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General MotorsAnnual Report2022 We respectfully acknowledge the
Traditional Owners of lands across
Australia and pay our respects to their
Elders, past, present and emerging.
Our head office is located on Gadigal land.
MA FINANCIAL GROUP LIMITED
Registered office
Principal place of business
Level 27, Brookfield Place
10 Carrington Street
Sydney NSW 2000
Tel: + 61 2 8288 5555
MAFinancial.com
KEY CONTACT:
Jane Clapcott
jane.clapcott@mafinancial.com
MA Financial Group | 2022 Annual Report 01
ABOUT
About MA Financial Group
Independent Chair’s letter
Joint Chief Executive Officer’s letter
2022 at a glance
Year in review
02
SUSTAINABILITY REPORT
Sustainability report
03
DIRECTORS’ REPORT
Directors’ report
Letter from the Chair of the Nomination and Remuneration Committee
Remuneration report
Auditor’s independence declaration
04
FINANCIAL REPORT
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Directors’ declaration
Independent auditor’s report
05
ADDITIONAL INFORMATION
Dividend details
Glossary
Corporate directory
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MA Financial Group | 2022 Annual Report 01 01 AboutMA Financial Group | 2022 Annual Report MA Financial Group is a diversified financial services firm specialising in managing alternative
assets, lending, corporate advisory and equities with a strong focus on growth and innovation.
In our thirteenth year of operation, our strategy remains the same, source great people, empower
them and provide the infrastructure to succeed individually and as a team. This strategy, coupled
with a focus on alignment of interest, provides the foundation to grow our diversified business
sustainably across many specialisations.
Founded in 2009, the Group has built on its capabilities as a corporate advisory business,
growing an alternative asset management business with $7.8 billion of assets under
management (AUM) and, more recently, a diversified Lending and Technology business. Our
focus has been to build specalised expertise and capabilities in deep addressable markets.
Where we see strategic benefit, we have invested in operating capability to complement our
investment capability, including retail shopping centres and hospitality venues. Today the Group
employs over 600 people in Australia, China and Hong Kong. A key MA Financial principle has
been to attract and hire the best people and empower them to reach their full potential. This
approach has been consistent throughout MA Financial’s journey and is pivotal to our success.
5
MA Financial Group | 2022 Annual ReportAbout MA Financial Group Our purpose and values
MA Financial is focused on delivering long term value to
our clients and partners, our shareholders and our people.
We do this by:
• partnering with clients who value strong alignment,
complementary expertise and sustainable performance
• empowering our people through a culture of growth,
cohesion, innovation and accountability
• delivering a high standard of technical expertise in both
investment and advisory roles
• being active managers of risk.
Differentiating Values and Behaviours
Growth
• We actively seek sustainable
value creation
• We are committed to continuous
improvement and technical excellence
• We pursue ongoing learning, and we invest in
practical individual and team development
Cohesion
• We recognise the whole is greater
than the sum of its parts
• We encourage each other to pursue
opportunities and empower one another
to succeed
• We actively find solutions, not problems
• Our growth is always paired with acting
• We value diversity
with integrity
Innovation
• We uncover opportunities others may
miss and transform them into actionable
and meaningful outcomes for our clients
Accountability
• We accept our commitments and
are accountable to deliver on them
• We own and discuss our mistakes
• We constantly develop and share new ideas
and learn from them
• We are entrepreneurial and think and act like
• We actively think about and manage risk
business owners
• We speak up and we don’t accept inappropriate
• We are hard-working and resilient
behaviour and actions
6
MA Financial Group | 2022 Annual ReportAbout MA Financial Group
Asset Management
Lending & Technology
We manage funds for institutional, high net worth and retail
investors across a diversified range of strategies including
real estate, hospitality, credit, private equity and venture
capital. The team also manage traditional asset classes such
as cash, bonds and listed equities.
In total, we have $7.8 billion AUM across 50 funds, distributed
and actively managed by teams of experienced investment
professionals.
The business benefits from deep operating expertise and
capability; we believe the in-house management of operating
assets can help us to deliver superior returns and best
manage risk. The investment teams also benefit from sharing
expertise across the Group, gaining sector insights and
access to differentiated investment opportunities.
In Real Estate, we manage a diversified portfolio of retail,
office and industrial assets, backed by strong operating
capabilities. In 2022, we entered into a joint-venture with
Centuria Capital Group and purchased ‘Allendale Square’, an
A-Grade office asset in Perth.
The Group’s Hospitality platform, MA Hotel Management,
applies sector expertise to a high-quality portfolio of 40 hotel
venues. This includes the Redcape Hotel Group, a $1.4+ billion
unlisted hospitality fund, open to retail investors.
We have expertise in providing credit to borrowers and
structuring transactions across a range of asset classes and
economic conditions. These capabilities are applied across
our credit investment strategies, spanning real estate credit,
private credit, structured finance, cash and bonds.
Our Lending & Technology division uses the combined
expertise we have in credit advisory and credit investment.
It comprises a technology-enabled Residential Lending
Marketplace and differentiated lending platforms.
Lending & Technology is highly symbiotic with our growing
credit investing activity. We can originate credit assets on a
proprietary basis with tailored underwriting standards and
utilise our in-house expertise to manage the loan portfolios.
It also provides us with actionable insights and market
intelligence, an important strategic advantage when investing
in credit. Similarly, our credit investing activity enables our
Lending & Technology division to scale while optimising
capital efficiency. This is a key differentiator for the division,
compared to traditional finance companies.
Residential Lending Marketplace
Our Residential Lending Marketplace was established in
2022 following the successful acquisition and integration of
mortgage aggregator Finsure. Today the marketplace has over
$90 billion in managed loans for over 350,000 borrowers.
It provides core infrastructure for over 2,600 broker and
features 80 lenders offering more than 4,500 products.
When combined with our residential lender MA Money, and
Middle, a digital tool helping brokers collect verified financial
information for loan applications, the Marketplace will help
us become a meaningful lender to Australia’s $2 trillion
residential mortgage market, and an originator of attractive
credit assets for our Asset Management business.
Lending Platforms
We have two lending platforms. MA Money provides
residential loans to prime, near-prime and specialist
customers nationally. Our Specialty Finance business is
focused on high-margin, lending opportunities. It includes our
legal disbursement finance activities and bespoke receivable
funding initiatives, including the CommissionNow product
designed for Finsure brokers.
7
MA Financial Group | 2022 Annual ReportAbout MA Financial Group Corporate Advisory & Equities
Our Corporate Advisory & Equities (CA&E) division provides
strategic and financial advice for mergers and acquisitions,
equity capital markets (ECM), debt capital markets (DCM),
restructuring, research and cash equities trading. Our
specialised sector capabilities include real estate, credit and
restructuring, technology and small to mid-cap industrial
companies.
We have a long-standing strategic alliance with NYSE listed
global investment bank Moelis & Company who own 13.4% of
the Group’s issued capital. The strategic alliance is beneficial
to both parties by:
• Providing access to a global network of advisory
executives sharing intellectual capital and client
relationships
• Facilitating cooperation on cross-border or industry
specific advisory mandates
• Benefiting from a recognisable global brand in corporate
advisory activities
Since 2009, we have advised on over $102 billion of
transactions and raised over $13.9 billion of equity capital
on behalf of our clients. Our Equities business provides
securities research, sales and trading execution services to
institutional clients, and complements the Corporate Advisory
business by providing ECM expertise and distribution
capabilities to facilitate transactions on behalf of clients.
8
MA Financial Group | 2022 Annual ReportAbout MA Financial Group MA Financial in the community
Our core value of Growth is about much more than financial performance.
Growth is about our people. It’s about creating opportunity for our growing team of 600 employees,
and the 4,700 people who are employed by the companies and funds we invest in. Growth is also
about our impact in the community and supporting our charity partners to reach their full potential.
MA Foundation
Established in 2018 the Foundation has donated over $7.7 million to 35 charities to date. The
activities of the Foundation are led by our people, and more than 80% of Foundation receipts
arise from employee pledges. This is a testament to our workplace culture that places great
importance on supporting our communities.
The MA Foundation has three Community Partners as part of our giving programme.
• GO Foundation – a focus on education and working to create a brighter future for
Indigenous Australians
• Beyond Blue – supporting millions of Australians achieve their best possible mental health
• Mirabel Foundation – assisting children who have been orphaned or abandoned due to
parental illicit drug use and are now in the care of extended family.
In the 2022 annual Christmas appeal, employees raised over $6,000 for the children in the care
of Mirabel Foundation.
9
MA Financial Group | 2022 Annual ReportAbout MA Financial Group MA Financial in the community
Sydney Contemporary
Publinc
In 2022 we continued our successful partnership with
Sydney Contemporary Art Fair hosting over 500 clients,
partners, and employees during the four-day art festival.
Sydney Contemporary is known for the diversity of artists
represented and we were delighted to host select clients
and celebrate the works of female emerging artist Nadia
Hernadez, and art curator Annika Kristensen.
As members of corporate Australia, we recognise our role in
helping to bridge the gap in providing the necessary support
to ensure the future of emerging artists, and a thriving cultural
sector for the benefit of all Australians.
Regional engagement
We have supported cultural ties between Australia and our
regional neighbours through active engagement with and
sponsorship of the Australia–China Business Council, the
Migration Institute of Australia and the Australia–China
Relations Institute.
Publinc Communities is our Hospitality venues community
programme. Publinc Communities is a purposeful social
impact programme driven by customers connecting with
their local community and giving back. Together with
our customers, Publinc has partnered with more than 80
community groups.
In 2022, Publinc Communities made $917,000 in financial
contributions to more than 130 charities and registered clubs,
and our teams provided 1,900 hours supporting the program
and its partners.
Non-for-profit services provider, Sunnyfield disAbility
Services, received a grant from Publinc Communities to
increase independence and enhance the lives of Sunnyfield’s
clients living with a disability.
10
MA Financial Group | 2022 Annual ReportAbout MA Financial Group Independent Chair’s letter
It is a pleasure to write to my fellow shareholders
and report on the performance of our company
in 2022.
MA Financial Group performed extremely strongly
in 2022, achieving record Underlying revenue of
$302 million, 41% higher than in the prior year
resulting in a 29% growth in Underlying earnings
per share to 38.3 cents per share, also a record
for the company.
years of ongoing investment in our
business platform and capability.
We have undertaken a deliberate
strategy to build a diverse
company, enabling it to grow
through market cycles.
share is up 18% on 2021. “Our growth is the result of many
We achieved strong growth in our Asset Management division
and through the successful acquisition of Finsure. The
addition of Finsure, which has grown under our ownership to
manage $91 billion of residential mortgages representing over
350,000 individual borrowers, represents valuable technology
enabled infrastructure in the Australian residential mortgage
sector. The data and insights we now gather in this $2 trillion
market significantly enhance our capability as a credit
originator and manager. Our deep capability in credit asset
management is reflected in the fact that we have originated
directly from our lending platforms over 75% of the credit
assets we manage today. Increasingly we are not buying credit
assets in the secondary market, we are manufacturing them.
In 2022 our overall assets under management grew by 13%
to $7.8 billion. This represents impressive growth when
considering that when we listed in 2017 we had just $1.1 billion
under management.
The Board is pleased to declare a fully franked final dividend
of 14 cents per share to add to our interim dividend of 6 cents
per share. The combined full year distribution of 20 cents per
11
MA Financial Group | 2022 Annual Report Additionally, back in October 2022, the Board announced a
$25 million market buy-back, which remains ongoing. These
initiatives reflect MA Financial’s strong financial position and
the Board’s confidence in the Group’s continued positive
momentum.
As our company grows, an important element is the
significant and growing proportion of our revenue
that is recurring in nature, underpinned by consistent
and predictable revenue streams. This should provide
shareholders with great confidence that we can continue
to grow, deliver solid results and importantly, strategically
invest in growth opportunities as they are identified by our
management team.
Our strong earnings growth has been the result of many years
of ongoing investment in our business platform and capability.
We have undertaken a deliberate strategy to build a financial
services company that is diverse, enabling it to grow through
market cycles.
Our business is largely focused on the specialised
management of alternative asset classes while also
maintaining global strength in corporate advisory through
our long-term partnership with NYSE listed investment bank
Moelis & Company. We have significant investment and
operational capability in the active management of Credit,
Hospitality and Real Estate assets. We are very proud that
our expertise in each of these alternative asset strategies
has seen each of them achieve a compound growth in assets
under management exceeding 60% per annum.
Active management of these asset classes involves greater
operational expertise and infrastructure than just the financial
management of tradeable fixed income or equity securities.
We have built our capability over many years.
During 2022, as the interest rate cycle turned, inflows into
our Credit funds almost doubled on the previous year to
$1.1 billion. This momentum has continued into 2023 and we
believe credit fund investing has long-term macroeconomic
and demographic growth tailwinds. Our investment in our
Credit and Lending platforms has been a conscious strategy
to harness these tailwinds.
Similarly, the Group’s hospitality assets benefited from strong
valuation gains and positive trading performance during
2022, demonstrating the defensive nature of their operating
cashflows and ability to weather market cycles.
Flows into Asset Management funds also benefited from the
increased diversity of our client base. We now source capital
from clients in 30 different countries globally.
International client inflows, unrelated to migration programs,
were almost double those received in 2021. Less than 18%
of our gross inflows in 2022 were from migration-related
investor channels reflecting the diversity in the business and
our ability to adapt to changing conditions.
This investment in our Lending & Technology division will
deliver future growth as we build a Residential Lending
Marketplace to scale into Australia’s $2 trillion mortgage
market by leveraging the strategic strengths of the MA
platform. These include being able to access diversified
sources of capital for growth, rich market data and insights,
unique distribution capabilities and proprietary technology
we have developed in-house. This includes an exciting digital
experience for mortgage brokers and borrowers called
Middle, which we believe will revolutionise the way mortgage
brokers do business.
The quality of our people is the real key to our success. The
ability to attract, develop and retain the best people is at
the core of our thinking. During the year we have made a
significant investment in our working environment, having
moved into new best in class office premises, as well as
employee development via the MA Academy. Further, we
continue to refine our remuneration structures to provide
appropriate incentivisation for senior staff that aligns with
positive shareholder outcomes.
Many years of empowerment and training coupled with our
history of high retention of key staff means we enjoy long term
stability and focus. This has helped us to deliver compound
annual EPS growth of 23% since our listing on the ASX in 2017.
As MA Financial’s activities grow and diversify the Board
continues to increase its focus on sustainability issues. We
are proud of our approach and development in sustainability,
with our second annual Sustainability report reflecting our
increasing maturity in Environment, Social and Governance
practices. From an environmental sustainability perspective,
this has been a key year, with the company reporting
a baseline figure for our carbon footprint, whilst also
committing to a Net Zero target by 2050 and a 50% reduction
in Scope 1 and 2 emissions by 2030. As we develop our
capability, we will further refine our targets and data integrity
in this area.
Reflective of our aim of increasing Board independence
and diversity, we appointed Nikki Warburton to the Board
of Directors in December 2022. Nikki has 30 years’
experience in consumer, brand, and marketing across a
range of industries including automotive, advertising and
media. She has joined the Board as an Independent Non-
Executive Director.
I would like to thank our Board, senior executives and staff
for their continued hard work, dedication and skill through
another period of significant business growth. Maintaining our
strong workplace culture based on our key values of growth,
innovation, cohesion and accountability remain key to our
continued success.
Thank you for your ongoing support of MA Financial Group.
12
Jeffrey Browne
Independent Chair
MA Financial Group | 2022 Annual Report Joint Chief Executive Officer’s letter
pleasing result illustrates
our considerable
capability to successfully
invest and actively
manage credit, hospitality,
and real estate assets.
“Asset Management’s
We are pleased to present the 2022 MA Financial Group
Annual Report.
Our 2022 financial year results reflect the value of our
diversified firm and our intentional strategy to build a
resilient business which can withstand challenging economic
conditions. This strategy has allowed us to successfully
invest in growing the business, while delivering record
shareholder returns.
Financial Performance
MA Financial Group delivered a strong performance to report a record
Underlying net profit of $61.4 million, up 44% on financial year 2021.
Underlying earnings per share of 38.3 cents are up 29% on 2021.
Our Asset Management division remains a significant contributor to
the firm delivering a record result with Underlying EBITDA up 78% to
$103.5 million driven by strong performance fees and a 36% increase in
recurring revenues.
Growing investor inflows saw Assets under Management increase 13%
on financial year 2021 to $7.8 billion.
Gross inflows of $1.5 billion were driven by strong growth in our credit
funds largely due to increasing investor demand for strategies offering
income stability and security against rising interest rates.
Our Hospitality assets continued to perform well with operational
earnings and a strong transactional market supporting both distribution
and valuation gains in 2022.
In Real Estate, we took a more cautious view in 2022 as the probability of
much higher interest rates weighed on our conviction to invest.
Reflecting our increasingly diverse source of funds, the division’s inflows
from international investors, unrelated to migration programs, increased
97% on financial year 2021 to $508.8 million.
Asset Management’s pleasing result illustrates our considerable
capability to successfully invest and actively manage credit, hospitality,
and real estate assets.
Our Corporate Advisory & Equities division performed well despite
the difficult market conditions. We advised on a range of completed
transactions worth $13.9 billion, up from $5.8 billion on 2021, and
strategically invested in new resources to increase our capability in the
13
MA Financial Group | 2022 Annual Report Assets under management
as at 31 December 2022
$7.8b
13% increase from
December 2021
small to mid-cap industrials sector. Revenue for the Corporate
Advisory & Equities division was mildly impacted by the
completion timing of several transactions that were largely
completed in 2022 but will close in early 2023.
The growth of our Lending & Technology division continued
at pace as we begin to realise our ambitions for this business.
Our strategy is to create a tech-enabled, highly scalable
lending ecosystem that generates fee-based income, spread
income, and delivers primary origination investment product to
managed credit funds in Asset Management.
Consistent with this objective, we established a technology
enabled Residential Lending Marketplace through the
acquisition and successful integration of Finsure in 2022.
Today the Residential Lending Marketplace is core
infrastructure for over 2,600 brokers to access more than
4,500 products from 80 lenders, for more than 350,000
borrowers. The platform was also delivering considerable
growth. The number of brokers subscribing to Finsure was
up 24% on 2021, while managed loans increased 37% to
$91 billion.
This Marketplace is strategically valuable, particularly when
combined with our residential lender MA Money and our real
estate credit funds. In 2023 we are also launching Middle, a
digital tool designed to help mortgage brokers and borrowers
collect verified financial information for loan applications, into
the Marketplace.
In 2022, we continued to develop our Lending Platforms. We
invested significantly in MA Money, boosting the range of
residential loan products and services on offer to drive growth.
Our Specialty Finance business has expanded its range of
high-margin, bespoke lending opportunities. Overall, the
Residential and Speciality loan book grew 98% to $393 million.
The combination of our Residential Lending Marketplace
and our complementary Lending Platforms will enable MA
Financial in becoming a meaningful lender and provider of
technology-driven infrastructure to Australia’s $3.5 trillion
credit markets*1.
1 Source: RBA, D2 Lending and Credit Aggregates, December 2022.
Underlying NPAT
$61.4m
44% increase
from 2021
Lending &Technology is highly symbiotic with our growing
credit Asset Management activities. It enables us to originate
credit assets on a proprietary basis, with tailored underwriting
standards, and service loan portfolios in-house. It also
provides us with actionable insights and market intelligence,
an important strategic advantage when investing in credit.
Investing for sustainable growth
MA Financial experienced continued expansion in 2022,
adding approximately 100 employees via organic growth,
and an additional 102 employees following the acquisition of
Finsure, and MA Money.
