Ensurance Limited Annual Report 2017

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FY2017 Annual Report · Ensurance Limited

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ABN 80 148 142 634

ANNUAL REPORT
30 June 2017

Chairman

Managing Director

Executive Director

Non-Executive Director

Appointed 17 August 2012

Appointed 1 May 2015

Appointed 7 September 2015

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

Corporate directory

DIRECTORS

Adam Davey

Stefan Hicks

Brett Graves

Neil Pinner

Grant Priest

COMPANY SECRETARY

Sam Hallab (appointed 1
February 2017)

REGISTERED OFFICE & PRINCIPAL PLACE OF BUSINESS

SHARE REGISTRY

Street:

Level 2/2 Glen St

Computershare Investor Services Pty Limited

Milsons Point NSW 2061

Level 11, 172 St Georges Terrace

Postal:

PO Box 523

PERTH WA 6000

Milsons Point NSW 1565

Telephone: 1300 850 505 (investors within

Telephone: +61 (0)2 9806 2000

Facsimile:

+61 (0)2 9806 2099

Website:

ensurance.com.au

Australia)

Telephone: +61 (0)3 9415 4000

Email:

web.queries@computershare.com.au

Website:

www.investorcentre.com

SECURITIES EXCHANGE

Australian Securities Exchange

SOLICITORS TO THE COMPANY

Steinepreis Paganin

Level 40, Central Park, 152-158 St Georges Terrace

Level 4, The Read Buildings, 16 Milligan Street

Perth WA 6000

Telephone:
Telephone:
Facsimile:
Website:

131 ASX (131 279) (within Australia)
+61 (0)2 9338 0000
+61 (0)2 9227 0885
www.asx.com.au

ASX Code:

ENA

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

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ANNUAL REPORT
30 June 2017

Contents

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

Directors' report .................................................................................................................................................................... 3

Remuneration report ............................................................................................................................................................. 9

Auditor's independence declaration .................................................................................................................................... 16

Consolidated statement of profit or loss and other comprehensive income ...................................................................... 17

Consolidated statement of financial position ..................................................................................................................... 18

Consolidated statement of changes in equity ..................................................................................................................... 19

Consolidated statement of cash flows ................................................................................................................................. 20

Notes to the consolidated financial statements .................................................................................................................. 21

Directors' declaration .......................................................................................................................................................... 58

Independent auditor's report .............................................................................................................................................. 59

Corporate governance statement ........................................................................................................................................ 65

Additional Information for Listed Public Companies ........................................................................................................... 71

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ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

Directors' report

ANNUAL REPORT
30 June 2017

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 2017.

1. Directors
The names of Directors in office at any time during or since the end of the year are:

Mr Adam Davey

Mr Stefan Hicks
Mr Brett Graves
Mr Neil Pinner

Mr Grant Priest

Chairman

Managing Director

Executive Director

Non-Executive Director

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.

Company secretary

2.
The following person held the position of Company Secretary at the end of the financial year:

Mr Sam Hallab

Qualifications

Experience



B.Ec., CA, F-AIST, GAICD, Diploma FP

Mr Hallab has spent more than 35 years in the financial sector and brings extensive
experience to the group. As a chartered accountant, he was a partner with Sydney
into the
accounting firm Sothertons for more than a decade before moving
superannuation industry as Deputy CEO of the Australian Catholic Superannuation and
Retirement Fund. Mr Hallab also held positions of COO, CFO and Company Secretary. He
is a registered auditor and tax agent and has gained extensive experience in risk
management and compliance.

3. Dividends paid or recommended
There were no dividends paid or recommended during the financial year ended 30 June 2017.

Significant changes in the state of affairs

During the year the group established a wholly owned subsidiary in the United Kingdom, namely Ensurance UK Limited,
with the intention of expanding the business into the United Kingdom and European markets. This involved
incorporating the company, establishing a base of operations in London and hiring an experienced team of underwriters.

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 an insurance brokerage,
insurance underwriting agency and an information technology company.

The insurance brokerage, Savill Hicks Corp Pty Ltd (SHC), has operated nationally for over 25 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 8 years. Ensurance IT has developed 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.

"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 difficulties associated with starting from scratch. In the insurance industry 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.

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ANNUAL REPORT
30 June 2017

Directors' report

5.2. Financial Review

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

a. Operating results
The Group delivered a FY17 loss after tax of $5.093m, representing an increase of $3.316m on the prior year loss of
$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 and the establishment of the London
office);

Increase in Finance costs (principally involved in interest on convertible notes and short-term financing)

Increase in Communications costs as a result of significantly less time spent by the IT team in R&D activities in
Australia and more time spent on the establishment of IT systems for the UK office. The R&D activities are normally
capitalised, whereas UK activities are treated as an expense.

Additional sales personnel and additional targeted marketing activities have allowed the Group to secure 163 white label
partners as at 30 June 2017. There are now three insurers on the Ensurance white label platform, each offering multiple
insurance products with a total of 10 quote options.

Revenue of the Group increased to $3.219M. This has been driven by Ensurance Underwriting which has continued its
strong growth trend. The result underscores the strong market share gain experienced by the Group, particularly in its
underwriting and white label businesses.

In April 2017, the Company completed the process of raising $3.0m via a Convertible Notes issue. These funds helped
finance the Group’s growth agenda and global reach. Further, in June 2017, the Company conducted a non-
renounceable entitlement issue of five new fully paid ordinary shares in the Company for every eleven held by eligible
shareholders to raise approximately $2.078m. The entitlement issue was completed on 26 June 2017 with the under
subscription of $1.479m taken up by Transocean Securities Pty Ltd, the underwriters of the issue.

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.

b. Financial position

The net assets of the Group have decreased from 30 June 2016 by $2.841m to a net deficiency of $1.999m at 30 June
2017 (2016: Net assets of $0.842m).

As at 30 June 2017, the Group's cash and cash equivalents increased from 30 June 2016 by $180,228 to $569,873 at 30
June 2017 (2016: $389,645) and had a working capital deficit of $1.229m (2016: $1.091m working capital deficit).

5.3. Events Subsequent to Reporting Date

On 31 July 2017, the Company issued the following unlisted options for ordinary shares: 1,000,000 options exercisable at
12 cents and expiring 31 July 2020, 3,000,000 options exercisable at 9.2 cents and expiring 31 July 2020; and 6,097,314 options
exercisable at 8 cents and expiring 31 July 2020. These options were issued in connection with the Entitlement Offer Prospectus
dated 6 June 2017 (9,097,314 options) and in connection with a short-term loan agreement (1,000,000 options).

The Company entered into an underwriting agreement on 27 September 2017 with Transocean Pty Limited in respect of
its intention to undertake a placement program for eligible investors with a view to raising $3,000,000 before capital
raising cost.

The Company entered into a loan agreement on 27 September 2017 with Kalonda Pty Ltd ATF Leibowitz Superannuation
Fund to make available to the Group a cash advance facility on a progressive basis up to but not exceeding $1,150,000,
payable at the earliest of 3 months from the initial drawdown or the finalisation of the $3,000,000 share placement plan.

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.

5.5. Environmental Regulations

The Group's operations are not subject to significant environmental regulations in the jurisdictions it operates in, namely
Australia and the United Kingdom.

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ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

Directors' report

ANNUAL REPORT
30 June 2017

Information relating to the directors

Mr Adam Davey



Independent Non-Executive Chairman

Length of service



4 years, 11 months from appointment 17 August 2012 (last re-elected 29 November 2016)

Qualifications

Experience



Professional Diploma in Stockbroking



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 industrial and mining companies. He has
significant experience in capital 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, member of the Remuneration & Nominations Committee and a
member of the Audit, Risk & Compliance Committee.

Interest in Shares and
Options

Directorships held in
other listed entities



604,090 ordinary shares in Ensurance Limited (indirect) (2016: 520,000). Increased holding a
result of Entitlement Issue. Cash was paid for these shares.
4,000,000 partly paid shares in Ensurance Limited (indirect) (2016: 4,000,000)



Non-executive director of ePat Technologies Limited and Ausnet Financial Services Limited.

Mr Stefan Hicks



Managing Director

Length of service



2 years, 4 months from appointment 1 May 2015 (last re-elected 30 November 2015)

Qualifications

Experience



MAICD, Diploma Financial Services



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 Pty Ltd, Ensurance Life, Ensurance
Underwriting, Ensurance IT and Savill Hicks Corp (NSW) Pty Ltd (a wholly owned subsidiary of
SHC). Mr Hicks has previously held senior insurance positions in Alexander Stenhouse (Aon),
Perth; Willis Faber Johnson and Higgins (Willis), Melbourne; and stockbroker position with
Perth based boutique corporate advisory firm Montagu Stockbrokers. He is a 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) (2016: 16,369,044)
9,560,962 ordinary shares in Ensurance Limited (indirect) (2016: 9,560,962)

Directorships held in
other listed entities



None

Mr Brett Graves



Executive Director

Length of service



2 years, 4 months from appointment 1 May 2015 (last re-elected 29 November 2016)

Qualifications

Experience



ANZIIF (Fellow) CIP



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), managing relationships with insurers, advising Government boards on the
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 Australian and New Zealand Institute of
Insurance and Finance.

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ANNUAL REPORT
30 June 2017

Directors' report

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

Special responsibilities 

Member of Audit, Risk & Compliance Committee.

Interest in Shares and
Options



14,545 ordinary shares in Ensurance Limited (direct) (2016: 10,000).
4,196,354 ordinary shares in Ensurance Limited (indirect) (2016: 2,884,994). Increased
holdings due to Entitlement Issue. Shares paid for by offsetting amounts owed to Mr Graves.

Directorships held in
other listed entities



None

Mr Neil Pinner



Independent Non-Executive Director

Length of service



2 years, 4 months from appointment 1 May 2015 (last re-elected 30 November 2015)

Experience



Mr Pinner has spent the past 44 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 five billion per annum in home mortgage lending.



