total current liabilities

Non-current liabilities
Provisions

Total non-current liabilities

Total liabilities

Net assets

Equity

Issued capital

Reserves

Accumulated losses

Non-controlling interest

Total equity

Note

ANNUAL REPORT
30 June 2016

2016
$

389,645

19,426

2015
(restated)
$

2,485,532

56,507

3,720,652

3,068,194

33,872

603

19,884

4,163,595

5,630,720

96,789

129,899

1,768,131

81,060

100,119

835,679

1,994,819

1,016,858

6,158,414

6,647,578

1,163,051

3,720,652

233,114

137,439

649,731

3,068,194

31,548

97,887

175,847

5,254,256

4,023,207

62,092

25,584

5,316,348

4,048,791

842,066

2,598,787

19, 3a

6,097,054

18,667

(2,042)

(5,273,655)

(3,496,225)

842,066

2,598,787

The consolidated statement of financial position is to be read in conjunction with the accompanying notes.

P a g e | 17

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2016 A n n u A l R e p o R t

020

AuDi t eD FinAnciAl Rep o R t c on t.
ANNUAL REPORT
30 June 2016

Consolidated statement of changes in equity
for the year ended 30 June 2016

Note

Issued
Capital

Accumulated
Losses

121,210

312,261

(3,728,736)

Balance at 1 July 2014

Profit / (loss) for the year attributable
owners of the parent (restated)

Other comprehensive income for the
year attributable owners of the parent

Total comprehensive income for the
year attributable owners of the
parent (restated)

Transaction with owners, directly in
equity

Shares issued during the year

Transaction costs (restated)

19a

6,396,337

(420,493)

Acquisition of minority interest

(79,750)

Balance at 30 June 2015 (restated)

6,097,054

(3,496,225)

Balance at 1 July 2015

6,097,054

(3,496,225)

Loss for the year attributable owners
of the parent

Other comprehensive income for the
year attributable owners of the parent

Total comprehensive income for the
year attributable owners of the
parent

Transaction with owners, directly in
equity

Performance rights issues during the
year

(1,777,430)

ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

Share-based
Payment
Reserve

Revaluation
Reserve

Non-
controlling
Interest

Total

271

(43,228)

390,514

(36,522)

(3,765,258)

(2,313)

(36,522)

(3,767,571)

6,396,337

(420,493)

79,750

(2,042)

11,729

2,598,787

(1,777,430)

11,729

(1,765,701)

Balance at 30 June 2016

6,097,054

(5,273,655)

8,980

9,687

The consolidated statement of changes in equity is to be read in conjunction with the accompanying notes.

8,980

842,066

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021

AuDi t eD FinAnciAl Rep o R t c on t.
ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

Consolidated statement of cash flows
for the year ended 30 June 2016

Cash flows from operating activities

Receipts from customers

Interest received

Interest and borrowing costs paid

Payments to suppliers and employees

Research and development grant income received

(Payments) / refund of income taxes

Net used in operating activities

Cash flows from investing activities

Proceeds from asset development grant funds

Payment for development of intangible assets

Payment for subsidiary net of cash acquired

(Payment for) / proceeds from financial assets

Purchase of plant and equipment

Net (used in) / cash from investing activities

Cash flows from financing activities

Net proceeds from issue of shares

Repayment of borrowings

Net cash provided by financing activities

ANNUAL REPORT
30 June 2016

Note

2016
$

2015
$

3,308,311

2,962,270

43,093

10,790

(18,242)

(110,608)

(4,554,980)

(3,507,474)

41,036

243,530

9d.i

(1,180,782)

(401,492)

146,128

439,571

(952,958)

(919,451)

2,920,916

(4,000)

88,139

(65,867)

(75,104)

(876,697)

2,454,071

150,000

(31,766)

(161,231)

(31,766)

(11,231)

Net (decrease) / increase in cash held

(2,089,245)

2,041,348

Cash and cash equivalents at the beginning of the year

2,346,703

305,355

Cash and cash equivalents at the end of the year

257,458

2,346,703

The consolidated statement of cash flows is to be read in conjunction with the accompanying notes.

P a g e | 19

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2016 A n n u A l R e p o R t

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AuDi t eD FinAnciAl Rep o R t c on t.
ANNUAL REPORT
30 June 2016

Notes to the consolidated financial statements
for the Year Ended 30 June 2016

ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

Statement of significant accounting policies

Note 1
These are the consolidated financial statements and notes of Ensurance Limited (Ensurance or the Company) and controlled
entities (collectively the Group). Ensurance is a company limited by shares, domiciled and incorporated in Australia.

The separate financial statements of Ensurance, as the parent entity, have not been presented with this financial report as
permitted by the Corporations Act 2001 (Cth).

The financial statements were authorised for issue on 29 September 2016 by the directors of the Company.

a. Basis of preparation
The financial statements comprise the consolidated financial statements of the Group. For the purposes of preparing the
consolidated financial statements, the Company is a for-profit entity. Material accounting policies adopted in the preparation
of these financial statements are presented below. They have been consistently applied unless otherwise stated.

i. Statement of compliance
These financial statements are general purpose financial statements which have been prepared in accordance with
Australian Accounting Standards and Interpretations of the Australian Accounting Standards Board (AAS Board) and
International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), and
the Corporations Act 2001 (Cth).

Australian Accounting Standards (AASBs) set out accounting policies that the AAS Board has concluded would result in a
financial report containing relevant and reliable information about transactions, events and conditions to which they apply.
Compliance with AASBs ensures that the financial statements and notes also comply with IFRS as issued by the IASB.

ii. Going Concern
The consolidated financial statements have been prepared on an accruals basis and are based on historical costs modified,
where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.
Historical cost is generally based on the fair values of the consideration given in exchange for goods and services.

The financial statements have been prepared on a going concern basis, which contemplates the continuity of normal
business activity and the realisation of assets and the settlement of liabilities in the ordinary course of business.

The Group incurred a loss for the year of $1,777,430 (2015 restated: $3,765,258 loss) and a net cash out-flow of
$2,089,245 (2015: $2,041,348 in-flow). The net assets of the Group have decreased from 30 June 2015 by $1,756,721 to
$842,066 at 30 June 2016 (2015: $2,598,787). As at 30 June 2016, the Group's cash and cash equivalents decreased from 30
June 2015 by $2,095,887 to $389,645 at 30 June 2016 (2015: $2,485,532) and had a working capital deficit of $1,124,533
(2015: $1,587,629 working capital).

Based on a cash flow forecast, the Group has sufficient working capital to fund its mandatory obligations for the period
ending 12 months from the date of this report. Should the Group be unable to generate sufficient funds from its operations
or it is unable to raise sufficient capital, the planned operations and software development may have to be amended. The
Board is confident in securing sufficient additional capital to fund the operations and software development program. The
Directors consider the going concern basis of preparation to be appropriate based on forecast cash flows and confidence in
raising additional funds.

Further, subsequent to year end, Ensurance commenced the process of raising $3.0 million via a Convertible Notes issue. At
the date of this report $1.422 million had been subscribed.

iii. Reverse acquisition
Ensurance (formerly Parker Resources Limited) is listed on the Australian Securities Exchange. The Company completed the
legal acquisition of Ensurance Capital Pty Ltd (Ensurance Capital) on 5 May 2015.

Ensurance Capital (the legal subsidiary) was deemed to be the acquirer for accounting purposes as it has obtained control
over the operations of the legal acquirer Ensurance (accounting subsidiary). Accordingly, the consolidated financial
statements of Ensurance have been prepared as a continuation of the financial statements of Ensurance Capital. Ensurance
Capital (as the deemed acquirer) has accounted for the acquisition of Ensurance from 5 May 2015. The comparative
information presented in the consolidated financial statements is that of Ensurance Capital.

The impact of the reverse acquisition on each of the primary statements is as follows:

The consolidated statement of comprehensive income:




for the year to 30 June 2016 comprises 12 months of the Group; and

for the comparative period comprises 12 months of Ensurance Capital and the period from 5 May 2015 to 30 June
2015 of Ensurance.

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2016 A n n u A l R e p o R t

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023

AuDi t eD FinAnciAl Rep o R t c on t.
ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

Notes to the consolidated financial statements
for the Year Ended 30 June 2016

Note 1

Statement of significant accounting policies

ANNUAL REPORT
30 June 2016

The consolidated statement of financial position represents the financial position of the Group as at 30 June 2016 and

the comparative period, 30 June 2015.

The consolidated statement of changes in equity:



for the year ended 30 June 2016 comprises the Group's balances at 1 July 2015, its loss for the year and
transactions with equity holders for 12 months. The number of shares on issue at year end represents those of
Ensurance only.

for the year ended 30 June 2015 comprises Ensurance Capital's balance at 1 July 2014, its loss for the year and
transactions with equity holders for 12 months. It also comprises Ensurance transactions within equity from
5 May 2015 to 30 June 2015 and the equity value of Ensurance Capital and Ensurance at 30 June 2015. The number
of shares on issue at year end represents those of Ensurance only.

The consolidated statement of cash flows:



the cash transactions for the 12 months of the Group; and

the cash balance of Group as at 1 July 2015;

for the year ended 30 June 2016 comprises:
o
o
o
for the year ended 30 June 2015 comprises:
o
o

the cash balances of the Group at 30 June 2016.

the cash balance of Ensurance Capital as at 1 July 2014;

the cash transactions for the twelve months (twelve months of Ensurance Capital and the period from 5 May
2015 to 30 June 2015 of Ensurance); and

the cash balances of Ensurance Capital and Ensurance at 30 June 2015.

iv. Use of estimates and judgments
The preparation of consolidated financial statements requires management to make judgements, estimates and
assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses.
These estimates and associated assumptions are based on historical experience and various 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. Actual results may differ from these estimates.

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 affected.

Judgements made by management in the application of AASBs that have significant effect on the consolidated financial
statements and estimates with a significant risk of material adjustment in the next year are discussed in Note 1p.

v. Comparative figures
Where required by AASBs comparative figures have been adjusted to conform with changes in presentation for the current
financial year.

Where the Group retrospectively applies an accounting policy, makes a retrospective restatement or reclassifies items in its
financial statements, an additional (third) statement of financial position as at the beginning of the preceding period in
addition to the minimum comparative financial statements is presented.

b. Accounting Policies
The Group has consistently applied the following accounting policies to all periods presented in the financial statements. The
Group has considered the implications of new and amended Accounting Standards applicable for annual reporting periods
beginning after 1 July 2016 but determined that their application to the financial statements is either not relevant or not
material.

c. Principles of consolidation
As at reporting date, the assets and liabilities of all controlled entities have been incorporated into the consolidated financial
statements as well as their results for the year then ended. Where controlled entities have entered (left) the Consolidated
Group during the year, their operating results have been included (excluded) from the date control was obtained (ceased).

i. Business combinations
Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on
which control is transferred to the Group. Control exists when the Group is exposed to variable returns from another entity
and has the ability to affect those returns through its power over the entity.

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024

AuDi t eD FinAnciAl Rep o R t c on t.
ANNUAL REPORT
30 June 2016

Notes to the consolidated financial statements
for the Year Ended 30 June 2016

Note 1

Statement of significant accounting policies

The Group measures goodwill at the acquisition date as:

the fair value of the consideration transferred; plus

ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

the recognised amount of any non-controlling interests in the acquire; plus

if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree;

less

the net recognised amount of the identifiable assets acquired and liabilities assumed.

When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.

The consideration transferred does not include amounts related to settlement of pre-existing relationships. Such amounts
are generally recognised in profit or loss.

Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Group
incurs in connection with a business combination are expensed as incurred.

Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is
classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to
the fair value of the contingent consideration are recognised in profit or loss.

ii. Subsidiaries
Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included in the consolidated
financial statements from the date that control commences until the date that control ceases.

The accounting policies of subsidiaries have been changed where necessary to align them with the policies adopted by the
Group. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even
if doing so causes the non-controlling interests to have a deficit balance.

A list of controlled entities is contained in Note 21 Controlled Entities of the financial statements.

iii. Loss of control
Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests
and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is
recognised in profit or loss. If the Group retains any interest in the previous subsidiary, than such interest is measured at
fair value at the date control is lost. Subsequently it is accounted for as an equity-accounted investee or as an available-for-
sale financial asset depending on the level of influence retained.

iv. Transactions eliminated on consolidation
All intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions,
are eliminated in preparing the consolidated financial statements.

d. Foreign currency transactions and balances

i. Functional and presentation currency
The functional currency of each of the Group's entities is measured using the currency of the primary economic
environment in which that entity operates. The consolidated financial statements are presented in Australian dollars which
is the parent entity's functional and presentation currency.

ii. Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the
transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items measured
at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured
at fair value are reported at the exchange rate at the date when fair values were determined.

Exchange differences arising on the translation of monetary items are recognised in the profit or loss except where
deferred in equity as a qualifying cash flow or net investment hedge.

Exchange differences arising on the translation of non-monetary items are recognised directly in other comprehensive
income to the extent that the gain or loss is directly recognised in other comprehensive income, otherwise the exchange
difference is recognised in the profit or loss.

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025

AuDi t eD FinAnciAl Rep o R t c on t.
ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

Notes to the consolidated financial statements
for the Year Ended 30 June 2016

Note 1

Statement of significant accounting policies

ANNUAL REPORT
30 June 2016

iii. Group companies and foreign operations
The financial results and position of foreign operations whose functional currency is different from the Group's
presentation currency are translated as follows:

assets and liabilities are translated at year-end exchange rates prevailing at that reporting date;

income and expenses are translated at average exchange rates for the period; and

retained earnings are translated at the exchange rates prevailing at the date of the transaction.

Exchange differences arising on translation of foreign operations are transferred directly to the Group's foreign currency
translation reserve in the statement of financial position. These differences are recognised in the profit or loss in the period
in which the operation is disposed.

e. Taxation

Income tax

i.
The income tax expense/(benefit) for the year comprises current income tax expense/(benefit) and deferred tax
expense/(benefit).

Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable
income tax rates enacted, or substantially enacted, as at reporting date. Current tax liabilities (assets) are therefore
measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.

Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as
well as unused tax losses.

Current and deferred income tax expense (benefit) is charged or credited outside profit or loss when the tax relates to
items recognised outside profit or loss.

Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have
been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial
recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable
profit or loss.

Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is
realised or the liability is settled, based on tax rates enacted or substantively enacted at reporting date. Their measurement
also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or
liability.

Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is
probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.

Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures,
deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be
controlled and it is not probable that the reversal will occur in the foreseeable future.

Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net
settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets
and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to
income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it
is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in
future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.

Where the Group receives the Australian Government's Research and Development Tax Incentive, the Group accounts for
the refundable tax offset under AASB 112. Funds are received as a rebate through the parent company's income tax return
and disclosed as such in Note 7 Income Tax.

ii. Tax consolidation

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026

AuDi t eD FinAnciAl Rep o R t c on t.
ANNUAL REPORT
30 June 2016

Notes to the consolidated financial statements
for the Year Ended 30 June 2016

Note 1

Statement of significant accounting policies

ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

Under the tax funding agreement, the members of the Group are required to contribute to the head entity for their
current tax liabilities. The assets and liabilities arising under the tax funding agreements are recognised as intercompany
assets and liabilities at call. Members of the tax consolidated group via the tax sharing agreement may be called to provide
for the income tax liabilities between the entities should the head entity default on its tax payment obligations. No amount
has been recognised in respect of this component of the agreement as the outcome is considered remote.

iii. Goods and Services Tax (GST)
Revenues, expenses, and assets are recognised net of the amount of GST, except where the amount of GST incurred is not
recoverable from the taxation authority. In these circumstances the GST is recognised as part of the cost of acquisition of
the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown
inclusive of GST.

The net amount of GST recoverable from, or payable to, the Australian Taxation Office is included as a current asset or
liability in the balance sheet.

Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and
financing activities, which are disclosed as operating cash flows.

f. Fair Value

i. Fair Value of Assets and Liabilities
The Group measures some of its assets and liabilities at fair value on either a recurring or non-recurring basis, depending
on the requirements of the applicable AASB.

Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a liability in an orderly
unforced transaction between independent, knowledgeable and willing market participants at the measurement date.

As fair value is a market-based measure, the closest equivalent observable market pricing information is used to determine
fair value. Adjustments to market values may be made having regard to the characteristics of the specific asset or liability.
The fair values of assets and liabilities that are not traded in an active market are determined using one or more valuation
techniques. These valuation techniques maximise, to the extent possible, the use of observable market data.

To the extent possible, market information is extracted from either the principal market for the asset or liability (i.e. the
market with the greatest volume and level of activity for the asset or liability) or, in the absence of such a market, the most
advantageous market available to the entity at the end of the reporting period (i.e. the market that maximises the receipts
from the sale of the asset or minimises the payments made to transfer the liability, after taking into account transaction
costs and transport costs).

For non-financial assets, the fair value measurement also takes into account a market participant's ability to use the asset
in its highest and best use or to sell it to another market participant that would use the asset in its highest and best use.

The fair value of liabilities and the entity's own equity instruments (excluding those related to share-based payment
arrangements) may be valued, where there is no observable market price in relation to the transfer of such financial
instruments, by reference to observable market information where such instruments are held as assets. Where this
information is not available, other valuation techniques are adopted and, where significant, are detailed in the respective
note to the financial statements.

ii. Fair value hierarchy
AASB 13 Fair Value Measurement requires the disclosure of fair value information by level of the fair value hierarchy, which
categorises fair value measurements into one of three possible levels based on the lowest level that an input that is
significant to the measurement can be categorised into as follows:

Level 1

Level 2

Level 3

Measurements based on quoted prices
(unadjusted) in active markets for
identical assets or liabilities that the
entity can access at the measurement
date.

Measurements based on inputs other
than quoted prices included in Level 1
that are observable for the asset or
liability, either directly or indirectly.

Measurements based on unobservable
inputs for the asset or liability.

The fair values of assets and liabilities that are not traded in an active market are determined using one or more valuation
techniques. These valuation techniques maximise, to the extent possible, the use of observable market data. If all
significant inputs required to measure fair value are observable, the asset or liability is included in Level 2. If one or more
significant inputs are not based on observable market data, the asset or liability is included in Level 3.

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027

AuDi t eD FinAnciAl Rep o R t c on t.
ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

Notes to the consolidated financial statements
for the Year Ended 30 June 2016

Note 1

Statement of significant accounting policies

ANNUAL REPORT
30 June 2016

iii. Valuation techniques
The Group selects a valuation technique that is appropriate in the circumstances and for which sufficient data is available
to measure fair value. The availability of sufficient and relevant data primarily depends on the specific characteristics of the
asset or liability being measured. The valuation techniques selected by the Group are consistent with one or more of the
following valuation approaches:

Market approach: valuation techniques that use prices and other relevant information generated by market transactions for

identical or similar assets or liabilities.

Income approach: valuation techniques that convert estimated future cash flows or income and expenses into a single
discounted present value.

Cost approach: valuation techniques that reflect the current replacement cost of an asset at its current service capacity.

Each valuation technique requires inputs that reflect the assumptions that buyers and sellers would use when pricing the
asset or liability, including assumptions about risks. When selecting a valuation technique, the Group gives priority to those
techniques that maximise the use of observable inputs and minimise the use of unobservable inputs. Inputs that are
developed using market data (such as publicly available information on actual transactions) and reflect the assumptions
that buyers and sellers would generally use when pricing the asset or liability are considered observable, whereas inputs
for which market data is not available and therefore are developed using the best information available about such
assumptions are considered unobservable.

g. Plant and equipment

i. Recognition and measurement
Items of plant and equipment are measured on the cost basis and carried at cost less accumulated depreciation (see below)
and impairment losses (see Note 1i Impairment of non-financial assets).

Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets
includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working
condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are
located, and an appropriate proportion of production overheads.

The carrying amount of plant and equipment is reviewed annually by Directors to ensure it is not in excess of the
recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows
that will be received from the assets employment and subsequent disposal. The expected net cash flows have not been
discounted to their present values in determining recoverable amounts.

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. Subsequent costs
The cost of replacing part of an item of plant and equipment is recognised in the carrying amount of the item if it is
probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured
reliably. Any costs of the day-to-day servicing of plant and equipment are recognised in the income statement as an
expense as incurred.

iii. Depreciation
Depreciation is charged to the income statement on a straight-line basis over the asset's useful life to the consolidated
group commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the
shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.

Depreciation rates and methods are reviewed annually for appropriateness. The depreciation rates used for the current
and comparative period are:

Fixtures, furniture, and equipment

Plant and equipment

2016
%

2015
%

11.25 – 37.50

25.00 – 37.50

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater
than its estimated recoverable amount.

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028

AuDi t eD FinAnciAl Rep o R t c on t.
ANNUAL REPORT
30 June 2016

Notes to the consolidated financial statements
for the Year Ended 30 June 2016

Note 1

Statement of significant accounting policies

ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

Gains and losses on disposal of an item of plant and equipment are determined by comparing the proceeds from disposal
with the carrying amount of plant and equipment and are recognised net within “other income” in profit or loss.

h. Non-current assets held for disposal
Non-current assets and disposal groups are classified as held for sale and measured at the lower of carrying amount and fair
value less costs to sell, where the carrying amount will be recovered principally through sale as opposed to continued use. No
depreciation or amortisation is charged against assets classified as held for sale.

Classification as "held for sale" occurs when: management has committed to a plan for immediate sale; the sale is expected to
occur within one year from the date of classification; and active marketing of the asset has commenced. Such assets are
classified as current assets.

A discontinued operation is a component of an entity, being a cash-generating unit (or a group of cash generating units), that
either has been disposed of, or is classified as held for sale, and: represents a separate major line of business or geographical
area of operations; is part of a single coordinated plan to dispose of a separate major line of business or geographical area of
operations; or is a subsidiary acquired exclusively with the view to resale.

Impairment losses are recognised for any initial or subsequent write-down of an asset (or disposal group) classified as held for
sale to fair value less costs to sell. Any reversals of impairment recognised on classification as held for sale or prior to such
classification are recognised as a gain in profit or loss in the period in which it occurs.

Impairment of non-financial assets

i.
The carrying amounts of the Group's non-financial assets, other than deferred tax assets (see Note 1e) 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.

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount.
A cash-generating unit is the smallest identifiable asset group that generates cash flows that largely are independent from
other assets and groups. Impairment losses are recognised in the income statement, unless the asset has previously been
revalued, in which case the impairment loss is recognised as a reversal to the extent of that previous revaluation with any
excess recognised through the income statement. Impairment losses recognised in respect of cash-generating units are
allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of
the other assets in the unit on a pro rata basis.

The recoverable amount of an asset or cash-generating unit is the greater of its fair value less costs to sell and value in use. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not
generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the
asset belongs.

Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has
decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine
the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed
the carrying amount that would have been determined, net of depreciation and amortisation, if no impairment loss had been
recognised.

j. Financial instruments

Initial recognition and measurement

i.
A financial instrument is recognised if the Group becomes party to the contractual provisions of the instrument. Financial
assets are derecognised if the Group's contractual rights to the cash flows from the financial assets expire or if the Group
transfers the financial asset to another party without retaining control or substantially all risks and rewards of the asset.
Financial liabilities are derecognised if the Group's obligations specified on the contract expire or are discharged or
cancelled.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to
the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair
value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as
appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial
liabilities at fair value through profit or loss are recognised immediately in profit or loss.

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029

AuDi t eD FinAnciAl Rep o R t c on t.
ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

Notes to the consolidated financial statements
for the Year Ended 30 June 2016

Note 1

Statement of significant accounting policies

ANNUAL REPORT
30 June 2016

ii. Non-derivative financial instruments
Non-derivative financial instruments comprise investments in equity securities, trade and other receivables, cash and cash
equivalents and trade and other payables.

Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through
profit or loss, any directly attributable transactions costs. Subsequent to initial recognition non-derivative financial
instruments are measured as described below.

iii. Classification and Subsequent Measurement

Cash and cash equivalents

(1)
Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short-term highly liquid
investments with original maturities of nine months or less, and bank overdrafts. Bank overdrafts are shown within
short-borrowings in current liabilities on the Statement of financial position.

Loans

(2)
Loans are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market
and are subsequently measured at amortised cost.

Loans are included in current assets, except for those which are not expected to mature within 12 months after the end
of the reporting period.

Trade and other receivables

(3)
Receivables are usually settled within 60 days. Receivables expected to be collected within 12 months of the end of the
reporting period are classified as current assets. All other receivables are classified as non-current assets.

Trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost using
the effective interest method, less any provision for impairment. Collectability of trade and other receivables are
reviewed on an ongoing basis. An impairment loss is recognised for debts which are known to be uncollectible. An
impairment provision is raised for any doubtful amounts (see Note 1j.vii).

Trade and other payables

(4)
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year
which are unpaid and stated at their amortised cost. The amounts are unsecured and are generally settled on 30 day
terms.

Share capital

(5)
Ordinary issued capital is recorded at the consideration received. Incremental costs directly attributable to the issue of
ordinary shares and share options are recognised as a deduction from equity, net of any related income tax benefit.
Ordinary issued capital bears no special terms or conditions affecting income or capital entitlements of the
shareholders.

iv. Amortised cost
Amortised cost is calculated as the amount at which the financial asset or financial liability is measured at initial recognition
less principal repayments and any reduction for impairment, and adjusted for any cumulative amortisation of the
difference between that initial amount and the maturity amount calculated using the effective interest method.

v. Fair value
Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to
determine the fair value for all unlisted securities, including recent arm's length transactions, reference to similar
instruments and option pricing models.

vi. Effective interest method
The effective interest method is used to allocate interest income or interest expense over the relevant period and is
equivalent to the rate that discounts estimated future cash payments or receipts (including fees, transaction costs and
other premiums or discounts) over the expected life (or when this cannot be reliably predicted, the contractual term) of the
financial instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected future net
cash flows will necessitate an adjustment to the carrying amount with a consequential recognition of an income or expense
item in profit or loss.

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030

AuDi t eD FinAnciAl Rep o R t c on t.
ANNUAL REPORT
30 June 2016

Notes to the consolidated financial statements
for the Year Ended 30 June 2016

Note 1

Statement of significant accounting policies

ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

vii. Impairment
A financial asset is assessed at each reporting date 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.

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.

Financial assets are tested for impairment on an individual basis.

All impairment losses are recognised in the income statement.

An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was
recognised. For financial assets measured at amortised cost the reversal is recognised in the income statement.

viii. Derecognition
Financial assets are derecognised where the contractual rights to cash flow expires or the asset is transferred to another
party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the
asset. Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expired. The
difference between the carrying value of the financial liability extinguished or transferred to another party and the fair
value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss.

ix. Finance income and expenses
Finance income comprises interest income on funds invested (including available-for-sale financial assets), gains on the
disposal of available-for-sale financial assets and changes in the fair value of financial assets at fair value through profit or
loss. Interest income is recognised as it accrues in profit or loss, using the effective interest method.

Financial expenses comprise interest expense on borrowings calculated using the effective interest method, unwinding of
discounts on provisions, changes in the fair value of financial assets at fair value through profit or loss and impairment
losses recognised on financial assets. All borrowing costs are recognised in profit or loss using the effective interest
method.

Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a
substantial period of time to prepare for their intended use or sale, are added to the cost of those assets, until such time as
the assets are substantially ready for their intended use or sale. All other borrowing costs are recognised in income in the
period in which they are incurred.

Foreign currency gains and losses are reported on a net basis.

k. Employee benefits

i. Short-term benefits
Liabilities for employee benefits for wages, salaries and annual leave that are expected to be settled within 12 months of
the reporting date represent present obligations resulting from employees' services provided to the reporting date and are
calculated at undiscounted amounts based on remuneration wage and salary rates that the Group expects to pay at the
reporting date including related on-costs, such as workers compensation insurance and payroll tax.

Non-accumulating non-monetary benefits, such as medical care, housing, cars and free or subsidised goods and services,
are expensed based on the net marginal cost to the Group as the benefits are taken by the employees.

ii. Other long-term benefits
The Group's obligation in respect of long-term employee benefits other than defined benefit plans is the amount of future
benefit that employees have earned in return for their service in the current and prior periods plus related on-costs; that
benefit is discounted to determine its present value, and the fair value of any related assets is deducted.

iii. Retirement benefit obligations: Defined contribution superannuation funds
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions onto a
separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to
defined contribution superannuation funds are recognised as an expense in the income statement as incurred.