Our culture and client-focused way of working remains a
competitive advantage for us, and we aim to protect it as we
grow. Through our continued work on diversity and inclusion,
we strive to build a balanced business that encourages
innovation, drives growth, and represents the broader
community we serve.
As mentioned in the Chair’s letter, we are proud of our
development in sustainability, with our second annual
Sustainability report including a baseline figure for our carbon
footprint for the first time. We are committed to ensuring our
growing business is sustainable.
All that was achieved in 2022 was the result of the dedication
and efforts of our people and we extend our thanks to them
and our leadership team.
Finally, we would like to thank you, our shareholders, for your
ongoing confidence and support. We look forward to updating
you throughout 2023.
Christopher Wyke & Julian Biggins
Joint Chief Executive Officers
14
MA Financial Group | 2022 Annual Report 2022 at a glance
Statutory revenue1
$332.9m
46% increase
from 2021
Assets under management
as at 31 December 2022
$7.8bn
13% increase from
December 2021
Underlying Return
on Equity4
15.9%
MA Foundation donations
$7.7m
Since establishment in 2018
Cash and cash
equivalents
$144.6m
FY22 acquisitions
Statutory EBITDA3
$118.9m
65% increase
from 2021
Statutory NPAT
$44.9m
40% increase
from 2021
Statutory earnings per share
28.0¢
26% increase from 2021
Full year dividend
per share
20.0¢
Fully franked
18% increase from 2021
Underlying revenue2
$301.8m
41% increase
from 2021
Underlying EBITDA2
$106.7m
51% increase from 2021
Underlying NPAT2
$61.4m
44% increase
from 2021
Underlying earnings
per share2
38.3¢
29% increase
from 2021
1 Statutory revenue refers to total income on the consolidated statement of profit or loss and other comprehensive income.
2 Underlying revenue, Earnings Before Interest, Taxation, Depreciation and Amortisation (EBITDA), Net Profit After Tax (NPAT), Return on Equity
(ROE), Earnings Per Share (EPS) and other measures of Underlying performance are not prepared in accordance with International Financial
Reporting Standards (IFRS) and are not audited. Detailed reconciliations between the Underlying and statutory measures are set out in note 3 of
the 2022 Financial Report and in the Group’s FY22 Investor Presentation.
3 Statutory EBITDA is not a recognised IFRS measure but has been presented to give a comparable measure to the Underlying result.
4 Underlying ROE is Underlying NPAT divided by average equity for the year.
15
MA Financial Group | 2022 Annual Report Year in review
Overview
The Group recorded total comprehensive income for the year of $45.8 million (2021: $48.1 million) and profit after income tax for
the year of $44.9 million (2021: $32.0 million). Basic earnings per share was 28.0 cents, an increase of 26% on the prior year.
Statutory results
Total income
Profit before tax
Profit after income tax
Total comprehensive income
Underlying results1
Revenue
EBITDA
Net profit after income tax
31 Dec 2022
$’000
31 Dec 2021
$’000
Movement
%
332,942
60,969
44,855
45,754
31 Dec 2022
$’000
301,799
106,720
61,436
228,735
48,710
32,041
48,065
31 Dec 2021
$’000
214,788
70,904
42,628
46%
25%
40%
(5%)
Movement
%
41%
51%
44%
31 Dec 2022
cents
31 Dec 2021
cents
Movement
%
Statutory Underlying
Statutory Underlying
Statutory Underlying
Basic earnings per share (cents per share)
28.0
38.3
22.3
29.6
Diluted earnings per share (cents per share)
26.9
36.9
21.2
28.1
Full year dividend (cents per share)
20.0
17.0
29%
31%
26%
27%
18%
1 As announced on 9 June 2022, the Group amended the Underlying treatment of mark to market movements of investments by removing any
unrealised gains or losses from Underlying revenue. The Underlying results for the full year ended 31 December 2022 reflect this revised
approach with comparatives restated accordingly.
Non-IFRS Underlying results
The Group also utilises non-IFRS Underlying financial
information in its assessment and presentation of Group
performance. When reading the Group’s results, we note
there are some Underlying adjustments that a reader may find
useful to understand in more detail. For further information
on adjustments between statutory and Underlying results,
please refer to the detailed reconciliation provided in note
3 of the 2022 Financial Report and to the explanation in the
Directors’ report as to why the Directors believe that, when
read in conjunction with the statutory results, the Underlying
measures are useful to the reader.
Underlying revenue was up 41% on the FY21 result, as
all business divisions experienced strong activity levels.
Underlying EBITDA was up 51% on FY21 as strong revenue
growth offset a 36% increase in expenses related to
the acquisition of Finsure and MA Money and continued
investment in platform capabilities to support our growth
strategy. Importantly Group EBITDA margins improved on
the prior year to 35.4%. As a result of this strong growth,
Group Underlying EPS grew 29% on FY21 and the Group’s
Underlying Return on Equity was 15.9% for the year.
16
MA Financial Group | 2022 Annual Report Year in review
Our business
The Group operates three divisions being Asset Management, Lending & Technology and Corporate
Advisory & Equities. Unallocated costs associated with the central executives and corporate support
functions are shown separately as Corporate Services.
In what was a volatile and uncertain year there was solid performance across the divisions. Key highlights include the strong
EBITDA growth in Asset Management, and the continued scaling of the Lending & Technology division, both organically and
through the acquisition of Finsure and MA Money. The Group continued to make significant investment in the platform with the
hiring of new resources and delivery of new premises in Sydney, Melbourne and Hong Kong.
The Group’s Underlying divisional measures directly align with the segment measures required by AASB 8 Operating Segments.
Further information and reconciliations are provided in note 3 of the 2022 Financial Report. The table below shows the divisions
respective contributions to Group Underlying EBITDA and NPAT.
31 Dec 2022
$’000
31 Dec 2021
$’000
Asset Management1
Lending & Technology
Corporate Advisory and Equities
Corporate Services
Underlying EBITDA
Depreciation and amortisation
Interest expense
Income tax expense
Underlying NPAT
103,477
15,611
13,982
(26,350)
106,720
(11,121)
(7,834)
(26,329)
61,436
58,128
7,817
21,949
(16,990)
70,904
(4,710)
(5,297)
(18,269)
42,628
1 The Priority Income Funds (PIF) strategies have been moved from Lending & Technology to Asset Management given they are third-party
managed funds. The Underlying results for the year ended 31 December 2022 reflect this revised approach with comparatives restated
accordingly.
17
MA Financial Group | 2022 Annual Report Year in review
Asset Management
The Asset Management division reported a record result
in the year with strong growth in revenue underpinned by
continued investment in the platform and capability. Asset
Management contributed 78% of FY22 Group Underlying
EBITDA before Corporate Services. Underlying EBITDA of
$103.5 million was up 78% from $58.1 million in FY21, due to a
36% increase in recurring revenues and strong performance
fees growth of 116% on FY21.
Assets under Management (AUM) grew by 13% over the year
to $7.8 billion at 31 December 2022. Gross fund inflows of $1.5
billion, were up 17% on FY21, a strong result and a testament
to the growing diversity of our distribution channels and
tailored product offering, especially in credit.
Gross inflows from Domestic clients continued to build
momentum, up 26% to $609.1 million from $482.0 million in
FY21. This is reflective of the Group’s significant investment in
its domestic distribution platform and the growing popularity
of the Group’s credit product offerings.
Gross inflows from International High Net Worth (HNW)
clients were impacted by a reduction in flows arising from
International Migration HNW applicants as visa processing
was interrupted by COVID related lockdowns in China and
Hong Kong. As such gross International Migration flows
reduced 52% to $273.3 million from $565.1 million in FY21.
This was offset by a near 100% increase in gross inflows from
International Non-Migration clients as the Group focuses on
leveraging its expanding network of International HNW clients.
Pleasingly, the ongoing investment in the development of an
Institutional distribution channel saw gross inflows of $140.6
million in the year from a prior year base of nil.
The key highlight for the investment strategies was the
impressive performance of the Credit investing division. The
asset class and fixed income nature of the product suite
resonated with investors with nearly 80% of Group net flows
going into Credit related strategies. The Real Estate Credit
strategies grew to $1.1 billion of AUM and the PIF strategies
exceeded $0.5 billion of AUM.
The Group’s Hospitality platform benefitted from strong asset
price growth and operational performance throughout the
year, with the combination of these two features delivering
large performance fees to the Group. Transactional activity
was measured, with the Brunswick Hotel acquisition in early
2022 and the sale of Minskys for a $16.2 million premium to
book value by Redcape Hotel Group the key highlights.
Real Estate adopted a cautious approach throughout the year,
selectively acquiring deep-value office assets in Adelaide and
Perth, both in partnership with Centuria Capital. Furthermore,
two retail assets in Dandenong and Warnambool were
realised in 2022, returning capital to investors.
18
MA Financial Group | 2022 Annual Report Year in review
The Private Equity and Venture Capital strategy continued
to grow a maturing pipeline of realisations which provided
a steady flow of performance fees in 2022. The new MA
Sustainable Future Fund was launched in the second half of
the year and saw strong investor demand for the portfolio
of assets that were seeded by over $15.0 million of balance
sheet capital.
The Equities investment division was impacted by the
uncertainty and volatility that was widespread in the global
equity markets in 2022. Whilst performance was down on the
prior year, we maintained positive net investor inflows in 2022.
AUM growth translated into strong fee revenue growth, with
recurring revenue up 36% to $125.7 million, driven by a 28%
increase in base management fees to $92.4 million and an
81% increase in Credit Funds income to $25.7 million. Credit
Funds income includes non-base fee recurring revenue
contributions from the Group’s two key credit fund strategies,
the Priority Income Fund (PIF) and Real Estate Credit.
PIF strategies were previously reported in the Lending &
Technology division but have been reclassified back into
Asset Management to better reflect their operations as
third-party managed funds.
Transaction and performance-based revenue increased
76% to $61.2 million, lifted by growth in performance fees
largely arising from the strong performance of the Group’s
Hospitality assets. Both transaction and performance fees are
becoming a more consistent contributor to earnings as AUM
increases and the Group’s investment strategies mature and
diversify, albeit FY22 was an exceptionally strong period for
performance fees.
The realised gains on the Group’s equity investments
delivered an $10.9 million gain relative to a $5.0 million gain
in FY21. This was primarily due to a reduction in the Group’s
investment in Redcape Hotel Group, leaving a co-investment
holding of just over 10%.
Expenses of $94.3 million were up 27% on FY21 due to the
continued investment in people and capability to support
growth as well as the inclusion of a full 12-month period
of RetPro. FY22 was an elevated year for investment in
the platform and the pace of new hiring and investment is
expected to reduce as the platform becomes more scalable.
A S S E T S U N D E R M A N A G E M E N T
A S S E T S U N D E R M A N AG E M E N T ( $ ’ B )
$5.4b
$4.9b
$3.7b
$6.9b
0.3
0.9
1.6
1.5
2.6
$7.8b
0.3
0.7
2.5
1.8
2.5
FY18
FY19
FY20
FY21
FY22
Real Estate
Hotels
Credit
Equities
PE/VC
19
MA Financial Group | 2022 Annual Report Year in review
Lending & Technology
The Lending & Technology business was the focus of major
investment in the year as the Group executed on its strategy
to build an integrated mortgage marketplace. In February
2022, the Group completed the acquisition of leading
mortgage aggregation platform Finsure, followed by the
acquisition of the remaining 52.5% of residential mortgage
lender MA Money (formerly MKM) in March 2022.
Finsure’s performance in the year exceeded expectations,
growing broker numbers by 24% and increasing its Managed
Loans by 37%, from $66.5 billion to $91.0 billion.
Finsure delivered FY22 Underlying revenue of $30.1 million
comprising:
•
•
•
$18.7 million of recurring subscription fees and trail
commissions;
$4.3 million of activity based upfront commissions and
other fees; and a
$7.1 million positive movement in the net present value of
future net trail commissions.
Coupled with prudent cost management this resulted in
Underlying EBITDA of $16.4 million, reflecting a margin
of 54.6%.
The Lending platforms of MA Money and Specialist Finance
grew the total loan portfolio by 98% to $392.6 million at
31 December 2022 driven by the MA Money acquisition.
The division’s spread income reduced by 19% to $11.0
million due to the accelerated investment in the MA Money
platform and the recycling of a large specialist loan into
asset management product. This recycling, whilst reducing
spread income, reflects the strength of the Group’s integrated
business strategy by returning over $30.0 million of capital
to the balance sheet and improving return on invested capital
(ROIC) in the Specialist platform from 19% to 63% in 2022.
The significant investment in the MA Money business across
people, platform and technology has been a drag on its
contribution and returns in 2022. This is expected to continue
in 2023 as the business scales and positions itself to take
advantage of the substantial opportunity for long term growth
in the residential mortgage market.
Corporate Advisory & Equities
The Corporate Advisory & Equities (CA&E) division was down
on the record earnings performance in FY21, declining 10%
on the prior year largely due to challenging equity capital
market (ECM) activities and Equities revenue being impacted
by softer market volumes and team rebuilding.
Corporate Advisory fees were down 7%, representing
revenue per executive of $1.0 million, slightly below the
Group’s target productivity range of $1.1 to $1.3 million.
Activity was broadly spread across the division’s core
capabilities of real estate, technology and mid-cap industrials.
The business advised on $13.9 billion of transactions during
the year, up on $5.8 billion in FY21. This was led by the
Group’s role advising CPH on its stake in Crown Resorts.
ECM activity continued to slow in 2H22 due to the ongoing
challenging market conditions in the year.
Expenses were in line with the prior year despite average
Advisory headcount growing from 51 to 58 staff. The Group
will continue to develop and grow the division but will remain
selective in its approach to hiring, always paying regard to the
maintenance of its revenue per head target range, discipline
in the cost base and the consistency of earnings productivity
in the business over the long term.
20
MA Financial Group | 2022 Annual Report Year in review
Financial position
Statutory total assets amounted to $2,246.2 million (2021:
$872.9 million) with net assets of $409.6 million (2021: $370.0
million) at the year ended 31 December 2022.
The statutory consolidated statement of financial position
includes the consolidation of two credit funds managed by the
Group, two specialist lending securitisation trusts and three
mortgage securitisation trusts associated with the MA Money
business. These special purpose funding vehicles contain
liabilities which are secured only by the assets of these entities
with no further recourse to the Group.
Management utilises an Operating balance sheet which
predominantly excludes the special purpose funding vehicles
when reviewing the Group financial position. The Operating
balance sheet presents a simplified view of the total
economic exposure of the Group and the capital available to
management to allocate. A reconciliation of the Operating
balance sheet to the statutory consolidated statement of
financial position can be found in the Group’s FY22 results
presentation.
31 Dec 2022
Statutory
$’000
31 Dec 2021
Statutory
$’000
31 Dec 2022
Operating
$’000
31 Dec 2021
Operating
$’000
Assets
Cash
Loans receivable
Contract assets
Investments
Goodwill and other intangibles
Right-of-use assets
Other assets
Total assets
Liabilities
Borrowings
Contract liabilities
Fund preferred units
Other financial liabilities
Other liabilities
Total liabilities
Net assets
Net tangible assets
144,589
855,482
607,232
287,898
185,018
61,773
104,242
2,246,234
371,505
571,365
568,584
116,419
208,774
1,836,647
409,587
240,108
242,861
342,449
-
190,232
27,895
9,874
59,561
872,872
120,030
-
286,290
-
96,519
502,839
370,033
343,418
98,803
8,959
35,866
210,549
185,018
61,773
73,660
674,628
237,170
50,530
-
171,289
27,895
9,874
61,329
558,087
95,030
95,030
-
-
-
170,011
265,041
409,587
240,108
-
-
-
93,024
188,054
370,033
343,418
Notable movements in the Group’s Operating balance sheet
were centred on the deployment of cash. Group cash reduced
in the year as capital was allocated to acquisitions, with
a particular focus on the Lending & Technology division’s
acquisition of Finsure and MA Money with a combined
consideration of approximately $160.0 million. These
acquisitions were funded predominantly through a capital
raise of $100.0 million in December 2021, and the associated
share purchase plan of $20.0 million in January 2022.
Net tangible assets decreased during the year as a result of
the utilisation of cash to fund the acquisition of MA Money and
Finsure, and the recognition of the related intangible assets
upon acquisition.
The year saw a high level of rotation of both short term
growth investments and long term strategic investments. This
dynamism underpins the ability of the Group to support future
growth and is reflected in the recycling of over $100.0 million
of prior investments and, excluding the acquisition of Finsure
and MA Money, the re-investment of some $115.0 million into
new and existing strategic initiatives.
21
MA Financial Group | 2022 Annual Report Year in review
Financial position
The Group’s investments, including strategic and co-investment positions, are shown in the table below
Cash
Lending (MA Money & Specialty Invested Capital)
Co-investments
Priority Income Funds (PIF)
Redcape Hotel Group (RDC)
Other equity investments
Total investments
Key movements related to:
31 Dec 2022
Operating
$’000
98,803
8,167
72,940
77,909
57,086
3,406
318,311
31 Dec 2021
Operating
$’000
237,170
43,060
43,706
49,442
84,339
1,272
458,989
• The utilisation of cash to fund the acquisition of Finsure and MA Money
• The refinance of disbursement loan receivables of $32.0 million to provide additional credit product for Asset Management
investors and improve Group returns on invested capital
• The continued co-investment in the PIF strategies, acquiring a further $32.0 million of “first loss” B units
• $30.0 million realisation of the investment in Redcape Hotel Group following the successful delisting in 2021
• The provision of $30.0 million of seed capital for the new and existing funds including the MA Sustainable Future Fund.
22
MA Financial Group | 2022 Annual Report Year in review
Financial position
Capital management
The Group manages its capital with the aim of ensuring that it
will be able to continue as a going concern while maximising
the return to shareholders through the optimisation of the
debt and equity capital balances. Fundamental to this is
maintaining a strong balance sheet, which supports the
business through economic shock but also facilitates
attractive investment opportunities.
During the year the Group declared an interim dividend of 6
cents per ordinary share (2021: 5 cents). Subsequent to year
end the Directors have resolved to pay a final dividend of 14
cents per share for the FY22 year (2021: 12 cents), an 18%
increase in full year dividends over FY21.
The Group successfully raised $100.0 million from the issue of
12.9 million ordinary shares through an institutional placement
in December 2021. The associated Share Purchase Plan
closed in January 2022 with a further 2.6 million ordinary
shares issued, raising an additional $20.0 million.
In September 2022, the Group successfully refinanced $25.0
million of maturing notes through the issue of a new $25.0
million fixed coupon note program maturing in 2027. This
increased tenor and fixed coupon adds to the conservative
positioning of the balance sheet. Furthermore, during the
year the Group entered into a new $40.0 million revolving
working capital facility with a major domestic bank. The facility
was undrawn at 31 December 2022 and will provide further
flexibility and firepower for the Group into the future.
The Group recognises that debt is an important component
of a balanced capital structure. Whilst the Group utilises both
recourse and non-recourse debt to fund its growth objectives,
we will continue to adopt a prudent approach to the use of
debt capital.
This approach to debt in conjunction with the strong level
of average cash holding throughout the year is indicative of
a consistent approach in managing the Group for the long
term and we will remain patient and prudent when deploying
capital. Fundamental to this is maintaining a strong balance
sheet, which not only stands us in good stead through
economic uncertainty but can also facilitate attractive
investment or business opportunities.
23
MA Financial Group | 2022 Annual Report Year in review
Financial position
Risk management
The Group faces a range of risks to achieving its financial
objectives, the most material of which are summarised below.