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 and Smartline, but he has also
played an active role in the Mortgage Finance Association of Australasia. He was on the first
ever Mortgage Originator Committee of Western Australia and then in later years on the
National Brokering Industry Board. Mr Pinner brings an extensive network of mortgage
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 

Chairman of Remuneration & Nominations Committee

Interest in Shares and
Options



10,000 ordinary shares in Ensurance Limited (direct) (2016: 10,000)
748,181 ordinary shares in Ensurance Limited (indirect) (2016: 517,500). Increased holding
due to Entitlement Issue. Shares were paid for by offsetting amounts owed to Mr Pinner.

Directorships held in
other listed entities



None

Mr Grant Priest



Independent Non-Executive Director

Length of service



2 years, 1 month from appointment 7 September 2015 (last re-elected 30 November 2015)

Qualifications

Experience



BBus, Diploma of Financial Services, FCA, CTA



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 & Compliance Committee and member of Remuneration &
Nominations Committee.

Interest in Shares and
Options



72,725 ordinary shares in Ensurance Limited (indirect) (2016: 50,000). Increased holding a
result of Entitlement Issue. Cash was paid for these shares.

Directorships held in
other listed entities



None

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ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

Directors' report

ANNUAL REPORT
30 June 2017

7. Meetings of directors and committees
During the financial year seven meetings of Directors were held. Attendances by each Director during the year are stated in
the following table.

DIRECTORS'
MEETINGS

AUDIT, RISK & COMPLIANCE
COMMITTEE

REMUNERATION & NOMINATIONS
COMMITTEE

Number eligible to
attend

Number Attended

Number eligible to
attend

Number Attended

Adam Davey

Stefan Hicks

Brett Graves

Neil Pinner

Grant Priest

Nil

N/A

Nil

N/A

Indemnifying officers or auditor

8.1.

Indemnification

The Company has entered an Indemnity, Insurance and Access Deed with each Director. Pursuant to the Deed:

The Director is indemnified by the Company against any liability incurred in that capacity as an officer of the
Company to the maximum extent permitted by law subject to certain exclusions.

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

a. The date which is seven years after the Director ceases to be an officer of the Company; and

b. 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).

The Director has the right to inspect and copy a Company document in connection with any relevant proceedings
during the period referred to above.

Subject to the next sentence, the Company must maintain an insurance policy insuring the Director against liability as a
director and officer of the Company while the Director is an officer of the Company and until the later of:
a. The date which is seven years after the Director ceases to be an officer of the Company; and

b. 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.

8.2.

Insurance premiums
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.

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ANNUAL REPORT
30 June 2017

Directors' report

9. Options

9.1. Unissued shares under option

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

At the date of this report, Ensurance Limited has the following unissued ordinary shares under option (unlisted):

Issuing Entity

Kli Pty Ltd

Transocean Securities Pty Ltd

Kalonda Pty Ltd

Portafortuna Pty Ltd

Jalonex Investments Pty Ltd

Transocean Securities Pty Ltd

Kalonda Pty Ltd

Portafortuna Pty Ltd

Jalonex Investments Pty Ltd

Shares Under
Option
No.

Class of Shares

Exercise Price of
Option
$

Expiry Date of
Option

Ordinary

1,000,000

1,321,429

250,000

1,178,571

1,948,465

1,250,000

250,000

2,648,849

10,097,314

0.120

0.092

0.080

31 July 2020

The holders of these options do not have the right, by virtue of the option, to participate in any share issue or interest
issue of the Company. These options were issued subsequent to reporting date in connection with the Entitlement Offer
Prospectus dated 6 June 2017 (9,097,314 options) and in connection with a short-term loan agreement (1,000,000 options).

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) the Company's auditor, provided taxation compliance advice
& assistance amounting to $28,630 (2016: $10,800). During the year, Buzzacott LLP (Buzzacott), the Company’s auditor in the
UK also provided taxation, payroll and compliance advice amounting to $32,836 (2016: nil). Details of remuneration paid to
the auditor can be found within the financial statements at Note 6 - Auditor's Remuneration.

The Board has established certain procedures to ensure that the provision of non-audit services are compatible with, and do
not compromise, the auditor independence requirements of the Corporations Act 2001 (Cth). These 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).

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.

12. Auditor's independence declaration
The auditor's independence declaration under section 307C of the Corporations Act 2001 (Cth) for the year ended
30 June 2017 has been received and can be found on page 16 of the annual report.

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ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

DIRECTORS' REPORT

13. Remuneration report (audited)

ANNUAL REPORT
30 June 2017

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
Mr Brett Graves
Mr Neil Pinner

Mr Grant Priest
Mr Michael Huntly

Managing Director

Executive Director, Chief Operating Officer

Non-Executive Director

CEO of Ensurance Underwriting

Mr Peter Fielding
Mr Tim James CEO of Ensurance UK (Appointed 1 December 2016)

COO of Ensurance IT

Mr Sam Hallab

Chief Financial Officer & Company Secretary

13.2. Principles used to determine the nature and amount of remuneration

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

Competitiveness and reasonableness;
Acceptability to the shareholders;

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:

a. Executive Directors and other Senior Executives
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 arrangement.

b. Non-Executive Directors
The Company's Constitution provides that Directors are entitled to be remunerated for their services as follows:
 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.

c. Fixed Remuneration

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 hold
shares in the company.

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ANNUAL REPORT
30 June 2017

DIRECTORS' REPORT

13. Remuneration report (audited)

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

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".

e. Service Contracts

Remuneration and other terms of employment for the directors, KMP and the company secretary are formalised in
contracts of employment.

f. 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 2017

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

2017

Group Key Management
Person

Short-term benefits

Adam Davey

Stefan Hicks

Brett Graves

Grant Priest

Neil Pinner

Michael Huntly

Peter Fielding

Tim James

Sam Hallab

Salary, fees
and leave
$

100,000

419,371

195,183

54,750

50,000

238,108

194,110

177,904

227,236

1,656,662

Profit share
and bonuses

Non-
monetary
$

1,852

7,031

19,523

28,406

Post-
employment
benefits
Super-
annuation
$

9,500

42,600

18,542

4,750

22,620

16,258

3,812

23,879

141,961

Other

Long-term
benefits

Equity-settled share-
based payments

Total

Other

Equity

Options /
Rights
$

109,500

463,823

220,756

54,750

260,728

210,368

181,716

270,638

1,827,029

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ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

Directors' report

13. Remuneration report (audited)

2016

Group Key Management
Person

Salary, fees
and leave
$

88,333

278,502

190,719

45,625

39,838

Adam Davey

Stefan Hicks

Brett Graves

Grant Priest

Neil Pinner

Short-term benefits

Profit share
and bonuses

Non-
monetary(2)

Other(1)

40,216

11,216

Michael Huntly

179,481

10,000

Peter Fielding

Sam Hallab

186,218

12,692

1,026,408

10,000

51,432

13.4. Service Agreements

ANNUAL REPORT
30 June 2017

Post-
employment
benefits
Super-
annuation
$

8,392

26,458

18,118

3,785

18,001

15,466

1,206

91,901

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

207,482

201,684

13,898

8,980

1,188,721

a. Non-Executive Director appointment letter with Adam Davey
The Company appointed Mr Adam Davey as non-executive Chairman, on standard terms for agreements of this nature,
under which he is be entitled to director fees of $100,000 per annum, plus superannuation.

b. Executive services contract (ESC) with Stefan Hicks

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.

The gross annual remuneration package (including superannuation) increased to $500,000 per annum, from August

2016, to cover relocation expenses to the United Kingdom.

Should Mr Hicks 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.

c. Executive services contract (ESC) with Director Brett Graves

The Company has entered into an ESC with Mr Brett Graves on the following terms:

Mr Graves is employed 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 appointed Mr Neil Pinner 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.

P a g e | 11

ANNUAL REPORT
30 June 2017

Directors' report

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

13. Remuneration report (audited)

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.

13.5. Share-based compensation

a. Securities Received that are not performance-related

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, on 30 November
2015, 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. There were no share-based compensation granted to the Directors during the year
ended 30 June 2017.

There were no equity instruments issued during the year to Directors as result of performance rights converting or
options being exercised that had previously been granted as compensation.

13.6. Key Management Personnel equity holdings

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

2017

Group Key Management Person

Adam Davey (1) (2) (4)

Stefan Hicks (3)(4)

Brett Graves (2)

Grant Priest (2) (4)

Neil Pinner (2)

Michael Huntly (2)

Peter Fielding

Tim James

Sam Hallab

Balance at
start of year
No.

4,520,000

25,930,006

2,894,994

50,000

527,500

1,222,861

35,145,361

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.

84,090

4,604,090

25,930,006

1,315,905

4,210,899

22,725

230,681

590,957

72,725

758,181

1,813,818

2,244,358

37,389,719

(1) Mr Davey's shares include 4,000,000 partly-paid ordinary shares held by Mr Davey and his related parties.
(2) Other changes during the year represent the number of shares issued under the Entitlement Issue Prospectus dated 6 June 2017.
(3) Mr Hicks did not take up his entitlement under the Entitlement Issue Prospectus dated 6 June 2017.
(4)

During the year these Directors subscribed to the Company’s Convertible Notes issue. Upon conversion (subject to shareholder
approval), shareholdings will increase as follows: Stefan Hicks: 6,250,000; Adam Davey: 2,500,000; Grant Priest: 250,000 (see 13.6 (d)).

P a g e | 12

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

Directors' report

13. Remuneration report (audited)
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

ANNUAL REPORT
30 June 2017

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

(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 his related parties.
(2) Mr Hicks’ change relates to a change in control of the holder of the shares.
(3)
(4) Other changes during the year relate to the number of shares held at the time of ceasing to be a director.

Balance at the start of the year represents Mr Priest's existing relevant interests at the time of becoming a director.

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

2017 – Group

Group Key
Management Person

Balance at
start of 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.

Vested and
Exercisable
No.

Not Vested
No.

Adam Davey (1)

250,000

Stefan Hicks

Brett Graves

Grant Priest

Neil Pinner

Michael Huntly

Peter Fielding

Tim James

Sam Hallab

250,000

(250,000)

(1) Other changes during the year relate to options that expired during the year.

2016 – Group

Group Key
Management Person

Balance at
start of year
No.

Granted
during the year
No.

Exercised
during the year
No.

Other changes
during the year
No.