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031

AuDi t eD FinAnciAl Rep o R t c on t.
ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

Notes to the consolidated financial statements
for the Year Ended 30 June 2016

Note 1

Statement of significant accounting policies

ANNUAL REPORT
30 June 2016

iv. Termination benefits
When applicable, the Group recognises a liability and expense for termination benefits at the earlier of: (a) the date when
the Group can no longer withdraw the offer for termination benefits; and (b) when the Group recognises costs for
restructuring pursuant to AASB 137 Provisions, Contingent Liabilities and Contingent Assets and the costs include
termination benefits. In either case, unless the number of employees affected is known, the obligation for termination
benefits is measured on the basis of the number of employees expected to be affected. Termination benefits that are
expected to be settled wholly before 12 months after the annual reporting period in which the benefits are recognised are
measured at the (undiscounted) amounts expected to be paid. All other termination benefits are accounted for on the
same basis as other long-term employee benefits.

v. Equity-settled compensation
The Group operates an employee share option plan. The fair value of options granted is recognised as an employee
expense with a corresponding increase in equity. The fair value is measured at grant date and spread over the period
during which the employees become unconditionally entitled to the options. The fair value of the options granted is
measured using the Black-Scholes pricing model, taking into account the terms and conditions upon which the options
were granted. The amount recognised is adjusted to reflect the actual number of share options that vest except where
forfeiture is only due to market conditions not being met.

l. Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is
probable that an outflow of economic benefits will results and that outflow can be reliably measured.

Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and, when appropriate, the risks specific to the liability.

m. Leases
Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal
ownership, are transferred to entities in the Group are classified as finance leases.

Leased assets are depreciated on a straight-line basis over their estimated useful lives where it is likely that the Group will
obtain ownership of the asset or over the term of the lease.

Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are recognised in the
income statement on a straight-line basis over the term of the lease.

Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the life of the
lease term.

n. Revenue and other income
Interest revenue is recognised in accordance with Note 1j.ix Finance income and expenses.

Revenue is measured at the fair value of the consideration received or receivable after taking into account any trade discounts
and volume rebates allowed. When the inflow of consideration is deferred, it is treated as the provision of financing and is
discounted at a rate of interest that is generally accepted in the market for similar arrangements. The difference between the
amount initially recognised and the amount ultimately received is interest revenue.

All revenue is stated net of the amount of GST (Note 1e.iii Goods and Services Tax (GST)).

o. Segment reporting
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 Managing Director to make decisions about resources to be
allocated to the segment and assess its performance, and for which discrete financial information is available.

p. Critical Accounting Estimates and Judgments
Management discusses with the Board the development, selection and disclosure of the Group's critical accounting policies and
estimates and the application of these policies and estimates. The estimates and judgements that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed
below.

P a g e | 29

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032

AuDi t eD FinAnciAl Rep o R t c on t.
ANNUAL REPORT
30 June 2016

Notes to the consolidated financial statements
for the Year Ended 30 June 2016

Note 1

Statement of significant accounting policies

ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

i. Key Estimate – Taxation
Balances disclosed in the financial statements and the notes thereto, related to taxation, are based on the best estimates
of directors. These estimates take into account both the financial performance and position of the company as they pertain
to current income taxation legislation, and the directors understanding thereof. No adjustment has been made for pending
or future taxation legislation. The current income tax position represents the directors' best estimate, pending an
assessment by tax authorities in relevant jurisdictions. Refer Note 7 Income Tax.

ii. Key Estimate —Impairment

(1)

(2)

Legal Parent Financial Assets related to Subsidiaries
At the end of each financial year, an assessment is made on whether there are indicators that the Company’s
investments to subsidiary and loan to subsidiaries are impaired. Where necessary, the Company’s and Group’s
assessments are based on the estimation of the value-in-use of the assets defined in FRS 36 Impairment of Assets
by forecasting the expected future cash flows for a period of up to 5 years, using a suitable discount rate in order
to calculate the present value of those cash flows. The Company’s carrying amount of investments in subsidiaries
as at 30 June 2016 was $nil (2015:$7,525,195), and loans $714,423 (2015: $567,669 after an impairment loss of
$9,029,808 was recognised in 2016 (2015: $nil). The impairment losses have been included in the Company’s loss.
Details of the impairment loss calculation are set out in Note 30.

Intangible Assets
The Company assesses impairment of intangible assets at each reporting date by evaluating conditions specific to
the Company and to the particular asset that may lead to impairment. If an impairment trigger exists, the
recoverable amount of the asset is determined. The Company used the income approach in determining the fair
value which reflects the current market expectations about future amounts that will be generated by the
intangible assets. This involves employing present value techniques that are dependent on the circumstances
specific to the intangible asset and the availability of sufficient data. No impairment loss is recognised during the
financial year. The carrying amount of the intangible assets as at 30 June 2016 was $1,768,131 (2015: $835,679)
(Note 15).
In making their assessment, the Directors employed the following key assumptions:

Financial Year

Key Assumption

Revenue growth
%

Discount factor
%

2017

2018

2019

2020

2021

2022

2023

2024

2.5

iii. Key Estimate —Intangible assets and amortisation
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value
at the date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life intangible
assets are not amortised and are subsequently measured at cost less any impairment. Finite life intangible assets are
subsequently measured at cost less amortisation and any impairment. The gains or losses recognised in profit or loss arising
from the derecognition of intangible assets are measured as the difference between net disposal proceeds and the carrying
amount of the intangible asset. The method and useful lives of finite life intangible assets are reviewed annually. Changes
in the expected pattern of consumption or useful life are accounted for prospectively by changing the amortisation method
or period.

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2016 A n n u A l R e p o R t

P a g e | 30

033

AuDi t eD FinAnciAl Rep o R t c on t.
ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

Notes to the consolidated financial statements
for the Year Ended 30 June 2016

Note 1

Statement of significant accounting policies

ANNUAL REPORT
30 June 2016

Research costs are expensed in the period in which they are incurred. Development costs are capitalised when it is probable
that the project will be a success considering its commercial and technical feasibility; the consolidated entity is able to use
or sell the asset; the consolidated entity has sufficient resources; and intent to complete the development and its costs can
be measured reliably. Capitalised development costs are amortised on a straight-line basis over the period of their expected
benefit, being their finite life of eight years.

Significant costs associated with software are deferred and amortised on a straight-line basis over the period of their
expected benefit, being their finite life of eight years.

iv. Key Estimate —Change in estimate – Amortisation
During the current year, the Directors determined that the amortisation period for the carrying amount of the Group's
intangibles of equipment should be increased from four years to eight years. The financial effect of this reassessment
resulted in a decrease in the amortisation of $412,690 per annum based on the current value of intangibles.

q. New Accounting Standards and Interpretations not yet mandatory or early adopted
A number of new standards, amendments to standards and interpretations issued by the AASB which are not yet mandatorily
applicable to the Group have not been applied in preparing these financial statements. Those which may be relevant to the
Group are set out below. The Group does not plan to adopt these standards early.

i. AASB 9 Financial Instruments and associated Amending Standards (applicable for annual reporting period commencing

1 January 2018)

The Standard will be applicable retrospectively (subject to the comment on hedge accounting below) and includes revised
requirements for the classification and measurement of financial instruments, revised recognition and derecognition
requirements for financial instruments and simplified requirements for hedge accounting.

Key changes made to this standard that may affect the Group on initial application include certain simplifications to the
classification of financial assets, simplifications to the accounting of embedded derivatives, and the irrevocable election to
recognise gains and losses on investments in equity instruments that are not held for trading in other comprehensive
income.

The Directors anticipate that the adoption of AASB 9 will not have a material impact on the Group’s financial instruments.

ii. AASB 15 Revenue from Contracts with Customers (applicable to annual reporting periods commencing on or after 1

January 2018).

When effective, this Standard will replace the current accounting requirements applicable to revenue with a single,
principles-based model. Except for a limited number of exceptions, including leases, the new revenue model in AASB 15 will
apply to all contracts with customers as well as non-monetary exchanges between entities in the same line of business to
facilitate sales to customers and potential customers.

The core principle of the Standard is that an entity will recognise revenue to depict the transfer of promised goods or
services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange
for the goods or services. To achieve this objective, AASB 15 provides the following five-step process:

(1)

(2)

Identify the contract(s) with a customer;

Identify the performance obligations in the contract(s);

(3) Determine the transaction price;

(4) Allocate the transaction price to the performance obligations in the contract(s); and

(5)

Recognise revenue when (or as) the performance obligations are satisfied.

This Standard will require retrospective restatement, as well as enhanced disclosures regarding revenue.

The Directors anticipate that the adoption of AASB 15 will not have a material impact on the Group’s revenue recognition
and disclosures.

iii. AASB 16: Leases (applicable to annual reporting periods commencing on or after 1 January 2019).
AASB 16 removes the classification of leases as either operating leases or finance leases for the lessee effectively treating
all leases as finance leases. Short term leases (less than 12 months) and leases of a low value are exempt from the lease
accounting requirements. Lessor accounting remains similar to current practice.

The Directors anticipate that the adoption of AASB 15 will not have a material impact on the Group’s recognition of leases
and disclosures).

P a g e | 31

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034

AuDi t eD FinAnciAl Rep o R t c on t.
ANNUAL REPORT
30 June 2016

Notes to the consolidated financial statements
for the Year Ended 30 June 2016

Note 1

Statement of significant accounting policies

ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

iv. AASB 2014-3: Amendments to Australian Accounting Standards – Accounting for Acquisitions of Interests in Joint

Operations [AASB 1 & AASB 11]

AASB 2014-3 amends AASB 11 Joint Arrangements to provide guidance on the accounting for acquisitions of interests in
joint operations in which the activity constitutes a business. The amendments require:

(1)

(2)

the acquirer of an interest in a joint operation in which the activity constitutes a business, as defined in AASB 3
Business Combinations, to apply all of the principles on business combinations accounting in AASB 3 and other
Australian Accounting Standards except for those principles that conflict with the guidance in AASB 11;

the acquirer to disclose the information required by AASB 3 and other Australian Accounting Standards for business
combinations

This Standard also makes an editorial correction to AASB 11.

The Directors anticipate that the adoption of these amendments will not have a material impact on the financial
statements.

v. AASB 2014-9: Amendments to Australian Accounting Standards – Equity Method in Separate Financial Statements
(AASB 2014-9 applies to annual reporting periods beginning on or after 1 January 2016. Early adoption permitted).
AASB 2014-9 amends AASB 127 Separate Financial Statements, and consequentially amends AASB 1 First-time Adoption of
Australian Accounting Standards and AASB 128 Investments in Associates and Joint Ventures, to allow entities to use the
equity method of accounting for investments in subsidiaries, joint ventures and associates in their separate financial
statements. AASB 2014-9 also makes editorial corrections to AASB 127.

The Directors anticipate that the adoption of these amendments will not have a material impact on the financial
statements.

vi. Other standards not yet applicable
There are no other standards that are not yet effective and that would be expected to have a material impact on the entity
in the current or future reporting periods and on foreseeable future transactions

Note 2

Company details

The registered office of the Company is:
Address:
Street:

The principal place of business of the Company is:
Address:
Street:

Suite 12, Level 1
11 Ventnor Avenue
PO Box 52
West Perth WA 6872
+61 (0)8 6141 3570
+61 (0)8 6141 3599

Postal:

Telephone:
Facsimile:

Level 2/2 Glen St
Milsons Point NSW 2061
PO Box 523
Milsons Point NSW 1565
+61 (0)2 9806 2000
+61 (0)2 9806 2099

Postal:

Telephone:
Facsimile:

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2016 A n n u A l R e p o R t

P a g e | 32

035

AuDi t eD FinAnciAl Rep o R t c on t.
ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

Notes to the consolidated financial statements
for the year ended 30 June 2016

Note 3

Prior period correction

ANNUAL REPORT
30 June 2016

Business combinations
On 5 May 2015, Ensurance Limited (formerly Parker Resources Limited)(Ensurance), acquired 100% of the ordinary share
capital and voting rights of Ensurance Capital Pty Ltd (Ensurance Capital) as described in the prospectus issued 6 February 2015
and supplementary prospectus issued 8 April 2015.

Under the principles of AASB 3, the transaction between Ensurance and Ensurance Capital was treated as a reverse acquisition.
As such, the assets and liabilities of the legal subsidiary (the accounting acquirer), being Ensurance Capital, were measured at
their pre-combination carrying amounts. The assets and liabilities of the legal parent (accounting acquiree), being Ensurance
were measured at fair value on the date of acquisition.

Whilst the Company believed at the time this transaction was accounted for correctly in accordance with AASB 3, upon
subsequent review, it was determined that a cash component paid by the legal parent to the vendors of the legal subsidiary
should be brought into account in determining the fair value of the consideration transferred.

The effect of the correction was contained entirely within equity, and has no effect on the net asset of the Company.
Furthermore, the effect is quarantined to financial year ended 30 June 2015, effecting the results and equity balances of that
period only. The correction has no effect on cash nor cash flows.

