HUB24 Annual Report 2020

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FY2020 Annual Report · HUB24

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‘20

ANNUAL REPORT YEAR ENDED 30 JUNE 2020

For personal use onlyFor personal use only1

CONTENTS

Appendix 4E – Year Ended 30 June 2020

Financial Highlights FY20

Chairman and Managing Director’s report

Directors’ report

Consolidated statement of financial position

Consolidated statement of changes in equity

Consolidated statement of cash flows

Notes to the financial statements

Introduction to the remuneration
report (unaudited)

103 Directors’ declaration

Remuneration report – audited

104 Independent auditor’s report

Auditor’s independence declaration

109 ASX additional information

Financial report

111 Corporate information

Consolidated statement of profit or loss
and other comprehensive income

CORPORATE GOVERNANCE

The Board is committed to achieving and demonstrating the highest standards of corporate governance. As such,
HUB24 Limited and its Controlled entities (‘the Group’) have adopted the third edition of the Corporate Governance
Principles and Recommendations which was released by the ASX Corporate Governance Council on 27 March 2014,
effective for the financial years beginning on or after 1 July 2014.

The Group’s Corporate Governance Statement for the financial year ending 30 June 2020 is dated as 30 June 2020 and
was approved by the Board on 24 August 2020. The Corporate Governance Statement is available on HUB24 Limited’s
website at www.hub24.com.au/corporate-governance-statement.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only2

HUB24 has delivered another year
of strong growth in terms of our
key financial metrics while also
continuing to deliver on our
strategic objectives.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only3

APPENDIX 4E – YEAR ENDED 30 JUNE 2020

RESULTS FOR ANNOUNCEMENT TO THE MARKET

Year ended
30 June 2020
$’000

Year ended
30 June 2019
$’000

Revenue from ordinary activities

112,060

98,668

Net profit after tax (from ordinary activities)
for the period attributable to members

Basic earnings per share (cents)

Diluted earnings per share (cents)

8,228

13.13

12.85

7,164

11.54

11.30

% change

13.6%

14.9%

13.8%

13.7%

DIVIDENDS

Interim dividend

Final dividend

Amount
per security

Franked amount
per security at 30%

3.50

Subsequent to year end the Directors have determined a fully franked final dividend of 3.5 cents per share
(unfranked 2.6 cents per share final dividend was paid following the year ended June 2019).

Dates for the dividend are as follows:

Ex-date

Record date

Dividend payment date

EXPLANATION OF RESULTS

14 September 2020

15 September 2020

16 October 2020

Refer to the attached Directors’ Report and review of operations for further explanation.

Net tangible asset (per fully paid ordinary share)

CHANGES IN CONTROLLED ENTITIES

30 June 2020

30 June 2019

$0.56

$0.44

HUB24 Limited has not gained or lost control over any entity during the reporting period.

AUDIT

The report is based on accounts that have been audited by the Group’s auditors, Deloitte Touche Tohmatsu.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only4

FINANCIAL HIGHLIGHTS FY20

PLATFORM SEGMENT
UNDERLYING EBITDA

$28.7m
59%

GROUP
UNDERLYING EBITDA

$24.7m
60%

GROUP
UNDERLYING NPAT

$10.1m
49%

FULLY FRANKED
FINAL DIVIDEND

3.5 cents

PER
SHARE

NETFLOWS FOR THE YEAR OF

$4.9b £27%

FUA OF

$17.2b £34%

PLATFORM
SEGMENT
REVENUE

$74.3m
£37%

PLATFORM MARGIN
(AS A PERCENTAGE OF FUA)
REVENUE

0.49
¤FROM 0.51%

PLATFORM MARGINS (AS A PERCENTAGE OF REVENUE)

GROSS PROFIT

75%

FLAT

UNDERLYING EBITDA

39%
£FROM 33%

All percentage changes shown above are relative to FY19.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only

CHAIRMAN
AND MANAGING
DIRECTOR’S
REPORT

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only6

FY20 Platform Revenue of
$74.3 million up 37% on FY19

FY20 Platform Underlying EBITDA of
$28.7 million up 59% on FY19

Funds Under Administration (FUA) grew
by 34% to $17.2 billion from $12.9 billion,
with record net inflows of $4.95 billion

FY20 Group Underlying EBITDA of
$24.7 million up 60% on FY19

1. INTRODUCTION

Dear Shareholders,

On behalf of the Directors we are pleased to present you
with this annual report for HUB24.

HUB24 has maintained its focus on providing innovative
solutions that create investment opportunities for
our clients. In the context of continued disruption in
financial services with increasing regulation on the back
of the Banking & Financial Services Royal Commission,
major institutions’ planned divestment of their wealth
businesses and also the emergence of the COVID-19
pandemic, the company has delivered another year of
strong growth in terms of our key financial metrics while
also continuing to deliver on our strategic objectives.

Over the past 12 months, HUB24’s market-leading
technology, product leadership and customer focus
have continued to deliver growth in revenue, profit and
shareholder returns. In addition, we have generated a
number of new business opportunities in a competitive
and challenging market.

The dislocation in the Australian financial services
industry which we have seen over the past few
years, accelerated this financial year with several
of the incumbent institutions either revising their
wealth strategy or opting out of wealth management

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only7

altogether by selling, or announcing the sale of their
wealth businesses. Due to this uncertainty licensees
and advisers are increasingly looking for providers that
are committed to wealth management and continuing
to invest in their proposition, evidenced by increasing
net flows to specialist platforms and Funds Under
Administration (FUA) transitions from incumbent
platforms. Additionally, there is consolidation activity
in progress amongst smaller platform providers who
have not been as successful in gaining market share.
The need for growth and scale is increasingly important
due to the competitive landscape and market volatility
caused by COVID-19. In this context, HUB24 continues to
be positioned as a platform of choice, given our robust
operational infrastructure, customer service excellence
and innovative product solutions. We are rapidly growing
and gaining market share.

For advisers, the drivers for change are continuing
as they transform their businesses to remain competitive
and adjust to new regulations and educational
requirements. The need for platforms like HUB24 to
assist them in this transformation is highly valued.

In this environment, even whilst managing the client
impacts of COVID-19 advisers have continued to switch
licensees, with almost 700 advisers switching licensees
in the last quarter of FY20. Of these, 4.3% of advisers
switched into institutional licensees, 19.9% into aligned
licensees and 75.8% of advisers moved into privately
owned licensees1.

We are continuing to see growth in mid-tier licensees
and the emergence of aggregated self-licensed practices
who are seeking to run efficient customer focussed
businesses using flexible and innovative products.
HUB24 is well positioned in these growing segments
having established relationships with several of these
licensees during FY20 who are seeking to establish their
future business model.

In February, HUB24 activated its Business Continuity
Plan (BCP) to seamlessly mobilise its teams across
Australia to work remotely and to leverage its robust
infrastructure and technology capabilities. This ensured
continued connectivity and delivery of services for
customers throughout this time.

As the pandemic continues to impact investment
markets, our team have actively supported advisers,
helping them to leverage the enhanced capability of
our platform for the benefit of their clients. Apart from
being able to efficiently rebalance portfolios this has

meant utilising the platform’s tax efficiency tools to
manage CGT and minimise transaction costs. This has
provided an opportunity to showcase the capability
available on the platform which can create tangible
benefits for clients.

In FY20 HUB24 achieved the following financial results:

• FY20 Platform Revenue of $74.3 million up 37%

on FY19

• FY20 Platform Underlying EBITDA of $28.7 million

up 59% on FY19

• Funds Under Administration (FUA) grew by 34%

to $17.2 billion from $12.9 billion, with record net
inflows of $4.95 billion

• FY20 Group Underlying EBITDA of $24.7 million up

60% on FY19.

Our statutory financial results are set out on page 47
of this annual report.

We are pleased to report that given the ongoing
profitability of the company, for the first time the
company is in a position to issue a fully franked dividend.
A fully franked final dividend of 3.5 cents has been
determined by the Board. Together with the interim
dividend of 3.5 cents this brings the full year dividend to
7 cents per share, representing an increase of 52% on
the prior year.

Along with strong financial growth during the year, we
have continued to be recognised for customer service
and product excellence:

• Equal first for platform service out of 15 platforms,

with the highest percentage of top ratings across all
categories2

• Best Platform Managed Accounts functionality 4th

year running3

• Rated No.1 for Product Offering3

• Rated No.1 for Integration3

• 1st place in terms of overall investment options and

second overall in terms of adviser satisfaction4.

In the recent Investment Trends Planner Technology
report HUB24 ranked 2nd in both adviser satisfaction
and adviser advocacy and has consistently ranked in the
top two platforms for the past five years. Additionally,

2 Wealth Insights Platform Service Report 2020.
3

Investment Trends Competitive Analysis and Benchmarking Report
December 2019.

1 Adviser Ratings Musical Chairs Report Q2 2020.

4 Adviser Ratings – Financial Advice Landscape Report 2019.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only8

the company’s focus on supporting advisers during
the pandemic has been well received, with HUB24
being ranked the top platform in terms of primary
users perceiving they received good support. HUB24
was ranked first in five categories including range of
investments, client portal, integration with planning
software, client reporting and tax optimisation tools.
Overall HUB24 was ranked in the top two in 17 out
of 25 categories5.

We have continued our market leadership in the
growing managed portfolios segment. As at December
2019, Funds Under Management (FUM) in managed
portfolios in Australia stood at more than $72 billion,
representing a compound annual growth rate of 11%6.
On the HUB24 platform, managed portfolio Funds
Under Administration (FUA) has been growing at a
much faster compound annual growth rate (CAGR) of
57% over the past four years.

HUB24 is committed to continued investment in managed
portfolios, having this year hired an additional managed
portfolio IT development team, and a new Head of
Managed Portfolios to support advisers and promote the
benefits of managed portfolios. A project nearing the final
stages of completion to streamline our managed portfolio
offer by moving managed portfolios on HUB24 Invest and
HUB24 Super into a registered non-unitised MIS scheme,
is designed to provide additional client benefits and will
lay the foundations for future innovation.

This year HUB24 added 108 new managed portfolios
across diversified, fixed interest and equity portfolios to
our platform menus. In response to demand for low cost
managed portfolio options we added ten ETF portfolios
through the year, including five enhanced index portfolios
from ClearView Wealth Limited (ClearView). As of 30 June
2020, Managed portfolios represented $7.4 billion of our
FUA, up from $5.6 billion at the end of FY19.

2. COVID IMPACT

Even though many industries in Australia have been
impacted by the COVID-19 pandemic, HUB24 remains
in a solid financial position, operating profitably with
cash reserves significantly above regulatory capital
requirements and generating strong operating cashflow.
The company has not entered into any deferred
payment arrangements and has not received any
government or third party concessions in relation
to the COVID-19 pandemic.

Whilst net inflows were softer in April as advisers
adjusted to the COVID-19 environment, momentum
improved towards the end of the year with the company
recording record net inflows of $4.95 billion for FY20.
Given the ongoing opportunities for growth, the
company remains focused on investing for the future
and delivering our strategic objectives.

3. FINANCIAL PERFORMANCE

Group Revenue over the full year was up 14% while group
direct costs decreased by -2%. Platform revenue was up
37% while platform direct costs increased by 26%.

The Group’s preferred measure of profitability,
which is Underlying Earnings Before Interest, Tax,
Depreciation, Amortisation and Abnormal items
(Underlying EBITDA), increased 60% to $24.7 million
for FY20 ($15.4 million in FY197), with Underlying
Net Profit After Tax (Underlying NPAT) up 49% to
$10.1 million for FY20 ($6.8 million for FY19).

They key items driving the Group Underlying EBITDA
performance for FY20 were:

• FUA growth in the Platform segment from

$12.9 billion at 30 June 2019 to $17.2 billion at
30 June 2020, an increase of 34%. Record net
inflows of $4.95 billion were achieved during FY20,
highlighting HUB24’s leadership in the growing
managed portfolio segment and award-winning
platform functionality. HUB24’s deep relationships
with licensees and advisers, together with platform
functionality which allows advisers to optimise
outcomes for their clients in an efficient way,
has resulted in record inflows

• Platform revenue increased by 37% to $74.3 million
for FY20 ($54.1 million for FY19) while platform
direct expenses increased by 36% to $18.6 million
($13.7 million for FY19). Whilst administration fees
were impacted by negative equity markets, market
volatility drove high transaction volumes and
brokerage fees and higher cash balances resulting
in higher overall cash fee income

• Platform costs have increased by 26% to

$45.6 million for FY20 ($36.1 million for FY19).
This increase reflects an investment in people
including sales and distribution, IT developers
and the Innovation Lab team

5
6

Investment Trends Planner Technology Report May 2020.
IMAP Managed Account Census 2019.

7 As disclosed at 30 June 2019, from 1 July 2019 interest income has
been shown as part of Gross Profit and Underlying EBITDA in the
Corporate segment to better represent income generation.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only9

• Whilst HUB24 has continued to invest for growth, the
Platform Underlying EBITDA margin increased from
33.3% in FY19 to 38.6% in FY20.

stockbrokers, boutique licensees and self-licensed
advisers. Our annual net inflows set a new record
of $4.95 billion up 27% from FY199.

Underlying Net Profit After Tax, being NPAT before
abnormal items, forms the basis of HUB24’s dividend
determination. This has increase by 49% to $10.1 million
in FY20 ($6.8 million in FY19). A statutory Net Profit
After Tax (NPAT) of $8.2 million was recorded in FY20
($7.2 million for FY19).

4. GROWTH

During FY20 the company once again delivered
significant growth and according to the latest available
platform market share data HUB24 has maintained
second position for both annual and quarterly net
inflows and has increased market share from 1.3% this
time last year to 1.9%8. HUB24 has now delivered
a compound annual growth rate of 59% in FUA
over the last five years.

Reinforcing licensees’ and advisers’ preference for
specialist platforms and continuing the trend from FY19,
institutional platforms are now collectively in net outflow,
having lost more than $10 billion in FUA over the past
year, whilst specialist platforms have continued to grow
their market share over the last five years from less than
3% to now almost 10%8.

Net flow share to underlying market share ratio

Our investment in FY19 to expand our distribution
team has also helped achieve this significant growth
and minimise the impact of COVID-19 as our team were
better able to support advisers during this difficult time.

This financial year, HUB24 signed 105 new licensee
agreements. Whilst actively pursuing new relationships,
our distribution team is also focussed on working
with our large national accounts and their advisers to
leverage existing strong growth opportunities within
their network. This year an additional 441 advisers
started using the platform, an increase of 27.1% on
the prior comparative period.

FUA across our Investor Directed Portfolio Service (IDPS)
and Super product as at 30 June 2020 was 54% in IDPS
and 46% in Super. The retail version of the platform
now accounts for 77% of FUA, with 23% in customer
branded white labels. The trend continues from last year
for licensees to use the HUB24 retail offer with flexible
pricing options rather than create their own white label
version of the platform.

Overall, market conditions for HUB24’s value proposition
continue to present significant opportunity for
growth and our sales pipeline remains strong across
all segments. As a result, we will continue to invest
appropriately to take advantage of this opportunity.

Average monthly net inflows

500

400

300

200

100

5 year CAGR
59%

FY16

FY17

FY18

FY19

FY20

Average monthly net inﬂows

Large transition

1 HUB24

Specialist platform
providers

Traditional/Institutional
platforms

Our innovative product capability and delivery of
customer service excellence continues to result in
growth in FUA driven by strong inflows across all of our
key market segments including large national licensees,

8 Strategic Insights March Quarter 2020, annual net flows share to

9 Net inflows represent gross inflows less outflows and do not include

FUA market share.

market movement.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only10

Platform statistics

FUA ($m)

Flows*

Gross inflows ($m)

Net inflows ($m)

Advisers

Number of advisers (#)

*Inflows exclude market movements.

5. OPERATIONS

FY19

12,870

5,327

3,890

1,625

FY20

Growth year on year

17,217

6,748

4,947

2,066

34%

27%

HUB24’s Business Continuity Plan has been effective
in supporting our national teams to work remotely,
leveraging our robust infrastructure and technology
capabilities. Maintaining the wellbeing and effectiveness
of our teams during the pandemic has been a priority.
We have provided assistance for our staff to set
themselves up to work from home, ensured they have
regular interaction with our clients and colleagues, and
encouraged employees to seek assistance through
our Employee Assistance Program if needed. We are
continuing to monitor and support our staff and work
with them to ensure their wellbeing whilst they continue
to deliver our products and services to our customers.

Market volatility during the early stages of the pandemic
significantly increased asset trading volumes on the
platform. These transactions were processed as
usual with customers and advisers able to rebalance
portfolios, purchase investments, open accounts or
withdraw funds without interruption.

Our team also efficiently processed requests from
customers for the early release of their superannuation.
The impact of these on our FUA was less than 0.1% of
FUA, given the demographic of our customers and their
relationship with their adviser.

Throughout FY20 we have continued to make
enhancements to the platform and in relation to
COVID-19 introduced new functionality which provides
the ability for advisers to adjust their clients’ pension
drawdown amounts and provides advisers with choice
around how revised legislated pension drawdown
minimums would be applied for their clients. Our
approach as always was to provide flexibility and to ensure
clients have choice rather than applying one approach
across the board. This was well received by advisers.

Additionally, we’ve continued to invest in our market
leading managed portfolio solution, providing portfolio
managers with increased trading security around

portfolio changes and delivering enhanced portfolio
research for advisers and their clients.

Despite the challenges encountered as a result of the
pandemic, our team remained focussed on delivering
our strategic initiatives.

In March, HUB24 was appointed by ClearView as its
strategic wrap platform provider. The agreement
includes the development and launch of a ClearView
white-label version of HUB24 Invest and HUB24
Super, along with the addition of ClearView’s managed
portfolio and insurance products to the HUB24 Invest
and HUB24 Super retail platform offer. Under the
arrangement, more than $1 billion in FUA from the
current ClearView WealthSolutions wrap platform will
migrate to HUB24. This opportunity is of significant
importance as we’ll now be providing our services as
part of an institutional offer and, given the market
dynamics, we expect further institutional opportunities
to open up for HUB24 moving forward.

We have already delivered the white-label product
for ClearView‘s advice networks, including their own
managed portfolios, and inflows are being received. The
bulk FUA transition is expected to occur during FY21.

Meanwhile, the rollout of HUBconnect has progressed
well with new partners adopting the technology.
HUBconnect provides advisers and their clients with
a consolidated view of their wealth by facilitating
the integration of data from different sources. The
new HUBconnect investor app is now also available.
HUBconnect is assisting the company’s business
development efforts and opening up new service
offer opportunities.

After a comprehensive selection process, HUB24
selected HTFS Nominees (a member of the EQT Group)
to be the new trustee of the HUB24 Super fund. This
was due to their specialised independent trustee
capabilities and the ability to support our strategic
objectives as we grow. The transition to HTFS Nominees
was completed in July.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only11

This year we established the HUB24 Innovation Lab,
which has been created to monitor and evaluate current
and emerging technology trends, and their impact and
applicability for HUB24. More specifically the Innovation
Lab has been assessing opportunities in relation to open
banking and the ASX block chain project. This team is
currently working with a group of advice licensees on an
advice enablement project which is integrating data and
overlaying this with artificial intelligence to review advice
documentation and provide valuable insights around
compliance. A pilot program has been initiated with
Fortnum Financial Group, a mid-tier licensee.

Across the market some advisers are reducing the
number of clients they service and looking to service
higher balance clients. This has left a gap in the market
with smaller balance clients finding it more difficult to
source cost-effective personal advice.

To address this market demand, this year HUB24 signed
an agreement with Aberdeen Standard Investments
to launch a digital client engagement and advice tool,
integrated with the HUB24 platform to provide a
solution for advisers to efficiently service clients with
smaller balances.

After completing a strategic review of the IT Services
business, HUB24 will cease to provide technology
hosting services to new clients. This business will
sharpen its focus on providing software, data and
technology integration services to not only its traditional
client base of stockbrokers but also to the broader
financial services market. We are already seeing new
opportunities arise with financial advice licensees and
emerging data and technology providers. As a result
of this refinement of strategy the leadership of this
business has now been aligned under the executive
currently responsible for Licensee Services (Paragem).

Meanwhile, as the licensee environment continues
to evolve and advisers make decisions on their
future, Paragem continues to attract advisers from
the institutional space as well as practices changing
from other licensees. Thirteen new practices joined
Paragem this financial year, bringing its total network
to 37 practices representing 77 financial advisers. The
business is evolving its offer and reviewing its pricing
in line with the market. Together with the growth in
practices, we expect financial performance to improve
going forward.

The growth in practice numbers reflects confidence in
the Paragem licensee model and its ability to support
businesses and their profitability while providing them with
the flexibility and business community they are seeking.

6. CORPORATE GOVERNANCE

Against a backdrop of change, HUB24’s Board of
Directors and Management remains committed to their
duties and obligations to maintain a robust system of
corporate governance.

The ongoing review and improvement of corporate
governance practices and processes are important
aspects of business and ensuring HUB24 maintains
industry best practice.

In November 2019, HUB24 appointed Ruth Stringer as
Non-Executive Director of the company effective as of
1 February 2020.

Ruth is an experienced financial services lawyer with
expertise in funds management, superannuation, life
insurance and financial planning. She has previous
experience serving on several boards and committees
including the Board of Taxation’s Advisory Panel and the
Steering Committee of the International Pension and
Employee Benefit Lawyers Association.

In November we established an internal audit function
as part of the Board’s commitment to further develop
and improve our processes, systems and compliance
effectiveness. This resulted in the appointment of KPMG
to undertake a program of independent reviews in key
areas of the business based on a three-year audit plan,
aligned to the risk appetite of the organisation.

8. OUTLOOK

FY20 has been a successful year for HUB24 even
though the COVID-19 pandemic has brought
challenges that have impacted our customers, staff,
shareholders and the community as we all adapt to an
environment with ongoing uncertainty. In this context,
our team has continued to successfully operate and
grow the HUB24 business with record growth, while
also building the foundations for further growth. We
have been able to support our customers to manage
their superannuation and investments using our
reliable and robust market leading solutions and
achieve better outcomes as a result.

HUB24 has maintained its market leading growth levels.
Subject to market conditions, we expect this rapid
growth will continue moving forward as our focus is
resulting in a strengthening pipeline and is securing
a number of new client relationships.

Despite the current pandemic we believe the market
conditions are increasingly favourable for HUB24
as the wealth management industry continues to

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only12

transform and the financial advice market continues to
reshape. There are new emerging opportunities and
we have been actively laying foundations to benefit
from these, including our investments in technology
services, the HUB24 platform, HUBconnect and
managed portfolios.

Moving forward we expect ongoing strong net
inflows to the platform and are now targeting a
FUA range of $28–$32 billion by 30 June 2022.
Subject to any unexpected impacts arising from
the pandemic or broader economy, we are confident
our profitable growth trajectory will continue in FY21
and beyond10.

We look forward to speaking with shareholders at the
Annual General Meeting and on behalf of the Directors
wish to thank our customers for their support as well as
our talented team for their ongoing commitment to both
our customers and HUB24.

Yours sincerely

Bruce Higgins
Chairman

Andrew Alcock
Managing Director

Over the past 12 months,
HUB24’s market-leading
technology, product
leadership and customer
focus have continued
to deliver growth in
revenue, profit and
shareholder returns.

10 The company expects strong growth and increasing profitability

moving forward subject to consistent and stable investment markets,
HUB24 terms of business and further significant unexpected or
ongoing impacts arising from the COVID-19 pandemic that may
affect Platform FUA and revenue.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only

DIRECTORS’
REPORT

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only14

Your Directors present their
report together with the financials
statements, on the Consolidated
group (referred to hereafter as
“the Group” or “HUB24”) consisting
of HUB24 Limited (referred to
hereafter as “the Company”) and
the entities it controlled for the full
year ended 30 June 2020 (“FY20”).

In order to comply with the provisions of the
Corporations Act 2001, the Directors report as follows:

BRUCE HIGGINS

DIRECTORS

The following persons were Directors of HUB24 Limited,
from the beginning of the financial year and up to the
date of this report, unless otherwise stated:

Mr Bruce Higgins (Chairman)
Mr Andrew Alcock (Managing Director)
Mr Ian Litster
Mr Anthony McDonald
Mr Paul Rogan
Ms Ruth Stringer (appointed 1 February 2020)

COMPANY SECRETARIES
Mr Paul Howard
Ms Debbie Last (appointed 13 March 2020)
Mr Mark Goodrick (resigned 13 March 2020)
Ms Wendy McIntyre (resigned 31 July 2019)

B Eng CP Eng, MBA, FAICD

CHAIRMAN AND NON-EXECUTIVE DIRECTOR

Bruce has more than 20 years experience as a senior
executive or CEO, with companies such as Honeywell,
Raytheon and listed technology companies. He is a
specialist in rapid growth entrepreneurial companies,
financial and software services companies, M&A and
corporate governance and has also served on ASX
boards as a Non-Executive Director or Chairman for
more than 14 years.

Bruce was awarded the Ernst & Young Entrepreneur
of the Year award in Southern California in 2005 and
has a Bachelor Degree in Electronic Engineering and
an MBA in Technology Management. He is a Chartered
Professional Engineer and Fellow of the Australian
Institute of Company Directors.

Bruce was appointed as Chairman of the Board on
19 October 2012.

Previous listed company directorships held in the last
three years:

• Legend Corporation Limited (resigned 30 August 2019)

• Novita Healthcare Limited (resigned 10 May 2018).