Adam Davey

Stefan Hicks

Brett Graves

Grant Priest

Neil Pinner

Michael Huntly

P a g e | 13

250,000

Balance at
end of year
No.

250,000

Vested and
Exercisable
No.

Not Vested
No.

250,000

ANNUAL REPORT
30 June 2017

Directors' report

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

13. Remuneration report (audited)

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

2017 – Group

Group Key
Management Person

Adam Davey

Stefan Hicks

Brett Graves

Grant Priest

Neil Pinner

Michael Huntly

Peter Fielding

Tim James

Sam Hallab

Balance at
start of year
No.

1,500,000

4,000,000

1,000,000

250,000

7,000,000

Granted as
Remuneration
during the year
No.

Other changes
during the year
No.

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

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

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.

1,500,000

4,000,000

1,000,000

250,000

7,000,000

Not Vested
No.

1,500,000

4,000,000

1,000,000

250,000

7,000,000

Converting loans in Ensurance Limited held by each Key Management Person

2017

Group Key Management Person – Converting
Loans

Balance at
start of year
No.

Subscribed
during the year
No.

Adam Davey

Stefan Hicks

Grant Priest

2,500,000

6,250,000

250,000

9,000,000

Balance at
end of year
No.

2,500,000

6,250,000

250,000

9,000,000

During the year these Directors subscribed to the Company’s Convertible Notes issue. Conversion is subject to
shareholder approval and until such point are classified as Converting Loans. Upon conversion, respective
shareholdings will increase by the number of shares detailed above.

P a g e | 14

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

ANNUAL REPORT
30 June 2017

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, converting loans and shareholdings.

13.8. Loans to Key Management Personnel

The Group currently has a loan payable to Mr Hicks of $2,485 as at 30 June 2017 (2016: $2,485). The Group also has a
loan payable to Mr Graves of $94,728 plus accrued interest of $12,164 as at 30 June 2017 (2016: nil).

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 Friday, 29 September 2017

P a g e | 15

AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE
CORPORATIONS ACT 2001 TO THE DIRECTORS OF ENSURANCE LIMITED
AND ITS CONTROLLED ENTITIES

I declare that, to the best of my knowledge and belief during the year ended 30 June 2017, there have
been:

— no contraventions of the auditor independence requirements as set out in the Corporations Act 2001

in relation to the audit; and

— no contraventions of any applicable code of professional conduct in relation to the audit.

MAZARS RISK & ASSURANCE PTY LIMITED

R. Megale
Director
Dated in Sydney this 29th day of September 2017.

M A Z A R S R I S K & A S S U R A N C E P T Y L I M I T E D
A B N : 3 9 1 5 1 8 0 5 2 7 5
L E V E L 1 2 , 9 0 A R T H U R S T R E E T , N O R T H S Y D N E Y N S W 2 0 6 0
P O B O X 1 9 9 4 , N O R T H S Y D N E Y N S W 2 0 5 9
T E L : + 6 1 2 9 9 2 2 1 1 6 6 - F A X : + 6 1 2 9 9 2 2 2 0 4 4
E M A I L : E M A I L @ M A Z A R S . C O M . A U

L I A B I L I T Y L I M I T E D B Y A S C H E M E , A P P R O V E D U N D E R T H E P R O F E S S I O N A L S T A N D A R D S L E G I S L A T I O N

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

ANNUAL REPORT
30 June 2017

Consolidated statement of profit or loss and other comprehensive income
for the year ended 30 June 2017

Continuing operations

Revenue

Other income

Business development

Compliance costs

Computers and communications

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

Net loss 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

2017
$

2016
$

3,218,892

3,033,103

6,000

679,195

3,224,892

3,712,298

(616,112)

(351,963)

(782,300)

(436,542)

(603,698)

(177,559)

(327,478)

(448,778)

(5,198,309)

(3,300,569)

(372,981)

(75,235)

(372,193)

(240,336)

(214,228)

(18,242)

(73,683)

(274,707)

(8,980)

(140,677)

(187,338)

(5,435,317)

(1,849,411)

342,285

71,981

(5,093,032)

(1,777,430)

1,801

11,729

Total comprehensive income attributable to members of the parent entity

(5,091,231)

(1,765,701)

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)

(5,093,032)

(1,777,430)

(5,091,231)

(1,765,701)

₵

(6.13)

₵

(3.11)

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

P a g e | 17

ANNUAL REPORT
30 June 2017

Consolidated statement of financial position
as at 30 June 2017

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

Note

2017
$

2016
$

Current assets
Cash and cash equivalents

Trade and other receivables

Trust account insurer 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

Provisions

Borrowings

Total current liabilities

Non-current liabilities
Provisions

Trade and other payables

Borrowings

Total non-current liabilities

Total liabilities

569,873

1,724,981

4,369,736

74,030

389,645

19,426

3,720,652

33,872

6,738,620

4,163,595

30,266

96,027

96,789

129,899

1,934,645

1,768,131

2,060,938

1,994,819

8,799,558

6,158,414

1,994,023

4,369,736

374,950

1,228,866

1,163,051

3,720,652

233,114

137,439

7,967,575

5,254,256

17a

57,833

25,453

17b

2,747,536

62,092

2,830,822

62,092

10,798,397

5,316,348

Net (liabilities)/assets

(1,998,839)

842,066

Equity

Issued capital

Reserves

Accumulated losses

Total equity

7,210,755

1,157,093

6,097,054

18,667

(10,366,687)

(5,273,655)

(1,998,839)

842,066

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

P a g e | 18

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

Consolidated statement of changes in equity
for the year ended 30 June 2017

Note

Issued
Capital

Accumulated
Losses

Balance at 1 July 2015

6,097,054

(3,496,225)

ANNUAL REPORT
30 June 2017

Share-based
Payment
Reserve

Share option
reserve

Revaluation
Reserve

Convertible
note option
premium
reserve

(1,777,430)

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 issued during the
year

8,980

Balance at 30 June 2016

6,097,054

(5,273,655)

8,980

Balance at 1 July 2016

6,097,054

(5,273,655)

8,980

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

Issue of ordinary shares

Capital raising transaction costs

Share options granted

Equity derivative issued

19c

17b

(5,093,032)

2,077,851

(964,150)

838,242

(2,042)

11,729

Total

2,598,787

(1,777,430)

11,729

(1,765,701)

9,687

1,801

8,980

842,066

(5,093,032)

1,801

(5,091,231)

2,077,851

(964,150)

838,242

298,383

Balance at 30 June 2017

7,210,755

(10,366,687)

8,980

838,242

11,488

298,383

(1,998,839)

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

P a g e | 19

ANNUAL REPORT
30 June 2017

Consolidated statement of cash flows
for the year ended 30 June 2017

Cash flows from operating activities

Receipts from customers

Interest received

Interest and borrowing costs paid

Payments to suppliers and employees

(Payments) / refund of income taxes

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

Note

2017
$

2016
$

3,475,100

3,308,311

23,428

(176,279)

43,093

(18,242)

(7,056,695)

(4,554,980)

41,036

Net used in operating activities

9d.i

(3,734,446)

(1,180,782)

Cash flows from investing activities

Proceeds from asset development grant funds

Payment for development of intangible assets

(Payment for) / proceeds from sale of financial assets

Purchase of plant and equipment

Net used in investing activities

Cash flows from financing activities

Proceeds from share issue

Proceeds from convertible notes subscriptions

Net proceeds from borrowings

Convertible notes interest paid

Repayment of borrowings

Net cash provided by/(used in) financing activities

146,128

(533,265)

(952,958)

66,523

(25,918)

(4,000)

(65,867)

(492,660)

(876,697)

457,507

3,000,007

1,172,187

(145,692)

(90,960)

(31,766)

4,393,049

(31,766)

Net increase/(decrease) in cash held

165,943

(2,089,245)

Cash and cash equivalents at the beginning of the year

257,458

2,346,703

Cash and cash equivalents at the end of the year

423,401

257,458

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

P a g e | 20

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

Notes to the consolidated financial statements
for the Year Ended 30 June 2017

ANNUAL REPORT
30 June 2017

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 2017 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.

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.

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 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 has incurred a net loss for the year of $5,093,032 (2016: $1,777,430). As at 30 June 2017, the Group had
negative working capital of $1,228,955 (2016: $1,090,661), a net liability of $1,998,839 (2016: $842,066 net assets), and
accumulated losses of $10,366,687 (2016: $5,273,655). The Group has had recurring operating losses and working capital
deficiencies as a result of the delivery of new products and cashflow generating business units in accordance with the
Group’s strategic goals. The ability of the Group to continue as a going concern and pay their debts as and when they fall
due is dependent upon a number of factors including:

The Group’s ability to raise additional funds through debt financing and capital raising arrangements such that they are
sufficient enough to provide adequate working capital in line with forecasts; the group’s ability to realise forecast
revenue and expense targets, including an increase in revenue of 60% prior to taking into account the revenue of
Ensurance UK Limited and 118% increase in revenue earned by Ensurance UK Limited. There is a forecast increase in
expenses of 14% over the next 12 months;

The ability of the Group’s two AFSL holders Savill Hicks Corporation Pty Ltd and Ensurance Underwriting Pty Ltd to
produce cash flows available to support the group in excess of the cash flow needs requirements established under
their licence conditions. Cash flows generated by these entities required to meet cash flow need requirements
including any cash flow buffers are not available to support Group cash flow needs. The AFSL licence holders represent
two of the three operating companies and 100% of the revenue and 57% of the cash flow of the group on a historical
basis.

The continued support of its investors in supporting any further capital raising program.

The directors have forecast a year to date positive cash flow result for the year ending 12 months from the date of this
report based upon the following key assumptions:

Ensurance UK to generate $1,892,600 revenue from the 51 signed up brokers

The white label products revenue in Savill Hicks Pty Ltd will significantly increase
Continued increase in revenue of Ensurance Underwriting Pty Ltd by 55%

The Group’s 2017 financial year loss was significantly contributed to ($1.015m) by the establishment of Ensurance UK
Limited in August 2016. During the year it has seen the delivery of a fully operational underwriting team, which
commenced generating cashflow at the beginning of the 2017/18 financial year.