This summary is not a comprehensive outline of every risk
associated with the Group’s financial prospects, and other risks
may emerge. The Group’s overall risk management framework
is summarised in its Corporate Governance Statement,
available on its website, and in the Sustainability report.
As a financial services provider, the Group is mindful of the
importance of trust with counterparts and preserving a strong
reputation to enable the business achieve its strategic goals.
We are mindful of this in all risk contexts and in our decisions
and actions.
Cyber risk
The Group depends on a range of information systems which
carry a risk of unauthorised use or external compromise. This
could result in financial loss, the disclosure or loss of personal
and confidential information, disruption to operations, poor
client service, regulatory sanctions and reputational damage.
The volume and sophistication of cyber threats facing
businesses in Australia has grown in recent years.
The Group maintains an experienced corporate technology
team which manages its core technology infrastructure and
supports our operations, including by assessing new systems
and software. The team engages in continual improvement
of the maturity of the Group’s cybersecurity controls which
includes continual threat monitoring and penetration testing
by third-party experts. The team’s work is supported by
documented policies and procedures, and training for staff on
related risks. A comprehensive IT Disaster Recovery Plan is in
place to promote effective incident response.
Regulatory change
The Group is subject to regulatory obligations in relation to
the activities that it undertakes. There is a general risk that
new or changed regulations could require significant spending
on compliance, contribute to higher risk of non-compliance or
impact on the profitability of certain lines of business.
The Group recognises specific risks in relation to the current
Australian government review of immigration policy inclusive
of its Significant Investor Visa program (SIV). The Group
manages investment funds for SIV applicants via its Asset
Management division. The Group has made submissions to
government as part of the review and, as set out in the Market
Update published on 12 September 2022, has engaged in
careful analysis of this risk and contingency planning.
Another current source of focus is discussion regarding
reform of gaming regulations in New South Wales. The
Group manages and operates some assets with exposure
to gaming in NSW (via the Redcape Hotel Group). A move to
‘cashless gaming’, for example, would require investment in
the development and deployment of technology. Our hotel
operator, MA Hotel Management, has a strong track record in
the responsible operation of hotel and gaming facilities. It will
continue to monitor developments and respond constructively
to regulatory change as it emerges.
Investment risk
The Group’s Asset Management division oversees
institutional, wholesale and retail investments across a range
of asset classes. This exposes the Group to associated
operational and market risks, which can result in investment
returns that compare poorly to expectations, benchmarks and
peers. In turn, a poor investment track record may affect the
Group’s ability to attract and retain clients, which can reduce
overall assets under management and materially affect long
term revenues and earnings.
The Group manages this risk through the careful selection of
investment strategies, and clearly defined, effective processes
for due diligence and portfolio management. Client reporting
puts investment returns in context and explains the outlook.
Retaining talent
The Group has invested significantly in recruiting, developing
and retaining its people. Across divisions and business units,
talented people are a source of competitive advantage and
play an important role in delivering long term, sustainable
value to shareholders and clients. The Group operates in a
competitive market for talent and counters the risk of staff
attrition through a comprehensive focus on culture and people
and a competitive remuneration structure, which is discussed
elsewhere in this Annual Report.
Volatility in levels of business activity
Some of the Group’s lines of business are subject to
inherently more revenue volatility. In particular, our Corporate
Advisory and Equities division reflects clients’ appetites to
raise finance, take part in mergers and acquisitions, and
engage in equities sales and trading, which is influenced by a
range of factors including economic conditions and sentiment.
Overall, the Group has diversified sources of income and is
therefore less dependent on inherently volatile revenues.
24
MA Financial Group | 2022 Annual Report 02 Sustainability reportMA Financial Group | 2022 Annual Report At MA Financial we believe building a sustainable business generates better outcomes for all
stakeholders including shareholders, employees, clients, investors, and the communities in
which we operate. Sustainability is about making decisions for the long term and, as significant
owners in the business, management places a long-term lens on decision making and strategy.
Sustainability scorecard 2022 - the highlights
Launched
MA Academy
Lecture Series and
training modules
Achieved 33% female
representation on MA
Financial Board
Formed an
MA Foundation
Employee Advisory
Committee
Disclosed
emissions
of 1,673 t CO2-e
and committed to
Net Zero by 2050
for direct
operations
Launched
MA Sustainable
Future Fund
Asset Management Division
becomes signatory to UNPRI
ESG Steering Committee
established
In 2022, considerable progress was made to our sustainability
framework and reporting, particularly in assessing the most
material aspects of sustainability to our business and our
stakeholders.
This report highlights sustainability procedures and practices
within the business and outlines focus points for future
development. MA Financial reports with reference to the
Global Reporting Initiative (GRI) Standards to create the
framework and define its approach to sustainability.
26
MA Financial Group MA Financial Group || 2022 Annual Report2022 Annual ReportSustainability report Materiality assessment
We report on material topics relevant to our business and
environmental impact. In 2021 we defined our materiality
process to identify and validate our sustainability material
topics. We analysed the material topics with reference to:
• sector and peer reporting
• expectations expressed in global ESG frameworks and
standards including GRI, Sustainability Accounting
Standards Board (SASB) and Task Force on Climate
related Financial Disclosures (TCFD)
• standards applied by leading ESG rating agencies.
M AT E R I A L I T Y M AT R I X
The analysis considered our business nature as a diversified
financial services group specialising in Asset Management,
Lending & Technology, Corporate Advisory & Equities and the
strategies within. We then considered the sustainability topics
identified to determine their overall materiality to us. The
topics and their prioritisation were reviewed and endorsed by
the Board. Topics were prioritised based on their materiality
level as set out in our Materiality Matrix below:
l
r
e
d
o
h
e
k
a
t
s
o
t
e
c
n
a
v
e
e
R
l
Most material
Material
Systemic risk management
Data privacy
and security
Govenance and
compliance
Ethical
behaviour
Health and safety
Diversity
Employment
Talent development
Product design and lifecycle management
Important
Climate change
Community investment
Human rights
Energy and emissions management
Waste management
Water management
Governance and business model
Social
Environmental
Significance of impact
Industry Associations and Memberships
MA Financial is a member of and supports the following organisations. Our involvement is designed to contribute to long term
value creation for our stakeholders and communities.
27
MA Financial Group | 2022 Annual ReportSustainability report
Position on Climate
MA Financial’s environmental, social and governance (ESG) practices continue to evolve as the Group increases in scale
and broadens its business interests. Minimising the impact our firm has on the environment is important to us. By acting in a
thoughtful and responsible way, and in line with Government guidelines, MA Financial aims to deliver net zero emissions by 2050
for our direct operations and reduce Scope 1 and 2 emissions intensity per employee by 50 percent by 2030. To achieve our
Scope 1 and 2 emission reductions for our direct operations, we will progress the development of a Climate Change Action Plan
by the end of 2023.
For our Asset Management division, MA Financial is a signatory to the UN Principles for Responsible Investment and is working
through associated implementation plans. We expect to include an update on our progress in our 2023 Sustainability report.
Stakeholder engagement
Our stakeholders are wide ranging and have a distinctive set of interests and priorities. They include shareholders, financers,
employees, fund investors, clients, governments and regulators, and industry groups. We engage with our key stakeholders
through a range of channels. The main groups and their areas of focus are outlined here.
Stakeholder
Engagement approach
Areas of focus
Shareholders
Employees
Fund Investors and Intermediaries
Clients
Investee Companies and their
communities
Industry Groups
Annual General Meeting
Full and Half Year results
One-on-one engagement meetings
Engagement with proxy advisors
Annual employee engagement survey
Monthly CEO updates
MA Academy
Employee Intranet
Regular monthly and quarterly Fund
reporting
Access to online investor portal
Access to Fund materials
One-on-one engagement meetings
MA Financial website
Access to dedicated Client Services team
Technical Education
Conferences and Events
One-on-one engagement meetings
Governance
Climate change management
Remuneration Framework
Culture
Diversity
Wellbeing
Employee development
Best practice retention and attraction
Remuneration
Governance
Responsible investing
Consistent sustainable returns
Product sustainability
Governance
Responsible investing
Quality advice
Trusted relationships
Investment decisioning
Regular management engagement and
reporting
Board representation
Industry memberships and participation
Roundtables
Conferences
Joint submissions to policy-makers
Governance
Responsible investing
Trusted relationships
Product sustainability
Community trust and relationships
Industry partnership and collaboration
Government and policy maker
engagement
Governments and Regulators
Meetings with policy makers
Industry memberships and participation
Governance
Community trust and engagement
As our business evolves, we will ensure our channels of stakeholder engagement continue to facilitate relevant insights and help
us validate the Group’s sustainability approach, and shape new perspectives.
28
MA Financial Group MA Financial Group || 2022 Annual Report2022 Annual ReportSustainability report Sustainability framework
Our sustainability framework contains six pillars and illustrates our approach to sustainability.
Talent development and
wellbeing
• Attracting, retaining, motivating,
engaging and developing our
workforce
• Supporting the health, safety and
Strong governance and ethical
behaviour
• Creating sustainable value
through effective governance,
strong ethical practices and
accountability
well-being of our people
• Overseeing internal and external
Sustainable business model
•
Incorporating sustainability factors
into our businesses, operations,
products and financial services
offerings
compliance
• Embedding systemic and active
risk management in our financial
services
Diversity and inclusion
• Promoting and maintaining a
Environmental impact
• Understanding the impact of
diverse and inclusive workplace
climate change
• Minimising our environmental
footprint focusing on energy
and emissions, waste, and water
management
Socially Responsible Behaviour
• Safeguarding the privacy and
security of our customers
• Protecting human rights in our
value chain
• Contributing to our community
29
MA Financial Group | 2022 Annual ReportSustainability report “[insert quote text]
We are pleased to provide an update on our approach to each of these six pillars.
Talent development and wellbeing
Our people
Culture and belonging
The Group is committed to providing a work environment
where employees feel recognised, motivated, and have a
strong sense of belonging. In 2022, employees1 participated
in the annual culture review designed to provide insights into
the Group’s culture and identify strengths, challenges, and
opportunities. Completion rate exceeded 60% and identified
key strengths of our culture as:
•
•
•
Innovation and entrepreneurship
Strengths in collegiality, respect and teamwork
Commitment to growth
Areas for focus included:
•
•
Optimise the organisation structure to effectively manage
growth, while realising business objectives
Building leadership capability to ensure consistency in our
emerging leaders
Insights were assessed by the Board and management and
incorporated into our people strategy, which includes a
continuous improvement plan to address identified gaps and
reinforcement mechanisms on the areas of strength. Enhancing
and protecting our culture remains a key priority as we grow.
It is our people that makes us unique – both in delivering
excellence in performance and shaping the Group’s
reputation. Our people provide a competitive advantage and
determine our unique culture which encourages an ‘owner’s
mentality’ to business building and problem solving. These
attributes, combined with specialised sector knowledge and
expertise, are critical to our overall performance. In achieving
our vision, the Group’s values of Growth, Cohesion, Innovation
and Accountability guide our behaviours.
At MA Financial there are 600 direct employees and
approximately 4,700 employees working in the companies
and funds we manage or invest in.
us unique and provide a
competitive advantage.
“It’s our people that make
1
30
Employees who work for wholly owned businesses which have been with the Group for more than two years.
MA Financial Group MA Financial Group || 2022 Annual Report2022 Annual ReportSustainability report Supporting our employees
Developing our employees
Ensuring we have attractive initiatives and benefits to support
our employees is important to us. The range of benefits on
offer to applicable employees1 are summarised below:
• 24/7 access to health advice via Sonder Wellbeing
• Paid parental leave
• Childcare Assistance Program
• Access to community sports and cultural events
• 2 X Wellbeing days each year
• Comprehensive health checks
• Annual flu vaccines
• Employee Assistance Program
Our new state of the art offices in Melbourne (opened
December 2021) and our head office in Sydney (opened
January 2022) are designed for collaboration, health,
wellbeing, connectivity, and sustainability and the investment
in our amenities reflect the value we place on our people.
We offer a variety of quiet rooms and larger open areas to
connect and collaborate. We invested significantly in video
conferencing facilities to allow integration of remote clients
and to enable flexible working for employees. The offices are
designed to maximise natural light and fresh air and provide
gyms, wellness rooms and end-of-trip facilities with touchless
entry points throughout to help prevent the spread of illness.
In 2022, we were proud to be receive the Best Interior Fit-Out
Award at the prestigious Master Builders Association of NSW
Excellence in Construction Awards.
We believe providing practical and broad opportunities and
direct exposure to our most experienced leaders is the best
way to develop a high performing team and help our people
realise their full potential. The MA Academy is the umbrella of
learning that encompasses all training and development of the
workforce. It is a structured way to pass the baton of learning
from one generation to the next. The Academy’s curriculum is
broad and encompasses onboarding, technical, personal and
leadership growth and development.
In 2022, select employees had the opportunity to participate
in modules on leadership coaching, talent recruitment,
interview skills and mentoring. Firm wide lectures on industry
topics were also offered to employees.
We remain committed to fostering strong links with the
student community. Our internship and graduate placements
provide rewarding opportunities for university students from
a range of backgrounds and faculties. Supplementary to the
MA Academy, select employees2 completed an average of
10 hours of individual training in 2022 on topics including
financial services, cyber security and data protection, and key
policies. Division specific learning is also provided.
Select senior executives underwent an average of 20
hours of training. Regular performance reviews and
career development discussions ensure employees have
opportunities to progress, upgrade skills and pursue their
interests within the Group.
1 Employees who work for wholly owned businesses which have been with the Group for more than two years.
2 Refers to eligible employees from core business divisions Corporate Advisory, Securities, Asset Management and Lending & Technology.
31
MA Financial Group | 2022 Annual ReportSustainability report Strong governance and ethical behaviour
MA Financial is focused on delivering long term value to
our shareholders. Strong corporate governance practices
and policies instil a culture of acting honestly, ethically, and
responsibly in support of organisational goals and values and
are a fundamental pillar for our sustainable development.
Our approach to governance and ethical behaviour is
described below.
The Board and Committees
The Board retains ultimate responsibility for promoting the
long term interests of the Group and overseeing the activities
of management and governance of the Group. The Board
comprises of six Non-Executive Directors and three Executive
Directors. In 2022, the Board welcomed Independent
Non-Executive Director Nikki Warburton as the ninth board
member. Ms Warburton has 30 years’ experience in brand and
marketing in the automotive, advertising and media sectors.
Each director is qualified with the appropriate skills,
expertise and experience to perform their responsibilities.
Two permanent standing committees assist the Board in key
areas of oversight: the Audit and Risk Committee and the
How we govern ESG
Nomination and Remuneration Committee. Both committees
are chaired by an Independent Director and comprise a
majority of Independent Directors. The Company also has a
Continuous Disclosure Committee to manage its continous
disclosure obligations.
More information on MA Financial’s Board and committees,
including roles and responsibilities, is available on the website
and is outlined in the Corporate Governance Statement 2022.
Code of Conduct
The Code of Conduct applies to all Directors, officers and
employees of the Group and sets out expectations for how
we act in the ordinary course of our business activities.
Employees annually confirm their compliance with the Code
of Conduct and are expected to abide by the highest standard
of ethical conduct in their relationships with each other,
investors, competitors, suppliers, and the public. We bring the
expected behaviour to life by having senior leaders’ model and
positively reinforce our values. A comprehensive framework
of additional policies and procedures that supplement and
support the Code of Conduct can be found on the website.
MA Financial Group Limited Board
Oversees the management of environmental, social and governance (ESG) risks and opportunities
Impact
Oversees the management
of the company, including
environmental and social
impact
Policy
Approves ESG-related
policies
Risk Management
Approves approach to risk
management, including
ESG risks
Disclosure
Inaugural Sustainability
Report incorporated within
2021 Annual Report
Board Committees will engage on ESG topics relevant to 5 respective charters.
Audit and Risk Committee
Nomination and Remuneration Committee
Executive
Responsible for assessing ESG risks and opportunities, maintaining and building further a sustainable business
model, managing each of the identified material topics, and reporting to the Board as appropriate
Asset Management
ESG Steering Committee
People and Investment
Committee
Senior Executive
Risk Committee
MA Group
Investment Committee
Risk governance
Risk management is a fundamental aspect of good
governance and a regulatory responsibility, and it includes
managing the risks and opportunities related to sustainability.
MA Financial’s Heads of Business have executive responsibility
for risk management supported by our core principle that risk
management is the responsibility of everyone.
The Board is responsible for ensuring the Group maintains
a risk management framework which identifies all areas of
potential risk. It reviews the balance between realising business
opportunities and remaining within the risk tolerances set out
in its Risk Appetite Statement, which includes sustainability
risks. The Board is assisted by its Audit & Risk Committee,
which reports annually whether it is satisfied that the risk
management framework is appropriate.
32
The Chief Operating Officer and Risk Director are responsible
for coordinating the Risk Management Framework, for
promoting an effective risk culture, and developing awareness
of risk management across the Group. The Senior Executive
Risk Committee meets to discuss key risk themes and
champions positive risk culture.
MA Financial Group MA Financial Group || 2022 Annual Report2022 Annual ReportSustainability report
Sustainable business model
Building and maintaining a sustainable business model will
enable our success. The Group operates as a diversified
financial services company specialising in managing
alternative assets, lending, corporate advisory and equities.
The Group has operational expertise in managing real estate,
hospitality and credit assets on behalf of MA Financial
managed funds. We understand that without incorporating
ESG considerations diversification alone has limitations
in terms of increasing our resilience and further reducing
our vulnerability to short medium and long term risks.
Diversification also means we must assess each of our
businesses individually, and as a portfolio, to gain greater
visibility of potential risks and opportunities that could affect
the value, performance and our reputation. Our goal is deliver
sustainable outcomes for our stakeholders.
In 2022, our Asset Management Division established an
ESG Steering Committee whose members meet quarterly
to oversee the ESG integration across investment activities.
As part of our commitment to integrating ESG, in June 2022
our Asset Management business became a signatory to the
United Nations Principles for Responsible Investment (UNPRI)
and produced the Responsible Investment Policy outlining
the division’s approach to ESG. Given the varying nature
of the asset classes we manage, the geographies in which
different companies or entities operate in, and the size of our
holdings, we also commenced development of a Responsible
Investment Policy for each asset class to capture the nuances
in approach to ESG by each investment team and aim to
finalise these in 2023 for implementation thereafter.
In August 2022 we successfully launched the MA Sustainable
Future Fund. The fund provides capital, in the form of secured
loans and hybrid credit instruments, to established growth-
stage companies with a positive sustainability impact.
To increase employee understanding of incorporating ESG,
in 2022 select employees in Asset Management completed
the PRI Academy training course ‘Understanding Responsible
Investing’ and continue to have access to regular webinars
to enhance knowledge. We also hosted and participated in
Seventeen X. This event was designed to engage and
educate the business community on UN Sustainable
Development Goals.
Looking ahead, we aim to assess our approach to
incorporating ESG into other parts of our business, including
lending, broking and advisory. For our hospitality and real
estate venues, we are working to develop effective and
efficient engagement with our tenants and collect quantitative
information in relation to our environmental footprint and
climate change risk. Our Hospitality platform operates several
hospitality venues, offering a range of entertainment options
including gambling services. The provision of this type of
entertainment is a government regulated offering and we
work closely with the relevant regulators to ensure all venues
operate in a socially responsible manner.
Supplier Code of Conduct
To ensure sustainability of our business from the supply chain
perspective, our Supplier Code of Conduct describes the
expectations we have for our supply chain. Our suppliers,
whether directly or through their operations and supply
chain, must comply with applicable laws and regulations, and
have procedures to identify, prevent, mitigate, and account
for material risks, including health & safety, ethical business
practices, cyber security and privacy, modern slavery, and
other human rights impacts. Suppliers are responsible for
the development, implementation, and testing of business
continuity and disaster recovery plans for operations
supporting our business. The Group seeks to safeguard
people and the environment from harm through its emergency
preparedness plans, while focusing on the continuation of key
business operations.