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only15

ANDREW ALCOCK

B Bus, GAICD

MANAGING DIRECTOR

IAN LITSTER

B Sc (Hons)

NON-EXECUTIVE DIRECTOR

Andrew has more than 25 years experience across
wealth management encompassing advice, platforms,
industry superannuation, insurance and information
technology. Andrew was formerly Chief Operating
Officer of Genesys Wealth Advisers overseeing the
authorisation of more than 300 financial planners and
Head of the Genesys Equity Program, where he was a
Director of more than 20 financial planning practices
across Australia.

Prior to this Andrew was CEO of Australian
Administration Services, a subsidiary of Link Market
Services, providing superannuation administration for
some of Australia’s largest superannuation funds. He
was also previously General Manager for Asteron’s
wealth management business.

Andrew’s extensive financial services experience solidly
underpins his role as Managing Director of HUB24
Limited.

Andrew was appointed to the Group’s Board on
29 August 2014 as Managing Director.

Previous listed company directorships held in the last
three years:

• Nil.

Ian Litster has more than 13 years experience in
designing and developing software for the financial
services industries, particularly in the area of financial
planning. He has been the founder of the companies
behind the VisiPlan and COIN software packages, two
of the leading financial planning systems in Australia.
His main areas of expertise are the management of
information technology organisations and software
development. Ian has a Bachelor Degree in Science
(Honours in Mathematics).

Ian was appointed to the Board on 25 September 2012
and is a member of the Remuneration and Nomination
Committee. Ian was replaced by Ruth Stringer as a
member of the Audit, Risk and Compliance Committee,
effective 1 February 2020.

Previous listed company directorships held in the last
three years:

• Nil.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only16

ANTHONY MCDONALD

B Comm LLB

NON-EXECUTIVE DIRECTOR

PAUL ROGAN

B Bus, GAICD

NON-EXECUTIVE DIRECTOR

Paul is a senior financial services professional with a
background in accounting and finance, with a proven
track record for delivering results in different regions
and markets. In his executive career he successfully
drove businesses through rapid growth phases including
with Challenger, NAB, MLC and Lend Lease.

Paul has more than 26 years experience serving on
entity boards and industry groups, including 13 years
in the not for profit sector. Paul was appointed to the
HUB24 Limited Board on 20 December 2017 and
appointed as Chair of the Audit, Risk and Compliance
Committee on 1 March 2018. Paul was appointed
a member of the Remuneration and Nomination
Committee effective 1 August 2020.

Previous listed company directorships held in the last
three years:

• Nil.

Anthony McDonald co-founded financial planning firm
Snowball Group Limited in 2000, which merged with
Shadforth in 2011 to become ASX-listed SFG Australia Limited.

Anthony is also a former Director of The Investment
Funds Association of Australia (now Financial Services
Council) and currently Chairman of a leading not-for-profit
organisation. He is currently non-executive Director of
8IP Emerging Companies Limited and was appointed as
non-executive Director of URB Investments Limited on
13 October 2016.

As a financial services executive Anthony worked in a
variety of senior roles with the Snowball Group, SFG, Jardine
Fleming Holdings Limited (Hong Kong), and Pacific Mutual
Australia Limited. Prior to entering the financial services
industry, Anthony worked as a solicitor with two global law
firms. He holds a Bachelor of Laws (LLB) and a Bachelor of
Commerce (Marketing) from the University of NSW.

Anthony was appointed to the HUB24 Board on
1 September 2015 and is the Chair of the Remuneration
and Nomination Committee.

Previous listed company directorships held in the last
three years:

• 8IP Emerging Companies Limited (appointed

24 September 2015)

• URB Investments Limited (appointed 13 October 2016).

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only17

RUTH STRINGER

B Sc, LLM, GAICD

NON-EXECUTIVE DIRECTOR

COMPANY SECRETARY

The names and details of the Company Secretaries in
office during the 2020 financial year and at the date of
this report are as follows:

Ruth is an experienced financial services lawyer
with particular expertise in funds management,
superannuation, life insurance and financial planning.
Her diverse career has included working in significant
national and international law firms, as well as serving as
in-house counsel with various financial institutions and
more recently, working with the Australian Securities
and Investments Commission. Ruth is engaged as a
Consultant to Herbert Smith Freehills.

Ruth has served on a number of boards and
committees during her career, including the Board of
Taxation’s Advisory Panel and the Steering Committee
of the International Pension and Employee Benefit
Lawyers Association. Ruth’s passion for improving the
superannuation system resulted in her appointment
to the CIPR (Comprehensive Income Products for
Retirement) Framework Advisory Group, formed to
advise Treasury on aspects of the legislative framework
for new retirement income products.

Ruth was appointed to the HUB24 Board on 1 February
2020 and also serves on the Audit, Risk and Compliance
Committee.

Previous listed company directorships held in the last
three years:

• Nil.

PAUL HOWARD

B Comm LLB, GAICD

COMPANY SECRETARY

Paul is a senior executive and lawyer with more than 20
years experience in private practice and in-house roles.

Paul was previously General Counsel & Company
Secretary at Rest, one of Australia’s largest
superannuation funds, responsible for the legal and
company secretariat functions. Paul was also a member
of the Executive Team and a trusted advisor to the
Board. Prior to joining Rest, Paul was a senior lawyer
at Challenger Limited, an ASX listed diversified financial
services business, holding various legal roles during his
time there. Before moving in house with Challenger, Paul
was in private practice as a senior corporate lawyer in
Sydney, Hong Kong and New Zealand.

Previous listed company directorships held in the last
three years:

• Nil.

Paul was appointed Company Secretary on 31 July 2019.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only18

DEBBIE LAST

B Comm, CA

MARK GOODRICK

B Acc, M App Fin, CA

COMPANY SECRETARY AND INTERIM CHIEF FINANCIAL OFFICER

PREVIOUS COMPANY SECRETARY AND CHIEF FINANCIAL OFFICER

Debbie has more than 25 years experience in
governance, risk, strategy implementation, finance and
process improvement in the financial services sector,
bringing industrial strength together with commercial
outcomes to growing businesses.

Debbie has held senior positions including CFO of NAB
Asset Management, a business within NAB Wealth with
more than $123 billion in funds under management
across listed and unlisted asset classes, and was also
a Director of a number of nabInvest related entities.
She was also a partner of PwC Australia and KPMG
London. Debbie holds a Bachelor of Commerce from the
University of Melbourne and is a Chartered Accountant.

Previous listed company directorships held in the last
three years:

• Mainstream Group Holdings Ltd.

Debbie was appointed Company Secretary on 13 March
2020 and Interim Chief Financial Officer on 5 March 2020.

Mark has more than 15 years of experience in funds
management as well as managing global finance teams
in complex and fast-growing listed companies.

Mark was previously CFO at Atlas Arteria, formerly
known as Macquarie Atlas Roads, a global developer and
operator of private toll roads, which during his tenure as
CFO grew market capitalisation significantly and is now
part of the ASX Top 100 companies. Additionally, Mark
held the role of CFO of Macquarie Infrastructure and
Real Assets (MIRA) Australia which operates a range of
infrastructure funds globally and manages approximately
$13 billion in equity under management.

Previous listed company directorships held in the last
three years:

• Nil.

Mark was appointed Company Secretary on 31 December
2018 and resigned on 13 March 2020.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only19

GROUP OVERVIEW

HUB24 Limited operates the HUB24 investment and
superannuation Platform (Platform), provides financial
advice to clients through financial advisers authorised
by Paragem Pty Ltd and provides application and
technology products through Agility Applications Pty Ltd.

The Platform is a leading portfolio administration
service that provides financial advisers with the
capability to offer their clients access to a wide range
of investments including market leading managed
portfolio functionality, efficient and cost effective
trading, insurance and comprehensive reporting for all
types of investors – individuals, companies, trusts or
self-managed super funds.

Paragem (the Licensee) provides boutique dealer group
licensee services to financial planning businesses. It
comprises a network of 37 financial advice businesses
which deliver high quality, goals-based advice. It provides
compliance, software, education and support to the
practices, enabling advisers to provide clients with
financial advice across a range of products.

Agility (IT Services) provides application and technology
products to the financial services industry, currently
servicing approximately 45% of Australia’s stockbroking
market. It earns software license and consulting fees
from data, software and infrastructure.

PRINCIPAL ACTIVITIES

The principal activities during the year were the provision
of investment and superannuation portfolio administration
services, the provision of licensee services to financial
advisers and software license and IT consulting services.

REVIEW AND RESULTS OF OPERATIONS

The key items regarding the Group performance for
FY20 were:

FUNDS UNDER ADMINISTRATION

• Funds Under Administration in the Platform segment
increased by 33.8% to $17.2 billion at 30 June 2020
(FY19 $12.9 billion), despite the uncertainty for
advisers and clients and resultant market volatility
impact of COVID-19 in 2H20.

REVENUE

• The Group recorded a 13.6% increase in revenue to

$112.1 million for FY20 ($98.7 million for FY19)

• Platform segment revenue increased by 37.4% to
$74.3 million for FY20 ($54.1 million for FY19).

WENDY MCINTYRE

BA LLB

(PREVIOUS COMPANY SECRETARY) GENERAL COUNSEL,
COMPLIANCE & RISK

Wendy is a specialist financial services lawyer, risk
and compliance professional and has more than
20 years experience across the financial services
industry.

Wendy’s experience includes wealth management,
platforms (IDPS and super wraps), managed
investment schemes, financial product advice,
superannuation, life insurance and distribution
arrangements. Wendy has worked at top tier law
firms, including MinterEllison, with other financial
services providers, such as Challenger Limited, and
with ASIC.

Previous listed company directorships held in the
last three years:

• Nil.

Wendy was appointed Company Secretary on
31 December 2018, and resigned on 31 July 2019.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only20

EBITDA

• The Group’s preferred measure of profitability is

Underlying Earnings Before Interest, Tax, Depreciation
and Amortisation (EBITDA) and abnormal items,
which increased by 60.0% to $24.7 million for FY20
($15.4 million in FY191)

• This EBITDA performance included Platform expenses
(direct, operating and growth expenses) increasing by
26.5% to $45.6 million ($36.0 million for FY19).

NET PROFIT AFTER TAX

• 75,533 shares were issued for performance award

rights earned by staff and executives in the financial
year ended 30 June 2020 (nil in FY19)

• No shares were issued for part payment of

consideration in the purchase of Agility Applications in
the financial year ended 30 June 2020 (31,669 in FY19).

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

There have been no significant changes in the nature
or state of affairs of the Group.

• Statutory Net Profit After Tax (NPAT) was up 14.9%

to $8.2 million for FY20 ($7.2 million for FY19)

DIVIDENDS

• Underlying Net Profit After Tax (which forms the basis
of the dividend payout ratio) represents Net Profit
After Tax before abnormal items. Underlying Net
Profit After Tax increased 49.3% to $10.1 million for
FY20 ($6.8 million in FY19).

CASH FLOWS

• The Group recorded a 118.9% increase in net cash
flow from operating activities to $25.5 million for
FY20 ($11.6 million for FY19).

In addition to the information disclosed in this Annual
Report, readers are referred to the Group’s disclosures to
the ASX on 25 August 2020 for further details and analysis
of the Group’s performance and financial position.

CORPORATE

The following options, performance rights and shares
were issued in accordance with schemes approved by
shareholders. These schemes contain ambitious targets,
including FUA targets of up to $32 billion, in order to
incentivise and align key staff towards HUB24 achieving
its strategic objectives:

• 331,332 share options were issued to staff and

executives in the financial year ended 30 June 2020
(375,705 in FY19)

• 132,680 performance award rights were issued to
staff and executives in the financial year ended
30 June 2020 (570,941 in FY192)

• 441,182 shares were issued for options exercised
by staff and executives in the financial year ended
30 June 2020 (709,080 in FY19)

1 As disclosed at 30 June 2019, from 1 July 2019 interest income has
been shown as part of Gross Profit and Underlying EBITDA in the
Corporate segment to better represent income generation.

2 Director issue – Anthony McDonald in FY19.

Subsequent to the end of the year, the Directors have
determined that the Group should issue a final dividend
of 3.5 cents per share fully franked to be paid on
16 October 2020.

Together with the interim unfranked dividend of 3.5
cents per share, the full year dividend of 7.0 cents per
share (FY19 4.6 cents per share) represents a 52%
increase in dividends for shareholders for the year and
a payout ratio of 43% of Underlying NPAT (FY19 42%).

SIGNIFICANT EVENTS AFTER THE REPORTING DATE

Subsequent to year end, the Directors have determined
a fully franked final dividend of 3.5 cents per share
(an unfranked 2.6 cents per share final dividend was
declared in FY19).

This will result in an increase of 52% to the full year
unfranked dividend of 6.6 cents per share, representing
40% of Underlying Net Profit After Tax (FY19: 4.6 cents
per share full year unfranked dividend representing 42%
of Underlying NPAT).

As of 31 July 2020 Diversa Trustees Ltd has retired as
trustee of the HUB24 Super Fund. They have been
replaced by HTFS Nominees Pty Ltd (the Trustee). To
ensure consistent and comparable operations of the
HUB24 Super Fund, the Group has entered into a
loan agreement with HTFS Holding Pty Ltd, a wholly
owned subsidiary of EQT Holdings Ltd, who will use
the loan proceeds to purchase capital in, the Trustee.
The Trustee, will reserve the funds for the purpose of
meeting the Operational Risk Financial Requirement
(ORFR) for the Fund in accordance with APRA Prudential
Standard SPS114. The parent entity HUB24 Limited
made the ORFR loan of $7 million on 31 July 2020 on
an arm’s length basis and on commercial terms at an
interest rate of 10%.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only21

No other significant matter or circumstance has arisen
since 30 June 2020 that has significantly affected, or may
significantly affect the Group’s operations, the results of
those operations, or the Group’s state of affairs in future
financial years.

LIKELY DEVELOPMENTS AND EXPECTED RESULTS

With the continued growth in FUA onto the HUB24
investment and superannuation platform and continuing
success of its supporting businesses, the Group expects
its financial results to continue improving with scale.

COVID-19 IMPACT

Even though many industries in Australia have been
impacted by the COVID-19 pandemic, HUB24 remains in
a solid financial position, operating profitably with cash
reserves significantly above regulatory capital requirements
and generating strong operating cashflow. The Company
has not entered into any deferred payment arrangements
and is not reliant on any government or third party
concessions in relation to the COVID-19 pandemic.

Whilst net inflows were softer in April as advisers
adjusted to the COVID-19 environment, momentum
improved towards the end of the year with the Company
recording record net inflows of $4.95 billion for FY20.
Given the ongoing opportunities for growth the

Company remains focused on investing for the future
and delivering our strategic objectives.

Market volatility may impact Funds Under Administration
(FUA) based fees and any official cash rate cut may
impact cash fee income. In the second half of the year
these adverse impacts were cushioned by higher cash
balances and increased asset trading fees resulting from
the volatile trading conditions. Net flows have proved to
be resilient, our new business pipeline remains strong
and assisted FUA transitions are continuing. HUB24’s
priority has been, and remains, ensuring the health
and safety of the team whilst continuing to operate our
business to meet the needs of licensees, advisers and
their clients as well as other key stakeholders.

Our estimates and assumptions have been prepared
based upon conditions existing at the date of this report.

ENVIRONMENTAL REGULATION AND PERFORMANCE

The Group’s operations are not subject to significant
environmental regulations under Australian legislation
in relation to the conduct of its operations.

DIRECTORS’ INDEMNITY

During FY20 the Group paid a premium in respect of
insuring all Directors and officers against liability, except
wilful breach of duty, of a nature that is required to
be disclosed under section 300(8) of the Corporations
Act 2001. In accordance with commercial practice, the
amount of the premium has not been disclosed.

The Group has indemnified officers and Directors to the
extent permitted by law against any liability that arises

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only22

as a result of actions as an officer or Director and has not otherwise, during or since the end of FY20, except to the
extent permitted by law, indemnified or agreed to indemnify an officer or auditor of the Group or of any related body
corporate against a liability incurred as such an officer or auditor.

MEETINGS OF DIRECTORS

The numbers of meetings of the Group’s Board of Directors and of each Board committee held during the year ended
30 June 2020, and the numbers of meetings attended by each Director were as per the table below:

Board
meetings

Audit, risk &
compliance
committee meetings

Remuneration
& nomination
committee meetings

Director

Attended

Held*

Attended

Held*

Attended

Held*

Mr Bruce Higgins (Chairman)

Mr Andrew Alcock (Managing Director)

Mr Ian Litster**

Mr Anthony McDonald

Mr Paul Rogan

Ms Ruth Stringer
(appointed 1 February 2020)

*Number of meetings held during the time the Director held office or was a member of the committee. Ruth Stringer replaced Ian Litster as a member of
the Audit, RIsk and Compliance Committee during the financial year ended 30 June 2020.

**Ian Litster replaced by Ruth Stringer 1 March 2020.

This report is made in accordance with a resolution of Directors.

Mr Bruce Higgins (Chairman) – Director

Sydney, 24 August 2020

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only23

INTRODUCTION TO THE REMUNERATION
REPORT (UNAUDITED)

FURTHER ENHANCEMENTS TO THE REMUNERATION REPORT

The FY19 Remuneration Report marked the first
inclusion of a specific letter from the Chairman of the
Remuneration and Nomination Committee setting out
key information, including graphical representations
of various aspects of the Remuneration Report. We
found that this assisted Shareholders with more readily
interpreting the Company’s remuneration philosophy,
structure, implementation and alignment.

As mentioned in the FY19 Remuneration Report, we are
committed to continual improvements to reflect shareholder
expectations and to support HUB24’s growth. We trust that
the FY20 Remuneration Report achieves that objective and
further assists Shareholders. We are also acutely aware
that FY20 warrants specific commentary on the effects
of COVID-19 on remuneration philosophy, structure,
implementation and alignment, and have included such
commentary in the FY20 Remuneration Report.

We have also been aided in FY20 with expert and
independent advice from a specialist remuneration
consultant and a leading accounting and tax adviser.
We determined that this was necessary given the
uncertainty and uniqueness of remuneration in a
COVID-19 environment, further building on our external
benchmarking exercises in FY16 and FY18.

More specifically, the FY20 remuneration review
included three key components, utilising external
services providers, namely:

1. Data collection and benchmarking of base, STI and total
remuneration against an agreed comparator group

2. Review of the LTI structure and trends in LTI

incentives post COVID-19

3. Overall COVID-19 impacts on remuneration strategy.

The FY20 Remuneration Report and FY21 remuneration
reflect various insights gleaned from those reviews.

We have also kept abreast of best practice guidelines and
regulatory developments in the area of remuneration
and benefits, all with the aim of better aligning each
of remuneration measures, incentives and retention
mechanisms to Shareholder value and to HUB24’s strategy.

Dear Shareholders,

On behalf of the Board and its
Remuneration and Nomination
Committee, I am pleased
to present HUB24’s 2020
Remuneration Report, for which
we will seek your support at our
Annual General Meeting this
November.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only24

Consistent with this approach, in FY20, and up until the
date of this Report, we also:

1. Carried out a review of our Corporate Governance
Statement as it applies to a diversity policy and our
skills matrix

2. Undertook an extensive Board Performance Review,
utilising an independent third-party governance
expert and facilitator

3. Initiated our second HUB24 Group Culture and

Conduct Survey seeking direct feedback from staff
to the Board about their experiences working with
HUB24 Group, and formally seeking input regarding
the day to day conduct and culture of our business

4. Updated and enhanced the Remuneration and

Nomination Committee Charter.

This year we have also expanded on our disclosure of Key
Performance Indicators, consistent with best practice (see
section 4 in the main body of this Report).

HUB24 REMUNERATION FOUNDATIONS –
PERFORMANCE ALIGNMENT

A key Board priority is to ensure a high degree of alignment
in outcomes between Shareholders and Management.

As reported last year, a number of initiatives were put
in place to further align interests during the last few
years. These are summarised in the table below. As
mentioned above, we undertook research regarding
potential COVID-19 effects on alignment and these
are commented on below and have been considered
in FY21 remuneration and benefits planning.

Table 1: Summary of various alignment arrangements for KMP in FY20

Key Remuneration
Component

Arrangement

Purpose and
Alignment

Fixed Remuneration Continuation in FY20 of the capping of

Short Term
Incentive (STI)

Fixed Remuneration in return for the
issuance of the Special LTI in FY19

• STI deferral provisions

• STI claw-back provisions

• Structured Scorecards

Alignment with cash flow and profitability objectives
of HUB24

• 33.3% of the KMP STI is payable upon approval by the
Board as recommended by the Remuneration and
Nomination Committee, whilst payment of the remaining
amount is deferred with half payable in a further six
months and the other half in a further 12 months

• Claw-back in instances of fraud or malfeasance

• Structured Scorecard KPIs covering:

– Growth and profitability
– Future foundations
– Product and service innovation
– Operational certainty
– Leadership and culture

Long Term
Incentive (LTI)

Issuance of Special LTI in FY19 in
addition to usual LTI scheme in return
for capping of Fixed Remuneration
until 1 September 2020

Alignment with cash flow and profitability objectives of
HUB24

THE YEAR THAT WAS

FY20 REMUNERATION OUTCOMES

The Board views it was another successful year for
HUB24, particularly in light of the effects on the business
late in the year as a result of COVID-19. HUB24 achieved
strong growth in Funds Under Administration (FUA)
(up 34%), Platform Revenue (up 37%) and Platform
Underlying Earnings Before Interest, Tax, Depreciation

and Amortisation (EBITDA) (up 59%). As a result of these
strong results, incentives were awarded to the Managing
Director, Mr Alcock, and Executives under the FY20 Short
Term and Long Term Incentive plans (STIs and LTIs). The
main FY20 remuneration outcomes for the Managing
Director are summarised below. The Board believes
that these outcomes appropriately align HUB24’s
performance, Shareholder value, market expectations
and KMP incentivisation and retention.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only25

Table 2: Andrew Alcock, Managing Director total remuneration snapshot

FIXED

STI

LTI

TOTAL

FY20

FY19

FY20

FY19

FY20

FY19

FY20

FY19

468,975

470,695

270,000

203,312

728,966

353,927

1,467,941

1,027,934

% STI eligibility
achieved

N/A

80%

60%

N/A

Managing Director remuneration breakdown 2020

1. Future Board reviews

2. Future Board appointments

Fixed
31.9%

STI
18.4%

3. A template for separate skills matrices for each Board

Committee

LTI
49.7%

Note: The LTI figure above includes special LTI (PARs) expenses
i.e. for those issued in FY19.

Managing Director total remuneration relative to
Group Underlying EBITDA

$’000

1500

1250

1000

750

500

250

FY18

FY19

FY20

MD remuneration
(left axis)

Group Underlying EBITDA
(right axis)

CORPORATE GOVERNANCE STATEMENT

Towards the end of FY20, the Remuneration and
Nomination Committee carried out a review of our
Corporate Governance Statement as it applies to a
diversity policy and our skills matrix.

4. Future disclosures and communications to Shareholders
and other stakeholders regarding the Board’s priorities
with regard to diversity and skills augmentation.

The skills matrix was prepared in light of the Australian
Institute of Company Directors “Guidance for preparing a
board skills matrix”. In summary, the matrix addressed skills
and diversity under the following categories and features.

Table 3: Skills and diversity matrix categories

Item

Skills

Category

Growth and Profitability

Including

• FUA growth measures

Building Future Foundations of the Business

• Strategic planning milestones

• Profitability and business development measures

Product and Service Innovation

•

Industry product & service level benchmarking measures

• Brand profile, market positioning an industry relationships

• Organisational and strategic development

Operational Certainty

• Product development milestones

• Enterprise risk management measures

• Regulatory, legal & compliance measures

• Scalability and capacity planning

Leadership and Culture (Overarching)

• Cultural and engagement assessments

• Alignment with company values

• Leadership development

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only31

Managing Director STI targets

Details of the STIs earned for each relevant KMP are set
out in section 5 of this Remuneration Report.

LTI

KMP may be eligible to participate in the LTI Plans for
the purpose of receiving Options and/or Performance
Award Rights (PARs) over ordinary shares. Additionally,
the Board may, at their discretion and with the
approval of Shareholders (as required), elect to
remunerate KMP through the issue of Options or
PARs outside of these plans.

The objective of the LTI Plans is to provide KMP
with the incentive to deliver sustained growth in
Shareholder value and to provide the Group with
the ability to attract, motivate and retain appropriate
personnel.

LTIs issued under the LTI Plans currently have two
performance hurdles:

• 50% of the Options and 50% of the PARs – the

Compound Annual Growth Rate (CAGR) in Funds
Under Administration (FUA) over a three year period;
and

• 50% of the Options and 50% of the PARs – the
Absolute Total Shareholder Return (ATSR)
performance over a three year period.

The Remuneration and Nomination Committee
regularly assesses the appropriateness of these hurdles,
including in light of independent advice. For example,
with the assistance of an independent adviser, the
Remuneration and Nomination Committee and the
Board have considered alternative hurdles such as
relative Shareholder return compared to comparators in
the market. At this time it was agreed that such a hurdle
was not in the best interests of Shareholders given the
very narrow, true listed comparator set, but that it would
be monitored.

The current hurdles incentivise KMP to build scale with
appropriate margins in order to deliver business growth
and profitability (as currently measured by the CAGR in
FUA) as well as the success in implementing the Group’s
long term strategic objectives (as currently measured by
the CAGR in ATSR).

Growth &
Proﬁtability

Base
25%

Stretch
32.5%

Leadership &
Culture

Stretch
6%

Product &
Service
Innovation

Base
11.5%

Base
8.5%

Stretch
6.5%

Base
5%
Stretch
5%

Operational
Certainty

Future
Foundations

Note: 25% of the Managing Director’s Growth and Profitability STI target
relates to financial performance with the remaining 32.5% assessed
against FUA growth and business development.