P a g e | 21

ANNUAL REPORT
30 June 2017

Notes to the consolidated financial statements
for the Year Ended 30 June 2017

Note 1

Statement of significant accounting policies

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

The Group’s 2017 financial year loss was contributed to through IT investment of $1.376m (with an additional $440k for
white label set-up, wages and marketing) to enable the delivery of a key automated software platform providing 7 new
products, including the integration of a major external third-party distribution lead generator.

Furthermore, the following agreements were signed subsequent to financial year-end to make available further working
capital funds:

The Group entered into an underwriting agreement on 27 September 2017 with Transocean Pty Limited in respect of its
intention to undertake a placement program for eligible investors with a view to raising $3,000,000 before capital
raising cost.

The Group entered into a loan agreement on 27 September 2017 with Kalonda Pty Ltd ATF Leibowitz Superannuation
Fund to make available to the Group a cash advance facility on a progressive basis up to but not exceeding $1,150,000,
payable at the earliest of 3 months from the initial drawdown or the finalisation of the $3,000,000 share placement
plan.

Having regard to the above, the Directors are confident that forecast results are realistic and achievable, and the
anticipated capital raising program is sufficient to meet the ongoing working capital needs of the Group. On this basis, the
Directors have determined that the going concern basis of preparation of the financial report remains appropriate.
Should the forecast results not be realised and should the anticipated capital raising program generate insufficient working
capital funds then there may be doubt as to the ability of the Group to continue as a going concern. In this instance, the
Group may be unable to realise its assets or discharge its liabilities in the normal course of operations and at the amounts
stated in the financial report.

iii. Reverse acquisition
Ensurance Ltd 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). Notwithstanding, as Ensurance Ltd is the listed
entity and the ultimate holding company of the Ensurance Group of companies, the financial statement have been referred
to as the financial statements of Ensurance Ltd.

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 2017 but determined that their application to the financial statements is either not relevant or not
material.

P a g e | 22

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

Notes to the consolidated financial statements
for the Year Ended 30 June 2017

Note 1

Statement of significant accounting policies

ANNUAL REPORT
30 June 2017

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.

The Group measures goodwill at the acquisition date as:

the fair value of the consideration transferred; plus
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. 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.

P a g e | 23

ANNUAL REPORT
30 June 2017

Notes to the consolidated financial statements
for the Year Ended 30 June 2017

Note 1

Statement of significant accounting policies

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

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

The Board of Ensurance Ltd has entered into the Tax Consolidation Regime 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

P a g e | 24

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

Notes to the consolidated financial statements
for the Year Ended 30 June 2017

Note 1

Statement of significant accounting policies

ANNUAL REPORT
30 June 2017

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) and Value Added Tax (VAT)
Revenues, expenses, and assets are recognised net of the amount of GST/VAT, except where the amount of GST/VAT
incurred is not recoverable from the taxation authority. In these circumstances the GST/VAT 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/VAT.

The net amount of GST/VAT recoverable from, or payable to, the Australian Taxation Office in Australia or HM Revenue &
Customs in the UK 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/VAT 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.

P a g e | 25

ANNUAL REPORT
30 June 2017

Notes to the consolidated financial statements
for the Year Ended 30 June 2017

Note 1

Statement of significant accounting policies

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

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

2017
%

2016
%

11.25 – 37.50

25.00 – 37.50

P a g e | 26

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

Notes to the consolidated financial statements
for the Year Ended 30 June 2017

Note 1

Statement of significant accounting policies

ANNUAL REPORT
30 June 2017

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.

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.

Impairment of non-financial assets

h.
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.

i. 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.

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.

P a g e | 27

ANNUAL REPORT
30 June 2017

Notes to the consolidated financial statements
for the Year Ended 30 June 2017

Note 1

Statement of significant accounting policies

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

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.

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.

P a g e | 28

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

Notes to the consolidated financial statements
for the Year Ended 30 June 2017

Note 1

Statement of significant accounting policies

ANNUAL REPORT
30 June 2017

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.

j. 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.

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.

P a g e | 29

ANNUAL REPORT
30 June 2017

Notes to the consolidated financial statements
for the Year Ended 30 June 2017

Note 1

Statement of significant accounting policies

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

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.

k. 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.

Leases

l.
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.

m. 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/VAT (Note 1e.iii Goods and Services Tax (GST) and Value Added Tax (VAT)).

n. 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.

o. 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.

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.

P a g e | 30

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

Notes to the consolidated financial statements
for the Year Ended 30 June 2017

Note 1

Statement of significant accounting policies

ii. Key Estimate —Impairment

ANNUAL REPORT
30 June 2017

(1)

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 in subsidiaries and loans to subsidiaries are impaired. Where necessary, the Company’s assessments
are based on the estimation of the value-in-use of the assets defined in AASB 136 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 2017 was $nil (2016: $nil), and loans $212,025 (2016: $714,423) after an impairment loss of $4,550,809
was recognised in 2017 (2016: $9,029,808). The impairment losses have been included in the parent Company’s
results for the year. Details of the impairment loss calculation are set out in Note 30.

In determining whether an impairment exists, management assumes that a subsidiary will only be able to repay
its loans to the extent it has positive net assets. It is also assumed that the Company’s legal subsidiaries have no
realisable value as standalone entities and so the shares it owns in them must be fully impaired. It is assumed
that loans with each subsidiary are interchangeable and so the extent of any impairment on loans is limited to the
amount of the net deficiency of the sub-group. A further net deficiency in the sub-group of 5% would see all loans
fully impaired, resulting in an impairment loss of $4,649,428 in the year. However, a 5% decrease in the
deficiency would see a reversal of the impairment of $303k.

(2)

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 was recognised during
the financial year. The carrying amount of the intangible assets as at 30 June 2017 was $1,934,645 (2016:
$1,768,131) (Note 15).

The value in use was determined by discounting the future cashflow generated from premium contracts and are
based on the following assumptions:

•
•

•

Budgets were projected based on actual operating results over a projected 8-year period
Revenue projections for year 2018 – 2025 were based on Ensurance UK Limited generating $1,892,600
revenue from the 51 signed up brokers; the white label products revenue in Savill Hicks Corporation Pty
Ltd significantly increasing and continued increase of revenue in Ensurance Underwriting Pty Ltd by
55%.
FY 2018 and FY 2019 growth rate without the use of the IT system are 86% and 68%, respectively. The
succeeding future years of the model use a constant 10%; and
A pre-tax discount of 25% based on weighted average cost of capital.

A sensitivity analysis was performed when making the impairment assessment. If projected revenue generated
from use of the asset were decreased by 10%, the notional value of the software decreases by $925k. If projected
revenue were decreased by 20%, the notional value of the software decreases by $1.85m. However, in both cases
the revised notional value of the software remains higher than its carrying amount and thus no impairment need
be recorded.

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.

P a g e | 31

ANNUAL REPORT
30 June 2017

Notes to the consolidated financial statements
for the Year Ended 30 June 2017

Note 1

Statement of significant accounting policies

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

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.

p. Amendments to AASBs and the new Interpretations that are mandatorily effective for the current period

The accounting policies adopted are consistent with those of the previous financial years except the following which the
Group adopted from 1 July 2016:

AASB 2016-3 Amendments to Australian Accounting Standards arising from Withdrawal of AASB 1031 Materiality
AASB 2014-4 Amendments to Australian Accounting Standards – Clarification of Acceptable Methods of Depreciation &

Amortisation

AASB 2015-1 Amendments to Australian Accounting Standards – Annual Improvements to Australian Accounting

Standards 2012-2014 Cycle

AASB 2015-2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 101

The adoption of this standard did not have any impact on the current period or any prior period and is not likely to affect
future periods.

q. New Accounting Standards and Interpretations applicable from 1 July 2016 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

on or after 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.

P a g e | 32

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

Notes to the consolidated financial statements
for the Year Ended 30 June 2017

Note 1

Statement of significant accounting policies

ANNUAL REPORT
30 June 2017

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 16 will require representing the Group’s rental leases in Sydney,
Melbourne and London as finance leases, with applicable accounting treatment applied. There will also be some minor
adjustments for representing operating leases over office equipment, but given the scale and nature of these amendments
the Directors believe that the adoption of AASB 16 will not have a material impact on the Group’s recognition of leases and
disclosures.

iv. AASB 2016-1: Amendments to Australian Accounting Standards – Recognition of Deferred Tax Assets for Unrealised

Losses (applicable to annual reporting periods commencing on or after 1 January 2017).

AASB 2016-1 clarifies the issues regarding recognition and measurement of deferred tax assets on fixed rate debt
investments. Where the fair value on a fixed rate debt investment to be held to maturity has decreased because of an
increase in market interest rates, deferred tax assets must be recognised for the deductible temporary difference between
the fair value and tax base, even though the investment is not deemed to be impaired.

The Directors anticipate that the adoption of AASB 2016-1 will not have a material impact on the Group’s recognition of
deferred tax assets.

v. AASB 2017-4: Amendments to Australian Accounting Standards – Uncertainty over Income Tax Treatments (applicable

to annual reporting periods commencing on or after 1 January 2019).

AASB 2017-4 amends AASB 1 to clarify that a first-time adopter whose date of transition to Australian Accounting
Standards is before 1 July 2017 may elect not to reflect the application of AASB Interpretation 23, as identified in AASB
1048 Interpretation of Standards, in comparative information in its first financial statements prepared in accordance with
Australian Accounting Standards.