33
MA Financial Group | 2022 Annual ReportSustainability report Our diversity principles
• Recruit, retain and develop an appropriately
diverse and skilled workforce and Board to
facilitate achieving or exceeding business
objectives
•
Leadership team proactively demonstrating
a commitment to diversity through modelling
inclusive behaviour
• Providing a work environment that values and
fully utilises the perspectives and experiences of
all employees and directors.
Diversity and inclusion
We value diversity as a critical enabler of innovation and
growth. Diversity at MA Financial involves creating a work
environment which allows all our people to meet their
potential and is underpinned by respecting and valuing a wide
range of differences including gender, ethnicity, disability,
age, religion, sexual orientation, and educational and work
experience. Our Diversity Policy (available on our website)
outlines our diversity principles, commitment to diversity
objectives and provides a framework for advancing our
diversity goals. Key initiatives to assist with the achievement
of our diversity objectives including a focus on our recruitment
processes, an annual gender remuneration gap review
process, accountability for senior employees and leadership
to support our diversity culture through non-financial metrics,
key employee benefits comprising paid parental leave above
minimum legislative requirements, and financial support for
female staff returning to work from parental leave. In 2021, we
set new measurable gender and CALD diversity objectives
towards our commitment of a diverse workplace and include
2022 figures in the table below.
Senior leaders Julian Biggins, Chris Wyke and Jill Shapiro mark
R U OK Day to promote mental health awareness in the workplace.
Objective/Quantitative targets
Baseline (2021)
2022
Achieve and retain a 30% female representation at Board level
25% female/75% male
33% female/67% male
Achieve and retain a 50% female representation in the business
48% female/52% male
48% female/52% male
Achieve and retain a 30% female representation in senior executive1
23% female/77% male
28% female/72% male
Achieve a Culturally and Linguistically Diverse (CALD) status of 40%
CALD = 35%
CALD = 34%2
On an annual basis, management monitors and reports to the Board on our objective advancement with the Board assessing
our progress against targets. The table illustrates our year-on-year movements on gender diversity at different levels of the
organisation.
1 Senior executives include all employees with a title of Vice-President, Executive Director, Managing Director or functional equivalent
2 Reflected in the 2022 Culture Survey completed by select parts of the business. Figure is not representative of the entire employee base. New
processes are in place to capture data across the business in 2023.
34
MA Financial Group MA Financial Group || 2022 Annual Report2022 Annual ReportSustainability report Level
Gender
2020
Workforce
Female
Male
Senior executives
Female
Male
Board
Female
Male
33%
67%
24%
76%
29%
71%
2021
48%
52%
25%
75%
25%
75%
2022
YOY change
48%
52%
28%
72%
33%
67%
3%
3%
8%
8%
MA Financial recognises more work is needed by the financial
services sector to attract females to careers in finance. As
members of Women in Banking and Finance (WiBF), we aim
to contribute to improved gender diversity and inclusive
leadership practices across the sector. In 2022, MA Financial
hosted a networking event ‘Next Gen Women in Finance’
inviting over 120 young female professionals to engage in
discussions about inclusive culture and driving change. The
People, Inclusion and Investment Committee, established
in 2021, continued its mandate in 2022 to support the
professional and personal goals of all employees and ensure
a consistent approach across the firm.
We are committed to fair and equitable remuneration. Our
annual remuneration review and discretionary bonus setting
process includes an analysis and elimination of any identified
gender pay gaps for comparable roles. The process assesses
the occurrence of unusual gaps which are not accounted for
by factors such as experience, skills, performance, and others
and removes them as applicable.
Health and safety
The Group aims to create and maintain a safe and healthy
workplace, and ensure all activities undertaken protect the
health and safety of our employees, suppliers, visitors and
clients as applicable. Our Work Health and Safety (WHS)
Policy sets the fundamental principles that govern our
approach to WHS management. In 2022, we established
a Work Health and Safety Committee with a mandate to
promote safety and health and to consult on issues relevant
to health, safety, and the welfare of workers. MA Financial
tracks Loss Time Due to Injury and can report zero reportable
the financial services sector to attract
females to a career in finance, and we aim
to contribute by focusing on increased
representation across all levels.
incidences in 2022.“We recognise more work is needed by
MA Financial Group | 2022 Annual Report
35
MA Financial Group | 2022 Annual ReportSustainability report Environmental impact
In 2022, MA Financial completed, for the first time, a
measurement of the emissions for which it is directly
responsible. We are pleased to be able to disclose the results:
1,673 t CO2-e (0.88 t CO2-e Scope 1 and 2 Emissions per
employee). This estimate was produced in respect of calendar
year 2022 and will serve as a baseline for future years.
We will assess our operations to identify and achieve other
reductions in sources of emissions. In parallel, we intend to
align our disclosures and reporting to the recommendations
of the TCFD, referencing the International Sustainability
Standards Board and, in Australia, the regulator ASIC, and the
federal government.
By acting in a thoughtful and responsible way, and in line with
Government guidelines, MA Financial aims to deliver net zero
emissions by 2050 for our direct operations and reduce Scope
1 and 2 emissions intensity per employee by 50 percent by
2030. To achieve our Scope 1 and 2 emission reductions for
our direct operations, we will progress the development of a
Climate Change Action Plan by the end of 2023. For our Asset
Management division, MA Financial is a signatory to the UN
Principles for Responsible Investment and is working through
associated implementation plans. We expect to include an
update on our progress in our 2023 Sustainability report.
Approach to emissions measurement
TCFD incoming mandatory reporting
The Group acknowledges the introduction of mandatory
climate reporting and is preparing for increased data and
disclosure requirements. We intend to align our disclosures and
reporting to the recommendations of the TCFD, referencing
the International Sustainability Standards Board and, in
Australia, the regulator ASIC, and the federal government.
Below is our roadmap outlining our future steps to
understanding the potential impacts of climate change and
embedding appropriate management practices in line with
the TCFD pillars.
•
This estimate was produced in respect of calendar year
2022 and will serve as a baseline for future years.
TCFD pillars
Our focus
• The estimate does not include all possible components, in
particular for some Scope 3 emissions. The detail of the
estimate is outlined in the disclosure document.
Governance
Identify relevant Group wide
employees to receive climate-
related awareness training.
Estimates for future years will build on this work and will
become more comprehensive, while still enabling year-on-
year comparisons.
Strategy
•
•
For some sources of emissions, we have had to use
estimates to bridge gaps in data, for example: where
separate electricity metering is not available, estimates
have been made.
Develop a CCAP to achieve Scope
1 and 2 emission reductions for
direct operations.
Risk Management
Assess and agree approach for
incorporating ESG in our Risk
Management Framework.
Metrics and targets
Continue to identify metrics in
relation to Scope 3 emissions
not yet included in emissions
boundary
We are developing processes and systems to collect
quantitative information in relation to our energy consumption,
to enable continued data analysis and better understanding
of our footprint. This will allow for better decision-making
on appropriate management practices to be implemented.
Moreover, this will help us in understanding the greenhouse gas
emissions associated with our operations which are essential
metrics related to climate change and the TCFD framework.
• The emissions ‘footprint’ relates to MA Financial’s direct
operations. This organisational boundary includes the
Group’s wholly owned entities. However, it does not extend
to the assets held by investment funds, or take account of
the projects financed by our credit businesses.
As noted in the introduction, MA Financial aims to deliver net
zero emissions by 2050 for our direct operations and reduce
Scope 1 and 2 emissions intensity per employee by 50 percent
by 2030.
•
•
•
To achieve our Scope 1 and 2 emission reductions for our
direct operations, we will progress the development of a
Climate Change Action Plan by the end of 2023.
Changing electricity supply to certified providers of energy
from renewable sources.
Identifying and realising opportunities to reduce energy
intensity of operations
36
MA Financial Group MA Financial Group || 2022 Annual Report2022 Annual ReportSustainability report Socially responsible behaviour
MA Financial recognises the impact we have on the
communities we operate in and other external parties.
Assessing our ESG impact ensures we continue to have
socially responsible business practices.
Privacy
The Group respects data privacy and recognise how critical
our actions in handling data are in building and maintaining
trust with current and prospective stakeholders. We are
committed to measures which protect the security of personal
data and confidential information that is collected, stored,
processed, or disseminated. The Group’s ‘Technology and
Data Handling Policy’ established specific requirements for
the use of all computing and network resources within the
business in a responsible, ethical, and compliant manner.
This along with the Group’s Privacy Policy also covers the
key principles of data privacy, compliance requirements,
privacy and personal rights and technology use guidelines
within the Group. They are reviewed for relevance and
accuracy annually.
To be effective in managing data privacy, our policies and
processes must be paired with a culture where all employees
understand the importance of privacy and operate with a high
level of vigilance in handling data. The Board is responsible
for ensuring that cyber resilience is an element of the broader
risk framework and that exposures are recognised and
assessed for impacts based on clearly defined metrics.
Human rights
MA Financial has no tolerance for any form of modern slavery
within its business and supply chain.
The Group’s approach to Modern Slavery is set out in its
Modern Slavery Policy and Modern Slavery Statement on the
website. Tier 1 risk assessments of the Group’s supply chain
conducted in 2022 has not identified any instances of modern
slavery or significant areas of concern. All objectives set out
in MA Financial’s Modern Slavery Statement for 2022 were
met, which included a risk assessment for new acquisitions
for Finsure and MA Money, and engagement with high and
medium risk suppliers to develop a deeper understanding
of their business and their supply chains. This included
completion of questionnaires and/or written assurances on
management of modern slavery risk.
In 2023, MA Financial will expand its diligence focus across
the supply chains on a risk assessed basis for those suppliers
assessed in medium and high-risk categories.
Community investment
At MA Financial fairness and generosity are fundamental
to our ethos. The MA Foundation was established in 2018
to support community initiatives that align with the culture
and community interests of the Group. The vision of the
Foundation and our community investment approach is
based on impactful partnerships, high staff engagement and
alignment with the broader ESG agenda of the Group. To date,
the Foundation has donated over $7.7 million to 35 charities.
The Foundation has three Community Partners, GO
Foundation, Beyond Blue and Mirabel Foundation.
In 2022, several initiatives were completed to help increase
the reach and engagement of the Foundation with our growing
workforce. These included an employee survey to provide
greater insight into the types of organisations the firm would
like to support; liaison with established and successful
foundations to determine best practice for charity selection,
and the establishment of the MA Foundation Committee,
comprising of employees from the various business divisions.
In 2023, the committee will present the MA Foundation
Board with recommendations designed to enhance the MA
Foundation and build further engagement with employees
across the group.
Responsible gaming
Our Hospitality platform MA Hotel Management, which
manages several hospitality funds including Redcape Hotel
Group, recognises its responsibility to ensure customers enjoy
safe and sociable venues, and responsibly enjoy the beverage
and entertainment offerings.
Redcape supports local communities and their initiatives
through its ‘Publinc Communities Programme’ which has an
objective of enriching local communities through lasting impact.
On gaming reform, MA Financial welcomes evidence-based
solutions that can help reduce harm and we will work with
industry and government to implement when appropriate. MA
Hotel Management’s approach to problem gaming and harm
minimisation is articulated in its Responsible Service Policy,
available on the Redcape website.
MA Hospitality Management’s approach to problem gaming
and harm minimisation is articulated in its Responsible Service
Policy, available on the Redcape website.
Looking forward
We are proud of the progress we have made in 2022, and our
continued focus on the six key pillars of our Sustainability
Framework. The development of our practices and
procedures within these pillars, and our disclosure around
them, will continue to expand over time. We look forward to
sharing our sustainability progress with our key stakeholders
over future periods.
37
MA Financial Group | 2022 Annual ReportSustainability report 03Directors’ reportMA Financial Group | 2022 Annual Report Directors’ report
For the year ended 31 December 2022
The Directors of MA Financial Group Limited (Company) submit their report together with the consolidated financial report of
the Company and its subsidiaries (Group) for the year ended 31 December 2022.
The names of the Directors of the Group during or since the end of the year are:
Jeffrey Browne
Andrew Pridham
Independent Chair and Non-Executive Director
Group Vice Chair
Alexandra Goodfellow
Independent Non-Executive Director
Simon Kelly
Nikki Warburton
Kenneth Moelis
Independent Non-Executive Director
Independent Non-Executive Director (appointed 23 December 2022)
Non-Executive Director
Kate Pilcher Ciafone
Non-Executive Director
Julian Biggins
Christopher Wyke
Joint Chief Executive Officer
Joint Chief Executive Officer
The Directors have been in office since the start of the year to the date of this report unless otherwise noted.
Jeffrey Browne
Independent Chair and
Non-Executive Director
Andrew Pridham AO
Group Vice Chair
Experience and expertise
Experience and expertise
Jeffrey was appointed to the Board in February 2017. He
was a senior executive at Nine Network Australia from 2006
to 2013, including Managing Director from 2010 to 2013.
He was previously Chair of Carsales.com. Jeffrey holds a
Degree in Arts from La Trobe University, and a Degree in
Law from Monash University, Melbourne.
Other directorships and appointments
Chair of Premoso Pty Ltd (owner of the business of
Walkinshaw Automotive Group)
President of Collingwood Football Club
Special responsibilities
Chair of the Board (appointed February 2017)
Member of the Audit and Risk Committee (appointed
February 2017)
Member of the Nomination and Remuneration Committee
(appointed February 2017)
Interests in the Company
Shares: 781,250
Andrew has served as a Director since the formation of MA
Financial Group Limited. He was Chief Executive Officer from
2009 to February 2020 and has 30 years’ of experience in
investment banking. Andrew was one of the founders of the
company in 2009.
Other directorships and appointments
Chair of Sydney Swans Limited
Adjunct Professor at University of South Australia
Special responsibilities
MA Academy sponsor
Director of MA Foundation (appointed November 2017)
Interests in the Company
Shares: Andrew holds 661,165 shares as well as a beneficial
equity interest in 18,289,444 shares as a result of his holdings
in the Existing Staff Trusts. As a result of Andrew’s ownership
of the Trustee of one of the Existing Staff Trusts, Andrew has
a deemed relevant interest in 23,952,462 shares.
Restricted and Loan Funded shares: 254,209
39
Directors’ report
For the year ended 31 December 2022
Alexandra Goodfellow
Simon Kelly
Independent Non-Executive Director
Independent Non-Executive Director
Experience and expertise
Experience and expertise
Alexandra is Vice Chair of Korn Ferry Australasia and has
30 years’ experience in executive search and human capital
consulting. She advises clients at Board, CEO and C-suite
level assisting with executive search, leadership succession
and human capital advisory.
Other directorships and appointments
Vice Chair of Korn Ferry Australasia
Non-Executive Director of Sydney Swans Limited
Special responsibilities
Chair of the Nomination and Remuneration Committee
(appointed August 2020)
Member of the Audit and Risk Committee (appointed 13
December 2022)
Interests in the Company
Shares: 32,371
Simon was appointed to the Board in April 2021 and has
30 years’ experience in strategic, financial and general
management in Australian listed and unlisted consumer
businesses. He is Chief Executive Officer of NoahFace and
has previously held C-suite roles at Ardent Leisure, Virgin
Australia, Nine Entertainment Co., Artisocrat Leisure and
Goodman Fielder.
Other directorships and appointments
Chief Executive Officer of NoahFace
Non-Executive Director of Altium Limited
Special responsibilities
Chair of the Audit and Risk Committee (appointed April 2021)
Interests in the Company
Shares: 65,161
Nikki Warburton
(appointed 23 December 2022)
Non-Executive Director
Kenneth Moelis
Non-Executive Director
Experience and expertise
Experience and expertise
Nikki was appointed to the Board in 2022 and has 30 years’
experience as a senior marketing executive and a board
director in automotive, sport, and media sectors. She is on
the Board of Directors for Greater Western Sydney Giants
Football Club, Car Expert, and is a Mentor for The Marketing
Academy. Nikki will offer herself for election as a Director at
the MA Financial Annual General Meeting in May 2023.
Other directorships and appointments
Non-Executive Director of Greater Western Sydney Giants
Football Club
Non-Executive Director of Car Expert
Special responsibilities
None
Interests in the Company
None
Ken has served as a Director of MA Financial Group since
2009. He is Chair and Chief Executive Officer of Moelis &
Company and has over 40 years’ experience as a banker
and executive. Prior to founding Moelis & Company, Ken was
President of UBS Investment Bank and previously Joint Global
Head of Investment Banking. Ken holds a Bachelor of Science
and an MBA from the Wharton School at the University of
Pennsylvania.
Other directorships and appointments
Chair and CEO of Moelis & Company Group LP
(Moelis & Company)
Non-Executive Chair of the Board of Directors, Moelis Asset
Management
Member, Board of Trustees, University of Pennsylvania
Member, Wharton Board of Overseers
Member, Board of Advisors, Ronald Reagan UCLA
Medical Center
Member, Business Roundtable
Member, The Business Council
Interests in the Company
Ken no longer has a deemed relevant interest in all shares
held by Moelis & Company. Moelis & Company presently holds
23,500,000 ordinary shares in the Group.
40
MA Financial Group | 2022 Annual Report Directors’ report
For the year ended 31 December 2022
Kate Pilcher Ciafone
Non-Executive Director
Julian Biggins
Executive Director and
Joint Chief Executive Officer
Experience and expertise
Experience and expertise
Kate is Chief Operating Officer of Investment Banking and
a founding member of Moelis & Company. Kate has 20
years’ experience as a banker and operations executive
in investment banking. She commenced her career with
UBS before joining Moelis & Company in 2007. Kate holds
a Bachelor of Commerce with distinction from the McIntire
School of Commerce at the University of Virginia.
Other directorships and appointments
None
Special responsibilities
Member of the Nomination and Remuneration Committee
(appointed August 2020)
Interests in the Company
None
Julian was appointed Joint Chief Executive Officer in
February 2020 and has been a director of the Board since
February 2017. Julian was one of the founders of the company
in 2009. He has 20 years’ of investment banking experience
in the real estate sector including senior roles within J.P.
Morgan’s Investment Bank and UBS’ Equities Research
division. He holds a Bachelor of Business (Real Estate) and
a Bachelor of Business (Banking and Finance) from the
University of South Australia.
Other directorships and appointments
None
Special responsibilities
Member of the Audit and Risk Committee (appointed
February 2017, resigned 13 December 2022)
Interests in the Company
Shares: Julian holds a beneficial equity interest in 5,328,170
shares as a result of his holding in the Existing Staff Trusts.
Share rights: 28,866
Restricted and Loan Funded Shares: 987,506
Christopher Wyke
Executive Director and
Joint Chief Executive Officer
Company secretaries’ qualifications
and experience
Janna Robertson
Experience and expertise
Chris was appointed Joint Chief Executive Officer in
February 2020 and has been a director of the Board since
March 2017. Chris was one of the founders of the company
in 2009. He has 20 years’ investment banking experience
specialising in restructuring, M&A, equity and debt capital
markets transactions. Chris has worked at J.P. Morgan and
UBS in London, Singapore and Sydney. He holds a Bachelor
of Economics with Honours from University College London.
Joint Company Secretary appointed 30 September 2019
Janna has over 25 years’ experience in financial services,
business operations and transformation. Prior to joining the
Group she was a partner at Deloitte. Janna holds a Bachelor
of Business from the University of Technology Sydney, is a
Member of the Institute of Chartered Accountants in Australia
and New Zealand and is a graduate of the Australian Institute
of Company Directors.
