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2021
iSelect is one of Australia’s
leading destinations for
comparison and purchasing
across insurance, personal
finance and utilities
OUTLOOK
Inside this
report
ABOUT ISELECT
2021 CEO AND CHAIRMAN’S LETTER
2021 OPERATIONAL HEADLINES
BRAND AND MARKETING
OUR PARTNERS
OUR PEOPLE
BOARD MEMBERS
LEADERSHIP TEAM
CORPORATE GOVERNANCE STATEMENT
DIRECTORS REPORT
REMUNERATION REPORT
FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
ASX INFORMATION
REPORTED VS UNDERLYING RESULTS
CORPORATE DIRECTORY
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IMPORTANT NOTICE AND DISCLAIMER
All references to FY18, FY19, FY20 and FY21 appearing in this Annual Report are to the financial years ended 30 June 2018, 30 June 2019, 30 June 2020 and 30 June 2021 respectively, unless
otherwise indicated.
This Annual Report contains forward-looking statements including but not limited to trends, plans, strategies and objectives of management, demand and customer projections, guidance on future
financial performance and/or estimates. The words “expect”, “anticipate”, “estimate”, “intend”, “believe”, “guidance”, “should”, “could”, “may”, “will”, “predict”, “plan” and other similar expressions
are intended to identify forward-looking statements regarding the results of the Company’s future financial performance outlined in this Annual Report. Forward-looking statements in this Annual
Report are based on an assessment of present economic and operating conditions, and on a number of assumptions regarding future events and actions that, at the date of this Annual Report,
are expected to take place. Such forward-looking statements are provided as a general guide only and should not be relied upon as an indication and are not guarantees of future performance.
Such forward-looking statements involve known and unknown risks, uncertainties, assumptions and other important factors many of which are subject to change without notice and/or are beyond
the control of the Group, the Directors and management. This may cause actual results to differ materially from those expressed in the forward-looking statements contained in this Annual Report.
The Group cannot and does not give any assurance that the results, performance or achievements expressed or implied by the forward-looking statements contained in this Annual Report will
actually occur and investors are cautioned not to place undue reliance on these forward-looking statements. This is particularly the case, in light of the current economic climate and significant
volatility, uncertainty and disruption arising in connection with COVID-19. To the full extent permitted by law, iSelect disclaims any obligation or undertaking to release any updates or revisions to
the information contained in this Annual Report to reflect any change in expectations, assumptions, new information, future events or results, or otherwise.
NON-IFRS INFORMATION
iSelect’s results are reported under International Financial Reporting Standards (IFRS). Throughout this Annual Report, iSelect has included certain non-IFRS financial information.
The information is presented to assist in making appropriate comparisons with prior periods and to assess the operating performance of the business. iSelect uses these measures to assess the
performance of the business and believes that information is useful to investors. EBITDA, EBIT, Operating Cash Conversion and Revenue per Sale (RPS) have not been audited or reviewed.
Any and all monetary amounts quoted in this Annual Report are in Australian dollars (AUD) unless otherwise stated.
Any references to “Group” in this Annual Report refer to iSelect Limited and its controlled entities.
ABN: 48 124 302 932
iSelect Annual Report 2021
iSelect Annual Report 2021
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About
iSelect
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and amazing attitude. Loved every
minute, made me feel like I was
“ Amazing service, clear, precise
talking to a friend.”
Broadband: Bailey, North Tamworth NSW
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iSelect Annual Report 2021
iSelect Annual Report 2021
At iSelect we’re passionate about helping Australians
save time, effort and money by making it easy to
compare from our marketplace of leading brands
at no cost to them.
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We have been around for more than
20 years and as our industries evolve,
customer behaviour changes and
new opportunities arise, the future
for comparison services is incredibly
exciting. We’re proud to be ASX-listed
and, unlike some other comparison
sites, we are not privately owned by
an insurance company. As well as our
flagship iSelect brand, the iSelect Group
also own energy comparison service,
Energy Watch.
iselect.com.au
We make it simple for millions of
Australians to not only reduce their
household bills, but also find products
that are a great fit for their life stage
through our thorough needs analysis.
We might be best known for health
insurance, but that’s far from all we do.
We help Aussies compare a wide range
of household products and services
across insurance, utilities and finance.
And we’re always looking to expand
into new verticals so we can help more
Aussies, more often.
iSelect is so much more than an online
comparison website. The majority of our
customers complete their purchase with
the assistance of our 300+ Australian-
based talented team members. Our
consultants strive to truly understand
customers’ needs and help them to
choose the most suitable product
from those available from our range
of providers. And we often save our
customers hassle by helping them to
complete their purchase.
iSelect Annual Report 2021
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2021 CEO and
Chairman’s letter
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“ Helpful, knowledgeable, friendly staff.
I had been looking into health funds,
thinking that my fund was not such good
value for money. I have changed funds
now, pay less and receive more”
Health: Karen, Acacia Hills, TAS
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iSelect Annual Report 2021
iSelect Annual Report 2021
Dear Shareholders,
On behalf of the Board of Directors
of iSelect Limited, we present to you
iSelect’s 2021 Annual Report. Our
performance in the year ended 30 June
2021 (FY21) highlights the resilience of
the iSelect business, with the backdrop
of the COVID-19 pandemic posing an
ongoing operational challenge as it has
done, and continues to do, for many
businesses. The recurring lockdowns
due to COVID-19 continue to place
many Australians under sustained
financial pressure, making our purpose
of helping Australians save time, effort
and money, more relevant than ever.
Despite fluctuations in consumer
demand at various stages throughout
FY21, our prioritisation of profit and cash
flow combined with the operating model
changes made in Q4FY20, delivered
an Underlying EBITDA result of $20.8
million for FY21, inclusive of $3.4 million
of JobKeeper. Our operating cash flows
remained solid with trail cash collections
performing slightly ahead of expectation.
Operationally, the business recorded
strong results across key performance
measures with conversion, cross-serve
and marketing ROI all improving and
growth in iSelect Account holders
continued, a position which we believe
provides a solid platform for business
growth as we turn our focus to FY22.
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LEADERSHIP CHANGES
As announced at our Annual General
Meeting in October 2020, the Board
appointed Warren Hebard as permanent
CEO, effective 1 November 2020.
Warren joined iSelect in 2018, having
previously served as Executive -
Marketing and Commercial.
The Board announced the appointment
of Brodie Arnhold as Chairman, effective
1 March 2021. Brodie first joined the
Board in 2014, before serving as interim
CEO between April 2018 and October
2020. Upon finishing as CEO, Brodie
returned to the Board and has played
an instrumental role in assisting with the
CEO transition. Former Chairman Chris
Knoblanche stepped down from the
Board on 28 February 2021. We would
like to thank Chris for his hard work,
commitment and invaluable stability
during his more than five years as
Chairman.
OPERATIONAL
PERFORMANCE
The global pandemic and associated
lockdown restrictions have seen
fluctuations in consumer demand
persist through FY21. This, combined
with the operating model changes and
prioritisation of cash flows and profit
during this uncertain period, resulted in
a reduction in leads. The lead declines
were most significantly felt in our Energy,
Telco and Car Insurance verticals, where
declines of 40-50% were recorded,
whilst Travel Insurance was down 99%.
In Health Insurance in H1, we saw a
21% decline in leads when elective
surgery and some extras services were
suspended, however recovery was seen
in H2, and the Health leads finished 13%
down for the full year.
Throughout FY21, our key operating
performance metric of conversion
remained strong across the board,
with the Energy and Telco segment
improving on prior year levels as the
Energy market normalised following the
regulatory changes introduced in FY20.
We expect these levels of performance
will provide us with a strong foundation
and position the business on a path
back to growth.
Despite lead challenges, our General
Insurance business delivered a
strong result in FY21, with a focus on
operational performance delivering
improved conversion. We saw growth
in Home and Contents Insurance and
a continued shift toward our online
sales channel. The transition to a
lower-risk lead referral model for Life
Insurance is now complete. We also
note the performance of the legacy Life
Insurance trail book remained strong,
with our retention initiatives continuing
to deliver.
ACCC SETTLEMENT
In October 2020, we reached a
settlement agreement with the
Australian Competition and Consumer
Commission (ACCC) in relation to
certain representations and disclosures
previously made by our energy
comparison service which were the
subject of proceedings in the Federal
Court. Importantly, the Federal Court
acknowledged that there was no
evidence that iSelect intended to
mislead consumers and acknowledged
the corrective action taken by iSelect
after it was notified of the ACCC’s
concerns. We were also very pleased
that several additional claims made by
the ACCC were dismissed. The Federal
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Court ordered iSelect to pay a penalty of
$8.5 million which is recognised in full in
the FY21 results. On a cash-only basis,
the penalty is to be paid in instalments,
the first payment of $1.9 million paid in
H1FY21 and the remainder spread over
the coming three years.
SCALING OF LEAD
SOURCES VIA
INNOVATIVE NEW
PARTNERSHIPS
iSelect will continue to look for ways
to realise value through partnerships,
signing two innovative agreements in
FY21 with NewsCorp and Seven Affiliate
Sales to promote both the iSelect and
Energy Watch brands to the Australian
market. Launching in January 2021, the
NewsCorp partnership has diversified
our digital marketing strategy and
focuses on making iSelect synonymous
with household budgets via tailored
content creation and strategic digital
advertising. The partnership continues
to build, albeit a little slower than
originally forecast, as learnings are
applied and additional integrated,
dynamic digital assets are rolled out.
In June 2021, we announced a
partnership between Energy Watch and
Seven Affiliate Sales, a division of Prime
Media Group. The media partnership
utilises the trusted voice of regional 7 to
take to market a new TV campaign for
Energy Watch. Similar in nature to the
NewsCorp partnership, the agreement
focuses on payment for lead generation
and sees Seven Affiliates strategically
place media based on shared insights
to maximise return for both parties.
Although in its infancy, the early signs
are encouraging.
INCREASING OUR
PRODUCT OFFERING
In January 2021, iSelect added the new
vertical of Business Loans comparison,
complementing our other small-medium
business offerings. In addition, new
verticals of Credit Cards, Personal
Loans and Car Loans have recently
been launched in August 2021. We look
forward to developing these in FY22 as
well as continuing to explore further new
vertical opportunities.
In addition to new verticals, a key focus
in FY21 has been to expand the breadth
and depth of our product range for
customers within our traditional verticals.
In June 2021, iSelect welcomed
Bupa (Health Insurance) and Aussie
Broadband (Telco) to our range of
providers. It is the first time that the
Bupa brand has joined iSelect’s range
of health insurance providers, with
iSelect now representing brands from
Australia’s nine major health insurers.
From a Telco perspective, with the
addition of Aussie Broadband, iSelect
now represents seven brands in the
home internet vertical.
GROWTH OF iSELECT
CUSTOMER ACCOUNT
HOLDERS
iSelect Customer Account holders
continue to scale and we now have
1.1 million account holders, which is a
growth rate of 108% (H2 vs H1). Our
Customer Account is a key pillar in our
transition from a transaction-based to
a relationship-based business where
metrics of ‘Verticals per customer’, Net
Promoter Score (NPS) and Customer
Lifetime Value will become an increasing
focus.
LONG TERM STRATEGY:
i26
During H2, the Board and newly formed
management team have developed
and documented iSelect’s long term
strategy, i26. Central to the first phase
of i26 is the Consumer Data Right (CDR)
legislation, which was passed in 2019.
The CDR’s objective is to empower
consumers by arming them with more
information to enable a more informed
spending decision making. The CDR has
already been implemented for Banking
(‘Open Banking’) with the Energy sector
(‘Open Energy’) to come next. Open
Energy’s first phase will incorporate
the major retailers (‘Tranche 1’) and
is currently scheduled for October
2022, with the second phase covering
the remaining retailers (‘Tranche 2’)
scheduled for October 2023. Following
this, the Telecommunications and
Insurance sectors are expected to follow
in subsequent years.
Open Energy will improve consumers’
ability to compare and switch between
products and services, and increase
competition between service providers,
leading not only to better prices for
customers, but also to more innovative
products and services. For iSelect, this
represents a significant opportunity
to deliver a simplified and seamless
user journey, and to continue building
relationships with our customers by
providing continuous comparisons and
one central location. The first phase of
i26 will leverage recent investments
in Data and our Customer Account to
bring an Open Energy proposition to our
customers in Q2 FY23.
Looking further ahead, we believe
the CDR will enable iSelect to offer
customers a personalised ‘Always On’
comparison service in several verticals,
with the prospect of recurring revenue
models such as those seen in the
UK comparison market. We believe
this will enable iSelect to increasingly
digitise its revenue, decreasing the
current reliance on our sales centre and
improve marketing ROI. We will continue
to update our shareholders on our
progress of i26.
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iSelect Annual Report 2021
We would like to close by thanking you,
our shareholders, for your ongoing
support through FY21. Despite the
uncertain economic environment,
we believe we have the right model,
strategy and team in place to deliver in
FY22 and beyond.
Yours sincerely,
Warren Hebard
CEO
Brodie Arnhold
Chairman
SPECIAL DIVIDEND AND
DIVIDEND PROGRAM
In FY21Q4 we were pleased to
announce a special dividend and
dividend program. The Board
determined to pay a special dividend
of $0.01 per share on 22nd June 2021.
The dividend did not relate to a specific
period and was unfranked. We will
continue a regular dividend program
during FY22, at an initial level of $0.01
per share, to be paid every half year
($0.02 per share, annually). The first
dividend payment in this program will be
made in March 2022.
LOOKING AHEAD
To conclude, the results in FY21 highlight
iSelect’s resilience and strength as a
business. Looking ahead, COVID-19
continues to cause market volatility
and we anticipate this will impact
performance in the first half of FY22.
We also note that we expect Health
Insurance premium increase timings
to return to normal and that we do not
anticipate receiving JobKeeper or similar
stimulus in FY22. With competition
increasing in our space, our focus in
FY22 will be on executing operationally
within our core businesses whilst
progressing our i26 strategy. Our first
phase of i26 will be leveraging our
Energy expertise and Customer Account
base in preparing for Open Energy,
building out our new verticals and
continuing to invest in our marketing
partnerships and brand.
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Somebody answers the phone,
sorts everything out, calls me
“ I don’t have to do the work.
back - wonderful”
Energy: Marion, Surfers Paradise QLD
iSelect Annual Report 2021
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2021 Operational
Headlines
car insurance and saved me a lot of
“ They reduced my electricity and my
money. I wish I did it earlier”
Energy: Gayle, NSW
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2021 RESULTS
REVENUE ($m)
111.0
-10%
LEADS (m)
2.1
-35%
EBITDA ($m)
20.8
52%
CONVERSION
10.4%
1.5PP
SALES UNITS (k)
MARKETING ROI
208
-30%
3.29
+6%
CUSTOMER ACCOUNTS
1.1m
+108% V H1
NPS
56
+8%
OPERATIONAL UPDATE
FY21 proved to be a challenging year
amid the continued impact of COVID-19
and recurring restrictions. Despite the
challenging external conditions, it was
also a year where we placed significant
focus on the optimisation of our operating
model and our ability to provide
customers provide customers with more
choice along with more providers and
products.
Market demand conditions affected
our lead volumes across most of our
segments, with the largest decreases
experienced in our Energy and Telco and
General Insurance verticals. We also saw
declines in Health Insurance through H1,
which pleasingly recovered through H2.
The reduction of lead volumes, however,
did have an impact on our sales volumes,
despite tangible improvements in our
conversion metrics.
Despite demand headwinds, our
business proved its resilience and
delivered Underlying EBITDA (including
JobKeeper) growth of 52%. This was
testament to the successful execution
of operational changes implemented at
the end of FY20, and our strong focus
on cash flow and profitability. Pleasingly,
the stabilisation of the Energy market
after the FY20 regulatory changes was
reflected in operational improvements in
our Energy and Telco segment through
FY21. Overall, our strong EBITDA result
was supported by improvements in
conversion, cross-serve and marketing
ROI.
We now have 1.1 million customer account
holders. In addition, our Net Promoter
Score improved by 8%, demonstrating
the value that we are delivering to
Australians and our continued focus to
help them save time, effort and money.
iSelect Annual Report 2021
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Brand and
Marketing
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“ They were very friendly, patient and
helpful. I am moving homes and it
really was great to have them do all
the comparisons for me to find the
best deals”
Broadband: Suzanne, Peterborough SA
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iSelect Annual Report 2021
In FY21 we maintained our brand presence and
continued to diversify our lead sources, building out
the partnership with NewsCorp and establishing a new
media partnership with Seven Affiliate Sales.
Seven Affiliates receive payment for
incremental lead generation in return for
an allocation of media for TV campaigns
across the Prime TV network. Although
still in its early days, initial data is
positive.
Looking forward in FY22, an all-new
brand campaign will be launched in H2.
The team will continue to evolve our
existing partnerships and also look to
on-board more new lead generation
partners.
Investment will continue at scale in
SEO and Content. The expansion of
marketing automation to promote
seamless interactions with the brand will
continue to be a focus along with the
optimisation of performance marketing
initiatives based on ROI. Marketing will
also support the rollout of new vertical
launches as we aim to help more
Australians save on their household
expenses.
We continued to uphold our strength in
brand with a strategically booked TVC
schedule utilising a series of animated
and COVID-19 relevant TVC’s including
the pitfalls of working from home. Our
press office supported all business
verticals, with successful outreach
including sharing of proprietary research
findings across TV, radio, press and
online. Additionally, our company
spokespeople featured regularly on
Sunrise and metro news programs
during key health and energy campaign
periods, encouraging Aussies to
compare household bills with iSelect.
Our digital marketing partnership with
NewsCorp is continuing to evolve.
Launched in January 2021, the unique
partnership, tailored to our business
model, goes beyond the realm of
traditional media buying and focuses on
content creation and digital advertising
in return for revenue share of converted
sales.
In June 2021 we launched a new
partnership between Energy Watch
and Seven Affiliate Sales, a division of
Prime Media Group and trusted voice in
regional Australia. Once again stretching
the boundaries of traditional media
relationships, the partnership sees
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Our
Partners
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We help our partners build
strong relationships with
hundreds of thousands of
Aussies who trust iSelect to
compare a wide range of
household services.
Our partners know that by joining the
iSelect network, their brand is seen
by more consumers in more places,
more often. We help our partners build
strong relationships with hundreds of
thousands of Aussies who trust iSelect
to compare a wide range of household
services. Our comparisons, offers and
cross-sell opportunities unlock growth
opportunities and provide invaluable
insights and data to our partners.
Our position as a leading comparison
marketplace has been further
strengthened through the onboarding of
additional leading brands across some
verticals, enhancing our service offering
by providing our customers with even
more choice. This extended range is
anticipated to lift our revenue over the
next year as demand for our service is
expected to continue to build, especially
as many households are seeking better
deals across energy, insurance and
personal finance.
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iSelect Annual Report 2021
one phone call! Love talking to
“ You took care of everything in
real people!!!!”
Car: Paola, South Melbourne, VIC
Insurance
Utilities
White Label and Click Out
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Our
People
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hearing impediment, and felt heard
“ Excellent customer service. I have a
and respected. Very kind people”
Car: Robert, Crestmead QLD
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iSelect Annual Report 2021
Throughout FY21 we have remained adaptable to
the ever-changing circumstances associated with
the COVID-19 pandemic. Our people continue to
show enormous resilience, prioritising the needs
of our customers so that we can continue to
support Australians in their efforts to reduce their
living expenses.
The way we live and work has
changed, as well as the needs of our
customers. Our team’s expertise has
adapted to navigate how to achieve
the best services to suit these evolving
circumstances.
EXPANDING HOW AND
WHERE WE WORK
Our people told us that the flexibility
to work where they wanted helped
them stay productive and balance their
work and life demands. We listened,
and as a result we continue to offer
flexibility to our team and are pleased
that this has also allowed us to expand
our employment offerings into regional
Victoria and other states. Broadening
the talent pool has enabled us to hire
exceptional talent wherever they are
located around Australia. It has also
expanded our knowledge of any unique
customer needs across a variety of
locations. Both of these are critical
elements of delivering the expertise
our customers have come to know and
expect from us.
SUPPORTING
EMPLOYEES TO DEVELOP
THEIR CAREERS
Extended lockdowns in Victoria
challenged us to think differently
about how we provide professional
development and training in FY21. All
of our induction and product training
moved online at the start of FY21 and
we have had a strong focus on ensuring
that we receive real-time feedback on
our new hire experience so that we
can adapt our approach throughout
the program. We have also significantly
expanded the content available through
our Academy, giving our people the
opportunity to develop skills relevant for
today but also for the future.
Our Emerging Leader program,
introduced in FY20, has resulted in a
number of the participants taking up
their first front-line leadership position
during the course of the year which is an
incredibly pleasing result. We have also
introduced a new framework centred on
driving values-based leadership with our
first workshops held in May 2021.
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OUR COMMUNITY
Our employees are passionate about
supporting the community and once
again have found fun and creative
ways of raising money and awareness
in support of their chosen charities.
To leverage this passion even further
we have established an employee
committee focused on how we drive
our CSR strategy and look forward to
achieving even more in FY22.
CONNECTION AND
WELLBEING
Being predominantly based in Victoria,
during this year we have had less than
three months where we could operate in
a ‘COVID normal’ environment. Enabling
our employees to maintain their sense
of belonging and our unique culture
without the opportunity to be together in
person has challenged us to continually
think about how we can maintain
connection in a predominantly online
environment. As a business we have
held virtual events to support the social
connections necessary for individuals
and the business to thrive, but it is the
work and creativity of our individual
people leaders working with their teams
that has enabled us to keep people
engaged and healthy.
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Board
Members
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iSelect Annual Report 2021
Brodie Arnhold
Shaun Bonett
Chairman and Non-Executive Director
Independent Non-Executive Director
Chair of the Remuneration and
Nominations Committees
Shaun was appointed to the iSelect
Board in March 2007. Shaun founded
Precision Group in 1994 and serves as
its CEO and Managing Director, being
principally responsible for the strategic
direction of Precision. In addition, Shaun
acts as a Director and Strategic Adviser
of various entities Precision has interests
in, including as Chairman of Litigation
Lending and of Prezzee, Skyfii and
Lenders Direct.
Shaun holds a Bachelor of Arts (Major
in Jurisprudence), Bachelor of Law and
Graduate Diploma in Legal Practice
from the University of Adelaide and is a
Barrister and Solicitor of the High Court
of Australia.
Shaun is also a Fellow of the Australian
Institute of Company Directors, a
member of the Young Presidents’
Organisation, and of the President’s
Council of the Art Gallery of NSW.
Philanthropy is also a key part of
Shaun’s activities, and he acts as Deputy
Chairman of Life Education Australia, is a
Director of the Prince’s Trust, a Director
of the Chinese Language and Culture
Education Foundation of Australia, and
founder of his own charity, the Heartfelt
Foundation.
Brodie was appointed Chairman in
March 2021, having first joined iSelect
Board as an Independent Non-Executive
Director in September 2014. Brodie
also spent two years as interim CEO for
the Company between April 2018 and
October 2020. Brodie has over 15 years’
domestic and international experience in
private equity, investment banking and
corporate finance.
Brodie is currently Chair of Shaver Shop
Group Limited (ASX: SSG) (since 2013)
Endota Spa Pty Ltd, Industry Beans Pty
Ltd, Hungry Hungry Pty Ltd and Prism Pty
Ltd, and is a Non-Executive Director of
Bailador Technology Investments Limited
(ASX: BTI) (since 2019).
Previously, Brodie was the CEO of
Melbourne Racing Club (2013 to 2017)
and prior to that worked for Investec
Bank from 2010 to 2013 where he was
responsible for building a high-net-worth
private client business.
He also worked for Westpac where he
grew the institutional bank’s presence
in Victoria, South Australia and Western
Australia, and from 2006 to 2010
held the role of Investment Director at
Westpac’s private equity fund.
During his career Brodie has also worked
at leading accounting and investment
firms including Deloitte, Nomura and
Goldman Sachs.
Brodie holds a Bachelor of Commerce
and MBA from the University of
Melbourne and is a member of
Chartered Accountants in Australia and
New Zealand (CA ANZ).
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Bridget Fair
Melanie Wilson
Geoff Stalley
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Member of the Audit and Risk
Management Committee, Remuneration
Committee, and Nominations Committee
Bridget was appointed to the iSelect
Board in September 2013 and is a
senior media executive with over 20
years’ experience in corporate affairs,
government relations, business strategy
and commercial negotiation in the
media, technology and communications
sectors.
Bridget joined Free TV Australia as Chief
Executive Officer in February 2018.
Bridget previously held a number of
senior roles with Seven West Media and
has also worked with the ABC and SBS.
Bridget is a former Chairman of
Screenrights and has been on the
Boards of OzTAM and Freeview.
She is a Board member of the Judith
Neilson Institute for Journalism and
Ideas. Bridget is also a Graduate of
the Australian Institute of Company
Directors.
Chair of the Audit and Risk Management
Committee, and a Member of the
Remuneration and Nominations
Committees
Melanie was appointed to the iSelect
Board in March 2016 and brings
extensive experience in online business
and digital marketing. In her former
role as Head of Online for BIG W she
managed Australia’s largest general
merchandise e-commerce website.
Melanie has over 12 years’ experience
in senior management roles across
Australian and global retail brands
including Limited Brands (Victoria’s
Secret, Bath & Bodyworks), Starwood
Hotels and Woolworths. She also held
corporate finance and strategy roles
with leading investment banks and
management consulting firms including
Goldman Sachs and Bain & Company.
Melanie is currently a Non-executive
Director of JB HiFi Limited (ASX: JBH)
(since 2020), EML Payments (ASX: EML)
(since 2018) and Baby Bunting Group
Ltd (ASX: BBN) (since 2016). She was
previously a Non-Executive Director of
Shaver Shop Group Limited (ASX: SSG)
(2016 to 2020).
Melanie holds a Master in Business
Administration (MBA) degree from the
Harvard Business School and a Bachelor
of Commerce (Honors) degree from the
University of Queensland.
Member of the Audit and Risk
Management Committee
Geoff was appointed to the iSelect
Board in December 2018 and is an
entrepreneurial senior executive
with more than 25 years’ consistent
success in starting, building, growing
and improving the performance of
businesses.
Geoff joined Booktopia (ASX: BKG) in
2020 as the Chief Financial Officer to
lead the IPO and establish the business
as a listed entity on the ASX. He was
previously the Chief Growth Officer for
Serco Asia Pacific, a global public sector
services business. Geoff has a long
career working for major professional
services firms (AT Kearney, Andersen,
EY and Deloitte) for global and
Australian clients on projects spanning
corporate innovation, new business
growth, complex transformations and
merger integration.
Geoff is also the Chair of Uplifting
Australia, a not-for-profit organisation
focused on the emotional wellbeing of
children; Chair of the Advisory Board
for a consulting business Exent; and a
mentor to a number of start-ups at Stone
& Chalk.
Geoff is a Graduate of the Australian
Institute of Company Directors, holds a
Master of Economics (Macq), a Bachelor
of Business (UTS), and is a member of
Chartered Accountants in Australia and
New Zealand (CA ANZ) and CPA.
iSelect Annual Report 2021
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Leadership
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Warren Hebard
Chief Executive Officer
Vicki Pafumi
Executive – Finance & Strategy
Warren was appointed CEO in
November 2020. He first joined iSelect
in April 2018 as Chief Marketing Officer
(CMO) before his role was expanded in
June 2020 to also include responsibility
for iSelect’s commercial partnerships.
Warren brings extensive management
and data-led decision making
experience to iSelect.
Prior to joining iSelect, Warren was
Chief Marketing Officer at William Hill
Australia. He previously held senior
management roles within both agency
and in-house environments, including
Brand Director with online bookmaker
TomWaterhouse.com where he was
responsible for launching the brand into
the Australian marketplace.
Warren holds a Bachelor of Business
Marketing and has attended Harvard
Business School Executive Education
programs in 2016, 2017 and 2019.
Vicki joined iSelect in November
2015 and held senior roles within the
Company’s finance and operations
functions before being appointed Chief
Financial Officer (CFO) in July 2018.
Prior to Vicki’s appointment as CFO, she
held the role of Interim CFO from 27
January 2016 to 3 July 2017 and from 17
November 2017 to 1 July 2018.
Previously, Vicki was responsible for
Workforce Planning, Dialler Operations
and Project Management as well
as the management of our Cape
Town business. Vicki has over 25
years’ experience spanning all areas
of finance, six sigma, supply chain,
operations and aftermarket.
A results-driven professional with
extensive people management
experience, Vicki is passionate about
leading and developing individuals to
succeed and be their best.
Vicki holds a Bachelor of Business
(Accountancy, Law and Economics
major) from Monash University, is a
qualified CPA and is a member of
the Australian Institute of Company
Directors.