The Directors anticipate that the adoption of AASB 2017-4 will not have a material impact on the Group’s presentation of its
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

P a g e | 33

ANNUAL REPORT
30 June 2017

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

Note 2

Registered Office and Principal Place of Business

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

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:

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

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

Postal:

Telephone:

Facsimile:

+61 (0)2 9806 2099

Note

Other Business Locations

Melbourne:

Telephone:

4/400 Canterbury Road
Surrey Hills VIC 3127
+61 1300 794 079

London:

Telephone:

Level 12, 6 Bevis Marks
London, EC3A 7BA, United Kingdom
+44 (0)20 3786 1035

Note

P a g e | 34

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

Notes to the consolidated financial statements
for the year ended 30 June 2017

Note 4

Revenue and other income

a. Revenue

Sales revenue

Interest

Other

b. Other Income
Grant income

Other

Note 5

Loss before income tax

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

Note

14b

15b

b. Employment costs:

Directors fees

Increase in employee benefits provisions

Superannuation expenses

Wages and salaries

Other employment related costs

Note 6

Auditor's remuneration

Audit and review of financial statements:

 Mazars Risk and Assurance Pty Limited
 Buzzacott LLP

Other services - Taxation and other advice provided by a related practice of

the Auditor - Mazars

Other services - Taxation and other advice provided by a related practice of

the Auditor - Buzzacott

ANNUAL REPORT
30 June 2017

2017
$

2016
$

3,168,931

2,881,038

23,428

26,533

43,093

108,972

3,218,892

3,033,103

6,000

2017
$

59,790

376,751

436,542

204,750

137,577

423,185

673,195

6,000

679,195

2016
$

36,088

412,690

448,778

193,958

160,404

236,128

3,922,824

2,443,686

509,973

266,393

5,198,309

3,300,569

2017
$

2016
$

102,500
15,249

115,000
-

28,630

10,800

32,836

179,215

125,800

P a g e | 35

ANNUAL REPORT
30 June 2017

Notes to the consolidated financial statements
for the year ended 30 June 2017

Note 7

Income tax

Note

Income tax (benefit)/expense
Current tax

Deferred tax

Tax rebate for Research and Development

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

2017
$

2016
$

(342,285)

(71,981)

(342,285)

(71,981)

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

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

Prima facie tax benefit on operating loss at 27.5% (2016: 30%)

(1,494,712)

(554,823)

Add / (Less)

Tax effect of:

Capital-raising costs deductible

Timing differences

Non-deductible expenses

Other

(20,312)

(91,436)

(3,087)

(59,529)

58,777

750

2,929

Deferred tax asset not brought to account

1,609,547

551,896

Income tax (benefit)/expense attributable to operating loss

Less rebates:

Tax rebate for Research and Development

Income tax (benefit)/expense

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

profit are as follows

(342,285)

(71,981)

(342,285)

(71,981)

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

350,906

350,522

P a g e | 36

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

Notes to the consolidated financial statements
for the year ended 30 June 2017

Note 7

Income tax (cont.)

Note

e. Deferred tax assets

Provisions

Other

Capital raising costs

Transaction costs

Tax losses

Set-off against deferred tax liabilities

Net deferred tax assets

Less deferred tax assets not recognised

Net tax assets

f. Deferred tax liabilities

Provisions

Intangibles

Property, plant, and equipment

Set-off deferred tax assets

Net deferred tax liabilities

g. 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

ANNUAL REPORT
30 June 2017

2017
$

79,023

38,444

1,340,313

1,457,780

(171,700)

1,286,080

(1,286,080)

171,700

(171,700)

2016
$

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)

(54,233)

2,134,779

978,546

791,244

7,016

2,080,546

1,776,806

Potential deferred tax assets attributable to tax losses have not been brought to account at 30 June 2017 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.

h. Tax consolidation

The Board of Ensurance Ltd has entered into the Tax Consolidation Regime from 1 July 2015. This includes 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.

P a g e | 37

ANNUAL REPORT
30 June 2017

Notes to the consolidated financial statements
for the year ended 30 June 2017

Note 8

Earnings per share(EPS)

a. Reconciliation of earnings to profit or loss

Loss for the year

Less: loss attributable to non-controlling equity interest

Loss used in the calculation of basic EPS

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

Note

2017
$

2016
$

(5,093,032)

(1,777,430)

(5,093,032)

(1,777,430)

2017
$

2016
$

b. Number of ordinary shares outstanding during the year used in calculation

of basic EPS

83,113,862

57,140,909

c. Earnings per share

Basic EPS (cents per share)

2017
$

2016
$

(6.13)

(3.11)

d. At the balance date, the Group has 10,097,314 unissued shares under options (2016: 1,000,000), 8,000,000 partly-paid shares on
issue (2016: 8,000,000), 7,000,000 performance rights (2016: 7,000,000) and 13,636,366 convertible notes (2016: nil). The Group
does not report diluted earnings per share on annual losses generated by the Group. During the 2017 financial year the Group's
unissued shares under option, partly-paid shares, and performance rights were anti-dilutive. The Group’s convertible notes are
dilutive.

e. During the year, the group issued the following unissued shares under options: 1,000,000 options exercisable at 12 cents and
expiring 31 July 2020; 3,000,000 options exercisable at 9.2 cents and expiring 31 July 2020 and 6,097,314 options exercisable at 8
cents and expiring 31 July 2020. These options are anti-dilutive.

P a g e | 38

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

Notes to the consolidated financial statements
for the year ended 30 June 2017

Note 9

Cash and cash equivalents

Note

a. Current

Cash at bank
Cash on hand

ANNUAL REPORT
30 June 2017

2017
$

568,694
1,179

569,873

2016
$

388,635
1,010

389,645

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

9a
17

569,873
(146,472)

389,645
(132,187)

423,401

257,458

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

2017
$

2016
$

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

Loss after income tax

(5,093,032)

(1,777,430)

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

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

Depreciation and amortisation
Convertible note interest
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 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

R&D Tax rebate receivable

Receivable from underwriter

436,542
145,692
-
-

(28,460)
(40,158)
(342,285)
1,049,678
137,577

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

37,080
(13,989)
(30,945)
648,206
171,733

(3,734,446)

(1,180,782)

2017
$

47,886

342,285

1,334,810

2016
$

19,426

1,724,981

19,426

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.

P a g e | 39

ANNUAL REPORT
30 June 2017

Notes to the consolidated financial statements
for the year ended 30 June 2017

Note 11 Other assets

Current
Prepayments

Note 12

Compliance of insurance assets versus insurance liabilities

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

2017
$

74,030

2016
$

33,872

30 JUNE 2016

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

Savill Hicks Corp.
Pty Limited
$

Ensurance
Underwriting Pty
Limited
$

Ensurance
UK Limited
$

872,494
1,633,100

444,384
833,634

Total trust account insurance assets

2,505,594

1,278,018

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

Total trust account insurance liabilities

2,505,594

1,278,018

Excess of insurance assets over insurance liabilities

30 JUNE 2017

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

1,376,866
1,393,544

844,031
816,170

2,487
-

Total trust account insurance assets

2,770,410

1,660,201

2,487

4,369,736

Trust account insurer liabilities
Underwriter's liability
Unearned commissions
Other

Less: intra-licensee balances

2,559,029
196,404
14,977

1,526,143
80,912
53,146

2,487
-
-

4,087,659
277,316
68,123

(63,362)

Total trust account insurance liabilities

2,770,410

1,660,201

2,487

4,369,736

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

2017
$

5,868

24,398

30,266

2016
$

19,467

33,435

43,887

96,789

P a g e | 40

-
-

-
-
-

Total
$

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

3,720,652

3,579,492
142,744
61,376

(62,960)

3,720,652

2,223,384
2,209,714
(63,362)

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

Notes to the consolidated financial statements
for the year ended 30 June 2017

ANNUAL REPORT
30 June 2017

Note 14

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 2015

Additions

Disposals

Note

14b

2017
$

127,527

(77,825)

49,702

186,616

(140,291)

46,325

96,027

Fixtures,
furniture, and
fittings
$

46,985

8,998

Plant and
equipment
$

53,134

56,870

2016
$

118,200

(67,601)

50,599

170,630

(91,330)

79,300

129,899

Total
$

100,119

65,868

Depreciation expense

(5,384)

(30,704)

(36,088)

Carrying amount: 30 June 2016

Carrying amount: 1 July 2016

Additions

Disposals

50,599

9,932

79,300

15,986

129,899

25,918

Depreciation expense

(10,829)

(48,961)

(59,790)

Carrying amount: 30 June 2017

49,702

46,325

96,027

Note 15

Intangible assets

a. Non-current

Software development costs

Accumulated amortisation

Total intangible assets

b. Movements in Carrying Amounts

Carrying amount: 1 July 2015

Additions

Amortisation expense

Carrying amount: 30 June 2016

Carrying amount: 1 July 2016

Additions

Amortisation expense

Carrying amount: 30 June 2017

P a g e | 41

Note

2017
$

2016
$

3,452,579

2,909,315

(1,517,934)

(1,141,184)

15b

1,934,645

1,768,131

Software
development
costs
$

835,679

1,345,142

(412,690)

1,768,131

543,265

(376,751)

1,934,645

ANNUAL REPORT
30 June 2017

Notes to the consolidated financial statements
for the year ended 30 June 2017

Note 16

Trade and other payables

a. Current

Unsecured
Trade payables & accruals

Other payables

Other taxes

Related party payables

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

Note

16b

2017
$

2016
$

544,923

538,783

747,176

163,141

341,783

239,897

578,886

2,485

1,994,023

1,163,051

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

Interest-bearing, unsecured short term loans (i)

Related party loans

Premium funding loans

b. Non-Current

Convertible notes (ii)

Convertible loans (ii)

Accrued interest

2017
$

146,472

963,900

114,906

3,588

2016
$

132,187

5,252

1,228,866

137,439

2,280,007

720,000

45,912

Less: Equity component – value of conversion rights (iii)

(298,383)

2,747,536

(i) This liability consists of the following loans: $200,000, unsecured and repayable on 12 July 2017 carrying an interest
rate of 2.5% for every two weeks the loan is outstanding; $340,000, unsecured and repayable upon receipt of the
Company’s R&D tax rebate carrying an interest rate of 10% pa; $500,000, unsecured and repayable on 8 August 2017
carrying an interest rate of 36% pa. An adjustment of $76,100 was made to this figure to account for the value of options
included with the loan balance. Refer to note 19 (c).

(ii) A $3m convertible note was issued by the Company on 11 July 2016 at an issue price of $0.22 per note. Each note
entitles the holder to convert to one ordinary share. Conversion may occur at any time for a period of three years from
the subscription date. If the notes have not been converted, they will be redeemed at this point. Interest of 8% will be
paid quarterly up until that settlement date.