Details in relation to the impact of this correction on comparative financial information are disclosed following.

a. Adjustments made to statements of financial position (extract)

As at 30 June 2015

Assets

Net assets

Equity

Issued capital
Reserves
Accumulated losses

Total equity

b. Statement of profit or loss and other comprehensive income

(extract)

For the year ended at 30 June 2015

Corporate transaction accounting expense

Loss before income tax

Income tax benefit

Previously
reported
30 June 2015
$

Effect of
accounting
correction
$

30 June 2015
(restated)
$

2,598,787

6,517,547
(2,042)
(3,916,718)

2,598,787

Previously
reported
30 June 2015
$

3,159,454

(4,154,203)

(31,548)

(420,493)
-
420,493

6,097,054
(2,042)
(3,496,225)

2,598,787

Effect of
accounting
correction
$

(420,493)

420,493

30 June 2015
(restated)
$

2,738,961

(3,733,710)

(31,548)

Loss from continuing operations

(4,185,751)

420,493

(3,765,258)

Other comprehensive income, net of income tax

(2,313)

Total comprehensive income attributable to members of
the parent entity

(4,188,064)

420,493

(3,767,571)

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2016 A n n u A l R e p o R t

036

AuDi t eD FinAnciAl Rep o R t c on t.
ANNUAL REPORT
30 June 2016

Notes to the consolidated financial statements
for the year ended 30 June 2016

Note 4

Revenue and other income

a. Revenue

Revenue

Commissions

Interest

Other

b. Other Income
Grant income

Other

Note 5

Profit / (loss) before income tax

Note

The following significant revenue and expense items are relevant in explaining
the financial performance:

a. Depreciation and amortisation:

Depreciation and amortisation of plant and equipment

Amortisation of intangibles

14b

15b

b. Employment costs:

Directors fees

Increase / (decrease) in employee benefits provisions

Superannuation expenses

Wages and salaries

Other employment related costs

Note 6

Auditor's remuneration

Remuneration of the auditor of the Ensurance Limited for:

Auditing or reviewing the financial reports:

 Stantons International
 Mazars Risk and Assurance Pty Limited (Mazars)

(formerly Duncan Dovico Risk and Assurance Pty Limited)

Taxation compliance assistance provided by a related practice of the
Auditor - Mazars

ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

2016
$

2015
$

2,452,546

2,421,946

428,492

43,093

108,972

191,264

35,984

1,199

3,033,103

2,650,393

673,195

6,000

679,195

2016
$

36,088

412,690

448,778

193,958

160,404

236,128

31,291

2015
$

13,754

336,625

350,379

106,047

54,480

146,077

2,443,686

1,587,468

266,393

100,479

3,300,569

1,994,551

2016
$

2015
$

20,000

115,000

51,000

10,800

125,800

71,000

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2016 A n n u A l R e p o R t

P a g e | 34

037

AuDi t eD FinAnciAl Rep o R t c on t.
ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

Notes to the consolidated financial statements
for the year ended 30 June 2016

Note 7

Income tax

Note

Income tax expense / (benefit)
Current tax

Deferred tax

Tax rebate for Research and Development

Deferred income tax expense included in income tax expense comprises:

Increase / (decrease) in deferred tax assets

(Increase) / decrease in deferred tax liabilities

ANNUAL REPORT
30 June 2016

2016
$

(71,981)

2015
(restated)
$

31,548

b. Reconciliation of income tax expense to prima facie tax payable

The prima facie tax payable / (benefit) on loss from ordinary activities before
income tax is reconciled to the income tax expense as follows:

Prima facie tax on operating loss at 30% (2015: 30%)

(554,823)

(1,120,113)

Add / (Less)

Tax effect of:

Capital-raising costs deductible

Timing differences

Non-deductible expenses

Other

Deferred tax asset not brought to account

(59,529)

58,777

750

2,929

551,896

(34,061)

14,522

954,517

258

216,425

Income tax expense / (benefit) attributable to operating loss

31,548

Less rebates:

Tax rebate for Research and Development

Income tax expense / (benefit)

c. The applicable weighted average effective tax rates attributable to operating

profit are as follows

d. Balance of franking account at year end of the legal parent

e. Current tax assets

Current tax asset

f. Current tax liabilities

Current tax liabilities

(71,981)

31,548

nil

(2.82)

nil

603

31,548

P a g e | 35

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2016 A n n u A l R e p o R t

038

AuDi t eD FinAnciAl Rep o R t c on t.
ANNUAL REPORT
30 June 2016

Notes to the consolidated financial statements
for the year ended 30 June 2016

Note 7

Income tax (cont.)

ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

Note

2016
$

2015
$

g. Deferred tax assets

Provisions

Other

Transaction costs

Tax losses

Set-off deferred tax liabilities

Net deferred tax assets

Less deferred tax assets not recognised

Net tax assets

h. Deferred tax liabilities

Provisions

Intangibles

Property, plant, and equipment

Set-off deferred tax assets

Net deferred tax liabilities

i. Tax losses and deductible temporary differences

Unused tax losses and deductible temporary differences for which no
deferred tax asset has been recognised, that may be utilised to offset tax
liabilities:

Deductible temporary differences

Revenue losses

Capital losses

47,043

38,014

123,922

798,261

1,007,240

(28,694)

978,546

(978,546)

10,803

17,891

28,694

(28,694)

66,058

3,370

56,201

420,249

545,878

( 13)

545,865

(545,865)

( 13)

978,546

545,865

791,244

413,232

7,016

1,776,806

966,113

Potential deferred tax assets attributable to tax losses have not been brought to account at 30 June 2016 because the
directors do not believe it is appropriate to regard realisation of the deferred tax assets as probable at this point in time.
These benefits will only be obtained if:

i. the Group derives future assessable income of a nature and of an amount sufficient to enable the benefit from the

deductions for the loss to be realised;

ii. the company continues to comply with conditions for deductibility imposed by law; and

iii. no changes in tax legislation adversely affect the Group in realising the benefit from the deductions for the loss.

j. Tax consolidation

The Board of Ensurance Ltd has resolved to enter into the Tax Consolidation Regime and have instructed their tax agent to
undertake the necessary steps to fully implement from 1 July 2015. This will include the preparation and signing of a Tax
Sharing and Funding Agreement. Ensurance Limited is the head entity in the newly formed tax consolidated group. As a
consequence, the entities are taxed as a single entity and the deferred tax assets and liabilities of these entities are set off
in the consolidated financial statements. Under the tax funding agreement, the members of the Group are required to
contribute to the head entity for their current tax liabilities. The assets and liabilities arising under the tax funding
agreements are recognised as intercompany assets and liabilities at call. Members of the tax consolidated group via the tax
sharing agreement may be called to provide for the income tax liabilities between the entities should the head entity
default on its tax payment obligations. No amount has been recognised in respect of this component of the agreement as
the outcome is considered remote.

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2016 A n n u A l R e p o R t

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039

AuDi t eD FinAnciAl Rep o R t c on t.
ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

Notes to the consolidated financial statements
for the year ended 30 June 2016

Note 8

Earnings per share(EPS)

Note

ANNUAL REPORT
30 June 2016

2016
$

2015
(restated)
$

a. Reconciliation of earnings to profit or loss

(Loss) / profit for the year

(1,777,430)

(3,765,258)

Less: loss attributable to non-controlling equity interest

36,522

(Loss) / profit used in the calculation of basic and diluted EPS

(1,777,430)

(3,728,736)

b. Weighted average number of ordinary shares outstanding during the year

used in calculation of basic EPS

57,140,909

34,164,084

2016
$

2015
$

c. Earnings per share

Basic EPS (cents per share)

2015
$

2015
(restated)
$

(3.11)

(10.91)

d. At the end of the 2016 financial year, the Group has 1,000,000 unissued shares under options (2015: 1,000,000), 8,000,000
partly-paid shares on issue (2015: 8,000,000), and 7,000,000 performance rights (2015: nil). The Group does not report diluted
earnings per share on annual losses generated by the Group. During the 2016 financial year the Group's unissued shares under
option, partly-paid shares, and performance rights were anti-dilutive.

e. As noted in Note 1a.iii, the equity structure in these consolidated financial statements following the reverse acquisition reflects the
equity structure of Ensurance, being the legal acquirer (the accounting acquiree), including the equity interests issued by
Ensurance to effect the business combination.

In calculating the weighted average number of ordinary shares outstanding (the denominator of the EPS calculation) for the
year ended 30 June 2015:

(1) the number of ordinary shares outstanding from 1 July 2014 to 4 May 2015 (deemed acquisition date) are computed on
the basis of the weighted average number of ordinary shares of Ensurance Capital, (legal acquiree / accounting acquirer)
outstanding during the period multiplied by the exchange ratio established in the acquisition agreement; and

(2) the number of ordinary shares outstanding from 5 May 2015 to the end of year shall be the actual number of ordinary

shares of Ensurance outstanding during that period.

P a g e | 37

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2016 A n n u A l R e p o R t

040

AuDi t eD FinAnciAl Rep o R t c on t.
ANNUAL REPORT
30 June 2016

Notes to the consolidated financial statements
for the year ended 30 June 2016

Note 9

Cash and cash equivalents

a. Current

Cash at bank
Cash on hand

b. Reconciliation of cash

Cash at the end of the financial year as shown in the statement of cash flows
is reconciled to items in the statement of financial position as follows:

Cash and cash equivalents
Bank overdrafts

ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

Note

2016
$

2015
$

388,635
1,010

2,484,522
1,010

389,645

2,485,532

9a
17

389,645
(132,187)

2,485,532
(138,829)

257,458

2,346,703

c. The Group's exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in Note

27 Financial risk management.

d. Cash Flow Information

Note

2016
$

2015
(restated)
$

i. Reconciliation of cash flow from operations to (loss)/profit after income tax

Loss after income tax

(1,777,430)

(3,765,258)

Cash flows excluded from (loss)/profit attributable to operating activities

Non-cash flows in (loss)/profit from ordinary activities:

Depreciation and amortisation
Corporate transaction accounting expense
Proceeds from asset development grants
Share-based payments

Changes in assets and liabilities, net of the effects of purchase and disposal of
subsidiaries:

(Increase)/decrease in receivables
(Increase)/decrease in prepayments and other assets
(Increase)/decrease in net tax assets
Increase/(decrease) in trade and other payables
Increase/(decrease) in grants unspent
Increase/(decrease) in provisions

Cash flow from operations

e. Credit standby facilities

The Group has no credit standby facilities.

f. Non-cash investing and financing activities

Nil.

Note 10

Trade and other receivables

a. Current

Trade receivables

Interest receivable

448,778
-
(673,195)
8,980

37,080
(13,989)
(30,945)
648,206
-
171,734

350,379
2,738,961
-
-

248,881
(5,591)
8,747
(61,702)
47,386
36,705

(1,180,781)

(401,492)

2016
$

19,426

2015
$

31,312

25,195

56,507

b. The Group's exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in note 27

Financial risk management.

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2016 A n n u A l R e p o R t

P a g e | 38

041

AuDi t eD FinAnciAl Rep o R t c on t.
ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

Notes to the consolidated financial statements
for the year ended 30 June 2016

Note 11 Other assets

Current
Prepayments

Note 12

Compliance of insurance assets versus insurance liabilities

30 JUNE 2015

Trust account insurer assets
Insurance debtors
Trust accounts
Less: intra-licensee balances

Total trust account insurance assets

Trust account insurer liabilities
Underwriter's liability
Unearned commissions
Other

Less: intra-licensee balances

ANNUAL REPORT
30 June 2016

2016
$

33,872

2015
$

19,884

Total
$

1,447,044
1,758,863
(137,713)

Savill Hicks Corp.
Pty Limited
$

Ensurance
Underwriting Pty
Limited
$

1,186,269
1,233,744

260,775
525,119

2,420,013

785,894

3,068,194

2,217,248
185,477
17,288

749,615
21,195
15,084

2,966,863
206,672
32,372

(137,713)

Total trust account insurance liabilities

2,420,013

785,894

3,068,194

Excess of insurance assets over insurance liabilities

30 JUNE 2016

Trust account insurer assets
Insurance debtors
Trust accounts
Less: intra-licensee balances

872,494
1,633,100

444,384
833,634

1,316,878
2,466,734
(62,960)

Total trust account insurance assets

2,505,594

1,278,018

3,720,652

Trust account insurer liabilities
Underwriter's liability
Unearned commissions
Other

Less: intra-licensee balances

2,334,268
158,750
12,576

1,245,224
(16,006)
48,800

3,579,492
142,744
61,376

(62,960)

Total trust account insurance liabilities

2,505,594

1,278,018

3,720,652

Excess of insurance assets over insurance liabilities

Note 13

Financial assets

a. Non-current

Tier 1 Financial assets: Listed shares

Tier 2 Financial assets: Unlisted shares or funds

Bonds on deposit

2016
$

19,467

33,435

43,887

96,789

2015
$

3,826

33,347

43,887

81,060

P a g e | 39

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2016 A n n u A l R e p o R t

042

AuDi t eD FinAnciAl Rep o R t c on t.
ANNUAL REPORT
30 June 2016

Notes to the consolidated financial statements
for the year ended 30 June 2016

Note 14

Property, plant, and equipment

a. Non-current

Fixtures, furniture, and fittings

Accumulated depreciation

Plant and equipment

Accumulated depreciation

Total plant and equipment

b. Movements in Carrying Amounts

Carrying amount: 1 July 2014

Additions

Disposals

Depreciation expense

Carrying amount: 30 June 2015

Carrying amount: 1 July 2015

Additions

Disposals

ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

Note

2016
$

2015
$

14b

118,200

109,202

(67,601)

(62,217)

50,599

170,630

(91,330)

46,985

115,038

(61,904)

14b

79,300

53,134

129,899

100,119

Fixtures,
furniture, and
fittings
$

Plant and
equipment
$

10,673

41,962

(1,837)

(3,813)

46,985

8,998

33,123

29,952

(9,941)

53,134

56,870

Total
$

43,796

71,914

(1,837)

(13,754)

100,119

65,868

Depreciation expense

(5,384)

(30,704)

(36,088)

Carrying amount: 30 June 2016

50,599

79,300

129,899

Note 15

Intangible assets

a. Non-current

Software development costs

Accumulated amortisation

Total intangible assets

b. Movements in Carrying Amounts

Carrying amount: 1 July 2014

Additions

Amortisation expense

Carrying amount: 30 June 2015

Carrying amount: 1 July 2015

Additions

Amortisation expense

Carrying amount: 30 June 2016

Note

2016
$

2015
$

2,909,315

1,564,172

(1,141,184)

(728,493)

15b

1,768,131

835,679

Software
development
costs
$

692,424

479,880

(336,625)

835,679

1,345,142

(412,690)

1,768,131

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2016 A n n u A l R e p o R t

P a g e | 40

043

AuDi t eD FinAnciAl Rep o R t c on t.
ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

Notes to the consolidated financial statements
for the year ended 30 June 2016

Note 16

Trade and other payables

a. Current

Unsecured
Trade payables

Other payables

Other taxes

Related party payables

Grant funds received in advance

ANNUAL REPORT
30 June 2016

Note

16b

2016
$

2015
$

310,670

271,010

578,886

2,485

206,752

87,140

218,472

2,485

134,882

1,163,051

649,731

b. Trade payables are non-interest bearing and usually settled within the lower of terms of trade or 30 days.

c. The Group's exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in note 27

Financial risk management.

Note 17 Borrowings

a. Current

Bank overdrafts

Convertible notes

Other borrowings

Premium funding

Note 18

Provisions

a. Disclosed as:
Current

Non-current

Carrying amount at the end of year

b. Movements in Carrying Amounts

Carrying amount at the beginning of year

Additional provisions raised during the year

Amounts used

2016
$

2015
$

132,187

138,829

5,252

2,681

21,008

13,329

137,439

175,847

Note

Annual leave
$

62,415

251,637

(112,848)

2016
$

233,114

62,092

295,206

Long service
Leave
$

61,056

32,946

2015
$

97,887

25,584

123,471

Total
$

123,471

284,583

(112,848)

Carrying amount at the end of year

201,204

94,002

295,206

c. Description of provisions

Provision for employee benefits represents amounts accrued for annual leave and long service leave.