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iSelect Annual Report 2021
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Katherine Briggs
Sonya Oakley
Michael White
Executive – General Counsel
Executive – People & Culture
Executive – Sales & Operations
Katherine joined iSelect in May 2021 and
leads the Legal, Company Secretariat,
Risk and Compliance teams. An
established leader, she brings more
than 20 years’ experience across a
range of areas including corporate
governance, regulatory change and
mergers and acquisitions. Katherine has
worked across a variety of industries
including financial services, payments,
insurance, and the online sector.
Prior to joining iSelect, Katherine was
Executive Manager, Client and Conduct
at Westpac.
Katherine is a graduate of the Australian
Institute of Company Directors and
holds a Bachelor of Laws and Bachelor
of Arts from The Australian National
University.
Sonya joined iSelect in April 2019 and is
responsible for the Company’s Human
Resources, Safety & Wellbeing functions.
A highly astute, pragmatic and authentic
leader in People & Culture, Sonya has
an extensive understanding of strategic
and operational best practice human
resources.
Sonya brings a great depth of relevant
HR leadership experience to iSelect
through senior HR roles within mid-
large businesses. Sonya joined iSelect
from Telstra, where she was General
Manager HR for IT & Digital Solutions
and previously held the role of Global
Head of Talent Acquisition and Career
Services. Prior to joining Telstra, Sonya
was the Director of Human Resources
ANZ at Delaware North and spent over
a decade with the Coles Group in a
variety of specialist senior positions.
Sonya holds a Bachelor of Economics
from the University of Newcastle and
a Graduate Diploma in Psychology
from Monash University. She is also a
Certified Professional of the Australian
Human Resources Institute.
Michael joined iSelect in February 2016
as Head of Commercial – Health, then
taking on the role of Group Executive –
Health & General Insurance in April 2017
and into his current role of Executive –
Sales & Operations in June 2020.
A commercial and results-orientated
executive, Michael’s experience spans
all major retail sectors including grocery,
discount and department stores.
Michael’s successful track record in
growing businesses is underpinned by
a strategic and customer-led approach,
while also focusing on building people
and business capability.
Prior to joining iSelect, Michael held
senior sales and marketing roles at
Masterfoods (MARS Group), Manassen
Foods (Bright Foods), Hallmark, FIJI
Water, Valcorp Fine Foods and Heinz.
Michael holds both a Bachelor
of Business and Masters of
Entrepreneurship & Innovation from
Swinburne University of Technology and
has attended Harvard Business School
Executive Education programs in 2020.
iSelect Annual Report 2021
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Leadership
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Justin Logan
Acting Executive – Commercial
Appointed July 2021
Justin joined iSelect in 2017 as Head of
Commercial (Telco & Energy) and was
welcomed into the iSelect Executive
team in 2021.
Justin has extensive expertise in
Business Development, Relationship
Management and Sales across the
Fintech Industry and financial markets.
Originally from a Foreign Exchange
dealing background, Justin has held
numerous senior positions included
leading National and APAC Sales teams
in FX and International Payments and
was the Country Manager for Western
Union Business Solutions.
Justin holds a Bachelor of Economics
from Monash University.
Andrew Charenko
Executive – Technology
Appointed July 2021
Paul Coco
Executive – Marketing
Appointed July 2021
Andrew joined iSelect in January 2021
as Head of Technology and was later
welcomed into the iSelect Executive
team in July 2021.
Andrew brings over 17 years’ experience
scaling businesses through strategic
technology change, the creation of
forward-focused digital roadmaps and
the development of high performance,
multi-skilled teams built to deliver at
pace.
Previous to his role at iSelect, Andrew
has held various senior leadership
positions, covering Architecture,
Security, Engineering and Infrastructure,
at carsales.com, Sportsbet and BetEasy.
Paul joined iSelect in March 2017 as
Digital Performance Lead, before
moving into the role of Head of Digital
Marketing in 2020 and was welcomed
into the iSelect Executive team as
Executive - Marketing in 2021.
Paul has a breadth of experience and
knowledge across all facets of digital
marketing strategy having previously
worked across various Finance, Real
Estate, Retail, Hospitality, Health
Insurance and Government sectors.
Paul started his career at Dentsu
Aegis, a multinational media and digital
marketing communication company
where he specialised in performance
marketing. He developed over his time
there to move on to lead multiple highly-
skilled digital performance teams and
become responsible for product growth
and delivering on large scale business
opportunities and pitches as an agency
Business Director.
Paul holds qualifications in Digital
Marketing from Squared Online, a
Bachelor of Exercise and Sports Science
(BSc) from Deakin University and
completed a Mini MBA in 2020.
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iSelect Annual Report 2021
“ Chris was great, very knowledgeable
and gave great recommendations. He
was understanding of my situation and
answered all the questions I had in ways
that really made sense and helped me
with my decisions”
Broadband: Julia, Box Hill VIC
iSelect Annual Report 2021
21
Corporate
Governance
Statement
service. I am now saving $50 a
month and getting much better
“ Excellent and personalised
health coverage”
Health: Maria, Northmead, NSW
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iSelect Annual Report 2021
This Corporate Governance Statement (Statement) explains how the Board of iSelect Limited (Board) oversees the management
of iSelect Limited’s (iSelect or Company) business. The Board is responsible for the overall corporate governance of iSelect,
including establishing and monitoring key performance goals. The Board monitors the operational and financial position and
performance of iSelect and oversees its business strategy including approving the strategic goals of iSelect and considering and
approving an annual operating plan, including a budget.
As at the date of this report, the Board is comprised of a majority of Independent Non-Executive Directors as follows:
DIRECTORS
POSITION
APPOINTED
PERIOD IN OFFICE
INDEPENDENT
Brodie Arnhold
Non-Executive Chairman
25 September 2014
6 years, 11 months
Shaun Bonett
Non-Executive Director
7 March 2007
14 years, 5 months
Bridget Fair
Non-Executive Director
30 September 2013
7 years, 10 months
Melanie Wilson
Non-Executive Director
31 March 2016
5 years, 4 months
Geoff Stalley
Non-Executive Director
1 December 2018
2 years, 8 months
No*
Yes
Yes
Yes
Yes
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*
Denoted as “not independent” in conformity with the formal temporal criterion in ASX guidance in the 4th edition Corporate Governance Principles and
Recommendations, because in addition to his directorship, Mr Arnold has held other Company roles in the past 3 years, principally as interim CEO in the
period April 2018 to October 2020.
The Board is committed to maximising iSelect’s performance, generating appropriate levels of shareholder value and financial
return, and sustaining the growth and success of iSelect. In conducting iSelect’s business with these objectives, the Board seeks
to ensure that iSelect is properly managed to protect and enhance shareholder interests, and that iSelect, its Directors, officers
and personnel operate in an appropriate environment of corporate governance. Accordingly, the Board has created a framework
for managing iSelect, including adopting relevant internal controls, risk management processes and corporate governance
policies and practices, which it believes are appropriate for iSelect’s business and which are designed to promote the responsible
management and conduct of iSelect.
The ASX Corporate Governance Council has developed and released its 4th edition ASX Corporate Governance Principles and
Recommendations (ASX Recommendations) for Australian listed entities in order to promote investor confidence and to assist
companies in meeting stakeholder expectations. The recommendations are not prescriptions, but guidelines. However, under the
ASX Listing Rules, iSelect is required to provide a statement in its Annual Report disclosing the extent to which it has followed the
ASX Recommendations in the reporting period. Where iSelect does not follow an ASX Recommendation, it must identify the ASX
Recommendation that has not been followed and give reasons for not following it.
An overview of iSelect’s main corporate governance practices is set out below.
Details of iSelect’s key policies and charters for the Board and each of its committees are available in the Our Company/
Governance section of the Company’s website at www.iselect.com.au.
This Statement is current as at 24 August 2021 and has been approved by the Board.
iSelect Annual Report 2021 23
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PRINCIPLE 1 – LAY SOLID
FOUNDATIONS FOR MANAGEMENT
AND OVERSIGHT
A listed entity should clearly delineate the respective
roles and responsibilities of its Board and management
and regularly review their performance.
Recommendation 1.1
A listed entity should have and disclose a Board Charter
setting out:
(a) The respective roles and responsibilities of its Board and
management; and
(b) Those matters expressly reserved to the Board and those
delegated to management.
The Board has adopted a formal Charter that details the
functions and responsibilities of the Board. The Board Charter
also establishes the functions reserved to the Board and those
powers delegated to management. The Board delegates to
the Chief Executive Officer (CEO) the authority and power to
manage iSelect and its businesses within the levels of authority
specified.
The CEO’s role includes the day-to-day management of
iSelect’s operations including effective leadership of the
management team in addition to the development of strategic
objectives for the business.
The number of Board and Board Committee meetings held
during the year along with the attendance by Directors is set
out in the Directors’ Report.
The Board is appointed by shareholders who hold them
accountable for the Company’s governance, performance,
strategies and policies. To assist with the efficient and effective
discharging of its responsibilities, the Board Charter allows the
Board to delegate powers and responsibilities to committees
established by the Board.
The Board strives to build sustainable value for shareholders
whilst protecting the assets and reputation of iSelect. The
Board’s responsibilities include but are not limited to:
• approving iSelect’s strategies, budgets, plans and policies;
• assessing performance against strategies implemented by
management;
•
reviewing operating information to understand the state of
health of the Company;
• approval of proposed acquisitions, divestments and
significant capital expenditure;
• approval of capital management including approving the
issue or allotment of equity, borrowings, dividend policy
and other financing proposals;
• ensuring that iSelect operates an appropriate corporate
governance structure and compliance systems;
• approving iSelect’s risk management strategy and
frameworks, and monitoring their effectiveness;
• approval and monitoring of the annual and half year
financial reports; and
• appointment and removal of the CEO.
The Board may from time to time establish appropriate
committees to assist in the discharge of its responsibilities.
The Board has established an Audit and Risk Management
Committee, a Nominations Committee and a Remuneration
Committee. Other committees may be established by the Board
as and when required. Membership of Board committees will
be based on the needs of iSelect, relevant legislative and other
requirements and the skills and experience of individual Directors.
The Board Charter provides that, with guidance from the
Nominations Committee and, where necessary, external
consultants, the Board shall identify candidates with appropriate
skills, experience, expertise and diversity in order to discharge
its mandate effectively and to maintain the necessary mix of
expertise on the Board.
Directors may obtain independent professional advice at
iSelect’s expense on matters arising in the course of their Board
and committee duties, after obtaining the Chair’s approval.
A copy of the Board Charter is available in the Our Company/
Governance section of the Company’s website at
www.iselect.com.au
Recommendation 1.2
A listed entity should:
(a) undertake appropriate checks before appointing a Director
or Senior Executive or putting someone forward for election
as a Director; and
(b) provide security holders with all material information in its
possession relevant to a decision on whether or not to elect
or re-elect a Director.
The Board is committed to ensuring appropriate checks are
conducted before appointing a person, or putting forward a
candidate for election to shareholders, as a Director. The types
of verifications the Company typically undertakes include checks
as to the proposed Director’s character, experience, education,
criminal and bankruptcy history.
All information relevant to a decision to elect or re-elect a
Director will be provided to shareholders before a resolution
is put forward to shareholders at the General Meeting. This
information will include details of any other material directorships
and biographical details, including relevant qualifications and
experience.
Recommendation 1.3
A listed entity should have a written agreement with each
Director and Senior Executive setting out the terms of their
appointment.
Non-Executive Directors are appointed pursuant to formal letters
of appointment setting out the key terms and conditions of the
appointment including details regarding Directors’ remuneration,
role and responsibilities, confidentiality of information, disclosure
of interests, matters affecting independence and entering into
deeds of indemnity and access. Each Senior Executive also has
a written employment contract which sets out the terms of their
employment.
Recommendation 1.4
The Company Secretary of a listed entity should be accountable
directly to the Board, through the Chair, on all matters to do with
the proper functioning of the Board.
The Board is responsible for appointing and removing the
Company Secretary and the Company Secretary shall be
accountable to the Board, through the Chair, on all corporate
governance matters. All Directors shall have direct access to the
Company Secretary.
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iSelect Annual Report 2021
Recommendation 1.5
A listed entity should:
(a) have and disclose a Diversity Policy;
(b) through its Board or a Committee of the Board set measurable objectives for achieving gender diversity in the composition of
its Board, Senior Executives and workforce generally;
(c) disclose in relation to each reporting period:
(i)
the measurable objectives set for that period to achieve gender diversity;
(ii) the entity’s progress towards achieving those objectives; and
(iii) either:
(a) the respective proposition of men and women on the Board, in Senior Executive positions and across the whole
workforce (including how the entity has defined ‘Senior Executive’ for these purposes); or
(b) if the entity is a ‘relevant employer’ under the Workplace Gender Equality Act, the entity’s most recent ‘Gender Equality
Indicators’, as defined in and published under that Act.’
If the entity was part of the S&P/ASX 300 Index at the commencement of the reporting period, the measurable objective for
achieving gender diversity in the composition of its Board should be to have not less than 30% of its Directors of each gender
within a specified period.
The workforce of iSelect is made up of individuals with diverse skills, backgrounds, perspectives and experiences and this diversity
is recognised, valued and respected by the Company. In recognition of the Company’s workforce, the Company has established a
‘Diversity and Inclusion Policy’ and also formed the iSelect Diversity Council. The iSelect Diversity Council is committed to its goal
of fostering an inclusive and equitable work environment for all of its people. The iSelect Diversity Council is charged with ensuring
that iSelect and all of its Directors, employees and contractors comply with the Diversity and Inclusion Policy.
The Diversity and Inclusion Policy is publicly available in the Our Company/Governance section of the Company’s website at
www.iselect.com.au
Measurable objectives for achieving gender diversity set
The Diversity and Inclusion Policy includes requirements for the Board to establish measurable objectives for achieving gender
diversity and for the Board to assess annually both the objectives and progress in achieving them. The objectives for the year
ended 30 June 2021 and the progress towards achieving them are outlined below:
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OBJECTIVES
KEY PERFORMANCE INDICATOR
ACTIONS
Recruitment & Talent
Development
Increased female representation
in applicant pool and hires.
Removal of CVs for consultant hiring and focus on
job simulation screening tool.
Gender Representation
Increased female representation
in target areas.
Flexible working arrangements and interstate hiring
implemented and have positively impacted our
female representation in our highest volume hiring.
Introduction of monthly networking event focused
on career development and work life balance.
STATUS
Complete
Complete
Increase Diversity and
Inclusion Awareness
Increase Mental Health &
Disability Support by improving
employee and manager
awareness.
Gender Equality Indicators
Series of events to destigmatise mental health.
Complete
Unconscious bias awareness sessions.
The proportion of men and women on the Board, in Senior Executive positions and across the entire workforce as at 30 June 2021
was as follows:
CATEGORY
Entire Workforce
Senior Executives (including CEO & Executive Team)
Board
FEMALE %
MALE %
37%
33%
40%
63%
67%
60%
iSelect remains committed to gender diversity on its Board and at all tiers of the Company.
iSelect Annual Report 2021 25
Recommendation 1.6
A listed entity should:
(a) have and disclose a process for periodically evaluating the
performance of the Board, its committees and individual
Directors; and
(b) disclose for each reporting period whether performance
evaluation has been undertaken in accordance with that
process during or in respect of that period.
The Company’s Board Charter details a process for the review
of Board, committee and individual Directors’ performance.
During the year ended 30 June 2021, an informal Board review
was conducted to ensure that it is working effectively and
efficiently in fulfilling its functions.
The Chair of the Board also held discussions with individual
Directors as to their performance.
Recommendation 1.7
A listed entity should:
(a) have and disclose a process for evaluating the
performance of its Senior Executives at least once every
reporting period;
(b) disclose for each reporting period whether a performance
evaluation has been undertaken in accordance with that
process during or in respect of that period.
The Company’s Board Charter details a process for the review
of the performance of the CEO.
The performance of the Company’s Senior Executives,
including the CEO, is reviewed regularly to ensure that
Senior Executive members continue to perform effectively in
their roles. Performance is measured against the goals and
Company performance set at the beginning of the financial
year and reviewed throughout the year. A performance
evaluation for Senior Executives has occurred during the year
in accordance with this process.
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PRINCIPLE 2 – STRUCTURE THE
BOARD TO BE EFFECTIVE AND ADD
VALUE
The Board of a listed entity should be of an appropriate
size and collectively have the skills, commitment and
knowledge of the entity and the industry in which it
operates, to enable it to discharge its duties effectively
and to add value.
Recommendation 2.1
The Board of a listed entity should:
(a) have a Nomination Committee which:
(i) has at least three members, a majority of whom are
independent; and
(ii) is chaired by an Independent Director. And disclose:
(iii) the Charter of the Committee;
(iv) the members of the Committee; and
(v) as at the end of each reporting period, the number of
times the Committee met throughout the period and
the individual attendances of the members at those
meetings.
The Board has an established Nominations Committee which
consists of a majority of Independent Directors, is chaired by
an Independent Director and has at least three members.
The committee currently comprises Shaun Bonett (Chair),
Bridget Fair and Melanie Wilson.
The Nominations Committee meets as often as is required
by the Nominations Committee Charter or other policies
approved by the Board to govern the operation of the
Nominations Committee. The number of Nominations
Committee meetings held during the year is set out in the
Directors’ Report.
Following each meeting, the Nominations Committee
reports to the Board on any matter that should be brought
to the Board’s attention and on any recommendation of the
Nominations Committee that requires Board approval.
Further details for the procedure for the selection of new
Directors to the Board, the re-election of incumbent Directors
and the Board’s policy for the nomination of Directors are
contained within the Company’s ‘Nominations Committee
Charter’ and ‘Board Charter’.
A copy of the Company’s ‘Nominations Committee Charter’ is
publicly available in the Our Company/Governance section of
the Company’s website at www.iselect.com.au.
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iSelect Annual Report 2021
Recommendation 2.2
A listed entity should have and disclose a Board skills matrix setting out the mix of skills that the Board currently has or is looking
to achieve in its membership.
The Nominations Committee is responsible for reviewing and making recommendations in relation to the composition and
performance of the Board and its committees and ensuring that adequate succession plans are in place (including for the
recruitment and appointment of Directors and senior management). Independent advice will be sought where appropriate.
The criteria to assess nominations of new Directors are reviewed annually and the Nominations Committee regularly compares
the skill base of existing Directors with that required for the future strategy of iSelect to enable identification of attributes required
in new Directors. In searching for and selecting new Directors for the Board, the Committee assesses certain criteria to make
recommendations to the Board. The criteria which will be assessed include the candidate’s background, experience, professional
skills, personal qualities, gender, capability to devote the necessary time and commitment to the role, potential conflicts of interest,
independence and whether their skills and experience will complement the existing Board.
The Board’s objective is to have an appropriate mix of expertise and experience on the Board and its committees so that it can
effectively discharge its corporate governance and oversight responsibilities. This mix and depth of experience is described in the
Board skills matrix as follows:
SKILLS AND EXPERIENCE
EXPLANATION
Accounting and Financial Reporting Accounting qualifications and/or experience assists the Board with the
Legal and Compliance
Strategy
Corporate Governance
provision of financial expertise in overseeing the integrity of financial
reporting.
Legal qualifications and/or experience assists the Board in meeting its
legal and compliance obligations.
Experience in strategy assists the Board in developing and sustaining
appropriate strategies to ensure continued growth for the Company.
Experience in the development of policies and frameworks supports
proper corporate governance including the monitoring of material risks.
Remuneration and Human Resource
Management
Expertise in remuneration and human resource management assists with
the Board’s role in overseeing talent management and development,
including succession planning.
Government Relations
Experience in working with government, government organisations and
regulators assists the Company to operate effectively and compliantly in
regulated industries.
CEO and Board Experience
Performing in a CEO or Senior Executive role assists with the
development of appropriate business strategies and operating plans.
Industry Experience
Experience in a senior position within industry assists the Board with
understanding and improving the Company’s processes and strategies.
Audit and Risk Management
Experience in audit and risk management assists the Board by providing
an understanding of financial management and developing appropriate
processes and strategies to deal with risk.
NUMBER OF
DIRECTORS
3
2
5
4
3
2
5
5
4
To the extent that any skills or experience are not directly represented on the Board, they are augmented through senior
management and external advisors. Full details of each Directors’ relevant skills and experience are set out on page 16 and 17
of this report.
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iSelect Annual Report 2021 27
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Recommendation 2.3
A listed entity should disclose:
(a) the names of the Directors considered by the Board to be
Independent Directors;
(b) if a Director has an interest, position or relationship
that might raise issues about the independence of a
Director but the Board is of the opinion that it does not
compromise the independence of the Director, the nature
of the interest, position or relationship in question and an
explanation of why the Board is of that opinion; and
(c) the length of service of each Director.
The Board considers an Independent Director to be a
Non-Executive Director who is not a member of iSelect’s
management and who is free of any business or other
relationship that could materially interfere with or reasonably
be perceived to interfere with the independent exercise of
their judgement. The Board will consider the materiality of any
given relationship on a case-by-case basis and has adopted
guidelines to assist in this regard. The Board reviews the
independence of each Director in light of interests disclosed to
the Board from time to time.
The iSelect Board Charter sets out guidelines and thresholds
of materiality for the purpose of determining independence of
Directors in accordance with the ASX Recommendations and
has adopted a definition of independence that is based on that
set out in the ASX Recommendations.
The Board considers thresholds of materiality for the purpose
of determining ‘independence’ on a case- by-case basis,
having regard to both quantitative and qualitative principles.
Without limiting the Board’s discretion in this regard, the Board
has adopted the following guidelines:
• The Board will determine the appropriate base to apply
(e.g. revenue, equity or expenses), in the context of each
situation;
•
In general, the Board will consider an affiliation with a
business that accounts for less than 5% of the relevant
base to be immaterial for the purpose of determining
independence. However, where this threshold is
exceeded, the materiality of the particular circumstance
with respect to the independence of the particular Director
should be reviewed by the Board; and
• Overriding the quantitative assessment is the qualitative
assessment. Specifically, the Board will consider whether
there are any factors or considerations which may mean
that the Director’s interest, business or relationship could,
or could be, reasonably perceived to materially interfere
with the Director’s ability to act in the best interests of
iSelect.
The Board considers that other than Brodie Arnhold who
served as the Company’s CEO during April 2018 and October
2020, all other Non-Executive Directors (being Shaun Bonett,
Bridget Fair, Geoff Stalley and Melanie Wilson) are free from
any business or any other relationship that could materially
interfere with, or reasonably be perceived to interfere with, the
independent exercise of the Director’s judgement and is able
to fulfil the role of Independent Director for the purpose of the
ASX Recommendations.
Brodie Arnhold is denoted as “not independent” in conformity
with the formal temporal criterion as set out in the 4th Edition
ASX Corporate Governance Principles and Recommendations
(ASX Recommendations), because in addition to his
directorship, Brodie has held other Company roles in the past
3 years, principally as interim CEO in the period April 2018 –
October 2020. Aside from the Company roles (and related
performance incentives associated with his interim CEO role,
the terms of which have been disclosed), the Board is satisfied
that Brodie fulfils the other ASX enunciated criteria for genuine
independence as set out in sections 2.3 and 2.5 of the ASX
Recommendations.
One of the five Directors of the Company (Shaun Bonett)
has served for a term of more than ten years. The Company
considers that Shaun Bonett’s sustained knowledge of
the Company enables him to continue to make a strong
contribution as an Independent Director of iSelect.
Recommendation 2.4
The majority of the Board of a listed entity should be
Independent Directors.
The Board consists of a majority of Independent Directors.
Recommendation 2.5
The Chair of the Board of a listed entity should be an
Independent Director, and in particular, should not be the same
person as the CEO of the entity.
The Board recognises the ASX Recommendation that the
Chair should be an Independent Director. However, as noted,
following the retirement of Independent Non-executive Chair,
Christopher Knoblanche on 28 February 2021, Brodie Arnhold
was appointed as Non-Executive Chair (effective 1 March
2021). Although not considered an Independent Director for
the reasons highlighted in Recommendation 2.3, the Board
believes that an independent Chair is not necessary as Brodie
Arnhold’s experience and industry knowledge makes him
the most appropriate person to lead the Board at this time
and aside from the Company roles (and related performance
incentives associated with his interim CEO role, the terms
of which have been disclosed), the Board is satisfied that
Brodie fulfils the other ASX enunciated criteria for genuine
independence as set out in sections 2.3 and 2.5 of the ASX
Recommendations.
The role of Chair and CEO were not exercised by the same
individual at any time during the year ended 30 June 2021.
Recommendation 2.6
A listed entity should have a program for inducting new
Directors and for periodically reviewing whether there is
a need for existing Directors to undertake professional
development to maintain the skills and knowledge needed to
perform their role as Directors effectively.
The Board recognises the importance of having a program
for inducting new Directors and providing appropriate
professional development opportunities for Directors to
maintain the skills to perform their role as Directors effectively.
The induction program for new Directors includes briefings
by the CEO and other members of senior management about
iSelect. The briefings will provide details on iSelect’s structure,
people, policies, culture, business strategies and performance.
The induction program also includes site visits to review
operations and understand the industries in which iSelect
operates.
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iSelect Annual Report 2021
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The Company operates a program of professional
development for Directors including regular written updates
on key developments within corporate governance and
ad-hoc seminars on relevant topics including corporate
governance and accounting. Formal professional development
opportunities for Directors are considered by the Chair on a
case-by-case basis.
PRINCIPLE 3 – ACT ETHICALLY AND
RESPONSIBLY
A listed entity should instill and continually reinforce
a culture across the organisation of acting lawfully,
ethically and responsibly.
Recommendation 3.1
A listed should articulate and disclose its values.
The Board recognises that it has a responsibility for setting
the ethical tone and standards of the Company and iSelect’s
Senior Executives recognise that they have a responsibility to
implement practices that are consistent with those standards.
The reputation of the Company is one of its most valuable
assets and the Board acknowledge the importance of
protecting this asset by acting ethically and responsibly.
Recommendation 3.4
A listed entity should:
(a) have and disclose an anti-bribery and corruption policy;
and
(b) ensure that the Board or a committee of the Board is
informed of any material breaches of that policy.
The Company has developed a ‘Anti-bribery and Corruption
Policy’ which applies to Directors, Officers and all employees
whether permanent or contracted or any other person directly
or indirectly linked to iSelect. All reportable gifts and benefits
are reviewed and reported to the Board on a quarterly basis.
Breaches of, or suspicious conduct are to be reported through
the relevant channels, such as the General Counsel or
Whistleblower hotline.
A copy of the ‘Anti-bribery and Corruption Policy’ is publicly
available in the Our Company/Governance section of the
Company’s website at www.iselect.com.au.
PRINCIPLE 4 – SAFEGUARD THE
INTEGRITY OF CORPORATE REPORTS
A listed entity should have appropriate processes to
verify the integrity of its corporate reports.
Recommendation 3.2
A listed entity should:
(a) have and disclose a code of conduct for its Directors,
Senior Executives and employees; and
(b) ensure that the Board or a committee of the Board is
informed of any material breaches of the code.
The Company has developed a ‘Code of Conduct’ Policy,
which has been fully endorsed by the Board and applies to all
Directors and employees. The Code of Conduct is designed to
identify and encourage:
•
•
•
the practices necessary to maintain confidence in the
Company’s integrity;
the practices necessary to take into account the
Company’s legal obligations; and
the responsibility and accountability of individuals for
reporting and investigating reports of unethical practices.
A copy of the Company’s ‘Code of Conduct’ is publicly
available in the Our Company/Governance section of the
Company’s website at www.iselect.com.au.
Recommendation 3.3
A listed entity should:
(a) have and disclose a whistleblower policy; and
(b) ensure that the Board or a committee of the Board is
informed of any material incidents reported under that
policy.
The Board has developed a Whistleblower Policy, which
applies to Directors, Senior Executives and employees.
Any material breaches of the Policy are to be reported to the
Audit and Risk Management Committee immediately.
A copy of the Company’s Whistleblower Policy is publicly
available in the Our Company/Governance section of the
Company’s website at www.iselect.com.au.
Recommendation 4.1
The Board of a listed entity should:
(a) have an Audit Committee which:
(i) has at least three members, all of whom are Non-
Executive Directors and a majority of whom are
Independent Directors; and
(ii) is chaired by an Independent Director, who is not the
Chair of the Board.
and disclose:
(iii) the Charter of the Committee;
(iv) the relevant qualifications and experience of the
members of the Committee; and
(v) in relation to each reporting period, the number of
times the Committee met throughout the period and
the individual attendance of the members at those
meetings.
The Board has established an Audit and Risk Management
Committee to assist in the discharge of its responsibilities.
The role of the Audit and Risk Management Committee is to
assist the Board in fulfilling its responsibilities for corporate
governance and overseeing iSelect’s internal control
structure and risk management systems. The Audit and
Risk Management Committee also confirms the quality and
reliability of the financial information prepared by iSelect,
works with the external auditor on behalf of the Board and
reviews non-audit services provided by the external auditor,
to confirm they are consistent with maintaining external audit
independence.