To the extent that convertible notes are held by Directors of the Company, they shall be classified as convertible loans, as
conversion is subject to the approval of shareholders. Convertible loans are held in the following proportions: Stefan
Hicks: $500,000; Adam Davey: $200,000; Grant Priest: $20,000.

P a g e | 42

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

ANNUAL REPORT
30 June 2017

(iii) The net proceeds received from the issue of the convertible notes have been split between the financial liability
element and an equity component, representing the residual attributable to the option to convert the financial liability
into equity of the Company. The equity derivative of $298,383 has been credited to equity (option premium on
convertible notes) and applies equally to convertible notes and convertible loans.
The liability component is measured at amortised cost. The interest component is measured at amortised cost. The
interest expense is calculated by applying an effective interest rate of 12% for the period since the loan notes were issued.

The conversion price of the note reduces in line with the issue price of any capital raising conducted during the life of the
note. As at the balance date, the conversion price was 8 cents and as such a further 37,500,000 shares stand to be issued,
being 28,500,000 from convertible notes and 9,000,000 from convertible loans.

Note 18

Employee benefit provisions

Note

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

Carrying amount at the end of year

Annual leave
$

201,204

349,784

(221,536)

329,452

2017
$

374,950

57,833

432,783

Long service
Leave
$

94,002

9,329

2016
$

233,114

62,092

295,206

Total
$

295,206

359,113

(221,536)

103,331

432,783

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 | 43

ANNUAL REPORT
30 June 2017

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

Notes to the consolidated financial statements
for the year ended 30 June 2017

Note 19

Issued capital

2017
No.

2016
No.

2017
$

2016
$

Fully paid ordinary shares at no par value

83,113,862

57,140,909

7,210,755

6,097,054

a. Ordinary shares

At the beginning of the period

57,140,909

6,097,054

Shares issued during the year

Capital raising transaction costs

25,972,953

2,077,851

(964,150)

Balance at reporting date

83,113,862

57,140,909

7,210,755

6,097,054

b. Partly paid shares

Partly-paid Shares

2017
No.

2016
No.

19b.i

8,000,000

i. Each Partly Paid Share is issued at a price of 20 cents of which 0.01 of one cent is paid with the balance payable, at
the election of the holder, any time within five years from the date of Shareholder approval of the 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

Options exercisable at 20 cents expired 19 September 2016

Options exercisable at 12 cents expiring 31 July 2020

Options exercisable at 9.2 cents expiring 31 July 2020

Options exercisable at 8 cents expiring 31 July 2020

Options were valued using the Black-Scholes model as follows

Options exercisable at 12 cents expiring 31 July 2020

Options exercisable at 9.2 cents expiring 31 July 2020

Options exercisable at 8 cents expiring 31 July 2020

2017
No.

2016
No.

1,000,000

3,000,000

6,097,314

10,097,314

1,000,000

2017
$

76,100

245,700

516,442

838,242

2016
$

P a g e | 44

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

d. Performance rights

Performance Rights Class A

Performance Rights Class B

Carrying amount at the end of year

e. Convertible Notes

Convertible notes

Converting loans

Carrying amount at the end of year

ANNUAL REPORT
30 June 2017

26a.i

26a.ii

17b.i

2017
No.

2016
No.

6,500,000

500,000

7,000,000

28,500,000

9,000,000

37,500,000

f. Capital Management

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.

Current ratio

2017

0.85

2016

0.79

The focus of the Group's capital risk management is the current working capital position against the requirements of the
Group in respect to operations, software development and overheads. The Group's strategy is to ensure appropriate
liquidity is maintained to meet forecast operating requirements, with a view to initiating 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 2017 and 30 June 2016 were as follows:

Note

12a

12b

2017
$

569,873

1,724,981

74,030

2016
$

389,645

19,426

33,872

4,369,736

3,720,652

(4,369,736)

(3,720,652)

(1,994,023)

(1,163,051)

(1,228,866)

(374,950)

(137,439)

(233,114)

(1,228,955)

(1,090,661)

Cash and cash equivalents

Trade and other receivables

Other current assets

Trust account insurer assets

Trust account insurer liabilities

Trade and other payables

Short-term borrowings

Short-term provisions

Working capital position

P a g e | 45

ANNUAL REPORT
30 June 2017

Notes to the consolidated financial statements
for the year ended 30 June 2017

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

Note 20 Reserves

Investment revaluation reserve

Share-based payment reserve

Convertible note option premium reserve

Share option reserve

Total reserves

Investment revaluation reserve

Note

20a

20b

20c

19,20d

2017
$

11,488

8,980

298,383

838,242

2016
$

9,687

8,980

1,157,093

18,667

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 equity issues.

c. Convertible note option premium reserve

The convertible note option premium reserve recognises the equity component attached to the Company’s convertible
notes.

d. Share option reserve

The share option reserve recognises the value of the unlisted share options in the Company.

P a g e | 46

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

ANNUAL REPORT
30 June 2017

Notes to the consolidated financial statements
for the year ended 30 June 2017

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

Ensurance UK Limited

Country of
Incorporation

Australia

United Kingdom

Class of
Shares

Ordinary

b. Investments in subsidiaries are accounted for at cost.

c. Ensurance UK Limited was incorporated in the United Kingdom on 10 August 2016.

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

2017

100.0%

2016

100.0%

2017
$

2016
$

267,848

178,401

446,249

216,147

159,182

375,329

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. A further
operating lease is held over 6 Bevis Marks, London. The period of lease is a non-cancellable one-year period commencing
12 December 2016.

P a g e | 47

ANNUAL REPORT
30 June 2017

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

Notes to the consolidated financial statements
for the year ended 30 June 2017

Note 23 Key Management Personnel compensation (KMP)

The names and positions of KMP are as follows:

Mr Adam Davey
Mr Stefan Hicks

Mr Brett Graves
Mr Neil Pinner
Mr Grant Priest

Chairman

Managing Director

Executive Director, Chief Operating Officer

Non-Executive Director

Mr Michael Huntly
Peter Fielding

CEO of Ensurance Underwriting

COO of Ensurance IT

Sam Hallab

Chief Financial Officer & Company Secretary (appointed Company Secretary 1 February 2017)

Tim James CEO of Ensurance UK Limited (Appointed 1 December 2016)

The total of remuneration paid to KMP during the year are as follows:

Short-term employee benefits

Post-employment benefits

Share-based payments

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 (spouse of Mr Brett Graves)
 C Hicks (spouse of Mr Stefan Hicks)
 P Huntly (spouse of Mr Michael Huntly)

J Huntly (son of Mr Michael Huntly)

2017
$

1,685,068

141,961

2016
$

1,087,840

91,901

8,980

1,827,029

1,188,721

2017
$

2016
$

45,865

-
11,585

43,654

615

46,442
-

P a g e | 48

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

Notes to the consolidated financial statements
for the year ended 30 June 2017

Note 25 Operating segments

Identification of reportable segments

ANNUAL REPORT
30 June 2017

2014
$

2013
$

The Group operates predominantly in the insurance industry. This comprises sale of insurance products & 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 four reportable
segments: insurance (both in Australia and the UK), information technology and corporate overheads.

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 "Corporate Head Office" 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

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

The Group operates in two geographical areas being Australia and the United Kingdom. Segment results are reported
under the Australian regulatory body’s accounting standards.

P a g e | 49

ANNUAL REPORT
30 June 2017

Notes to the consolidated financial statements
for the year ended 30 June 2017

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

Note 25 Operating segments (cont.)

For the Year to 30 June 2017

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 2017

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
$

Insurance (UK)
$

Information
Technology
$

Corporate Head
Office
$

3,195,464
-
22,018

3,020,161

(163,247)
6,000

-
-
-

-
-

Total
$

3,195,464
-
23,428

3,218,892

-
-
-

-
-
1,410

1,410

(147,819)
-

311,066
-

-
6,000

3,224,892

17,359

(1,013,351)

(1,009,827)

(2,992,956)

(4,998,775)

(69,267)
-

(1,681)
-

(361,554)
-

(4,039)
-

(436,542)
-

(5,435,317)

6,006,212

128,133

1,741,599

11,708,489

19,584,433

(10,784,875)

8,799,558

76,265
14,354

90,619

-
8,981

8,981

466,999
-

466,999

-
2,255

2,255

543,264
25,590

568,854

5,415,103

1,142,995

3,226,384

2,927,657

12,712,139

(1,913,742)

10,798,397

P a g e | 50

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

Notes to the consolidated financial statements
for the year ended 30 June 2017

ANNUAL REPORT
30 June 2017

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
(iii) Amounts not included in segment results

but reviewed by Board:

Depreciation and amortisation

(iv) 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
$

Corporate Head
Office
$

-
673,195
-

673,195

-
-
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

(13,149,605)

6,158,414

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

(4,278,641)

5,316,348

P a g e | 51

ANNUAL REPORT
30 June 2017

Notes to the consolidated financial statements
for the year ended 30 June 2017

Note 26

Share-based payments

Share-based payment expense

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

2017
$

2016
$

8,980

a. The above share-based payment expense is comprised of the following arrangements in place at 30 June 2017:

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

2017
No.

7,000,000

2016
No.

7,000,000

The weighted average remaining contractual life of performance rights outstanding at year end was 3.423 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. These values were calculated using the Monte-Carlo option pricing model, applying the
following inputs to performance rights issued:

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

Class B Rights

30 November 2015 30 November 2015

$0.19

$0.80

6,500,000

3.423

31.06%

2.00%

$0.19

$0.25

500,000

3.423

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 | 52

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

Notes to the consolidated financial statements
for the year ended 30 June 2017

Note 27
Financial risk management
a. Financial Risk Management Policies

ANNUAL REPORT
30 June 2017

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

Financial Assets

 Cash and cash equivalents

569,873

 Trade and other receivables

 Trust account insurer assets

 Financial assets

Fixed
Interest
Rate

Non-
interest
Bearing

2017
Total

Floating
Interest
Rate

569,873

389,645

1,724,981

2,209,714

2,160,022

4,369,736

30,266

Fixed
Interest
Rate

Non-
interest
Bearing

2016
Total

389,645

19,426

2,466,734

1,316,878

3,783,612

96,789

Total Financial Assets

569,873

2,209,714

3,915,269

6,694,856

389,645

2,466,734

1,433,093

4,289,472

Financial Liabilities

Financial liabilities at
amortised cost

 Trade and other payables

 Trust account insurer

liabilities

 Borrowings

1,994,023

4,369,736

146,472

3,826,342

3,588

3,976,402

132,187

Total Financial Liabilities

146,472

3,826,342

6,367,347

10,340,161

132,187

1,163,051

3,720,652

5,252

137,439

4,888,955

5,021,142

Net Financial
Assets/(Liabilities)

423,401

(1,616,628)

(2,452,078)

(3,645,305)

257,458

2,466,734

(3,455,862)

(731,670)

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.