Other Executive STI targets

Leadership &
Culture

Stretch
25%

Operational
Certainty

Base
6%Stretch

3% Base
10%

Future
Foundations

Stretch
9%

Base
11%

Growth &
Proﬁtability

Base
24%

Stretch
13%

Product &
Service
Innovation

Note: 24% of the aggregated Executive STI Growth and Profitability target
relates to financial performance with the remaining 25% assessment
against FUA growth and business development. Weightings vary between
each Executive.

Other KMP STI Conditions

33.3% payable upon approval by the Board as
recommended by the Remuneration and Nomination
Committee.

Balance deferred with half payable in a further six
months and the other half in a further 12 months.

“Claw-back” mechanism for certain events such as
fraud and governance failures by the relevant KMP.

Ability to convert 50% of STIs achieved and payable in
cash to shares in the Group, with the Board having a
discretion to allow higher levels of conversion.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only
32

Other LTI Conditions

Sales restrictions on shares resulting from the exercise of
Options or PARs – 12 months from the date of exercise
except for the purpose of funding the exercise price of
Options or to meet the tax obligations arising from the
exercise of Options or PARs or from the sale of shares.
The sale of shares in such circumstances is undertaken
in accordance with a process overseen by the Board.

Options and PARs will expire upon resignation or
termination of KMP employment unless KMP are
determined by the Board to be a “Good Leaver” based
upon special circumstances such as death, disablement
or such other circumstances as the Board determines.

LTI awards may be forfeited in particular circumstances,
or other circumstances the Board determines, such as
a material misstatement or omission in the financial
statements of the Group and actions by KMP that
seriously damage the Group’s reputation or put the
Group at significant risk.

Upon a change of control event, the LTI awards vest on
a pro rata period of time basis. The Board has discretion
to vest the full grant of Options and PARs upon a change
of control event in appropriate circumstances.

OTHER SHARE BASED INCENTIVES

The objective of other share based remuneration is to
reward KMP and staff (where applicable) in a manner
that aligns this element of remuneration with the
creation and growth of sustained Shareholder value.
As such, ordinary share and Option/PAR grants may be
made to KMP who are able to influence Shareholder
value and thus have an impact on the Group’s
performance.

Share based KMP remuneration may be delivered in the
form of shares, partly paid shares, PARs or grants under
the Employee Share Plan or as share Option grants,
as the Board recommends in its discretion, on a case
by case basis. Recipients of share based remuneration
may be required to meet vesting or exercise conditions,
including business performance, length-of-service, and
market and non-market performance based criteria,
including sustained share price targets.

SUPPORTING INFORMATION

In considering the Group’s performance the Board has
regard to the following with respect to the current year
and previous financial years:

Underlying EBITDA ($'000)

2020

2019

2018

24,684

14,779

11,353

Funds Under Administration (FUA) ($b)

17.217

12.870

Underlying Profit/(Loss) after income tax ($'000)

10,136

6,489

8.343

5,400

2017

5,119

5.515

3,942

2016

(840)

3.313

2015

(4,385)

1,704

(1,187)

(6,457)

Underlying EBITDA and FUA

-5

-10

2015

2016

2017

2018

2019

2020

Underlying EBITDA (left axis)

FUA (right axis)

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only33

The factors that are considered to affect Shareholder value are summarised in the table and chart below:

Share price at financial year end ($)
S&P ASX 300 (#)
HUB share price % increase since 2015
S&P ASX 300 % since 2015

2020
9.30
5,858.5
675%
8%

2019
11.88
6,568.4
890%
22%

2018
11.55
6,152.3
863%
14%

2017
6.24
5,668.8
420%
5%

2016
3.68
5,195.5
207%
-4%

2015
1.2
5,400.5
N/A
N/A

HUB24 share price vs ASX 300

5. REMUNERATION FOR KMP

900%

800%

700%

600%

500%

400%

300%

200%

100%

2015

2016

2017

2018

2019

2020

The table below sets out the percentage of the maximum
available STI (against base salary) for each KMP that was
awarded in relation to FY20 and the percentage that was
forfeited because the Group and individual performance
criteria did not meet the agreed targets.

Current year (FY20) STI entitlement
Name
A. Alcock
J. Entwistle
C. Lawrenson
M. Goodrick*
D. Last**

Entitlement Awarded
82%
87%
85%
0%
N/A

75%
75%
70%
50%
N/A

Forfeited
18%
13%
15%
100%
N/A

HUB share price % change since 2015
S&P ASX 300 % change since 2015

*resigned 13 March 2020
**appointed 5 March 2020

Short term benefits
Salary
and Fees1
$

Bonus
$

Post
employment
benefits

Superannuation
$

Long term
benefits
Long Service
Leave
$

Share based payments
Options &
PARs2
$

Shares
$

Performance
related
%

Total
$

2020
Non-Executive Directors
B. Higgins
I. Litster
A. McDonald
P. Rogan
R. Stringer3
Sub-total
Non-Executive Directors
Executives
A. Alcock
J. Entwistle
C. Lawrenson
M. Goodrick4
D. Last5
Sub-total Executives

210,672
98,254
87,000
101,588
35,388

532,902

438,669
342,901
350,946
259,030
158,400
1,549,946

-
-
-
-
-

270,000
223,000
208,000
-
-
701,000

Total

2,082,848

701,000

-
-
-
-
3,362

3,362

21,003
21,003
21,003
15,025
-
78,034

81,396

-
-
-
-
-

-
-
94,639
-
-

210,672
98,254
181,639
101,588
38,750

94,639

630,903

9,303
7,536
8,290
-
-
25,130

25,130

-
1,000
1,000
1,000
-
3,000

3,000

728,966
664,076
263,800
87,027
N/A
1,743,869

1,467,941
1,259,517
853,039
362,082
158,400
4,100,979

1,838,508

4,731,882

0%
0%
0%
0%
0%

19%
18%
25%
0%
0%

1. KMP salary and fees includes Fixed Remuneration and movement in annual leave entitlement.
2.

Increase in Options and PARs due to Special LTI issued in December 2018 which was provided to executives in return for capping of fixed
remuneration for a three year period ending 1 September 2020 and subject to significant growth in FUA to be measured at 30 June 2022.

3. Appointed 1 February 2020.
4. Resigned 13 March 2020.
5. Appointed 5 March 2020 and engaged on a contracted basis with daily rate payments made to an external party.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only34

2019
Non-Executive Directors
B. Higgins
I. Litster
A. McDonald
P. Rogan
Sub-total
Non-Executive Directors
Executives
A. Alcock
J. Entwistle
C. Lawrenson
M. Goodrick2
M. Haes3
Sub-total Executives

Short term benefits
Salary
and Fees1
$

Bonus
$

Post
employment
benefits

Superannuation
$

Long term
benefits
Long Service
Leave
$

Share based payments
Options &
PARs
$

Shares
$

180,525
90,263
87,000
90,263

448,051

427,524
351,153
342,439
221,207
138,480
1,480,803

-
-
-
-

203,312
166,500
155,129
63,548
35,000
623,489

-
-
-
-

20,451
20,451
20,451
11,977
10,185
83,516

83,516

-
-
-
-

22,720
18,383
10,158
3,348
-
54,609

54,609

-
-
-
-

-
1,000
1,000
-
1,000
3,000

3,000

Current
Period
Performance
Related
%

0%
0%
0%
0%

20%
20%
22%
19%
15%

Total
$

180,525
90,263
127,318
90,263

-
-
40,318
-

40,318

488,369

353,927
260,778
164,927
27,745
44,019
851,396

1,027,934
818,265
694,104
327,825
228,684
3,096,812

891,714

3,585,181

Total

1,928,854

623,489

1. KMP salary and fees includes Fixed Remuneration and movement in annual leave entitlement. 2. Appointed 3 December 2018. 3. Resigned 31 December 2018.

6. SERVICE AGREEMENTS

On appointment to the Board, all Non-Executive Directors enter into a service agreement with the Group in the form of a letter
of appointment. The letter summarises the Board policies and terms, including compensation relevant to the office of Director.

Remuneration and other terms of employment for KMP are formalised in employment agreements.

All KMP have ongoing employment agreements. The Group may generally terminate the employment agreement by
providing between three and six months written notice depending on the agreement or providing payment in lieu of
the notice period (based on the fixed component of the relevant KMP remuneration).

The major provisions of the agreements relating to remuneration are set out below. Salaries set out below are for FY20
and are subject to review by the Remuneration and Nomination Committee.

Name
A. Alcock1
Managing Director
J. Entwistle
Director, Strategic Development
C. Lawrenson
Chief Operating Officer
M. Goodrick – Chief Financial Officer,
resigned 13 March 2020
D. Last – Interim Chief Financial Officer,
appointed 5 March 2020

Base Salary (including
superannuation)
451,805

370,000

369,570

370,000

N/A5

STI1
Up to 75% of
Base Salary
Up to 75% of
Base Salary
Up to 70% of
Base Salary
Up to 50% of
Base Salary
N/A

LTI
54,764 Options,
21,932 PARs2
44,848 Options,
17,961 PARs3
13,438 Options,
5,382 PARs3
22,424 Options,
8,980 PARs4
N/A

Term of
agreement
Ongoing – commenced
29 July 2013
Ongoing – commenced
1 August 2013
Ongoing – commenced
21 August 2017
Commenced 3 December 2018.
Ceased 13 March 2020
Ongoing – commenced
5 March 2020

Notice period
– either party
6 months

6 months

Not applicable

1. For Andrew Alcock 50% of STI payable upon achieving base case objectives set by the Board. A further 50% payable upon the achievement of stretch

case objectives. For other KMP the allocated weighting between base case objectives and stretch case objectives may vary.
2. Options and PARs for Andrew Alcock have a one-year sale restriction after issue of shares. See section 7 for vesting conditions.
3. Options and PARs for Jason Entwistle and Craig Lawrenson have a one-year sale restriction after issue of shares. See section 7 for vesting conditions.
4. Options and PARs for Mark Goodrick have a one-year sale restriction after issue of shares. See section 7 for vesting conditions. All options and PARs

are forfeited.

5. Debbie Last is engaged on a contracted basis with daily rate payments made to an external party.

KMP have no entitlement to termination payments in the event of removal for misconduct.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only35

7. SHARE BASED COMPENSATION

OPTIONS

The terms and conditions of each grant of Options affecting remuneration of KMP in the current or a future reporting
period are as follows:

Grant date

Expiry date

17 Oct 2014

17 Oct 2019

14 Oct 2015

14 Oct 2020

7 Dec 2015

7 Dec 2020

29 Nov 2016

29 Nov 2021

11 Oct 2017

11 Oct 2022

11 Oct 2017

11 Oct 2022

11 Dec 2017

11 Oct 2022

7 Sep 2018

7 Sep 2023

12 Dec 2018

12 Dec 2023

12 Dec 2018

12 Dec 2023

25 Nov 2019

25 Nov 2024

Exercise
price
($)

Value per
Option at
grant date ($)

Performance

achieved % vested

Balance
at start of
Year

Issued
during
year

Exercised/
lapsed
during year

Balance
at end of
year

0.98

2.46

4.46

7.09

6.25

7.09

12.04

13.44

12.36

0.19

0.95

1.60

2.33

3.00

3.48

4.06

3.58

4.22

3.79

3.80

Yes

Partially

Yes

Partially

100%

50%

100%

50%

160,000

120,000

150,000

193,793*

87,357*

34,247

78,077

55,352

51,186

24,667

Nil

135,474

160,000

Nil

24,667

22,424

Nil

120,000

150,000

193,793

87,357

34,247

78,077

55,352

51,186

Nil

113,050

*Balance at start of year excludes options for M. Haes who resigned in prior year.

Options granted carry no dividends or voting rights.

Option vesting conditions are as follows:

Grant Date

Granted To

Performance Condition 1

Performance Condition 2

14 October 2015

Executives

7 December 2015 Managing

Director

N/A

The closing sale price of the shares
traded on the Australian Securities
Exchange must have increased by
at least 52% of the Exercise Price of
the Options for each day in any 20
consecutive trading day period starting
on or after 36 months after the date
of issue of the Options. These Options
can be exercised, subject to satisfaction
of vesting conditions, after the 3rd
anniversary of the date of issue.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only36

Grant Date

Granted To

Performance Condition 1

Performance Condition 2

29 November
2016

Executives

The CAGR in FUA over the three-year
period until 30 June 2019 must be at
least 28% p.a. Proportional vesting
will occur between a CAGR of 28%
(0% vesting) to 45% (100% vesting).

11 October 2017

Executives

The CAGR in FUA over the three-year
period until 30 June 2019 must be at
least 28% p.a. Proportional vesting
will occur between a CAGR of 28%
(0% vesting) to 45% (100% vesting).

11 October 2017

Executives

The CAGR in FUA over the three-year
period until 30 June 2020 must be at
least 29.58% p.a. Proportional vesting
will occur between a CAGR of 25.88%
(0% vesting) to 33.09% (100% vesting).

11 December
2017

Managing
Director

The CAGR in FUA over the three-year
period until 30 June 2020 must be at
least 29.58% p.a. Proportional vesting
will occur between a CAGR of 25.88%
(0% vesting) to 33.09% (100% vesting).

The CAGR in the ATSR over the three-
year period until approximately
31 August 2019 must be at least 12.5%
p.a. Proportional vesting will occur
between a CAGR of 12.5% (0% vesting)
to 17.5% (100% vesting). The ATSR is
inclusive of dividends.

Any unvested Options from the three-
year vesting date will be retested
against the ATSR CAGR hurdles over the
cumulative four-year period and if they
remain unvested after this test will lapse.

The CAGR in the ATSR over the three-
year period until approximately
31 August 2020 must be at least 12.5%
p.a. Proportional vesting will occur
between a CAGR of 12.5% (0% vesting)
to 17.5% (100% vesting). The ATSR is
inclusive of dividends.

Any unvested Options from the three
year vesting date will be retested
against the ATSR CAGR hurdles over the
cumulative four year period and if they
remain unvested after this test will lapse.

Any unvested Options from the three-
year vesting date will be retested
against the ATSR CAGR hurdles over the
cumulative four-year period and if they
remain unvested after this test will lapse.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only37

Grant Date

Granted To

Performance Condition 1

Performance Condition 2

7 September 2018 Executives

The CAGR in FUA over the three-year
period until 30 June 2021 must be at
least 29.23% p.a. Proportional vesting
will occur between a CAGR of 29.23%
(0% vesting) to 40.23% (100% vesting).

12 December
2018

Managing
Director

The CAGR in FUA over the three-year
period until 30 June 2021 must be at
least 29.23% p.a. Proportional vesting
will occur between a CAGR of 29.23%
(0% vesting) to 40.23% (100% vesting).

12 December
2018

Executives

The CAGR in FUA over the three-year
period until 30 June 2021 must be at
least 29.23% p.a. Proportional vesting
will occur between a CAGR of 29.23%
(0% vesting) to 40.23% (100% vesting).

25 November
2019

Managing
Director

The CAGR in FUA over the three-year
period until 30 June 2022 must be at
least 28.02% p.a. Proportional vesting
will occur between a CAGR of 28.02%
(0% vesting) to 35.47% (100% vesting).

The CAGR in the ATSR over the three-
year period until approximately
31 August 2021 must be at least 12.5%
p.a. Proportional vesting will occur
between a CAGR of 12.5% (0% vesting)
to 17.5% (100% vesting). The ATSR is
inclusive of dividends.

Any unvested Options from the three-
year vesting date will be retested
against the ATSR CAGR hurdles over the
cumulative four-year period and if they
remain unvested after this test will lapse.

The CAGR in the ATSR over the three-year
period until approximately 31 August 2021
must be at least 12.5% p.a. Proportional
vesting will occur between a CAGR of
12.5% (0% vesting) to 17.5% (100%
vesting). The ATSR is inclusive of dividends.

Any unvested Options from the three-year
vesting date will be retested against the
ATSR CAGR hurdles over the cumulative
four-year period and if they remain
unvested after this test will lapse.

The CAGR in the ATSR over the three-year
period until approximately 31 August 2021
must be at least 12.5% p.a. Proportional
vesting will occur between a CAGR of
12.5% (0% vesting) to 17.5% (100%
vesting). The ATSR is inclusive of dividends.

Any unvested Options from the three-year
vesting date will be retested against the
ATSR CAGR hurdles over the cumulative
four-year period and if they remain
unvested after this test will lapse.

The CAGR in the ATSR over the three-
year period until approximately
31 August 2022 must be at least 12.5%
p.a. Proportional vesting will occur
between a CAGR of 12.5% (0% vesting)
to 17.5% (100% vesting). The ATSR is
inclusive of dividends.

Any unvested Options from the three-
year vesting date will be retested
against the ATSR CAGR hurdles over the
cumulative four-year period and if they
remain unvested after this test will lapse.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only38

Grant Date

Granted To

Performance Condition 1

Performance Condition 2

25 November
2019

Executives

The CAGR in FUA over the three-year
period until 30 June 2022 must be at
least 28.02% p.a. Proportional vesting
will occur between a CAGR of 28.02%
(0% vesting) to 35.47% (100% vesting).

Any unvested Options from the three-
year vesting date will be retested
against the ATSR CAGR hurdles over the
cumulative four-year period and if they
remain unvested after this test will lapse.

KMP hold the following Options:

Financial
year of
grant

Financial year in
which Options
may vest

Number
of Options
granted

Value of
Options at
grant date
($)

Number of
Options vested
during the year

Number of Options
lapsed/forfeited
during the year

2020

2019

2018

2017

2016

2020

2019

2018

2017

2016

2020

2019

2018

2020

2019

2023

2022

2021

2020

2019

2023

2022

2021

2020

2019

2023

2022

2021

2023

2022

54,764

51,186

78,077

106,464

150,000

44,848

40,000

63,940

87,329

120,000

13,438

15,352

23,417

34,247

22,424

24,667

208,083

215,994

317,133

198,449

240,000

170,406

142,880

191,580

203,477

114,000

51,059

54,808

70,163

119,126

85,203

93,544

Nil

39,039

106,464

Nil

31,970

87,329

Nil

11,709

34,247

Nil

22,424

24,667

Name

A. Alcock

A. Alcock*

J. Entwistle

J. Entwistle*

C. Lawrenson

M. Goodrick**

*Options vested in FY19.

**Resigned 13 March 2020.

The assessed fair value at grant date of the Options granted to individuals is allocated over the period from grant date
to expected vesting date and the amount is included in the remuneration tables in section 5 of this Remuneration
Report. Fair values at grant date are determined using the Black Scholes and the Hoadleys 1 Hybrid ESO model that
takes into account the exercise price, term of the Option, share price at grant date, probability of service condition
being met, expected price volatility of the underlying share price and the risk-free rate for the term of the Option.

160,000 Options were exercised by KMP during FY20.

Options granted carry no dividends or voting rights.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only39

PERFORMANCE AWARD RIGHTS (PARS)

The terms and conditions of each grant of PARs affecting remuneration of KMP in the current or a future reporting
period are as follows:

Grant date

Expiry date

29 Nov 2016

29 Nov 2031

11 Oct 2017

11 Oct 2032

11 Oct 2017

21 Aug 2032

11 Dec 2017

11 Dec 2032

7 Sep 2018

7 Sep 2033

12 Dec 2018

12 Dec 2033

12 Dec 2018

12 Dec 2033

12 Dec 2018

12 Dec 2033

12 Dec 2018

12 Dec 2033

25 Nov 2019

25 Nov 2034

Value per
PAR at
grant date
($)

4.07

5.52

6.35

6.95

10.71

11.16

12.69

12.76

9.42

Performance
achieved

% vested

Balance at
start of year

Issued
during year

Yes

Partially

Yes

Partially

100%

50%

100%

50%

Nil

72,688

26,737

11,211

23,897

15,221

14,072

6,981

235,000

20,000

Nil

54,225

Exercised/
lapsed
during year

9,249

Nil

6,981

Nil

8,980

Balance at
end of year

63,438

26,737

11,211

23,897

15,221

14,072

Nil

235,000

20,000

45,275

PAR vesting conditions are as follows:

Grant date

Granted to

Performance Condition 1

Performance Condition 2

29 November
2016

Executives

The CAGR in FUA over the three-year
period until 30 June 2019 must be at
least 28% p.a. Proportional vesting
will occur between a CAGR of 28%
(0% vesting) to 45% (100% vesting).

11 October 2017

Executives

The CAGR in FUA over the two period
until 30 June 2019 must be at least
28% p.a. Proportional vesting will
occur between a CAGR of 28%
(0% vesting) to 45% (100% vesting).

Any unvested PARs from the three-year
vesting date will be retested against the
ATSR CAGR hurdles over the cumulative
four-year period and if they remain
unvested after this test will lapse.

The CAGR in the ATSR over the
two-year period until approximately
31 August 2019 must be at least 12.5%
p.a. Proportional vesting will occur
between a CAGR of 12.5% (0% vesting)
to 17.5% (100% vesting). The ATSR is
inclusive of dividends.

Any unvested PARs from the three-year
vesting date will be retested against the
ATSR CAGR hurdles over the cumulative
four-year period and if they remain
unvested after this test will lapse.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only40

Grant date

Granted to

Performance Condition 1

Performance Condition 2

11 October 2017

Executives

The CAGR in FUA over the three-year
period until 30 June 2020 must be at
least 25.88% p.a. Proportional vesting
will occur between a CAGR of 25.88%
(0% vesting) to 33.09% (100% vesting).

11 December
2017

Managing
Director

The CAGR in FUA over the three-year
period until 30 June 2020 must be at
least 25.88% p.a. Proportional vesting
will occur between a CAGR of 25.88%
(0% vesting) to 33.09% (100% vesting).

7 September
2018

Executives

The CAGR in FUA over the three-year
period until 30 June 2021 must be at
least 29.23% p.a. Proportional vesting
will occur between a CAGR of 29.23%
(0% vesting) to 40.23% (100% vesting).

12 December
2018

Managing
Director

The CAGR in FUA over the three-year
period until 30 June 2021 must be at
least 29.23% p.a. Proportional vesting
will occur between a CAGR of 29.23%
(0% vesting) to 40.23% (100% vesting).

The CAGR in the ATSR over the three-year
period until approximately 31 August 2020
must be at least 12.5% p.a. Proportional
vesting will occur between a CAGR of
12.5% (0% vesting) to 17.5% (100%
vesting). The ATSR is inclusive of dividends.

Any unvested PARs from the three-year
vesting date will be retested against the
ATSR CAGR hurdles over the cumulative
four-year period and if they remain
unvested after this test will lapse.

Any unvested PARs from the three-year
vesting date will be retested against the
ATSR CAGR hurdles over the cumulative
four year period and if they remain
unvested after this test will lapse.

The CAGR in the ATSR over the three-year
period until approximately 31 August 2021
must be at least 12.5% p.a. Proportional
vesting will occur between a CAGR of
12.5% (0% vesting) to 17.5% (100%
vesting). The ATSR is inclusive of dividends.

Any unvested PARs from the three-year
vesting date will be retested against the
ATSR CAGR hurdles over the cumulative
four-year period and if they remain
unvested after this test will lapse.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only41

Grant date

Granted to

Performance Condition 1

Performance Condition 2

12 December
2018

Executives

The CAGR in FUA over the three-year
period until 30 June 2021 must be at
least 29.23% p.a. Proportional vesting
will occur between a CAGR of 29.23%
(0% vesting) to 40.23% (100% vesting).

The CAGR in the ATSR over the three-year
period until approximately 31 August 2021
must be at least 12.5% p.a. Proportional
vesting will occur between a CAGR of
12.5% (0% vesting) to 17.5% (100%
vesting). The ATSR is inclusive of dividends.

Any unvested PARs from the three-year
vesting date will be retested against the
ATSR CAGR hurdles over the cumulative
four-year period and if they remain
unvested after this test will lapse.

12 December
2018

Executives

For the performance period from
1 July 2018 to 30 June 2022:

N/A

• zero vesting will occur if the CAGR
in FUA is below a minimum level of
33% per annum;

• 100% vesting will occur if the CAGR
in FUA reaches 33% per annum;

The hurdle will be tested over a
cumulative four year period to the
test date on 30 June 2022. Any PARs
that are unvested as at the end of the
Performance Period will lapse.

12 December
2018

Director

For the performance period from
1 July 2018 to 30 June 2021:

N/A

• Provide support to the HUB24
Managing Director and KMPs
in relation to the securing and
maintenance of key accounts;

• Directly liaise with key accounts

to facilitate growth and customer
satisfaction, and to assess the
effectiveness of HUB24 corporate
culture and client satisfaction and
provide feedback to the Board.
Measure the improvement in the
Company’s customer satisfaction
service levels.

The CAGR in FUA over the three-year
period until 30 June 2022 must be at
least 28.02% p.a. Proportional vesting
will occur between a CAGR of 28.02%
(0% vesting) to 35.47% (100% vesting).

25 November
2019

Executives

The CAGR in the ATSR over the three-year
period until approximately 31 August 2022
must be at least 12.5% p.a. Proportional
vesting will occur between a CAGR of
12.5% (0% vesting) to 17.5% (100%
vesting). The ATSR is inclusive of dividends.

Any unvested Options from the three-
year vesting date will be retested
against the ATSR CAGR hurdles over the
cumulative four-year period and if they
remain unvested after this test will lapse.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only42

Grant date

Granted to

Performance Condition 1

Performance Condition 2

25 November
2019

Managing
Director

The CAGR in FUA over the three-year
period until 30 June 2022 must be at
least 28.02% p.a. Proportional vesting
will occur between a CAGR of 28.02%
(0% vesting) to 35.47% (100% vesting).

The CAGR in the ATSR over the three-year
period until approximately 31 August 2022
must be at least 12.5% p.a. Proportional
vesting will occur between a CAGR of
12.5% (0% vesting) to 17.5% (100%
vesting). The ATSR is inclusive of dividends.