The Audit and Risk Management Committee provides advice
to the Board and reports on the status and management
of the risks to iSelect. The purpose of the Committee’s risk
management process is to ensure that risks are identified,
assessed and appropriately managed.
iSelect Annual Report 2021 29
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The Board has adopted a policy regarding the services that
iSelect may obtain from its external auditor. It is the policy of
iSelect that the external auditor:
• Must be independent of iSelect and the Directors and
Senior Executives. To ensure this, iSelect requires a formal
confirmation of independence from its external auditor on
a six-monthly basis; and
• May not provide services to iSelect that are, or are
perceived to be, materially in conflict with the role of the
external auditor. Non-audit or assurance services that
may impair, or appear to impair, the external auditor’s
judgement or independence are not appropriate. However,
the external auditor may be permitted to provide additional
services which are not, or are not perceived to be,
materially in conflict with the role of the auditor, if the Board
or Audit and Risk Management Committee have approved
those additional services. Such additional services
may include financial audits, tax compliance, advice
on accounting standards and due diligence in certain
acquisition or sale transactions.
Information on the procedures for the selection and
appointment of the external auditor, and for the rotation of
external audit engagement partners is contained within the
Company’s ‘Audit and Risk Management Committee Charter’.
The Committee currently comprises Melanie Wilson (Chair),
Bridget Fair and Geoff Stalley.
The Board acknowledges the ASX Recommendations that the
Audit and Risk Management Committee should be chaired by
an Independent Director (who is not Chair of the Board) and
in recognition of this, Melanie Wilson currently chairs the Audit
and Risk Management Committee.
An Audit and Risk Management Committee Charter has
been adopted by the Board and sets out the functions and
responsibilities of the Committee.
The Audit and Risk Management Committee meets as often
as is required by the Audit and Risk Management Committee
Charter. The number of Audit and Risk Management
Committee meetings held during the year is set out in the
Directors’ Report.
The Chair of the Audit and Risk Management Committee
invites members of management and representatives of the
external auditor to be present at meetings of the Committee
and may seek advice from external advisors. The Audit
and Risk Management Committee regularly reports to
the Board about Committee activities, issues and related
recommendations.
A copy of the Company’s ‘Audit and Risk Management
Committee Charter’ is publicly available in the Our Company/
Governance section of the Company’s website at
www.iselect.com.au.
Recommendation 4.2
The Board of a listed entity should, before it approves the
entity’s financial statements for a financial period, receive
from its CEO and CFO a declaration that, in their opinion, the
financial records of the entity have been properly maintained
and that the financial statements comply with the appropriate
accounting standards and give a true and fair view of the
financial position and performance of the entity and that the
opinion has been formed on the basis of a sound system
of risk management and internal control which is operating
effectively.
Before approval of the financial statement for the periods
ended 31 December 2020 and 30 June 2021, the Board
received assurance from the CEO and the CFO that the
declaration provided in accordance with section 295A of
the Corporations Act is founded on a sound system of risk
management and internal control and that the system is
operating effectively in all material respects in relation to
financial reporting risks.
This assurance was given by Warren Hebard (the CEO) and by
Vicki Pafumi (the CFO) as required.
The Board has also received from the CEO and the CFO
written affirmations concerning the Company’s financial
statements as set out in the Directors’ Declaration.
Recommendation 4.3
A listed entity should disclose its process to verify the integrity
of any periodic corporate report it releases to the market that is
not audited or reviewed by an external auditor.
Any periodic report the Company releases to the market that
is not audited or reviewed by an external auditor is reviewed
and approved by the Board so that it is satisfied the report in
question is materially correct, balanced and provides investors
with appropriate information to make an informed investment
decision. Following review by the Board the report is formally
approved prior to release.
PRINCIPLE 5 – MAKE TIMELY AND
BALANCED DISCLOSURE
A listed entity should make timely and balanced
disclosure of all matters concerning it that a
reasonable person would expect to have a material
effect on the price and value of its securities.
Recommendation 5.1
A listed entity should have and disclose a written policy for
complying with its continuous disclosure obligations under
ASX Listing Rule 3.1.
As a company listed on the ASX, iSelect is required to comply
with the continuous disclosure requirements of the ASX Listing
Rules and the Corporations Act 2001. iSelect is required to
disclose to the ASX any information, with the exception of
certain carve-outs, concerning iSelect which is not generally
available and which, if it was made available, a reasonable
person would expect to have a material effect on the price or
value of iSelect’s securities.
The Board aims to ensure that shareholders and stakeholders
are informed of all major developments affecting iSelect’s
state of affairs. As such, iSelect has adopted a ‘Disclosure
Policy’ and ‘Shareholder Communication Policy’, which
together establish procedures to ensure that Directors and
senior management are aware of, and fulfil, their obligations
in relation to providing timely, full and accurate disclosure of
material information to iSelect’s stakeholders and comply with
iSelect’s disclosure obligations under the Corporations Act
and ASX Listing Rules. The ‘Disclosure Policy’ also sets out
procedures for communicating with shareholders, the media
and the market.
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iSelect Annual Report 2021
iSelect has formed a Disclosure Committee which meets
as frequently as needed to determine, among other things,
whether there are matters that require disclosure to the ASX.
The Disclosure Committee will make recommendations to
the Board on matters which may require disclosure to the
market. The members of the Disclosure Committee consist of
a Non-Executive Director, CEO, CFO and the General Counsel/
Company Secretary (Chair).
iSelect is committed to observing its disclosure obligations
under the ASX Listing Rules and the Corporations Act 2001.
Information is to be communicated to shareholders through
the lodgement of all relevant financial and other information
with the ASX and with continuous disclosure announcements
also made available on iSelect’s website, www.iselect.com.au.
A copy of the Company’s ‘Disclosure Policy’ and ‘Shareholder
Communication Policy’ are publicly available in the Our
Company/Governance section of the Company’s website at
www.iselect.com.au.
Recommendation 5.2
A listed entity should ensure that its Board receives copies of
all material market announcements promptly after they have
been made.
The Board receives confirmation of release from the ASX
Market Announcements Office whenever there has been a
market release by the Company.
Recommendation 5.3
A listed entity that gives a new and substantive investor or
analyst presentation should release a copy of the presentation
materials on the ASX Market Announcements Platform ahead
of the presentation.
The Company ensures that all investor presentations are
lodged with the ASX ahead of the presentation.
PRINCIPLE 6 – RESPECT THE RIGHTS
OF SHAREHOLDERS
A listed entity should provide its security holders with
appropriate information and facilities to allow them to
exercise their rights as security holders effectively.
Recommendation 6.1
A listed entity should provide information about itself and its
governance to investors via its website.
The Company maintains an investor section of its website,
which includes information about itself which is relevant to
shareholders and other stakeholders. The “Our Company”
section includes a Governance section, which includes
detailed information on the Company’s governance framework
and documents.
Recommendation 6.2
A listed entity should have an investor relations program that
facilitates effective two-way communication with investors.
The Board has adopted a ‘Shareholder Communication Policy’
which is designed to supplement the iSelect ‘Disclosure
Policy’. The ‘Shareholder Communication Policy’ aims to
promote effective communication with shareholders and other
stakeholders.
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The policy recognises the following key methods of
communication which will be used to provide information to
shareholders and other stakeholders:
•
•
•
•
releases to the Australian Securities Exchange (ASX) in
accordance with continuous disclosure obligations;
iSelect’s website;
iSelect’s annual and half-yearly reports;
the annual general meeting; and
• email and other electronic means.
In addition to the above-mentioned communication methods,
since listing on the ASX in 2013 the Company has maintained
an active investor relations program to facilitate effective two-
way communication with retail and institutional shareholders
and other relevant equity market stakeholders. This program
includes face to-face meetings with investors, broker analysts
and proxy firms as well as responding to shareholder enquiries
as appropriate. The Company utilises public investor webcasts
and conference calls for key announcements such as the full
year and half year financial results. The Board encourages
effective participation at iSelect’s General Meetings by
providing opportunity for shareholders to ask questions of the
Company’s Directors and auditors.
iSelect encourages shareholders to receive Company
information electronically by registering their email address
online with iSelect’s shareholder registry. The Company also
allows shareholders to communicate electronically with the
Company and share registry including providing shareholders
the ability to submit proxy voting instructions online.
A copy of the Company’s ‘Shareholder Communication Policy’
is publicly available in the Our Company/Governance section
of the Company’s website at www.iselect.com.au.
Recommendation 6.3
A listed entity should disclose how it facilitates and encourages
participation at meetings of security holders.
The Company encourages full participation by shareholders
at General Meetings during which they are invited to raise
questions or make comments regarding the operations and
performance of the Company.
Recommendation 6.4
A listed entity should ensure that all substantive resolutions at
a meeting of security holders are decided by a poll rather than
by a show of hands.
All resolutions put to security holders at a meeting of security
holders are decided by a poll.
Recommendation 6.5
A listed entity should give security holders the option to
receive communications from, and send communications to,
the entity and its security registry electronically.
The Company, and its share registry service provider, gives
security holders the option to receive communications
electronically.
iSelect Annual Report 2021
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PRINCIPLE 7 – RECOGNISE AND
MANAGE RISK
A listed entity should establish a sound risk
management framework and periodically review the
effectiveness of that framework.
Recommendation 7.1
The Board of a listed entity should:
(a) have a committee(s) to oversee risk, each of which:
(i) has at least three members, a majority of whom are
Independent Directors; and
(ii) is chaired by an Independent Director; and disclose
(iii) the Charter of the Committee;
(iv) the members of the Committee; and
(v) as at the end of each reporting period, the number of
times the Committee met throughout the period and
the individual attendances of the members at those
meetings.
As stated in Principle 4, the Board has established an Audit
and Risk Management Committee to assist in the discharge
of its responsibilities to establish a sound risk management
framework and periodically review the effectiveness of that
framework. This Committee is structured to ensure it consists
of a majority of Independent Directors and it is chaired by an
Independent Director.
The Company has also developed a ‘Risk Management
Framework’ which is publicly available in the Our Company/
Governance section of the Company’s website at
www.iselect.com.au
Recommendation 7.2
The Board or a committee of the Board should:
(a) review the entity’s risk management framework at least
annually to satisfy itself that it continues to be sound and
that the entity is operating with due regard to the risk
appetite set by the Board; and
(b) disclose, in relation to each reporting period, whether such
a review has taken place.
The Company’s ‘Board Charter’ provides that a function of the
Board with the guidance of the Audit and Risk Management
Committee is:
• approving policies on and overseeing the management of
business, financial and non-financial risks (including foreign
exchange and interest rate risks, enterprise risk and risk in
relation to occupational health and safety);
•
reviewing and monitoring processes and controls to
maintain the integrity of accounting and financial records
and reporting; and approving financial results and reports
for release and dividends to be paid to shareholders.
The Company’s ‘Audit and Risk Management Charter’ also
provides that the Committee’s specific function with respect to
risk management is to review and report to the Board that:
•
iSelect’s ongoing risk management program effectively
identifies all areas of potential risk;
• adequate policies and procedures have been designed
and implemented to manage identified risks;
• a regular program of audit is undertaken to test the
adequacy of and compliance with prescribed policies
regarding high risks; and
• proper remedial action is undertaken to redress areas of
weakness.
The Company seeks to take and manage risk in ways that will
generate and protect shareholder value and recognises that
the management of risk is a continual process and an integral
part of the management and corporate governance of the
business.
The Company acknowledges that it has an obligation to all
stakeholders, including shareholders, customers, employees,
contractors and the wider community and that the efficient
and effective management of risk is critical to the Company
meeting these obligations and achieving its strategic
objectives.
The Board, with assistance from the Audit and Risk
Management Committee, requires management to design and
implement a suitable risk management framework to manage
the Company’s material business risks. During the year,
management reported to the Board as to the effectiveness
of the Company’s management of its material business risks.
The Audit and Risk Management Committee is responsible
for evaluating the adequacy and effectiveness of a risk
management framework established by management.
The Audit and Risk Management Committee conducted a
review of the Company’s risk management framework during
the year and were satisfied that it continues to be sound
having regard to the size and complexity of the Company’s
operations.
Recommendation 7.3
A listed entity should disclose, if it has an internal audit
function, how the function is structured and what role it
performs.
The annual internal audit plan is approved by the Audit and
Risk Management Committee and the Committee has full
access to all functions, records, property and personnel of the
Company. The Committee also oversees relevant financial and
non-financial risks.
During this past reporting period, the Company has employed
the following process for evaluating and continually improving
the effectiveness of its risk management and internal control
processes:
•
•
•
the Audit and Risk Management Committee monitors the
need for an internal audit function having regard to the
size, location and complexity of the Company’s operations;
senior management facilitates the periodic review of
financial and non-financial systems and processes and
presents to the Committee the objectives and scope,
proposed outcomes and any recommendations arising
from the review; and
the Board reviews risk management and internal
compliance procedures at Board meetings and any risk
matters raised for consideration by senior management.
iSelect may use external service providers to supplement or
support the delivery of the Company’s internal audit function.
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Recommendation 7.4
A listed entity should disclose whether it has any material
exposure to environmental or social risks and, if it does, how it
manages or intends to manage those risks.
iSelect’s ‘Risk Management Framework’ supports its strategy
of creating an environment in which risk management
underpins consistently good practice – enabling informed
decisions that optimise returns within a specified appetite
for risk.
iSelect understands that “material exposure” in this context
means a real possibility that the risk in question could
substantively impact the Company’s ability to create or
preserve value for shareholders over the short, medium or
long term. In this context materiality is linked to the rating
attributed to residual risks taking into account the risk
mitigation strategies and controls in place, and “Very High”
rated risk would be considered material.
At the time of reporting, iSelect has no material exposure to
“Very High” rated risks to our economic, environmental and
social sustainability profile.
PRINCIPLE 8 – REMUNERATE FAIRLY
AND RESPONSIBLY
A listed entity should pay Director remuneration
sufficient to attract and retain high quality Directors
and design its executive remuneration to attract retain
and motivate high quality Senior Executives and to
align their interests with the creation of value for
security holders and with the entity’s values and risk
appetite.
Recommendation 8.1
The Board of listed entity should:
(a) have a Remuneration Committee which:
(i) has at least three members, a majority of whom are
independent Directors; and
(ii) is chaired by an independent Director; and disclose:
(iii) The Charter of the Committee;
(iv) The members of the Committee; and
(v) As at the end of each reporting period, the number of
times the Committee met throughout the period and
the individual attendance of the members at those
meetings.
The Board has established a Remuneration Committee
to assist in the discharge of its responsibilities. The role
of the Remuneration Committee is to review and make
recommendations to the Board on remuneration packages
and polices related to the Directors and Senior Executives. The
Remuneration Committee is also charged with ensuring that
the remuneration policies and practices are consistent with
iSelect’s strategic goals and human resources objectives.
The Remuneration Committee meets as often as is required
by the Remuneration Committee Charter. The number of
Remuneration Committee meetings held during the year is set
out in the Directors’ Report.
Following each meeting, the Remuneration Committee
reports to the Board on any matter that should be brought
to the Board’s attention and on any recommendation of the
Remuneration Committee that requires Board approval.
The Committee currently comprises Shaun Bonett (Chair),
Bridget Fair and Melanie Wilson.
The Board acknowledges the ASX Recommendations that
the Remuneration Committee should be chaired by an
Independent Director and in recognition of this, Shaun Bonett
currently chairs the Remuneration Committee.
A copy of the Company’s ‘Remuneration Committee Charter’ is
publicly available in the Our Company/Governance section of
the Company’s website at www.iselect.com.au.
Recommendation 8.2
A listed entity should separately disclose its policies and
practices regarding the remuneration of Non-Executive
Directors and the remuneration of Executive Directors and
other Senior Executives. iSelect clearly distinguishes the
structure of Non-Executive Directors’ remuneration from that of
Executive Directors and Senior Executives.
Non-Executive Director remuneration is fixed and Non-
Executive Directors do not participate in any ‘at risk’ incentive
plans. Remuneration paid to Senior Executives in the 2021
financial year includes fixed and variable components.
The remuneration policy for the Board and the remuneration
of each Director is set out in both the Remuneration Report,
which forms part of the Directors’ Report, and in Notes to the
Financial Statements.
The Board acknowledges the guidelines, which recommend
that Non-Executive Directors should not be provided with
retirement benefits other than superannuation. The Company
also notes that Brodie Arnhold has a notice period of 3 months,
which may constitute a retirement benefit. The Company
believes that a notice period for the Chair is appropriate to
ensure continuity.
Information on the performance evaluation and structure of
remuneration for the Company’s Senior Executives can be
found in the Remuneration Report, which forms part of the
Directors’ Report.
Recommendation 8.3
A listed entity, which has an equity based remuneration
scheme, should:
(a) Have a policy on whether participants are permitted
to enter into transactions (whether through the use of
derivatives or otherwise) which limit the economic risk of
participating in the scheme, and
(b) Disclose that policy or a summary of it.
The Company’s ‘Share Trading Policy’ prohibits the Directors
and Senior Executives from entering into transactions or
arrangements which limit the economic risk of participating in
unvested entitlements.
The Company’s Long Term Incentive and Performance Right
Plan was approved by shareholders at the 2018 Annual
General Meeting.
iSelect Annual Report 2021 33
of the Directors in office at the date of this report appear on
pages 16 and 17 of this annual report.
COMPANY SECRETARY
Mark Licciardo
Mark Licciardo is Managing Director of Mertons Corporate
Services Pty Ltd which provides company secretarial and
corporate governance consulting services to ASX listed and
unlisted public and private companies.
As a former Company Secretary of ASX 50 companies,
Transurban Group and Australian Foundation Investment
Company Limited, his expertise includes working with Boards
of Directors in the areas of corporate governance, business
management, administration, consulting and company
secretarial matters. Mark holds a Bachelor of Business Degree
(Accounting) and a Graduate Diploma in Company Secretarial
Practice, is a Fellow of the Australian Institute of Company
Directors, the Governance Institute of Australia and the
Institute of Company Secretaries and Administrators.
Directors
Report
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The Directors present their report together with
the consolidated financial statements of the Group
comprising iSelect Limited and its subsidiaries for the
financial year ended 30 June 2021 and the auditor’s
report thereon.
DIRECTORS
The names of the Directors in office during or since the
end of the financial year are:
Chris Knoblanche AM
Non-Executive Chairman (resigned 28 February 2021)
Brodie Arnhold
Executive Director and Interim Chief Executive Officer
(resigned 31 October 2020)
Non-Executive Director (appointed 1 November 2020,
resigned 28 February 2021)
Non-Executive Chairman (appointed 1 March 2021)
Shaun Bonett
Non-Executive Director
Bridget Fair
Non-Executive Director
Melanie Wilson
Non-Executive Director
Geoff Stalley
Non-Executive Director
The above named Directors held office for
the whole of the period unless otherwise
specified. The qualifications, experience,
special responsibilities and other details
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iSelect Annual Report 2021
DIRECTORS’ MEETINGS
The number of meetings of Directors, including meetings of Committees of Directors, held during the year and the number of
meetings attended by each Director is presented below.
DIRECTORS
BOARD OF DIRECTORS
AUDIT AND RISK
MANAGEMENT
COMMITTEE
REMUNERATION
COMMITTEE
NOMINATIONS
COMMITTEE
C. Knoblanche
B. Arnhold
S. Bonett
B. Fair
M. Wilson
G Stalley
HELD^
ATTENDED
HELD^
ATTENDED
HELD^
ATTENDED
HELD^
ATTENDED
5
7
7
7
7
7
5
7
6
7
7
7
-
-
-
4
4
4
-
-
-
4
4
4
-
-
1
1
1
-
-
-
1
1
1
-
-
-
-
-
-
-
-
-
-
-
-
-
^ The number of meetings held indicates the total number held whilst the Director was in office during the course of the year.
PRINCIPAL ACTIVITIES
The principal activities during the financial year within the Group were health, life and car insurance policy sales, mortgage
brokerage, energy, broadband and financial referral services. There have been no significant changes in the nature of these
activities during the year.
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REVIEW OF RESULTS AND OPERATIONS1
Summary of financial results
Continuing Operations
Operating revenue
Gross profit
EBITDA
EBIT
NPAT
Reported Results (including discontinued operations)2
Operating revenue
Gross profit
EBITDA
EBIT
NPAT
EPS (cents)
Underlying Results3
Underlying EBITDA
Underlying EBIT
Underlying NPAT
Underlying EPS (cents)
2020
$’000
CHANGE
2021
$’000
110,970
43,542
11,450
120,425
34,522
(11,922)
976
(20,531)
(2,059)
(20,462)
111,059
43,578
8,471
(2,003)
(5,072)
(2.3)
17,399
6,925
4,685
2.1
125,270
35,868
(31,682)
(41,039)
(43,549)
(19.9)
9,966
1,357
509
0.2
(8%)
26%
196%
105%
90%
(11%)
21%
127%
95%
88%
88%
75%
410%
n.m.
n.m.
1
Throughout this report, certain non-IFRS information, such as EBITDA, EBIT, Net Profit after Tax (NPAT), Earnings Per Share (EPS), Conversion Ratio, Leads
and Revenue Per Sale (RPS) are used. Earnings before interest and income tax expense (EBIT) reflects profit for the year prior to including the effect of
net finance costs and income taxes. Earnings before interest, income tax expense, depreciation and amortisation (EBITDA) reflects profits for the year
prior to including the effect of net finance costs, income taxes, and depreciation and amortisation. The individual components of EBITDA and EBIT are
included as line items in the Consolidated Statement of Profit or Loss and Other Comprehensive Income. Non-IFRS information is not audited. Reference to
underlying results excludes the financial impacts of the iMoney performance, and material once-off transactions in reference to ACCC’s proceedings and
the JobKeeper subsidy.
2 Results include iMoney trading, which is classified as “discontinued operation” for statutory reporting purposes.
3 Refer to the Reported versus Underlying Results reconciliation on page 104. The reconciliation forms part of the Review of Results and Operations.
n.m.: not meaningful
iSelect Annual Report 2021 35
REVIEW OF RESULTS AND OPERATIONS
(CON’D)
Key Operating Metrics
Leads
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Summary of financial results (con’d)
Group financial performance and reported results
The Group operates in the online product comparison sector
and compares private health insurance, general insurance,
broadband, energy and personal financial products. The
Group maintains two brands, iSelect (www.iselect.com.au),
and Energy Watch (www.energywatch.com.au). It should be
noted that iSelect exited its iMoney (www.imoney.my) business
in Q1 FY21. The Group’s business model is comprised of four
key pillars that are linked: brand, lead generation, conversion
and product providers. The Group derives the majority of its
revenue from fees or commissions paid by product providers
for a referred sale of their products.
Reported Operating Revenue for the year ended 30 June 2021
was $111,059,000, representing a decrease of 11% on the prior
comparative period.
The Group delivered Reported Gross Profit of $43,578,000, an
increase of 21% on prior year. The increase in gross profit can
be summarised as follows:
• Since the onset of COVID-19, consumer demand has
fluctuated across all of iSelect’s segments impacting leads
and revenue.
• The series of changes that were implemented in Q4FY20
in response to COVID-19 were intended to prioritise profit
and cash flow and position the business for growth post
COVID-19.
• These changes were primarily in our Energy, Telco, Life
and General Insurance businesses and have enabled
iSelect to realise improved profitability through this
uncertain period.
• Strong operational performance: With the return of the
Energy market and associated cross-serve business,
the strong conversion rates seen across our segments
enabled a significant improvement in Gross Profit in FY21.
Reported operating overheads for the year was $35,288,000.
The costs and penalities from ACCC proceedings, JobKeeper
subsidy, as well as iMoney group performance were excluded
from the underlying result. On an underlying basis, operating
overheads reduced from last year by 3%, as a result of the
Group’s continued focus on its fixed cost base.
Reported EBITDA for the year was a profit of $8,471,000. On
an underlying basis, EBITDA was a profit $17,399,000, up 75%
on prior year.
Reported EBIT was a loss of $2,003,000, with Underlying
EBIT of $6,925,000 compared to $1,357,000 in FY20 (a 410%
increase).
Reported NPAT was a $5,072,000 loss. Underlying NPAT was
a profit of $4,685,000.
iSelect categorises a ‘lead’ across the business as a second-
page visit to one of its websites, or an inbound phone call from
a potential customer to the Customer Contact Centre. This is
considered by management to be a more conservative metric
than counting all the unique visits to the homepage as leads.
Conversion Ratio
Once a lead is generated, iSelect provides information and
purchase support to the customer either via its websites or its
Customer Contact Centre. If that results in a customer referral
to a product provider, then the lead is considered to have
been converted. The conversion ratio is used to measure
the efficiency in turning leads into sales. An increase in the
conversion ratio increases iSelect’s earnings without the need
for additional marketing spend.
It should be noted that product sales are subject to clawback
provisions and lapses (for example, from customers deciding
not to continue with their selected products). The conversion
ratio as tabled represents the ‘gross’ conversion of leads,
before the impact of clawback and lapses.
Revenue Per Sale
Revenue Per Sale (RPS) measures the average revenue
generated from each lead that is converted to a sale. It should
be noted the RPS of different products sold by the Group
varies considerably.
Consolidated Key Operating Metrics
The Group’s key operating metrics are considered to be
“leads”, “conversion ratio” and “RPS”. Throughout this report
consolidated key operating metrics are provided.
CONSOLIDATED
Leads (000s)
Conversion ratio1
Average RPS2 ($)
2021
2,128
10.4%
490
2020
CHANGE
3,296
8.9%
460
(35%)
1.5pp
7%
1 Conversion ratio is calculated as the number of gross sales divided by
sales leads (ie. average percentage of sales leads that are converted
into sales)
2 Average RPS is calculated as gross referred revenue divided by the
number of gross sales
pp: percentage point
Discussion of Consolidated Key Operating
Metrics
The consolidated key operating metrics for the financial year
2021 are discussed in more detail below. Key operating metrics
by segment are also discussed in this Review of Results and
Operations, in the section on Segment Performance.
Leads
Leads decreased by 35% to 2,128,000 a result of fluctuations
in consumer demand due to COVID-19 and a prioritisation
of profit and cash flow during this uncertain period. The
Health segment had volume declines of 13%, Energy and
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Telecommunications segment had volume declines of 49%,
while the Life and General segment had a decline of 47%.
The decline in the Energy, Telecommunications and General
Insurance verticals was due to both a decline in market
demand for these products, and a reduced marketing spend
given the scaled back operations team and changes to our
operating model.
Conversion Ratio
Conversion improved to 10.4% for the year reflecting
an ongoing focus on operational efficiency despite the
challenging environment. The Energy & Telecommunications
segment experienced an increase of 2.7pp, a reflection of the
recovery of the Energy market compared to FY20. Conversion
increased by 4.6pp in the Life & General segment.
Revenue Per Sale
RPS has increased by 7%, ending the year at $490. This was
driven by a changing mix in contribution from each business,
with the Health business increasing its share of revenue within
the Group which has a higher average RPS compared to other
segments.
Segment Performance
Health
The Health segment offers comparison, purchase and referral
services across the private health insurance category.
FINANCIAL
PERFORMANCE
Operating revenue
Segment EBITDA1
Margin %
KEY OPERATING
METRICS
Leads (000s)
Conversion ratio
Average RPS ($)
2021
2020
$’000
$’000
CHANGE
75,072
11,986
16.0
2021
753
9.6%
1,063
74,100
8,230
1%
46%
11.1
4.9pp
2020 CHANGE %
866
9.7%
1,003
(13%)
(0.1pp)
6%
1 Segment EBITDA excludes certain corporate overhead costs that are not
allocated at segment level.
The Health segment showed operating revenue increased
slightly by $972,000 (or 1%) to $75,072,000 against prior
comparative period. Although COVID-19 did impact demand in
H1FY21, a second premium rate increase in H2FY21 did offset
this to some extent. Considering the sales and operations
teams have worked predominantly remotely in FY21, the
conversion performance has been pleasing. The return of the
energy market and improvement in our cross-serve business
also contributed to the conversion uplift in Health.
EBITDA increased by 46% to $11,986,000. The slight increase
in operating revenue was more than offset at the EBITDA
level due to efficiencies in marketing spend, conversion and
continued focus on cost control.
Life and General Insurance
The Life and General Insurance segment offers comparison,
purchase and referral services across a range of life insurance,
car insurance and other general insurance products.
FINANCIAL
PERFORMANCE
Operating revenue
Segment EBITDA1
Margin %
KEY OPERATING
METRICS
Leads (000s)
Conversion ratio
Average RPS ($)
2021
16,847
8,476
50.3
2021
431
13.4%
184
2020
CHANGE
18,475
2,539
(9%)
234%
13.7
36.6pp
2020 CHANGE %
815
8.8%
273
(47%)
4.6pp
(33%)
1 Segment EBITDA excludes certain corporate overhead costs that are not
allocated at segment level.