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.

P a g e | 53

ANNUAL REPORT
30 June 2017

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

Note 27 Financial risk management (cont.)

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

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 that no allowance for impairment is necessary 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, wherever possible.

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

Gross
2017
$

Impaired
2017
$

1,302,571
465,221
257,875
47,493
(63,362)

2,009,798

47,886

2,057,684

-
-
-
-
-

Past due but not
impaired
2017
$

Net
2017
$

1,302,571
465,221
257,875
47,493
(63,362)

2,009,798

-
465,221
257,875
47,493
-

770,589

47,886

2,057,684

770,589

Trade receivables
Not past due
Past due up to 30 days
Past due 30 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 to demonstrate the Licensees will have sufficient
cash under the terms of their license.

P a g e | 54

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

Notes to the consolidated financial statements
for the year ended 30 June 2017

Note 27 Financial risk management (cont.)

ANNUAL REPORT
30 June 2017

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

2017
$

2016
$

2017
$

2016
$

Total

2017
$

2016
$

Financial liabilities due for payment
Trade and other payables
Trust account insurer liabilities
Borrowings

1,994,023
4,369,736
1,228,866

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

25,453
-
2,747,536

Total contractual outflows

7,592,625

5,021,142

2,772,989

Financial assets

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

569,873
1,724,981
4,369,736

389,645
19,426
3,720,652

Total anticipated inflows

6,664,590

4,129,723

-
-
-

Net (outflow)/inflow on financial
instruments

(928,035)

(891,419)

(2,772,989)

i. Market risk

-
-
-

2,019,476
4,369,736
3,976,402

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

10,365,614

5,021,142

569,873
1,724,981
4,369,736

389,645
19,426
3,720,652

6,664,590

4,129,723

(3,701,024)

(891,419)

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 on its financial instruments.

P a g e | 55

ANNUAL REPORT
30 June 2017

Notes to the consolidated financial statements
for the year ended 30 June 2017

Note 27 Financial risk management (cont.)

(3) Price risk

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

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) Foreign exchange

Notwithstanding the Group’s subsidiary in the UK, namely Ensurance UK Limited, the Group did not carry
significant financial assets or liabilities in foreign currencies in the 2017 financial year (2016: nil), and therefore was
not subject to material foreign exchange risk, and according not subject to material sensitivities. Balances held by
Ensurance UK Limited are not currently material.

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

On 31 July 2017, the Company issued the following unlisted options for ordinary shares: 1,000,000 options exercisable at 12
cents and expiring 31 July 2020, 3,000,000 options exercisable at 9.2 cents and expiring 31 July 2020; and 6,097,314 options
exercisable at 8 cents and expiring 31 July 2020. These options were issued in connection with the Entitlement Offer
Prospectus dated 6 June 2017 (9,097,314 options) and in connection with a short-term loan agreement (1,000,000 options).

The Company entered into an underwriting agreement on 27 September 2017 with Transocean Pty Limited in respect of its
intention to undertake a placement program for eligible investors with a view to raising $3,000,000 before capital raising costs.

The Company entered into a loan agreement on 27 September 2017 with Kalonda Pty Ltd ATF Leibowitz Superannuation Fund
to make available to the Group a cash advance facility on a progressive basis up to, but not exceeding, $1,150,000, payable at
the earliest of 3 months from the initial drawdown or the finalisation of the $3,000,000 share placement plan.

Note 29

Contingent liabilities

There are no contingent liabilities as at 30 June 2017 (2016: Nil).

P a g e | 56

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

ANNUAL REPORT
30 June 2017

Notes to the consolidated financial statements
for the year ended 30 June 2017

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 liabilities

Total liabilities

Net assets/(deficiency)

Equity

Issued capital

Investment revaluation reserve

Convertible note option premium 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

2017
$

2016
$

2,007,943

1,353,487

90,145

1,769,289

3,361,430

1,859,434

2,283,813

3,049,797

75,692

941,676

5,333,610

1,017,368

(1,972,180)

842,066

12,332,351

11,218,650

(200)

298,383

952,522

(800)

114,280

(15,555,236)

(10,490,064)

(1,972,180)

842,066

(5,065,172)

(9,408,863)

800

(5,065,172)

(9,408,063)

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

The Board of Ensurance Ltd 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 Ltd.

d. Impairment of investments and loans to subsidiaries

The Board of Ensurance Ltd has undertaken an impairment assessment of the parent entity's investment in Ensurance Capital of
$7,525,195 and loans to subsidiaries of $6,267,446. 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 $6,055,422. This equates to an impairment loss of
$13,580,617. Of this amount $4,550,809 is recognised in the current year (2016: $9,029,808). These impairments relate only
to disclosures as contained in this Note 30

P a g e | 57

ANNUAL REPORT
30 June 2017

Directors' declaration

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

The Directors of the Company declare that:

1. The financial statements and notes, as set out on pages 17 to 55, 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 Friday, 29 September 2017

P a g e | 58

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
ENSURANCE LIMITED AND ITS CONTROLLED ENTITIES

Report on the Financial Report

Opinion
We have audited the accompanying financial report of Ensurance Ltd and its controlled entities (the
“Group”), which comprises the consolidated statement of financial position as at 30 June 2017 and
consolidated statement of profit or loss and other comprehensive income, consolidated statement of
changes in equity and consolidated statement of cash flows for the year ended on that date, other selected
explanatory notes and the directors’ declaration as set out on pages 17 to 56.

In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:

(i)

(ii)

giving a true and fair view of the Group’s financial position as at 30 June 2017 and of its
performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations 2001.

Basis of Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.

We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Group, would be in the same terms if given to the directors as at the time
of this auditor’s report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.

Material Uncertainty Related to Going Concern
We draw attention to Note 1 to the financial report, which indicates that the Group incurred a net loss
of $5,093,032 during the year ended 30 June 2017 and as of that date, the Group’s reflected a negative
net working capital of $1,228,955, net liability of $1,998,839 and accumulated losses of $10,366,687.

L I A B I L I T Y L I M I T E D B Y A S C H E M E , A P P R O V E D U N D E R T H E P R O F E S S I O N A L S T A N D A R D S L E G I S L A T I O N

The ability of the Group to continue as a going concern and pay their debts as and when they fall due is
dependent upon a number of factors including:

a) the Group’s ability to raise additional funds through debt financing and capital raising
arrangements such that they are adequate enough to provide sufficient working capital in line
with forecasts;

b) the Group’s ability to realise forecast revenue and expense targets, including an increase in

revenue of 60% in Australia and 118% in the UK over the next 12 months;

c) the continued support of its investors in supporting any further capital raising program.
d) The ability of the Group’s two AFSL holders Savill Hicks Corporation Pty Ltd and Ensurance
Underwriting Pty Ltd to produce cash flows available to support the group in excess of the cash
flow needs requirements established under their licence conditions. Cash flows generated by
these entities required to meet cash flow need requirements including any cash flow buffers are
not available to support group cash flow needs. The AFSL licence holders represent two of the
three operating companies and 100% of the revenue and 57% of the cash flow of the group on
a historical basis.

Should the Group be unable to generate sufficient funds from its operations or unable to raise sufficient
working capital then it may indicate the existence of a material uncertainty which may cast significant
doubt as to the Group’s ability to continue as a going concern and therefore, the Group may be unable
to realise its assets and discharge its liabilities in the normal course of business and at the amounts stated
in the financial report.

Key Audit Matters

The key audit matters are those matters that, in our professional judgement Key audit matters are those
matters that, in our professional judgement, were of most significance in our audit of the financial
report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.

L I A B I L I T Y L I M I T E D B Y A S C H E M E , A P P R O V E D U N D E R T H E P R O F E S S I O N A L S T A N D A R D S L E G I S L A T I O N

How the matter was addressed in the
audit

Group’s

challenging

Our procedures included but were not limited
to:

key
the
assumptions and estimates used to determine
the recoverable value, including those relating
to discount rates, cash flows and growth
assumptions.

comparing previous forecasts to actual
results to assess the performance of the business
and the accuracy of forecasting.

performing a sensitivity analysis over
key assumptions such as forecast growth rates.

assessing management’s evaluation of
indicators that capitalised software intangible
assets may be impaired. In assessing this, we
compared
the
estimated future benefits to our understanding
of the business and relevant economic and
industry factors.

criteria
evaluating
applied to the costs incurred and capitalised
the
against
financial year
during
requirements of the accounting standards.

of
appropriateness
the
disclosures made in the financial report relating
to the assumptions, judgements, estimates
made.

the assumptions underlying

recognition

assessing

the

Key audit matter

Valuation of intangible assets
Note 15

Capitalised intangible assets relate to the costs
incurred for the development of an insurer
online platform.

The impairment of intangible assets is a key
audit matter in the statutory audit as the
assessment of impairment has a high degree of
judgement and dependent on estimates derived
by management.

judgements

in
Management have used
determining the extent to which the developed
software will generate sufficient economic
benefits to support the carrying value of these
costs. These judgements relate to discount
rates, expected cash flows and revenue and cost
growth.

test

intangible

for
Management
impairment annually and whenever
there
appears to be an indication that the intangible
assert is impaired. .

assets

Management used value in use calculations to
assess the recoverable amount of the intangible
assets. The key assumptions relate to discount
rates and revenue and cost growth rates. Based
upon the results of impairment tests performed
by management, there was no impairment in the
carrying value of intangible assets as the
recoverable amount determined based on the
value in use calculations exceeded the carrying
amount as at 30 June 2017. The key
assumptions are disclosed in note 1.p.ii.2 of the
financial statements.