The current portion for this provision includes the total amount accrued for annual leave entitlements and the amounts
accrued for long service leave entitlements that have vested due to employees having completed the required period of
service. Based on past experience, the Group does not expect the full amount of annual leave or long service leave
balances classified as current liabilities to be settled within the next 12 months. However, these amounts must be classified
as current liabilities since the Group does not have an unconditional right to defer the settlement of these amounts in the
event employees wish to use their leave entitlement.

The non-current portion for this provision includes amounts accrued for long service leave entitlements that have not yet
vested in relation to those employees who have not yet completed the required period of service.

P a g e | 41

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044

AuDi t eD FinAnciAl Rep o R t c on t.
ANNUAL REPORT
30 June 2016

Notes to the consolidated financial statements
for the year ended 30 June 2016

Note 19

Issued capital

Note

ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

2016
No.

2015
No.

2016
$

2015
(restated)
$

Fully paid ordinary shares at no par value

57,140,909

6,097,054

6,643,601

a. Ordinary shares

At the beginning of the period

Shares issued during the year:

Conversion of notes

Balance before reverse acquisition

Elimination of existing legal

acquiree (Ensurance Capital) shares

Shares of legal acquirer

(Ensurance) at acquisition date

Issue of shares to Ensurance
Capital vendors

Transaction costs relating to share
issues

57,140,909

2,006,254

6,097,054

121,210

141,779

2,148,033

(2,148,033)

27,140,909

30,000,000

425,337

546,547

5,971,000

(420,493)

At reporting date

57,140,909

6,097,054

b. Partly paid shares

Partly-paid Shares

2016
No.

2015
No.

19b.i

8,000,000

i. Each Partly Paid Share is issued at a price of 20 cents of which 0.01 cent is paid on issue with the balance payable, at the
election of the holder, any time within five years from the date of Shareholder approval of this special resolution, being
30 November 2020, in accordance with resolution 13 of the Company's 2015 Annual General Meeting.

The Partly Paid Shares will not be subject to calls by Ensurance and any of the Partly Paid Shares which are not fully paid
up at the expiration date of 30 November 2020 shall be forfeited (in accordance with Ensurance’s constitution) and the
holder shall have no right to pay up and shall retain no rights in relation thereto.

c. Options

2016
No.

2015
No.

Options exercisable at 20 cents expiring 19 September 2016

1,000,000

d. Performance rights

Performance Rights Class A

Performance Rights Class B

Carrying amount at the end of year

26a.i

26a.ii

6,500,000

500,000

7,000,000

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2016 A n n u A l R e p o R t

P a g e | 42

045

AuDi t eD FinAnciAl Rep o R t c on t.
ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

Notes to the consolidated financial statements
for the year ended 30 June 2016

Note 19

Issued capital (cont.)

e. Capital Management

ANNUAL REPORT
30 June 2016

The Directors' objectives when managing capital are to ensure that the Group can maintain a capital base so as to maintain
investor, creditor and market confidence and to sustain future development of the business. The Board of Directors
monitors the availability of liquid funds in order to meet its short term commitments. It does this by ensuring that its
current ratio (current assets divided by current liabilities) remains in excess of 1:1.

Current ratio

2016

0.80

2015

1.40

The focus of the Group's capital risk management is the current working capital position against the requirements of the
Group in respect to its operations, software developments programmes, and corporate overheads. The Group's strategy is
to ensure appropriate liquidity is maintained to meet anticipated operating requirements, with a view to initiating
appropriate capital raisings as required.
The Group is subject to externally imposed capital requirements under the FSRA Legislation through its Australian Financial
Services (AFS) Licensees, Savill Hicks Corp. Pty Limited and Ensurance Underwriting Pty Limited. This legislation requires
that the insurance assets of the entity be equal to or exceed the insurance liabilities. Refer also note 12.

The working capital position of the Group at 30 June 2016 and 30 June 2015 were as follows:

Cash and cash equivalents

Trade and other receivables

Trust account insurer assets

Trust account insurer liabilities

Trade and other payables

Net current income taxes (payable)/receivable

Short-term borrowings

Short-term provisions

Working capital position

Note 20 Reserves

Investment revaluation reserve

Share-based payment reserve

Total reserves

Investment revaluation reserve

Note

7e,f

Note

20a

20b

2016
No.

389,645

19,426

2015
No.

2,485,532

56,507

3,720,652

3,068,194

(3,720,652)

(3,068,194)

(1,161,637)

(137,439)

(233,114)

(649,731)

(30,945)

(175,847)

(97,887)

(1,123,119)

1,587,629

2016
$

9,687

8,980

18,667

2015
$

(2,042)

The investment revaluation reserve records revaluations of investments held by the Group.

b. Share-based payment reserve

The share-based payment reserve records items recognised as expenses on the value of directors and employee equity
issues.

P a g e | 43

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046

AuDi t eD FinAnciAl Rep o R t c on t.
ANNUAL REPORT
30 June 2016

ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

Notes to the consolidated financial statements
for the year ended 30 June 2016

Note 21

Controlled entities

a. Legal parent entity

Ensurance Limited is the ultimate parent of the Group (refer to Note 1a.iii).

i. Legal subsidiaries

Ensurance Capital Pty Limited

Ensurance IT Pty Limited

Ensurance Underwriting Pty Limited

Savill Hicks Corp. Pty Limited

Savill Hicks Corp. (NSW) Pty Ltd

Ensurance Life Pty Ltd

Country of
Incorporation

Australia

Class of
Shares

Ordinary

b. Investments in subsidiaries are accounted for at cost.

Note 22

Commitments

a. Operating lease commitments:

Minimum lease payments under non-cancellable operating leases

not later than 12 months

between 12 months and 5 years

greater than 5 years

Percentage Owned

2016

100.0%

2015

100.0%

2016
$

2015
$

216,147

159,182

375,329

117,712

122,426

127,323

367,461

A renewed operating lease is held over level 2 Glen St, Milsons Point, NSW. The period of the lease is a non-cancellable
three-year period commencing 1 August 2016. A further operating lease is held over 400 Canterbury Road, Surrey Hills
Melbourne Vic. The period of the lease is a non-cancellable three-year period commencing 9 March 2015.

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2016 A n n u A l R e p o R t

P a g e | 44

047

ANNUAL REPORT
30 June 2016

AuDi t eD FinAnciAl Rep o R t c on t.
ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

Notes to the consolidated financial statements
for the year ended 30 June 2016

Note 23

Key Management Personnel compensation (KMP)

The names and positions of KMP are as follows:

Mr Adam Davey

Chairman

Mr Stefan Hicks

Managing Director

Mr Brett Graves

Executive Director, Chief Operating Officer

Mr Neil Pinner

Non-executive Director

Mr Grant Priest

Non-executive Director (Appointed on 7 September 2015)

Mr Brian Thomas

Non-executive Director (Resigned on 10 September 2015)

Mr Michael Huntly

CEO of Ensurance Underwriting

Peter Fielding

Sam Hallab

COO of Ensurance IT (Appointed 1 February 2016)

Chief Financial Officer (Appointed 6 June 2016)

The totals of remuneration paid to KMP during the year are as follows and is prepared on the following bases:

This note relates to accounting entity with Ensurance Capital Pty Limited as the accounting parent of the Group (refer to
Note 1a.iii. KMP remuneration for the accounting acquiree, Ensurance Limited, is disclosed from the date of control.
Consequently, comparative amounts reported below will differ from the Remuneration report table on page 12.

Short-term employee benefits

Post-employment benefits

Share-based payments

Other long-term benefits

Termination benefits

Total

Note 24

Related party transactions

Transactions between related parties are on normal commercial terms and
conditions no more favourable than those available to other parties unless
otherwise stated.

Payments made in respect to remuneration of related parties of the KMP:

 K Graves
 C Hicks
 P Huntly

2016
$

1,087,840

91,901

8,980

2015
$

543,413

39,473

1,188,721

582,886

2016
$

2015
$

43,654

615

46,442

87,600

76,650

P a g e | 45

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048

AuDi t eD FinAnciAl Rep o R t c on t.
ANNUAL REPORT
30 June 2016

Notes to the consolidated financial statements
for the year ended 30 June 2016

Note 25 Operating segments

Identification of reportable segments

ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

2014
$

2013
$

The Group operates predominantly in the insurance industry. This comprises sale of insurance products and underwriting,
and development of industry information technology. Inter-segment transactions are priced at cost to the Group.

The Group has identified its operating segments based on the internal reports that are provided to the Board of Directors
(the Board) on a monthly basis and in determining the allocation of resources. Management has identified the operating
segments based on the two principal operations: insurance and information technology.

b. Basis of accounting for purposes of reporting by operating segments

i. Accounting policies adopted

Unless stated otherwise, all amounts reported to the Board, being the chief decision maker with respect to operating
segments, are determined in accordance with accounting policies that are consistent to those adopted in the annual
financial statements of the Group.

ii.

Inter-segment transactions

An internally determined transfer price is set for all inter-segment sales. This price is based on what would be realised
in the event the sale was made to an external party at arm's length. All such transactions are eliminated on
consolidation of the Group's financial statements.

Corporate charges are recognised in "All other segments" which contains the treasury and oversight functions of the
Group. Management fees are charged from respective segments to reflect an allocation of costs across the Group. All
such transactions are eliminated on consolidation of the Group's financial statements.

Inter-segment loans payable and receivable are initially recognised at the consideration received/to be received net of
transaction costs. If inter-segment loans receivable and payable are not on commercial terms, these are not adjusted to
fair value based on market interest rates. This policy represents a departure from that applied to the statutory financial
statements.

iii. Segment assets

Where an asset is used across multiple segments, the asset is allocated to that segment that receives majority
economic value from that asset. In the majority of instances, segment assets are clearly identifiable on the basis of their
nature and physical location.

iv. Segment liabilities

Liabilities are allocated to segments where there is a direct nexus between the incurrence of the liability and the
operations of the segment. Borrowings and tax liabilities are generally considered to relate to the Group as a whole and
are not allocated. Segment liabilities include trade and other payables and certain direct borrowings.

v. Unallocated items

The following items of revenue, expenses, assets and liabilities are not allocated to operating segments as they are not
considered part of the core operations of any segment:

Depreciation and amortisation
Gains or losses on sales of financial and non-financial assets

Investment income

Corporate transaction accounting expense

c. Basis of accounting for purposes of reporting by operating segments

The Group operates in one geographical area and therefore one regulatory environment being Australia.

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P a g e | 46

049

AuDi t eD FinAnciAl Rep o R t c on t.
ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

Notes to the consolidated financial statements
for the year ended 30 June 2016

ANNUAL REPORT
30 June 2016

Note 25 Operating segments (cont.)

For the Year to 30 June 2016

Revenue

Revenue
Grant funding

Interest revenue

Total segment revenue
Reconciliation of segment revenue to group
revenue

Intra-segment income and expense

Other income

Total group revenue and other income

Segment net/profit (loss) from continuing
operations before tax
Reconciliation of segment loss to group loss
(i) Amounts not included in segment results

but reviewed by Board:

Depreciation and amortisation

(ii) Unallocated items

Loss before income tax

As at 30 June 2016

Segment Assets

Reconciliation of segment assets to group
assets

Intra-segment eliminations

Total assets

Segment asset increases for the year:

Capital expenditure
Acquisitions

Segment Liabilities

Reconciliation of segment liabilities to group
liabilities

Intra-segment eliminations

Total liabilities

Insurance
$

2,990,010
-
30,151

3,020,161

Information
Technology
$

-
673,195
-

673,195

Treasury
$

-
-
12,942

12,942

Total
$

2,990,010
673,195
43,093

3,706,298

(348,157)
6,000

(70,526)
-

418,683
-

-
6,000

3,712,298

(74,195)

189,256

(1,515,694)

(1,400,633)

(55,148)
-

(392,359)
-

(1,271)
-

(448,778)
-

(1,849,411)

5,482,654

1,642,440

12,182,925

19,308,019

(13,023,684)

6,284,335

76,962
30,818

107,780

875,996
27,943

903,939

-
7,105

7,105

952,958
65,866

1,018,824

4,840,837

1,755,844

2,998,308

9,594,989

(4,152,720)

5,442,269

P a g e | 47

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2016 A n n u A l R e p o R t

050

AuDi t eD FinAnciAl Rep o R t c on t.
ANNUAL REPORT
30 June 2016

Notes to the consolidated financial statements
for the year ended 30 June 2016

ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

Note 25 Operating segments (cont.)

For the Year to 30 June 2015

Revenue

Revenue
Grant funding

Interest revenue

Total segment revenue
Reconciliation of segment revenue to group
revenue

Insurance
$

2,614,409
-
24,214

2,638,623

Information
Technology
$

-
-
5,236

5,236

Treasury
$

-
-
6,534

6,534

Intra-segment eliminations

(364,515)

279,973

84,542

Total
$

2,614,409
-
35,984

2,650,393

-
31,291

2,681,684

(301,696)

(137,630)

(205,044)

(644,370)

Depreciation and amortisation

(32,103)

(318,276)

(350,379)

(2,738,961)

(3,733,710)

Other income

Total group revenue and other income

Segment net profit/(loss) from continuing
operations before tax
Reconciliation of segment profit/(loss) to
group loss
(i) Amounts not included in segment results

but reviewed by Board:

(ii) Unallocated items:

Corporate transaction accounting expense

Loss before income tax

As at 30 June 2015

Segment Assets

Reconciliation of segment assets to group
assets

Intra-segment eliminations

Total assets

Segment asset increases for the year:

Capital expenditure
Acquisitions

Segment Liabilities
Reconciliation of segment liabilities to group
liabilities

Intra-segment eliminations

Total liabilities

4,945,260

1,197,580

11,232,441

17,375,281

(10,727,703)

6,647,578

126,012
58,532

184,544

353,868
11,705

1,726
7,100,100

481,606
7,170,337

365,573

7,101,826

7,651,943

5,346,838

1,179,861

629,285

7,155,984

(3,107,193)

4,048,791

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2016 A n n u A l R e p o R t

P a g e | 48

051

AuDi t eD FinAnciAl Rep o R t c on t.
ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

Notes to the consolidated financial statements
for the year ended 30 June 2016

Note 26

Share-based payments

Share-based payment expense

ANNUAL REPORT
30 June 2016

2016
$

8,980

2015
$

a. The above share-based payment expense is comprised of the following arrangements in place at 30 June 2016:

i. On 30 November 2015, 6,500,000 Performance Rights Class A (Class A Rights) were granted to Directors of the
Company. Upon the Company achieving the target share price of $0.80, based on a 30 day volume weighted average
share price, within 5 years, the Class A Rights will vest, entitling the holder or his nominee to 1 fully paid ordinary share
in the Company per vested Class A Right. The Class A Rights hold no voting or dividend rights and are not transferable.
At balance date, no Class A Right has converted or been forfeited and 6,500,000 Class A Rights remain.

ii. On 30 November 2015, 500,000 Performance Rights Class B (Class B Rights) were granted to Mr Adam Davey. Class B
Rights will vest on the introduction to, and entry into an agreement with, a strategic partner to the Company which
results directly or indirectly in a material increase in the Company's revenue or otherwise increases the value of the
Company, at the discretion of the Board of the Company. The Class B Rights hold no voting or dividend rights and are
not transferable. At balance date, no Class B Right has converted or been forfeited and 500,000 Class B Rights remain.

b. A summary of the movements of all Company performance rights issued as share-based payments is as follows:

Outstanding at the beginning of the year

Granted

Converted to ordinary shares

Expired

Outstanding at year-end

2016
No.

7,000,000

2015
No.

The weighted average remaining contractual life of performance rights outstanding at year end was 4.423 years.