Operating revenue for the Life and General segment
decreased by $1,628,000 (or 9%), from the last comparative
period, impacted by both the changes made to the operating
model and fluctuating consumer demand due to COVID-19. In
our Travel Insurance business, leads declined by 99% from the
last comparative period.
Operational performance remained strong which is reflected
in the conversion result. In Car Insurance, online conversion
improved 24% from the last comparative period, indicating
further opportunity for growth in this channel.
The Life and General segment’s RPS for the year decreased
by 33% as a result of the adjusted business model in Life
Insurance and changing product mix in this segment.
The segment posted an EBITDA profit of $8,476,000
compared with the prior year profit of $2,539,000 (an increase
of 234%). The significant year on year EBITDA improvement
can be attributed to improved profitability of the Life Insurance
model, a focus on operational and marketing ROI and
efficiency and well controlled costs.
Energy and Telecommunications
The Energy and Telecommunications segment offers
comparison, purchase and referral services across a range of
household utilities including electricity, gas and broadband
products.
FINANCIAL
PERFORMANCE
2021
2020
$’000
$’000
CHANGE
Operating revenue
18,625
26,689
Segment EBITDA1
Margin %
(903)
(4.8)
(1,633)
(6.1)
(30%)
45%
1.3pp
iSelect Annual Report 2021 37
REVIEW OF RESULTS AND OPERATIONS
(CON’D)
Segment Performance (con’d)
Energy and Telecommunications (con’d)
KEY OPERATING
METRICS
Leads (000s)
Conversion ratio
Average RPS ($)
2021
787
11.7%
230
2020 CHANGE %
1,537
9.0%
224
(49%)
2.7pp
3%
1 Segment EBITDA excludes certain corporate overhead costs that are not
allocated at segment level.
The Energy and Telecommunications segment delivered a
revenue result of $18,625,000, which was $8,064,000 or 30%
lower than previous year.
The segment posted an EBITDA loss of $903,000 compared
with the prior year loss of $1,633,000 (a 45% improvement).
This result reflects the challenging year in Energy and
Telecommunications, where demand fluctuated and the
company prioritised profit and cash flow ahead of growth.
Encouragingly, the conversion and RPS metrics improved on
the previous year, which positions the business well to return
to growth in FY22.
Financial position and cash flow
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CASH FLOW
SUMMARY
Net cash provided
from operating
activities
Net cash used in
investing activities
Net cash used in
financing activities
Net change in
cash and cash
equivalent
FINANCIAL
POSITION
SUMMARY
Current assets
2021
9,859
2020
CHANGE
1,850
433%
(6,901)
(9,565)
28%
(5,217)
(3,286)
(59%)
(2,259)
(11,001)
79%
2021
61,611
61,208
2020
CHANGE
Non-current assets
110,696
112,983
Total assets
Current liabilities
Non-current
liabilities
Total liabilities
Net assets
Equity
172,307
30,567
31,033
61,600
110,707
110,707
174,191
28,335
31,139
59,474
114,717
114,717
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iSelect Annual Report 2021
1%
(2%)
(1%)
8%
(0%)
4%
(3%)
(3%)
Capital expenditure and cash flow
Net operating cash inflow was $9,859,000, which was
$8,009,000 higher than last year. This correlates to the focus on
profit and cash flow during FY21.
Net investing cash outflows for the year was $6,901,000. The
$2,664,000 decrease in investing activities is primarily a result
of reduced capital expenditure in FY21.
Net financing cash outflows for the 2021 year totalled
$5,217,000. This included $2,595,000 lease payments,
$162,000 interest expense related to leases and dividend
payment of $2,185,000.
Statement of financial position
Net assets have decreased to $110,707,000 at 30 June 2021
from $114,717,000 at 30 June 2020.
Current assets have increased from 30 June 2020 by 1% to
$61,611,000. The current component of the trail commission
asset is $33,407,000, which increased by 12% since 30 June
2020.
Non-current assets have decreased from 30 June 2020 by 2%
to $110,696,000 which is largely due to depreciation of capital
assets. The non-current component of the trail commission
asset is $91,361,000, a 3% increase from prior year.
Current liabilities increased by 8% to $30,567,000 for the year
primarily due to payments to suppliers in addition to trade
related payable balances post 30 June 2020.
Non-current liabilities remained consistent with prior year.
DIVIDENDS
A special dividend of $0.01 (1 cent) per ordinary share was
declared during the year and paid on 22 June 2021. Further
details of the dividend are provided in note 4.1 to the financial
statements.
FUTURE DEVELOPMENTS AND
EXPECTED RESULTS
COVID-19 made for a challenging external market in FY21 and
we anticipate fluctuations in demand to continue in FY22.
From an operational perspective, we expect key metrics of
conversion, cross-serve and marketing ROI to remain strong
and this will provide the platform to return to growth.
We will continue to maintain our investment and innovation in
our brand, continuing on from our activities in FY21 in this area.
From a cash perspective, we have seen an adverse working
capital trend since FY18. Despite remaining negative in FY21,
we expect this to improve in FY22.
Looking ahead to the future, we note the introduction of Open
Energy due in October 2022, as part of the Government’s
implementation of the Consumer Data Right (CDR) legislation.
We view this as a significant opportunity, and preparing for
this will be a focus during FY22. Longer term, we expect the
CDR implementation to extend to Telecommunications and
Insurance, expanding the opportunity to serve our customers
with real-time, data-driven comparisons.
The Group also remains aware of potential risks to its business
and will continue to closely monitor and work to mitigate
these throughout FY22. These include potential changes in
government policy and legislation, any commercial decisions
taken by product providers currently listed on the Group’s
websites and considerable uncertainty stemming from specific
ongoing business impacts associated with the COVID-19
pandemic and from broader economic repercussions.
CHANGES IN THE STATE OF AFFAIRS
In the Directors’ opinion there have been no significant
changes in the state of affairs of the Group during the year.
SIGNIFICANT EVENTS AFTER
BALANCE DATE
In a COVID-19 context, iSelect notes the recent developments
in Victoria, New South Wales and Queensland, where the
related business effects remain highly uncertain.
No other matters or circumstances have arisen since the
end of the period that have significantly affected or may
significantly affect the operations of the Group, the results of
those operations, or the state of affairs of the Group in future
financial years.
INDEMNIFICATION OF OFFICERS AND
AUDITORS
The Constitution of the Group provides that the Group will
indemnify each person who is or has been a Director, Alternate
Director or Executive Officer (each an Officer) of the Group,
on a full indemnity basis and to the extent permitted by law,
against any losses, liabilities, costs, charges and expenses
incurred by them in their capacity as an Officer.
The Group has entered into Deeds of Indemnity and Access
with each of its Officers.
During the year the Group paid a premium in respect of
a contract insuring the Officers of the Group against a
liability incurred by an Officer to the extent permitted by
the Corporations Act 2001. The Group has not otherwise,
during or since the end of the period, indemnified or agreed
to indemnify an Officer (including a Director) or Auditor of
the Group or of any related body corporate against a liability
incurred by such an Officer or Auditor. In accordance with
commercial practice, the insurance policy prohibits disclosure
of the terms of the policy, including the nature of the liability
insured against and the amount of the premium.
PROCEEDINGS ON BEHALF OF THE
GROUP
No proceedings have been brought or intervened in on behalf
of the Group with leave of the Court under section 237 of the
Corporations Act 2001.
ENVIRONMENTAL REGULATION
The Group is not subject to significant environmental
regulation in respect of its operations. The Group has not
incurred any liability (including any liability for rectification
costs) under any environmental legislation.
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CORPORATE GOVERNANCE
STATEMENT
For detailed information on the corporate governance
framework and main governance practices, policies and
charters of the Group, including details of the Group’s
compliance with the 4th edition of the ASX Corporate
Governance Principles and Recommendations, refer to the
Group’s 2021 corporate governance statement found on
pages 22 to 33 of this report.
NON-AUDIT SERVICES
Details of the amounts paid or payable to the auditor (BDO
Audit Pty Ltd (BDO)) for non-audit services provided during
the financial year by the auditor are outlined in note 7.3 to the
financial statements.
The Directors are satisfied that the provision of non-audit
services during the financial year, by the auditor (or by another
person or firm on the auditor’s behalf), is compatible with the
general standard of independence for auditors imposed by the
Corporations Act 2001.
The Directors are of the opinion that the services as disclosed
in note 7.3 to the financial statements do not compromise
the external auditor’s independence requirements of the
Corporations Act 2001 for the following reasons:
• all services have been reviewed and approved to ensure
that they do not impact the integrity and objectivity of the
auditor; and,
• none of the services undermine the general principles
relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants issued by
the Accounting Professional and Ethical Standards Board,
including reviewing or auditing the auditor’s own work,
acting in a management or decision making capacity for
the Company, acting as advocate for the Company or
jointly sharing economic risks and rewards.
OFFICERS OF THE GROUP WHO ARE
FORMER AUDIT PARTNERS OF BDO
There are no Officers of the Group who are former partners of
BDO.
AUDITOR’S INDEPENDENCE
DECLARATION
A copy of the auditor’s independence declaration as required
under section 307C of the Corporations Act 2001 in relation to
the audit for the year ended 30 June 2021 is on page 55 of
this report.
AUDITOR
BDO is appointed in accordance with section 327 of the
Corporations Act 2001.
ROUNDING
The Group has applied the Australian Securities and
Investments Commission (ASIC) Corporations (Rounding in
Financial/Directors’ reports) Instrument 2016/191 to this report
and amounts in the financial statements are rounded to the
nearest thousand dollars, unless otherwise indicated.
iSelect Annual Report 2021 39
Remuneration
Report
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This Remuneration Report for the year ended 30 June
2021 outlines the remuneration arrangements of the
Group in accordance with the Corporations Act 2001
(the “Act”) and its regulations. This information has been
audited as required by section 308(3C) of the Act.
The remuneration report is presented under the
following sections:
1.
Introduction
2. Remuneration governance
3. Senior executive remuneration for the year ended
30 June 2021
4. Senior executive contracts
5. Link between group performance, shareholder
wealth and remuneration
6. Non-executive director remuneration
7. Key management personnel shareholdings
8. Key management personnel option holdings
9. Other transactions and balances with KMP
and their related parties
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1.
INTRODUCTION
The Remuneration Report details the remuneration arrangements for Key Management Personnel (KMP) who are defined as
those persons having authority and responsibility for planning, directing and controlling the activities of the Group, either directly
or indirectly, including any Director (whether executive or otherwise) of the parent entity. The KMP during and since the year
ended 30 June 2021 were as follows:
CURRENT NON-EXECUTIVE DIRECTORS
Brodie Arnhold1
Shaun Bonett
Bridget Fair
Melanie Wilson
Geoff Stalley
CURRENT SENIOR EXECUTIVES
Warren Hebard2
Slade Sherman
Vicki Pafumi
FORMER NON-EXECUTIVE DIRECTORS
Non-Executive Chairman (appointed 1 March 2021)
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Chief Executive Officer (appointed 1 November 2020)
Executive – Customer Experience (ceased 9 July 2021)
Executive – Finance & Strategy
Chris Knoblanche
Non-Executive Chairman (ceased 28 February 2021)
1 Chief Executive Officer and Executive Director (ceased 31 October 2020). Non-Executive Director from 1 November 2020 to 28 February 2021.
2 Executive – Marketing & Commercial (for period up to and including 31 October 2020)
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2. REMUNERATION GOVERNANCE
2.1 Remuneration committee
In accordance with the Remuneration Committee Charter (“the Charter”), the role of the Remuneration Committee is:
•
•
To review and make recommendations to the Board on remuneration packages and policies related to the Directors
and Senior Executives; and
To ensure that the remuneration policies and practices are consistent with the Group’s strategic goals and human
resources objectives.
The Remuneration Committee membership is made up of members of the Board, none of whom are Senior Executives,
as determined in accordance with the iSelect Board Charter (“the Board Charter”). For the year ended 30 June 2021:
•
•
Shaun Bonett acted as Chair of the Committee
Bridget Fair served as a member of the Committee
• Melanie Wilson served as a member of the Committee
Details regarding Remuneration Committee meetings are provided in the Directors’ Report.
The Remuneration Committee meets as often as is required by the Charter or other policies approved by the Board to
govern the Committee’s operation. The Remuneration Committee reports to the Board as necessary, and seeks Board
approval as required. iSelect’s CEO attends certain Remuneration Committee meetings by invitation, where management
input is required.
2.2 Information used to set Senior Executive Remuneration
To ensure the Remuneration Committee has sufficient information to make appropriate remuneration decisions and
recommendations, it may seek and consider information from independent remuneration consultants. Remuneration
advice provided by such consultants is used to aid decision making, but does not replace thorough consideration of
Senior Executive remuneration by the Directors.
During the 2021 financial year, iSelect’s Remuneration Committee did not seek a remuneration recommendation from an
external consultant in relation to our KMP.
iSelect Annual Report 2021
41
3. SENIOR EXECUTIVE REMUNERATION FOR THE YEAR ENDED 30 JUNE 2021
3.1 Remuneration Principles and Strategy
iSelect relies heavily on our people to enable the business to perform, grow and innovate.
The aim of the Group’s remuneration strategy is to align iSelect’s remuneration with its strategic direction, create
shareholder value and provide a tangible link between remuneration outcomes with both Group and individual
performance.
Fixed remuneration is set at a level which is competitive with remuneration for professionals with the required skills and
expertise to maximise the current and future value of the business. Variable remuneration provides the opportunity for
employees to share financially in iSelect’s overall performance and performance of the business when targets are met or
exceeded.
The Group’s Senior Executive remuneration strategy is designed to:
• Align the interests of Senior Executives with shareholders – the remuneration framework incorporates variable
components including short-term incentives and long-term incentives. Performance is assessed against both
financial and non-financial targets, goals and key performance indicators that are relevant to the success of the
Group and provide acceptable returns for shareholders; and
• Attract, motivate and retain high-performing individuals – the remuneration framework ensures that the
remuneration paid is competitive with that offered by companies to professionals with the required skills and
expertise to maximise the current and future value of the business as well as support retention through longer-term
remuneration.
3.2 Remuneration Framework
Senior Executive remuneration is provided in a mix appropriate to the position, responsibilities and performance of each
Senior Executive within the Group and considerations of relevant market practices.
For the financial year ended 30 June 2021, Senior Executive remuneration was structured as a mix of Total Fixed and
Variable Remuneration utilising short and long-term incentive elements. As a result, the relative weightings of the three
components are as follows:
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TOTAL REMUNERATION % (ANNUALISED AT TARGET) FOR FY2021
FIXED
VARIABLE
TOTAL FIXED
REMUNERATION (TFR)
SHORT TERM INCENTIVE
PLAN (STIP)
LONG TERM INCENTIVE
PLAN (LTIP)
Current Organisation Structure1
Chief Executive Officer2
Other Senior Executives2
61%
62%
28% (45% of TFR)
11% (18% of TFR)
28% (45% of TFR)
10% (16% of TFR)
1 As disclosed in section 1 under “Current Senior Executives”
2 LTIP rights were capped at 500,000 and therefore varied the % of annualised variable remuneration in FY21
Further details regarding each element of the remuneration mix is provided in section 3.3.
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3.3 Details of Senior Executive Remuneration Components
The following table provides an overview of each of the elements of the remuneration framework with details for the fixed
and variable components outlined separately in this section.
PARAMETER
Objectives
DETAILS
• Align the interests of Senior Executives with shareholders – the remuneration
framework incorporates variable components including short-term incentives and
long-term incentives. Performance is assessed against both financial and non-
financial targets, goals and key performance indicators that are relevant to the
success of the Group and provide acceptable returns for shareholders, and;
• Attract, motivate and retain high-performing individuals – ensure that
remuneration paid is competitive with that offered by companies to professions
with the required skills and expertise to maximise the current and future value of
the business as well as support retention through longer-term remuneration.
Benchmark peer groups
Below Senior Executive level, the prime benchmarking reference is through job
evaluation methodology matched to grade levels sourced from an independent third
party’s market research.
Review
Remuneration levels are reviewed annually through a remuneration review that
considers market data, insights into remuneration trends, the performance of the
Group and individual, as well as the broader economic environment.
Total Fixed Remuneration
(TFR)
TFR comprises cash salary, employer contributions to superannuation and salary
sacrifice benefits.
Variable Remuneration
(VR)
Total Remuneration (TR)
Variable Remuneration is awarded on a contingent basis depending on outcomes
against defined targets.
It is divided into two elements, a short-term incentive (STI) and a long-term incentive
(LTI), which depend respectively on annual and long-term performance measures.
The sum of TFR, STI and LTI represents total remuneration (TR). It is intended
that when VR is awarded at target levels, the TR will reflect “at target” TR for the
benchmark populations. Additionally, when performance is exceptional, it is intended
that Senior Executives well established in their roles will have the potential for TR to
be at or above the 75th percentile of the benchmark population.
Total Fixed Remuneration (TFR)
TFR consists of base salary and statutory superannuation contributions. Senior Executives may also elect to have a
combination of benefits provided out of their TFR including additional superannuation. The value of any non-cash
benefits provided to them includes the cost of any fringe benefits tax payable by iSelect as a result of providing the
benefit. TFR is not “at risk” and is set using appropriate market benchmark data which considers the individual’s role,
responsibility, skills, experience and performance.
Due to the preceding impacts of COVID-19 and ongoing uncertainty during the normal review period there was no
general review of Senior Executive’s TFR during FY21.
Variable Remuneration
Short Term Incentive Plan (STIP)
The STIP puts a significant proportion of remuneration “at risk” subject to the achievement of Group financial outcomes
and individual performance measures. All Senior Executives are eligible to participate. This provides a tangible link
between the interest of employees and the financial performance of the Group.
PARAMETER
DETAILS
Name
Objective
Type
Short Term Incentive Plan (STIP)
To align superior outcomes for shareholders with remuneration outcomes for Senior
Executives and employees; to reward performance; to be competitive in the broad
market and to offer attractive levels of reward for over-performance. STIP is a key
element in the overall remuneration objective to attract, motivate and retain high-
calibre individuals.
Annual awards based on annual objectives delivered in cash, with payments made
once per year following the announcement of the audited financial results at financial
year end.
iSelect Annual Report 2021 43
3.3 Details of Senior Executive Remuneration Components (con’d)
Variable Remuneration (con’d)
Short Term Incentive Plan (STIP) (con’d)
PARAMETER
DETAILS
For FY21 the STIP opportunity for the CEO and Senior Executives was 28% of the total
remuneration package.
The minimum payout for each measure is 0% of TFR.
Performance against the financial targets must be greater than the Underlying EBIT
target established by the Board in order for any STIP to be paid. For performance
above the minimum threshold but below EBIT plus 2%, 30% of the STIP will be
payable. Where performance is between the minimum threshold and target,
the Board may apply discretion in awarding STIP between 30% and 100%. For
performance above EBIT plus 2%, 100% of STIP will be available to be paid with a
maximum of 150% for significantly greater performance against EBIT targets.
The performance measures for the Senior Executives have been adopted to provide
a balance between financial and non-financial, Group and individual, operational and
strategic aspects of performance.
For the CEO, there are three financial measures – Underlying EBIT, operational
expenses and Marketing Return On Investment (ROI), and a measure of performance
against individual goals. Operating expenses were set against the Group’s financial
year 2021 budget on an underlying basis. Marketing ROI is set against a target
multiple set by the Board.
For other Senior Executives there are two performance measures considered within
the STIP – a financial measure (Underlying EBIT) and individual goals.
The Board uses Underlying EBIT as a primary measure to assess the Group’s
operating performance while maintaining focus on the Group’s operating results and
associated cash generation. Underlying EBIT is set against the Group’s financial year
2021 budget.
Individual goals create personal, non-financial measures specific to each individual’s
area of accountability. Goals are aligned to business objectives in the areas of
growth and diversification, marketplace efficiency, customer experience, employee
experience, platforms and technology, regulatory and compliance requirements and
Contact Centre performance.
For the financial year ended 30 June 2021, the relative weightings were as follows:
Financial measures
Individual Goals
CEO
50%
50%
Other Senior Executives
50%
50%
The Group’s financial performance STIP targets are set by the Board, based on the
recommendation of the Remuneration Committee. The CEO’s individual goals are
set and measured by the Board with the assistance of the Remuneration Committee.
The individual goals of each Senior Executive are set and measured by the CEO.
Recommendations by the CEO in relation to payment on the basis of achievement of
performance targets set under the STIP are made to the Remuneration Committee.
The award of a STI is subject to ongoing employment with satisfactory performance
throughout the performance period.
Adherence to iSelect’s values and behavioural standards while running their
operations is a requirement for achieving satisfactory performance.
All elements of the STIP are measured and paid annually following the preparation
and completion of the financial statements. Payments are generally made in the
month of September following financial year end.
Opportunity amount
Performance measures
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Service and behavioural
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Payment
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iSelect Annual Report 2021
3.3 Details of Senior Executive Remuneration Components (con’d)
Long Term Incentive Plan (LTIP)
LTIP awards are provided in the form of equity allocations which are made annually according to role size and influence
on long-term performance. The equity may vest in the future subject to the Senior Executives meeting service and
performance obligations, and the Group meeting or exceeding performance hurdles.
Grants were made under the FY21 LTIP in July 2020. The details provided in this section relate to these grants during the
financial year ended 30 June 2021. A detailed description of the LTI plan operation is provided below.
PARAMETER
DETAILS
Name
Objective
Type
Long Term Incentive Plan (LTIP)
The LTIP has been established to provide a long-term incentive component of
remuneration to support the attraction, reward and retention of key employees
including Senior Executives. The LTIP links long-term reward with the ongoing creation
of shareholder value.
LTI is conditional equity that may or may not vest in the future. Vesting is subject to the
Group meeting or exceeding long-term performance conditions (set out below).
Allocation basis and
pricing period
The basis of LTI awards and allocations is on the face value of an iSelect share
calculated as the 5 day VWAP up to and including the date the award is granted.
Grant
Allocation amount
LTI equity grants to Senior Executives are made as soon as practicable after
Remuneration Committee approval, which is generally at the end of August following
the end of the financial year.
The value of the allocation is role-based reflecting accountability and influence on long-
term Group performance. For FY21:
Role
% of TFR allocation on a Face Value basis
18%1
16%
CEO
Other Senior Executives
Awards are considered soon after the end of the financial year and take into account
demonstrated performance and long-term commitment as assessed at that time. The
Board may determine that the allocation should be varied up or down (including to
zero).
The benchmarks used to determine the allocation levels are described in the Total
Remuneration section 3.2.
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Allocation approval
Instruments
Dividends and voting
rights
Service and behavioural
conditions
Annual LTI allocations for Senior Executives are approved by the Board on advice from
the Remuneration Committee. The CEO makes recommendations to the Remuneration
Committee in respect of his direct reports.
Performance Share Rights (PSRs) are the standard vehicle for Senior Executives’ LTI
awards for FY21. A PSR is a right to a fully paid ordinary share in the Company, subject
to the fulfilment of performance and service conditions. The PSRs are granted at no cost
because they are awarded as remuneration.
PSRs carry no dividend entitlements or voting rights.
In addition to the performance conditions below, unvested LTI awards will ordinarily be
forfeited if the holder does not remain in ongoing employment with satisfactory service
through to the end of the performance period. Satisfactory service includes adherence
to iSelect’s values and behavioural standards.
1 LTIP was issued in role of Executive – Marketing & Commercial and not adjusted in FY21 following appointment to CEO on 1 November 2020.
iSelect Annual Report 2021 45
PARAMETER
DETAILS
Performance condition
Awards granted under the FY21 LTIP are subject to a three-year performance period for
Senior Executives and a relative Total Shareholder Return (TSR) hurdle.
The relative TSR target is a market-based performance measure that provides a
direct link between Senior Executive reward and shareholder value. It provides an
external market measure to encourage and motivate Senior Executive performance
which is relative to the designated comparator group, the ASX Small Ordinaries Index
excluding mining and energy companies, during the performance period. The ASX
Small Ordinaries Index was selected as it was deemed to be the best comparator to
the Group’s current size. The ASX Small Ordinaries Index is made up of the small cap
members of the ASX 300 Index (ASX members 101-300).
MEASURE
WEIGHTING DESCRIPTION OF MEASURE
Relative Total
Shareholder
Return (TSR)
100%
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The shares will only vest if a certain Total Shareholder
Return (TSR) relative to the designated comparator
group, the ASX Small Ordinaries Index excluding
mining and energy companies, is achieved during the
performance period.
TSR measures the total change in the value of the shares
over the performance period, plus the value of any
dividends and other distributions being treated as if they
were reinvested in shares.
The Group’s TSR is compared against the TSR of the
designated comparator group during the performance
period. The shares will vest in line with the following
relevant TSR vesting schedule:
RELATIVE TSR
Less than 50th
Percentile
% OF LTI PLAN SHARES
THAT VEST
0%
50th Percentile
50%
50th to 75th Percentile Straight line vesting between
50% and 100%
Minimum and maximum
value
The minimum value of the PSRs is zero. This will be the case where awards are not
made, or where service conditions are not met, or where performance conditions are
not met and there is no vesting. The maximum present-day value is the present-day
face value based on full vesting. The actual future value will of course depend on the
future share price and the level of vesting.
Pricing period
The pricing period for allocation is the 5-day VWAP up to and including the last trading
day of the date the award is granted.
Vesting and exercise
PSRs vest according to the level at which each the performance condition has been
met. Exercise of PSRs is automatic on vesting and there is no exercise price.
Leaver
Where a Senior Executive ceases employment, any unvested LTIP shares will be
forfeited unless determined and approved otherwise by the Board.
Malus and clawback
Change of control
Under the rules of the FY21 LTIP, the Board has the power (in certain circumstances)
to determine a participants’ interest in any or all of the LTIP shares to be forfeited and
surrendered and/or that the value that the participant has derived from any vested
shares is set off against any current or future fixed remuneration or annual bonuses
owed to the participant. This applies in cases of fraud, dishonesty and breach of
obligations, including, without limitation, a material misstatement of financial information
whether the action or omission is intentional or inadvertent.
In the event of a change of control, the Board may in its absolute discretion, subject to
applicable laws, determine that all or a specified number of a participant’s performance
rights shall immediately vest having regard to all relevant circumstances including
whether performance is in line with any applicable performance conditions.
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iSelect Annual Report 2021
3.4 Details of Senior Executive Remuneration outcomes for financial year ended
30 June 2021
Variable Remuneration
Short Term Incentive Plan (STIP)
The STIP performance outcomes (inclusive of superannuation) for the year ended 30 June 2021 are detailed below:
CURRENT SENIOR EXECUTIVES
Warren Hebard
Slade Sherman
Vicki Pafumi
Long Term Incentive Plan (LTIP)
STIP
OUTCOME (%)
ACTUAL STIP
AWARDED
STIP FORFEITED (%)
69%
0%
82%
$163,966
$0
$179,974
31%
100%
18%
The CEO and Eligible Senior Executives received LTIP shares with a grant date of 1 July 2020. As previously noted,
CEO LTIP was issued in previous role of Executive – Marketing & Commercial and not adjusted on appointment to Chief
Executive Officer position on 1 November 2020.
The relevant values of the grants are as follows:
RECIPIENT
GRANT DATE
RELATIVE TSR
FAIR VALUE OF AWARDS
AT GRANT DATE
ONE WEEK VWAP
UP TO AND
INCLUDING
GRANT DATE
CEO & Senior Executives
1 July 2020
$0.15
$0.21
NAME
Warren Hebard
Slade Sherman
Vicki Pafumi
NUMBER OF
PERFORMANCE
AWARDS GRANTED
VALUE AT
GRANT DATE($)1
MAXIMUM TOTAL
VALUE OF GRANT
YET TO VEST ($)
500,000
500,000
500,000
$75,000
$75,000
$75,000
$75,000
$75,000
$75,000
1 Determined at the time of grant per AASB2. For details on the valuation of the LTIP shares please refer to note 5.2 of the financial
statements.
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3.4 Details of Senior Executive Remuneration outcomes for financial year ended
30 June 2020 (con’d)
Long Term Incentive Plan (LTIP) (con’d)
FY2021 Performance Rights
During the 2021 financial year, a grant was made under the FY2021 Performance Rights Plan for eligible Senior
Executives. The grant had a performance period of three years.
The FY2021 Performance Rights Plan grant consisted of issuing 1,500,000 rights to Senior Executives.
DETAIL
Grant date
Performance period (testing date is the last
day of the period)
FY2021 GRANT OF PERFORMANCE RIGHTS PLAN
1 July 2020
3 years
MEASURE
WEIGHTING
DESCRIPTION OF MEASURE
Relative Total
Shareholder Return
(TSR)
100%
Relative TSR to the designated comparator group, the ASX Small
Ordinaries Index excluding mining and energy companies, is
achieved during the performance period.
TSR measures the total change in the value of the shares over the
performance period, plus the value of any dividends and other
distributions being treated as if they were reinvested in shares.