L I A B I L I T Y L I M I T E D B Y A S C H E M E , A P P R O V E D U N D E R T H E P R O F E S S I O N A L S T A N D A R D S L E G I S L A T I O N

Key audit matter

How the matter was addressed in the
audit
Compliance with Australian Financial Services Licence

Note 12

Our audit procedures focussed upon the group’s
compliance with the financial and operational
requirements of
two Australian Financial
Services Licenses held by the Group throughout
the financial year. The group holds Australian
financial
- Ensurance
Underwriting Pty Ltd: 429874 and Savill Hicks
Corp Pty Ltd: 240867 which enable them to
trade as an insurance broker. Conditions
attached to both licenses include the need for
positive net assets, sufficiency of cash flows
and documentation of operational matters.

services

licenses

Given the emphasis of matter relating to going
concern noted in Note 1.a.ii to the financial
report, our review of the cash flow requirements
and associated projections is a key area of the
audit, particularly given
significant
judgements and estimates required in their
compilation.

the

comparing cash flow forecasts from prior

Our procedures included but were not limited
to:

periods to actual balances.

ensuring there are no calculation errors
within the projections and other financial
calculations used.

performing sensitivity analysis over key
assumptions and their impact on AFSL ratio
requirements.

assessing management’s assumptions
and judgements made in the preparation of cash
flow projections and performance of associated
sensitivities.

reviewing of documentation of all
operational requirements ensuring compliance
with the licensing requirements.

of
disclosures made in the financial report relating
to the financial services licenses held and
compliance with their conditions.

appropriateness

assessing

the

Other Information
The directors are responsible for the other information. The other information comprises the information
included in the annual report for the year ended 30 June 2017, but does not include the financial report
and our auditor’s report thereon.

Our opinion on the financial report does not cover the other information and we will not express any
form of assurance conclusion thereon.

In connection with our audit of the financial report, our responsibility is to read the other information
identified above when it becomes available and, in doing so, consider whether the other information is
materially inconsistent with the financial report or our knowledge obtained in the audit, or otherwise
appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of the other
information, we are required to report that fact. We have nothing to report in this regard.

L I A B I L I T Y L I M I T E D B Y A S C H E M E , A P P R O V E D U N D E R T H E P R O F E S S I O N A L S T A N D A R D S L E G I S L A T I O N

Responsibilities of Directors for the Financial Report
The directors of the Group are responsible for the preparation of the financial report that gives a true
and fair view in accordance with the Australian Accounting Standards and the Corporations Act 2001.
The directors’ responsibility also includes such internal control as the directors determine is necessary
to enable the preparation of a financial report that gives a true and fair view and is free from material
misstatement, whether due to fraud or error.

In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of the financial report.

As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:



Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, designs and performs audit procedures responsive to those risks, and obtains
audit evidence that is sufficient and appropriate to provide a basis for the auditor’s opinion. The
risk of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations,
or the override of internal control.

 Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.

 Evaluate the appropriateness of accounting policies used and the reasonableness of accounting

estimates and related disclosures made by management.

 Conclude on the appropriateness of the director’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If the auditor concludes that a material uncertainty exists, we are required to draw
attention in the auditor’s report to the related disclosures in the financial report or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of the auditor’s report. However, future events or conditions
may cause the Group to cease to continue as a going concern.

L I A B I L I T Y L I M I T E D B Y A S C H E M E , A P P R O V E D U N D E R T H E P R O F E S S I O N A L S T A N D A R D S L E G I S L A T I O N

 Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.

We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that the
auditor identifies during the audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable related safeguards.

From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our audit report unless law or regulation precludes public
disclosure about the matter or when, in extreme rare circumstances, we determine that a matter should
not be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest of such communication.

Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included on pages 9 of the directors' report for the year ended
30 June 2017.

In our opinion, the Remuneration Report of Ensurance Limited for the year ended 30 June 2017,
complies with section 300A of the Corporations Act 2001.

Responsibilities
The directors of the Group are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express
an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian
Auditing Standards.

MAZARS RISK & ASSURANCE PTY LIMITED

R. Megale
Director
Signed in Sydney this 29th day of September 2017

L I A B I L I T Y L I M I T E D B Y A S C H E M E , A P P R O V E D U N D E R T H E P R O F E S S I O N A L S T A N D A R D S L E G I S L A T I O N

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

ANNUAL REPORT
30 June 2017

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.

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 49 employees, 21 of those
employees are woman.

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)

P a g e | 65

ANNUAL REPORT
30 June 2017

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.

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

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 encouraged 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 Neil Pinner (Chair), Adam Davey and Grant
Priest. 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.

P a g e | 66

ANNUAL REPORT
30 June 2017

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

3
4
3
1
4
3
2

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

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 Report 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
Report 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.

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

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.

P a g e | 67

ANNUAL REPORT
30 June 2017

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

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 their 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
relations
two-way
program
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’s 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
is
Strategy outlines a range of ways
communicated to shareholders.
The Shareholder Communications Strategy can be found in Schedule 9
of the Corporate Governance Plan which
is available on the
Company’s website.

information

in which

P a g e | 68

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

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,

ANNUAL REPORT
30 June 2017

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. 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
are outlined in Schedule 3 of the Company’s Corporate
Governance Plan available online on the Company’s website.
The Board devote time at board meetings 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.

P a g e | 69

YES

(a)

The Company’s processes 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.

ANNUAL REPORT
30 June 2017

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

Corporate governance statement
PRINCIPLES AND RECOMMENDATIONS

COMPLY
(YES/NO)

EXPLANATION

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
Neil Pinner (Chair), Adam Davey and Grant Priest. The Remuneration
& Nominations Committee carries out their duties under a 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 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.

P a g e | 70

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

Additional Information for Listed Public Companies

ANNUAL REPORT
30 June 2017

The following additional information is required by the Australian Securities Exchange in respect of listed public companies.

Capital

a. Ordinary share capital

83,113,909 ordinary fully paid shares held by 411 shareholders.

b. Unlisted Options over Unissued Shares

Subsequent to the reporting date, the Company issued the following unlisted options for ordinary shares: 1,000,000
options exercisable at 12 cents and expiring 31 July 2020; 3,000,000 options exercisable at 9.2 cents and expiring 31 July
2020; and 6,097,314 options exercisable at 8 cents and expiring 31 July 2020. These options were issued in connection
with the Entitlement Offer Prospectus dated 6 June 2017 (9,097,314 options) and in connection with a short-term loan
agreement (1,000,000 options).

Convertible notes and converting loans

The Company raised $3m (13,636,366 notes) via a convertible notes issue on 11 July 2016 at a conversion price of
$0.22 per note. The conversion price was reduced to $0.08 following the entitlement issue conducted as per the
prospectus dated 6 June 2017. Each note entitles the holder to convert to one ordinary share. Conversion may
occur at any time for a period of three years from the subscription date. If the notes have not been converted, they
will be redeemed at this point. Interest of 8% will be paid quarterly up until the settlement date.

d. 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.

e. Partly Paid Shares

The Company has the following:

8,000,000 Partly Paid Shares issued at a price of 20 cents of which 0.01 of one 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 the special resolution, being 30 November 2020.

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
nor participate in dividends, when declared, until such time as the options are exercised and subsequently
registered as ordinary shares.

Substantial Shareholders as at 18 September 2017.

g.
Name

Mr Stefan Hicks

Mr Brett Graves + Mrs Kerrie Graves

Number of Ordinary
Fully Paid Shares Held

% Held of Issued Ordinary
Capital

16,369,044

9,515,962

4,181,809

19.69

11.45

5.03

P a g e | 71

ANNUAL REPORT
30 June 2017

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

Additional Information for Listed Public Companies

h. Distribution of Shareholders as at 18 September 2017.

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

210

103

411

Number
Ordinary

% Held of Issued
Ordinary Capital

1,317

14,546

836,025

8,880,877

73,381,097

0.00

0.02

1.00

10.69

88.29

83,113,862

100.00

Unmarketable Parcels as at 18 September 2017.
As at 18 September 2017 there were 10 fully paid ordinary shareholders holding less than a marketable parcel of
shares.

j. On-Market Buy-Back

There is no current on-market buy-back.

k. Restricted Securities

The Company has 28,750,000 shares on escrow to 6 May 2018.

l.
Rank Name

20 Largest Shareholders — Ordinary Shares as at as at 18 September 2017

Mr Stefan Hicks

Mr Brett Graves + Mrs Kerrie Graves

Kalonda Pty Ltd

Church Street Trustees Limited

4edwardstaff Pty Ltd

Nutsville Pty Ltd

Mr Richard Anthony De Souza + Mrs Karen Louise De Souza
Mr Robert John Peters + Mrs Sandra Lillian Peters

10. Kli Pty Ltd

11. Thornbury Nominees Pty Ltd

Inswinger Holdings Pty Ltd
13. Museum Investments Limited
14.

& E Jenzen p/l no2 sf a/c>

Mr Allan Graham Jenzen + Mrs Elizabeth Jenzen

17. FM Wolf Pty Ltd

18. Tabachnik Super Pty Ltd

19. J & TW Dekker Pty Ltd
20. Ferncastle Holdings Pty Ltd

Number of Ordinary
Fully Paid Shares Held

% Held of Issued Ordinary
Capital

16,369,044

9,515,962

4,181,809

2,633,722

2,000,000

1,783,818

1,682,822

1,630,000

1,454,545

1,250,000

1,123,000

1,038,545

1,000,000

930,181

917,766

837,500

778,181

738,181

19.69

11.45

5.03

3.17

2.41

2.15

2.02

1.96

1.75

1.50

1.35

1.25

1.20

1.12

1.10

1.01

0.94

0.89

TOTAL

51,540,076

62.01

P a g e | 72

ENSURANCE LIMITED
AND CONTROLLED ENTITIES
ABN 80 148 142 634

ANNUAL REPORT
30 June 2017

Additional Information for Listed Public Companies

The name of the Company Secretary is Sam Hallab.

Principal registered office

As disclosed in Note 2 ‘Company details’ on page 33 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.

P a g e | 73

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