Any unvested Options from the three-
year vesting date will be retested
against the ATSR CAGR hurdles over the
cumulative four-year period and if they
remain unvested after this test will lapse.

KMP hold the following PARs:

Financial
year of
grant

Financial year
in which PARs
may vest

Number
of PARs
granted

Value of
PARs at
grant date
($)

Number of
PARs vested
during the year

Number of PARs
lapsed/forfeited
during the year

2020

2019

2018

2017

2020

2019

2018

2017

2020

2019

2018

2020

2019

2023

2022

2021

2020

2023

2022

2021

2020

2023

2022

2021

2023

2021

21,932

206,507

90,000

1,142,224

14,072

23,897

34,851

17,961

157,034

166,129

113,475

169,117

90,000

1,142,224

11,000

19,570

28,587

5,382

117,852

107,966

93,079

50,676

35,000

444,198

4,221

11,211

7,167

8,980

45,219

71,212

39,542

84,554

20,000

253,828

6,981

77,905

20,000

255,115

Nil

11,949

34,851

Nil

9,785

28,587

Nil

11,211

3,583

Nil

8,980

Nil

6,981

Nil

Name

A. Alcock

J. Entwistle

C. Lawrenson

M. Goodrick*

A. McDonald

*Resigned 13 March 2020.

The assessed fair value at grant date of the PARs granted to individuals is allocated over the period from grant date
to expected vesting date and the amount is included in the remuneration tables in section 5 of this Remuneration
Report. Fair values at grant date are independently determined using the Black Scholes and the Hoadleys 1 Hybrid ESO
model that takes into account the term of the PAR, share price at grant date, probability of service condition being met,
expected volatility of the underlying share price and the risk free rate.

PARs granted carry no dividends or voting rights.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only43

8. ADDITIONAL DISCLOSURES RELATING TO KMP

The number of shares in the Group held during the financial year by each Director and other members of KMP of the
Group, including their personally related parties, is set out below:

Balance at
start
of the year

939,683

1,182,491

243

796,811

3,280,677

9,424

25,000

Received due to
tax exempt share
plan issue

Other changes
during the year

Balance at
end of the year

188,587

10,000

7,950

10,000

2,550

939,683

1,371,158

323

806,811

3,280,677

17,374

35,000

2,550

Ordinary Shares

A. Alcock

J. Entwistle

C. Lawrenson

M. Goodrick*

B. Higgins

I. Litster

A. McDonald

P. Rogan

R Stringer

*Resigned 13 March 2020.

OPTIONS

The number of Options over ordinary shares in the Group held during FY20 by each Director and other members of
KMP of the Group, including their personally related parties, is set out below:

Options over
ordinary shares

Balance at start
of the year

Granted

Exercised

Expired/
forfeited/other

Balance at end
of the year

A. Alcock

J. Entwistle

C. Lawrenson

M. Goodrick*

385,727

471,269

73,016

24,667

54,764

44,848

13,438

22,424

160,000

47,091

440,491

356,117

86,454

Nil

*Resigned 13 March 2020.

PERFORMANCE AWARD RIGHTS (PARS)

The number of PARs over ordinary shares in the Group held during FY20 by each Director and other members of KMP
of the Group, including their personally related parties, is set out below:

PARs over
ordinary shares

Balance at start
of the year

Granted

Exercised

Expired/
forfeited/other

Balance at end
of the year

A. Alcock

J. Entwistle

C. Lawrenson

M. Goodrick*

A. McDonald

*Resigned 13 March 2020.

162,820

149,157

57,599

26,981

20,000

21,932

17,961

5,382

8,980

15,961

184,752

167,118

62,981

20,000

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only44

NON-EXECUTIVE DIRECTOR REMUNERATION

The Board seeks to set aggregate remuneration at
a level which provides the Group with the ability to
attract, motivate and retain Directors of the highest
calibre, whilst incurring a cost which is acceptable to
Shareholders.

The amount of Fixed Remuneration is established for
individual Non-Executive Directors by resolution of the
full Board, at its discretion. The annual aggregate Non-
Executive remuneration may not exceed the amount
fixed by the Group in a General Meeting for that purpose
(currently fixed at a maximum of $600,000 per annum
as approved by Shareholders at the Annual General
Meeting held on 29 November 2016).

The following fees, including superannuation, apply for
Non-Executive Directors:

Chairman (inclusive of committees):

$220,000 p.a.

A. McDonald

Other Non-Executive Directors:

$75,000 p.a.

$85,000 p.a.

The Chair of the Audit, Risk and Compliance Committee
and the Chair of the Remuneration and Nomination
Committee receive an additional $20,000 remuneration
per annum. Committee participation other than the role
of Chair is set at $10,000 per annum per Non-Executive
Director excluding the Chairman of the Board.

The Remuneration and Nomination Committee may
from time to time receive advice from independent
remuneration consultants or utilise market based
comparative data or indices to ensure Non-Executive
Directors’ fees and payments are appropriate and in
line with market. The Chairman’s fees are determined
independently to the fees of other Non-Executive
Directors based on the comparative roles in the
external market.

No additional amounts are paid to each Director
other than reimbursements for reasonable travel,
accommodation and other expenses incurred as a
consequence of their attendance at Board meetings and
otherwise in the execution of their duties as Directors.

The remuneration of Non-Executive Directors for
FY20 and FY19 is detailed in section 5 of this
Remuneration Report.

RETIREMENT ALLOWANCES FOR DIRECTORS

There are no retirement schemes or retirement benefits
other than statutory benefits for Non-Executive Directors.

9. REMUNERATION GOVERNANCE

RESPONSIBILITY FOR SETTING REMUNERATION

The Remuneration and Nomination Committee is
delegated responsibility by the Board for reviewing
and making recommendations on remuneration
policies for the Group, including policies governing the
remuneration of Executives.

Activities of the Remuneration and Nomination
Committee are governed by its Charter, which is available
on the Company’s website at www.HUB24.com. Amongst
other responsibilities the Remuneration and Nomination
Committee assists the Board in its oversight of:

• remuneration policy for Executives;

•

level and structure of remuneration for Executives,
including Short Term and Long Term Incentive plans;

• the Group’s compliance with applicable legal and

regulatory requirements in respect of remuneration
matters; and

• approval of the allocation of shares and incentives

under HUB24’s schemes.

USE OF REMUNERATION ADVISORS DURING THE YEAR

During FY20 the Group engaged an external specialist
remuneration consultant and a leading accounting
and tax adviser to conduct a benchmarking review
of LTI structure and trends in LTI incentives post
COVID-19. This review included benchmarking Executive
remuneration against a core comparator group of
companies and ensuring the design and operation of the
Group’s Short Term and Long Term Incentives are in line
with Shareholder and market expectations.

SHARE TRADING POLICY

All staff are required to comply with HUB24’s Share
Trading Policy at all times and in respect of all HUB24
shares held. Trading is subject to pre-clearance and is
not permitted during designated blackout periods unless
there are exceptional circumstances.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only45

AUDITOR’S INDEPENDENCE DECLARATION

Deloitte Touche Tohmatsu
A.B.N. 74 490 121 060

Grosvenor Place
225 George Street
Sydney NSW 2000
PO Box N250 Grosvenor Place
Sydney NSW 1220 Australia

DX 10307SSE
Tel: +61 (0) 2 9322 7000
Fax: +61 (0) 2 9322 7001
www.deloitte.com.au

Deloitte Touche Tohmatsu
A.B.N. 74 490 121 060

Grosvenor Place
225 George Street
Sydney NSW 2000
PO Box N250 Grosvenor Place
Sydney NSW 1220 Australia

DX 10307SSE
Tel: +61 (0) 2 9322 7000
Fax: +61 (0) 2 9322 7001
www.deloitte.com.au

The Board of Directors
HUB24 Limited
Level 2, 7 Macquarie Place
Sydney NSW 2000

24 August 2020

The Board of Directors
HUB24 Limited
Dear Board Members
Level 2, 7 Macquarie Place
Sydney NSW 2000

HUB24 Limited

In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following
declaration of independence to the directors of HUB24 Limited.

24 August 2020
As lead audit partner for the audit of the consolidated financial statements of HUB24 Limited for the
financial year ended 30 June 2020, I declare that to the best of my knowledge and belief, there have
been no contraventions of:
Dear Board Members

(i) the auditor independence requirements of the Corporations Act 2001 in relation to the
HUB24 Limited

audit; and

(ii) any applicable code of professional conduct in relation to the audit.

In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following
declaration of independence to the directors of HUB24 Limited.

As lead audit partner for the audit of the consolidated financial statements of HUB24 Limited for the
financial year ended 30 June 2020, I declare that to the best of my knowledge and belief, there have
Yours sincerely
been no contraventions of:

(i) the auditor independence requirements of the Corporations Act 2001 in relation to the

DELOITTE TOUCHE TOHMATSU

audit; and

(ii) any applicable code of professional conduct in relation to the audit.

Declan O’Callaghan
Partner
Chartered Accountant
Yours sincerely

DELOITTE TOUCHE TOHMATSU

Declan O’Callaghan
Partner
Chartered Accountant

Liability limited by a scheme approved under Professional Standards Legislation.

Member of Deloitte Asia Pacific Limited and the Deloitte organisation.

Liability limited by a scheme approved under Professional Standards Legislation.

Member of Deloitte Asia Pacific Limited and the Deloitte organisation.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only

For financial advisers, the drivers
for change are continuing as they
transform their businesses to
remain competitive and adjust to
new regulations and educational
requirements. The need for platforms
like HUB24 to assist them in this
transformation is highly valued.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only47

FINANCIAL
REPORT

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only48

CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 JUNE 2020

Revenue from continuing operations

Revenue

Fair value gain on contingent consideration

Interest and other income

Expenses

Platform and custody fees

Licensee fees

Employee benefits expense

Property and occupancy costs

Depreciation and amortisation expense

Administrative expenses

Impairment write-off

Interest expense on lease liability

Profit before income tax

Income tax (expense)/benefit

Profit after income tax for the year

Other comprehensive income

Total comprehensive income for the year

Total comprehensive income for the year attributable
to ordinary members of HUB24 Limited

Consolidated

2020
$

2019
$

Notes

110,265,071

96,358,115

850,627

944,510

1,145,336

1,164,132

112,060,208

98,667,583

(7,689,122)

(6,122,683)

(28,252,729)

(33,798,356)

(42,320,107)

(32,351,399)

(417,078)

(2,203,212)

(5,322,539)

(2,574,321)

(14,026,827)

(10,771,870)

(1,000,000)

(204,408)

99,232,810

87,821,841

12,827,398

10,845,742

(4,599,101)

(3,681,787)

8,228,297

7,163,955

8,228,297

7,163,955

8,228,297

7,163,955

Cents

Earnings per share for profit attributable to ordinary equity members of HUB24 Limited

Basic earnings per share

Diluted earnings per share

13.13

12.85

11.54

11.30

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

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only
CONSOLIDATED STATEMENT OF
FINANCIAL POSITION

AS AT 30 JUNE 2020

Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Total current assets
Non-current assets
Intangible assets
Right of Use Asset
Deferred tax assets (net of deferred tax liability)
Office equipment
Other non-current assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Provisions
Trade and other payables
Lease liabilities
Deferred income
Total current liabilities
Non-current liabilities
Lease liabilities
Provisions
Deferred income
Other non-current liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Profit reserve
Reserves
Accumulated losses
Total equity

Consolidated

2020
$

2019
$

Notes

19
8

11
9
7
10
12

14
13
9

9
15

17
29
18

33,809,323
10,046,081
1,799,377
45,654,781

39,963,264
5,436,824
5,101,024
1,661,629
-
52,162,741
97,817,522

7,811,054
5,369,919
1,670,311
88,879
14,940,163

4,385,270
1,513,662
587,078
1,567,978
8,053,988
22,994,151
74,823,371

18,465,847
7,565,465
780,997
26,812,309

37,068,563
-
9,685,343
1,955,564
2,000,000
50,709,470
77,521,779

5,053,154
3,363,071
-
259,419
8,675,644

-
1,001,090
775,303
2,146,200
3,922,593
12,598,237
64,923,542

100,146,048
40,847,253
8,823,118
(74,993,048)
74,823,371

98,187,400
13,014,445
5,256,545
(51,534,848)
64,923,542

The above consolidated statement of financial position should be read in conjunction with the accompanying notes.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only
50

CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2020

Consolidated

Opening balance

Balance at 1 July 2019

Opening balance
adjustment on adoption
of new accounting
standard

Restated total equity
at the beginning of the
financial year

Total comprehensive
income for the year

Transfer to Profit reserve

Total comprehensive
income for the year

Dividends provided
for or paid

Capital raising costs

Options and Rights
granted – Employees

Issued
capital
$

Reserves
$

Profit
reserve
$

Retained
earnings
$

Total
equity
$

Notes

98,187,400

5,256,545

13,014,445

(51,534,848)

64,923,542

98,187,400

5,256,545

13,014,445

(51,534,848)

64,923,542

(26,747)

98,187,400

5,256,545

13,014,445

(51,561,595)

64,896,795

Transactions with owners in their capacity as owners:

(11,867)

8,228,297

31,659,750

(31,659,750)

31,659,750

(23,431,453)

8,228,297

(3,826,942)

(11,867)

4,294,717

1,242,371

Share based payments

1,758,515

(516,144)

Issue of treasury shares
to employees

212,000

(212,000)

4,294,717

Balance at 30 June 2020

100,146,048

8,823,118

40,847,253

(74,993,048)

74,823, 371

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only51

CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY (CONTINUED)

Consolidated

Opening balance

Notes

Issued
capital
$

Reserves
$

Profit
reserve
$

Retained
earnings
$

Total
equity
$

96,183,908

3,942,850

5,088,013

(47,349,205)

57,865,566

Balance at 1 July 2018

96,183,908

3,942,850

5,088,013

(47,349,205)

57,865,566

Total comprehensive
income for the year

Transfer to Profit reserve

Total comprehensive
income for the year

7,163,955

11,349,598

(11,349,598)

11,349,598

(4,185,643)

7,163,955

Transactions with owners in their capacity as owners:

Issue of treasury shares
to employees*

Capital raising costs

Options and Rights
granted – Employees

Dividends provided for
or paid

171,000

(13,630)

(171,000)

1,826,461

(3,423,166)

Share based payments

1,846,122

(341,766)

2,003,492

1,313,695

(3,423,166)

(13,630)

1,826,461

(3,423,166)

1,504,356

(105,979)

Balance at 30 June 2019

98,187,400

5,256,545

13,014,445

(51,534,848)

64,923,542

*Prior comparatives have been reclassified for presentation purposes and consistency with the current period.

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only52

CONSOLIDATED STATEMENT OF
CASH FLOWS

FOR THE YEAR ENDED 30 JUNE 2020

Cash flows from operating activities

Receipts from customers (inclusive of GST)

Payments to suppliers and employees (inclusive of GST)

Interest received

Interest paid on lease liability

Short term lease payments

Consolidated

2020
$

2019
$

Notes

116,810,659

102,183,621

(91,768,273)

(91,197,982)

633,021

(204,408)

(212,620)

645,014

Net cash inflow from operating activities

25,258,379

11,630,653

Cash flows from investing activities

Payments for acquisitions (net of cash acquired)

Payments for office equipment

Payments for intangible assets

Net cash (outflow) from investing activities

Cash flows from financing activities

ORFR loan facility advance settlement proceeds

Payments for capital raising costs

Proceeds from issues of shares and other equity securities

(475,000)

(498,365)

(411,250)

(458,350)

(6,726,957)

(6,904,702)

(7,700,322)

(7,774,302)

2,000,000

(15,756)

(19,471)

1,242,371

1,093,137

Repayment of lease principal payments

(1,614,253)

Dividends paid

Net cash (outflow) from financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents at the beginning of the financial year

(3,826,943)

(3,423,166)

(2,214,581)

(2,349,500)

15,343,476

1,506,851

18,465,847

16,958,996

Cash and cash equivalents at end of year

33,809,323

18,465,847

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only
CONTENTS OF THE NOTES
TO THE FINANCIAL STATEMENTS

Corporate
information

Summary of significant
accounting policies

Financial
risk management

Critical accounting judgements,
estimates and assumptions

Operating
segments

Revenue and expenses from
continuing operations

Income
tax

Current assets –
Trade and other receivables

Non-current assets –
Right-of-use assets

Non-current assets –
Office equipment

Non-current assets –
Intangible assets

Non-current assets –
receivables

Current liabilities –
Trade and other payables

Current liabilities –
Provisions

Non-current liabilities –
Provisions

Other –
Non-current liabilities

Issued
capital

Reserves

Reconciliation
of cash flows

Commitments
and contingencies

Share based
payments plan

Significant events after
the reporting date

Earnings
per share

Remuneration
of auditors

Related party
disclosures

Parent entity
financial information

Key management
personnel

Financial
instruments

Profit
reserves

100

102

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only54

1. CORPORATE INFORMATION

The Annual Report of HUB24 Limited and its controlled entities (‘the Group or HUB24’) for the year ended 30 June 2020
was authorised for issue in accordance with a resolution of the Board of Directors on 25 August 2020 and covers the
Company as an individual entity as well as the Group consisting of the Company and its subsidiaries as required by the
Corporations Act 2001.

HUB24 is limited by shares and incorporated and domiciled in Australia whose shares are publicly traded on the
Australian Securities Exchange (ASX:HUB).

The nature of the operations and principal activities of the Group are described in the Directors’ report.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PREPARATION

These general purpose financial statements have been prepared in accordance with Australian Accounting Standards
and Interpretations issued by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001, as
appropriate for profit oriented entities. The financial statements have also been prepared under the historical cost
convention, except for, where applicable, the revaluation of certain classes of assets and liabilities. The financial report
is presented in Australian dollars.

PARENT ENTITY INFORMATION

In accordance with the Corporations Act 2001, these financial statements present the results of the Group only.
Supplementary information about the parent entity is disclosed in Note 26.

COMPLIANCE WITH IFRS

The financial report complies with Australian Accounting Standards and International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards Board.

NEW ACCOUNTING STANDARDS AND INTERPRETATIONS

The Group has adopted all of the new, revised or amended Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board (AASB) that are mandatory for the current reporting period. These Accounting
Standards and Interpretations did not have any significant impact on the financial performance or position of the Group.

NEW AND AMENDED ACCOUNTING STANDARDS EFFECTIVE FOR THE CURRENT YEAR

The Group’s assessment of the impact of new accounting standards and interpretations is set out below.

(i) AASB 16 Leases

The Group has applied AASB 16 using the modified retrospective approach, under which the cumulative effect
of initial application is recognised in retained earnings at 1 July 2019. Accordingly, the comparative information
presented for June 2019 has not been restated. The new accounting policies that have been applied from 1 July
2019 are disclosed below.

AASB 16 introduced a single, on-balance sheet accounting model for lessees, which replaced AASB 117 Leases and
AASB Interpretation 4 “Determining Whether an Arrangement contains a Lease”. As a result, the Group, as a lessee, has
recognised right-of-use assets representing its right to use the underlying asset, and lease liabilities, representing its
obligation to make lease payments.

Expedients applied

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains,
a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group uses
the definition of a lease in AASB 16.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only55

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NEW AND AMENDED ACCOUNTING STANDARDS EFFECTIVE FOR THE CURRENT YEAR (CONTINUED)

In applying AASB16 for the first time, the Group has used the following practical expedients permitted by the standard:

i. applying a single discount rate to a portfolio of leases with reasonably similar characteristics;

ii. relying on previous assessments on whether leases are onerous as an alternative to performing an impairment

review – there were no onerous contracts as at 1 July 2019;

iii. accounting for operating leases with a lease term of less than 12 months as short-term leases excluding initial direct

costs for the measurement of the right-of-use asset at the date of initial application;

iv. exemption for leases where the value of the underlying leased asset is deemed to be low-value; and

v. use of hindsight with regards to the determination of the lease term.

The Group has elected not to reassess whether a contract is or contains a lease at the date of initial application.
Instead, for contracts entered into before the transition date the Group relied on its assessment made applying AASB
117 and Interpretation 4 – Determining whether an Arrangement contains a Lease.

IMPACT ON TRANSITION*

The impact on transition is summarised below:

Measurement of right-of-use-assets

The associated right-of-use assets for property leases were measured on a retrospective basis as if the new rules had
always been applied.

The change in accounting policy affected the following items in the balance sheet on 1 July 2019:

Right-of-use assets

Deferred tax assets

Current provisions

Non-current provisions

Lease liabilities

Increase by

Decrease by

Increase by

1 July 2019
$

7,159,927

11,467

361,646

110,047

7,669,834

The net impact on accumulated losses on 1 July 2019 was an increase of $26,747.

*For the impact of AASB16 on the profit and loss for the period, see Note 9.

When measuring lease liabilities for leases that were previously classified as operating leases, the Group discounted
lease payments using its incremental borrowing rate at 1 July 2019. The weighted average rate applied was 4.05%.

Measurement of lease liabilities

Operating lease commitments disclosed as at 30 June 2019

Discounted using the lessee’s incremental borrowing rate at the date of initial application

Add/(less): contracts reassessed as lease contracts

Lease liability recognised as at 1 July 2019

Of which are:

Current lease liabilities

Non-current lease liabilities

1 July 2019
$

8,107,097

(624,938)

187,675

7,669,834

1,812,179

5,857,655

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only56

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

GOING CONCERN

The financial report has been prepared on a going concern basis.

DIVIDENDS

The Board’s dividend policy targets a payout ratio between 40% and 60% of the Group’s underlying net profit after tax
over the medium term subject to prevailing market conditions and alternate uses of capital.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements comprise the financial statements of the Group and its subsidiaries as at 30 June
each year. Refer to Note 25 for a listing of all subsidiaries. There are no interests in associates as at 30 June 2020.

FUNCTIONAL AND PRESENTATION CURRENCY

Items included in the financial statements of each of the Group’s entities are measured using the currency of the
primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial
statements are presented in Australian dollar ($), which is HUB24 Limited’s functional and presentation currency.

COMPARATIVES

Where required by the Accounting Standards and/or for improved presentation purposes, certain comparative figures
have been adjusted to conform to changes in presentation for the current year.

3. FINANCIAL RISK MANAGEMENT

The Group’s principal financial instruments comprise receivables, payables and cash and cash equivalents. During
the year the Group has established an overdraft facility with our banking partners. At the time of publication of these
statements, the facility remains undrawn. The Group does not trade in derivative instruments. The Group is exposed to
the following risks from its use of financial instruments:

• Credit risk
• Liquidity risk
• Market risk
•
• Foreign exchange risk
• Capital management

Interest rate risk

This note presents information about HUB24 and the Group’s exposure to each of the above risks, their objectives,
policies and processes for measuring and managing risk, and the management of capital. Further quantitative
disclosures are included throughout this financial report. The Board of Directors has overall responsibility for the
establishment and oversight of the risk management framework.

Risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate
risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are
reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group, through training and
management standards and procedures, aims to develop a disciplined and constructive control environment in which
all employees and consultants understand their roles and obligations.

The Group Audit, Risk and Compliance Committee (ARCC) oversees how management monitors compliance with
the Company’s and the Group’s risk management policies and procedures and reviews the adequacy of the risk
management framework in relation to risks faced. The ARCC is assisted by external professional advisors from
time to time.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only57

3. FINANCIAL RISK MANAGEMENT (CONTINUED)

CREDIT RISK

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet
its contractual obligations, and arises from the financial assets of the Group, which comprise cash and cash equivalents
and principally, trade and loan receivables.

Exposure at reporting date is addressed at each particular note. The Group does not hold any credit derivatives to
offset its credit exposure.

It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification
procedures including an assessment of their independent credit worthiness, financial position, past experience and
industry reputation.

In addition, credit risk exposures and receivable balances are monitored on an ongoing basis with the intended result
that the Group’s exposure to bad debts is not significant. Management has assessed the expected credit losses on
trade receivables and have used a provision matrix to measure the groups impairment losses.

The Group also has credit risk in respect of its debtors. In the case of most transactions, revenue is generally earned
over a period of several months due to the complexity and size of the work involved. The Group manages this risk by
entering into contractual agreements with its counterparties, obtaining external legal advice where necessary, at the
start of each transaction.

The Group provides financial guarantees to wholly-owned subsidiaries and has provided a guarantee to ANZ with
regards to the borrowing facility established during the financial year.

LIQUIDITY RISK

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 risk is to ensure, as far as possible, that it will always maintain banking/credit facilities
and typically ensures that it has sufficient cash on demand to meet operational expenses for a period of 90 days,
excluding the potential impact of extreme circumstances that cannot be reasonably predicted.

Group forecasts and actual cash flows are continuously monitored, matching the maturity of assets and liabilities, to
meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or
risking damage to the Group’s reputation (Refer Note 28).

MARKET RISK

Market risk is the risk that changes in market prices will affect the Group’s income and include price risk.

Refer to Note 28: Financial Instruments for a market risk analysis of the Group’s financial assets and liabilities.

CAPITAL MANAGEMENT

The Board’s practice is to maintain a sufficient capital base so as to maintain investor, creditor and market confidence
and to sustain future development of the business. It is noted that the Group, through its subsidiary HUB24 Custodial
Services Limited, fully complied with the minimum capital requirements for IDPS Operators and providers of custodial
services for the year ended 30 June 2020 so as to ensure ongoing capital adequacy. Paragem Pty Ltd complied with all
minimum regulatory capital requirements.

As part of broader capital management plans, during the year the Group entered into a $5 million working capital
facility which remains undrawn at balance date.