RELATIVE TSR
% OF LTI PLAN SHARES THAT VEST
Less than 50th Percentile
50th Percentile
50th to 75th Percentile
0%
50%
Straight line vesting between
50% and 100%
75th Percentile or more
100%
Fair value of instrument at grant
$0.15
Previous Incentive Plans
FY2019 LTIP Vesting Outcomes
Following the completion of the performance period for the FY2019 LTIP performance period from 1 July 2018 to 30 June
2021, an independent evaluation of Relative TSR determined that the relevant performance hurdles were not met. On
that basis, 0% of the FY2019 LTIP vested for Mr Warren Hebard and Mr Slade Sherman. However, an extension to the
vesting date to 30 June 2022 was approved by the Board for Ms Vicki Pafumi. The fair value of the awards at the grant
date was $219,000.
With reference to the 5-day VWAP, the total change in the value of iSelect’s shares over the performance period was
-47%. The 50th percentile of the designated comparator group achieved a TSR of 18% over the performance period.
48
iSelect Annual Report 2021
3.4 Details of Senior Executive Remuneration outcomes for financial year ended
30 June 2020 (con’d)
Number of performance awards on issue as at 30 June 2021
BALANCE AT
START OF YEAR
GRANTED
VESTED
FORFEITED /
OTHER
BALANCE AT
END OF YEAR
CURRENT SENIOR EXECUTIVES
Warren Hebard
Slade Sherman
Vicki Pafumi
944,445
1,033,111
1,085,891
500,000
500,000
500,000
FORMER SENIOR EXECUTIVES
Brodie Arnhold
1,329,032
-
-
-
-
-
-
-
(51,724)
1,444,445
1,533,111
1,534,167
-
1,329,032
3.5 Key Events Impacting Remuneration during the Year Ended 30 June 2021
Chief Executive Officer Departure
On 31 October 2020, Mr Brodie Arnhold resigned as Chief Executive Officer and Executive Director and returned to
the Board as a Non-Executive Director. For the period up to 31 October 2020, Mr Arnhold received the following in
satisfaction of his contractual entitlements:
• A pro-rata amount of TFR for the period up to 31 October 2020 of $274,667.
• A short-term incentive payment on successful completion of FY21 strategic objectives as set by the Board for
successful succession management and transition to the new Chief Executive Officer of $200,000.
Remuneration received in FY21 in relation to his Board membership is included in sections 6.3 and 6.4.
Chief Executive Officer Appointment
On 1 November 2020, Mr Warren Hebard was promoted to the position of Chief Executive Officer from his previous
position of Executive - Marketing and Commercial.
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3.6 Remuneration Paid to Senior Executives
The table below has been prepared in accordance with the requirements of the Corporations Act and relevant
Accounting Standards.
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4. SENIOR EXECUTIVE CONTRACTS
Remuneration arrangements for Senior Executives with service during the year ended 30 June 2021 are formalised in
employment contracts. All current Senior Executive contracts are for an unlimited duration.
CURRENT SENIOR EXECUTIVES
Warren Hebard
•
6 months notice by either party (or payment in lieu).
• Where employment terminates prior to a bonus being paid, or a bonus is due to be paid during
gardening leave, may receive a bonus payment at the discretion of the Board.
Slade Sherman
•
6 months notice by either party (or payment in lieu).
• Where employment terminates prior to a bonus being paid, or a bonus is due to be paid during
gardening leave, may receive a bonus payment at the discretion of the Board.
Vicki Pafumi
•
6 months notice by either party (or payment in lieu).
• Where employment terminates prior to a bonus being paid, or a bonus is due to be paid during
gardening leave, may receive a bonus payment at the discretion of the Board.
FORMER SENIOR EXECUTIVES
Brodie Arnhold
•
3 months notice by either party.
• Where employment terminates prior to a bonus being paid, or a bonus is due to be paid during
gardening leave, may receive a bonus payment at the discretion of the Board.
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5. LINK BETWEEN GROUP PERFORMANCE, SHAREHOLDER WEALTH AND
REMUNERATION
The variable or “at risk” remuneration of Senior Executives is linked to the Group’s performance through measures based on
the operating performance of the business.
5.1 Group Performance and STIP
For the year ended 30 June 2021 STIP is to be awarded based on the achievement of Underlying EBIT (including
JobKeeper) targets.
Underlying EBIT
The Underlying EBIT (including JobKeeper) result for the year ended 30 June 2021 was a profit of $10,329,000. Details
regarding reported and Underlying EBIT performance of the business are provided in the Review of Results and
Operations section of the Directors’ Report.
5.2 Group Performance and LTI Plan Grants
LTIP grants were made in the financial year ended 30 June 2021. Grants made to Senior Executives in financial year 2021
are linked to Relative TSR.
iSelect Annual Report 2021
51
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5.3 Group Performance
MEASURE
Share price at year end
5 day VWAP to 30 June
Dividend paid per security
FY2021
$0.41
$0.40
1.0 cent
FY2020
FY2019
$0.20
$0.21
-
$0.62
$0.62
-
FY2018
RESTATED1
$0.82
$0.80
1.5 cents
EBIT
($2,003,000)
($41,039,000)
($2,252,000)
($15,278,000)
Operating revenue
$111,059,000
$125,270,000
$154,585,000
$178,139,000
Reported earnings per share
(2.3 cents)
(19.9 cents)
(1.7 cents)
(7.0 cents)
1 Restated due to retrospective adoption of new Accounting Standards. The EBIT, operating revenue and reported earnings per share as per
the financial year 2018 audited financial statements were EBIT $12,941,000 loss, $181,439,000 operating revenue and 6.0 cents reported
loss per share.
6. NON-EXECUTIVE DIRECTOR REMUNERATION
6.1 Remuneration Policy
The Group’s Non-Executive Director remuneration strategy is designed to:
• Attract and retain Directors of the highest calibre – ensure remuneration is competitive with companies of a similar
size and complexity. Independence and impartiality of Directors is aided by no element of Director remuneration
being ‘at risk’ (i.e. Remuneration is not based upon Group performance); and
•
Incur a cost that is acceptable to shareholders – the aggregate pool is set by shareholders with any change
requiring shareholder approval at a general meeting.
6.2 Remuneration arrangement
Maximum aggregate remuneration
The aggregate remuneration paid to Non-Executive Directors is capped at a level approved by shareholders. The
current Non-Executive Director fee pool was set at $950,000 on 31 May 2013. The amount of aggregate remuneration is
reviewed annually with no increase in the Non-Executive Director fee pool during the financial year ended 30 June 2021.
Board and Committee fees, as well as statutory superannuation contributions made on behalf of the Non-Executive
Directors, are included in the aggregate fee pool.
Non-Executive Director fees for the financial year ended 30 June 2021
The table below provides details of Board and Committee fees (inclusive of superannuation) for the year ended 30
June 2021. Director member fees have not increased during financial year 2021 and the remuneration of Non-Executive
Directors does not include any commission, incentive or percentage of profits.
All committee members are also members of the Board. No additional fees are paid to Board members for their
participation on committees, apart from where they act as a Chair of the committee.
Fees are annualised and include superannuation.
Chair
Board Member
Audit and Risk Management Committee
Remuneration Committee
Nomination Committee
FEE ($)
250,000
95,000
10,000
10,000
10,000
52
iSelect Annual Report 2021
6.3 Key Events Impacting Remuneration and makeup of Non-Executive Directors during
the year ended 30 June 2021
Executive Director Appointment as Non-Executive Director
On 31 October 2020, Mr Brodie Arnhold resigned from his position as Chief Executive Officer and Executive Director
and returned to the Board from 1 November 2020 as a Non-Executive Director, and from 1 March 2021 as Non-
Executive Chairman. To support the transition of the new Chief Executive Officer, Mr Arnhold was paid an additional
fee of $60,000 for the period 1 November 2020 to 28 February 2021. The amount paid was based on normal market
rates, to Arnhold Investments Pty Ltd, with $0 outstanding at 30 June 2021.
Non-Executive Chairman Departure
On 28 February 2021, Mr Chris Knoblanche resigned from his position of Non-Executive Chairman and member of the
iSelect Board. For the period ended 30 June 2021, in satisfaction of his contractual entitlements Mr Knoblanche received
a pro-rata amount of gross fees of $206,575 for the period up to 28 February 2021, including notice in lieu of $41,038.
6.4 Remuneration Paid to Non-Executive Directors for the Year Ended 30 June 2021
FEES &
ALLOWANCES
$
SHORT TERM
BENEFITS
$
SUPER
$
OTHER
$
TOTAL
$
NON-EXECUTIVE DIRECTORS
Chris Knoblanche (ceased 28 February 2021)
2021
2020
206,575
229,181
-
-
18,079
21,746
-
-
224,654
250,927
Brodie Arnhold (appointed 1 November 2020, Chairman from 1 March 2021)
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2020
Shaun Bonett
2021
2020
Bridget Fair
2021
2020
Melanie Wilson
2021
2020
Geoff Stalley
2021
2020
2021
2020
112,121
-
105,023
97,892
86,758
80,638
95,890
89,216
86,758
80,638
693,125
577,565
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9,977
9,300
8,242
8,242
9,110
8,476
8,242
7,652
53,650
55,416
60,000
172,121
-
-
-
-
-
-
-
-
-
60,000
-
-
115,000
107,192
95,000
88,880
105,000
97,692
95,000
88,290
806,775
632,981
iSelect Annual Report 2021 53
7. KEY MANAGEMENT PERSONNEL SHAREHOLDINGS
The numbers of ordinary shares in iSelect Limited held during the financial year (directly and indirectly) by KMP of the Group
and their related parties are set out below:
BALANCE AT
START OF YEAR
GRANTED AS
REMUNERATION
LAPSED/
FORFEITED
OTHER
CHANGES
BALANCE AT
END OF YEAR
CURRENT SENIOR EXECUTIVES
Warren Hebard
Slade Sherman
Vicki Pafumi
-
14,000
160,005
CURRENT NON-EXECUTIVE DIRECTORS
Brodie Arnhold
Shaun Bonett
Bridget Fair
Melanie Wilson
Geoff Stalley
FORMER SENIOR EXECUTIVES1
Chris Knoblanche
291,084
2,500,000
80,728
43,242
30,000
418,091
1 Balance is as at the date they cease being KMP.
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-
-
-
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-
-
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-
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-
-
14,000
160,005
291,084
2,500,000
80,728
43,242
30,000
418,091
8. KEY MANAGEMENT PERSONNEL OPTION HOLDINGS
There were no options in iSelect Limited held during the financial year (directly or indirectly) by KMP of the Group and their
related parties.
9. OTHER TRANSACTIONS AND BALANCES WITH KMP AND THEIR RELATED
PARTIES
Arnhold Investments Pty Ltd
All remuneration for Mr Brodie Arnhold including payment for his position of Chief Executive Officer and Executive Director, and
all related fees for his positions of Non-Executive Director and Non-Executive Chairman was paid to Arnhold Investments Pty
Ltd. Mr Arnhold is the Director and Company Secretary of Arnhold Investments Pty Ltd.
Prezzee Pty Ltd
During the year, the Group paid Prezzee Pty Ltd $112,043 (2020: $68,661) in relation to digital gift cards for customer and staff
incentives. Prezzee Pty Ltd is considered to be a related party of the Group due to Precision Group’s (under significant influence
of Mr Shaun Bonett, a Non-Executive Director of the Group) investment in Prezzee Pty Ltd and noting Mr Bonett is Chairman
and a Non-Executive Director of Prezzee Pty Ltd. The amount payable to Prezzee Pty Ltd as at 30 June 2021 was $9,020.
This Directors’ Report and Remuneration Report is signed in accordance with a resolution of the Directors.
On behalf of the Directors
Brodie Arnhold
Director
Melbourne,
24 August 2021
Melanie Wilson
Director
Melbourne,
24 August 2021
54
iSelect Annual Report 2021
Tel: +61 3 9603 1700
Fax: +61 3 9602 3870
www.bdo.com.au
Collins Square, Tower Four
Level 18, 727 Collins Street
Melbourne VIC 3008
GPO Box 5099 Melbourne VIC 3001
Australia
DECLARATION OF INDEPENDENCE BY JAMES MOONEY TO THE DIRECTORS OF ISELECT LIMITED
As lead auditor of iSelect Limited for the year ended 30 June 2021, I declare that, to the best of my
knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of iSelect Limited and the entities it controlled during the period.
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James Mooney
Director
BDO Audit Pty Ltd
Melbourne, 24 August 2021
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members
of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent
member firms. Liability limited by a scheme approved under Professional Standards Legislation.
iSelect Annual Report 2021 55
Financial
Statements
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F
ABOUT THIS REPORT
This is the financial report for iSelect Limited and its controlled
entities. iSelect Limited (the “Company”) is a for-profit entity
limited by shares incorporated and domiciled in Australia whose
shares are publicly traded on the Australian Securities Exchange
(Code: ISU). The consolidated financial statements of the
Company as at and for the year ended 30 June 2021 comprise
the financial statements of the Company and its subsidiaries
(as outlined in note 6.2), together referred to in these financial
statements as the “Group” and individually as “Group entities”.
The financial report of iSelect Limited for the year ended 30 June
2021 was authorised for issue in accordance with a resolution of
Directors on 24 August 2021.
READING THE FINANCIALS
Section introduction
The introduction at the start of each section outlines
the focus of the section and explains the purpose and
content of that section.
Information panel
The information panel describes our key accounting
estimates and judgements applied in the preparation
of the financial report which are relevant to that
section or note.
56
iSelect Annual Report 2021
CONTENTS
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
58
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
60
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CASH FLOWS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Section 1: Basis of preparation
1.1
Basis of preparation of the financial report
1.2
Terminology used
1.3
Key judgements and estimates
1.4
Basis of consolidation
1.5
Foreign currency
1.6
1.7
Provision for credit impairment on financial assets
measured at amortised costs
Changes in amended standards and
interpretations
1.8 Other accounting policies
Section 2: Performance for the year
2.1
Segment information
2.2 Revenue from contracts with customers
2.3 Other income and expenses
2.4 Earnings per share
2.5 Cash and cash equivalents
2.6 Taxes
Section 3: Our core assets and working capital
3.1
Property, plant and equipment
3.2
Intangible assets
3.3 Trade receivables and contract assets
3.4 Trail commission asset
3.5
Leases
3.6 Provisions
62
63
64
64
64
64
64
65
65
65
65
66
66
67
68
69
70
71
75
75
77
79
80
81
82
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Section 4: Our capital and risk management
4.1 Dividends
4.2 Equity
4.3 Capital management
4.4 Financial instruments and risk management
Section 5: Our people
5.1
Key management personnel compensation
5.2 Employee share plans
Section 6: Our investments
6.1
Parent entity disclosures
6.2 Subsidiaries
6.3 Changes in group structure
6.4 Deed of cross guarantee
Section 7: Other information
7.1 Other accounting policies
7.2 Related party transactions
7.3 Auditor’s remuneration
7.4
Events after the reporting date
7.5 Commitments and contingencies
84
84
84
85
86
88
88
88
93
93
93
94
95
96
96
96
96
96
97
iSelect Annual Report 2021 57
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
For the year ended 30 June 2021
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Continuing Operations
Revenue from contracts with customers – continuing operations
Upfront revenue
Trail commission revenue
Total Revenue From Contracts With Customers
Cost of sales
Gross Profit
Other income
Administrative expenses
Impairment loss
Loss on disposal of property, plant and equipment
Share-based payments expense
Depreciation and amortisation
Profit/(Loss) Before Interest and Tax
Finance income
Finance costs
Net Finance Costs
Profit/(Loss) Before Income Tax Expense
Income tax benefit/(expense)
Loss for the Year from Continuing Operations
Discontinued Operations
Loss before tax for the period from discontinued operations
Income tax benefit/(expense)
Loss After Tax For The Year From Discontinued Operations
CONSOLIDATED
NOTE
2021
$’000
2020
$’000
2.2
2.2
2.3
2.3
2.3
2.3
70,699
40,271
89,149
31,276
110,970
120,425
(67,428)
(85,903)
43,542
34,522
3,600
(34,706)
-
(139)
(847)
4,220
(30,251)
(18,835)
(669)
(909)
(10,474)
(8,609)
976
(20,531)
3
(403)
(400)
28
(381)
(353)
576
(20,884)
2.6
(2,635)
422
(2,059)
(20,462)
6.3
6.3
(3,013)
(20,832)
-
(2,255)
(3,013)
(23,087)
Loss for the Year
(5,072)
(43,549)
58
iSelect Annual Report 2021
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME (CON’D)
For the year ended 30 June 2021
CONSOLIDATED
NOTE
2021
$’000
2020
$’000
Other Comprehensive Income
Items that are or may be reclassified to profit or loss
Foreign operations – foreign currency translation movements
Other Comprehensive Income Net of Tax
Total Comprehensive Income for the Year
Loss attributable to
Owners of the Company
Non-controlling interests
Total Comprehensive Income attributable to
Owners of the Company
Non-controlling interests
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(168)
192
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(5,240)
(43,357)
(5,007)
(43,324)
(65)
(225)
(5,072)
(43,549)
(5,184)
(43,135)
(56)
(222)
(5,240)
(43,357)
Loss per share (cents per share)
Basic / diluted profit/(loss) for the year attributable to ordinary equity holders
of the parent
2.4
(2.3)
(19.9)
Loss per share (cents per share) for continuing operations
Basic / diluted profit/(loss) for the year attributable to ordinary equity holders
of the parent
2.4
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(9.4)
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Basic / diluted profit/(loss) for the year attributable to ordinary equity holders
of the parent
The accompanying notes form part of these consolidated financial statements.
2.4
6.3
(1.4)
(10.5)
iSelect Annual Report 2021 59
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2021
ASSETS
Current Assets
Cash and cash equivalents
Trade receivables and contract assets
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Other assets
Assets held for sale
Total Current Assets
Non-Current Assets
Trail commission asset
Property, plant and equipment
Intangible assets
Other assets
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Trade and other payables
Lease liabilities
Provisions
Other
Liabilities directly associated with the assets held for sale
Total Current Liabilities
60
iSelect Annual Report 2021
CONSOLIDATED
NOTE
2021
$’000
2020
$’000
2.5
3.3
3.4
6.3
3.4
3.1
3.2
3.5
3.6
6.3
9,433
14,864
33,407
3,907
61,611
-
10,522
15,826
29,850
3,328
59,526
1,682
61,611
61,208
91,361
4,538
14,772
25
88,413
6,939
17,606
25
110,696
112,983
172,307
174,191
21,762
2,747
6,058
-
18,102
2,544
5,430
325
30,567
26,401
-
1,934
30,567
28,335
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CON’D)
As at 30 June 2021
Non-Current Liabilities
Lease liabilities
Provisions
Net deferred tax liabilities
Total Non-Current Liabilities
Total Liabilities
Net Assets
EQUITY
Contributed equity
Reserves
Retained earnings
Equity attributable to owners of the Company
Non-controlling interest
Total Equity
The accompanying notes form part of these consolidated financial statements.
CONSOLIDATED
NOTE
2021
$’000
2020
$’000
3.5
3.6
2.6
4.2
4.2
1,443
395
29,195
31,033
61,600
110,707
111,425
11,288
(12,006)
110,707
-
110,707
4,157
422
26,560
31,139
59,474
114,717
111,290
10,618
(4,814)
117,094
(2,377)
114,717
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iSelect Annual Report 2021
61
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2021
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62
iSelect Annual Report 2021
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CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2021
Cash Flows from Operating Activities
Receipts from customers
Payments to suppliers and employees
Interest received
Income taxes refunded
Net cash provided by operating activities
Cash Flows from Investing Activities
Payments for property, plant and equipment and intangible assets
Cash disposed of as a part of discontinued operations
Net cash used in investing activities
Cash Flows from Financing Activities
Repayment of lease liabilities
Interest paid
Dividend paid to shareholders of the parent
Net cash used in financing activities
Net decrease in cash and cash equivalents
Net foreign exchange difference
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
2.5
The accompanying notes form part of these consolidated financial statements.
CONSOLIDATED
NOTE
2021
$’000
2020
$’000
109,504
143,991
(99,648)
(142,809)
3
-
49
619
9,859
1,850
2.6
2.5
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(1,576)
(6,901)
(9,565)
-
(9,565)
(2,595)
(2,562)
(437)
(2,185)
(5,217)
(724)
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(3,286)
(2,259)
(11,001)
436
11,256
9,433
301
21,956
11,256
iSelect Annual Report 2021 63
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2021
Section 1: Basis of preparation
This section explains basis of preparation of our
financial report and provides a summary of our key
accounting estimates and judgements.
1.1 Basis of preparation of the financial report
The financial report is a general purpose financial
report which has been prepared in accordance with the
requirements of the Corporations Act 2001, Australian
Accounting Standards, International Financial Reporting
Standards (IFRS) and other authoritative pronouncements
of the Australian Accounting Standards Board. It has
been prepared on a historical cost basis. The financial
report is presented in Australian dollars unless otherwise
noted. The Company is a company of the kind referred
to in ASIC Class Order 2016/191, dated 24 March 2016,
and in accordance with that Class Order, amounts in the
Directors’ Report and the financial report are rounded
off to the nearest thousand dollars, unless otherwise
indicated.
Coronavirus (COVID-19) pandemic
The spread of novel coronavirus (COVID-19) was
declared a public health emergency by the World Health
Organisation on 31 January 2020 and upgraded to a
global pandemic on 11 March 2020. Domestically, Australia
continues to see COVID-19 related disruptions, such
as snap lockdowns in local territories, and Australia’s
vaccination rollout remains slow while abroad there is still
a degree of global uncertainty.
For the year ended 30 June 2021, COVID-19 has impacted
the Group, specifically as follows:
• Since the onset of the pandemic, consumer demand
has fluctuated across all of iSelect’s segments
impacting both leads and revenue with a 35% and 8%
decline respectively.
• A series of changes, primarily in Energy & Telco, Life
Insurance and General Insurance, were implemented
at the end of FY2020 to prioritise profit and cash flow.
This resulted in strong conversion rates across all
segments which enabled a significant improvement in
gross profit in FY21.
1.2 Terminology used
Earnings before interest and income tax expense (EBIT)
reflects profit or loss for the year prior to including the
effect of net finance costs and income taxes.
Our management uses EBIT and earnings before interest,
income tax expense, depreciation and amortisation
(EBITDA), in combination with other financial measures,
primarily to evaluate the Group’s operating performance.
In addition, the Directors believe EBIT is useful to investors
because analysts and other members of the investment
community largely view EBIT as a key and widely
recognised measure of operating performance.
EBITDA is a similar measure to EBIT, but it does not take
into account interest, depreciation and amortisation.
1.3 Key judgements and estimates
In the process of applying the Group’s accounting policies,
management has made a number of judgements and
applied estimates of future events. Judgements and
estimates which are material to the financial report are
found in the following notes:
NOTE
SECTION
PAGE
2.2
2.6
3.1
3.2
3.3
3.4
3.6
5.2
Revenue from contracts with
customers
Taxes
Property, plant and equipment
Intangible assets
Trade receivables and contract
assets
Trail commission asset
Provisions
Employee share plans
67
71
75
77
79
80
82
88
1.4 Basis of consolidation
The consolidated financial statements comprise the
financial statements of the Group and its subsidiaries as
at 30 June 2021. A list of controlled entities (subsidiaries)
at year end is contained in note 6.2. The financial
statements of subsidiaries are prepared for the same
reporting period as the parent company, using consistent
accounting policies. When necessary, adjustments
are made to the financial statements of subsidiaries to
bring their accounting policies into line with the Group’s
accounting policies. All intra-group assets, liabilities, equity,
income, expenses and cash flows relating to transactions
between members of the Group are eliminated in full on
consolidation. Assets, liabilities, income and expenses of
a subsidiary acquired or disposed of during the year are
included in the consolidated statement of profit or loss
and other comprehensive income from the date the Group
gains control until the date the Group ceases to control the
subsidiary.
Control is achieved when the Group is exposed, or has
rights, to variable returns from its involvement with the
investee and has the ability to affect those returns through
its power over the investee. Specifically, the Group
controls an investee if, and only if, the Group has:
•
•
the power over the investee (i.e. existing rights that
give it the current ability to direct the relevant activities
of the investee);
the exposure, or rights, to variable returns from its
involvement with the investee, and
• has the ability to use its power over the investee to
affect its returns.
64
iSelect Annual Report 2021
1.5 Foreign currency
1.7 Changes in amended standards and
s
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interpretations
The Group applies, for the first time, the following
standards and interpretations. The nature and effect of
these changes are disclosed below.
AASB Interpretation 23 Uncertainty over
Income Tax Treatment
The amendments provide a new definition of material
that states, “information is material if omitting, misstating
or obscuring it could reasonably be expected to influence
decisions that the primary users of general purpose
financial statements make on the basis of those financial
statements, which provide financial information about a
specific reporting entity.” The amendments clarify that
materiality will depend on the nature or magnitude of
information, either individually or in combination with other
information, in the context of the financial statements.
A misstatement of information is material if it could
reasonably be expected to influence decisions made by
the primary users. These amendments had no impact
on the consolidated financial statements of, nor is there
expected to be any future impact to the Group.
AASB 2020-4 Amendments to Australian
Accounting Standards – COVID-19-Related
Rent Concessions
On 15 June 2020, the AASB issued COVID-19-Related
Rent Concessions - amendment to AASB 16 Leases The
amendments provide relief to lessees from applying AASB
16 Leases guidance on lease modification accounting for
rent concessions arising as a direct consequence of the
COVID-19 pandemic. As a practical expedient, a lessee
may elect not to assess whether a COVID-19 related
rent concession from a lessor is a lease modification. A
lessee that makes this election accounts for any change in
lease payments resulting from the COVID-19 related rent
concession the same way it would account for the change
under AASB 16 Leases, if the change were not a lease
modification.
The amendment applies to annual reporting periods
beginning on or after 1 June 2020. Earlier application is
permitted. This amendment had no material impact on the
consolidated financial statements of the Group.
1.8 Other accounting policies
Significant and other accounting policies that summarise
the measurement basis used and are relevant to the
understanding of the financial statements are provided
throughout the notes to the financial statements.
The Group’s consolidated financial statements are
presented in Australian dollars, which is also the parent’s
functional currency.
Transactions in foreign currencies are initially recorded by
the Group’s entities at their respective functional currency
spot rates at the date the transaction first qualifies for
recognition. Monetary assets and liabilities denominated in
foreign currencies are translated at the functional currency
spot rates of exchange at the reporting date. Differences
arising on settlement or translation of monetary items are
recognised in profit or loss.
On consolidation, the assets and liabilities of foreign
operations are translated into Australian dollars at
the rate of exchange prevailing at the reporting date
and their statements of profit or loss are translated at
exchange rates prevailing at the dates of the transactions.
The exchange differences arising on translation for
consolidation are recognised in other comprehensive
income.
1.6 Provision for credit impairment on
financial assets measured at amortised
costs
The Group assesses impairment for its financial assets
carried at amortised cost using an expected credit loss
(ECL) model.
ECLs are probability-weighted estimates of credit losses.
Credit losses are measured as the present value of all
cash shortfalls and consist of three components:
• Probability of default (PD): represents the possibility
of a default over the next 12 months and remaining
lifetime of the financial asset;
• A loss given default (LGD): expected loss if a default
occurs, taking into consideration the mitigating effect
of collateral assets and time value of money;
• Exposure at default (EAD): the expected loss when a
default takes place.
The Group measures the loss allowance for a financial
instrument at an amount equal to the lifetime ECL if the
credit risk on that financial instrument has increased
significantly since initial recognition, or if the credit risk on
the financial instrument has not increased significantly
since initial recognition (except for a purchase or
originated credit-impaired financial asset), the Group is
required to measure the loss allowance for that financial
instrument at an amount equal to a 12-month ECL.
The Group uses the simplified approach for measuring
the loss allowance at an amount equal to lifetime ECL for
trade receivables and contract assets. Specifically, AASB
9 requires the Group to recognise a loss allowance for
expected credit losses on:
•
trade receivables and contract assets, and
• financial guarantee contracts to which the impairment
requirements of AASB 9 apply.
Assessment of ECL is disclosed in the relevant notes to
the financial statements.
iSelect Annual Report 2021 65
CONSOLIDATED
2021
$’000
2020
$’000
Operating revenue
Upfront revenue
41,405
47,425
Trail commission revenue
33,667
26,675
Health Insurance
Upfront revenue
75,072
74,100
10,359
15,005
Trail commission revenue
6,488
3,470
Life and General Insurance
16,847
18,475
Upfront revenue
18,539
26,525
Trail commission revenue
86
164
Energy and Telecommunications
18,625
26,689
Upfront revenue
Trail commission revenue
Other
396
30
426
196
965
1,161
Operating revenue
110,970 120,425
EBITDA
Health
Life and General Insurance
11,986
8,476
8,230
2,539
Energy and Telecommunications
(903)
(1,633)
Other
283
582
Unallocated corporate costs
(8,392)
(21,640)
EBITDA
11,450
(11,922)
Depreciation and amortisation
(10,474)
(8,609)
Net finance cost
(400)
(353)
Profit / (loss) before income tax
576 (20,884)
Income tax (expense) / benefit
(2,635)
422
Loss from continuing
operations
(2,059)
(20,462)
Revenue from two customers individually exceeded
10% of iSelect’s revenue and amounted individually to
$28,244,000 (2020: $31,230,000) and $17,051,000 (2020:
$19,964,000), arising from upfront and trail commission in
the Health segment.