Other directorships and appointments
None
Special responsibilities
Director of MA Foundation (appointed November 2017)
Interests in the Company
Shares: Chris holds a beneficial equity interest in 5,328,170
shares as a result of his holding in the Existing Staff Trusts.
As a result of Chris’ ownership of the Trustee of one of the
Existing Staff Trusts, Chris has deemed relevant interest in
14,850,000 shares.
Share rights: 29,236
Restricted and Loan Funded Shares: 1,005,216
Rebecca Ong
Joint Company Secretary appointed 19 February 2020
Rebecca has over 15 years’ experience as a lawyer in the
financial services industry, and prior to joining the Group was
Regional Counsel at UBS, advising its Asset Management
business across Asia Pacific. Rebecca holds a Bachelor of
Commerce (Finance)/ Bachelor of Laws from the University of
New South Wales.
41
Directors’ report
For the year ended 31 December 2022
Directors’ meetings
The following table sets out the number of Directors’ meetings (including meetings of committees of Directors) held during the
financial year:
Board meeting
Audit and Risk Committee
Nomination and
Remuneration Committee
Jeffrey Browne
Andrew Pridham
Alexandra Goodfellow
Simon Kelly
Nikki Warburton
Kenneth Moelis
Kate Pilcher Ciafone
Julian Biggins
Christopher Wyke
A
7
7
6
7
0
7
7
7
7
B
7
7
7
7
0
7
7
7
7
A
9
#
#
9
#
#
#
9
#
B
9
#
#
9
#
#
#
9
#
A
5
#
5
#
#
#
5
#
#
B
5
#
5
#
#
#
5
#
#
A = Number of meetings attended.
B = Number of meetings held during the time the Director held office during the year.
# = Not a member of committee
Principal activities
MA Financial Group is a financial services business with
offices in Sydney, Melbourne, Hong Kong and Shanghai. The
Group’s principal activities are providing asset management,
lending and technology, corporate advisory and equities
services. During the year, the Group expanded its Lending
& Technology segment by acquiring Finsure Holding Pty Ltd
and its subsidiaries (Finsure), a leading Australian mortgage
aggregator, and MA Money Financial Services Pty Ltd
(formerly MKM NewCo Pty Ltd) and its subsidiaries (MA
Money), a residential mortgage lender. In the opinion of the
Directors, there were no other significant changes to the
principal activities of the Group during the financial year under
review that are not otherwise disclosed in this report.
Results
The financial report and results for the years ended 31
December 2022 and 31 December 2021 have been prepared
in accordance with Australian Accounting Standards, which
comply with International Financial Reporting Standards
(IFRS). Total comprehensive income attributable to ordinary
equity holders of the Group for the year ended 31 December
2022 was $45.8 million (2021: $48.1 million) and the profit
after tax for the year ended 31 December 2022 was $44.9
million (2021: $32.0 million).
Management have considered the financial impact of the
ongoing COVID-19 pandemic on the Group and, where
applicable, relevant disclosures have been provided in the
Financial Report.
Dividends
Subsequent to the year ended 31 December 2022, the
Directors have resolved to pay a final dividend of 14 cents per
share, fully franked, for the year ended 31 December 2022.
The dividend is payable on 22 March 2023.
On 21 September 2022, the Company paid an interim dividend
of $10.5 million (6.0 cents per share), fully franked, for the
financial year ended 31 December 2022.
On 11 March 2022, the Company paid a final dividend of $20.5
million (12.0 cents per share), fully franked, for the financial
year ended 31 December 2021.
State of affairs
There were no other significant changes in the state of affairs
of the Group that occurred during the financial year under
review that are not otherwise disclosed in this report.
42
MA Financial Group | 2022 Annual Report Directors’ report
For the year ended 31 December 2022
Operating and financial review
Please refer to the Year in Review section of this Annual
Report for the following in respect of the Group:
• a review of operations during the year and the results of
Differences in measurement principally arise where the Group
prefers to use non-IFRS measures to better:
• Align with when management has greater certainty of
timing of cash flows;
those operations;
• Regulate the variability in the value of key strategic
•
likely developments in the operations in future financial
years and the expected results of those operations;
• comments on the financial position;
• comments on business strategies and prospects for future
financial years; and
• summary of material risks the Group faces in achieving its
financial objectives, such as cyber risk, regulatory change,
investment risk, retaining talent and volatility in levels of
business activity.
Non-IFRS Underlying results
The Group also utilises non-IFRS “Underlying” financial
information in its assessment and presentation of the
Group’s performance. In particular, the Group references
Underlying revenue, Underlying Earnings Before Interest, Tax,
Depreciation and Amortisation (EBITDA), Underlying Earnings
Per Share (EPS), Underlying Net Profit After Tax (NPAT), and
Underlying Return on Equity (ROE).
Underlying EBITDA and Underlying NPAT achieved for
the year ended 31 December 2022 was $106.7 million
(2021: $70.9 million) and $61.4 million (2021: $42.6 million)
respectively.
The Directors place great importance and value on the IFRS
measures. As such, the Directors believe that, when read in
conjunction with the IFRS measures, the Underlying measures
are useful to the reader as:
• The Underlying measures reveal the underlying run rate
business economics of the Group;
• The Underlying measures are used by management to
allocate resources and make financial, strategic and
operating decisions. Further, all budgeting and forecasting
is based on Underlying measures. This provides insight
into management decision making; and
• Unless otherwise disclosed, the Underlying adjustments
have been consistently applied in all reporting periods,
regardless of their impact on the Underlying result.
The Underlying financial information is not prepared in
accordance with Australian Accounting Standards and IFRS
and is not audited. Adjustments to the IFRS information align
with the principles by which the Group views and manages
itself internally and consist of both differences in classification
and differences in measurement.
Differences in classification arise because the Group chooses
to classify some IFRS measures in a different manner to that
prescribed by IFRS.
assets; and
• Normalise for the impacts of one-off transaction costs.
As announced on 9 June 2022, the Group amended the
Underlying treatment of mark to market movements of
investments by removing any unrealised gains or losses
from Underlying revenue. The Underlying results for the year
ended 31 December 2022 reflect this revised approach with
comparatives restated accordingly.
EBITDA from Priority Income Fund (PIF) strategies have been
reclassified from Lending & Technology to Asset Management
given they are third-party managed funds. The Underlying
results for the year ended 31 December 2022 reflect this
revised approach with comparatives restated accordingly.
Please refer to note 3 in the Financial Report for a detailed
reconciliation between the IFRS and Underlying measures.
Likely developments
The Group continues to pursue its strategy of focusing on its
core operations. In particular, the Group will look to grow its
lending operations, continue to market its managed funds and
launch new managed funds with the aim of growing assets
under management.
Events subsequent to reporting date
There has not arisen in the interval between the end of the
financial year and the date of this report any item, transaction
or event of a material and unusual nature likely, in the opinion
of the directors of the Company, to affect significantly the
operations of the Group, the results of those operations, or
the state of affairs of the Group, in future financial years.
Environmental regulation
Please refer to the Sustainability Report for details of the
Group’s Environmental, Social, and Governance (ESG)
framework. The Group has policies and procedures in place,
to identify obligations and notify material breaches, where
operations are subject to any particular and significant
environmental regulation under a law of the Commonwealth
or of a State or Territory. The Directors have determined that
there has not been any material breach of these obligations
during the financial year.
43
MA Financial Group | 2022 Annual Report Directors’ report
For the year ended 31 December 2022
Change in auditor
Effective 21 June 2022, following the outcome of an audit
tender process, KPMG was appointed as auditor for the
Company. In accordance with s.329(5) of the Corporations Act
2001 (Cth) (the Act), the Company received the resignation of
Deloitte Touche Tohmatsu following Australian Securities and
Investments Commission (ASIC)’s consent to the resignation.
In accordance with s.327C of the Act, the appointment of
KPMG as auditors of the Company will be recommended by
the Directors for shareholder approval at the Company’s next
Annual General Meeting.
Non-audit services
The Directors are satisfied that the provision of non-audit
services during the year, by the auditor (or by another person
or company on the auditor’s behalf), is compatible with the
general standard of independence for auditors imposed by
the Act.
$0.6 million of non-audit services were provided prior to
KPMG’s appointment as the Group’s auditor.
The Directors are of the opinion that the services as disclosed
in note 41 to the financial statements do not compromise the
external auditor’s independence, for the following reasons:
• all non-audit 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 Code
of Conduct 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 Group, acting as
advocate for the Group or jointly sharing economic risks
and rewards.
Indemnification and insurance of Directors’, officers
and auditors
During the year, the Group paid a premium in respect of a
contract insuring the Directors and officers of the Group
against liabilities and legal expenses incurred as a result of
carrying out their duties as a Director or officer. The Directors
have not included details of the nature of the liabilities covered
or the amount of premium paid in respect of this insurance, as
such disclosure is prohibited under the terms of the contract.
The Group has agreed to indemnify all current and former
Directors, company secretaries and certain officers of the
Group, its controlled entities and certain investment portfolio
vehicles against all liabilities to persons (other than the
Group or a related body corporate) which arise out of the
performance of their normal duties as a Director, company
secretary or officer to the extent permitted by law and unless
the liability relates to conduct involving wilful misconduct, bad
faith or conduct known to be in breach of law.
The Group has not otherwise, during or since the end of
the financial year, except to the extent permitted by law,
indemnified or agreed to indemnify an officer or auditor of
the Group or any related body corporate against a liability
incurred as such an officer or auditor.
Proceedings on behalf of the Company
No person has applied to the Court under s.237 of the Act
for leave to bring proceedings on behalf of the Company, or
to intervene in any proceedings to which the Company is a
party for the purpose of taking responsibility on behalf of the
Company for all or part of those proceedings.
Rounding of amounts
The Group is of a kind referred to in ASIC Corporations
(Rounding in Financial/Directors’ Reports) Instrument 2016/191
and in accordance with that Instrument, amounts in the
Directors’ Report and the Financial Report have been rounded
off to the nearest thousand dollars, unless otherwise stated.
Lead auditor’s independence declaration
The lead auditor’s independence declaration is included at the
end of this report and forms part of the Directors’ Report for
the financial year ended 31 December 2022.
Signed in accordance with a resolution of the Directors.
Jeffrey Browne
Julian Biggins
Independent Chair and
Non-Executive Director
Director and Joint Chief
Executive Officer
Sydney
Sydney
23 February 2023
23 February 2023
MA Financial Group | 2022 Annual Report
Letter from the Chair of the Nomination and Remuneration Committee
Dear Shareholders,
On behalf of the Board of Directors of MA Financial Group
and its subsidiaries, I am pleased to present the Remuneration
Report for the year ended 31 December 2022.
The report summarises the Company’s achievements and
the associated remuneration for our Board, Chief Executive
Officers and senior executives.
Year in Review
MA Financial experienced continued expansion in 2022,
adding approximately 100 employees via organic growth,
and an additional 102 employees following the successful
acquisition of mortgage aggregator Finsure, and residential
mortgage lender, MA Money.
• The LTI Performance Condition which applies is an EPS
hurdle on a sliding scale, between 7.5% and 12% per
annum (same as in 2021). However, in 2022 the calculation
of the EPS performance condition is based on compound
annual growth rate (CAGR), replacing average EPS growth.
This aligns us better with market practice and has the
effect of increasing the required EPS growth to achieve
the hurdle.
• During 2022, the company changed how Underlying
earnings is determined, by excluding any unrealised gains
or losses from Underlying earnings. This has flowed
through 2021 and 2022 LTI performance measures.
We consider this change to improve the alignment of
Executives and Shareholders in the long term.
People and culture
Remuneration outcomes
Successfully embedding culture while experiencing significant
growth is a challenge. At MA Financial, this has been aided by
the company’s leadership team modelling the values of the
Group and investing in a workplace environment designed for
collaboration and innovation. These measures have enabled
the company to build capability by attracting and developing
key talent and creating an experienced and high-performing
workforce.
Results from the 2022 Culture Survey highlighted the
company’s well-aligned culture with significant strengths in
respect, teamwork and a shared commitment to growth.
Enhanced remuneration framework
Our remuneration structure has been designed to include
significant deferred and share based components which
vest progressively over five years. This, combined with an
LTI instrument which rewards for dividends and share price
growth only, aligns the Executive to deliver shareholder
outcomes and encourages responsible business building.
In considering shareholder feedback, changes were made to
the remuneration framework in 2022 including:
• The performance condition applied to LTI awards in 2022
is for 100% of the LTI award, with vesting after five years.
Previously, 70% was subject to performance conditions
and 30% subject to continued employment.
The performance of the Group in 2022 was strong and the
ability to deliver another record result in 2022 is pleasing,
particularly when we reflect on the macroeconomic and
geopolitical influences which created complexity and
uncertainty during the year.
The assessed performance of Executives against KPI
measures in 2022 exceeded the final award of STI, reflecting
the wider context, including the composition of earnings and
macroeconomic environment.
The 2022 result underscores the value of a diversified Group
and its intentional strategy to build a resilient business which
can withstand cycles: allowing the Group to continue to
invest in growing the business while delivering shareholder
returns. The challenge is to ensure that remuneration rewards
delivering current year results, while encouraging appropriate
risk taking and investing in the future. We believe the
remuneration framework achieves this.
Summary
On behalf of the Board, I would like to thank our shareholders
for your support, and trust and recognise the continued hard
work and dedication of our employees.
I invite you to review the full report, and we look forward to
receiving your feedback at the Annual General Meeting.
Alexandra Goodfellow
Chair of the Nomination and Remuneration Committee
45
Remuneration report
1. Remuneration report overview
The Directors of MA Financial are pleased to present the
Remuneration report (the Report) for the Group for the year
ended 31 December 2022. This Report forms part of the
Directors’ Report and has been prepared in accordance with
section 300A of the Corporations Act 2001 (Cth) (the Act).
The Report details the remuneration arrangements for the
Group’s key management personnel (KMP) including:
•
•
the Non-Executive Directors (NEDs)
the Chief Executive Officers (Joint CEOs) and senior
executives (collectively the Executive).
KMP are those persons who, directly or indirectly, have
authority and responsibility for planning, directing and
controlling the activities of the Group.
The table below outlines the KMP of the Group and their movements during the year ended 31 December 2022 (FY22).
Name
Position
Term as KMP
Non-Executive KMP
Jeffrey Browne
Independent Non-Executive Chair
Full financial year
Alexandra Goodfellow
Independent Non-Executive Director
Full financial year
Simon Kelly
Nikki Warburton
Kenneth Moelis
Independent Non-Executive Director
Full financial year
Independent Non-Executive Director
Appointed 23 December 2022
Non-Executive Director
Full financial year
Kate Pilcher Ciafone
Non-Executive Director
Full financial year
Executive KMP
Julian Biggins
Executive Director and Joint CEO
Full financial year
Christopher Wyke
Executive Director and Joint CEO
Full financial year
Andrew Pridham
Graham Lello
Janna Robertson
Group Vice Chair
Full financial year
Chief Financial Officer
Full financial year
Chief Operating Officer
Full financial year
46
MA Financial Group | 2022 Annual Report Julian is responsible for the Group’s finance, investor
relations and communications functions, and leading the
strategy and scaling of all our Real Estate, Hospitality and
operating businesses associated with real estate. He also
leads our Equities and Capital Markets capabilities
The Board recognises the important role people play in
achieving the Group’s long term objectives and as a key
source of competitive advantage. To grow and be successful,
the Group must be able to attract, develop, motivate and retain
the highest calibre individuals.
•
•
•
•
•
•
Remuneration report
2. How remuneration is governed
2.1
Joint CEO Structure
MA Financial established a Joint CEO structure in March
2020 following the appointments of Julian Biggins and
Christopher Wyke as Joint CEOs.
The Board considers the Joint CEO structure to be
appropriate for MA Financial in this current phase of its
growth due to the following:
Christopher Wyke and Julian Biggins are founding
members of the Group. The Group operates a breadth of
businesses across three divisions (Asset Management,
Lending & Technology, Corporate Advisory & Equities),
has operations across Australia, China and Hong Kong,
over 600 employees, and has $7.8 billion of assets under
management. Our investment expertise spans Real Estate,
Hospitality, Credit, Equities and Private Equity investments
including Venture Capital
Each CEO brings specific skills and capabilities to allow
them to focus on managing and growing different parts
of our diversified financial services businesses, which we
believe will facilitate stronger and more sustainable growth
Christopher has responsibility for our Advisory, Lending &
Technology and Credit investing activities. He also takes
responsibility for our risk, legal and compliance functions
The Joint CEOs share equal responsibility for Asset
Management and distribution capability and the Group’s
culture, people and strategy, including acquisitions
Together, the Joint CEOs are also jointly responsible
for determining and driving the growth ambition of
the company.
The Board is responsible for periodically assessing the
appropriateness of the Joint CEO structure to ensure its
effectiveness by assessing the joint performance of the CEOs
in delivering strong shareholder outcomes.
2.2
Remuneration decision-making
The Board established the Nomination and Remuneration
Committee (the Committee), which operates under the
delegated authority of the Board. The Committee has primary
carriage of the Group’s remuneration strategy, framework
and principles.
The Board, Committee and the Executive work together
to apply the remuneration governance framework. The
remuneration governance framework is designed to support
our purpose, principles, strategy, and long term approach to
creating sustainable value for our shareholders, clients and
the community.
The members of the Committee during FY22 were:
•
Alexandra Goodfellow – Independent Non-Executive
Committee Chair (full year)
•
•
Jeffrey Browne – Independent Non-Executive Committee
Member (full year)
Kate Pilcher Ciafone – Non-Independent Non-Executive
Committee Member (full year)
Following a thorough review of compensation practices
during the year ended 31 December 2021 (FY21), the FY22
year has focused on refinement of our approach, including
incorporating stakeholder feedback, to ensure remuneration
policies and practices remain appropriate and competitive.
The Committee has oversight of remuneration practices and,
where required, will access specialist external advice about
remuneration structure and levels and is utilised periodically
to support the remuneration decision-making process.
The Committee Charter can be found on the Corporate
Governance page of the Group’s website at
www.mafinancial.com.
2.3
Remuneration principles and links to business
strategy and performance
The Group’s purpose is to deliver long term, sustainable
value to our shareholders, clients and people. The key
objectives underpinning our purpose are embedded in the
Group’s remuneration principles, as summarised in the
following diagram.
The Board exercises significant oversight and judgement to
ensure the appropriate alignment of employees, shareholders
and client outcomes. In setting remuneration, the Board
seeks to strike a balance between having a transparent,
aligned and structured remuneration framework, whilst
retaining some discretion and flexibility to alter remuneration
arrangements to deliver fair outcomes. In 2022, this has
resulted in the awarded STI outcomes being below the
assessed performance against the KPI measures. We believe
this prudent and disciplined approach is appropriate when
considering the wider context, including the economic outlook
and the composition of the financial result.
As the Executives of MA Financial continue to build and
scale the business, we seek to strike a balance between
investing in the future and appropriate reward for the progress
achieved to date. The Board recognises the need for a human
judgement overlay in determining remuneration outcomes as
rigid formulaic approaches can deliver unintended outcomes.
As a whole, the Group’s compensation philosophy seeks to
maintain relatively low fixed salaries against market and offer
higher at risk components, using a long term incentives (LTI)
structure. The proportion of variable to fixed compensation
increases with the level of seniority and the ability to influence
the financial outcomes of the Company.
47
MA Financial Group | 2022 Annual Report Remuneration report
2. How remuneration is governed
O U R P U R P O S E
• Partnering with clients who value strong alignment, complementary expertise and sustainable
performance
• Empowering our people through a culture of growth, cohesion, innovation and accountability (Our
Differentiating Values and Behaviours)
• Delivering a high standard of technical expertise in both fiduciary and advisor roles
• Being active managers of risk.