The fair value of the performance rights granted to Directors is deemed to represent the value of the Directors' services
received over the vesting period. The weighted average fair value of performance rights granted during the year was 0.6414
cents (2015: Nil). These values were calculated using the Monte-Carlo option pricing model, applying the following inputs to
performance rights issued this year:

Grant date:

Grant date share price:

Deemed strike price

Number of performance rights issued:

Remaining life of the performance rights (years):

Expected share price volatility:

Risk-free interest rate:

Class A Rights

30 November 2015 30 November 2015

$0.19

$0.80

6,500,000

4.423

31.06%

2.00%

$0.19

$0.25

500,000

4.423

31.06%

2.00%

Volatility has been determined based on the historical share price for the period between 5 May 2015 and 19 October 2015.
The start date of May 5 2015 was used as this was the date the Company announced its reinstatement to Official Quotation
on the ASX.

P a g e | 49

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052

AuDi t eD FinAnciAl Rep o R t c on t.
ANNUAL REPORT
30 June 2016

Notes to the consolidated financial statements
for the year ended 30 June 2016

Financial risk management
Note 27
a. Financial Risk Management Policies

ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

This note presents information about the Group's exposure to each of the above risks, its objectives, policies and
procedures for measuring and managing risk, and the management of capital.

The Group's financial instruments consist mainly of deposits with banks, short-term investments, and accounts payable and
receivable.

The Group does not speculate in the trading of derivative instruments.

A summary of the Group's Financial Assets and Liabilities is shown below:

Floating
Interest
Rate

389,645

Financial Assets

 Cash and cash equivalents
 Trade and other receivables
 Trust account insurer assets
 Financial assets

Fixed
Interest
Rate

Non-
interest
Bearing

2016
Total

Floating
Interest
Rate

389,645

2,485,532

19,426

Fixed
Interest
Rate

Non-
interest
Bearing

2015
Total

2,485,532

56,507

1,758,863

1,447,044

3,205,907

2,466,734

1,316,878

3,783,612

96,789

81,060

Total Financial Assets

389,645

2,466,734

1,433,093

4,289,472

2,485,532

1,758,863

1,584,611

5,829,006

Financial Liabilities

Financial liabilities at
amortised cost
 Trade and other payables
 Trust account insurer

liabilities
 Borrowings

132,187

Total Financial Liabilities

132,187

1,163,051

3,720,652

5,252

137,439

138,829

4,888,955

5,021,142

138,829

649,731

3,068,194

37,018

175,847

3,754,943

3,893,772

Net Financial
Assets/(Liabilities)

257,458

2,466,734

(3,455,862)

(731,670)

2,346,703

1,758,863

(2,170,332)

1,935,234

b. Specific Financial Risk Exposures and Management

The main risk the Group is exposed to through its financial instruments are credit risk, liquidity risk and market risk
consisting of interest rate, foreign currency risk and equity price risk.

The Board of directors has overall responsibility for the establishment and oversight of the risk management framework.
The Board adopts practices designed to identify significant areas of business risk and to effectively manage those risks in
accordance with the Group's risk profile. This includes assessing, monitoring and managing risks for the Group and setting
appropriate risk limits and controls. The Group is not of a size nor is its affairs of such complexity to justify the
establishment of a formal system for risk management and associated controls. Instead, the Board approves all
expenditure, is intimately acquainted with all operations and discuss all relevant issues at the Board meetings. The
operational and other compliance risk management have also been assessed and found to be operating efficiently and
effectively.

i. Credit risk

Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties of
contract obligations that could lead to a financial loss to the Group.

The Group does not have any material credit risk exposure to any single receivable or group of receivables under
financial instruments entered into by the Group.

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053

AuDi t eD FinAnciAl Rep o R t c on t.
ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

Notes to the consolidated financial statements
for the year ended 30 June 2016

Note 27 Financial risk management (cont.)

ANNUAL REPORT
30 June 2016

The objective of the Group is to minimise the risk of loss from credit risk. Although revenue from operations is minimal,
the Group trades only with creditworthy third parties.

In addition, receivable balances are monitored on an ongoing basis with the result that the Group's exposure to bad
debts is insignificant. The Group's maximum credit risk exposure is limited to the carrying value of its financial assets as
indicated on the statement of financial position.

The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade
and other receivables.

Credit risk exposures

The maximum exposure to credit risk is that to its alliance partners and that is limited to the carrying amount, net
of any provisions for impairment of those assets, as disclosed in the statement of financial position and notes to the
financial statements.

Credit risk related to balances with banks and other financial institutions is managed by the Group in accordance
with approved Board policy. Such policy requires that surplus funds are only invested with financial institutions
residing in Australia, where ever possible.

Impairment losses

The ageing of the Group's trade and other receivables at reporting date was as follows:

Gross
2016
$

Impaired
2016
$

658,591
262,672
276,683
62,277
(62,960)

1,197,263

18,012

1,215,275

-
-
-
-
-

Past due but not
impaired
2016
$

Net
2016
$

658,591
262,672
276,683
62,277
(62,960)

1,197,263

-
262,672
276,683
62,277
-

601,632

18,012

1,215,275

601,632

Trade receivables
Not past due
Past due up to 15 days
Past due 15 days to 3 months
Past due over 3 months
Less intra-Group balances

Other receivables
Not past due

Total

ii. Liquidity risk

Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise
meeting its obligations related to financial liabilities.

The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and ensuring sufficient cash
and marketable securities are available to meet the current and future commitments of the Group.

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall 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, under both normal and stressed conditions, without incurring unacceptable losses or risking
damage to the Group's reputation.

Typically the Group ensures that it has sufficient cash to meet expected operational expenses for a period of 60 days,
including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot
reasonably be predicted, such as natural disasters.

In addition, the Group's AFS Licensees are subject to the conditions of their AFS License. Accordingly, in meeting the
cash needs requirement, the Group prepares cash flow projections on a consolidated basis to demonstrate the
Licensees will have sufficient cash under the terms of their license.

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054

AuDi t eD FinAnciAl Rep o R t c on t.
ANNUAL REPORT
30 June 2016

Notes to the consolidated financial statements
for the year ended 30 June 2016

Note 27 Financial risk management (cont.)

ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

Other than the trust account insurer liabilities, the financial liabilities of the Group are confined to trade and other
payables as disclosed in the statement of financial position. All trade and other payables are non-interest bearing and
due within 30 days of the reporting date.

Contractual Maturities

The following are the contractual maturities of financial liabilities of the Group:

Within 1 Year

Greater Than 1 Year

2016
$

2015
$

2016
$

2015
$

Total

2016
$

2015
$

Financial liabilities due for payment

Trade and other payables
Trust account insurer liabilities
Borrowings

1,163,051
3,720,652
137,439

649,731
3,068,194
175,847

Total contractual outflows

5,021,142

3,893,772

Financial assets

Cash and cash equivalents
Trade and other receivables
Trust account insurer assets

389,645
19,426
3,720,652

2,485,532
56,507
3,068,194

Total anticipated inflows

4,129,723

5,610,233

Net (outflow)/inflow on financial
instruments

(891,419)

1,716,461

i. Market risk

-
-
-

1,163,051
3,720,652
137,439

649,731
3,068,194
175,847

5,021,142

3,893,772

389,645
19,426
3,720,652

2,485,532
56,507
3,068,194

4,129,723

5,610,233

(891,419)

1,716,461

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will
affect the Group's income or the value of its holdings of financial instruments. The objective of market risk
management is to manage and control market risk exposures within acceptable parameters, while optimising the
return.

The Board meets on a regular basis and considers the Group's interest rate risk.

(1) Interest rate risk

Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of the
reporting period whereby a future change in interest rates will affect future cash flows or the fair value of fixed
rate financial instruments. The Group is also exposed to earnings volatility on floating rate instruments.

Due to the low amount of debt exposed to floating interest rates, interest rate risk is not considered a high risk to
the Group. Movement in interest rates on the Group's financial liabilities and assets is not material.

(2) Foreign exchange risk

Exposure to foreign exchange risk may result in the fair value or future cash flows of a financial instrument
fluctuating due to movement in foreign exchange rates of currencies in which the Group holds financial
instruments which are other than the AUD functional currency of the Group.

The Group has no material exposure to foreign exchange risk.

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055

AuDi t eD FinAnciAl Rep o R t c on t.
ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

Notes to the consolidated financial statements
for the year ended 30 June 2016

Note 27 Financial risk management (cont.)

(3) Price risk

ANNUAL REPORT
30 June 2016

Price risk relates to the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in market prices. The Group does not presently hold material amounts subject to price risk. As such the
Board considers price risk as a low risk to the Group.

ii. Sensitivity Analyses

(1) Interest rates

The following table illustrates sensitivities to the Group's exposures to changes in interest rates. The table indicates
the impact on how profit and equity values reported at balance sheet date would have been affected by changes in
the relevant risk variable that management considers to be reasonably possible. These sensitivities assume that
the movement in a particular variable is independent of other variables.

A change of 25 basis points in the interest rates at the reporting date would have increased / (decreased) equity
and profit or loss by the amounts shown below. The analysis is performed on the same basis for 2015.

Year ended 30 June 2016

±25 basis points change in interest rates
Year ended 30 June 2015

± 50 basis points change in interest rates

(2) Foreign exchange

Profit
$

Equity
$

± 644

± 11,734

The Group did not carry significant assets or liabilities in foreign currencies in the 2015 financial year (2014: nil),
and therefore was not subject to material foreign exchange risk, and according not subject to material sensitivities.

iii. Net Fair Values

(1) Fair value estimation

The fair values of financial assets and financial liabilities are presented in the table in note 27a and can be
compared to their carrying values as presented in the statement of financial position. Fair values are those
amounts at which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an
arm's length transaction.

Financial instruments whose carrying value is equivalent to fair value due to their nature include:

Cash and cash equivalents;

Trade and other receivables;

Trust account insurance assets and liabilities; and

Trade and other payables.

The methods and assumptions used in determining the fair values of financial instruments are disclosed in the
accounting policy notes specific to the asset or liability.

Note 28

Events subsequent to reporting date

Ensurance is expanding its business to Europe and has incorporated a wholly owned subsidiary in the United Kingdom
Ensurance UK Ltd. This company was incorporated on 10 August 2016. Further, subsequent to year end, Ensurance
commenced the process of raising $3 million via a Convertible Notes issue. At the date of this report $1.422 million had been
subscribed. There are no other material events subsequent to reporting date.

Note 29

Contingent liabilities

There are no contingent liabilities as at 30 June 2016 (2015: Nil).

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AuDi t eD FinAnciAl Rep o R t c on t.
ANNUAL REPORT
30 June 2016

ENSURANCE CAPITAL PTY LTD
AND CONTROLLED ENTITIES
ABN 15 158 971 718

Notes to the consolidated financial statements
for the year ended 30 June 2016

Note 30

Parent entity disclosures

Note

a. Financial Position of Ensurance Limited (legal parent)

Current assets

Non-current assets

Total assets

Current liabilities

Non-current assets

Total liabilities

Net assets

Equity

Issued capital

Investment revaluation reserve

Share-based payment reserve

Accumulated losses

Total equity

b. Financial performance of Ensurance Limited

Profit / (loss) for the year

Other comprehensive income

Total comprehensive income

2016
$

2015
(restated)
$

90,145

1,655,884

2,191,984

8,067,669

1,746,029

10,259,653

75,692

941,676

1,017,368

14,430

728,661

10,245,223

11,218,650

11,221,125

(800)

114,280

105,300

(10,603,469)

(1,081,202)

728,661

10,245,223

(9,522,267)

(732,925)

800

(9,521,467)

(732,925)

c. Guarantees entered into by Ensurance Limited for the debts of its subsidiaries

The Board of Ensurance has declared in writing that it will support the liabilities of its subsidiaries (the companies) and will
continue to financially support the companies while they remain wholly owned under the control of Ensurance.

d. Impairment of investments and loans to subsidiaries

The Board of Ensurance has undertaken an impairment assessment of the parent entity's investment in Ensurance Capital of
$7,525,195 and loans to subsidiaries of $2,332,441. As a result of this assessment, the Company has recognised an impairment
to the investment of $7,525,195 and an impairment to the loans of $1,618,018. This equates to an impairment loss of
$9,029,808. These impairments relate only to disclosures as contained in this Note 30

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057

ENSURANCE LIMITED
DiRec toRs’ D ecl AR At ion
AND CONTROLLED ENTITIES
ABN 76 149 278 759

Directors' declaration

ANNUAL REPORT
30 June 2016

The Directors of the Company declare that:

1. The financial statements and notes, as set out on pages 16 to 54, are in accordance with the Corporations Act 2001 (Cth)

and:

(a) comply with Accounting Standards;

(b) are in accordance with International Financial Reporting Standards issued by the International Accounting Standards

Board, as stated in note 1 to the financial statements; and

that date of the Group.

(d) the Directors have been given the declarations required by s.295A of the Corporations Act 2001 (Cth);

in the directors' opinion there are reasonable grounds to believe that the Company will be able to pay its debts as and
when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the
directors by:

ADAM DAVEY

Chairman

Dated this Thursday, 29 September 2016

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AuDi toR ’s Rep oR t c on t.