Apart from the new working capital facility, there were no changes in the Group’s approach to capital management
during the year.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only58

3. FINANCIAL RISK MANAGEMENT (CONTINUED)

INTEREST RATE RISK

Interest rate risk is the risk that the cash rate set by the Reserve Bank of Australia (RBA) changes and will affect the
Group’s income and includes price risk.

Refer to Note 28 Financial Instruments for an interest rate risk analysis of the Group’s financial assets and liabilities.

FOREIGN EXCHANGE RISK

Foreign currency exchange rate risk is the risk that the fair value or future cash flow of an exposure will fluctuate
because of a change in foreign currency rates. The Group’s exposure to the risk of a change in foreign currency relate
primarily to the Group’s operating activities (when revenue and expenses are denominated in a foreign currency).

4. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts in the financial statements. Management regularly evaluates its judgements and estimates in
relation to assets, liabilities, contingent liabilities, revenue and expenses.

Management bases its judgements, estimates and assumptions on historical experience and on other various factors,
including expectations of future events, management believes to be reasonable under the circumstances. The resulting
accounting judgements and estimates will seldom equal the related actual results.

The COVID-19 outbreak was declared a pandemic by the World Health Organisation in March 2020. The outbreak
and response of governments in dealing with the pandemic has impacted the community and economy. The scale
and duration of these developments remain uncertain as at the date of this report. It is not possible to estimate the
ongoing impact of the pandemic or governments’ responses on the effectiveness of internal controls, accounting
estimates or forecasts. Whilst the methodology for estimates has not changed, the underlying inputs are less certain.

Market volatility may impact Funds Under Administration (FUA) based fees and any official cash rate cut may impact
cash margin income. In the second half of the year these adverse impacts were cushioned by higher cash balances and
increased asset trading fees resulting from the volatile trading conditions. Net flows have proved to be resilient, our new
business pipeline remains strong and assisted FUA transitions are continuing. HUB24’s priority has been, and remains,
ensuring the health and safety of the team whilst continuing to operate our business to meet the needs of licensees,
advisers and their clients as well as other key stakeholders.

Our estimates and assumptions have been prepared based upon conditions existing at the date of this report.

The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities are as follows:

Investment platform estimate of useful life (Note 11)

• Deferred tax assets (Note 7)
•
• Goodwill and other indefinite life intangible assets (Note 11)
• Agility contingent consideration (Notes 13 and 16)
• Restructuring provision (Note 14)
• Useful life assessment for CGUs (Note 11)
• Value in Use assessment of CGUs (Note 11).
• Third Party Claims provision (Note 14)
• Share based payment (Note 21).

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only59

5. OPERATING SEGMENTS

IDENTIFICATION OF REPORTABLE SEGMENTS

The Platform, Licensee and IT Services operating segments are based on the internal reports that are reviewed and
used by the executive management team (identified as the Chief Operating Decision Makers hereafter CODM) in
assessing performance and in determining the allocation of resources.

The CODM reviews segment revenues and profits (Underlying EBITDA) on a monthly basis.

KEY ACCOUNTING POLICIES

The accounting policies adopted for internal reporting to the CODM are consistent with those adopted in the financial
statements.

All of the Group’s operations are based in Australia. The principal products and services for each of the operating
segments are as follows:

PLATFORM

Development and provision of investment and superannuation Platform services to financial advisers, stockbrokers,
accountants and their clients, and direct consumers.

LICENSEE SERVICES

Provision of financial advice to clients through financial advisers authorised by Paragem Pty Ltd. The Licensee provides
compliance, software, education and business support to adviser practices enabling advisers to provide clients with
financial advice over a range of products.

IT SERVICES

Provision of application and technology products for the financial services sector. Fees are generated from license and
consulting services relating to data management, software and infrastructure.

CORPORATE

The provision of corporate services supports the three operating segments and therefore includes an allocation of
overhead costs.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only60

5. OPERATING SEGMENTS
CORPORATE (CONTINUED)

Consolidated –
year ended 30 June 2020

Revenue

Platform
$

Licensee
$

IT Services
$

Corporate
S

Total
$

Sales to external customers

74,261,042

29,550,135

6,360,248

110,171,425

Interest revenue

Expenses

Underlying EBITDA

Other non-operating items

Non-recurring revenue

Fair value gain – contingent consideration

Share based payments – Employees
and Director (Including payroll tax)

Discount on contingent consideration

640,827

(45,596,060)

(30,088,005)

(7,244,465)

(3,199,998)

(86,128,528)

28,664,982

(537,870)

(884,217)

(2,559,171)

24,683,724

93,592

93,646

850,627

(4,416,131)

(97,404)

Abnormal items*

Impairment write-off

(1,740,651)

(7,583)

(10,300)

(1,758,534)

(1,000,000)

Depreciation and amortisation

(4,879,879)

(42,959)

(399,701)

Interest expense

(194,735)

(1,584)

(9,672)

(5,322,539)

(205,991)

Profit before income tax

21,943,309

(589,942)

(1,303,890)

(7,222,079)

12,827,398

Income tax (expense)/benefit

(4,599,101)

Profit after income tax

21,943,309

(589,942)

(1,303,890)

(11,821,180)

8,228,297

Reconciliation to revenue from ordinary activities

Sales to external customers

Non-recurring revenue

Interest revenue

Fair value gain – contingent consideration

Sub-lease income

Waived service fees

Revenue from ordinary activities

110,171,425

93,646

640,827

850,627

33,834

269,849

112,060,208

*Abnormal items include committed restructuring costs, ($0.8m) and costs associated with the transition to the newly appointed superannuation fund
trustee ($0.9m).

Interest income is now shown as part of underlying EBITDA to better represent income generation.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only
61

5. OPERATING SEGMENTS
CORPORATE (CONTINUED)

Consolidated –
year ended 30 June 2019

Revenue

Platform
$

Licensee
$

IT Services
$

Corporate
S

Total
$

Sales to external customers

54,051,037

35,236,008

6,977,074

96,264,119

Interest revenue

Expenses

Underlying EBITDA

Other non-operating items

Non-recurring revenue

Fair value gain – contingent consideration

Share based payments – Employees
and Director (Including payroll tax)

Discount on contingent consideration

645,014

(36,046,427)

(35,477,622)

(7,520,906)

(2,440,170)

(81,485,125)

18,004,610

(241,614)

(543,832)

(1,795,156)

15,424,008

93,997

(2,317)

93,997

1,145,336

(2,122,792)

(351,756)

(3,678)

(351,756)

(768,730)

(8,298)

(245,205)

(2,574,321)

Abnormal items*

Depreciation and amortisation

(762,735)

(2,320,818)

Profit before income tax

15,015,054

(249,912)

(791,354)

(3,128,046)

10,845,742

Income tax (expense)/benefit

(3,681,787)

Profit after income tax

15,015,054

(249,912)

(791,354)

(6,809,833)

7,163,955

Reconciliation to revenue from ordinary activities

Sales to external customers

Non-recurring revenue

Interest revenue

Fair value gain – contingent consideration

Waived service fees**

Sub-lease income

Revenue from ordinary activities

96,264,119

93,997

645,014

1,145,336

316,121

202,996

98,667,583

*Abnormal items includes one-off project related costs and expiring IT service contract costs.

**Waived service fees are included within abnormal items for segment allocation purposes.

Prior comparatives have been reclassified for presentation purposes and consistency with the current period.

MAJOR CLIENTS

During the year ended 30 June 2020, HUB24’s largest client accounted for approximately 4.8% or $5.3 million in
revenue to the consolidated group. The client is a wealth management business, serviced by the Platform segment.
(During the year ended 30 June 2019, HUB24’s largest client accounted for approximately 11% or $11.0 million in
revenue to the consolidated group. The client is a financial advice business and is serviced by the Licensee segment).

Platform segment: no client contributed 10% in external revenue to the segment during the year ended 30 June 2020
or 30 June 2019.

Licensee Services segment: no client contributed 10% in external revenue to the segment during the year ended
30 June 2020 (during 30 June 2019 one client contributed more than 10% to the segment, with a contribution of 32%
or $11.0 million in external revenue).

IT Services segment: One client contributed more than 10% to the segment, with a 53% or $4.0 million external
revenue contribution (during 30 June 2019 two clients each contributed more than 10% to the segment, with a 49% or
$3.6 million and 21% or $1.6 million external revenue contribution).

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only62

6. REVENUE AND EXPENSES FROM CONTINUING OPERATIONS

KEY ACCOUNTING POLICIES

Revenue is measured at the fair value of the consideration received or receivable. The Group recognises revenue when
the amount can be reliably measured, it is probable that future economic benefits will flow to the Group and specific
criteria have been met for each of the activities.

Revenue is recognised for the major business activities as follows:

Platform fees

•

FUA fee revenue is recognised and measured at the fair value of the consideration received or receivable on the
value of client account balances.

• Transaction fee revenue is recognised and measured at the fair value of the consideration received or receivable on

the date of execution of the transaction.

• Platform fees are accrued daily, paid monthly in arrears for the ongoing provision for agreed services and transactions.

Licensee Services fees

• Licensee fee revenue is measured at the fair value of the consideration received or receivable on advice provided to

clients and payments from product providers.

• Licensee fee revenue is recognised per the advisors client receipts as per agreed terms outlined per the individual

contracts and underlying fee schedules.

IT Service fees

• Licence fee revenue is measured at the fair value of the contracted consideration received or receivable on licensed
software services provided to clients. This revenue is recognised in accordance with the performance delivery of
agreed services, within a period of 1-6 months.

• Consulting IT Services fee revenue is measured at the fair value of the consideration received or receivable

on advice provided to clients on a time and materials basis. Revenue is recognised on a monthly basis and is
dependant upon time and material usage.

Interest income

•

Interest income comprises interest on cash, short term deposits and ORFR loan. Interest income is recognised as it
accrues in profit using the effective interest method.

(a) Revenue

Platform fees

Licensee fees

IT Services fees

Expenses

(b) Employee benefits expenses

Wages and salaries (Including superannuation and payroll tax)

Share based payments expense – employees

Other employee benefits expenses

2020
$

Consolidated
2019
$

74,354,634

54,145,033

29,550,191

35,236,008

6,360,246

6,977,074

110,265,071

96,358,115

29,837,490

24,749,013

4,294,717

8,187,900

1,826,461

5,775,925

42,320,107

32,351,399

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only63

2020
$

Consolidated
2019
$

1,723,103

767,179

2,832,257

5,322,539

1,219,853

2,470,319

3,685,249

919,729

1,733,266

98,989

714,864

1,859,457

2,574,321

990,556

1,634,064

2,948,623

1,248,159

733,604

353,093

1,590,949

1,364,798

24,204

2,284,269

1,498,973

14,026,827

10,771,870

6. REVENUE AND EXPENSES FROM CONTINUING OPERATIONS
KEY ACCOUNTING POLICIES (CONTINUED)

Depreciation of right-of-use assets

Depreciation of office equipment

Amortisation of intangible assets

(d) Administrative expenses

Corporate fees

Professional and consultancy fees

Information services and communication

Travel and entertainment

Transaction costs

Discount on consideration

Superfund administrative fees

Bad and doubtful debts

Other administrative expenses

7. INCOME TAX

KEY ACCOUNTING POLICIES

Current tax assets and liabilities for the current and prior years are measured at the amount expected to be recovered
from or paid to the taxation authorities based on the current year’s taxable income. The tax rates and tax laws used to
compute the amount are those that are enacted or substantively enacted by the reporting date.

Deferred tax is provided on all temporary differences at the reporting date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes. Deferred tax liabilities are recognised for all
taxable temporary differences except:

• When the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction
that is not a business combination and that, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss; and

• When the temporary difference is associated with investments in subsidiaries, associates or interests in joint

ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that the
temporary difference will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, carry-forward of unused tax credits
and unused tax losses, to the extent that it is probable that taxable profit will be available against which the
deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be
utilised, except:

• When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of
an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss; and

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only64

7. INCOME TAX
KEY ACCOUNTING POLICIES (CONTINUED)

• When the deductible temporary difference is associated with investments in subsidiaries, associates or interests
in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the
temporary difference will reverse in the foreseeable future and taxable profit will be available against which the
temporary difference can be utilised.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.

Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has
become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset
is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted
at the reporting date.

Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the
same taxation authority.

OTHER TAXES

Revenues, expenses and assets are recognised net of the amount of GST except:

• When the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in

which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as
applicable;

• Receivables and payables, which are stated with the amount of GST included (UIG 1031.8). The net amount of
GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the
statement of financial position; and

• Cash flows are included in the statement of cash flow on a gross basis and the GST component of cash flows arising
from investing and financing activities, which is recoverable from, or payable to, the taxation authority is classified as
part of operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation
authority.

KEY ESTIMATES AND JUDGEMENTS

Recovery of deferred tax assets

Deferred tax assets are recognised for prior periods income tax losses, research and development tax offsets and
deductible temporary differences to the extent that Directors consider that it is probable that future taxable profits will
be available to offset these amounts.

The deferred tax asset continues to be recognised as at 30 June 2020 based on the following management judgements.

• The Group continues to be profitable with consistent growth, margins and profit line trends over the last 5 financials years;

• For the year ended 30 June 2020, the Group has increased profit performance and is expected to remain profitable.

The Group assumes and will continue to monitor that there will be ongoing compliance with relevant tax legislations.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only65

7. INCOME TAX
KEY ESTIMATES AND JUDGEMENTS (CONTINUED)

Research and development expenditure

The income tax calculation for the year ended 30 June 2020, included in the financial statements is based upon a
number of estimates. A material estimate of this calculation relates to Research and Development (R & D) expenditure.
Remuneration expenses of the development team are the largest component of the R & D expenditure, which for the
year ended 30 June 2020, comprise 72% of the total estimated R & D claim. This percentage allocation is consistent
with the actual R & D claim for the year ended 30 June 2019.

(a) Income tax expense/(benefit)

Deferred tax expense/(benefit)

Prior period deferred tax under/(over) provision

Income tax expense/(benefit)

Deferred tax included in income tax expense/(benefit) comprises:

Decrease/(increase) in deferred tax assets

Prior period deferred tax under/(over) provision

(Decrease)/increase in deferred tax liabilities

Deferred tax – debited/(credited) directly to equity

2020
$

Consolidated
2019
$

4,642,517

3,334,833

(43,416)

346,954

4,599,101

3,681,787

3,228,488

3,375,570

(43,416)

1,398,676

15,353

346,954

(46,579)

5,842

4,599,101

3,681,787

2020
$

Consolidated
2019
$

(b) Reconciliation of income tax expense/(benefit) to pre-tax accounting profit/(loss)

Profit from continuing operations before income tax expense

Prima facie income tax at 30%

12,827,398

10,845,742

12,827,398

10,845,742

3,848,219

3,253,723

Tax effect of amounts which are not deductible (taxable) in calculating taxable income:

Entertainment – non-deductible

Other expenses – non-deductible

Employee share plan costs – non-deductible

Other income – non-assessable

R&D benefit

Prior period deferred tax under/(over) provision

Income tax expense/(benefit)

Other disclosure items

37,892

109,853

1,224,815

(362,812)

(215,450)

(43,416)

33,044

203,367

496,638

(465,106)

(186,833)

346,954

4,599,101

3,681,787

Deferred tax – debited/(credited) directly to equity

(15,353)

(5,842)

*Prior comparatives have been reclassified for presentation purposes and consistency with the current year.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only
66

7. INCOME TAX
KEY ESTIMATES AND JUDGEMENTS (CONTINUED)

Deferred tax asset comprises temporary differences attributable to:

Intangibles – other

Accrued expenses

Provisions

Carry forward tax losses

Non-refundable carry forward tax offsets

Sundry DTA

Lease liabilities – right-of-use assets

Movements:

Opening balance

Prior period deferred tax under/(over) provision

Lease liabilities – right-of-use assets – recognition

Intangibles – other

Accrued expenses

Provisions

Carry forward tax losses

Non-refundable carry forward tax offsets

Sundry DTA

Lease liabilities – right-of-use assets

Closing balance

(d) Deferred Tax Liability

Deferred tax liability comprises temporary differences attributable to:

DTL on intangibles

Other depreciable assets – right-of-use assets

Movements:

Opening balance

Other depreciable assets – right-of-use assets – recognition

Other depreciable assets – right-of-use assets

Other intangibles

Closing balance

2020
$

Consolidated
2019
$

322,731

429,091

2,730,896

1,600,262

23,168

1,816,674

1,051,116

79,181

1,822,074

2,631,859

4,485,951

38,284

6,922,822

10,108,465

13,830,989

43,416

(346,954)

2,300,950

(530,875)

349,910

908,822

(2,676,140)

(3,082,334)

(15,116)

(484,276)

(488,081)

(25,636)

330,059

(4,012,583)

846,239

(25,568)

6,922,822

10,108,465

2020
$

Consolidated
2019
$

190,751

1,631,047

423,122

1,821,798

423,122

2,147,978

(516,931)

(232,371)

1,821,798

469,701

(46,579)

423,122

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only7. INCOME TAX
KEY ESTIMATES AND JUDGEMENTS (CONTINUED)

(e) Other disclosure items

Capital raising costs in Equity

Deferred tax asset (net of deferred tax liability)

TAX CONSOLIDATION

2020
$

Consolidated
2019
$

(15,353)

(5,842)

5,101,024

9,685,343

Members of the tax consolidated entity and the tax sharing arrangement

The Group and its 100% owned Australian resident subsidiaries have formed a tax consolidated entity. HUB24 Limited
is the head entity of the tax consolidated entity. Members of the Group have entered into a tax sharing agreement.

Tax effect accounting by members of the tax consolidated Group

The head entity and the controlled entities in the tax consolidated group continue to account for their own current
and deferred tax amounts as per UIG 1052 Tax Consolidation Accounting. The consolidated group has applied the
consolidated group allocation approach in determining the appropriate amount of current taxes and deferred taxes
to allocate to members of the tax consolidated group. The current and deferred tax amounts are measured in a
systematic manner that is consistent with the broad principles in AASB 112 Income Taxes.

In addition to its own current and deferred tax amounts, the head entity also recognises current tax liabilities (or
assets) and the deferred tax assets and liabilities arising from unused tax losses and unused tax credits (if any)
assumed from controlled entities in the tax consolidated group.

8. CURRENT ASSETS – TRADE AND OTHER RECEIVABLES

KEY ACCOUNTING POLICIES

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method, less an allowance for impairment.

Collectability of trade receivables is reviewed on an ongoing basis at an operating unit level. Individual debts that are
known to be uncollectable are written off when identified. An impairment provision under the ‘simplified’ approach is
used to recognise short term trade receivables ‘lifetime expected credit losses’ from the first reporting period. These
are the credit losses expected over the term of the receivable.

The Group’s impairment model calculates expected credit losses on trade receivables using a provision matrix. Under
the model, historic provision rates with current and forward looking estimates are used.

KEY ESTIMATES AND JUDGEMENTS

Estimation of bad debts and provisioning

Receivables are assessed by management for recoverability based on days past due or pending legal actions and other
counter party information.

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8. CURRENT ASSETS – TRADE AND OTHER RECEIVABLES
KEY ESTIMATES AND JUDGEMENTS (CONTINUED)

Trade receivables

Provision for doubtful debts

Other receivables

IMPAIRMENT AND RECOVERABILITY

2020
$

Consolidated
2019
$

9,945,881

7,604,412

(43,268)

143,468

(19,339)

(19,608)

10,046,081

7,565,465

Balances within trade and other receivables do not contain impaired assets. It is expected that these balances will be
received as and when they fall due. Refer to Note 28 for the maturity analysis.

FAIR VALUE

Due to the short term nature of these receivables, their carrying value is assumed to approximate their fair value.

9. NON-CURRENT ASSETS – RIGHT-OF-USE ASSET

The Group leases various property and equipment. Lease agreements are negotiated on an individual basis with
bespoke terms and conditions and are typically made for fixed periods of 2 years to 7 years.

Under AASB 16, as a lessee the Group will recognise a right-of-use asset, representing its right to use the underlying
asset, and a lease liability, for all leases with a term of more than 12 months, exempting those leases where the
underlying asset is deemed to be of a low-value.

The Group recognises a right-of-use asset and a lease liability at the lease commencement date, i.e. when the
underlying asset is first available for use.

The right-of-use asset includes initial direct costs and estimates of costs to dismantle or remove the underlying leased
asset. The right-of-use asset is measured at cost less any accumulated depreciation and impairment losses and
adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, the Group’s incremental borrowing rate, being the rate that the lessee would pay to borrow the funds
necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions.

The lease liability is subsequently increased by the interest cost on the lease liability and decreased by lease payments
made. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, a
change in the estimate of the amount expected to be payable under a residual value guarantee, or as appropriate,
changes in the assessment of whether purchase; renewal or termination options are reasonably certain to be
exercised.

The Group has applied judgement to determine the lease term for some lease contracts in which it is a lessee that
includes purchase, renewal or termination options. The assessment of whether the Group is reasonably certain
to exercise such options impacts the lease term, which affects the value of lease liabilities and right-of-use assets
recognised.

MODIFICATIONS TO LEASE ARRANGEMENTS

In the event that there is a modification to a lease arrangement, a determination of whether the modification results in
a separate lease arrangement being recognised needs to be made.

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9. NON-CURRENT ASSETS – RIGHT-OF-USE ASSET
MODIFICATIONS TO LEASE ARRANGEMENTS (CONTINUED)

Where the modification does result in a separate lease arrangement needing to be recognised, due to an increase in
the scope of a lease through additional underlying leased assets and a commensurate increase in lease payments, the
measurement requirements as described above need to be applied.

Where the modification does not result in a separate lease arrangement, from the effective date of the modification,
the Group will remeasure the lease liability using the redetermined lease term, lease payments and applicable
discount rate. A corresponding adjustment will be made to the carrying amount of the associated right-of-use asset.
Additionally, where there has been a partial or full termination of a lease, the Group will recognise any resulting gain or
loss in the income statement.

AMOUNTS RECOGNISED IN THE BALANCE SHEET

This note provides information for leases where the Group is a lessee.

The Statement of Financial Position shows the following amounts relating to leases:

Leased property and equipment

Total right-of-use assets

2020
$

5,436,824

Consolidated
1 July 2019*
$

7,159,927

There were no new additions to the right-of-use assets during the year ended 30 June 2020.

Current

Non-current

Total lease liabilities

Within 1 year

After 1 year and less than 5 years

More than 5 years

Total

2020
$

1,670,311

4,385,270

6,055,581

Interest
$

(159,800)

(228,167)

Consolidated
1 July 2019*
$

1,812,179

5,857,655

7,669,834

Present value
of minimum
lease
payments
$

1,670,311

4,358,270

Future value
of minimum
lease
payments
$

1,830,111

4,613,437

6,443,548

(387,967)

6,055,581

*For adjustments recognised on adoption of AASB 16 on 1 July 2019, please refer to note 2.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only70

9. NON-CURRENT ASSETS – RIGHT-OF-USE ASSET (CONTINUED)

AMOUNTS RECOGNISED IN THE STATEMENT OF PROFIT OR LOSS

The Statement of Profit or Loss and the related Notes to the Financial Statements show the following amounts
relating to leases:

Depreciation charge of right-of-use asset

Interest expense on lease liabilities

Expenses relating to short-term leases

2020
$

Consolidated
2019
$

(1,723,103)

(204,408)

(212,620)

The total cash outflow for lease payments (interest & principal) in the year ended 30 June 2020 was $1,818,661.

10. NON-CURRENT ASSETS – OFFICE EQUIPMENT

KEY ACCOUNTING POLICIES

Office equipment is stated at historical cost less accumulated depreciation and any accumulated impairment losses.
Such cost includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing the parts is
incurred. Similarly, when each major inspection is performed, its cost is recognised in the carrying amount of the office
equipment as a replacement only if it is eligible for capitalisation. All other repairs and maintenance are recognised in
profit or loss as incurred.

The assets’ residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each
reporting date.

Depreciation is calculated on a straight-line basis over the estimated useful life of the specific assets as follows:

• Office furniture and fittings – over 2.5 to 5 years
• Computer equipment – 3 years

Consolidated
Year ended 30 June 2020

Cost or fair value

Accumulated depreciation

Net book amount

Computer
equipment
$

Office
furniture and
fittings
$

Total
$

2,357,883

1,992,824

4,350,707

(1,726,213)

(962,865)

(2,689,078)

631,670

1,029,959

1,661,629

Reconciliations of the carrying amounts at the beginning and end of the financial year:

Opening net book amount

Additions

Disposals

Depreciation charge

Closing net book amount

614,035

423,454

(16,140)

1,341,529

1,955,564

74,911

(8,981)

498,365

(25,121)

(389,679)

(377,500)

(767,179)

631,670

1,029,959

1,661,629

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only71

10. NON-CURRENT ASSETS – INTANGIBLE ASSETS
KEY ESTIMATES AND JUDGEMENTS (CONTINUED)

Consolidated
Year ended 30 June 2019

Cost or fair value

Accumulated depreciation

Net book amount

Computer
equipment
$

Office
furniture and
fittings
$

Total
$

2,053,399

1,935,641

3,989,040

(1,439,364)

(594,112)

(2,033,476)

614,035

1,341,529

1,955,564

Reconciliations of the carrying amounts at the beginning and end of the financial year:

Opening net book amount

Additions

Disposals

Depreciation charge

Closing net book amount

11. NON-CURRENT ASSETS – INTANGIBLE ASSETS

KEY ACCOUNTING POLICIES

Goodwill

739,308

262,076

(2,264)

1,475,033

2,214,341

196,274

458,350

(2,264)

(385,085)

(329,778)

(714,863)

614,035

1,341,529

1,955,564

Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of the business
combination over the Group’s interest in the net fair value of the acquirer’s identifiable assets, liabilities and contingent
liabilities.