R E M U N E R AT I O N P R I N C I P L E S
Enable the Group
to attract, retain
and motivate a high
performing Executive
cohort
Align Executives
to deliver both
short and long
term results and
sustainable value
creation
Alignment to
shareholder objectives
through an ‘owner’s
mentality’
Reinforce active
risk management
and the upholding
of the Group’s
values
Encourage and
drive growth by
linking pay and
performance
and rewarding
outperformance
E X E C U T I V E K M P R E M U N E R AT I O N F R A M E W O R K
At-risk
Fixed Annual Remuneration (FAR)
Short Term Incentive
Long Term Incentive
e
s
o
p
r
u
P
e
r
u
t
c
u
r
t
S
h
c
a
o
r
p
p
A
Set at a comparatively
low level relative to
industry and a smaller
proportion of the total
remuneration mix.
Rewards for achieving annual objectives
that drives execution of our strategy
and creates sustainable shareholder
wealth, in a manner consistent with our
values and risk culture.
Rewards for creating
sustainable long term
shareholder value and
reinforcing an ownership
mindset.
Base salary, compulsory
superannuation and non-
monetary benefits.
• 65% paid as cash
• 35% deferred into shares, as follows:
– One third for 1 year
– One third for 2 years
– One third for 3 years.
Annual grant of loan funded
shares funded by an interest-
free limited recourse loan, with
vesting subject to a 5-year
performance period.
Reviewed periodically
considering various
factors including our
remuneration policy,
role responsibility and
complexity, market
conditions and relevant
external remuneration
benchmarks.
Quantum:
Quantum:
• Target opportunity range of 275%–
325% of FAR for Joint CEOs
• Maximum opportunity of 325% of FAR
for Joint CEOs
• No maximum opportunity for other
KMP who may earn above target
range, based on Board discretion.
Performance Assessment:
• 50% Corporate objectives (Underlying
EPS and ROE)
• 50% Personal objectives
(role-specific).
• Target opportunity range
of 125%–175% of FAR for
Joint CEOs
• No maximum opportunity
for any KMP (including
Joint CEOs) who may earn
above target range for
outperformance, based on
Board discretion.
Performance Assessment:
• CAGR EPS growth on
a sliding scale
48
MA Financial Group | 2022 Annual Report Remuneration report
2. How remuneration is governed
To ensure that the remuneration framework remains fit-for-
purpose as the Group continues to grow, the Board has
continued to refine and enhance the remuneration framework
during FY22.
on compound annual growth rate (CAGR), whereas in 2021
average EPS growth was applied. This better aligns our
practice with market practices and increases the required
performance to achieve the hurdle.
After consultations with all stakeholders, the Board has made
certain amendments to the remuneration structure introduced
in 2021. The enhancements made relate to LTI are as follows:
•
•
The Performance Condition applied to LTI award was
previously 70% of the total LTI award (with 30% being
subject to a service condition). In 2022, 100% of the LTI
award will be subject to a Performance Condition, with
vesting after 5 years.
The Performance Condition which applies is an EPS hurdle
on a sliding scale, of between 7.5% and 12% per annum
(which is unchanged from 2021). However, the calculation
of the EPS performance condition in 2022 will be based
During 2022 MA Financial made changes to how Underlying
Earnings are determined, by excluding unrealised gains from
Underlying Earnings (refer to ASX Announcement 9 June
2022). As we consider it appropriate to align Executives to
reported earnings, consistent amendments were made to the
KPIs set at the commencement of 2022.
In order that the FY21 LTI Performance Condition can be
assessed against reported results, we propose to calculate
FY21 LTI Performance Condition applying the Underlying
Earnings definition consistent with the reporting practices
adopted in mid-2022.
The elements of the Executive remuneration framework are summarised in the diagram below and detailed in the subsequent
sections.
Type
Structure
FY22
FY23
FY24
FY25
FY26
Fixed
Remuneration
Short Term
Incentive
(at risk) (STI)
Long Term
Incentive
(at risk) (LTI)
Base salary,
compulsory
superannuation
and non-monetary
benefits
At risk, with 65%
paid as cash, with
35% deferred into
shares vesting over
3 years
At risk, with annual
grant of loan funded
shares funded by an
interest-free, limited
recourse loan
(subject to a 5-year
vesting period)
Cash paid
throughout
the year
Opportunity
range is set as
a % of base
salary
STI cash
component
paid in Q1
FY23
Share component deferred with one
third in Year 3, one third in Year 4 and one
third in Year 5
Subject to a 5-year performance period measured against Underlying EPS
CAGR between 7.5% and 12% per annum
Legends:
Award (subject to
appropriate approvals)
Share vesting
The above diagram illustrates the phasing of remuneration
opportunity across a five year period. The remuneration
structure has been designed to include significant deferred
and share based components. This, combined with the LTI
instrument (which awards for dividends and share price
growth only) aligns the Executive to deliver shareholder
outcomes and in our view encourages measured and
responsible business building and growth.
49
MA Financial Group | 2022 Annual Report Remuneration report
3. Executive remuneration policy and practices
This is illustrated further in the following tables that highlight total remuneration deferral over a five year period. The cumulative
award shows the opportunity phasing from 20% in year 1 to 100% in year 5, with a material LTI weighting.
T I M I N G O F FA R , S T I A N D LT I O V E R 5 Y E A R S
FAR
STI
LTI
Y1
100%
-
-
Y2
-
65%
-
T I M I N G O F F Y 2 2 R E M U N E R AT I O N O P P O R T U N I T Y 1
Total
Cumulative Total
FY22
20%
20%
FY23
34%
54%
1 Based on FY22 Joint CEO remuneration award
Remuneration mix
J O I N T C E O s
LTI
28%
Y4
-
12%
-
FY25
6%
66%
Y5
-
11%
100%
FY26
34%
100%
Y3
-
12%
-
FY24
6%
60%
K M P
20%
Fixed
LTI
19%
Fixed
39%
80%
At risk
61%
At risk
52%
STI
STI
42%
The graph above shows the remuneration mix for the Joint CEOs and KMP based on the remuneration outcomes for FY22 as
set out in Table 3, 5 and 8. The remuneration mix shows graphically the Board’s focus on maintaining higher at risk components
of remuneration, with 61–80% of KMP remuneration opportunity at risk. The approach to each of the components is described
below in sections 3.1 to 3.3.
50
MA Financial Group | 2022 Annual Report Remuneration report
3. Executive remuneration policy and practices
3.1
Fixed Annual Remuneration (FAR)
Consists of base salary, compulsory superannuation and non-
monetary benefits. FAR levels for the Executive are reviewed
periodically by the Committee on behalf of the Board taking
into consideration several factors including:
•
•
•
•
•
•
the scope and complexity of the role, including role
accountabilities
the criticality of the role to successful execution of the
business strategy
skills and experience of the individual
period of service
scarcity of talent
market pay levels for comparable roles.
MA Financial has and will continue to position FAR at relatively
low levels compared with peers and intends to review FAR
based on the Group achieving growth milestones, rather
than on an annual basis. We believe that higher at-risk
remuneration supports our philosophy of rewarding for long
term performance.
Following the FY21 remuneration structure review, a review of
FAR for Senior Executives and the Managing Director cohort
was conducted in FY22 for the first time since the Group’s
inception in 2009. This followed a review of Joint CEO salaries.
The review considered the appropriate mix of fixed and at
risk compensation but has not led to an increase in total
compensation awarded in FY22.
As a consequence of the review, the Board agreed an
increase to fixed salaries in FY22 for the following KMP:
Andrew Pridham (Vice Chair), Janna Robertson (COO) and
Graham Lello (CFO).
The FAR of the relevant KMPs increased during FY22 is:
FAR (revised)
FAR (pre review)
Effective date
FAR % increase in FY22
Andrew Pridham
Janna Robertson
Graham Lello
$600,000
$500,000
$500,000
$450,000
$450,000
$450,000
15 Feb 22
1 Apr 22
1 Apr 22
29%
8%
8%
51
MA Financial Group | 2022 Annual Report Remuneration report
3. Executive remuneration policy and practices
3.2
Short Term Incentive (STI) plan
What is the objective
of the STI plan?
The purpose of the STI plan is to recognise the Executive for achieving a combination of Board-
approved Corporate and Personal objectives that support the execution of the Group’s strategy
and create sustainable shareholder wealth, in a manner consistent with organisational values and
risk culture.
How is it paid?
STI awards for the Executive are paid part in cash (65%) with a portion deferred in shares (35%)
according to the extent of achievement of the applicable performance measures.
What is the
performance period?
STI awards are assessed over a 12-month performance period aligned with the Group’s financial
year (1 January 2022 to 31 December 2022).
How much can the
Executive earn?
In FY22, the Joint CEOs had a target STI opportunity of $1,800,000 and a maximum opportunity of
$1,950,000.
The Vice Chair has no target attached to his KPIs, as certain KPIs (eg revenue generation) are
not subject to an upper limit. Other KMP had a target STI opportunity of 90–110% of FAR, with the
ability to earn above the target range for significant outperformance, based on Board discretion.
STI award outcomes depend on the extent of achievement of the applicable performance measure.
How is performance
assessed and what
are the performance
measures?
Performance measures include Corporate and Personal objectives (50% each) that align with the
Group’s strategy and core values.
The Board, with the assistance of the Committee, sets and assesses the measures applicable to the
Joint CEOs. The outcome of the assessment determines the STI amount payable to the Joint CEOs.
The Joint CEOs set and assess the individual measures applicable to the KMP. The Committee
reviews the outcome of the assessment.
The Corporate objectives applicable to the Joint CEOs for FY22, their weightings and link to
strategy are listed below.
Corporate objective
Underlying EPS
ROE
Weighting
(% of STI)
25%
25%
50%
Rationale why chosen and link to strategy
To incentivise profitability growth as a key driver of
sustainable shareholder returns
Delivering long term competitive investment returns for
our investors is core to our offering
The remaining 50% of the STI opportunity relates to performance against personal objectives that
are specific to the role and responsibilities of the Executive in the areas they control and influence.
Personal objectives are ultimately linked to the overall strategy and success measures of the Group.
Refer to section 4.2 for further detail of the Corporate and Personal objectives of the Joint CEOs
for FY22, including commentary on performance assessment and outcomes.
During FY22, MA Financial made changes to how Underlying EBITDA (and consequently, Underlying
EPS) is determined. The KPI measures for FY22 were adjusted to align with the reported Underlying
EPS.
Yes.
35% of any STI award is deferred into ordinary shares in the Company. The shares vest in equal
thirds on the first, second and third anniversaries of the grant date, respectively, subject to the
recipient’s continued employment.
The number of shares to be allocated is equal to 35% of the STI award divided by the face value
of Company shares, calculated as the 5 day volume-weighted average price (VWAP) up to and
including 31 December 2022, less the dividend to be paid following the results announcement.
The deferral mechanism ensures that the impact of decisions and performance in any one year are
sustained over the medium–long term, acts as a retention mechanism, and provides the Board an
opportunity to reinforce accountability through remuneration reductions if necessary.
Is there a deferral
mechanism and why?
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MA Financial Group | 2022 Annual Report Remuneration report
3. Executive remuneration policy and practices
What happens to
STI awards when an
Executive ceases
employment?
How are dividends
treated during the
deferral period?
Is there a malus/
clawback provision?
Unless the Board determines otherwise or the Executive is a good leaver (see below), if the
Executive ceases to be an employee of the Group during the deferral period, their deferred STI will
be forfeited.
Subject to the Board’s discretion to determine otherwise and any applicable laws, an Executive
who is a good leaver will be entitled to retain a pro rata portion of their deferred STI based on the
proportion of the deferral period that has elapsed as at the date on which employment ceases.
Any retained deferred STI will continue to be held subject to the rules governing the grant of the
deferred STI component and will remain subject to restriction until the end of the relevant deferral
period. The balance of the deferred STI will be forfeited.
Good leaver means a participant who ceases employment due to retirement (with agreement of
the Board), resignation (with agreement of the Board), ill-health, total and permanent disablement,
redundancy, or death, or the sale by the Company of the business in which the participant is
employed such that it is no longer a member of the Group, as determined by the Board, or such
other circumstances as the Board may at any time determine.
Dividends will be paid to holders of the shares during the deferral period.
Yes.
Where, in the opinion of the Board, a participant has acted fraudulently, dishonestly, made a
material misstatement, has engaged in serious misconduct, gross negligence, is responsible for
material financial losses, has contributed to material reputational damage, is in material breach
of duties, has commenced employment with a direct competitor of the Company, the Board may,
deem all or some of any deferred STI to have been forfeited, adjust conditions applicable to the STI,
or adjust the participant’s incentive entitlements in respect of any future year.
Why does the Board
consider Board
discretion to be
appropriate?
At all times, the Board may exercise discretion on STI awards. The Board acknowledges that
selected performance measures and formulaic calculations may not provide the right remuneration
outcome in every situation, leading to occasions where the incentive does not reflect true
performance and overall contributions of the Executive. It is at this point that discretion becomes
necessary, such that the Board can adjust outcomes up or down as warranted.
Discretion will only be applied in a manner that aligns the experience of both the Company and
shareholders. Any discretion applied will be disclosed and explained in the Remuneration Report.
3.3
Long Term Incentive (LTI) plan
Why does the Board
consider a LTI plan is
appropriate?
The key objectives of the LTI plan is to:
•
•
•
•
•
Align Executive remuneration with the creation of sustainable long term shareholder value
Reward Executives for share price appreciation and earnings performance over a five-year
performance period
Attract and retain key Executives
Encourage an ‘owner’s mentality’
Provide competitive remuneration aligned with general market practice of ASX-listed entities.
Who is eligible?
The Executive and other senior executives.
How is the award
delivered?
The LTI award for FY22 is in the form of Loan Funded Shares.
A Loan Funded Share is a share whose acquisition has been fully or partly funded by a limited
recourse loan from the Company. The loan is provided for the sole purpose of participants acquiring
shares in the Company. Loan Funded Shares granted to eligible participants under the LTI plan carry
the same rights and entitlements as other shares on issue, including voting and dividends.
The loan is ‘interest free’ in that there is no annual interest charge to the participant on the loan.
However, the notional value of this interest is taken into account in the overall structure of the
programme.
The Loan Funded Shares are subject to risk of forfeiture during the vesting/performance periods
and while the loan remains outstanding.
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3. Executive remuneration policy and practices
How often are
awards made?
How much can the
Executive earn?
LTI awards are granted on an annual basis to eligible participants.
The Board has absolute discretion to determine the frequency and timing of grants under the LTI plan.
FY22 target LTI opportunities are as follows:
Joint CEOs: 125–175% of fixed remuneration at target
Outperformance may lead to an award in excess of the target range, subject to Board discretion.
What is the quantum
of the award and
what allocation
methodology is used?
The number of Loan Funded Shares granted to an Executive is determined by dividing the
Executive’s LTI opportunity by the fair value of the Company’s shares.
The fair value is calculated as the 5-day volume weighted average price (VWAP) of Company
shares up to and including the grant date, multiplied by the binomial pricing model valuation factor.
The model inputs for Loan Funded Shares granted during the year included:
What is the
performance period?
What are the
performance
conditions?
Why were the
performance
conditions selected?
• Share price at grant
• Binomial factor of 30%
• LTI award
5-year performance period of 1 January 2022 to 31 December 2026.
Of the total number of Loan Funded Shares granted to an Executive, 100% will be subject to a
Performance Condition: the performance condition for the FY22 LTI award is based on a CAGR of
Underlying EPS. The award is on a sliding scale of 50%–100% award with CAGR Underlying EPS
growth of 7.5% to 12%.
The performance conditions were selected by the Board in consideration of the Group’s strategic
objectives. Specifically:
• Use of Underlying EPS aligns the Executive to drive profitable growth objectives. Underlying
EPS growth aligns the Executive to the strategic objectives to build MA Financial as a diversified
financial services group in a manner which is measured and can be sustained. This determines the
size of the LTI award
•
•
•
•
Use of the Loan Funded Share instrument aligns the Executive to growth in the share price,
because the share price appreciation from issue to vest determines the value of the LTI award
Use of a sliding scale protects against a binary LTI award outcome
Average EPS growth has been replaced with CAGR to better align our practices to market; and
The 30% service condition has been removed and the LTI is now 100% subject to a performance
hurdle, with vesting after 5 years.
The Board will review the performance conditions annually to determine the appropriate hurdles
based on the Group’s strategy and prevailing market practice and conditions.
What is underlying
CAGR and how is it
measured?
The definition of average growth in Underlying CAGR is set out as follows:
Compound Annual
Growth Rate (CAGR) %
= ( 26EPS )
21EPS
( 1 )
N
– 1
Where:
21EPS = Underlying EPS as at 31/12/21
26EPS = Underlying EPS as at 31/12/26
N = number of years (being 5 years in the plan)
The level of vesting of this component will be determined according to the following schedule:
Underlying CAGR (per annum)
Percentage of Loan Funded Shares that vest
Less than 7.5%
7.5% to 12%
Nil
Pro rata between 50% and 100% vest
Greater than or equal to 12%
100% vest
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MA Financial Group | 2022 Annual Report Remuneration report
3. Executive remuneration policy and practices
What are the
restrictions applying
to Loan Funded
Shares?
Loan Funded Shares may not be transferred, encumbered, disposed of or otherwise dealt with
while they remain subject to the above performance conditions, unless permitted by the LTI plan
rules or determined by the Board.
Once Loan Funded Shares vest, subject to the Company’s Trading Policy and applicable law, the
Executive will generally be able to sell them subject to repaying the loan applicable to those Shares
(or making arrangements acceptable to the Board regarding repaying of the loan).
How are dividends
treated during the
performance period?
Any dividends paid on the shares while the shares are restricted are applied (on a notional after-tax
basis) towards repaying the loan. The balance of the dividend is paid directly to the Executives to
fund their tax liability on the dividends received.
What happens to
Loan Funded Shares
when an Executive
ceases employment?
Unless the Board determines otherwise or the Executive is a good leaver (see below), if the
Executive ceases to be an employee of the Group during the performance period, their unvested
Loan Funded Shares will be forfeited.
Subject to the Board’s discretion to determine otherwise and any applicable laws, an Executive
who is a good leaver will be entitled to retain a pro rata number of their unvested Loan Funded
Shares based on the proportion of the performance period that has elapsed as at the date on which
employment ceases. Any retained unvested LTI will continue to be held subject to LTI plan rules and
relevant performance conditions, and generally the Executive will have six months to settle the loan
following vesting. The balance of unvested Loan Funded Shares will be forfeited in satisfaction of
the portion of the loan to which the forfeited Loan Funded Shares relate.
Good leaver means a participant who ceases employment due to retirement (with agreement of
the Board), resignation (with agreement of the Board), ill-health, total and permanent disablement,
redundancy, or death, or the sale by the Company of the business in which the participant is
employed such that it is no longer a member of the Group, as determined by the Board, or such
other circumstances as the Board may at any time determine.
What happens in the
event of a change of
control?
Is there a malus/
clawback provision?
Yes.
The Board has discretion to make a determination to award, partially award or adjust LTI in the
event of a change of control.
Yes.
Where, in the opinion of the Board, a participant has acted fraudulently, dishonestly, made a
material misstatement, has engaged in serious misconduct, gross negligence, is responsible for
material financial losses, has contributed to material reputational damage, has breached any term
of the Loan Agreement, is in material breach of duties, has commenced employment with a direct
competitor of the Group, the Board may, deem all or some of any unvested Loan Funded Shares
as forfeited, adjust conditions applicable to the Loan Funded Shares, or adjust the participant’s
incentive entitlements in respect of any future year.