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Section 2: Performance for the year
This section explains our results and performance and
includes our segment results, which are reported on
the same basis as our internal management structure,
and our earnings per share for the period. It also
provides details of selected income and expense items,
information about taxation and a reconciliation of our
profit to net cash generated from operating activities
2.1 Segment information
Segment information is based on the information that
management uses to make decisions about operating
matters and allows users to review operations
through the eyes of management. We present our
reportable segments and measure our segment
results on a continuing operations basis, i.e. the same
basis as our internal management reporting structure.
We have four reportable segments which offer a service
that includes comparison, purchase support and lead
referrals across:
• Health (private health insurance),
• Life and General Insurance,
• Energy and Telecommunications, and
• Other, predominately offering financial service products
including home loans in Australia.
In prior year, unallocated corporate costs include costs
associated with the business restructure and impairment
losses.
All revenue from continuing operations is generated from
Australia. All non-current assets from continuing operations
are also located in Australia.
CONSOLIDATED
2021
$’000
2020
$’000
Trail commission asset
Health
81,645
73,577
Life and General Insurance
39,207
39,433
Other
Impairment losses1
Health
Life and General Insurance
Energy and Telecommunications
1
Included in unallocated corporate costs
66
iSelect Annual Report 2021
3,916
5,253
124,768
118,263
CONSOLIDATED
2021
$’000
2020
$’000
-
-
-
-
6,645
2,456
9,734
18,835
2.2 Revenue from contracts with customers
Recognition and measurement
Upfront revenue
Upfront fees
Click-through fees
Advertising and subscription
fees
CONSOLIDATED
2021
$’000
2020
$’000
68,825
88,260
1,319
555
139
750
70,699
89,149
Trail commission revenue
40,271
31,276
Total revenue from contracts
with customers
110,970 120,425
Revenue represents the variable consideration estimated
at the point in time when the Group has essentially
completed its contracted services and constrained until
it is highly probable that a significant revenue reversal in
the amount of cumulative revenue recognised will not
occur when the associated uncertainty with the variable
consideration is subsequently resolved.
Upfront fees
When the Group refers a consumer to the product
provider (and thereby satisfies its performance obligation),
the Group is entitled to an upfront fee that is contingent
upon the following events: (a) the referred sale becoming
‘financial’, which occurs upon new members joining a
health fund, initiating a life insurance policy, obtaining
general insurance products, mortgages, broadband or
energy products via iSelect; and (b) whether a ‘clawback’
of the upfront fee is triggered. Upfront fees may trigger
a ‘clawback’ of revenue in the event of early termination
by customers as specified in individual product provider
agreements. These contingencies are incorporated
into the estimate of variable consideration (refer to key
estimates).
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Revenue related to
performance obligations
satisfied in previous years
(284)
814
Click-through fees
Key estimate: upfront fee revenue
Upfront fee revenue is recognised on a net basis of
the historical percentage of ‘referred’ sales expected
to become ‘financial’ and that do not trigger a
‘clawback’. These estimates are adjusted to actual
percentages experienced at each reporting date. As
such, the Group determines its revenue by estimating
variable consideration and applying the constraint by
utilising industry data and historical experience (refer
to note 3.6 for further information).
Key estimate: trail commission revenue
The method of revenue recognition for trail
commission revenue requires Directors and
management to make certain estimates and
assumptions based on industry data and historical
experience of the Group. Refer to note 3.4 for details
on trail commission revenue.
Click-through fees are recognised based on the
contractual arrangement with the relevant product
provider. This can occur at one of three points depending
on the contract; either when an internet user clicks on
a paying advertiser’s link, submits an application or a
submitted application is approved.
Advertising and subscription fees
Revenue for contracted services, including advertising and
subscription fees, is recognised based on the transaction
price allocated to each performance obligation. As a
result, non-refundable revenue may be recognised across
multiple periods until the performance obligation has been
satisfied.
Trail commission revenue
Trail commissions are ongoing fees for customers referred
to individual product providers or who have applied
for mortgages via iSelect. Trail commission revenue
represents commission earned calculated as a percentage
of the value of the underlying policy relationship to the
expected life and, in the case of mortgages, a proportion
of the underlying value of the loan. The Group is entitled to
receive trail commission without having to perform further
services. On initial recognition, trail revenue and assets are
recognised at expected value and subject to constraints.
iSelect Annual Report 2021 67
2.3 Other income and expenses
Recognition and measurement
In our profit or loss and other comprehensive income, we
classify our expenses (apart from share-based payments,
depreciation and amortisation and net finance income)
by function as this classification more accurately reflects
the type of operations we undertake. The below provides
more detail on the type (by nature) of expenses we
incurred.
CONSOLIDATED
2021
$’000
2020
$’000
3,406
3,699
194
521
3,600
4,220
24,102
35,892
Other Income
Government grant
Sundry income
Employee Benefits Expense
Classified as cost of sales
Remuneration, bonuses, on-
costs and amounts provided for
benefits
Superannuation expenses
2,098
3,042
Classified as administrative
expenses
Remuneration, bonuses, on-
costs and amounts provided for
benefits
14,228
16,272
Superannuation expenses
Share-based payments
1,167
847
1,710
909
Government grant
A government grant is recognised in the balance sheet
initially as deferred income when there is reasonable
assurance that it will be received and that the Group
will comply with the conditions attached to it. Grants
that compensate the Group for expenses incurred are
recognised as other income on a systematic basis in the
same periods in which the expenses are incurred.
Due to the economic impacts of COVID-19, the Group
has received JobKeeper payments under the COVID-19
government stimulus program. The amount received
during the financial year was $3,406,000 (2020:
$3,699,000).
Employee benefits expense
The Group’s accounting policy for expenses associated
with employee benefits is set out in note 3.6. Employee
benefits expense is net of amounts capitalised as
development costs of $2,572,000 (2020: $4,372,000).
The policy relating to share-based payments is set out in
note 5.2.
Depreciation and amortisation
Depreciation and amortisation reflects the use of property,
plant and equipment and intangible assets over their
useful life. Refer to note 3.1 and note 3.2 for further details.
Finance costs
Lease payments are apportioned between finance
charges and reduction of the lease liability so as to
achieve a constant rate of interest on the remaining
balance of the liability. Finance charges are recognised in
finance costs in the statement of profit or loss and other
comprehensive income.
42,442
57,825
Impairment of receivables
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Impairment expenses are recognised to the extent that
the carrying amounts of assets exceed their recoverable
amounts. Refer to note 3.3 for details.
Depreciation and Amortisation1
Depreciation
Amortisation of previously
capitalised development costs
Finance Costs2
Finance costs on lease liabilities
Other
Research and development
expenditure
Research and development
expenditure recognised as
expenses
2,627
2,896
7,847
6,461
10,474
9,357
162
275
437
244
480
724
2,920
2,833
1 FY21 included depreciation and amortisation charges for
discontinued operations totalled $0 (2020:$748,000).
2 FY21 included finance cost on lease liabilities of $0 (2020:
$3,000) and other finance cost of $34,000 (2020: $340,000) for
discontinued operations totalled $34,000 (2020: 343,000).
68
iSelect Annual Report 2021
Recognition and measurement
Basic Earnings Per Share
Basic earnings per share is calculated as net profit
attributable to members of the parent, adjusted to exclude
any costs of servicing equity (other than dividends),
divided by the weighted average number of ordinary
shares outstanding during the financial year.
Diluted Earnings Per Share
Diluted earnings per share adjusts the figures used in the
determination of basic earnings per share to take into
account:
• The after-tax effect of interest and other financing
costs associated with dilutive potential ordinary shares;
and
• The weighted average number of additional ordinary
shares that would have been outstanding assuming
the conversion of all dilutive potential ordinary shares.
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2.4 Earnings per share
This note outlines the calculation of Earnings Per
Share (EPS) which is the amount of post-tax profit
attributable to each share.
We calculate basic and diluted EPS. Diluted EPS
reflects the effects of the equity instruments allocated
to our employee share schemes under iSelect
Limited’s share-based payment plans which is
considered dilutive.
CONSOLIDATED
2021
$’000
2020
$’000
Continuing operations
(2,059)
(20,462)
Discontinued operations
(2,948)
(22,862)
Loss attributable to the owners
of the Group
(5,007)
(43,324)
WANOS1 for basic earnings
per share
Effect of dilution2
WANOS1 adjusted for effect of
dilution
Loss per share:
Basic/Diluted EPS
Basic/Diluted EPS – continuing
operations
Basic/Diluted EPS –
discontinued operations
SHARES
(‘000)
SHARES
(‘000)
217,902
217,761
-
-
217,902
217,761
CENTS
CENTS
(2.3)
(0.9)
(19.9)
(9.4)
(1.4)
(10.5)
1 Weighted average number of ordinary shares.
2 As at 30 June 2021, the Group has 160,767 (2020: 589,933) LTIP
shares granted but not issued (see note 5.2). These shares are
not included in the diluted earning per share calculation due to
losses and any potential increases in the number of shares are
considered anti-dilutive.
iSelect Annual Report 2021 69
2.5 Cash and cash equivalents
Reconciliation of profit after tax to net cash
flows from operating activities
2.6 Taxes
CONSOLIDATED
2021
$’000
2020
$’000
Cash at bank and on hand
9,433
10,522
Cash at bank and on hand
attributable to discontinued
operations (note 6.3)
-
734
9,433
11,256
Net loss after tax
Non-cash items:
Foreign exchange
movements
CONSOLIDATED
2021
$’000
2020
$’000
(5,072)
(43,549)
79
(60)
Depreciation and amortisation
10,474
9,357
909
847
2,433
34,810
163
669
437
724
1,050
(6,505)
-
(547)
6,570
(4,185)
679
527
3,614
2,635
601
(350)
(5,300)
1,773
(701)
(373)
9,859
1,850
Share-based payments
expense
Impairment loss
Loss on disposal of property,
plant and equipment and
intangible assets
Items in net profit but not in
operating cash flows:
Interest expense classified as
financing cash flow
(Increase)/decrease in assets
Trade receivables
Trail commission asset
Income tax receivable
Other assets
Increase/(decrease) in
liabilities
Trade and other payables
Deferred taxes
Provisions
Other liabilities
Net cash flow provided by
operating activities
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The Group has pledged $1,500,000 (2020: $1,515,000) to
fulfill bank guarantee and credit facility requirements. The
Group also has an undrawn debt facility of $10,000,000
(2020: $10,000,000).
Recognition and measurement
Cash and short-term deposits in the consolidated
statement of financial position comprise cash at bank
and on hand and short-term deposits with an original
maturity of three months or less, which are subject to an
insignificant risk of changes in value.
Cash at bank earns interest at floating rates based on
daily bank deposit rates. Short-term deposits are made
for varying periods of between one day and three months
depending on the immediate cash requirements of the
Group and earn interest at the respective short-term
deposit rates.
As all cash is held with major financial institutions (ADI) and
there has been no history of loss, it has been determined
that expected credit loss would not be material and
consequently has not been recognised.
Changes in liabilities arising from financing
activities
CONSOLIDATED
2021
$’000
2020
$’000
Lease liabilities
Outstanding at the beginning of
the period
6,709
9,342
Recognition of lease liability in
relation to right-of-use assets
Write-off of lease liability on
termination of lease
76
-
-
(71)
Cash flows
(2,595)
(2,562)
Outstanding at the end of the
period
4,190
6,709
70
iSelect Annual Report 2021
On May 2016 the Board of Taxation announced and
released the Tax Transparency Code (the “Code”).
Whilst the Code is voluntary, the Directors have
elected to adopt it in order to provide greater tax
disclosure transparency to the users of the financial
report.
Part A: Disclosures of tax information
Part A of this report provides reconciliations of the
Group’s current and deferred taxes and a summary of
its tax-related accounting policies.
Current income tax is calculated by applying the statutory
tax rate to taxable income. Taxable income is calculated
as the accounting profit adjusted for differences in income
and expenses where the tax and accounting treatments
differ.
Deferred income tax, which is accounted for using
the balance sheet method, arises because timing of
recognition of accounting income is not always the same
as taxable income. This creates temporary differences,
which usually reverse over time. Until they reverse, a
deferred tax asset or liability must be recognised on the
balance sheet.
The table to the right provides a reconciliation of notional
income tax expense to actual income tax expense. The
table on the following page details the amount of deferred
tax assets and liabilities recognised in the statement of
financial position.
CONSOLIDATED
2021
$’000
2020
$’000
Current taxes
Amounts recognised in profit
or loss
Current income tax
Current income tax expense
(2,279)
2,094
Previous years’ adjustment1
1,138
373
Deferred income tax
Origination and reversal of
temporary differences
Reversal of previously
recognised tax losses
(655)
(1,628)
42
(2,279)
Previous years’ adjustment1
(881)
(393)
Income tax reported in income
statement
(2,635)
(1,833)
2.6 Taxes
On May 2016 the Board of Taxation announced and
released the Tax Transparency Code (the “Code”).
Whilst the Code is voluntary, the Directors have
elected to adopt it in order to provide greater tax
disclosure transparency to the users of the financial
report.
Part A: Disclosures of tax information
Part A of this report provides reconciliations of the
Group’s current and deferred taxes and a summary of
its tax-related accounting policies.
Current income tax is calculated by applying the statutory
tax rate to taxable income. Taxable income is calculated
as the accounting profit adjusted for differences in income
and expenses where the tax and accounting treatments
differ.
Deferred income tax, which is accounted for using
the balance sheet method, arises because timing of
recognition of accounting income is not always the same
as taxable income. This creates temporary differences,
which usually reverse over time. Until they reverse, a
deferred tax asset or liability must be recognised on the
balance sheet.
The table to the right provides a reconciliation of notional
income tax expense to actual income tax expense. The
table on the following page details the amount of deferred
tax assets and liabilities recognised in the statement of
financial position.
CONSOLIDATED
2021
$’000
2020
$’000
Current taxes
Amounts recognised in profit
or loss
Current income tax
Current income tax expense
(2,279)
2,094
Previous years’ adjustment1
1,138
373
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CONSOLIDATED
2021
$’000
2020
$’000
Tax reconciliation
Accounting profit/(loss) before
income tax
(2,437)
(41,716)
Notional income tax at the
statutory income tax rate of
30%
Non temporary differences
Share-based payments
Entertainment
Goodwill and brand name
impairment
Initial recognition of research
and development concessional
credits
Previous years’ adjustment in
respect of current income tax1
Previous years’ adjustment in
respect of deferred income tax1
731
12,515
(254)
(27)
(273)
(26)
-
(5,650)
182
174
1,138
362
(881)
(392)
Unrecognised tax losses
(146)
(5,074)
Reversal of previously
recognised tax losses
42
(2,279)
Non-deductible fine and penalty
(2,580)
Loss on disposal of overseas
subsidiary
Other
Effect of lower tax rates in
Malaysia
Effect of lower tax rates in
Thailand
Effect of lower tax rates in
Singapore
Effect of lower tax rates in
Indonesia
Effect of lower tax rates in
Hong Kong
(730)
(82)
(26)
-
-
(2)
-
-
-
(48)
(1,184)
(1)
87
(46)
2
Deferred income tax
Origination and reversal of
temporary differences
Reversal of previously
recognised tax losses
(655)
(1,628)
42
(2,279)
Total income tax expense
(2,635)
(1,833)
1 Arises from difference between provisional research and
development concessional credits at previous reporting period
and amount claimed in income tax return in current financial year.
Previous years’ adjustment1
(881)
(393)
Income tax reported in income
statement
(2,635)
(1,833)
iSelect Annual Report 2021
71
2.6 Taxes (con’d)
CONSOLIDATED
2021
$’000
2020
$’000
CONSOLIDATED
2021
$’000
2020
$’000
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Deferred taxes
Deferred tax assets relate to the
following:
Trade and other receivables
-
42
Trade and other payables
3,549
1,753
Provisions
Property, plant and equipment
ITAA 97 Section 40-880
business related costs
1,936
3,996
614
26
64
60
Unused tax losses
3,890
4,989
Total deferred tax assets
10,015
10,904
Deferred tax liabilities relate to
the following:
Income tax receivable
Total income tax expense
(2,635)
(1,833)
Temporary differences
Origination and reversal of
temporary differences
Income tax payable in the
current financial year
Income tax receivable at the
beginning of the year
Net tax refunded during the year
Income tax receivable as at 30
June
Represented in the statement of
financial position by:
2,635
1,773
-
-
-
-
-
(60)
679
(619)
-
-
Trail commission asset
(37,663)
(35,740)
Income tax receivable
Development costs
(1,547)
(1,724)
Total deferred tax liabilities
(39,210)
(37,464)
Effective tax rate (ETR)
Net deferred tax liabilities
(29,195)
(26,560)
Global operations1
n.m
(4.39%)
Australian operations2
452.4%
2.02%
1 Global operations ETR: The Group calculated total consolidated
company income tax expense divided by total consolidated
accounting profit on continuing and discontinued operations.
2 Australian operations ETR: The Group calculated total company
income tax expense for all Australian companies operations of
and Australian operations of overseas company included in these
consolidated financial statements, divided by accounting profit
derived by all Australian companies and Australian operations
of overseas companies included in these consolidated financial
statements. Effective tax rate for 2021 was impacted by non-
deductible fine and penalty of $8,500,000.
n.m.: not meaningful
72
iSelect Annual Report 2021
In accordance with Group accounting policy, the Group
has applied Interpretation 1052, in which the head entity,
iSelect Limited, and the controlled entities in the tax
consolidated group continue to account for their own
current and deferred tax amounts. This is governed
through a tax funding agreement between iSelect Ltd and
its wholly-owned Australian entities.
In addition to its own current and deferred tax amounts,
iSelect Limited also recognises the current tax liabilities (or
assets) and the deferred tax assets arising from unused
tax losses and unused tax credits assumed from controlled
entities in the tax consolidated group.
The allocation of taxes to the head entity is recognised
as an increase/decrease in the controlled entities’
intercompany accounts with the tax consolidated group
head entity.
Key estimates: current and deferred taxes
The Group’s accounting policy for taxation requires
management’s judgement in assessing whether
deferred tax assets and deferred tax liabilities are
recognised on the statement of financial position.
Assumptions about the generation of future taxable
profits depend on management’s estimates of future
cash flows. These depend on estimates of future
sales volumes, operating costs, capital expenditure,
dividends and other capital management
transactions.
Judgements are also required about the application
of income tax legislation in respect of the availability
of carry forward tax losses. These judgements and
assumptions are subject to risk and uncertainty,
hence there is a possibility that changes in
circumstances will alter expectations, which may
impact the amount of deferred tax assets recognised
on the statement of financial position and the amount
of other tax losses and temporary differences not yet
recognised. In such circumstances, some or all of the
carrying amounts of recognised deferred tax assets
and liabilities may require adjustment, resulting in a
corresponding credit or charge to the statement of
profit or loss and other comprehensive income in
future periods.
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2.6 Taxes (con’d)
Recognition and measurement
Our income tax expense is the sum of current and
deferred income tax expenses. Current income tax
expense is calculated on accounting profit after adjusting
for non-taxable and non-deductible items based on rules
set by the tax authorities. Deferred income tax expense
is calculated at the tax rates that are expected to apply to
the period in which the deferred tax asset is realised or
the deferred tax liability is settled. Both our current and
deferred income tax expenses are calculated using tax
rates that have been enacted or substantively enacted at
reporting date.
Our current and deferred taxes are recognised as an
expense in profit or loss, except when they relate to items
that are directly recognised in other comprehensive
income or equity. In this case, our current and deferred
tax expenses are also recognised directly in other
comprehensive income or equity.
We generally recognise deferred tax liabilities for all
taxable temporary differences, except to the extent that
the deferred tax liability arises from:
•
•
the initial recognition of goodwill; and
the initial recognition of an asset or liability in a
transaction that is not a business combination and
affects neither our accounting profit nor our taxable
income at the time of the transaction.
For our investments in controlled entities and associated
entities, recognition of deferred tax liabilities is required
unless we are able to control the timing of our temporary
difference reversal and it is probable that the temporary
difference will not reverse.
Deferred tax assets are recognised to the extent that it is
probable that taxable profit will be available against which
the deductible temporary differences, and the carried
forward unused tax losses and tax credits, can be utilised.
Deferred tax assets and deferred tax liabilities are offset
in the statement of financial position where they relate to
income taxes levied by the same taxation authority and to
the extent that we intend to settle our current tax assets
and liabilities on a net basis.
Tax Consolidation Legislation
The iSelect Group formed an income tax consolidated
group as at 30 April 2007. Members of the Group entered
into a tax sharing agreement at that time that provided
for the allocation of income tax liabilities between the
entities should the head entity default on its tax payment
obligations. No amounts are expected to be recognised
in the consolidated financial statements in respect of this
agreement on the basis that the probability of default is
remote.
iSelect Annual Report 2021
73
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2.6 Taxes (con’d)
Part B – Taxes paid report
Part B of this report discloses the taxes paid by iSelect
Ltd and provides qualitative information about our
approach to tax risk.
Tax policy, strategy and governance
Our philosophy is to embrace change by understanding
the decisions, activities and operations undertaken by the
Group, therefore enabling us to manage tax uncertainties
and ensure our people, systems and processes are tax
compliant in all aspects.
We achieve this by:
• Ensuring our teams are appropriately trained and
resourced;
• Developing and maintaining strong internal control at
management and Board level;
• Ensuring our systems and data are up-to-date and
accurate;
• Collaborating across the organisation; and
• Maintaining robust documentation on processes and
in supporting tax positions.
The Group adheres to the following tax principles:
• Complying with all relevant laws, rules, regulations,
and reporting and disclosure requirements, wherever
we operate;
• Ensuring openness, honesty and transparency will be
paramount in all dealings with the tax authorities and
other relevant bodies;
• Adopting a low risk appetite;
• Considering the commercial needs of the Group
as paramount and ensuring that all tax planning will
be undertaken in this context. All transactions must
therefore have a business purpose or commercial
rationale; and
• Due consideration will be given to the Group’s
reputation, brand, corporate and social responsibilities
when considering tax initiatives, as well as the
applicable legal and fiduciary duties of directors and
employees of the Group and will form part of the
overall decision-making and risk assessment process.
The decisions, activities and operations undertaken by
the Group gives rise to various areas of uncertainty. We
manage tax risk in 4 key areas:
Transactional risk: This concerns the risks and exposures
associated with specific transactions undertaken by the
Group.
Operational risk: This concerns the underlying risks of
applying the tax laws, regulations and decisions to the
routine everyday business operations of the Group.
Compliance risk: This concerns the risks associated
with meeting the Group’s tax compliance obligations.
This primarily relates to the preparation, completion and
review of the Group’s tax returns and the risks within those
processes.
Financial accounting risk: This concerns the risk of
material misstatement (including material disclosures)
in the Group’s financial report, cash flow planning,
forecasting, and in managing investor expectations of the
future.
Tax governance strategy is about understanding where
these risks may arise and implementing controls to
effectively manage these risks. iSelect has a Tax Risk
Management Strategy to identify, assess and manage
these risks.
Australian taxes paid summary
Tax payments made by iSelect for the 2021 and 2020
financial years are summarised below.
CONSOLIDATED
2021
$’000
2020
$’000
-
1,904
240
(679)
2,783
240
2,144
2,344
Income tax (net of refund)
Payroll tax
Fringe benefits tax
Total taxes paid
74
iSelect Annual Report 2021
Section 3: Our core assets and working capital
This section describes our core long-term tangible and intangible assets underpinning the Group’s performance
and provides a summary of our asset impairment assessment. This section also describes our short-term assets
and liabilities, i.e. our working capital supporting the operating liquidity of our business.
3.1 Property, plant and equipment
LEASEHOLD
IMPROVE-
MENTS
$’000
OFFICE AND
COMPUTER
EQUIPMENT
$’000
RIGHT OF
USE ASSETS
$000
COMPUTER
SOFTWARE
$’000
FURNITURE,
FIXTURES
AND
FITTINGS
$’000
TOTAL
$’000
As at 30 June 2021
Cost
Accumulated depreciation
Net carrying amount
Net carrying amount at
1 July 2020
Additions
Disposals
Depreciation expense
Net carrying amount at
30 June 2021
As at 30 June 2020
Cost
Accumulated depreciation
Net carrying amount
Net carrying amount at 1 July
2019
Additions
Disposals
Revaluation
Depreciation expense
Exchange differences
Net carrying amount at
30 June 2020
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a
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6,994
(6,853)
141
178
-
-
(37)
141
6,994
(6,816)
178
276
-
(24)
(65)
(10)
1
178
8,388
(7,584)
804
7,109
(4,249)
2,860
1,076
4,718
123
(2)
(393)
804
8,267
(7,191)
1,076
76
-
(1,934)
2,860
7,033
(2,315)
4,718
1,111
6,873
598
(18)
(532)
(86)
3
1,076
-
(67)
(2,080)
(7)
(1)
4,718
7,848
(7,416)
432
578
24
-
(170)
432
7,824
(7,246)
578
574
122
-
(106)
(12)
-
578
863
(562)
301
31,202
(26,664)
4,538
389
6,939
5
-
(93)
301
858
(469)
389
519
39
(9)
(113)
(47)
-
389
228
(2)
(2,627)
4,538
30,976
(24,037)
6,939
9,353
759
(118)
(2,896)
(162)
3
6,939
iSelect Annual Report 2021 75
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3.1 Property, plant and equipment (con’d)
Derecognition
Recognition and measurement
Property, plant and equipment
Property, plant and equipment is stated at cost less
accumulated depreciation and accumulated impairment
loss, if any. When significant parts of plant and equipment
are required to be replaced at intervals, the Group
depreciates them separately based on their specific useful
lives. Likewise, when a major inspection is performed, its
cost is recognised in the carrying amount of the plant and
equipment as a replacement if the recognition criteria
are satisfied. All other repair and maintenance costs are
recognised in profit or loss as incurred.
Items of property, plant and equipment are depreciated on
a straight-line basis over their useful lives as follows:
USEFUL LIFE
An item of property, plant and equipment and any
significant part initially recognised is derecognised
upon disposal or when no future economic benefits are
expected from its use or disposal. Any gain or loss arising
on derecognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying
amount of the asset) is included in profit or loss when the
asset is derecognised.
Impairment
All non-current tangible assets are reviewed for
impairment whenever events or changes in circumstances
indicate that the carrying amounts may not be
recoverable. For our impairment assessment we identify
cash generating units (CGUs), i.e. the smallest groups of
assets that generate cash inflows independent of cash
inflows from other assets or groups of assets.
Office and computer equipment
2 to 5 years
Key estimate – useful lives
The estimation of useful lives, residual value
and depreciation methods require management
judgement and are reviewed annually. If they
need to be modified, the change is accounted for
prospectively from the date of reassessment until
the end of the revised useful lives. Such revisions
are generally required when there are changes in
economic circumstances impacting specific assets
or groups of assets and as such, any reasonably
possible change in the estimate is unlikely to have
a material impact on the estimation of useful lives,
residual value or amortisation methods.
Furniture, fixtures and fittings
8 years
Leasehold improvements
8 to 10 years
Right-of-use asset
The Group recognises a right-of-use asset at the lease
commencement date. The right-of-use asset is initially
measured at cost, which comprises the initial amount of
the lease liability adjusted for any lease payments made at
or before the commencement date, plus any initial direct
costs incurred and an estimate of costs to dismantle and
remove the underlying asset or to restore the underlying
asset or the site on which it is located, less any lease
incentives received.
The right-of-use asset is subsequently depreciated using
the straight-line method from the commencement date to
the earlier of the end of the useful life of the right-of-use
asset or the end of the lease term. The estimated useful
lives of right-of-use assets are determined on the same
basis as those of property and equipment. In addition, the
right-of-use asset is periodically reduced by impairment
losses, if any, and adjusted for certain remeasurements of
the lease liability.
For the Group’s accounting policy on leases, refer to
note 3.5.
76
iSelect Annual Report 2021
3.2 Intangible assets
This note provides details of our intangible assets and their impairment assessment. Our impairment assessment
compares the carrying value of our cash generating units (CGUs) with their recoverable amounts determined using a
‘value-in-use’ calculation. The value in use calculations use key assumptions such as cash flow forecasts, discount rates
and terminal growth rates.