ANNUAL REPORT
30 June 2016

Independent auditor's report

TO BE REPLACED BY STANTONS REPORT

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 76 149 278 759

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059

AuDi toR ’s Rep oR t c on t.
ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 76 149 278 759

ANNUAL REPORT
30 June 2016

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Corporate
Disrupting insurance
Disrupting insurance
governance statement
Our perspective
Our perspective

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coRp oR At e Gove RnAnce s tAt emen t
ANNUAL REPORT
30 June 2016

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 76 149 278 759

Corporate governance statement
This Corporate Governance summary discloses the extent to which the Company will follow the recommendations set by the ASX Corporate
Governance Council in its publication ‘Corporate Governance Principles and Recommendations (3rd Edition)’ (Recommendations). The
Recommendations are not mandatory, however, the Recommendations that will not be followed have been identified and reasons have been
provided for not following them.

The Company’s Corporate Governance Plan has been posted on the Company’s website at www.ensurance.com.au.

PRINCIPLES AND RECOMMENDATIONS

COMPLY
(YES/NO)

EXPLANATION

Principle 1: Lay solid foundations for management and oversight
Recommendation 1.1
A listed entity should have and disclose a charter which:
(a)

YES

(b)

sets out the respective roles and responsibilities of
the board, the chair and management; and
includes a description of those matters expressly
reserved to the board and those delegated to
management.

Recommendation 1.2
A listed entity should:
(a) undertake appropriate checks before appointing a
person, or putting forward to security holders a
candidate for election, as a director; and

(b) provide security holders with all material information
relevant to a decision on whether or not to elect or re-
elect a director.

Recommendation 1.3
A listed entity should have a written agreement with each
director and senior executive setting out the terms of their
appointment.

Recommendation 1.4
The company secretary of a listed entity should be accountable
directly to the board, through the chair, on all matters to do
with the proper functioning of the board.
Recommendation 1.5
A listed entity should:
(a) have a diversity policy which includes requirements for

YES

the board:
(i)

to set measurable objectives for achieving gender
diversity; and
to assess annually both the objectives and the
entity’s progress in achieving them;

(ii)

(b) disclose that policy or a summary or it; and
(c) disclose as at the end of each reporting period:

(i)

the measurable objectives for achieving gender
diversity set by the board in accordance with the
entity’s diversity policy and its progress towards
achieving them; and

(ii) either:
(A)

the respective proportions of men and
women on the board, in senior executive
positions and across the whole organisation
(including how the entity has defined “senior
executive” for these purposes); or
the entity’s “Gender Equality Indicators”, as
defined in the Workplace Gender Equality
Act 2012.

(B)

The Company has adopted a Board Charter.
The Board Charter sets out the specific responsibilities of the Board,
requirements as to the Boards composition, the roles and
responsibilities of the Chairman and Company Secretary, the
establishment, operation and management of Board Committees,
Directors access to company records and information, details of the
Board’s relationship with management, details of the Board’s
performance review and details of the Board’s disclosure policy.
A copy of the Company’s Board Charter is stated in Schedule 1 of the
Corporate Governance Plan which is available on the Company’s
website.
(a) The Company has detailed guidelines for the appointment and
selection of the Board members. The Company’s Corporate
Governance Plan requires the Board to undertake appropriate
checks before appointing a person, or putting forward to
security holders a candidate for election, as a director.

(b) Material information relevant to any decision on whether or not
to elect or re-elect a Director will be provided to security holders
in the notice of meeting holding the resolution to elect or re-
elect the Director.

The Company’s Corporate Governance Plan requires the Board to
ensure that each Director and senior executive is a party to a written
agreement with the Company which sets out the terms of that
Director’s or senior executive’s appointment.

the

The Board Charter outlines
responsibilities and
accountability of the Company Secretary. The Company Secretary is
accountable directly to the Board, through the chair, on all matters to
do with the proper functioning of the Board.
(a) The Company has adopted a Diversity Policy.

roles,

(i)

(ii)

The Diversity Policy provides a framework for the
Company to achieve a list of 6 measurable objectives that
encompass gender equality.
The Diversity Policy provides for the monitoring and
evaluation of the scope and currency of the Diversity
Policy. The company is responsible for implementing,
monitoring and reporting on the measurable objectives.
(b) The Diversity Policy is stated in Schedule 10 of the Corporate
Governance Plan which is available on the company website.

(c)

(i)

(ii)

The measurable objectives set by the Board will be
included in the annual key performance indicators for the
CEO, MD and senior executives. In addition the Board will
review progress against the objectives in its annual
performance assessment.
The Company currently has 40 employees, 21 of those
employees are woman.

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062

coR p oR A t e GoveRnAnce s tA t emen t con t.
ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 76 149 278 759

Corporate governance statement
PRINCIPLES AND RECOMMENDATIONS

Recommendation 1.6
A listed entity should:
(a) have and disclose a process for periodically evaluating the
performance of the board, its committees and individual
directors; and

(b) disclose in relation to each reporting period, whether a
performance evaluation was undertaken in the reporting
period in accordance with that process.

COMPLY
(YES/NO)
YES

Recommendation 1.7
A listed entity should:
(a) have and disclose a process for periodically evaluating the

YES

performance of its senior executives; and

(b) disclose in relation to each reporting period, whether a
performance evaluation was undertaken in the reporting
period in accordance with that process.

Principle 2: Structure the board to add value
Recommendation 2.1
The board of a listed entity should:
(a) have a nomination committee which:

YES

(i)

has at least three members, a majority of whom
are independent directors; and
is chaired by an independent director,

(ii)
and disclose:
(iii)
(iv)
(v)

the charter of the committee;
the members of the committee; and
as at the end of each reporting period, the
number of times the committee met throughout
the period and the individual attendances of the
members at those meetings; or

(b)

if it does not have a nomination committee, disclose that
fact and the processes it employs to address board
succession issues and to ensure that the board has the
appropriate balance of skills, experience, independence
and knowledge of the entity to enable it to discharge its
duties and responsibilities effectively.

ANNUAL REPORT
30 June 2016

EXPLANATION

(a) The Board is responsible for evaluating the performance of the
Board and individual directors on an annual basis. It may do so
with the aid of an independent advisor. The process for this can
be found in Schedule 5 of the Company’s Corporate Governance
Plan.

(b) The Company’s Corporate Governance Plan requires the Board
to disclosure whether or not performance evaluations were
conducted during the relevant reporting period.
Due to the size of the Board and the nature of the business, it
institute a formal
has not been deemed necessary to
individuals.
documented performance review program of
However, the Chairman intends to conduct formal reviews each
financial year whereby the performance of the Board as a whole
and the individual contributions of each director are reviewed.
The Board considers that at this stage of the Company’s
development an informal process is appropriate.
The review will assist to indicate if the Board’s performance is
appropriate and efficient with respect to the Board Charter.
The Board regularly reviews its skill base and whether it remains
appropriate for the Company’s operational, legal and financial
requirements. New Directors are obliged to participate in the
Company’s induction process, which provides a comprehensive
understanding of the Company, its objectives and the market in
which the Company operates.
Directors are encourages to avail themselves of resources
required to fulfil the performance of their duties.

(a) The Board is responsible for evaluating the performance of
is to arrange an annual

senior executives. The Board
performance evaluation of the senior executives.

(b) The Company’s Corporate Governance Plan requires the Board
to conduct annual performance of the senior executives.
Schedule 5 ‘Performance Evaluation’ requires the Board to
disclose whether or not performance evaluations were
conducted during the relevant reporting period.
During the financial year an evaluation of performance of the
individuals was not formally carried out. However, a general
review of the individuals occurs on an on-going basis to ensure
that structures suitable to the Company’s status as a listed entity
are in place.

(a) The members of

the Remuneration and Nominations
Committee are Adam Davey (Chair), Grant Priest and Neil
Pinner. Pursuant to Clause 4 of the Company’s Board Charter.
The Remuneration & Nominations Committee carries out the
duties outlined in Schedule 5 of the Company’s Corporate
Governance Plan available online on the Company’s website.
The Board devotes time at board meetings to discuss board
succession issues. All members of the Board are involved in the
Company’s nomination process, to the maximum extent
permitted under the Corporations Act and ASX Listing Rules.
The Board regularly updates the Company’s board skills matrix
(in accordance with recommendation 2.2) to assess the
appropriate balance of skills, experience, independence and
knowledge of the entity.

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coR p oR A t e GoveRnAnce s tA t emen t con t.
ANNUAL REPORT
30 June 2016

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 76 149 278 759

Corporate governance statement
PRINCIPLES AND RECOMMENDATIONS

Recommendation 2.2
A listed entity should have and disclose a board skill matrix
setting out the mix of skills and diversity that the board
currently has or is looking to achieve in its membership.

Recommendation 2.3
A listed entity should disclose:
(a)

the names of the directors considered by the board to be
independent directors;
if a director has an interest, position, association or
relationship of the type described in Box 2.3 of the ASX
Corporate Governance Principles and Recommendation
(3rd Edition), but the board is of the opinion that it does
not compromise the independence of the director, the
nature of
interest, position, association or
relationship in question and an explanation of why the
board is of that opinion; and
the length of service of each director

the

(b)

(c)

Recommendation 2.4
A majority of the board of a listed entity should be independent
directors.

Recommendation 2.5
The chair of the board of a listed entity should be an
independent director and, in particular, should not be the same
person as the CEO of the entity.
Recommendation 2.6
A listed entity should have a program for inducting new
directors and providing appropriate professional development
opportunities for continuing directors to develop and maintain
the skills and knowledge needed to perform their role as a
director effectively.

Principle 3: Act ethically and responsibly
Recommendation 3.1
A listed entity should:
(a) have a code of conduct for its directors, senior executives

and employees; and

(b) disclose that code or a summary of it.

COMPLY
(YES/NO)
YES

EXPLANATION

Board Skills Matrix

Executive & Non- Executive experience
Industry experience & knowledge
Leadership
Corporate governance & risk management
Strategic thinking
Desired behavioural competencies
Geographic experience
Capital Markets experience
Subject matter expertise:
- accounting
- capital management
- corporate financing
- industry taxation
- risk management
- legal
- IT expertise

Number of Directors
that Meet the Skill
5
5
5
5
3
5
3
5

3
4
3
1
4
3
5

YES

(a) The Board Charter provides for the disclosure of the names of
Directors considered by the Board to be independent. These
details are provided in the Annual Reports and Company
website.

(b) The Board Charter requires Directors to disclose their interest,
positions, associations and relationships and requires that the
independence of Directors is regularly assessed by the Board in
light of the interests disclosed by Directors. Details of the
Directors interests, positions associations and relationships are
provided in the Annual Reports and Company website.
The Board Charter provides for the determination of the
Directors’ terms and requires the length of service of each
Director to be disclosed. The length of service of each Director is
provided in the Annual Reports and Company website.

(c)

The Board Charter requires that where practical the majority of the
Board will be independent.
Details of each Director’s independence are provided in the Annual
Reports and Company website.
The Board Charter provides that where practical, the Chairman of the
Board will be a non-executive director. If the Chairman ceases to be
independent then the Board will consider appointing a
lead
independent Director. The current Chairman is Independent.
The Board Charter states that a specific responsibility of the Board is to
procure appropriate professional development opportunities for
Directors. The Board is responsible for the approval and review of
induction and continuing professional development programs and
procedures for Directors to ensure that they can effectively discharge
their responsibilities.

YES

(a) The Corporate Code of Conduct applies to the Company’s

directors, senior executives and employees.

(b) The Company’s Corporate Code of Conduct is in Schedule 2 of
the Corporate Governance Plan which is on the Company’s
website.

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064

coR p oR A t e G oveRnAnce s tAt emen t c on t.
ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 76 149 278 759

ANNUAL REPORT
30 June 2016

Corporate governance statement
PRINCIPLES AND RECOMMENDATIONS

COMPLY
(YES/NO)

EXPLANATION

Principle 4: Safeguard integrity in financial reporting
Recommendation 4.1
The board of a listed entity should:
(a) have an audit committee which:

YES

(i)

(ii)

has at least three members, all of whom are non-
executive directors and a majority of whom are
independent directors; and
is chaired by an independent director, who is not
the chair of the board,

(a) The members of the Audit and Risk Committee are Grant Priest
(Chair), Adam Davey and Brett Graves. The Audit & Risk
Committee carries out the duties under a written Charter for
that committee.
The role and responsibilities of the Audit and Risk Committee
are outlined
in Schedule 3 of the Company’s Corporate
Governance Plan available online on the Company’s website.

and disclose:
(iii)
(iv)

(v)

the charter of the committee;
the relevant qualifications and experience of the
members of the committee; and
in relation to each reporting period, the number
of times the committee met throughout the
period and the individual attendances of the
members at those meetings; or

(b)

if it does not have an audit committee, disclose that fact
and the processes it employs that independently verify
and safeguard the integrity of its financial reporting,
including the processes for the appointment and removal
of the external auditor and the rotation of the audit
engagement partner.

Recommendation 4.2
The board of a listed entity should, before it approves the
entity’s financial statements for a financial period, receive from
its CEO and CFO a declaration that the financial records of the
entity have been properly maintained and that the financial
statements comply with the appropriate accounting standards
and give a true and fair view of the financial position and
performance of the entity and that the opinion has been
formed on the basis of a sound system of risk management and
internal control which is operating effectively.
Recommendation 4.3
A listed entity that has an AGM should ensure that its external
auditor attends its AGM and is available to answer questions
from security holders relevant to the audit.

Principle 5: Make timely and balanced disclosure
Recommendation 5.1
A listed entity should:
(a) have a written policy for complying with its continuous
disclosure obligations under the Listing Rules; and

(b) disclose that policy or a summary of it.

Principle 6: Respect the rights of security holders
Recommendation 6.1
A listed entity should provide information about itself and its
governance to investors via its website.

Recommendation 6.2
A listed entity should design and implement an investor
two-way
program
relations
communication with investors.

effective

facilitate

YES

The Company’s Corporate Governance Plan states that a duty and
responsibility of the Board is to ensure that before approving the
entity’s financial statements for a financial period, the CEO and CFO
have declared that in their opinion the financial records of the entity
have been properly maintained and that the financial statements
comply with the appropriate accounting standards and give a true and
fair view of the financial position and performance of the entity and
that the opinion has been formed on the basis of a sound system of
risk management and internal control which is operating effectively.

The Company’s Corporate Governance Plan provides that the Board
must ensure the Company’s external auditor attends its AGM and is
available to answer questions from security holders relevant to the
audit.