Why does the Board
consider Board
discretion to be
appropriate?
At all times, the Board may exercise discretion on vesting of LTI awards. The Board acknowledges
that selected performance measures and formulaic calculations may not provide the right
remuneration outcome in every situation, leading to occasions where the incentive does not reflect
the true performance and overall contributions of the executive. It is at this point that discretion
becomes necessary, such that the Board can adjust outcomes up or down as warranted.
Discretion will only be applied in a manner that aligns the experience of both the Company and
shareholders. Any discretion applied will be disclosed and explained in the Remuneration Report.
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MA Financial Group | 2022 Annual Report Remuneration report
4. Executive remuneration outcomes in FY22
4.1
Company performance
FY22 financial performance
The graphs below provide a summary of the Group’s financial
performance over the past five financial years (including
FY22) in accordance with the requirements of the Act. As
remuneration outcomes are measured with reference to
Underlying and not statutory results, only the Underlying
results are presented in this section 4 of the Remuneration
Report. A reconciliation of Underlying results to statutory
results is set out in note 3 of the Financial Report:
U N D E R LY I N G R E V E N U E ( $ ’ M )
U N D E R LY I N G E P S ( C E N T S )
301.8
214.8
23.4
25.3
23.6
38.3
29.6
131.3
155.6
157.1
FY18
FY19
FY20
FY21
FY22
FY18
FY19
FY20
FY21
FY22
U N D E R LY I N G R E T U R N O N E Q U I T Y ( % )
S H A R E P R I C E ( $ )
16.4
16.5
15.7
15.9
8.95
14.6
4.57
5.10
4.75
4.54
FY18
FY19
FY20
FY21
FY22
FY18
FY19
FY20
FY21
FY22
U N D E R LY I N G E B I T DA ( $ ’ M )
D I V I D E N D ( C E N T S )
54.8
60.8
57.5
70.9
106.7
20.0
17.0
10.0
10.0
8.0
FY18
FY19
FY20
FY21
FY22
FY18
FY19
FY20
FY21
FY22
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MA Financial Group | 2022 Annual Report Remuneration report
4. Executive remuneration outcomes in FY22
4.1
Company performance (continued)
4.2
STI performance and outcomes
The Board provides the following commentary regarding
the Group’s Underlying financial performance for FY22.
Further commentary on performance is set out in the Year in
Review section.
In accordance with the methodology set out in section 3 of
the Remuneration Report, an assessment was undertaken of
the performance of each eligible Executive against their FY22
objectives.
FY22 was another strong performance year and maintaining
growth rates of the order experienced in that year was
not expected in all parts of the Group. The pleasing FY22
performance shows the strength of a diversified Group.
The FY22 STI objectives for the Joint CEOs, with commentary
on achievements, are provided in Tables 1 and 2, respectively.
The STI award percentages and payments to Executives are
presented in Table 3 and 4.
We call out the following key highlights in the FY22 result:
•
Revenue increased by 41%, with Asset Management
organic growth and performance fees a significant
contributor and the addition of Finsure to our
Lending platform
• Underlying EBITDA increased by 51%.
In the case of each of the Joint CEOs, the assessed
performance against KPI measures exceeded 90%. The final
STI awarded was less than 90%. In relation to other KMPs,
assessed performance against KPI measures also exceeded
the final STI award. This reflects our judgement that prudence
is appropriate in light of the composition of the earnings result
and in the current macroeconomic environment.
• Underlying EPS increased by 29% to 38.3 cents per share
and statutory EPS grew by 26%
• Underlying Return on Equity was 15.9% compared to 16.5%
in the prior year
• Full year dividend up 18%, representing a payout ratio
of 52%
This strong result reflects the benefits of a diversified
business. Whilst not all parts of the business have enjoyed
equal growth, being diversified has enabled the business to
continue to grow and invest where opportunities present.
Despite the positive momentum in the business, the share
price, along with equity markets, has fallen during 2023. We
continue to align Executives to delivering share price growth
through the structure of our remuneration practices and
remain confident of future growth as the business continues
to perform well.
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MA Financial Group | 2022 Annual Report Remuneration report
4. Executive remuneration outcomes in FY22
TA B L E 1 – J O I N T C E O J U L I A N B I G G I N S F Y 2 2 P E R F O R M A N C E O B J E C T I V E S & O U T C O M E S
Category
Measure
Rationale for measure
Commentary on performance
Corporate Objectives (50% – 25% per objective)
Shareholder
Return
Underlying EPS attributable to
shareholders.
Provides alignment to
shareholders
Underlying EPS of 38.3cps which is 0.7cps
(2%) below the EPS target of 39.0cps
Investment
Performance
Underlying Return on Equity
(ROE)
Metrics focused on
maintenance of a strong and
conservative balance sheet
position.
Personal Objectives (50%)
Delivering long term
competitive investment returns
for our investors is core to our
offering
Underlying ROE of 15.9% exceeded ROE
target of 15.0%
Business
Growth
Strategic
Initiatives
Employee
Engagement
Strategic growth and leadership
of the Group’s Real Estate and
Hospitality strategies.
Provides alignment to the
Group’s financial performance.
Metrics focusing on strong
leadership of the business,
including promoting leadership
cohesion and cross business
collaboration.
Lead the progression of the
group strategic approach
to ESG.
Drive and elevate the MA
Financial brand strategy,
internal and external
communications and brand.
Maintaining collaboration
between the various divisions
is considered fundamental to
the performance of the Group.
ESG strategy will be a critical
element of long term and
sustained success.
The profile of the Group will
be critical for the next phase
of growth and for attracting
aligned, high calibre talent.
Metrics focusing on strong
leadership of the business,
assessed against employee
belonging and alignment to the
Group’s culture and values.,
including actively reinforcing a
strong risk culture, promoting
MA Foundation and MA
Academy as strategic pillars of
our culture.
Providing a motivating
workplace and maintaining
an ‘owner’s mentality’
environment to drive continued
business outcomes for
investors and shareholders.
Fostering the development of
our people so that they are
able to realise their potential.
Risk
Metrics focusing on reinforcing
a strong risk culture and
managing strategic and
operational risk within Board
approved risk appetite.
Adherence to the Group’s risk
culture underpins the entire
short term incentive award.
It is critical for our senior
management to have a high
degree of ownership of risk
management
Revenue and growth performance in
Hospitality has been very strong and Real
Estate has performed well, transacting
on key initiatives notwithstanding a more
challenged macroeconomic environment
during FY22.
Strategic initiatives include acquisitions of
25 Grenfell Street, Adelaide and Allendale
Square, Perth office assets, and the
acquisition of the Brunswick Hotel.
Strong leadership of culture, including
relocation of our Head Office to Brookfield
Place to deliver a unique client and
employee experience, reflecting our core
belief that when our people are valued,
nurtured and developed, they thrive.
Led the FY22 growth in our employees
and successfully strengthened our culture.
The 2022 Culture Survey highlighted a
strong, well-aligned culture with significant
strengths in respect, teamwork and a
shared commitment to growth. The Survey
also highlighted progress made in the
areas of talent development and diversity
and inclusion.
Led the progression of our ESG strategy,
including a strong personal passion and
leadership of our social stance, via giving
and the activities of the MA Foundation.
Oversaw seamless leadership transition in
Hospitality and building out of Corporate
capability in the areas of Communications
and Marketing following the renaming of
the business in FY21.
Overall performance
>90%
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4. Executive remuneration outcomes in FY22
TA B L E 2 – J O I N T C E O C H R I S T O P H E R W Y K E F Y 2 2 P E R F O R M A N C E O B J E C T I V E S & O U T C O M E S
Category
Measure
Rationale for measure
Commentary on performance
Corporate Objectives (50% – 25% per objective)
Shareholder
Return
Underlying EPS attributable to
shareholders.
Provides alignment to
shareholders
Underlying EPS of 38.3cps which is 0.7cps
(2%) below the EPS target of 39.0cps
Delivering long term
competitive investment returns
for our investors is core to our
offering
Underlying ROE of 15.9% exceeded ROE
target of 15.0%
Investment
Performance
Underlying Return on Equity
(ROE)
Metrics focused on
maintenance of a strong and
conservative balance sheet
position.
Personal Objectives (50%)
Business
Growth
Strategic
Initiatives
Driving the strategy and
growth for the Group’s and
residential mortgage lending
platforms, including acquisition
integration.
Metrics focused on promoting
and driving innovation, as well
as delivery of agreed Lending &
Technology milestones.
Leading internal innovation and
technology adoption to enable
our businesses and promote a
culture of innovation.
Metrics focusing on strong
leadership of the business,
including promoting leadership
cohesion and cross business
collaboration.
Provides alignment to the
Group’s financial performance
Maintaining collaboration
between the various business
divisions is considered
fundamental to the
performance of the Group
Employee
Engagement
Metrics focusing on strong
leadership of the business,
assessed against employee
belonging and alignment to the
Group’s culture
and values.
Providing a motivating
workplace and maintaining
a ‘owner’s mentality’
environment to drive continued
business outcomes for
investors and shareholders
Risk
Metrics focusing on reinforcing
a strong risk culture, and
promoting MA Foundation
and MA Academy as strategic
pillars of our culture
Fostering the development of
our people so that they are
able to realise their potential
It is critical for our senior
management to have a high
degree of ownership of risk
management
As the organization broadens
and grows, ensuring
consistency of risk approach
and measurement via a well
designed group wide enterprise
risk management framework,
measurement and training
Revenue and growth performance in
Lending & Technology and Credit activities
has been very strong and met budgeted
growth targets.
Led the successful acquisition and
integration of Finsure and MA Money as
well as the continued investment in lending
and technology platform innovation.
Led the FY22 growth in our employees
and successfully strengthened our culture
The 2022 Culture Survey highlighted a
strong, well-aligned culture with significant
strengths in respect, teamwork and a
shared commitment to growth. The Survey
also highlighted progress made in the
areas of talent development and diversity
and inclusion.
Leadership in culture and integration of
new employees, including leading MA
Academy lecture series and promoting
a strong culture of risk identification and
appropriate risk taking.
Successful ongoing sponsorship of key
strategic projects relating to business
transformation and risk.
Advanced our risk culture and systems
via oversight of the Risk Management
Framework and Cyber Security priorities
delivered in FY22.
Overall performance
>90%
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5. Executive contracts
TA B L E 3 – S T I O P P O R T U N I T Y F O R E X E C U T I V E K M P I N F Y 2 2
Target STI
opportunity
Maximum STI
opportunity
STI outcome
% of target
STI awarded1
% of maximum
STI awarded
Julian Biggins
$1,800,000
$1,950,000
$1,600,000
Christopher Wyke
$1,800,000
$1,950,000
$1,600,000
Andrew Pridham
N/A
Graham Lello
$450,000
Janna Robertson
$500,000
N/A
N/A
N/A
$900,000
$375,000
$425,000
89%
89%
N/A
83%
85%
82%
82%
N/A
N/A
N/A
1 The assessed performance of each of the Joint CEOs, Graham Lello and Janna Robertson met or exceeded the percentage of STI awarded.
At the request of the KMP, certain amounts of STI Award has been foregone in favour of a donation to the MA Foundation. The
amounts which have been foregone are outlined in the table below.
TA B L E 4 – S T I AWA R D E D T O E X E C U T I V E K M P I N F Y 2 2
Achieved STI
Amount
Amount Foregone
as Donation
STI Amount
Awards
STI Outcome
(Cash)
STI Outcome
(Deferred)1
Julian Biggins
$1,600,000
$150,000
$1,450,000
$942,500
$507,500
Christopher Wyke
$1,600,000
Andrew Pridham2
$900,000
Graham Lello
$375,000
-
-
-
$1,600,000
$1,040,000
$560,000
$900,000
$585,000
$315,000
$375,000
$243,750
$131,250
Janna Robertson
$425,000
$10,000
$415,000
$269,750
$145,250
1 With the exception of Mr Pridham, 35% of the STI amount awarded will take the form of restricted shares. Refer to further information regarding
Mr Pridham’s deferred STI in footnote 2 below.
2
In relation to Mr Pridham, the Board has exercised discretion to award the 2022 deferred STI as a deferred cash amount. Given Mr Pridham’s
substantial equity holdings, he would be subject to adverse tax outcomes were he to receive the deferred component in the form of deferred
shares. This amount will be paid in line with the vesting schedule for the restricted shares provided to other KMP. In making this decision, the
Board had regard to Mr Pridham’s substantial shareholdings in the Group and considers that he continues to have significant alignment with
shareholders.
All of the statutory remuneration tables set out in this remuneration report are shown in accordance with amounts received or
to be received by each KMP and accordingly, exclude the donation amounts foregone as set out in Table 4 unless otherwise
footnoted.
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5. Executive contracts
TA B L E 5 – LT I AWA R D S F O R E X E C U T I V E K M P R E L AT I N G T O F Y 2 2
Target LTI opportunity
(% of FAR)
LTI opportunity
granted ($)
LTI awarded
(% of FAR)
Julian Biggins
Christopher Wyke
Andrew Pridham
Graham Lello
Janna Robertson
125–175%
125–175%
60–120%
Up to 50%
Up to $50%
$850,000
$850,000
$500,000
$75,000
$200,000
142%
142%
83%
15%
40%
The LTI outcomes are calculated in accordance with the methodology outlined in section 3.5 of this report. Any equity granted to the Executive
Directors will be presented to shareholders for approval in accordance with the requirements of the Act.
The remuneration award to Executive KMP compared with prior year is set out below.
TA B L E 6 – C O M PA R I S O N O F VA R I A B L E C O M P E N S AT I O N AWA R D T O P R I O R Y E A R
Executive
STI outcome1
Awarded LTI
Awarded Total Remuneration2
FY21
FY22
%
FY21
FY22
%
FY21
FY22
%
Julian Biggins
1,950,000
1,600,000
-18% 1,000,000
850,000
-15% 3,450,000 3,050,000
-12%
Christopher Wyke
1,950,000
1,600,000
-18% 1,000,000
850,000
-15% 3,450,000 3,050,000
-12%
Andrew Pridham
1,200,000
900,000
-25%
225,000
500,000
122% 1,875,000
1,981,250
6%
Graham Lello
450,000
375,000
-17%
225,000
75,000
-67%
1,125,000
937,500
-17%
Janna Robertson
585,000
425,000
-27%
225,000
200,000
-11% 1,260,000
1,112,500
-12%
1. STI outcome is the award of STI before any donation amounts nominated by the Executive is deducted.
2. Awarded Total Remuneration includes FAR paid in FY21 and FY22..
Remuneration arrangements for Executives are formalised in employment agreements or service contracts (contracts). The
following table outlines the key terms of the contracts with Executives.
TA B L E 7 – E X E C U T I V E K E Y C O N T R A C T P R O V I S I O N S
Name
Term of contract
Julian Biggins
Ongoing
Christopher Wyke
Ongoing
Andrew Pridham
Ongoing
Graham Lello
Ongoing
Janna Robertson
Ongoing
Notice period from
the company1
Notice period
from the
executive
Treatment of STI and
LTI on cessation
9 months
9 months
3 months
6 months
3 months
9 months
9 months
3 months
6 months
3 months
Refer to section 3 of the
Remuneration Report for the
treatment of STI and LTI on
cessation of employment.
Refer to section 3 of the
Remuneration Report for the
treatment of STI and LTI on
cessation of employment.
1 The Group may make payment in lieu of notice and must pay statutory entitlements together with superannuation benefits. No notice period or
payment in lieu of notice applies if termination was due to serious misconduct.
Termination payments
The Group did not make any termination payments to KMP during FY22. All contractual termination benefits comply with the
provisions of the Act.
61
MA Financial Group | 2022 Annual Report Remuneration report
6. Executive remuneration tables
6.1
Executive cash value of remuneration realised in FY22
The cash value of remuneration realised by the Executive in FY22 is set out below. This information is considered to be relevant
as it provides shareholders with a view of the ‘take home pay’ received by the Executive in FY22 and may differ from the
disclosure of statutory remuneration in Table 8.
TA B L E 8 – E X E C U T I V E VA L U E O F R E M U N E R AT I O N I N F Y 2 2
Executive
Fixed
remuneration
FY22 Annual STI bonus1
Fixed remuneration
Variable remuneration
Salary including
superannuation
$
Cash
component
$
Deferred
equity2
$
Shares
Salary including
superannuation
%
Cash bonus
%
Deferred
equity
%
Julian Biggins
600,000
942,500
507,500
117,880
Christopher Wyke
600,000
1,040,000
560,000
130,075
Andrew Pridham
581,250
900,000
-
-
Graham Lello
487,500
243,750
131,250
30,486
Janna Robertson
487,500
269,750
145,250
33,738
29%
27%
39%
57%
54%
46%
47%
61%
28%
30%
25%
26%
-
15%
16%
1 FY22 annual bonus amounts are net of voluntary donations, see section 4.
2 Amounts disclosed represent the accounting value of the award that will vest in three annual and equal instalments commencing 2024 and ending
in 2026. The maximum value of the award would be the number of restricted shares at the Company’s share price at the time of vesting. The
minimum total value of the award may be $0 in the event that the service condition attached to the award is not met.
62
MA Financial Group | 2022 Annual Report Remuneration report
6. Executive remuneration tables
6.2
Statutory executive remuneration in FY22
The below sets out the statutory executive remuneration disclosures which have been prepared in accordance with the Act and Australian Accounting Standards.
TA B L E 9 – S TAT U T O R Y E X E C U T I V E R E M U N E R AT I O N TA B L E
Short term employee benefits
Long term benefits
Equity-based benefits
Cash
salary
$
Bonus (cash
component)1
$
Annual
leave
$
Non-
monetary
$
Total
short term
benefits
$
Super-
annuation
$
Long
service
leave
$
Bonus
(deferred
cash
component)
$
Total
long term
benefits
$
Restricted
shares
$
Options &
rights
$
Total
equity-
based
benefits
$
Total
remuneration
$
Performance
related
%
FY22
575,570
942,500
23,912
12,749
1,554,731
24,430
11,928
- 36,358
606,669
506,509
1,113,178
2,704,267
FY21
500,000
1,105,000
67,499
-
1,672,499
22,631
43,974
- 66,605
408,569
149,359
557,928
2,297,032
FY22
575,570 1,040,000
37,360
13,106 1,666,036
24,430
11,922
- 36,352
664,062
451,001
1,115,063
2,817,451
FY21
500,000
1,235,000
51,594
-
1,786,594
22,631
43,703
- 66,334
434,465
153,237
587,702
2,440,630
FY22
556,820
585,000
64,375
14,967
1,221,162
24,430
45,851
315,000 385,281
54,829
222,222
277,051
1,883,494
FY21
450,000
780,000
(15,165)
12,894
1,227,729
22,631
8,183
420,000 450,814
84,798
22,462
107,260
1,785,803
FY22
463,070
243,750
4,678
FY21
450,000
289,250
30,976
FY22
463,070
269,750
(1,000)
FY21
450,000
364,000
27,760
-
-
-
-
711,498
24,430
18,988
- 43,418
152,473
112,701
265,174
1,020,090
770,226
22,631
11,646
-
34,277
134,576
78,623
213,199
1,017,702
731,820
24,430
5,642
- 30,072
183,066
145,604
328,670
1,090,562
841,760
22,631
3,864
-
26,495
109,754
85,577
195,331
1,063,586
78%
75%
77%
77%
66%
74%
51%
52%
57%
55%
Executive
Julian
Biggins2
Christopher
Wyke2
Andrew
Pridham2
Graham
Lello
Janna
Robertson
Total
FY22 2,634,100 3,081,000 129,325
40,822 5,885,247
122,150
94,331
315,000 531,481 1,661,099 1,438,037 3,099,136
9,515,864
FY21 2,350,000
3,773,250
162,664
12,894 6,298,808
113,155
111,370
420,000 644,525
1,172,162
489,258
1,661,420
8,604,753
1 The cash component of bonuses received in respect of FY22 is expected to be paid in March 2023.
2 Reflects the amortisation of unvested deferred equity granted to the Executive including share rights, restricted shares and loan funded shares. The expense is based on grant date fair value, amortised on a straight line
basis over the vesting period.