DEVELOPMENT
COSTS
$’000
TRADEMARKS
AND DOMAIN
NAMES
$’000
GOODWILL
$’000
BRAND NAMES
$’000
TOTAL
$’000
As at 30 June 2021
Cost
Accumulated amortisation
Net carrying amount
Net carrying amount at
1 July 2020
Additions
Disposals
Amortisation
50,889
(36,487)
14,402
17,236
5,173
(160)
(7,847)
370
-
370
370
-
-
-
Net carrying amount at
30 June 2021
14,402
370
As at 30 June 2020
Cost
Accumulated amortisation
Net carrying amount
Net carrying amount at
1 July 2019
Additions
Disposals
Amortisation
Impairment
Exchange differences
Net carrying amount at
30 June 2020
45,876
(28,640)
17,236
17,294
8,806
(632)
(6,461)
(1,729)
(42)
17,236
370
-
370
383
-
-
-
(13)
-
370
-
-
-
-
-
-
-
-
-
-
-
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a
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-
-
-
-
-
-
-
-
-
-
-
51,259
(36,487)
14,772
17,606
5,173
(160)
(7,847)
14,772
46,246
(28,640)
17,606
26,187
6,718
50,582
-
-
-
-
-
-
8,806
(632)
(6,461)
(26,187)
(6,718)
(34,647)
-
-
-
-
(42)
17,606
iSelect Annual Report 2021
77
3.2 Intangible assets (con’d)
Useful lives and amortisation
Intangible assets acquired separately are measured on
initial recognition at cost. Following initial recognition,
intangible assets are measured at cost less any
accumulated amortisation and impairment losses.
Intangible assets acquired in a business combination are
measured at fair value as at the date of acquisition.
Development costs – Development costs are recognised
only when the Group can demonstrate the technical
feasibility, the resources and the intention to complete the
asset; its ability to use or sell the asset, generate future
economic benefits and measure reliably the expenditure
during development. Amortisation of the asset begins
when development is complete and the asset is available
for use in the condition as intended by management.
Trademarks and domain names – The Group made
upfront payments to purchase trademarks and domain
names which can be renewed at little or no cost to the
Group are carried at cost less any impairment.
Brand names – The Group acquired brand names as part
of the Energy Watch Group acquisition. These were initially
recorded at fair value and subsequently carried at cost
less any impairment.
Key estimates - development costs
Internal project costs are classified as research or
development based on management’s assessment of
the nature of each cost and the underlying activities
performed. Management performs this assessment
against the Group’s development costs policy which
is consistent with the requirements of AASB 138.
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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. Amortisation is
calculated over the estimated useful life of the asset as
follows:
Development costs
USEFUL LIFE
2 to 5 years
Trademarks and domain names
Indefinite
Derecognition
Gains and losses arising from the derecognition of an
intangible asset are measured as the difference between
the net disposal proceeds and the carrying amount of the
asset, and are recognised in profit or loss when the asset
is derecognised.
Key estimates - useful lives
The amortisation period and the method for
intangible assets with a finite useful life are reviewed
at least annually. Any changes in the useful life
assessment is accounted for as a change in an
accounting estimate and is made on a prospective
basis.
78
iSelect Annual Report 2021
3.3 Trade receivables and contract assets
Contract assets
Contract assets are initially recognised for revenue earned
from comparison, purchase support and referral services,
as receipt of consideration is conditional on successful
completion of a purchase between the customers and
the product providers. Upon completion of sale and
acceptance by the customer and the provider, invoices
are issued to the provider for the amount receivable.
These amounts invoiced are reclassified from contract
assets to trade receivables. The trade receivable balance
represents the Group’s unconditional right to receive the
cash.
Key estimates – allowance for credit losses
We apply management judgement to estimate
the expected credit losses for trade receivables
and contract assets. Expected credit losses are
assessed on an ongoing basis. Financial difficulties
of the debtor, probability of default, delinquency
in payments and credit ratings are utilised in this
assessment.
The impact of COVID-19 on the recoverability
of receivables from partner companies have
been considered. While the methodologies and
assumptions applied in the base expected credit loss
(ECL) calculations remained unchanged from those
applied in the prior financial year, the Group has
incorporated estimates, assumptions and judgements
specific to the impact of the COVID-19 pandemic.
Whilst no material recoverability issues have been
identified, there is a risk that the economic impacts of
COVID-19 could be deeper or more prolonged than
anticipated, which could result in higher credit losses
than those modelled under the base case.
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Trade receivables
Contract assets
CONSOLIDATED
2021
$’000
2020
$’000
1,432
3,038
13,432
12,788
14,864
15,826
The ageing analysis of trade
receivables is as follows:
Current
1,414
2,961
Past due 1 – 30 days
Past due 31 – 90 days
Past due 90+ days
18
-
-
77
-
-
1,432
3,038
Recognition and measurement
All trade and other receivables recognised as current
assets are due for settlement within no more than 30 days
for upfront fees and within one year for trail commission.
Trade receivables are measured on the basis of amortised
cost less any expected credit loss.
It is the Group’s policy that all key partners who wish to
trade on credit terms are subject to credit verification
procedures.
Allowance for credit losses
iSelect applies the simplified approach and records
lifetime expected losses on all trade receivables and
contract assets. As a consequence, we do not track
changes in credit risk, but recognise a loss allowance
based on lifetime expected credit loss at each reporting
date.
iSelect calculates its provision utilising historical credit loss
experience, adjusted for other relevant factors, i.e. aging of
receivables, credit rating of the debtor, etc. Debts that are
known to be uncollectable are written off when identified.
If an impairment allowance has been recognised for a
debt that becomes uncollectable, the debt is written
off against the provision. If an amount is subsequently
recovered, it is credited against profit or loss.
iSelect Annual Report 2021 79
Key estimates – trail commission revenue and asset
This method of revenue recognition and valuation
of trail commission asset requires the Directors
and management to make certain estimates and
assumptions based on industry data and the historical
experience of the Group.
Attrition rates in Health are particularly relevant to the
overall trail commission asset considering the relative
size of the Health trail commission asset. Attrition
rates vary substantially by provider and also by the
duration of time the policy has been in force, with
rates generally higher in policies under two years old.
The attrition rates used in the valuation of the Health
portfolio at 30 June 2021 ranged from 8.9% and
26.5% (2020: 7.5% and 26.5%).
In undertaking this responsibility, the Group engages
Deloitte Actuaries and Consultants Limited, a firm
of consulting actuaries, to assist in reviewing the
accuracy of assumptions for health, mortgages and
life trail revenue. These estimates and assumptions
include, but are not limited to: termination or lapse
rates, mortality rates, inflation, forecast fund premium
increases and the estimated impact of known
Australian Federal and State Government policies.
These variable considerations are constrained to
the extent that it is highly probable that a significant
reversal in the amount of cumulative revenue
recognised will not occur when the uncertainty
associated with the variable consideration is
subsequently resolved. In determining the extent of
constraint necessary to ensure to a high probability
that a significant reversal of revenue will not occur,
the Group performs a detailed assessment of the
accuracy of previously forecast assumptions against
historical results.
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3.4 Trail commission asset
CONSOLIDATED
2021
$’000
2020
$’000
33,407
29,850
91,361
88,413
Current
Non-current
Total trail commission asset
124,768
118,263
Reconciliation of movement in
trail commission asset:
Opening balance
118,263
114,078
Trail commission revenue –
current period trail commission
sales
40,271
31,276
Cash receipts
Closing balance
(33,766)
(27,091)
124,768
118,263
Recognition, measurement and classification
The Group accounts for trail commission revenue at
the time of selling a product to which trail commission
attaches, rather than on the basis of actual payments
received from the relevant fund or providers involved. On
initial recognition, trail commission revenue and assets
are recognised at expected value. Subsequent to initial
recognition and measurement, the carrying amount of
the trail commission asset is adjusted to reflect actual and
revised estimated cash flows. The resulting adjustment is
recognised as revenue or against revenue in profit or loss.
Cash receipts that are expected to be received within 12
months of the reporting date are classified as current. All
other expected cash receipts are classified as non-current.
Allowance for credit losses
Current trail commission receivables are due
from a combination of highly rated major insurers,
telecommunication and energy providers. There has been
no historical instances where a loss has been incurred.
ECL would not be material and consequently has not been
recognised.
Sensitivity of trail commission asset
A combined premium price decrease of 1% and
termination rate increase of 1% would have the effect
of reducing the carrying value by $10,416,000 (2020:
$10,186,000). A combined premium price increase of 1%
and termination rate decrease of 1% would have the effect
of increasing the carrying value by $9,900,000 (2020:
$9,419,000). Individually, the effects of these inputs would
not give rise to any additional amount greater than those
stated.
80
iSelect Annual Report 2021
3.5 Leases
Lease liabilities
Current1
Non-current
CONSOLIDATED
2020
$’000
2019
$’000
2,747
1,443
4,190
2,552
4,157
6,709
1 2020 includes current lease liability of $8,000 from the iMoney
Group.
Recognition, measurement and classification
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
assesses whether:
• The contract involves the use of an identified asset –
this may be specified explicitly or implicitly, and should
be physically distinct or represent substantially all of
the capacity of a physically distinct asset. If the supplier
has a substantive substitution right, the Group does
not have the right to use the identified asset.
• The Group has the right to obtain substantially all
of the economic benefits from the use of the asset
throughout the period of use; and
• The Group has the right to direct the use of the asset.
The Group has this right when it has the decision-
making rights that are most relevant to changing
how and for what purpose the asset is used. In rare
cases where all the decisions about how and for what
purpose the asset is used are predetermined, the
Group has the right to direct the use of the asset if
either:
• The Group has the right to operate the asset
• The Group designed the asset in a way that
predetermines how and for what purpose it will be
used
The Group recognises a right-of-use asset and a
lease liability at the lease commencement date. For
measurement and recognition of right-of-use assets, refer
to note 3.1.
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 lessee’s incremental borrowing rate.
Generally, the lessee uses its incremental borrowing rate
as the discount rate.
Lease payments included in the measurement of the lease
liability comprise:
• Fixed payments, including in-substance fixed
payments;
• Variable lease payments that depend on an index or a
rate, initially measured using the index or rate as at the
commencement date;
• Amounts expected to be payable under a residual
value guarantee; and
• The exercise price under a purchase option that
the Group is reasonably certain to exercise, lease
payments in an optional renewal period if the Group
is reasonably certain to exercise an extension option,
and penalties for early termination of a lease unless
the Group is reasonably certain not to terminate early.
After the commencement date, the amount of lease
liabilities is increased to reflect the accretion of interest
and reduced for the lease payments made. In addition, the
carrying amount of lease liabilities is remeasured if there is
a modification, a change in the lease term, a change in the
lease payments (e.g., changes to future payments resulting
from a change in an index or rate used to determine such
lease payments) or a change in the assessment of an
option to purchase the underlying asset.
When the lease liability is remeasured in this way, a
corresponding adjustment is made to the carrying amount
of the right-of-use asset, or is recorded in profit or loss if
the carrying amount of the right-of-use asset has been
reduced to zero.
Short-term leases and leases of low-value assets
The Group has elected not to recognise right-of-use
assets and lease liabilities for short-term leases that have
a lease term of 12 months or less and do not contain a
purchase option, and leases of low-value assets, including
IT equipment. The Group recognises the lease payments
associated with these leases as an expense on a straight-
line basis over the lease term.
Right-of-use assets and lease liabilities by class
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CONSOLIDATED
2021
$’000
2020
$’000
2,827
4,705
33
13
2,860
4,718
4,157
6,695
33
14
4,190
6,709
Right-of-use assets
Office premises
Office equipment
Total
Lease liabilities
Office premises
Office equipment
Total
iSelect Annual Report 2021
81
3.5 Leases (con’d)
3.6 Provisions
Maturity analysis – contractual undiscounted
cash flows
Current
Annual leave
Long service leave
Clawback
Rebates
Non-Current
Long service leave
CONSOLIDATED
2021
$’000
2020
$’000
2,183
2,007
966
934
2,905
2,255
4
234
6,058
5,430
395
395
422
422
Recognition, measurement and classification
Employee benefits – annual and long service
leave
The Group recognises a liability for long service leave and
annual leave measured as the present value of expected
future payments to be made in respect of services
provided by employees up to the reporting date using
the projected unit credit method. Consideration is given
to expected future wage and salary levels, experience of
employee departures, and periods of service. Expected
future payments are discounted using market yields at
the reporting date on corporate bond rates with terms to
maturity and currencies that match, as closely as possible,
the estimated future cash outflows.
The Group does not expect its long service leave or
annual leave benefits to be settled wholly within 12 months
of the reporting date.
Annual and long service leave are classified as current
where there is a current obligation to pay the employee
shall they leave the Group.
Clawback provisions
Upfront fees received from certain insurance funds,
broadband providers and mortgage brokers can
be clawed back in the event of early termination of
membership. They vary across the industries and are
usually triggered where a referred member terminates
their policy. Each relevant Product Provider has an
individual agreement and the clawback period ranges
between 0 and 24 months, depending on the agreement.
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CONSOLIDATED
2021
$’000
2020
$’000
2,832
2,714
1,456
4,255
-
-
4,288
6,969
Not later than 1 year
Later than 1 year and not later
than 5 years
Later than 5 years
Total
The Group has initially entered into leases on office
premises with lease terms between 1 to 10 years. The
Group has the option to lease the premises for additional
terms of 1 to 10 years.
Amounts recognised in the profit or loss
Interest on lease liabilities
Expenses relating to short-term
leases1
Income relating to variable
lease payment2
Depreciation charge for right-
of-use assets
Office premises
Office equipment
CONSOLIDATED
2021
$’000
2020
$’000
162
23
146
244
144
194
1,879
2,030
55
50
1,934
2,080
1 Relates to iMoney Group’s short term leases for office premises in
Indonesia, Philippines and Thailand.
2 As a direct result of the COVID-19 pandemic, the Group received
a rent concession in relation to its principal place of business. The
concession was a combination of rent deduction and deferment
for a fixed period as agreed with the landlord. The Group has
elected to apply the practical expedient to AASB 16 Leases
in relation to lease modifications as a result of the COVID-19
pandemic and recognise the rent discount to the profit and loss.
Amounts recognised in the statement of
cash flows
CONSOLIDATED
2021
$’000
2020
$’000
Total cash outflow for leases
2,757
2,806
82
iSelect Annual Report 2021
3.6 Provisions (con’d)
Key estimates - Employee benefits
Long service leave liabilities are measured as the
present value of expected future payments to be
made in respect of services provided by employees
up to the end of the reporting period using the
projected unit credit method. Expected future
payments are discounted using market yields at the
end of the reporting period of high-quality corporate
bonds with terms and currencies that match, as
closely as possible, the estimated future cash
outflows.
ANNUAL LEAVE
LONG SERVICE
LEAVE
CLAWBACK
REBATE
2021
2020
2021
2020
2021
2020
2021
2020
Movement in provision
Carrying amount at the
beginning of the year
2,007
2,349
1,356
1,248
2,255
2,715
234
241
Arising during the year
1,558
2,116
Utilised during the year
(1,382)
(2,458)
Carrying amount at the
end of the year
2,183
2,007
132
(127)
1,361
209
(101)
6,189
6,484
4
(5,539)
(6,944)
(234)
-
(7)
1,356
2,905
2,255
4
234
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iSelect Annual Report 2021 83
CONSOLIDATED
2021
$’000
2020
$’000
Contributed equity
Issued capital
111,425
111,290
MOVEMENT IN SHARES
ON ISSUE
NUMBER OF
SHARES
SHARE
CAPITAL
$’000
Ordinary shares
Total quoted shares
outstanding at 1 July 2019
217,861,393
111,290
Issue of shares
-
-
Total quoted shares
outstanding at 30 June
2020
Issue of shares
Buyback of share capital
Total quoted shares
outstanding at 30 June
2021
217,861,393
111,290
472,911
-
135
-
218,334,304
111,425
Total unquoted shares
outstanding at 1 July 2019
589,933
Issue of shares
Forfeiture of Shares
Exercise of Shares
Total unquoted shares
outstanding at 30 June
2020
Issue of shares
Forfeiture of Shares
Total unquoted shares
outstanding at 30 June
2021
-
-
-
589,933
-
(429,166)
160,767
-
-
-
-
-
-
-
-
Section 4: Our capital and risk
management
4.2 Equity
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This section sets out the policies and procedures
applied to manage our capital structure and the
financial risks we are exposed to. We manage our
capital structure in order to maximise shareholders’
return, maintain optimal cost of capital and provide
flexibility for strategic investments.
4.1 Dividends
This note also provides information about the current
year final dividend paid. No provision for the current
year final dividend has been raised as it was not
determined or publicly recommended by the Board
as at 30 June 2021.
Dividends paid during the financial year are as
follows:
Previous year final
dividend paid
Interim dividend paid
CONSOLIDATED
2021
$’000
2020
$’000
-
2,185
2,185
-
-
-
Franking credit balance
Our franking credits available for use in subsequent
reporting periods can be summarised as follows:
Franking account balance
Franking debits from the refund
of income tax as at 30 June (at
a tax rate of 30% on a tax paid
basis)
CONSOLIDATED
2021
$’000
2020
$’000
130
-
130
-
130
130
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4.2 Equity (con’d)
Ordinary shares
4.3 Capital management
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares or options
are shown in equity as a deduction, net of tax, from the
proceeds. Ordinary shares have no par value and entitle
the holder to the right to receive dividends as declared
and, in the event of winding up of the Group, to participate
in the proceeds from the sale of all surplus assets in
proportion to the number and amount paid up on shares
held. Ordinary shares entitle their holder to one vote,
either in person or by proxy, at a meeting of the Group.
Unquoted shares
Shares issued as part of the Long Term Incentive Plan are
unquoted shares. Refer to note 5.2 for further details of the
Long Term Incentive Plans.
Reserves
Share-based payment reserve
Business combination reserve
Foreign currency translation
reserve
CONSOLIDATED
2021
$’000
2020
$’000
5,717
5,571
-
4,870
5,571
177
11,288
10,618
Share-based payment reserve
This reserve records the value of shares under the Long
Term Incentive Plan, and historical Employee and CEO
Share Option plans offered to the CEO, Senior Executives
and employees as part of their remuneration. Refer to note
5.2 for further details of these plans.
Business combination reserve
The internal group restructure performed in the 2007
financial year, which interposed the holding company,
iSelect Limited, into the consolidated group was exempted
by AASB 3 Business Combinations as it precludes entities
or businesses under common control. The carry-over
basis method of accounting was used for the restructuring
of the iSelect Group. As such, the assets and liabilities
were reflected at their carrying amounts. No adjustments
were made to reflect fair values, or recognise any new
assets or liabilities. No goodwill was recognised as a
result of the combination and any difference between the
consideration paid and the ‘equity’ acquired was reflected
within equity as an equity reserve titled “Business
combination reserve”.
Foreign currency translation reserve
Refer to note 1.5 for further details.
This note provides information about components
of our net equity as well as our capital management
policies. In order to maintain or adjust the capital
structure, we may issue or repay debt, adjust the
amount of dividends paid to shareholders, return
capital to shareholders or issue new shares.
The Board’s policy is to maintain a strong capital base so
as to maintain investor, creditor and market confidence
and to sustain operations and future development of the
business. Capital consists of ordinary shares and retained
earnings. The Board of Directors monitors the return on
equity and seeks to maintain a balance between the
higher returns that might be possible with higher levels of
borrowings and the advantages and security afforded by a
sound capital position. A summary of our equity and debt
attribution is as follows:
CONSOLIDATED
2021
$’000
2020
$’000
Shareholders’ equity
111,425
111,290
Debt
Total funding
-
-
111,425
111,290
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4.4 Financial instruments and risk
Managing our foreign exchange risk
management
Our underlying business activities result in exposure
to operational risks and a number of financial risks,
including interest rate risk, foreign currency risk,
credit risk and liquidity risk.
Our overall risk management program seeks to
mitigate these risks in order to reduce volatility on
our financial performance and to support the delivery
of our financial targets. Financial risk management is
carried out by the Finance department under policies
approved by the Board.
This note summarises how we manage these
financial risks.
Foreign currency risk is the risk that the value
of a financial commitment, forecast transaction,
recognised asset or liability will fluctuate due to
changes in foreign exchange rates.
The Group has minimal transactional currency exposure.
Such exposures are limited to transactional currency
exposure for some purchases made by the Australian
entities in currencies other than the functional currency.
We manage this risk by ensuring commercial terms with
out suppliers are denominated in our functional currency
and where they are not, invoices be processed in a timely
manner. No hedging instrument have been or are in place
as at 30 June 2021 (2020: nil).
Managing our interest rate risk
Managing our credit risk
Interest rate risk arises from changes in market
interest rates. Variable rates on our cash and cash
equivalents give rise to cash flow interest rate risk.
We manage interest rate risk on our cash and cash
equivalents by:
• Monitoring levels of exposure to interest rate risk
based on market performance;
• Maximising our interest rate cash potential by
managing our term deposit portfolio; and
• Reducing risks by managing our target maturity
profiles on term deposits.
Sensitivity
At 30 June 2021, if interest rates had moved as illustrated
in the table below, with all other variables being held
constant, post-tax profit would have been higher/(lower)
as follows:
CONSOLIDATED
2021
$’000
2020
$’000
103
(103)
103
(103)
79
(79)
79
(79)
TOTAL
+1% (100 basis points)
-1% (100 basis points)
CASH AT BANK
+1% (100 basis points)
-1% (100 basis points)
Credit risk is the risk that a counterparty will default
on its contractual obligations resulting in a financial
loss. We are exposed to credit risk from our operating
activities (primarily from cash and cash equivalents,
trade receivables and contract assets and trail
commission asset in future periods).
The Group’s maximum exposure to credit risk at
reporting date in relation to each class of financial
asset is the carrying amount of those assets as
indicated in the statement of financial position.
Credit risk related to cash and cash equivalents
Investments of surplus funds are made only with approved
counterparties and for approved amounts, to minimise the
concentration of risks and mitigate financial loss through
potential counterparty failure.
Credit risk related to trade receivables and future
trail commission
Customer credit risk is managed in accordance with the
Group’s policies, procedures and controls relating to
customer credit risk management. The credit risk rating of
a customer is assessed based on internally defined criteria
including the financial position of the counterparties and
the business sector they operate in, and individual credit
limits are defined in accordance with this assessment.
Outstanding customer receivables and contract assets are
regularly monitored.
An impairment analysis is performed at each reporting
date based on days past due for groupings of various
customer segments with similar loss patterns (i.e., by
geographical region, product type and customer type and
rating). The calculation reflects the time value of money
and reasonable and supportable information that is
available at the reporting date about past events, current
conditions and forecasts of future economic conditions.
Generally, trade receivables are written-off if past due for
more than one year and are not subject to enforcement
activity. The Group does not hold collateral as security.
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4.4 Financial instruments and risk
management (con’d)
Exposure to credit risk
The carrying amount of financial assets subject to credit
risk at reporting date are as follows:
The Group’s non-derivative financial liabilities consist of
trade payables expected to be settled within three months
and lease liabilities expected to be settled within five years.
At 30 June 2021, the contractual cash flows are:
TRADE
PAYABLES
$’000
LEASE
LIABILITIES
$’000
TOTAL
$’000
CONSOLIDATED
2021
$’000
2020
$’000
Cash and cash equivalents
9,433
11,256
Trade receivables and contract
assets
14,864
16,419
Trail commission asset
124,768
118,263
149,065 145,938
Managing our liquidity risks
Liquidity risk is the risk that we will be unable to meet
our financial obligations.
The Group aims to maintain the level of its cash and cash
equivalents at an amount to meet its financial obligations.
The Group also monitors the level of expected cash
inflows on trade receivables and contract assets together
with expected cash outflows on trade and other payables
through rolling forecasts. This excludes the potential impact
of extreme circumstances that cannot reasonably be
predicted.
The Directors have prepared projected cash flow
information for five years from the date of approval of
these financial statements taking into consideration the
estimation of the continued business impacts of COVID-19.
In response to the uncertainty arising from this, the
Directors have considered severe but plausible downside
forecast scenarios.
Concentrations arise when a number of counterparties are
engaged in similar business activities, or activities in the
same geographical region, or have economic features that
would cause their ability to meet contractual obligations
to be similarly affected by changes in economic, political
or other conditions. Concentrations indicate the relative
sensitivity of the Group’s performance to developments
affecting a particular industry. In order to avoid excessive
concentrations of risk, the Group’s internal policies and
procedures include specific guidelines to focus on
maintaining a diversified portfolio. Identified concentrations
of liquidity risks are controlled and managed accordingly.
30 June 2021
Less than 3
months
3 – 12 months
1 – 5 years
30 June 2020
Less than 3
months
3 – 12 months
1 – 5 years
21,762
714
22,476
-
-
2,118
1,456
2,118
1,456
21,762
4,288
26,050
19,853
695
20,548
-
-
2,019
2,019
4,255
4,255
19,853
6,969
26,822
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Valuation and disclosure within fair value
hierarchy
To determine fair value we use both observable and
unobservable inputs. We classify inputs used in the
valuation of our financial instruments according to a
three level hierarchy as shown below:
• Level 1 – quoted (unadjusted) market prices in
active markets for identical assets or liabilities;
• Level 2 – valuation techniques for which the
lowest level input that is significant to the fair
value measurement is directly or indirectly
observable; and
• Level 3 – valuation techniques for which the
lowest level input that is significant to the fair
value measurement is unobservable.
The fair values of all financial assets and liabilities, with the
exception of lease liabilities, approximates their carrying
amounts shown in the statement of financial position.
For financial instruments not quoted in the active markets,
the Group used valuation techniques such as present
value techniques (which include lapse and mortality
rates, commission terms, premium increases and credit
risk), comparison to similar instruments for which market
observable prices exist, and other relevant models used
by market participants. These valuation techniques use
both observable and unobservable market inputs.
iSelect Annual Report 2021 87
Section 5: Our people
5.2 Employee share plans
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We are working to attract and retain employees with
the skills and passion to best serve our markets. This
section provides information about our employee
benefits obligations. It also includes details of our
employee share plans and compensation paid to key
management personnel.
5.1 Key management personnel
compensation
Key management personnel (KMP) refers to those
who have authority and responsibility for planning,
directing and controlling the activities of the Group.
For a list of key management personnel and
additional disclosures, refer to the remuneration
report on pages 40 to 54.
KMP aggregate compensation
During the financial years 2021 and 2020, the aggregate
compensation provided to KMP was as follows:
CONSOLIDATED
2021
$
2020
$
Short-term employee
benefits
2,893,428
2,752,219
Post-employment benefits
118,732
137,108
Share-based payments
560,061
365,812
Termination benefits
-
24,167
3,572,221 3,279,306
Other transactions with our KMP and their
related parties
During the financial years 2021 and 2020, apart from
transactions disclosed in note 7.2 of the financial report,
there were no other transactions with our KMP and their
related parties.
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We have a number of employee share plans that
are available for executives and employees as part
of their short-term and long-term remuneration
packages.
A transaction will be classified as share-based
compensation where the Group receives services
from employees and pays for these in shares or
similar equity instruments.
This note summarises the primary employee share
plans and the key movements in the share-based
payment arrangements during the financial year.
Recognition and measurement
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 were granted. The fair
value was determined by the Directors and management
using a Binomial or Monte Carlo model.
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
(the vesting period), ending on the date on which the relevant
employees become fully entitled to the award (the vesting
date).
At each subsequent reporting date until vesting, the
cumulative charge to profit or loss is the product of (i) grant
date fair value of the award; (ii) current best estimate of the
number of awards that will vest, taking into account the
likelihood of employee turnover during the vesting period
and the likelihood of non-market performance conditions
being met; and (iii) expired portion of the vesting period. The
charge to profit or loss for the period is the cumulative amount
as calculated above less the amounts already charged in
previous periods where there is a corresponding credit to
equity.
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 due to the failure
to meet a service or non-market vesting condition. Any
award subject to a market condition is considered to vest
irrespective of whether or not that market condition is fulfilled,
provided that all other conditions are satisfied.
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 designated 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.
5.2 Employee share plans (con’d)
Shares is repaid in full;
Key estimates – employee share plans
The fair value shares granted under the long
term incentive plans take into account terms and
conditions upon which long term incentive plans
shares were granted. Fair value is estimated as at
the date of the grant using a binomial option pricing
model for shares subject to an EPS hurdle. For shares
subject to a TSR hurdle, a Monte Carlo simulation
option pricing model has been used to estimate the
fair value. Refer to each long term incentive plan for
lists of inputs used in the valuation model.
The recognised expense arising from equity settled share-
based payment plans during the period is shown in note
2.3. During the year ended 30 June 2021, the Group had
the following share-based payment plans in place:
Long Term Incentive Plan
• 2018 LTI Plan
Performance Rights Plan
• 2021, 2020, 2019 and 2018 PRP
• The 2018 LTI Plan lapsed on 30 June 2021.
There have been no cancellations or modifications to
the plans during the period other than as outlined on
page 48 of this report.
FY2018 LTI Plans
Description of Share-Based Payment Plans
The FY2018 LTI Plans were established as the long-term
incentive component of remuneration in order to assist in
the attraction, reward and retention of certain employees.