Following initial recognition, goodwill is measured at cost less any accumulated impairment losses.

For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date,
allocated to each of the Group’s cash-generating units that are expected to benefit from the synergies of the
combination, irrespective of whether other assets or liabilities of the Group are assigned to those units.

When the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is
recognised. When goodwill forms part of a cash-generating unit and an operation within that unit is disposed of,
the goodwill associated with the operation disposed of is included in the carrying amount of the operation when
determining the gain or loss on disposal of the operation. Goodwill disposed of in this manner is measured based
on the relative values of the operation disposed of and the portion of the cash-generating unit retained. Impairment
losses recognised for goodwill are not subsequently reversed.

Intangibles

Intangible assets acquired separately or in a business combination are initially measured at cost. The cost of an
intangible asset acquired in a business combination is its fair value as at the date of acquisition. Following initial
recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment
losses. Internally generated intangible assets, excluding capitalised development costs, are not capitalised and
expenditure is recognised in profit or loss in the year in which the expenditure is incurred.

The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are
amortised over the useful life and tested for impairment whenever there is an indication that the intangible asset may
be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life is
reviewed at least at each reporting date. Changes in the expected useful life or the expected pattern of consumption
of future economic benefits embodied in the asset are accounted for prospectively by changing the amortisation
period or method, as appropriate, which is a change in accounting estimate. The amortisation expense on intangible

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11. NON-CURRENT ASSETS – INTANGIBLE ASSETS
KEY ACCOUNTING POLICIES (CONTINUED)

assets with finite lives is recognised in profit or loss in the expense category consistent with the function of the
intangible asset. Refer to note below, Investment Platform estimate of useful life, for detailed information.

Intangible assets with indefinite useful lives are tested for impairment annually either individually or at the cash-
generating unit level consistent with the methodology outlined for goodwill above, such intangibles are not amortised.
The useful life of an intangible asset with an indefinite life is reviewed each reporting period to determine whether
indefinite life assessment continues to be supportable. If not, the change in the useful life assessment from indefinite
to finite is accounted for as a change in an accounting estimate and is thus accounted for on a prospective basis.
The Group had no indefinite life intangible assets in FY20 (FY19: nil).

KEY ESTIMATES AND JUDGEMENTS

Investment Platform estimate of useful life

Management have assessed the remaining useful life of the investment platform based upon the useful life of its
separate platform components.

The three components with different useful lives are:

• Core database with a useful life of 20 years;
• Applications with a useful life of 10 years;
• User Interface with a useful life of 5 years.

The assessment of useful life is a key management judgement and the useful lives adopted could change significantly
as a result of technical innovations or some other event. The amortisation charge will increase where the useful lives
are less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or
sold will be written off or written down.

Goodwill and other indefinite life intangible assets

The carrying value of intangible assets (including goodwill) is assessed annually for indications that the asset has
been impaired in accordance with the accounting policy under the heading Goodwill and Intangibles. The recoverable
amounts of cash generating units have been determined based on value-in-use calculations. These calculations
require the use of assumptions including estimated discount rates based on the current cost of capital and growth
rates of the estimated future cash flows. Details of these assumptions and the potential impact of changes to these
assumptions can be found later in this note.

Impairment of non-financial assets other than goodwill and other indefinite life intangible assets

The Group assesses impairment of non-financial assets other than goodwill and other indefinite life intangible assets
at each reporting date by evaluating conditions specific to the Group and to the particular asset that may lead to
impairment. If an impairment trigger exists, the recoverable amount of the asset is determined. This involves fair value
less costs of disposal or value-in-use calculations, which incorporate a number of key estimates and assumptions.

Capitalisation of development costs

The Group capitalises project development costs eligible for capitalisation in relation to the investment platform and
Agility development projects. The capitalised costs are all directly attributable costs necessary to create, produce, and
prepare assets to be capable of operating in the manner intended. Capitalised project costs are amortised over the
project’s useful life.

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11. NON-CURRENT ASSETS – INTANGIBLE ASSETS
KEY ESTIMATES AND JUDGEMENTS (CONTINUED)

Investment
Platform
$

Goodwill
$

Agility
Connect
software
$

Agility
customer
relationship
$

Other*
$

Total
$

Consolidated

Year ended 30 June 2020

At cost

32,340,749

16,325,588

2,540,970

1,284,000

1,891,962

54,383,269

Accumulated amortisation
and impairment

(10,923,641)

(1,767,079)

(899,933)

(829,352)

(14,420,005)

Net carrying amount

21,417,108

16,325,588

773,891

384,067 1,062,610

39,963,264

Reconciliations of the carrying amount at the beginning and end of the financial year:

Opening carrying amount

16,918,982

16,325,588

1,762,707

1,083,648

977,637

37,068,562

Other additions

Amortisation charge

Impairment

6,415,916

(1,917,790)

(320,492)

(668,324)

311,043

6,726,959

(367,905)

(226,070)

(2,832,257)

(331,676)

(1,000,000)

Closing carrying amount

21,417,108

16,325,588

773,891

384,067 1,062,610

39,963,264

*Other is comprised of the Dealer network, Managed fund client list and Software intangibles.

Investment
Platform
$

Goodwill
$

Agility
connect
software
$

Agility
customer
relationship
$

Other*
$

Total
$

Consolidated

Year ended 30 June 2019

At cost

25,924,832

16,325,588

2,540,970

1,284,000

1,580,278

47,655,668

Accumulated amortisation
and impairment

(9,005,850)

(778,263)

(200,352)

(602,640)

(10,587,105)

Net carrying amount

16,918,982

16,325,588

1,762,707

1,083,648

977,638

37,068,563

Reconciliations of the carrying amount at the beginning and end of the financial year:

Opening carrying amount

11,842,102

16,325,588

2,083,199

1,163,918

608,511

32,023,318

Other additions

Amortisation charge

6,326,781

(1,249,901)

577,921

6,904,702

(320,492)

(80,270)

(208,794)

(1,859,457)

Closing carrying amount

16,918,982

16,325,588

1,762,707

1,083,648

977,638

37,068,563

*Other is comprised of the Dealer network, Managed fund client list and Software intangibles.

Intangible assets are allocated to the Group’s cash-generating units (CGUs) as required by AASB 136.

Intangibles are associated with a CGU as listed below:

Investment Platform CGU

Licensee Services CGU

IT Services CGU

Investment Platform

Managed fund client list

Software

Goodwill on acquisition of Paragem, Agility and DIY

Dealer network

Agility connect software

Agility customer relationship

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11. NON-CURRENT ASSETS – INTANGIBLE ASSETS
KEY ESTIMATES AND JUDGEMENTS (CONTINUED)

Investment Platform (Included within Investment Platform CGU)

The recoverable amount of the Investment Platform is determined based on a value-in-use calculation. This calculation
uses cash flow projections based on financial budgets approved by Directors. Cash flows beyond the 5 year period are
extrapolated using a terminal value.

Goodwill – Paragem (Included within Investment Platform CGU)

Goodwill recognised as part of the Paragem acquisition was allocated to the Investment Platform CGU, while the
Dealer Network intangible was identified as part of the Licensee CGU with a finite life.

The recoverable amount of the goodwill generated has been determined based on a value-in-use calculation using a
discounted cash flow over a 5 year projection period. Cash flows beyond the 5 year period are extrapolated using a
terminal value.

Goodwill – Agility (Included within Investment Platform CGU)

Goodwill recognised as part of the Agility acquisition has been allocated to the Investment Platform CGU, while the
Agility customer relationship and Agility connect software intangible have been identified as part of the IT Services CGU
with a finite life.

Agility connect software (Included within IT services CGU)

The fair market value of the Agility connect software intangible has been determined based on a value-in-use
calculation. This calculation uses cash flow projections based on financial budgets approved by Directors covering a
5 year period. Cash flows beyond the 5 year period are extrapolated using a terminal value.

The recoverable amount of the Agility connect software intangible has been assessed for indicators of impairment as
at 30 June 2020 with required impairment reflected.

Agility customer relationships (Included within IT services CGU)

The fair market value of the Agility customer relationships intangible has been determined based on a value-in-use
calculation. This calculation uses cash flow projections based on financial budgets approved by Directors covering a
5 year period. Cash flows beyond the 5 year period are extrapolated using a terminal value.

The recoverable amount of the Agility customer relationships intangible has been assessed for indicators of
impairment as at 30 June 2020 with required impairment reflected.

Key assumptions used for value-in-use calculations – Investment Platform CGU

The cash generated by the Investment Platform CGU has been segregated between the cash generated by the
Paragem dealer group, the cash generated by the acquisition of Agility and the cash generated by all other dealer
groups on the Platform, in order to assess the recoverable amount associated with each intangible.

The Investment Platform has been assessed based on the cash generated by all dealer groups excluding the Paragem
dealer group.

The goodwill recognised as a result of the Paragem Pty Ltd acquisition has been assessed based on the cash
generated from future funds under administration transferred to the Platform.

The goodwill recognised as a result of the Agility Applications Pty Ltd acquisition has been assessed based on future
funds under administration transferred to the Platform from Agility stockbroking clients.

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11. NON-CURRENT ASSETS – INTANGIBLE ASSETS
KEY ESTIMATES AND JUDGEMENTS (CONTINUED)

Key assumptions used for value-in-use calculations – Investment Platform intangible

1. Growth in funds under administration on the Platform – Growth in the number of client accounts and

hence funds under administration on the Platform is a key assumption used in calculating future cashflows.
Management have estimated future funds under administration on the Platform at a 5 year compound
annual growth rate of 27% (FY19: 26%) with reference to current client transition rates, industry data and
pipeline monitoring.

2. Pre-tax discount rate – The pre-tax discount rate used for the Group’s value-in-use calculations is 14% (2019:14%)

which equates to the weighted average cost of capital over the reporting period.

3. Terminal growth rate – The terminal growth rate used for the Group’s value-in-use calculations is 2.5% (2019: 2.5%).

4. Period over which cashflows have been discounted – Management have used a period of 5 years to discount
projected cashflows for its value-in-use calculations. This period is considered reasonable given the stage of
Platform development and the remaining useful life of the core database (10 years and 5 months from
30 June 2020).

There were no other key assumptions used for the investment platform intangible value in use calculation.

Based on the above assessment there was no impairment of the investment platform intangible in FY20 (FY19: nil).

Impact of possible changes in key assumptions – Investment Platform intangible

If the projected earnings on client account balances used in the value-in-use calculation for the investment platform
CGU are 3% lower than management estimates over the period of the value-in-use calculation, there would be no
impairment of the intangible asset.

If the pre-tax discount rate for this intangible was 2% higher than management estimates (16% instead of 14%), there
would be no impairment of the intangible asset.

Key assumptions used for value-in-use calculations – Agility customer relationship and Agility connect software

1. Growth in Connect licenses, consulting income and IT infrastructure support are key assumptions used in

calculating future cash flows. Management have estimated revenue growth of the IT Services CGU as a 5 year CAGR
of 4% with reference to current client license rates, industry data and pipeline monitoring.

2. An EBITDA 5 year average margin of 3% is estimated and is also considered a key assumption used in calculating
future cashflows. The rate is considered by management to be reasonable based upon the actual and anticipated
performance of the asset.

3. Pre-tax discount rate – The pre-tax discount rate used for the Company’s value-in-use calculations is 16% (2019:

16%). This has been determined based on the weighted average cost of capital for the IT Services CGU.

4. Period over which cashflows have been discounted – Management have used a period of 5 years to discount

projected cashflows for its value-in-use calculations.

5. Terminal growth rate – The terminal growth rate used for the Company’s value-in-use calculations is 1.5%. (2019:1.5%).

There were no other key assumptions used in the Customer relationship and Connect software value-in-use
calculation prepared at the date of acquisition. Indicators of impairment have been reviewed as part of the financial
year end with $1 million impairment reflected.

Impact of possible changes in key assumptions – Customer relationship and Connect software

If the business EBITDA margin were 2% lower than management estimates over the period of the value-in-use
calculation, the asset would be further impaired.

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11. NON-CURRENT ASSETS – INTANGIBLE ASSETS
KEY ESTIMATES AND JUDGEMENTS (CONTINUED)

If the pre-tax discount rate for this CGU had been 2% higher than management estimates (18% instead of 16%) the
asset would be further impaired.

Based on the above the value-in-use of the Customer relationship and Connect software intangibles were considered
to be impaired.

12. NON-CURRENT ASSETS – RECEIVABLES

ORFR loan facility

ORFR LOAN FACILITY

2020
$

Consolidated
2019
$

2,000,000

HUB24 had advanced a loan to Sargon Superannuation Holdings SPV Pty Ltd, who had in turn used it to subscribe for
capital in Diversa Trustees Limited, the Trustee for the HUB24 Super Fund (“the Fund”). The $5 million Loan Agreement
was entered into on 10 June 2016 on an arm’s length basis and on commercial terms at an interest rate of 17% per
annum (revised to 15% per annum on 1 July 2019).

The capital received by the Trustee was reserved for the purpose of meeting the Operational Risk Financial
Requirement (ORFR) for the Fund in accordance with APRA Prudential Standard SPS114.

The loan was repaid to the Group on 30 June 2020 with capital requirements for the HUB24 Super Fund being met by
Diversa Trustees Limited directly, while a change of trustee is completed. For information pertaining to the new ORFR
loan agreement, refer to note 22.

13. CURRENT LIABILITIES – TRADE AND OTHER PAYABLES

KEY ACCOUNTING POLICIES

Trade creditors, deferred consideration and other payables are carried at amortised cost and represent liabilities for
goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the
Group becomes obliged to make future payments in respect of the purchase of these goods and services.

Trade creditors

Deferred contingent consideration – Agility

Key contract consideration – Agility

Sundry creditors

Total trade and other payables

DEFERRED CONTINGENT CONSIDERATION – AGILITY

2020
$

1,690,042

175,000

3,504,877

5,369,919

Consolidated
2019
$

168,648

525,000

300,000

2,369,423

3,363,071

On 3 January 2017 HUB24 Limited acquired 100% of the issued shares in Agility Pty Ltd, a specialist provider of
application, data exchange and technology products and services to the financial services industry, for consideration of
up to $15 million in cash and shares, (fair value $14,188,209).

As at 30 June 2020, the following payments have been made in relation to the deferred consideration and were subject
to performance conditions and warranty claims being met:

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13. CURRENT LIABILITIES – TRADE AND OTHER PAYABLES
DEFERRED CONTINGENT CONSIDERATION – AGILITY (CONTINUED)

• $200,000 paid on 14 July 2017
• $1,500,000 paid on 5 January 2018
• $822,469 paid on 2 April 2019 comprised of $411,250 in cash and 31,669 ordinary shares valued at $12.98 per share
• $300,000 paid on 19 July 2019
• $175,000 paid on 9 March 2020.

As at 30 June 2020, $175,000 is due to be settled through the issuance of HUB24 ordinary shares post the release of
the 31 December 2020 half-year financial results.

Management’s estimate of the performance over the earnout period until 31 December 2020 against set criteria
requires significant judgement. As at 30 June 2020 management estimates that 56% of the funds under administration
performance criteria will be met over the period until 31 December 2020, resulting in fair value deferred contingent
consideration of $1.5 million, reflecting a payout ratio of 37% (30 June 2019, estimated to be $2.7 million in total
purchase consideration based on management’s judgement that 53% of the performance criteria would be met).

In the circumstances where 10% of performance criteria were not to be met, the following impact would result:

Deferred contingent consideration

Fair value gain

Decrease by $454,986

Increase by $454,986

For details of the non-current portion of the deferred consideration see note 16.

14. CURRENT LIABILITIES – PROVISIONS

KEY ACCOUNTING POLICIES

Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it
is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation.

Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the
present obligation at the reporting date. If the effect of the time value of money is material, provisions are discounted
using a current pre-tax rate that reflects the risks specific to the liability. When discounting is used, the increase in the
provision due to the passage of time is recognised as a borrowing cost.

Employee benefits

• Short-term benefits: Liabilities for wages and salaries, including non-monetary benefits and long service leave

expected to be settled within 12 months of the reporting date are recognised in respect of employees’ services up
to the reporting date. They are measured at the amounts expected to be paid when the liabilities are settled.

• Long-term benefits: Liabilities for wages and salaries, including non-monetary benefits and annual leave expected
to be settled within 12 months of the reporting date are recognised in respect of employees’ services up to the
reporting date. They are measured at the amounts expected to be paid when the liabilities are settled.

• Superannuation and other post employment benefits: All Australian employees are entitled to varying levels of
benefits on retirement, disability or death. The superannuation plans provide accumulated benefits. Employees
contribute to the plans at various percentages of their wages and salaries.

Lease make good

The provision represents the present value of the estimated costs to make good the premises leased by the Group at
the end of the respective lease term.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only78

14. CURRENT LIABILITIES – PROVISIONS
KEY ACCOUNTING POLICIES (CONTINUED)

Third party claims

The Group estimates the provision for third party claims is in respect of on-going claims made by third parties in
respect of services provided by the Platform segment.

Restructuring Provision

The restructure provision is in respect of cost obligations for the change of HUB24 Super Fund trustee and the
transfer of the Group’s management portfolio into a Management Investment Scheme (MIS) structure.

Employee benefits – Short term incentive

Employee benefits – Annual leave

Restructuring provision

Third party claims

Lease make good

Rental lease liability

2020
$

4,563,494

2,260,329

662,349

300,000

24,882

Consolidated
2019
$

3,053,086

1,613,540

24,882

361,646

7,811,054

5,053,154

Movements in each class of provision during the financial year, other than employee benefits, are set out below:

Consolidated

2020

Third party
claims
$

Lease
liability
$

Lease
make good
$

Restructuring
provision
$

Carrying amount at the start of the year

361,646

24,882

Additional provisions recognised/(released)

300,000

(361,646)

Amounts paid during the year

Carrying amount at the end of the year

300,000

Consolidated

2019

Carrying amount at the start of the year

Additional provisions recognised/(released)

Amounts paid during the year

Carrying amount at the end of the year

Third party
claims
$

Lease
liability
$

239,156

122,490

361,646

662,349

24,882

662,349

Lease
make good
$

Restructuring
provision
$

45,988

(21,106)

24,882

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only15. NON-CURRENT LIABILITIES – PROVISIONS

Employee benefits – long service leave

Employee benefits – deferred short term incentive

Lease make good provision

Rental lease liability

EMPLOYEE BENEFITS – DEFERRED SHORT TERM INCENTIVE

2020
$

Consolidated
2019
$

1,133,111

775,492

265,000

115,551

110,047

1,513,662

1,001,090

The provision represents the portion of STI bonus relating to the financial year ending 30 June 2020 payable to senior
staff members that has been deferred until after the FY21 financial year end.

LEASE MAKE GOOD

The provision represents the present value of the estimated costs to make good the premises leased by the Group at
the end of the respective lease term.

MOVEMENTS IN PROVISIONS

Movements in each class of provision during the financial year, other than employee benefits, are set out below:

Consolidated

2020

Employee benefits
$

Lease make good
$

Rental lease liability
$

Carrying amount at start of year

Additional provisions recognised/(released)

Carrying amount at end of period

265,000

115,551

110,047

(110,047)

Consolidated

2019

Carrying amount at start of year

Additional provisions recognised/(released)

Carrying amount at end of period

16. OTHER – NON-CURRENT LIABILITIES

DEFERRED CONTINGENT CONSIDERATION – AGILITY

Deferred Contingent Consideration – Agility

Employee benefits
$

Lease make good
$

Rental lease liability
$

70,185

45,366

115,551

117,741

(7,694)

110,047

2020
$

1,567,978

Consolidated
2019
$

2,146,200

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only80

16. OTHER – NON-CURRENT LIABILITIES
DEFERRED CONTINGENT CONSIDERATION – AGILITY (CONTINUED)

Consolidated

2020

Carrying amount at start of year

Amounts reclassified/released during the year

Unwinding of discount

Fair value gain on contingent consideration (profit and loss)*

Carrying amount at end of period

*Refer to note 13 for current liability deferred consideration.

Consolidated

2019

Carrying amount at start of year

Amounts reclassified/released during the year

Unwinding of discount

Fair value gain on contingent consideration (profit and loss)

Carrying amount at end of period

17. ISSUED CAPITAL

KEY ACCOUNTING POLICIES

Contingent consideration
$

2,146,200

(175,000)

97,404

(500,626)

1,567,978

Contingent consideration
$

2,926,872

(525,000)

211,423

(467,095)

2,146,200

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new equity instruments
are shown in equity as a deduction, net of GST from the proceeds.

Consolidated

Issued and paid up capital

Ordinary shares, fully paid

Other equity securities

Treasury shares

Total capital

2020
Number

2019
Number

2020
$

2019
$

62,846,130

62,329,415

100,172,838

98,225,656

(39,636)

(56,596)

(26,790)

(38,256)

62,806,494

62,272,819

100,146,048

98,187,400

Movements in issued and paid up capital

Beginning of the financial year

62,329,415

61,588,666

98,225,656

96,231,758

Shares issued

516,715

740,749

1,242,371

1,504,356

Transfer from share based payment reserve

Additional paid up capital

Total shares

Capital raising costs

516,144

200,534

341,766

161,406

62,846,130

62,329,415

100,184,705

98,239,286

(11,867)

(13,630)

End of the financial year

62,846,130

62,329,415

100,172,838

98,225,656

Movement in other equity securities – treasury shares

Beginning of the financial year

Employee share issue

End of the period

56,596

(16,960)

39,636

70,789

(14,193)

56,596

38,256

(11,466)

26,790

47,850

(9,594)

38,256

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only81

17. ISSUED CAPITAL
ORDINARY SHARES – FOR THE YEAR ENDED 30 JUNE 2020 (CONTINUED)

Fully paid ordinary shares carry one vote per share and carry the right to dividends.

ORDINARY SHARES – FOR THE YEAR ENDED 30 JUNE 2020

On 31 July 2019, the Group issued 260,000 ordinary shares for options exercised by employees of the Group for
consideration of $478,800.

On 4 November 2019, the Group issued 202,169 ordinary shares for options and performance rights (PARs) exercised
by employees of the Group for consideration of $489,796.

On 25 November 2019, the Group issued 4,546 ordinary shares for options and PARs exercised by employees of the
Group for consideration of $15,276.

On 14 February 2020, the Group issued 50,000 ordinary shares for options exercised by employees of the Group for
consideration of $258,500.

ORDINARY SHARES – FOR THE YEAR ENDED 30 JUNE 2019

On 22 August 2018, the Group issued 160,000 ordinary shares for options exercised by employees of the Group for
consideration of $156,800.

On 31 August 2018, the Group issued 200,000 ordinary shares for options exercised by employees of the Group for
consideration of $196,000.

On 8 October 2018, the Group issued 80,000 ordinary shares for options exercised by employees of the Group for
consideration of $78,400.

On 12 November 2018, the Group issued 60,000 ordinary shares for options exercised by employees of the Group for
consideration of $147,600.

On 28 November 2018, the Group issued 75,000 ordinary shares for options exercised by employees of the Group for
consideration of $184,500.

On 10 December 2018, the Group issued 15,000 ordinary shares for options exercised by employees of the Group for
consideration of $36,900.

On 31 December 2018, the Group issued 10,000 ordinary shares for options exercised by employees of the Group for
consideration of $24,600.

On 4 January 2019, the Group issued 19,080 ordinary shares for options exercised by employees of the Group for
consideration of $46,937.

On 6 February 2019, the Group issued 90,000 ordinary shares for options exercised by employees of the Group for
consideration of $221,400.

On 26 April 2019, the Group issued 31,669 ordinary shares for consideration of $411,219 for the purchase of Agility
Applications.

TREASURY SHARES

Treasury shares are shares in HUB24 Limited that are held by HUB24 Employee Share Ownership Trust (ESOT) for the
purpose of issuing shares under HUB24 Employee Share Ownership Plan.

On 10 October 2019, the Group transferred 16,960 shares to eligible employees under the HUB24 Employee Share
Ownership Plan.

On 7 September 2018, the Group transferred 14,193 shares to eligible employees under the HUB24 Employee Share
Ownership Plan.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only82

18. RESERVES

GENERAL RESERVES

Share based payments share reserve

Movements in share based payments share reserves:

Opening balance

Reserve reclassified to share capital through options exercised

Employee share based payment expense

Shares issued through HUB24 Share Ownership Trust

Closing balance

19. RECONCILIATION OF CASH FLOWS

KEY ACCOUNTING POLICIES

Cash and cash equivalents

2020
$

Consolidated
2019
$

8,823,118

5,256,545

3,942,850

(516,144)

4,294,717

(212,000)

8,823,118

(341,766)

1,826,461

(171,000)

5,256,545

Cash and cash equivalents in the statement of financial position comprise cash at bank and in hand and short-term
deposits with an original maturity of three months or less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value and bank overdrafts. Bank overdrafts are shown within
borrowings current liabilities in the balance sheet.

For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as
defined above, net of outstanding bank overdrafts.

(a) Reconciliation of the net profit/(loss) after tax to cash flow from operations

Net profit/(loss) after tax for the year

Non-cash items:

Depreciation and amortisation

Share based payment expense – Employee

Fair value (gains)/losses

Deferred revenue

Loss on disposal of office equipment

Impairment write off

Changes in operating assets and liabilities

(Increase)/decrease in trade and other receivables

(Increase)/decrease in deferred tax assets

(Increase)/decrease in leases and other assets

Increase/(decrease) in trade and other payables

Increase/(decrease) in lease liabilities and provisions

Net cash flow from operating activities

2020
$

Consolidated
2019
$

8,228,297

7,163,955

5,322,539

4,294,717

(850,627)

(358,765)

25,121

1,000,000

2,574,321

1,826,461

(1,145,336)

(405,017)

2,264

(2,480,615)

(2,477,437)

4,599,672

3,681,787

(8,178,307)

(5,040)

2,656,849

(1,029,297)

10,999,498

1,443,992

25,258,379

11,630,653

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only19. RECONCILIATION OF CASH FLOWS
KEY ACCOUNTING POLICIES (CONTINUED)

(b) Reconciliation of cash and cash equivalents

Cash and cash equivalents comprises:

Cash on hand and at bank

2020
$

Consolidated
2019
$

33,809,323

18,465,847

33,809,323

18,465,847

For the purposes of the Statement of cash flows, cash and cash equivalents includes cash on hand and at bank,
deposits held at call with financial institutions, other short term, highly liquid investments with maturities of three
months or less, that are readily convertible to known amounts of cash and which are subject to an insignificant risk of
changes in value and bank overdrafts.