(a) The Board Charter provides details of the Company’s disclosure
policy. In addition, Schedule 6 of the Corporate Governance Plan
is entitled ‘Disclosure – Continuous Disclosure’ and details the
Company’s disclosure requirements as required by the ASX
Listing Rules and other relevant legislation.

(b) The Board Charter and Schedule 6 of the Corporate Governance

Plan are available on the Company website.

Information about the Company and its governance is available in the
Corporate Governance Plan which can be found on the Company’s
website.

facilitate effective

to promote and

The Company has adopted a Shareholder Communications Strategy
which aims
two-way
communication with investors. The Shareholder Communications
Strategy outlines a range of ways
is
communicated to shareholders.
The Shareholder Communications Strategy can be found in Schedule 9
of the Corporate Governance Plan which is available on the Company
website.

information

in which

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coR p oR A t e GoveRnAnce s tA t emen t con t.
ANNUAL REPORT
30 June 2016

Corporate governance statement
PRINCIPLES AND RECOMMENDATIONS

Recommendation 6.3
A listed entity should disclose the policies and processes it has
in place to facilitate and encourage participation at meetings of
security holders.

COMPLY
(YES/NO)
YES

Recommendation 6.4
A listed entity should give security holders the option to receive
communications from, and send communications to, the entity
and its security registry electronically.

Principle 7: Recognise and manage risk
Recommendation 7.1

The board of a listed entity should:
(a) have a committee or committees to oversee risk, each of

YES

which:
(i)

(ii)
and disclose:
(iii)
(iv)
(v)

has at least three members, a majority of whom
are independent directors; and
is chaired by an independent director,

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 76 149 278 759

EXPLANATION

The Shareholder Communications Strategy states that as a part of the
Company’s developing investor relations program, Shareholders can
register with the Company Secretary to receive email notifications of
when an announcement is made by the Company to the ASX,
including the release of the Annual Report, half yearly reports and
quarterly reports. Links are made available to the Company’s website
on which all information provided to the ASX is immediately posted.
Shareholders are encouraged to participate at all EGMs and AGMs of
the Company. Upon the despatch of any notice of meeting to
Shareholders, the Company Secretary sends out material with that
notice of meeting stating that all Shareholders are encouraged to
participate at the meeting.
Security holders can register with the Company to receive email
notifications when an announcement is made by the Company to the
ASX.
Shareholders queries should be referred to the Company Secretary at
first instance.

(a) The members of the Audit and Risk Committee are Grant Priest
(Chair), Adam Davey and Brett Graves. Pursuant to Clause 4 of
the Company’s Board Charter. The Audit & Risk Committee
carries out the duties under the written Charter for that
committee.
The role and responsibilities of the Audit and Risk Committee
in Schedule 3 of the Company’s Corporate
are outlined
Governance Plan available online on the Company’s website.
The Board devote time at annual board meeting to fulfilling the
roles and responsibilities associated with overseeing risk and
maintaining the entity’s risk management framework and
associated internal compliance and control procedures.

(b)

if it does not have a risk committee or committees that
satisfy (a) above, disclose that fact and the process it
employs for overseeing the entity’s risk management
framework.
Recommendation 7.2
The board or a committee of the board should:
(a)

review the entity’s risk management framework with
management at least annually to satisfy itself that it
continues to be sound, to determine whether there have
been any changes in the material business risks the entity
faces and to ensure that they remain within the risk
appetite set by the board; and

(b) disclose in relation to each reporting period, whether

such a review has taken place.

Recommendation 7.3
A listed entity should disclose:
(a)

(b)

if it has an internal audit function, how the function is
structured and what role it performs; or
if it does not have an internal audit function, that fact and
the processes it employs for evaluating and continually
improving the effectiveness of its risk management and
internal control processes.

Recommendation 7.4
A listed entity should disclose whether, and if so how, it has
regard to economic, environmental and social sustainability
risks and, if it does, how it manages or intends to manage those
risks.

YES

(a)

The Company process for risk management and internal
compliance includes a requirement to identify and measure
risk, monitor the environment for emerging factors and trends
that affect these risks, formulate risk management strategies
and monitor the performance of risk management systems.
Schedule 7 of the Corporate Governance Plan is entitled
‘Disclosure – Risk Management’ and details the Company’s
disclosure requirements with respect to the risk management
review procedure and internal compliance and controls.

YES

(b)
The company does not have an internal audit program. The Audit &
Risk Committee is responsible for monitoring the effectiveness of the
Company’s risk management and internal control processes.

Schedule 3 of the Company’s Corporate Governance Plan details the
Company’s risk management systems which assist in identifying and
managing potential or apparent business, economic, environmental
and social sustainability risks (if appropriate). Review of the Company’s
risk management framework is conducted at least annually and
reports are continually created by management on the efficiency and
effectiveness of the Company’s risk management framework and
associated internal compliance and control procedures.

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066

coR p oR A t e G oveRnAnce s tAt emen t c on t.
ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 76 149 278 759

Corporate governance statement
PRINCIPLES AND RECOMMENDATIONS

COMPLY
(YES/NO)

EXPLANATION

ANNUAL REPORT
30 June 2016

Principle 8: Remunerate fairly and responsibly
Recommendation 8.1
The board of a listed entity should:
(a) have a remuneration committee which:

YES

(i)

(ii)

(iii)
(iv)
(v)

has at least three members, a majority of whom
are independent directors; and
is chaired by an independent director,

and disclose:

(b)

if it does not have a remuneration committee, disclose
that fact and the processes it employs for setting the level
and composition of remuneration for directors and senior
executives and ensuring that such remuneration
is
appropriate and not excessive.

Recommendation 8.2
A listed entity should separately disclose its policies and
practices regarding the remuneration of non-executive
directors and the remuneration of executive directors and
other senior executives and ensure that the different roles and
responsibilities of non-executive directors compared to
executive directors and other senior executives are reflected in
the level and composition of their remuneration.

Recommendation 8.3
A listed entity which has an equity-based remuneration scheme
should:
(a) have a policy on whether participants are permitted to
enter into transactions (whether through the use of
derivatives or otherwise) which limit the economic risk of
participating in the scheme; and
(b) disclose that policy or a summary of it.

The members of the Remuneration & Nominations Committee are
Adam Davey (Chair), Grant Priest and Neil Pinner. Pursuant to Clause 4
of the Company’s Board Charter. The Remuneration & Nominations
Committee carries out the duties under the written terms of reference
for that committee.
The role and responsibilities of the Remuneration & Nominations
Committee are outlined in Schedule 4 of the Company’s Corporate
Governance Plan available online on the Company’s website.
The Board devote time at annual board meetings to fulfilling the roles
and responsibilities associated with setting the level and composition
of remuneration for Directors and senior executives and ensuring that
such remuneration is appropriate and not excessive.

YES

The Company’s Corporate Governance Plan requires the Board to
disclose its policies and practices regarding the remuneration of non-
executive directors, executive directors and other senior executives.

YES

(a) The Company’s Corporate Governance Plan states that the
Board is required to review, manage and disclose the policy (if
any) on whether participants are permitted to enter into
transactions (whether through the use of derivatives or
otherwise) which limit the economic risk of participating in the
scheme. The Board must review and approve any equity based
plans.

(b) A copy of the Company’s Corporate Governance Plan is available

on the Company’s website.

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ADDi t ionAl inFoRmAt ion F oR puBl ic l is t eD compAnies
ANNUAL REPORT
30 June 2016

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 76 149 278 759

Additional Information for Listed Public Companies

The following additional information is required by the Australian Securities Exchange in respect of listed public companies.

Capital

a. Ordinary share capital

57,140,909 ordinary fully paid shares held by 405 shareholders.

b. Unlisted Options over Unissued Shares

The Company has no Unlisted Options on issue.

Performance Rights
The Company has:

6,500,000 Performance Rights Class A (Class A Rights) on issue. Upon the Company achieving the target share
price of $0.80, based on a 30 day volume weighted average share price, within 5 years, the Class A Rights will
vest, entitling the holder or his nominee to 1 fully paid ordinary share in the Company per vested Class A Right.

500,000 Performance Rights Class B (Class B Rights) on issue. Class B Rights will vest on the introduction to, and
entry into an agreement with, a strategic partner to the Company which results directly or indirectly in a
material increase in the Company's revenue or otherwise increases the value of the Company, at the discretion
of the Board of the Company.

d. Partly Paid Shares

The Company has the follows:

8,000,000 Partly Paid Shares issued at a price of 20 cents of which 0.01 cent is paid on issue with the balance
payable, at the election of the holder, any time within five years from the date of Shareholder approval of this
special resolution, being 30 November 2020.

e. Voting Rights

The voting rights attached to each class of equity security are as follows:

Ordinary shares: Each ordinary share is entitled to one vote when a poll is called, otherwise each member

present at a meeting or by proxy has one vote on a show of hands.

Unlisted Options and Performance Rights: Options and performance rights do not entitle the holders to vote in
respect of that option, nor participate in dividends, when declared, until such time as the options are exercised
and subsequently registered as ordinary shares.

Substantial Shareholders as at 20 September 2016.

f.
Name

Mr Stefan Hicks

Mr Brett Graves + Mrs Kerrie Graves

g. Distribution of Shareholders as at 20 September 2016.

Category (size of holding)

Total Holders

1 – 1,000

1,001 – 5,000

5,001 – 10,000

10,001 – 100,000

100,001 – and over

125

211

405

Number of Ordinary
Fully Paid Shares Held

% Held of Issued Ordinary
Capital

16,369,044

9,515,962

2,874,994

28.65

16.65

5.03

Number
Ordinary

% Held of Issued
Ordinary Capital

1,072

24,000

1,239,701

9,363,983

46,512,153

0.00

0.04

2.17

16.39

81.40

57,140,909

100.00

h. Unmarketable Parcels as at 20 September 2016.

As at 20 September 2016 there were 7 fully paid ordinary shareholders holding less than a marketable parcel of
shares.

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068

ADDi t ionAl inFoRmAt ion F oR puBl ic l is t eD compAnies
ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 76 149 278 759

Additional Information for Listed Public Companies

i. On-Market Buy-Back

There is no current on-market buy-back.

ANNUAL REPORT
30 June 2016

Restricted Securities
The Company has 28,750,000 share on escrow for 24 months from date of reinstatement (5 May 2015).

20 Largest Shareholders — Ordinary Shares as at as at 20 September 2016

k.
Rank Name

Number of Ordinary
Fully Paid Shares Held

% Held of Issued Ordinary
Capital

Mr Stefan Hicks

Mr Brett Graves + Mrs Kerrie Graves

Maplaljac Pty Ltd

Thornbury Nominees Pty Ltd

Mr Robert John Peters + Mrs Sandra Lillian Peters

Nutsville Pty Ltd

Mr Richard Anthony De Souza + Mrs Karen Louise De Souza

Inswinger Holdings Pty Ltd

10.

Mr Allan Graham Jenzen + Mrs Elizabeth Jenzen

11. Ferncastle Holdings Pty Ltd

12. Court Securities Pty Ltd

13. Second Impact Investments Limited

14. Continental Global Investment Limited

15. Pacific Finance And Securities Pty Ltd

16. WB Nominees Limited

17. Mr Peter Leuzzi

18. Vinceman Pty Ltd

19. Flue Holdings Pty Ltd

20. Chin Nominees Pty Ltd

16,369,044

9,515,962

2,874,994

1,222,861

1,003,000

1,000,000

957,822

785,000

714,000

639,500

507,500

500,000

478,000

455,000

450,000

437,934

416,187

400,000

375,498

28.65

16.65

5.03

2.14

1.76

1.75

1.68

1.37

1.25

1.12

0.89

0.88

0.84

0.80

0.79

0.77

0.73

0.70

0.66

TOTAL

39,602,302

69.31

The names of the Joint Company Secretaries are Jay Stephenson and Julia Becket

Principal registered office

As disclosed in Note 2 Company details on page 32 of this Annual Report.

Registers of securities

As disclosed in the Corporate directory on page i of this Annual Report.

Stock exchange listing

Quotation has been granted for all the ordinary shares of the Company on all Member Exchanges of the Australian
Securities Exchange Limited, As disclosed in the Corporate directory on page i of this Annual Report.

Use of funds

The Company has used its funds in accordance with its initial business objectives.

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coRp o R At e D iRec to Ry

CURRENT DIRECTORS

Adam Davey: Chairman

Stefan Hicks: Managing Director

Brett Graves: Executive Director

Neil Pinner: Non-executive Director

Grant Priest: Non-executive Director - Appointed 7 September 2015

JOINT COMPANY SECRETARIES

Jay Stephenson and Julia Beckett

REGISTERED OFFICE

Street: Suite 12, Level 1, 11 Ventnor Ave. WEST PERTH WA 6005

Postal: PO Box 52 WEST PERTH WA 6872

Telephone: +61 (0)8 6141 3500

Facsimile: +61 (0)8 6141 3599

PRINCIPAL PLACE OF BUSINESS/OFFICE

Sydney: Level 2/2 Glen St. Milsons Point NSW 2061

Melbourne: Suite 4- 400 Canterbury Rd. Surrey Hills VIC 3127

Postal: PO Box 523 Milsons Point NSW 2061

Telephone: +61 (0)2 9806 2000

Facsimile: +61 (0)2 9806 2099

Website: ensurance.com.au

SECURITIES EXCHANGE

Australian Securities Exchange: ASX Code – ENA

SHARE REGISTRY

Computershare Investor Services Pty Limited

Level 11, 172 St Georges Trc. PERTH WA 6000

Telephone: 1300 850 505 (investors within Australia)

Telephone: +61 (0)3 9415 4000

Website: www.investorcentre.com

SOLICITORS TO THE COMPANY

Steinepreis Paganin

Level 4, The Read Buildings, 16 Milligan St. PERTH WA 6000

AUDITORS

Mazars Risk & Assurance Pty Limited

Level 12, 90 Arthur Street NORTH SYDNEY NSW 2060

Telephone: +61 (0)2 99 22 11 66

Website: www.mazars.com.au

CORPORATE ADVISER

Wolfstar Group Pty Ltd

Suite 12, L1, 11 Ventnor Avenue WEST PERTH WA 6005

Telephone: +61 (0)8 6141 3500

Facsimile: +61 (0)2 9227 0885

Website: www.wolftstargroup.com.au

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070

Ensurance Limited

& Controlled Entities

Level 2/2 Glen St

Milsons Point NSW 2061

ABN: 80 148 142 634

ASX CODE: ENA

T: +61 (0)2 9806 2000

F: +61 (0)2 9806 2099

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