The LTI Plans are designed to link long-term reward
with the ongoing creation of shareholder value, through
the allocation of LTI Plan Shares which are subject to
satisfaction of long-term performance conditions.
The key terms of the LTI Plans are as follows:
• Participants are invited to join, via a loan-based
share plan. There is no initial cost to the recipient to
participate in the LTI Plan, but the loan must be repaid
before or at the time of sale of the shares. The value
of the loan is set by applying the market value at grant
date to the number of units granted. This means the
share price must increase over the life of the Plan, and
pass the performance tests for there to be any value to
the participant between vesting and expiry;
• The LTI Plan Shares are issued to each participant
upfront, with the number of LTI Plan Shares
determined by dividing the remuneration value by
the fair value of the LTI Plan Shares at the time of
allocation;
• The LTI Plan Shares will only vest upon satisfaction of
conditions set by the Board at the time of the offer;
•
If the conditions are met and the LTI Plan Shares vest,
the loan becomes repayable and participants have up
to five years from the date of allocation of the LTI Plan
Shares to repay the outstanding balance. The LTI Plan
Shares cannot be dealt with (other than to repay the
loan) until the loan in respect of the vested LTI Plan
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• Until the LTI Plan Shares vest, the participant is not
entitled to exercise any voting rights attached to the
LTI Plan Shares. Any dividends paid on the LTI Plan
Shares while the loan remains outstanding are applied
(on a notional after-tax basis) towards repayment of
the loan; and
•
In general, if the conditions are not satisfied by the
relevant testing date for those conditions, or if the
participant ceases employment before the LTI Plan
Shares vest, the participant forfeits all interest in the LTI
Plan Shares in full satisfaction of the loan.
Cessation of employment
Except where the Board determines otherwise in a
specific instance, where a participant ceases employment
with iSelect prior to any conditions attaching to LTI Plan
Shares issued under the LTI Plan being satisfied, their
LTI Plan Shares will be forfeited and surrendered (in full
satisfaction of the loan) and the participant will have no
further interest in the LTI Plan Shares. However the Board
has discretion to approve the reason for a participant
ceasing employment before LTI Plan Shares have vested
in appropriate circumstances. Such circumstances
may include ill health, death, redundancy or other
circumstances approved by the Board.
Where the Board has approved the reason for ceasing
employment, it has discretion to determine any treatment
in respect of the unvested LTI Plan Shares it considers
appropriate in the circumstances – for example, that a pro-
rata number of LTI Plan Shares are eligible to vest, having
regard to time worked during the performance period and
the extent the performance condition has been satisfied at
the time of cessation.
In relation to vested LTI Plan Shares that remain subject
to the loan, the participant will have 12 months (or as
otherwise agreed by the Board) from the date of the
cessation of their employment to repay the loan. Once
the loan is repaid, the participant may deal in the LTI Plan
Shares.
For the purposes of Sections 200B and 200E of the
Corporations Act, iSelect shareholders have approved the
giving of any potential benefits under the LTI Plan provided
in connection with any future retirement of a participant
who holds a ‘managerial or Executive office’ such that for
the purposes of the provisions, those benefits will not be
included in the statutory limit.
Change in control
Unless the Board determines otherwise, all LTI Plan Shares
will vest upon a ‘change of control’, and participants’
loans will become repayable (including in respect of any
outstanding loan where LTI Plan Shares had already
vested prior to the ‘change of control’). If the share
price has fallen, LTI Plan Shares will be forfeited and
surrendered in full satisfaction of the loan.
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5.2 Employee share plans (con’d)
Fair value of shares at grant date:
FY2018 offer under LTI Plan
Each LTI Plan share is offered subject to the achievement
of the performance measure, which is tested once at
the end of the performance period. The LTI Plans will be
measured against one performance measure – relative
Total Shareholder Return (TSR). LTI Plan Shares that do not
vest after testing of the relevant performance measure,
lapse without retesting.
The shares will only vest if a certain Total Shareholder
Return (TSR) relative to the designated comparator
group, being the ASX Small Ordinaries Index excluding
mining and energy companies, is achieved during the
performance period. In relation to the offer, vesting starts
where relative TSR reaches the 50th Percentile.
At the 50th Percentile, 50% of LTI Plan shares will vest.
All LTI Plan shares will vest if relative TSR is above the
75th Percentile. Between these points, the percentage of
vesting increases on a straight-line basis.
Summary of Shares issued under the FY2018 LTI
Plan
The following table illustrates the number of, and
movements in, shares issued during the year:
2021
NUMBER
2020
NUMBER
Outstanding at the
beginning of the period
589,933
589,933
Granted during the period
-
Forfeited during the period
(429,166)
Exercised during the period
-
-
-
-
Outstanding at the end of
the period
160,767
589,933
The following table lists the inputs to the model for grants
made:
GRANT ON
3 JULY 2017
GRANT ON
31 OCTOBER
2017
$2.00
$1.53
$2.00
$1.53
3 years
3 years
2.2%
3.0%
35%
2.2%
3.0%
35%
Five day volume
weighted average price
(VWAP) as at grant date
Exercise price (same as
underlying share price at
grant date)
Expected life of LTI Plan
shares
Risk free rate
Dividend yield
Expected volatility
GRANT ON
3 JULY 2017
GRANT ON
31 OCTOBER
2017
Relative TSR class
$0.60
$0.40
FY2021, FY2020, FY2019 & FY2018
Performance Rights Plan
The key terms of the Performance Rights Plans are as
follows:
• The Performance Rights Plan allows the Group
to issue rights to employees. The number of
Performance Rights issued is determined by dividing
the remuneration value by the fair value of the
Performance Rights at the time of allocation;
• The Performance Rights Plan will only vest upon
satisfaction of certain conditions which are set by the
Board at the time of the offer;
•
If the conditions are met and the Performance Rights
vest, each participant is entitled to an ordinary share
for each Performance Right which vests;
• Until the Performance Rights vest and ordinary shares
are issued, the participant is not entitled to exercise
any voting rights attached to the Performance Rights
and is not entitled to any dividend payments; and
•
In general, if the conditions are not satisfied by
the relevant testing date for those conditions, or
if the participant ceases employment before the
Performance Rights Plan Shares vest, the participant
forfeits all interest in the Performance Rights.
Offer under Performance Rights Plan
The Performance Rights Plan rights granted are subject
to the achievement of the performance measure, which
is tested once at the end of the 3-year performance
period. The Performance Rights will be measured against
one performance measure – relative Total Shareholder
Return (TSR). The Performance Rights that do not vest
after testing of the relevant performance measure, lapse
without retesting.
Cessation of employment
Except where the Board determines otherwise
in a specific instance, where a participant ceases
employment with iSelect prior to any conditions
attaching to Performance Rights Plan Shares issued
under the Performance Rights Plan being satisfied, their
Performance Rights will be forfeited and the participant
will have no further interest in the Performance Rights.
However the Board has discretion to approve the reason
for a participant ceasing employment before Performance
Rights have vested in appropriate circumstances. Such
circumstances may include ill health, death, redundancy or
other circumstances approved by the Board.
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5.2 Employee share plans (con’d)
Fair value of shares at grant date:
Where the Board has approved the reason for ceasing
employment, it has discretion to determine any treatment
in respect of the unvested Performance Rights it considers
appropriate in the circumstances – for example, that a
pro-rata number of Performance Rights are eligible to vest,
having regard to time worked during the performance
period and the extent the performance condition has been
satisfied at the time of cessation.
For the purposes of Sections 200B and 200E of the
Corporations Act, iSelect shareholders have approved the
giving of any potential benefits under the Performance
Rights Plan provided in connection with any future
retirement of a participant who holds a ‘managerial
or Executive office’ such that for the purposes of the
provisions, those benefits will not be included in the
statutory limit.
Change in control
Upon a ‘change of control’, the Board has discretion to
determine that some or all of the participants’ Performance
Rights vest immediately.
Shares issued under the FY2021, FY2020,
FY2019 and FY2018 Performance Rights plans
FY2021 Performance Rights Plan
The following table illustrates the number of, and
movements in, shares issued during the year:
2021
NUMBER
2020
NUMBER
Outstanding at the
beginning of the period
-
Granted during the period
3,220,823
Forfeited during the period
(448,202)
Exercised during the period
-
Outstanding at the end of
the period
2,772,621
-
-
-
-
-
The following table lists the inputs to the model for grants
made:
Relative TSR class
GRANT ON
1 JULY 2020
$0.15
FY2020 Performance Rights Plan
The following table illustrates the number of, and
movements in, shares issued during the year:
2021
NUMBER
2020
NUMBER
Outstanding at the
beginning of the period
5,570,499
-
Granted during the period
-
5,570,499
Forfeited during the period
(1,596,324)
Exercised during the period
-
-
-
Outstanding at the end of
the period
3,974,175 5,570,499
The following table lists the inputs to the model for grants
made:
GRANT ON
1 JULY 2019
GRANT ON
20 AUGUST
2019
$0.61
$0.55
$0.61
$0.55
3 years
1 year
1.1%
5.5%
40%
1.0%
0.0%
40%
Five day volume weighted
average price (VWAP) as at
grant date
Exercise price (same as
underlying share price at
grant date)
Expected life of LTI Plan
shares
Risk free rate
Dividend yield
Expected volatility
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GRANT ON
1 JULY 2020
Fair value of shares at grant date:
Five day volume weighted average price
(VWAP) as at grant date
Exercise price
Expected life of LTI Plan shares
Risk free rate
Dividend yield
Expected volatility
$0.21
$0.00
3 years
0.26%
0.00%
40%
GRANT ON
1 JULY 2019
GRANT ON
20 AUGUST
2019
Relative TSR class
$0.32
$0.31
iSelect Annual Report 2021
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5.2 Employee share plans (con’d)
FY2019 Performance Rights Plan
The following table illustrates the number of, and
movements in, shares issued during the year:
2021
NUMBER
2020
NUMBER
Outstanding at the
beginning of the period
2,558,889
2,594,261
FY2018 Performance Rights Plan
The following table illustrates the number of, and
movements in, shares issued during the year:
2021
NUMBER
2020
NUMBER
Outstanding at the
beginning of the period
396,238
407,262
Granted during the period
-
-
Granted during the period
-
-
Forfeited during the period
(396,238)
(11,024)
Forfeited during the period
(681,111)
(35,372)
Exercised during the period
-
-
Outstanding at the end of
the period
1,877,778 2,558,889
The following table lists the inputs to the model for grants
made:
GRANT ON
2 JULY 2018
Five day volume weighted average price
(VWAP) as at grant date
$0.80
Expected life of Performance Rights Plan
3 years
Risk free rate
Dividend yield
Expected volatility
Fair value of shares at grant date:
Relative TSR Class
2.28%
4.1%
40%
GRANT ON
2 JULY 2018
$0.45
Exercised during the period
Outstanding at the end of
the period
-
-
-
396,238
The following table lists the inputs to the model for grants
made:
GRANT ON
3 JULY 2017
Five day volume weighted average price
(VWAP) as at grant date
$2.00
Expected life of Performance Rights Plan
3 years
Risk free rate
Dividend yield
Expected volatility
Fair value of shares at grant date:
Relative TSR Class
Retention Rights Class
2.2%
3.0%
35%
GRANT ON
3 JULY 2017
$1.16
$1.79
92
iSelect Annual Report 2021
Section 6: Our investments
6.2 Subsidiaries
This section outlines our group structure and includes
information about our controlled and associated
entities. It provides details of changes to these
investments and their effect on our financial position
and performance during the financial year. It also
includes the results of our associated entities.
6.1 Parent entity disclosures
The accounting policies of the parent entity, iSelect
Limited, which have been applied in determining the
financial information shown below, are the same as those
applied in the consolidated financial statements except
for accounting for investments in subsidiaries which are
measured at cost.
CONSOLIDATED
2021
$’000
2020
$’000
154
208
123,740
142,363
123,894
142,571
58,113
74,568
58,113
74,568
65,781
68,003
111,425
111,290
5,717
4,870
(51,361)
(48,157)
65,781
68,003
Financial Position
Assets
Current Assets
Non-Current Assets
Total Assets
Liabilities
Current Liabilities
Total Liabilities
Net Assets
Equity
Contributed Equity
Reserves
Accumulated Losses
Total Equity
Financial Performance
Loss of the parent entity
(1,019)
(10,017)
Total comprehensive income
of the parent entity
(1,019)
(10,017)
There are no contractual or contingent liabilities of the
parent as at reporting date (2020: $nil). iSelect Limited
has issued bank guarantees and letters of credit to third
parties for various operational purposes. It is not expected
these guarantees will be called on.
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The consolidated financial statements include the financial
statements of iSelect Limited as the ultimate parent, and
the subsidiaries listed below:
2021
2020
iSelect Health Pty Ltd1
Australia
100%
100%
iSelect Life Pty Ltd
Australia
100%
100%
iSelect General Pty Ltd Australia
100%
100%
iSelect Media Pty Ltd1
Australia
100%
100%
iSelect Mortgages Pty
Ltd1
Australia
100%
100%
iSelect Services Pty Ltd1 Australia
100%
100%
Tyrian Pty Ltd1
Australia
100%
100%
General Brokerage
Services Pty Ltd1
Energy Watch Trading
Pty Ltd1
Australia
100%
100%
Australia
100%
100%
Procure Power Pty Ltd1 Australia
100%
100%
Energy Watch Services
Pty Ltd1
iSelect International
Pty Ltd1
Australia
100%
100%
Australia
100%
100%
Intelligent Money Sdn
Bhd
Malaysia
iMoney Comparison
Sdn Bhd
iMoney Comparison
Singapore Pte Ltd
Malaysia
Singapore
PT Atur Duit Indonesia
Indonesia
iMoney Co., Ltd
Thailand
iMoney Comparison
Philippines
iMoney Hong Kong
Pte Ltd
Philippines
Hong Kong
-
-
-
-
-
-
-
88.8%
88.8%
88.8%
88.8%
88.8%
88.8%
88.8%
1 A Deed of Cross Guarantee has been entered into by iSelect
Limited and these entities. Refer to note 6.4.
iSelect Annual Report 2021 93
6.3 Changes in group structure
Carrying amounts of assets and liabilities disposed:
CONSOLIDATED
AUG 2020
$’000
JUN 2020
$’000
Assets
Cash and cash equivalent
Trade and other receivables
Other assets
1,576
505
323
734
593
355
Assets held for sale
2,404
1,682
CONSOLIDATED
AUG 2020
$’000
JUN 2020
$’000
Liabilities
Trade and other payables
Lease liabilities
Other
1,705
-
208
1,751
8
175
Liabilities directly
associated with the assets
1,913
1,934
The net cash flows incurred by iMoney are as follows:
Operating
Financing
Investing
Net cash inflow/(outflow)
Loss per share
Basic / diluted profit/
(loss) for the period from
discontinued operations
2021
$’000
2020
$’000
(126)
(34)
1,002
842
(2,828)
1,039
(862)
(2,651)
CENTS
CENTS
(1.4)
(10.5)
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Discontinued operations
In May 2020, the Group commenced negotiation with an
independent third party to sell the Group’s 88.8% interest
in the iMoney Group. The sale of iMoney was completed
on 14 August 2020. The Group has a net cash inflow of
$842,000 prior to disposal with a net loss on disposal
of $491,000 due to majority of the group’s assets being
fully impaired in prior year. The group also recorded a
loss of $2,433,000 from derecognition of iMoney’s non-
controlling interest through profit and loss. of At 30 June
2020, iMoney was classified as a disposal group held for
sale and as a discontinued operation. The business of
iMoney represented the entirety of the Group’s operations
in Asia. With iMoney being classified as a discontinued
operations, its operating results are no longer presented in
the segment note. The results of iMoney for the period are
presented below:
CONSOLIDATED
JUN 2021
$’000
JUN 2020
$’000
89
(635)
(546)
(34)
(2,433)
4,845
(9,378)
(4,533)
(324)
-
-
(15,975)
(3,013)
(20,832)
-
(2,255)
(3,013)
(23,087)
Revenue
Expenses
Operating income
Net finance cost
Derecognition of non-
controlling interest
Impairment of property,
plant and equipment and
other intangible assets
Loss before tax from
discontinued operations
Tax expense related to
current pre-tax loss
Post-tax loss of
discontinued operations
The net cash flows generated from the sale of iMoney
Group are, as follows:
Cash received from sale of discontinued
operations
Cash disposed as a part of discontinued
operations
Net cash flow on date of disposal
$’000
-
(1,576)
(1,576)
94
iSelect Annual Report 2021
6.4 Deed of cross guarantee
Pursuant to the iSelect Deed of Cross Guarantee (“the
Deed”) and in accordance with ASIC Corporations (Wholly-
owned Companies) Instrument 2016/758 (previously
98/1418), the subsidiaries identified with a ‘1’ in note 6.2 are
relieved from the requirements of the Corporations Act
2001 relating to the preparation, audit and lodgment of
their financial reports.
iSelect Limited and the subsidiaries identified with a
‘1’ in note 6.2 together are referred to as the “Closed
Group”. The Closed Group, with the exception of General
Brokerage Services Pty Ltd, Energy Watch Trading Pty Ltd,
Procure Power Pty Ltd, Energy Watch Services Pty Ltd and
iSelect International Pty Ltd entered into the Deed on 26
June 2013.
General Brokerage Services Pty Ltd, Energy Watch Trading
Pty Ltd, Procure Power Pty Ltd and Energy Watch Services
Pty Ltd entered into the Deed on 1 July 2014, the date
they were acquired as part of the Energy Watch Group
acquisition. iSelect International Pty Ltd entered the Deed
on 8 September 2014. The effect of the Deed is that
iSelect Limited guarantees to each creditor payment in full
of any debt in the event of winding up any of the entities in
the Closed Group.
The consolidated income statement of the entities that are
members of the Closed Group is as follows:
CONSOLIDATED
2021
$’000
2020
$’000
Consolidated income
statement
Loss from continuing operations
before income tax
(14,849)
(36,897)
Income tax benefit
1,993
5,228
Net loss for the year
(12,856)
(31,669)
The consolidated balance sheet of the entities that are
members of the Closed Group is as follows:
CONSOLIDATED
2021
$’000
2020
$’000
Assets
Current assets
Cash and cash equivalents
1,524
3,960
Trade receivables and contract
assets
13,725
21,604
Trail commission asset
27,521
24,022
Other assets
3,857
3,296
Total current assets
46,627
52,882
Non-current assets
Investments
14,880
36,799
Trail commission asset
58,040
54,807
Property, plant and equipment
4,540
6,939
Intangible assets
14,772
17,606
Total non-current assets
92,232
116,151
Total assets
138,859 169,033
Liabilities
Current liabilities
Trade and other payables
89,556
76,595
Lease liabilities
Provisions
2,747
2,544
5,559
4,677
Total current liabilities
97,862
83,816
Non-current liabilities
Provisions
Lease liabilities
395
1,443
422
4,157
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Retained earnings at the
beginning of the period
Transferred in from divested
subsidiary
(50,406)
(18,737)
(30,045)
-
Net deferred tax liabilities
17,509
14,884
Net loss for the year
(12,856)
(31,669)
Dividends paid
(2,185)
-
Retained earnings at the end
of the year
(95,492)
(50,406)
Total non-current liabilities
19,347
19,463
Total liabilities
Net Assets
Equity
Contributed equity
Reserves
Retained earnings
Total Equity
117,209 103,279
21,650
65,754
111,425
111,290
5,717
4,870
(95,492)
(50,406)
21,650
65,754
iSelect Annual Report 2021 95
Section 7: Other information
7.3 Auditor’s remuneration
This section provides other information and disclosures
not included in the other sections, for example our
external auditor’s remuneration, commitments and
contingencies and significant events occurring after
the reporting date.
7.1 Other accounting policies
The external auditor of the Group is BDO Audit Pty
Ltd (2020: Ernst & Young). In addition to the audit and
review of our financial reports, BDO (2020: Ernst &
Young) provides other services throughout the year.
This note shows the total fees to external auditors
split between audit, audit related and non-audit
related services.
CONSOLIDATED
2021
$
2020
$
Audit services
Group statutory audit
245,000 342,500
Total audit services
245,000 342,500
Audit-related services
AFSL compliance review
procedures
20,000
34,000
Other assurance services
-
-
Total audit-related services
20,000
34,000
Total audit and audit-related
services
265,000 376,500
Non-audit services
None
Total non-audit services
-
-
-
-
Total fee for services provided
265,000 376,500
7.4 Events after the reporting date
In a COVID-19 context, iSelect notes the recent
developments in Victoria, New South Wales and
Queensland, where the related business effects remain
highly uncertain.
No other matters or circumstances have arisen since the
end of the period that have significantly affected or may
significantly affect the operations of the Group, the results
of those operations, or the state of affairs of the Group in
future financial years.
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Standards issued but not yet effective
AASB 2020-1 & AASB 2020-6 - Amendments to
AASB 101: Classification of Liabilities as Current
or Non-current
In January 2020, the AASB issued amendments
to paragraphs 69 to 76 of AASB 101 to specify the
requirements for classifying liabilities as current or non-
current. The amendments clarify:
• What is meant by a right to defer settlement
• That a right to defer must exist at the end of the
reporting period
• That classification is unaffected by the likelihood that
an entity will exercise its deferral right
• That only if an embedded derivative in a convertible
liability is itself an equity instrument would the terms of
a liability not impact its classification
The amendments are effective for annual reporting
periods beginning on or after 1 January 2023 and must be
applied retrospectively. The Group is currently assessing
the impact the amendments will have on current practice
and whether existing loan agreements may require
renegotiation.
7.2 Related party transactions
Transactions and their terms and conditions
with other related parties
Arnhold Investments Pty Ltd
All remuneration for Mr Brodie Arnhold including payment
for his position of Chief Executive Officer and Executive
Director, and all related fees for his positions of Non-
Executive Director and Non-Executive Chairman was paid
to Arnhold Investments Pty Ltd. Mr Arnhold is the Director
and Company Secretary of Arnhold Investments Pty Ltd.
Prezzee Pty Ltd
During the year, the Group paid Prezzee Pty Ltd $112,043
(2020: $68,661) in relation to digital gift cards for customer
and staff incentives. Prezzee Pty Ltd is considered to be a
related party of the Group due to Precision Group’s (under
significant influence of Mr Shaun Bonett, a Non-Executive
Director of the Group) investment in Prezzee Pty Ltd.
and noting Mr Bonett is Chairman and a Non-Executive
Director of Prezzee Pty Ltd. The amount payable to
Prezzee Pty Ltd as at 30 June 2021 was $9,020
(2020: $21).
96
iSelect Annual Report 2021
7.5 Commitments and contingencies
Life insurance policies
On 24 October 2011, iSelect Life Pty Ltd reported to
the Australian Securities and Investment Commission
a breach in relation to its Australian financial services
license relating to life insurance policies sold between
April 2009 and March 2011. As a result of this breach, an
internal review of all life insurance policies sold during that
period was undertaken. The review and remediation work
commenced in October 2011. As at 30 June 2021, 100%
(30 June 2020: 100%) of the initial 5,095 policies had
been reviewed by iSelect with only 489 (30 June 2020:
508) policies in relation to one provider still subject to final
remediation.
The amount, if any, of the liability associated with
those policies yet to be remediated cannot be reliably
determined at this time, and accordingly no amounts have
been recorded in the consolidated financial statements for
the year ended 30 June 2021 (30 June 2020: nil).
Potential liabilities for the Group, should any obligation
be identified, are expected to be covered by insurance
maintained by the Group.
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Directors’
Declaration
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In accordance with a resolution of the Directors of iSelect Limited we state that:
1.
In the opinion of the Directors:
a.
the consolidated financial statements and notes that are set out on pages 56 to 97 and the Directors’
report, are in accordance with the Corporations Act 2001, including:
i. giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its performance,
for the financial year ended on that date; and
ii. complying with Australian Accounting Standards and the Corporations Regulations 2001; and
iii. there are reasonable grounds to believe that the Group will be able to pay its debts as and when they
become due and payable.
2. There are reasonable grounds to believe that the Company and the Group entities identified in note 6.2 will
be able to meet any obligations or liabilities;
3. The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from
the Chief Executive Officer and the Chief Financial Officer for the financial year ended 30 June 2021;
4. The Directors draw attention to note 1.1 to the consolidated financial statements, which includes a statement
of compliance with International Financial Reporting Standards; and
5. As at the date of this declaration, there are reasonable grounds to believe that the members of the Closed
Group identified in note 6.4 will be able to meet any obligations or liabilities to which they are or may become
subject, by virtue of the Deed of Cross Guarantee.
On behalf of the Directors
Brodie Arnhold
Director
Melbourne,
24 August 2021
Melanie Wilson
Director
Melbourne,
24 August 2021
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Tel: +61 3 9603 1700
Fax: +61 3 9602 3870
www.bdo.com.au
Collins Square, Tower Four
Level 18, 727 Collins Street
Melbourne VIC 3008
GPO Box 5099 Melbourne VIC 3001
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of iSelect Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of iSelect Limited (the Company) and its subsidiaries (the Group),
which comprises the consolidated statement of financial position as at 30 June 2021, 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 report, including a summary of significant accounting policies and the directors’ declaration.
In our opinion the accompanying financial report of the Group, is 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 2021 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
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 of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
iSelect Annual Report 2021 99
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Recognition of trail commission revenue and valuation of associated trail commission asset
Key audit matter
How the matter was addressed in our audit
The Group recognises trail commission revenue
which records, at the point of sale, the future
sales commissions expected to be earned over the
contract.
The recognition and measurement of trail
commission revenue, and the associated trail
commission asset, is a key audit matter due to
the:
Accounting and economic sophistication
necessary to value the trail commission asset
and related revenue
Sensitivity of accounting judgements, inputs
and estimates on the valuation of the trail
commission asset
Complexity of the trail commission contract
model
The accounting policy, and details of the key
accounting estimates and assumptions, are disclosed
in Note 2.2 (Revenue from contracts with customers)
and 3.4 (Trail commission asset).
Our audit procedures included, but were not
limited to:
Evaluating Management’s processes and
controls to recognise revenue
Assessing the revenue recognition policy for
compliance with the relevant Accounting
Standards
Agreeing a sample of sales to appropriate
customer source documentation to agree the
revenue had been accurately recorded in
accordance with the revenue recognition
policy
Evaluating the accuracy of data inputs into
the trail commission model
Engaging our actuarial specialist to assist in
reviewing the Group’s trail commission
valuation model including assessing the
reasonableness of key assumptions and
estimates within the trail commission asset
Performing analytical procedures comparing
revenue with our expectations and
understanding of the financial performance
during the year as well as well as the trail
commission asset valuation
Assessing the appropriateness of the relevant
disclosures in the financial statements.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s 2021 Annual Report for the year ended 30 June 2021, but does not include
the financial report and the 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
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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.
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.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 40 to 54 of the Directors’ Report for the
year ended 30 June 2021.
In our opinion, the Remuneration Report of iSelect Limited, for the year ended 30 June 2021, 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.
BDO Audit Pty Ltd
James Mooney
Director
Melbourne, 24 August 2021
iSelect Annual Report 2021
101
ASX
Information
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Additional information required by the Australian
Securities Exchange Ltd and not shown elsewhere in this
report is as follows. The information is current as of
3 August 2021.
MARKETABLE PARCELS
There were 195 shareholders holding less than a marketable
parcel of $500 worth of shares, based on the closing market
price on 3 August 2021 of $0.5050 per share.
SHARES SUBJECT TO VOLUNTARY
ESCROW
As at 3 August 2021, there are no Shares subject to voluntary
escrow.
DISTRIBUTION OF
SHAREHOLDINGS
SIZE OF HOLDING
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
FULLY PAID ORDINARY
SHARES
NUMBER OF SHARES^
80,239
829,689
1,231,607
9,482,456
207,120,037
^
The total number of shares on issue as at 3 August 2021 was
218,744,028.
102
iSelect Annual Report 2021
SUBSTANTIAL SHAREHOLDERS AS
AT 3 AUGUST 2021
NUMBER OF
ORDINARY
SHARES HELD
% OF
VOTING
RIGHTS
62,430,788
28.66
32,825,266
19,083,682
15.07
8.74
18,199,282
8.35
14,599,191
11,107,451
6.69
5.09
NAME
BHL Management Services
Limited
Thorney Investment Group
Microequities Asset
Management
Renaissance Asset
Management
Forager Funds Management
National Nominees Ltd
ANF Together Trustees
Pty Ltd ATF Equipsuper
Superannuation Fund
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TWENTY LARGEST SHAREHOLDERS
The twenty largest shareholders of fully paid ordinary shares as at 3 August 2021 were:
NAME
Innovation Holdings Australia Pty Ltd <1>
J P Morgan Nominees Australia Pty Limited
UBS Nominees Pty Ltd
Innovation Holdings Australia Pty Ltd <2>
National Nominees Limited
BNP Paribas Noms Pty Ltd
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