20. COMMITMENTS AND CONTINGENCIES

COMMITMENTS

2020

Services payable*

Other contractual obligations
and commitments

2019

Rental payable**

Within
1 year
$

After 1 year
and less than
5 years
$

More than
5 years
$

483,649

1,664,145

811,943

1,295,592

1,134,534

2,798,679

Within
1 year
$

After 1 year
and less than
5 years
$

More than
5 years
$

Total
$

2,147,794

1,946,477

4,094,271

Total
$

1,772,607

5,916,039

418,451

8,107,097

*FY20 commitments relate to IT services and equipment with contractual terms between 1 and 5 years.

**FY19 commitments relate to lease commitments for six premises and office equipment with lease terms between 1 and 5 years.

Short term leased property and occupancy payments recognised as an expense in the current year amount
to$212,620 (2019: $1,916,546).

CONTINGENCIES

Nil contingencies (2019: Nil).

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only84

21. SHARE BASED PAYMENTS PLAN

KEY ACCOUNTING POLICIES

Equity settled transactions

The Group provides benefits to employees (including Directors) in the form of share-based payments, whereby
services are rendered in exchange for shares or rights over shares (equity settled transactions).

There are currently three plans in place to provide these benefits:

• The Employee Share Option Plan (ESOP);
• The Performance Rights (PARs); and
• The Employee Share Plan (ESP).

The cost of these equity-settled transactions with employees is measured by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by reference to the active market for
the shares which trade on the Australian Securities Exchange, at grant date.

In valuing equity settled transactions, no account is taken of any vesting conditions, other than (if applicable):

• Non-vesting conditions that do not determine whether the Group receives services that entitle the employee to

receive payment in equity or cash;

• Conditions that are linked to the price of the shares of HUB24.

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period
in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees
become entitled to the award (the vesting period). The cumulative expense recognised for equity-settled transactions
at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the entity’s
best estimate of the number of equity instruments that will ultimately vest. The income statement expense or credit for
a period is recorded in Employee Benefits Expense and represents the movement in cumulative expense recognised
as at the beginning and end of that period.

At each subsequent reporting date until vesting, the cumulative charge to the statement of profit or loss and other
comprehensive income is the product of:

• The grant date fair value of the award;

• The current best estimate of the number of awards that will vest, taking into account such factors as the likelihood
of employee turnover during the vesting period and the likelihood of non-market performance conditions being
met; and

• The expired portion of the vesting period.

The charge to the consolidated statement of profit or loss and other comprehensive income for the period is
the cumulative amount as calculated above less the amounts already charged in previous periods. There is a
corresponding entry to equity.

Equity settled awards granted by the Group to employees of subsidiaries are recognised in the parent’s separate
financial statements as an additional investment in the subsidiary with a corresponding credit to equity. As a result,
the expense recognised by the Group in relation to equity-settled awards only represents the expense associated
with grants to employees of the parent. The expense recognised by the Group is the total expense associated with
all such awards.

Until an award has vested, any amounts recorded are contingent and will be adjusted if more or fewer awards
vest than were originally anticipated to do so. Any award subject to a market condition or non-vesting condition is
considered to vest irrespective of whether or not that market condition or non-vesting is fulfilled, provided that all
other conditions are satisfied.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only85

21. SHARE BASED PAYMENTS PLAN
KEY ACCOUNTING POLICIES (CONTINUED)

If a non-vesting condition is within the control of the Group or the employee, the failure to satisfy the condition is
treated as a cancellation. If a non-vesting condition within the control of the Group or employee is not satisfied during
the vesting period, any expense for the award not previously recognised is recognised over the remaining vesting
period, unless the award is forfeited.

If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not
been modified. An additional expense is recognised for any modification that increases the total fair value of the share-
based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification.

If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not
yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award
and designed as a replacement award on the date that it is granted, the cancelled and new award are treated as if they
were a modification of the original award, as described in the previous paragraph.

The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of diluted
earnings per share.

KEY ESTIMATES AND JUDGEMENTS

The Group measures the cost of equity-settled transactions by reference to the fair value of the equity instruments
at the date at which they were granted. The fair value is determined using a monte carlo simulation method. The
accounting estimates and assumptions relating to the equity-settled share-based payments would have no impact
on the carrying amounts of assets or liabilities within the next annual reporting period but may impact expenses and
equity.

Recognised share-based payment expenses

The expense recognised from equity-settled share-based payment transactions during the year is $4,294,717
(2019: $1,826,461).

Types of share-based payment plans

1. Share based payment plans issued during the year ended 30 June 2020.

Tax Exempt Share Plan – Employees

Number of Shares Issued

16,960

Issue Date

Issue Price

10 October 19

$12.50

Vesting Conditions for All Shares Interests held in the shares are not at risk of forfeiture. There is no condition or

Voting

Dividends

Specific Terms

requirement that needs to be satisfied in order to acquire the shares.

Shareholders are entitled to vote.

The shares provide entitlement to dividends or other distributions paid to ordinary
shareholders.

The shares must not be sold, transferred or otherwise disposed of, or mortgaged,
charged or otherwise encumbered, on or before the 3rd anniversary of the date
employees acquired the Shares or the date they cease to be employed, whichever
occurs first.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only86

21. SHARE BASED PAYMENTS PLAN
KEY ESTIMATES AND JUDGEMENTS (CONTINUED)

Options and Rights – Employees

Issue Date

Number issued

Expiry Date

Expected Vesting Period

Exercise Price

Vesting Conditions

I. Service

II. Market

III. FUA

Disposal Restrictions

Share Ownership Plan

PARs (Rights)

25 Nov 19

323,151

25 Nov 24

3 years

$12.36

25 Nov 19

129,404

25 Nov 34

3 years

nil

[I] Must be an employee from date of issue until options are exercised, unless
considered a good leaver (in which case must exercise within 30 days)

[II] 50% of the options and performance rights will be subject to, and will vest on, the
achievement of a hurdle measuring the Absolute Total Shareholder Return (ATSR) of
12.5% to 17.5% over the next three years. The vesting is calibrated as follows: 25%
vesting occurs when a threshold of 12.5% ASTR compounded annually is achieved;
100% vesting occurs when a threshold of 17.5% ASTR compounded annually
is achieved; and vesting between 25% and 100% will be on a straight line basis
between the two levels.

[III] 50% of the options and 50% of the performance rights will be subject to,
and will vest on, the achievement of a hurdle measuring the compound annual
growth (CAGR) in funds under administration (FUA) over the next three years.
The vesting is calibrated as follows: zero vesting will occur if the FUA does not
exceed $27 billion by 30 June 2022; 25% vesting will occur if the FUA reaches
$27 billion by 30 June 2022; 80% vesting will occur if the FUA reaches $29 billion
by 30 June 2022; 100% vesting will occur if the FUA reaches $32 billion by 30 June
2022. vesting for between $27 billion and $29 billion (for between 25% and 80%)
will be on a straight line basis between the two levels; and vesting for between
$29 billion and $32 billion (for between 80% and 100%) will be on a straight line
basis between the two levels.

Restriction on sale of shares for 12 months from exercise, except to fund options
exercised for associated tax liabilities.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only87

21. SHARE BASED PAYMENTS PLAN
KEY ESTIMATES AND JUDGEMENTS (CONTINUED)

Options and Rights – Employees

Issue Date

Number issued

Expiry Date

Expected Vesting Period

Exercise Price

Vesting Conditions

I. Service

II. Leadership

III. Strategy

Share Ownership Plan

PARs (Rights)

25 Nov 19

8,181

25 Nov 24

3 years

$12.36

25 Nov 19

3,276

25 Nov 34

3 years

nil

[I] Must be an employee from date of issue until options are exercised, unless
considered a good leaver (in which case must exercise within 30 days)

[II] Effective leadership of the Group's Legal and Compliance functions together
with the development of enhancements to these functions.

[III] Effective leadership and management of key legal and compliance matters
across the Group such that the contribution of the Legal & Compliance team
through its management of these matters supports the Group in achieving is
strategic outcomes and priorities.

Disposal Restrictions

Restriction on sale of shares for 12 months from exercise, except to fund options
exercised for associated tax liabilities.

2. Share based payment plans issued during the year ended 30 June 2019.

Tax Exempt Share Plan – Employees

Number of Shares Issued

14,193

Issue Date

Issue Price

7 September 18

$12.04

Vesting Conditions for All Shares Interests held in the shares are not at risk of forfeiture. There is no condition or

Voting

Dividends

Specific Terms

requirement that needs to be satisfied in order to acquire the shares.

Shareholders are entitled to vote.

The shares provide entitlement to dividends or other distributions paid to ordinary
shareholders.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only88

21. SHARE BASED PAYMENTS PLAN
KEY ESTIMATES AND JUDGEMENTS (CONTINUED)

Options and Rights – Employees

Issue Date

Number issued

Expiry Date

Expected Vesting Period

Exercise Price

Vesting Conditions

I. Service

II. Market

III. FUA

Share
Ownership
Plan

PARs
(Rights)

Share
Ownership
Plan –
Paragem

PARs
(Rights) –
Paragem

Share
Ownership
Plan

PARs
(Rights)

7 Sep 18

257,852

70,888

12,000

4,000

30,000

10,000

7 Sep 23

7 Sep 33

7 Sep 23

7 Sep 33

7 Sep 23

7 Sep 33

3 years

$12.04

3 years

nil

2 years

$12.04

2 years

nil

2 years

$11.73

2 years

nil

[I] Must be an employee from date of issue until options are exercised, unless
considered a good leaver (in which case must exercise within 30 days)

[II] 50% vesting on
the achievement of
Performance condition 2.
Absolute Total Shareholder
Return (ATSR) CAGR in
excess of 17.5% over three
years, proportional vesting
between 12.5% and 17.5%.

[III] 50% vesting on
the achievement of
Performance condition 1.
Growth in Funds Under
Administration (FUA) CAGR
in excess of 115.8% over
three years, proportional
vesting between 29.23%
and 40.23% p.a.

[III] 0% vesting if the
CAGR in FUA was below
a minimum level of
25.88% p.a (99.5% over
three years). 50% vesting
will occur if the CAGR in
FUA reaches29.58% p.a
(117.6% over three years).
100% vesting will occur if
the CAGR in FUA reaches
33.09% p.a (135.7% over
three years)

Disposal Restrictions

Restriction on sale of shares for 12 months from exercise, except to fund options
exercised for associated tax liabilities.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only

21. SHARE BASED PAYMENTS PLAN
KEY ESTIMATES AND JUDGEMENTS (CONTINUED)

Options and Rights – Employees

Issue Date

Number issued

Expiry Date

Expected Vesting Period

Exercise Price

Vesting Conditions

I. Service

II. Market

III. FUA

Share Ownership
Plan – MD

PARs
(Rights) – MD

Share Ownership
Plan – CFO

PARs
(Rights) – CFO

12 Dec 18

51,186

12 Dec 23

3 years

$12.04

12 Dec 18

14,072

12 Dec 33

3 years

nil

12 Dec 18

24,667

12 Dec 23

3 years

$13.44

12 Dec 18

6,981

12 Dec 33

3 years

nil

[I] Must be an employee from date of issue until options are exercised, unless
considered a good leaver (in which case must exercise within 30 days)

[II] 50% vesting on the achievement of Performance condition 2. Absolute Total
Shareholder Return (ATSR) CAGR in excess of 17.5% over three years, proportional
vesting between 12.5% and 17.5%.

[III] 50% vesting on the achievement of Performance condition 1. Growth in
Funds Under Administration (FUA) CAGR in excess of 115.8% over three years,
proportional vesting between 29.23% and 40.23% p.a.

Disposal Restrictions

Restriction on sale of shares for 12 months from exercise, except to fund options
exercised for associated tax liabilities.

Options and Rights – Employees

PARs (Rights) – Director

Issue Date

Number issued

Expiry Date

Expected Vesting Period

Exercise Price

Vesting Conditions

12 Dec 18

20,000

12 Dec 33

3 years

nil

I. Service

II. Market

III. Growth

[I] Must be a Director from date of issue until options are exercised, unless
considered a good leaver (in which case must exercise within 30 days)

[II] Performance condition (a) stipulates that the Director must provide support
to the HUB24 Managing Director and KMPs in relation to the securing and
maintenance of key accounts over the period from 1 July 2018 to 30 June 2021.

[III] Performance condition (b) stipulates that the Director must directly liaise with
key accounts to facilitate growth and customer satisfaction as measured by the
improvement in the Company’s customer satisfaction service levels over the period
from 1 July 2018 to 30 June 2021

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only

21. SHARE BASED PAYMENTS PLAN
KEY ESTIMATES AND JUDGEMENTS (CONTINUED)

Options and Rights – Employees

PARs (Rights) – Head of Legal & Compliance

Issue Date

Number issued

Expiry Date

Expected Vesting Period

Exercise Price

Vesting Conditions

12 Dec 18

20,000

12 Dec 33

4 years

nil

I. Service

II. Market

III. Growth

[I] Must be an employee from date of issue until options are exercised, unless
considered a good leaver (in which case must exercise within 30 days)

[II] Performance condition (a) stipulates that the employee must display effective
leadership of the development and operation of the Group’s risk and compliance
framework and policies over the Performance Period.

[III] Performance condition (b) stipulates that the employee must display effective
leadership and management of key legal, risk and compliance matters across the
HUB24 Group.

Options and Rights – Employees

PARs (Rights) – Special LTI

Issue Date

Number issued

Expiry Date

Expected Vesting Period

Exercise Price

Vesting Conditions

I. FUA

Disposal Restrictions

12 Dec 18

425,000

12 Dec 33

4 years

nil

[I] Applying to 425,000 performance rights, 100% vesting will occur if the 4 year
CAGR in FUA reaches 33% per annum.

Restriction on sale of shares for 12 months from exercise, except to fund options
exercised for associated tax liabilities.

3. Share based payment plans issued prior to 1 July 2018.

Tax Exempt Share Plan – Employees

Number of Shares Issued

Issue Date

Issue Price

24,160

1 Sep 17

$6.25

Vesting Conditions for All Shares Interests held in the shares are not at risk of forfeiture. There is no condition or

Voting

Dividends

Specific Terms

requirement that needs to be satisfied in order to acquire the shares.

Shareholders are entitled to vote.

The shares provide entitlement to dividends or other distributions paid to ordinary
shareholders.

The shares must not be sold, transferred or otherwise disposed of, or mortgaged, charged
or otherwise encumbered, on or before the 3rd anniversary of the date employees
acquired the shares or the date they cease to be employed, whichever occurs first.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only91

21. SHARE BASED PAYMENTS PLAN
KEY ESTIMATES AND JUDGEMENTS (CONTINUED)

Options and Rights – Employees

Issue Date

Number issued

Expiry Date

Expected Vesting Period

Exercise Price

Vesting Conditions

I. Service

II. Market

III. FUA

Disposal Restrictions

Share
Ownership
Plan

PARs
(Rights)

Share
Ownership
Plan

PARs
(Rights)

Share
Ownership
Plan – MD

PARs
(Rights) –
MD

11 Oct 17

21 Aug 17

21 Aug17

11 Dec 17

401,686

122,942

34,247

11,211

78,077

23,897

11 Oct 22

11 Oct 32

21 Aug 22

21 Aug 32

11 Dec 22

11 Dec 32

3 years

$7.09

3 years

nil

3 years

$6.25

3 years

nil

3 years

$7.09

3 years

nil

[I] Must be an employee from date of issue until options are exercised, unless
considered a good leaver (in which case must exercise within 30 days)

[II] 50% vesting on the achievement of Performance condition 2. Absolute Total
Shareholder Return (ATSR) CAGR in excess of 17.5% over three years, proportional
vesting between 12.5% and 17.5%.

[III] 50% vesting on
the achievement of
Performance condition 1.
Growth in Funds Under
Administration (FUA) CAGR
in excess of 117.6% over
three years, proportional
vesting between 25.88%
and 33.09% p.a.

[III] 50% vesting on
the achievement of
Performance condition 1.
Growth in Funds Under
Administration (FUA) CAGR
in excess of 109.7% over
three years, proportional
vesting between 28% and
45% p.a.

Restriction on sale of shares for 12 months from exercise, except to fund options
exercised for associated tax liabilities.

4. Share based payment plans issued prior to 1 July 2017.

Tax Exempt Share Plan – Employees

Number of Shares Issued

Issue Date

Issue Price

14,112

1 Sep 16

$4.46

Vesting Conditions for All Shares Interests held in the shares are not at risk of forfeiture. There is no condition or

Voting

Dividends

Specific Terms

requirement that needs to be satisfied in order to acquire the shares.

Shareholders are entitled to vote.

The shares provide entitlement to dividends or other distributions paid to ordinary
shareholders.

The shares must not be sold, transferred or otherwise disposed of, or mortgaged,
charged or otherwise encumbered, on or before the 3rd anniversary of the date
employees acquired the shares or the date they cease to be employed, whichever
occurs first.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only

21. SHARE BASED PAYMENTS PLAN
KEY ESTIMATES AND JUDGEMENTS (CONTINUED)

Options and Rights – Employees

FY2017

Issue Date

Number issued

Expiry Date

Expected Vesting Period

Exercise Price

Vesting Conditions

I. Service

II. Market

Share Ownership Plan

PARs (Rights)

Share Ownership Plan

29 Nov 16

418,639

29 Nov 21

3 years

$4.46

29 Nov 16

137,043

29 Nov 31

3 years

nil

29 Nov 16

50,000

29 Nov 21

3 years

$5.17

[I] Must be an employee from date of issue until options are exercised, unless
considered a good leaver (in which case must exercise within 30 days)

[II] 50% vesting on the achievement of Performance
condition 1. Absolute Total Shareholder Return (ATSR)
CAGR in excess of 17.5% over three years, proportional
vesting between 12.5% and 17.5%.

[II] Achieve share price
hurdle of 52% greater
than exercise price for 20
consecutive days in the
period between 36 months
from the issue date and
expiry of options.

III. FUA

[III] 50% vesting on the achievement of Performance
condition 2. Growth in Funds Under Administration
(FUA) CAGR in excess of 45% over three years,
proportional vesting between 28% and 45%.

N/A

Disposal Restrictions

Restriction on sale of shares for 12 months from exercise, except to fund options
exercised for associated tax liabilities.

Options and Rights – Employees

FY2016

Issue Date

Number issued

Expiry Date

Expected Vesting Period

Exercise Price

Vesting Conditions

I. Service

II. Market

Disposal Restrictions

Share Ownership Plan

PARs (Rights) – MD

Share Ownership Plan

14 Oct 15

620,000

14 Oct 20

3 years

$2.46

7 Dec 15

150,000

7 Dec 30

3 years

$2.46

30 Mar 16

50,000

30 Mar 21

3 years

$3.98

[I] Must be an employee from date of issue until options are exercised, unless
considered a good leaver (in which case must exercise within 30 days).

[II] Achieve share price hurdle of greater than 52% of exercise price for 20
consecutive days in the period between 36 months from the issue date and expiry
of options.

Restriction on sale of shares for 12 months from exercise, except to fund options
exercised for associated tax liabilities.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only
93

21. SHARE BASED PAYMENTS PLAN
KEY ESTIMATES AND JUDGEMENTS (CONTINUED)

Options and Rights – Employees

FY 2015

Issue Date

Number issued

Expiry Date

Expected Vesting Period

Exercise Price

Vesting Conditions

I. Service

II. Market

III. Performance

Disposal Restrictions

SUMMARIES OF OPTIONS GRANTED

Share Ownership Plan

Share Ownership Plan – MD

17 Oct 14

760,000

17 Oct 19

3 years

$0.98

4 Dec 14

200,000

4 Dec 19

3 years

$0.98

[I] Must be an employee from date of issue until options are exercised, unless
considered a good leaver (in which case must exercise within 30 days)

[II] Achieve share price hurdle in excess
of 60% of the exercise price for 20
consecutive days in the period between 36
months from issue and expiry of options.

As determined by the Board in its sole discretion

Restriction on sale of shares for 12 months from exercise, except to discharge tax
obligations in relation to the issue.

The following table illustrates the number, weighted average exercise prices (WAEP) and weighted average share prices
(WASP) of, and movements in, share options issued during the year:

Outstanding at the beginning of the year

1,792,344

Granted during the year

Forfeited during the year

Exercised during the year

Expired during the year

Outstanding at end of the year

Exercisable at the end of the year

Number

WAEP

331,332

(49,397)

$12.36

2020

WASP

Number

WAEP

2,265,045

375,705

$12.11

(139,326)

2019

WASP

(441,182)

$2.82

$11.91

(709,080)

$1.54

$13.40

1,633,095

535,711

1,792,344

160,000

The outstanding balance as at 30 June 2020 is represented by:

• 120,000 options over ordinary shares with an exercise price of $2.46 each, vested expiring 14 October 2020
• 150,000 options over ordinary shares with an exercise price of $2.46 each, vested expiring 7 December 2020
• 265,711 options over ordinary shares with an exercise price of $4.46 each, vested expiring 29 November 2021
• 34,247 options over ordinary shares with an exercise price of $6.25 each, yet to vest expiring 21 August 2022
• 306,799 options over ordinary shares with an exercise price of $7.09 each, yet to vest expiring 11 October 2022
• 78,077 options over ordinary shares with an exercise price of $7.09 each, yet to vest expiring 11 December 2022
• 237,684 options over ordinary shares with an exercise price of $12.04 each, yet to vest expiring 7 September 2023
• 12,000 options over ordinary shares with an exercise price of $12.04 each, yet to vest expiring 7 September 2023
• 30,000 options over ordinary shares with an exercise price of $11.73 each, yet to vest expiring 7 September 2023
• 51,186 options over ordinary shares with an exercise price of $12.04 each, yet to vest expiring 12 December 2023
• 24,667 options over ordinary shares with an exercise price of $13.44 each, yet to vest expiring 12 December 2023
• 322,724 options over ordinary shares with an exercise price of $12.36 each, yet to vest expiring 25 November 2024

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only94

21. SHARE BASED PAYMENTS PLAN (CONTINUED)

SUMMARY OF PERFORMANCE RIGHTS GRANTED

The outstanding balance as at 30 June 2020 is represented by:

Number

WAEP

2020

WASP

Number

WAEP

2019

WASP

Outstanding at the beginning of the year

Granted during the year

Forfeited during the year

Exercised during the year

Expired during the year

Outstanding at end of the year

Exercisable at the end of the year

823,092

132,680

(15,303)

(75,533)

864,936

282,784

570,941

(30,633)

823,092

• 52,507 performance rights over ordinary shares, yet to vest expiring 29 November 2031
• 93,901 performance rights over ordinary shares, yet to vest expiring 11 October 2032
• 23,897 performance rights over ordinary shares, yet to vest expiring 11 December 2032
• 65,345 performance rights over ordinary shares, yet to vest expiring 7 September 2033
• 4,000 performance rights over ordinary shares, yet to vest expiring 7 September 2033
• 10,000 performance rights over ordinary shares, yet to vest expiring 7 September 2033
• 486,053 performance rights over ordinary shares, yet to vest expiring 12 December 2033
• 129,233 performance rights over ordinary shares, yet to vest expiring 25 November 2034

OPTION PRICING MODEL

The fair value of all equity-settled options issued in the year is estimated at the date of grant using the Black Scholes
and the Hoadleys 1 Hybrid ESO model (monte carlo simulation method).

The following table lists the inputs to the models used:

1. Share based payment plans issued during the year ended 30 June 2020

Dividend Yield (%)

Expected Volatility (%)

Risk-free Interest Rate (%)

Expected Life of Options (Months)

Option Exercise Price ($)

Average Share Price at Measurement Date ($)

Model Used

25 Nov
2019 SOP

25 Nov
2019 PRP
(Rights)

0.39

0.82

12.36

11.83

0.39

0.82

N/A

11.83

Hoadleys/
Black Scholes

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only95

21. SHARE BASED PAYMENTS PLAN
OPTION PRICING MODEL (CONTINUED)

2. Share based payment plans issued prior to 1 July 2019.

Dividend Yield (%)

Expected Volatility (%)

Risk-free Interest Rate (%)

Expected Life of Options (Months)

Option Exercise Price ($)

Average Share Price at
Measurement Date ($)

Model Used

Dividend Yield (%)

Expected Volatility (%)

Risk-free Interest Rate (%)

Expected Life of Options (Months)

Option Exercise Price ($)

Average Share Price at
Measurement Date ($)

Model Used

Dividend Yield (%)

Expected Volatility (%)

Risk-free Interest Rate (%)

Expected Life of Options (Months)

Option Exercise Price ($)

Average Share Price at
Measurement Date ($)

Model Used

7 Sep 2018
SOP

7 Sep
2018 PRP
(Rights)

7 Sep 2018
SOP –
Paragem

7 Sep
2018 PRP
(Rights) –
Paragem

7 Sep 2018
SOP

7 Sep
2018 PRP
(Rights)

0.54

2.17

12.04

12.44

0.54

2.17

N/A

12.44

0.54

2.17

12.04

12.44

0.54

2.17

N/A

12.44

0.54

2.17

11.73

12.44

0.54

2.17

N/A

12.44

Hoadleys/
Black Scholes

12 Dec
2018 SOP
– MD

12 Dec
2018 PRP
(Rights) –
MD

12 Dec
2018 SOP –
CFO

12 Dec
2018 PRP
(Rights) –
CFO

12 Dec
2018 PRP
(Rights) –
Director

12 Dec
2018 PRP
(Rights) –
Special LTI

0.54

2.12

12.04

12.97

0.54

2.12

N/A

12.97

0.54

2.12

13.44

12.97

0.54

2.12

N/A

0.54

2.12

N/A

0.54

2.12

N/A

12.97

Hoadleys/
Black Scholes

11 Oct
2017 SOP

11 Oct
2017 PRP
(Rights)

21 Aug
2017 SOP

21 Aug
2017 PRP
(Rights)

11 Dec
2017 SOP

11 Dec
2017 PRP
(Rights)

2.38

7.09

8.18

2.38

N/A

8.18

2.37

6.25

8.18

2.37

N/A

8.18

2.37

7.09

9.68

2.37

N/A

9.68

Hoadleys/
Black Scholes

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only96

21. SHARE BASED PAYMENTS PLAN
OPTION PRICING MODEL (CONTINUED)

Dividend Yield (%)

Expected Volatility (%)

Risk-free Interest Rate
(%)

Expected Life of
Options (Months)

Option Exercise Price
($)

Average Share Price at
Measurement Date ($)

Model used

17 Oct
2014
SOP

4 Dec
2014
SOP CEO

4 Dec
2014 SOP
Paragem

14 Oct
2015
SOP

7 Dec
2015
SOP CEO

30 Mar
2016
SOP

29 Nov
2016
SOP

29 Nov
2016 PRP
(Rights)

2.5

12-36

1.8

2.09

2.16

0.98

1.156

2.46

3.98

4.46

5.17

2.16

N/A

0.89

2.69

3.52

4.06

5.79

Black
Scholes

Hoadleys Hoadleys Hoadleys Hoadleys/
Black
Scholes

Hoadleys Hoadleys/
Black
Scholes

22. SIGNIFICANT EVENTS AFTER THE REPORTING DATE

Subsequent to year end the Directors have determined a fully franked final dividend of 3.5 cents per share (an
unfranked 2.6 cents per share final dividend was declared in FY19).

As of 31 July 2020 Diversa Trustees Ltd has retired as trustee of the HUB24 Super Fund. They have been replaced by
HTFS Nominees Pty Ltd (the Trustee). To ensure consistent and comparable operations of the HUB24 Super Fund, the
Group has entered into a loan agreement with HTFS Holding Pty Ltd, a wholly owned subsidiary of EQT Holdings Ltd,
who will use the loan proceeds to purchase capital in, the Trustee. The Trustee, will reserve the funds for the purpose
of meeting the Operational Risk Financial Requirement (ORFR) for the Fund in accordance with APRA Prudential
Standard SPS114. The parent entity HUB24 Limited made the ORFR loan of $7 million on 31 July 2020 on an arm’s
length basis and on commercial terms at an interest rate of 10%.

No other significant matter or circumstance has arisen since 30 June 2020 that has significantly affected, or may significantly
affect the Group’s operations, the results of those operations, or the Group’s state of affairs in future financial years.

23. EARNINGS PER SHARE

KEY ACCOUNTING POLICIES

Basic EPS is calculated by dividing the result attributable to members of the Group, adjusted for the after-tax effect of
preference dividends on preference shares classified as equity, by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for bonus elements in ordinary shares during the year.

Diluted EPS: is calculated by adjusting the basic earnings by the after-tax effect of dividends and interest associated
with dilutive potential ordinary shares. The weighted average number of shares used is adjusted for the weighted
average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares
into ordinary shares.

Diluted earnings per share exclude shares that may be issued in the future relating to the deferred consideration from
the Agility acquisition as the number of shares cannot be determined at this time.

The following reflects the income and share data used in the calculations of basic and diluted loss per share.

Diluted earnings per share includes 513,806 options and 864,936 rights issued for employees. 678,261 options

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only97

23. EARNINGS PER SHARE
KEY ACCOUNTING POLICIES (CONTINUED)

issues since FY19 have not been considered as the average share price used for the calculation does not exceed their
exercise price.

Earnings per share

Profit/(Loss) after income tax

Profit/(Loss) after income tax attributable to the owners of HUB24 Limited
used in calculating basic and diluted earnings per share

Weighted average number of ordinary shares used
in calculating basic earnings per share

Weighted average number of ordinary shares used
in calculating diluted earnings per share

Basic earnings per share

Diluted earnings per share

24. REMUNERATION OF AUDITORS

2020
$

Consolidated
2019
$

8,228,297

7,163,955

8,228,297

7,163,955

2020
Number

Consolidated
2019
Number

62,666,196

62,097,012

64,044,938

63,398,125

2020
Cents

13.13

12.85

Consolidated
2019
Cents

11.54

11.30

During the year the following fees were paid or payable for services provided by professional service firms:

Audit and review of financial statements provided by Deloitte Touche Tohmatsu

Other assurance services

Tax and other services

Total audit and other fees

2020
$

365,000

91,350

266,043

722,393

Consolidated
2019
$

300,000

183,230

71,946

555,776

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only98

25. RELATED PARTY DISCLOSURES

SUBSIDIARIES

The consolidated financial statements include the financial statements of HUB24 Limited and the Australian
subsidiaries listed in the following table.

Operating Entities

HUB24 Custodial Services Limited (formerly ANZIEX Ltd)

HUB24 Share Ownership Trust

HUB24 Management Services Pty Ltd

HUB24 Administration Pty Ltd

HUB24 Services Pty Ltd

Firstfunds Ltd

HUBConnect Pty Ltd (formerly ConnectHUB Pty Ltd)

Marketsplus Australia Pty Ltd

Paragem Pty Ltd

Agility Applications Pty Ltd

Non-Operating Entities

HUB24 International Nominees Pty Ltd (formerly ANZIEX Nominees Ltd)

HUB24 Nominees Pty Ltd (formerly Kardinia Nominees Pty Ltd)

AT Pty Ltd*

Investorfirst Securities Ltd*

Researchfirst Pty Ltd*

Captain Starlight Nominees Pty Ltd*

Findlay & Co Stockbrokers Ltd*

HTH Nominees Pty Ltd*

% Equity Interest

as at
30 June 2020

as at
30 June 2019

100

*These companies are no longer trading and there is no intention that they will resume activities. The process to deregister these entities has commenced.

Balances and transactions between HUB24 and its subsidiaries have been eliminated on consolidation and are not
disclosed in this note.

ULTIMATE PARENT

HUB24 Limited is the ultimate parent entity of the Group.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only99

26. PARENT ENTITY FINANCIAL INFORMATION

SIGNIFICANT ACCOUNTING POLICIES

The accounting policies of the parent entity are consistent with those of the Group except for investments in
subsidiaries which are accounted for at cost, less any impairment, in the parent entity.

SUMMARY FINANCIAL INFORMATION

Set out below is the supplementary information about the parent entity.

Statement of profit or loss and other comprehensive income

Profit/(loss) after income tax

Total comprehensive income

Statement of financial position

Total assets

Total liabilities

Net assets

Total equity

CONTINGENT LIABILITIES

2020
$

2019
$

16,891,558

18,641,334

16,891,558

18,641,334

101,383,287

61,398,347

25,142,638

3,736,072

76,240,649

57,662,275

76,240,649

57,662,275

The parent entity did not have any contingent liabilities as at 30 June 2020 or 30 June 2019.

CAPITAL COMMITMENTS

The parent entity had no capital commitments as at 30 June 2020 or 30 June 2019.

DEFERRED TAX ASSET

In addition to its own current and deferred tax amounts, the parent entity also recognises current tax liabilities (or
assets) and the deferred tax assets arising from unused tax losses and unused tax credits (if any) assumed from
controlled entities in the Group. Refer to Note 7 for further details.

27. KEY MANAGEMENT PERSONNEL

KEY MANAGEMENT PERSONNEL COMPENSATION

Short term employment benefits

Post employment benefits

Share based payments

2020
$

2,783,848

106,526

1,841,508

4,731,882

Consolidated
2019
$

2,552,344

138,124

894,714

3,585,182

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only100

28. FINANCIAL INSTRUMENTS

KEY ACCOUNTING POLICIES

Held to maturity investments

The Group’s principal financial instruments comprise cash, receivables, and payables. For the year ended 30 June 2020,
the Group did not utilise derivatives, holds no debt and has not traded in financial instruments including derivatives.

Interest rate risk

The Group is not materially exposed to movements in short-term variable interest rates on cash and cash equivalents.
All other financial assets and liabilities are non-interest bearing. The Directors believe a 50 basis point decrease is
a reasonable sensitivity given current market conditions. A 50 basis point increase and a 50 basis point decrease in
interest rates would increase/decrease profit and loss in the Group by:

Cash and cash equivalents at end of period

50 basis points increase in interest rate

50 basis points decrease in interest rate

Net impact on profit after tax

Profit for the year

50 basis points increase in interest rate

50 basis points decrease in interest rate

Credit risk

2020
$

Consolidated
2019
$

33,809,323

18,465,847

169,047

(169,047)

8,228,297

8,397,344

8,059,250

92,329

(92,329)

7,163,955

7,256,284

7,071,626

During the year the Group had a loan receivable from Sargon Superannuation Holdings SPV Pty Ltd, who has in turn
used it to subscribe for capital in Diversa Trustees Limited, the Trustee for the HUB24 Super Fund (“the Fund”). As at 30
June 2020 this loan has been fully repaid. In the event that the Group is required to extend loan facilities in the future
the agreed approach will be to ensure security over the loan to ensure that the credit risk is low.

Liquidity risk

The table below reflects all contractually fixed pay-offs for settlement resulting from recognised financial liabilities. Cash
flows are undiscounted. The remaining contractual maturities of the Group’s and parent entity’s financial liabilities are:

Not later than one month

Later than 1 month not later than 3 months

Later than 3 months not later than 1 year

Later than 1 year

2020
$

Consolidated
2019
$

4,563,708

2,557,499

657,333

148,878

5,369,919

280,572

695,522

2,146,200

5,679,793

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only

101

28. FINANCIAL INSTRUMENTS
KEY ACCOUNTING POLICIES (CONTINUED)

Capital Management – financing arrangements

The Group had access to the following borrowing facilities which were undrawn throughout, and at the end of the
reporting period:

Floating rate – Expiring within one year (bank overdraft facility)

Consolidated
2019
$

2020
$

5,000,000

The bank overdraft facility may be drawn at any time and may be cancelled by giving the bank 10 business days notice.
The bank loan facility is subject to annual review.

The Group incurs a line fee of 0.60% per annum to maintain the bank overdraft facility with a further rate of BBSY +
1.25% applied to any drawn balances. The facility is guaranteed by all subsidiaries of the Group.

MATURITY ANALYSIS OF FINANCIAL ASSETS AND LIABILITIES

The risk implied from the values shown in the table below is based on best estimates and reflect a balanced view of
cash inflows and outflows. Leasing obligations, trade payables and other financial liabilities mainly originate from the
financing of assets used in our ongoing operations such as office equipment, Platform development and investments
in working capital e.g. receivables. These assets are considered in the Group’s overall liquidity risk.

0–1 month
$

1–3 months
$

4–12 months*
$

1–5 years
$

Total
$

30 June 2020

Consolidated financial assets:

Cash and cash equivalents

28,668,004

5,141,319

Trade and other receivables

9,076,626

804,173

Consolidated financial liabilities:

Trade and other payables

Net Maturity

37,744,630

5,945,492

4,563,708

657,333

4,563,708

657,333

33,180,922

5,288,159

165,282

148,878

16,404

33,809,323

10,046,081

43,855,404

5,369,919

38,485,485

*For the 4–12 month period the Agility deferred consideration includes equity components payable following the 31 December 2020 performance hurdle
assessment. Refer to Note 13 for further details.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only102

28. FINANCIAL INSTRUMENTS
MATURITY ANALYSIS OF FINANCIAL ASSETS AND LIABILITIES (CONTINUED)

0–1 month
$

1–3 months
$

4–12 months*
$

1–5 years**
$

Total
$

30 June 2019

Consolidated financial assets:

Cash and cash equivalents

13,381,689

5,084,158

18,465,847

Trade and other receivables

6,480,170

950,772

134,524

2,000,000

9,565,466

19,861,859

6,034,930

134,524

2,000,000 28,031,313

Consolidated financial liabilities:

Trade and other payables

2,557,499

280,572

695,522

2,146,200

5,679,793

695,522

2,146,200

5,679,793

Net Maturity

17,304,360

5,754,358

(560,998)

(146,200)

22,351,520

*For the 4–12 month period the Agility deferred consideration includes cash and equity components payable 3 January 2019.
**For the 1–5 year period the Agility deferred consideration includes cash and equity components payable February 2020 following the results announcement.

The Group monitors rolling forecasts of liquidity reserves on the basis of expected cash flow and aims to maintain a
minimum equivalent of 90 days worth of operational expenses in cash reserves.

MARKET RISK

The Group balance sheet is not materially exposed to movements in market prices.

The net fair value of financial assets and liabilities approximates their carrying values and the methods for estimating
fair values are outlined in the relevant notes to the financial statements.

FAIR VALUE MEASUREMENT

No other financial instruments for the year ended 30 June 2020 required fair value assessment (FY19: Nil).

29. PROFIT RESERVES

To the extent possible under the Corporations Act 2001 and applicable tax laws, the profits reserve is preserved for
future dividend payments.

Profit reserve

Movement in profit reserves

Opening balance

Transfer to profit reserves

Dividends provided for or paid

Closing balance

2020
$

Consolidated
2019
$

40,847,253

13,014,445

5,088,013

31,659,750

11,349,598

(3,826,942)

(3,423,166)

40,847,253

13,014,445

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DIRECTORS’ DECLARATION

FOR THE YEAR ENDED 30 JUNE 2020

IN THE DIRECTORS’ OPINION:

c. there are reasonable grounds to believe that the

Group will be able to pay its debts as and when they
become due and payable, and

a. the financial statements and notes set out on pages

d. this declaration has been made after receiving the

48 to 102 are in accordance with the Corporations Act
2001, including:

i. giving a true and fair view of the Group’s financial

position as at 30 June 2020 and of its performance
for the financial year ended on that date, and

ii. complying with Australian Accounting

Standards (including the Australian Accounting
Interpretations), the Corporations Regulations
2001 and other mandatory professional reporting
requirements, and

b. the financial statements and notes comply with
International Financial Reporting Standards as
disclosed in Note 2, and

declarations by the Chief Executive Officer and Chief
Financial Officer required by section 295A of the
Corporations Act 2001.

Signed in accordance with a resolution of Directors.

Bruce Higgins
Chairman

Sydney
24 August 2020

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only104

INDEPENDENT AUDITOR’S REPORT

Deloitte Touche Tohmatsu
A.B.N. 74 490 121 060

Grosvenor Place
225 George Street
Sydney NSW 2000
PO Box N250
Sydney NSW 1217 Australia

DX: 10307SSE
Deloitte Touche Tohmatsu
Tel: +61 (0) 2 9322 7000
A.B.N. 74 490 121 060
Fax: +61 (0) 2 9322 7001
www.deloitte.com.au
Grosvenor Place
225 George Street
Sydney NSW 2000
PO Box N250
Sydney NSW 1217 Australia

DX: 10307SSE
Tel: +61 (0) 2 9322 7000
Fax: +61 (0) 2 9322 7001
www.deloitte.com.au

Independent Auditor’s Report
to the Shareholders of HUB24 Limited

Report on the Audit of the Financial Report

Opinion

Independent Auditor’s Report
We have audited the financial report of HUB24 Limited (the “Company”) and its subsidiaries (the “Group”) which
to the Shareholders of HUB24 Limited
comprises the consolidated statement of financial position as at 30 June 2020, the consolidated statement of
profit or loss and other comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a
Report on the Audit of the Financial Report
summary of significant accounting policies, and the directors’ declaration.

Opinion
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
We have audited the financial report of HUB24 Limited (the “Company”) and its subsidiaries (the “Group”) which
comprises the consolidated statement of financial position as at 30 June 2020, the consolidated statement of
giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its financial
(i)
profit or loss and other comprehensive income, the consolidated statement of changes in equity and the
performance for the year then ended; and
consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a
summary of significant accounting policies, and the directors’ declaration.
(ii)

complying with Australian Accounting Standards and the Corporations Regulations 2001.

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

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
(i)
giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its financial
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of
performance for the year then ended; and
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 & Ethical Standards Board’s
(ii)
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are
relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
Basis for Opinion
accordance with the Code.

complying with Australian Accounting Standards and the Corporations Regulations 2001.

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s
our report. We are independent of the Group in accordance with the auditor independence requirements of the
report.
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
opinion.
accordance with the Code.

Key Audit Matters
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
report.
of the financial report for 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
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
these matters.
opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the financial report for 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.

Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.

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105

How the scope of our audit responded to the
Key Audit Matter

Our procedures included, but were not limited to:

▪ updating our understanding of the key controls
associated with the preparation of the value-in-
use models;

▪ evaluating management’s methodologies and their

documented basis for key assumptions, as
outlined in Note 11;
in conjunction with our valuation specialists, we
assessed and challenged the:

▪

reasonableness of long-term growth rates
used in the forecast cash flows by comparing
them to historical results, economic and
industry forecasts; and

- discount rate applied against our
independently determined rate.

▪

testing the mathematical accuracy and integrity of
the value-in-use models;

▪ assessing the consistency of forecast cash flow

models and Board approved budget;

▪ performing sensitivity analysis around the key
drivers of growth rates used in the cash flow
forecasts and the discount rate used; and
▪ assessing managements’ consideration of the

sensitivity to a change in key assumptions that
both individually or collectively would be required
for assets to be impaired and considered the
likelihood of such a movement in those key
assumptions.

We also assessed the appropriateness of the
disclosure in Note 11 to the financial statements.

Our procedures included, but were not limited to:

▪ reviewing management’s position paper for:
o alignment with the renegotiated the

Share Sale Deed

o Agility Applications’ performance against
the performance hurdles and targets to
date;

o key assumptions relating to the

probability of achieving the performance
hurdles and targets as at 30 June 2020;
and
the likelihood and magnitude of the
payment estimated by management.

▪

inquiring with key executives as to the likelihood
of performance targets being met;

▪ evaluating the reasonableness of management’s
underlying assumptions as outlined within the
position paper; and

▪ updating our understanding of the key controls
associated with the preparation and Board

Key Audit Matter

Intangible Assets

As at 30 June 2020 the carrying value of intangible
assets totalling $39.96 million, include the following
as disclosed in Note 11:

Investment platform at $21.4 million;

•
• Agility customer relationships of $0.38 million

(after impairment);

• Agility CONNECT software of $0.77 million

(after impairment); and
• Goodwill of $16.32 million.

Evaluation of the recoverable amount of intangible
assets requires significant judgement due to the
estimation of future cash flows, discount and terminal
growth rates, and the period over which cash flows
have been discounted.

Contingent Consideration

On 3 January 2017, HUB24 Limited acquired Agility
Applications Pty Ltd for consideration of up to $15
million. Consideration comprised $2.8 million cash,
$3.8 million shares, $1.9 million deferred
consideration and $5.7 million contingent
consideration.

In the prior year, Management and the vendors
renegotiated the terms in the Share Sale Deed which
(amongst other changes) have extended the period
for the vendors to meet the targets.

Consequently, the Company may be required to
make further payments to the respective vendors in
the event that certain conditions and performance
targets are met, as detailed within the revised Share
sale deed.

Significant judgement is required in determining the
fair value of the contingent consideration which is
dependent on recent and forecasted trading results of

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106

Key Audit Matter

the business and the relative risks of achieving
performance targets.

How the scope of our audit responded to the
Key Audit Matter
approval of position paper supporting the fair
value of contingent consideration.

As at 30 June 2020, management has determined the
fair value of the contingent consideration to be $1.74
million.

We also assessed the appropriateness of classification
of the liability and the disclosures in Note 13 and 16
to the financial statements.

Other Information

The directors are responsible for the other information. The other information comprises the information included
in the Group’s annual report for the year ended 30 June 2020, 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 do 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 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 this other
information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Directors for the Financial Report

The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the 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 has no realistic
alternative but to do so.

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107

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 this 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, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our 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 the directors.

• Conclude on the appropriateness of the directors’ 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 we conclude that a
material uncertainty exists, we are required to draw attention in our 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 our auditor’s report. However,
future events or conditions may cause the Group to cease to continue as a going concern.

•

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.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial report. We are responsible for the
direction, supervision and performance of the Group’s audit. We remain solely responsible for our audit
opinion.

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 we identify during our
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, actions taken to eliminate threats or 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 auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely 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
benefits of such communication.

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108

Report on the Remuneration Report

Opinion on the Remuneration Report

We have audited the Remuneration Report included in pages 23 to 44 of the Directors’ Report for the year ended
30 June 2020.

In our opinion, the Remuneration Report of HUB24 Limited, for the year ended 30 June 2020, complies with
section 300A of the Corporations Act 2001.

Responsibilities

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

DELOITTE TOUCHE TOHMATSU

Declan O’Callaghan
Partner
Chartered Accountants
Sydney, 24 August 2020

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109

ASX ADDITIONAL INFORMATION

Additional information required by the Australian Securities Exchange Limited and not shown elsewhere in this report
is as follows. This information is current as at 21 August 2020.

DISTRIBUTION OF EQUITY SECURITIES

Ordinary share capital 62,830,297 fully paid ordinary shares are held by 4,284 individual security holders.

All issued ordinary shares carry one vote per share without restriction and carry the rights to dividends. The number of
security holders, by size of holding, in each class are:

Fully paid ordinary shares – holding ranges

1 to 1,000

1,001 to 5,000

5,001 to 10,000

10,001 to 100,000

100,001 and over

Total

OPTIONS

Holders

Total units

2,351

1,517

229

155

907,197

3,666,428

1,642,526

4,129,543

52,484,603

4,284

62,830,297

1.44

5.84

2.61

6.57

83.53

100

1,431,852 options and 931,488 performance rights are held. Options and performance rights do not carry a right to vote.

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only110

ASX ADDITIONAL INFORMATION (CONTINUED)

TOP TWENTY SHAREHOLDERS – QUOTED ORDINARY SECURITIES

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED

J P MORGAN NOMINEES AUSTRALIA PTY LIMITED

CITICORP NOMINEES PTY LIMITED

BNP PARIBAS NOMS PTY LTD

BNP PARIBAS NOMINEES PTY LTD

NATIONAL NOMINEES LIMITED

PACIFIC CUSTODIANS PTY LIMITED

MR IAN JAMES LITSTER

BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD

MRS JASMIN ZHENG-MIN ZHAO LITSTER

UBS NOMINEES PTY LTD

LITSTER & ASSOCIATES PTY LTD

SKYLYX PTY LTD

MR BRUCE HIGGINS & MRS RUTH HIGGINS

MIRRABOOKA INVESTMENTS LIMITED

JASFORCE PTY LTD

EGG AU PTY LTD

BNP PARIBAS NOMS(NZ) LTD

NETWEALTH INVESTMENTS LIMITED

CRAIG APPS & MICHELLE APPS

Total

Number held

18,180,109

7,019,377

4,168,285

3,984,332

3,346,076

3,336,621

1,921,382

1,513,744

1,224,918

1,188,545

820,962

578,388

547,736

510,000

508,000

409,845

362,356

345,295

304,475

258,723

%IC

28.94%

11.17%

6.63%

6.34%

5.33%

5.31%

3.06%

2.41%

1.95%

1.89%

1.31%

0.92%

0.87%

0.81%

0.65%

0.58%

0.55%

0.48%

0.41%

50,529,169

80.42%

DETAILS OF SUBSTANTIAL SHAREHOLDERS – QUOTED ORDINARY SECURITIES

TIGA Trading Pty Ltd

ECP Asset Management Pty Ltd

Hyperion Asset Management

Mr Ian J Litster

Date of most recent
substantial shareholder notice

Number held

18/08/2020

18/03/2020

19/05/2020

18/03/2019

6,763,443

6,135,832

5,326,764

3,280,677

%IC

10.76%

9.76%

8.48%

5.22%

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only111

CORPORATE INFORMATION

HUB24 LIMITED

ACN 124 891 685

PRINCIPAL REGISTERED
OFFICE IN AUSTRALIA

Level 2, 7 Macquarie Place
Sydney NSW 2000
Australia

DIRECTORS

SECRETARIES

Mr Bruce Higgins (Chairman)

Mr Andrew Alcock (Managing Director)

Mr Ian Litster

Mr Anthony McDonald

Mr Paul Rogan

Ms Ruth Stringer
(appointed 1 February 2020)

Mr Paul Howard
(appointed 31 July 2019)

Ms Debbie Last
(appointed 13 March 2020)

Mr Mark Goodrick
(resigned 13 March 2020)

Ms Wendy McIntyre
(resigned 31 July 2019)

SHARE REGISTRY

AUDITOR

Link Market Services Limited
Level 12, 680 George Street
Sydney NSW 2000

HUB24 Limited shares are listed on
the Australian Securities Exchange
(ASX Code: HUB)

Deloitte Touche Tohmatsu
Grosvenor Place
225 George Street
Sydney NSW 2000

WEBSITE

hub24.com.au

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use only112

NOTES

HUB24 ANNUAL REPORT YEAR ENDED 30 JUNE 2020For personal use onlyFor personal use onlyFor personal use only