63
MA Financial Group | 2022 Annual Report Remuneration report
7. Non-Executive Director remuneration
7.1
NED remuneration policy and fee structure
The Group’s NED remuneration policy is designed to attract
and retain suitably skilled Directors who can discharge
their roles and responsibilities required in terms of good
governance, oversight, independence and objectivity.
The Board seeks to attract Directors with different skills,
experience, expertise and diversity.
Under the Group’s Constitution and the ASX listing rules, the
total annual fee pool for NEDs is determined by shareholders.
The current maximum aggregate NED fee pool of $1,000,000
per annum was approved by shareholders at the 2020 AGM.
Within this aggregate amount, NED fees are reviewed annually
by the Committee and set by the Board.
TA B L E 1 0 – N E D F E E S T R U C T U R E
The Committee reviews NED fees against comparable
companies within the broader general industry and taking
into account recommendations from independent
remuneration advisors.
There were no changes to NED fees during FY22, however,
the Board Committee Chair fees have been reviewed for FY23.
The table below summarises the annual Board and committee
fees payable to NEDs (inclusive of superannuation).
Board fees
Role
Chair
NED
FY22
FY21
280,000
150,000
120,000
120,000
Committee
fees
Role
Chair
FY22
FY21
20,000
20,000
Member
-
-
The payment of Chair committee fees recognises the additional time commitment required by NEDs who serve in those
positions. The Chair of the Board does not receive additional fees for being a member of any Board committee.
NEDs do not receive share options, other performance-based incentives or retirement benefits.
7.2
Total fees paid to NEDs
TA B L E 1 1 – S TAT U T O R Y N E D R E M U N E R AT I O N
Non-Executive Director
Cash salary and fees including superannuation $
Short term employee be-nefits
Jeffrey Browne
Kenneth Moelis
Alexandra Goodfellow
Kate Pilcher Ciafone
Simon Kelly
Nikki Warburton1
Total
FY22
280,000
-
FY21
160,833
-
140,000
140,000
-
140,000
2,959
562,959
-
97,222
-
398,055
1 Fees paid to Nikki Warburton are reported from commencement of term as Non-Executive Director on 23 December 2022.
64
MA Financial Group | 2022 Annual Report
Remuneration report
8. Equity instrument reporting
8.1
Loan Funded Shares provided to the Executive
The following table details Loan Funded Shares that have been
issued to the Executive under the LTI plan (refer section 3).
The LTI granted for FY21 is subject to an Underlying EPS
performance condition. As announced on 9 June 2022, the
Group amended the Underlying treatment of mark to market
movements of investments by removing any unrealised gains
or losses from Underlying revenue and, as a result, amended
TA B L E 1 2 – L O A N F U N D E D S H A R E S – LT I P L A N
the definition of Underlying earnings. As a consequence of
this change, the FY21 LTI performance condition will be tested
applying the amended Underlying earnings definition. On this
basis, the FY20 Underlying EPS (which provides the baseline
for the EPS performance condition calculation) is 23.6 cps,
as compared with 25.1 cps if applying the previous Underlying
earnings methodology.
Julian Biggins1
Christopher Wyke1
Andrew Pridham1
Graham Lello
Janna Robertson
Balance at
1 Jan 22
250,000
250,000
100,000
400,000
500,000
Granted as
remuneration
515,900
515,900
116,077
94,840
94,840
Vested
Lapsed
-
-
-
-
-
-
-
-
-
-
Balance at
31 Dec 22
765,900
765,900
216,077
494,840
594,840
8.2 Movements in Executive equity holdings and deferred shares
The details of equity holdings and deferred shares in the
Company held by executives (including close family members
and/or any entity they, or their close family members, control,
jointly control or significantly influence) are set out in
Table 12 below.
There have been no changes to the terms and conditions
of these awards since the awards were granted. There are
no amounts unpaid on any of the shares exercised and all
restricted shares and rights are exercised automatically
when vested.
TA B L E 1 3 – E Q U I T Y H O L D I N G S O F E X E C U T I V E K M P
Executive
Equity instrument1
Number at
start of year
Granted during
the period2
Vested
Acquired
Disposed
Number at
reporting
date
Julian Biggins Ordinary shares
5,667,523
Share rights
111,021
-
-
184,904
(82,155)
Restricted shares
255,549
68,806
(102,749)
Christopher
Wyke
Ordinary shares
5,556,504
Share rights
117,778
-
-
195,347
(88,542)
Restricted shares
269,220
76,901
(106,805)
-
-
-
-
-
-
(524,257)
5,328,170
-
-
28,866
221,606
(423,681)
5,328,170
-
-
29,236
239,316
Andrew
Pridham
Ordinary shares
18,981,133
Restricted shares
Salary Sacrifice
Shares
57,198
1,153
Graham Lello
Ordinary shares
223,957
Janna
Robertson
Share rights
Restricted shares
Ordinary shares
Restricted shares
Salary Sacrifice
Shares
44,581
47,791
66,693
68,676
1,153
-
-
-
-
-
18,011
-
22,665
20,219
137,075
(187,818)
18,950,609
(19,066)
(1,153)
63,595
(44,581)
(19,014)
26,275
(25,122)
(1,153)
-
-
-
-
38,132
-
8,500
(20,914)
275,138
-
-
-
-
-
-
-
-
-
-
-
46,788
92,968
66,219
-
1 Ordinary share holding includes directly held shares and beneficial interests in ordinary shares as a result of holdings in the Existing Staff Trusts
(as defined in the Glossary in the Additional Information section of the Annual Report.
2 Only includes restricted shares to be granted as part of the FY22 short term incentive award in March 2023.
65
MA Financial Group | 2022 Annual Report Remuneration report
8. Equity instrument reporting
8.3 Movements in Non-Executive Director equity holdings
The number of equity instruments in the Company held (directly and nominally) by Non-Executive Directors or their related
parties (their close family members and/or any entity they, or their close family members, control, jointly control or significantly
influence) are set out below.
TA B L E 1 4 – E Q U I T Y H O L D I N G S O F N O N - E X E C U T I V E D I R E C T O R S
Executive
Equity instrument
Number at
start of year
Granted
during the
year
Exercised
Purchased
Lapsed
or sold
Jeffrey Browne
Ordinary shares
781,250
Kenneth Moelis
Ordinary shares
-
Alexandra Goodfellow Ordinary shares
21,500
Kate Pilcher Ciafone
Ordinary shares
-
Simon Kelly
Ordinary shares
10,000
Nikki Warburton
Ordinary shares
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10,871
-
55,161
-
-
-
-
-
-
-
Number at
reporting
date
781,250
-
32,371
-
65,161
-
9. Loans to KMP
There were no loans to KMP during the year. Loan balances under the limited recourse Loan Funded Share Plan represent a
transaction with a KMP that is an in-substance option and not a loan to the KMP.
10. Other transactions and balances with KMP and their related parties
Transactions conducted by KMP (and their related parties) during the reporting period with the Group and subsidiaries, joint
ventures and associates of the Group are described below.
During the year ended 31 December 2019 Mr Pridham and Mr Biggins entered into property management service arrangements
with the Group on the same terms offered to third-party investors in a property managed by the Group. Total management fees
payable by Mr Pridham and Mr Biggins for FY22 amounted to $69,352 and $15,506 respectively.
66
MA Financial Group | 2022 Annual Report Auditor’s independence declaration
For the year ended 31 December 2022
67
67 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 To the Directors of MA Financial Group Limited I declare that, to the best of my knowledge and belief, in relation to the audit of MA Financial Group Limited for the financial year ended 31 December 2022 there have been: i. no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and ii. no contraventions of any applicable code of professional conduct in relation to the audit. KPMG Shaun Kendrigan Partner Sydney 23 February 2023 MA Financial Group | 2022 Annual Report 04 Financial StatementsMA Financial Group | 2022 Annual Report Restricted cash
Receivables
Loans receivable
Loss allowance
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Significant accounting policies
1
Application of new and revised Australian Accounting Standards
2
Segment information
3
Fee and commission income
4
Fee and commission expense
5
Interest income
6
Investment income
7
Other income
8
Employee expenses
9
Finance costs
10
Other expenses
11
12
Income tax expense
13 Cash and cash equivalents
14
15
16
17 Other assets
18 Contract assets and liabilities
19
20 Other financial assets and liabilities
21
Property, plant and equipment
22 Right-of-use assets
23
24
25 Trade and other payables
26 Borrowings
27
28 Provisions
29 Financial instruments
30 Contributed equity
31
Earnings per share
32 Dividends
33 Reserves
34 Share-based payments
35 Key management personnel compensation
36 Related party transactions
37 Acquisitions and disposals of subsidiaries
38 Parent entity disclosures
39 Deed of cross guarantee
40 Structured entities
41
42 Commitments
43 Contingent assets and liabilities
44 Events after the reporting date
Investments in associates and joint ventures
Intangible assets
Auditor’s remuneration
Lease liabilities
70
71
72
73
74
74
90
91
96
96
96
97
97
97
97
97
98
100
101
102
102
104
104
104
105
105
106
106
109
111
111
113
114
114
123
124
125
125
126
132
132
133
136
137
139
140
140
140
140
MA Financial Group | 2022 Annual Report Consolidated statement of profit or loss and other comprehensive income
For the year ended 31 December 2022
Fee and commission income
Fee and commission expense
Net fee and commission income
Share of net profits from associates
Interest income
Investment income
Other income
Total income
Employee expenses
Marketing and business development
Information, technology and data
Depreciation and amortisation
Finance costs
Credit loss allowance
Other expenses
Total expenses
Profit before tax
Income tax expense
Profit after income tax
Note
4
5
23
6
7
8
9
21,22,24
10
16
11
12
Other comprehensive income, net of income tax
Items that will not be classified subsequently to profit or loss:
Fair value (loss)/gain on investments in equity instruments designated at FVTOCI
Share of other comprehensive income from associates
Foreign exchange movements on translation
Total other comprehensive income
Total comprehensive income
31 Dec 2022
Consolidated
$’000
31 Dec 2021
Consolidated
$’000
700,752
(443,509)
257,243
1,389
58,633
6,873
8,804
201,969
(20,502)
181,467
3,187
30,621
7,579
5,881
332,942
228,735
167,047
129,585
11,323
10,071
17,241
40,694
1,887
23,710
271,973
60,969
(16,114)
44,855
(920)
1,608
211
899
45,754
5,589
5,984
8,952
14,520
1,222
14,173
180,025
48,710
(16,669)
32,041
7,462
8,562
-
16,024
48,065
Earnings per share
From continuing operations
Basic (cents per share)
Diluted (cents per share)
31
31
28.0
26.9
22.3
21.2
The above consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the
accompanying notes.
70
MA Financial Group | 2022 Annual Report Consolidated statement of financial position
For the year ended 31 December 2022
Note
31 Dec 2022
Consolidated
$’000
31 Dec 2021
Consolidated
$’000
Assets
Current assets
Cash and cash equivalents
Receivables
Loans receivable
Other assets
Contract assets
Other financial assets
Total current assets
Non-current assets
Restricted cash
Loans receivable
Contract assets
Other financial assets
Property, plant and equipment
Right-of-use assets
Investments in associates and joint ventures
Intangible assets
Goodwill
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Other financial liabilities
Borrowings
Contract liabilities
Lease liabilities
Provisions
Income tax payable
Total current liabilities
Non-current liabilities
Trade and other payables
Borrowings
Contract liabilities
Lease liabilities
Provisions
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Retained earnings
Total shareholders equity
13
14
15
17
18
20
19
15
18
20
21
22
23
24
24
25
20
26
18
27
28
12
25
26
18
27
28
12
30
33
144,589
88,483
319,802
9,086
139,280
167,100
868,340
700
535,680
467,952
29,212
5,973
61,773
91,586
56,849
128,169
1,377,894
2,246,234
77,565
116,419
246,505
131,061
6,219
45,005
3,849
626,623
240
693,584
440,304
58,733
1,624
15,539
1,210,024
1,836,647
409,587
275,087
54,011
80,489
409,587
242,861
36,505
169,156
14,321
-
3,805
466,648
6,700
173,293
-
66,034
2,035
9,874
120,393
13,885
14,010
406,224
872,872
33,978
-
55,030
-
6,598
42,461
7,047
145,114
229
351,290
-
3,687
1,239
1,280
357,725
502,839
370,033
254,990
48,491
66,552
370,033
The above consolidated statement of financial position is to be read in conjunction with the accompanying notes.
71
MA Financial Group | 2022 Annual Report Consolidated statement of changes in equity
For the year ended 31 December 2022
Consolidated
Note
Balance as at 1 January 2021
Profit after income tax
Other comprehensive income, net of tax
Total comprehensive income
Payment of dividends
Issue of ordinary shares
Treasury shares
Equity transaction costs
Share-based payments
Balance as at 31 December 2021
Balance as at 1 January 2022
Profit after income tax
Other comprehensive income, net of tax
Foreign currency translation
Total comprehensive income
Payment of dividends
Issue of ordinary shares
Share buy-back
Treasury shares
Equity transaction costs
Share-based payments
Balance as at 31 December 2022
32
30
34
33
32
30
34
Contributed
equity
$’000
154,579
-
-
-
-
124,180
(22,147)
(1,622)
-
100,411
254,990
Reserves
$’000
25,141
-
16,024
16,024
-
-
-
-
7,326
7,326
48,491
254,990
48,491
-
-
-
-
-
47,114
(4,104)
(22,782)
(131)
-
20,097
275,087
-
688
211
899
-
-
-
-
-
4,621
4,621
54,011
Retained
earnings
$’000
57,137
32,041
-
32,041
(22,626)
-
-
-
-
(22,626)
66,552
66,552
44,855
-
-
44,855
(30,918)
-
-
-
-
-
(30,918)
80,489
Total equity
$’000
236,857
32,041
16,024
48,065
(22,626)
124,180
(22,147)
(1,622)
7,326
85,111
370,033
370,033
44,855
688
211
45,754
(30,918)
47,114
(4,104)
(22,782)
(131)
4,621
(6,200)
409,587
The above consolidated statement of changes in equity is to be read in conjunction with the accompanying notes.
72
MA Financial Group | 2022 Annual Report Consolidated statement of cash flows
For the year ended 31 December 2022
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Amounts advanced to third parties
Interest received
Interest paid
Income taxes paid
31 Dec 2022
Consolidated
$’000
31 Dec 2021
Consolidated
$’000
Note
572,259
228,062
(519,092)
(334,774)
(146,917)
(119,017)
54,247
27,529
(35,189)
(21,249)
(14,201)
(20,231)
Net cash used in operating activities
13
(283,798)
(44,775)
Cash flows from investing activities
Net proceeds from sale of financial investments
Distributions received from investments
Payments for employee loans
Net proceeds/(payments) from the acquisition and sale of shares in associates
Payments to acquire subsidiaries, net of cash acquired
37
Payments to acquire property, plant and equipment and intangible assets
Net cash used in investing activities
Cash flows from financing activities
Net proceeds from the issue of shares
Purchase of treasury shares
Share buy-back
Proceeds from exercise of share options
Cash transferred from/(to) restricted cash accounts
Payments of lease liabilities
Interest on lease liabilities
Proceeds from borrowings
Dividends paid to shareholders
Net cash generated by financing activities
Net (decrease)/increase in cash and cash equivalents
32
(376)
8,393
(1,388)
25,784
(146,910)
(12,866)
(127,363)
19,297
(6,734)
(4,104)
536
5,999
(5,948)
(3,513)
336,667
(30,918)
311,282
(99,879)
(5,818)
2,228
(384)
(35,467)
(10,870)
(2,207)
(52,518)
97,205
(4,915)
-
585
(4,200)
(2,931)
(250)
138,750
(22,626)
201,618
104,325
Cash and cash equivalents at the beginning of the year
242,861
138,004
Effects of exchange rate changes on the balance of cash held in foreign currencies
1,607
532
Cash and cash equivalents at the end of the year
13
144,589
242,861
The above consolidated statement of cash flows is to be read in conjunction with the accompanying notes.
73
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements
For the year ended 31 December 2022
1
a
Significant accounting policies
Basis of preparation
The Financial Report is a General Purpose Financial Report
which has been prepared in accordance with Australian
Accounting Standards and the Corporations Act 2001 (Cth)
(the Act). The Financial Report comprises the consolidated
financial statements of the Group and accompanying notes.
MA Financial Group Limited is a for-profit company for the
purposes of preparing this Financial Report. MA Financial
Group Limited is a listed public company limited by shares,
incorporated and domiciled in Australia.
The principal accounting policies adopted in the preparation
of this Financial Report and that of the previous financial
year are set out below. These policies have been consistently
applied to all the financial years presented and are applicable
to both MA Financial Group Limited and its subsidiaries
(Group) as well as to MA Financial Group Limited (Company),
unless otherwise stated.
In accordance with the Act, these financial statements
present the results of the Group only. Supplementary
information about the parent entity is disclosed in note 38.
The Financial Report was authorised for issue in accordance
with a resolution of the Directors on 23 February 2023.
Compliance with International Financial Reporting
Standards
Compliance with Australian Accounting Standards ensures
that the Financial Report complies with International Financial
Reporting Standards (IFRS) as issued by the International
Accounting Standards Board (IASB). Consequently, this
Financial Report has also been prepared in accordance with
and complies with IFRS as issued by the IASB.
Basis of measurement
Unless otherwise stated, amounts in this Financial Report
are presented in Australian dollars, which is the Company’s
functional currency, and have been prepared on a historical
cost basis, except for financial assets which are measured at
fair value. Historical cost is generally based on the fair values
of the consideration given in exchange for goods and services.
Going concern
The Directors have, at the time of approving the financial
statements, a reasonable expectation that the Group has
adequate resources to continue in operational existence
for the foreseeable future. Thus they continue to adopt the
going concern basis of accounting in preparing the financial
statements.
Critical accounting estimates and significant judgements
The preparation of the Financial Report in conformity with
Australian Accounting Standards requires the use of certain
critical accounting estimates. It also requires management to
exercise judgement in the process of applying the accounting
policies. The notes to the consolidated financial statements
set out areas involving a higher degree of judgement or
complexity, or areas where assumptions are significant to the
Group such as:
• determination of control of subsidiaries (note 1(b) and 37).
• determination of significant influence over associates and
joint control over joint ventures (note 1(j) and 23).
•
•
•
the impairment of goodwill (note 1(m) and 24).
recognition and measurement of employee benefits
including share based payments (note 1(q) and 34).
recognition of fees subject to performance criteria and
other conditions, including conditions outside of the
Group’s control (note 1(c)).
• valuation of contract assets and liabilities (note 1(g) and
note 18).
• acquisition accounting, including the recognition and
measurement of intangible assets and residual goodwill, of
the acquired subsidiaries (note 1(n) and note 37).
Estimates and judgements are continually evaluated and are
based on historical experience and other factors, including
reasonable expectations of future events.
b
Basis of consolidation
The consolidated financial statements incorporate the
financial statements of the Company and its subsidiaries.
Subsidiaries are all those entities controlled by the Company.
Control is achieved when the Company:
• has power over the investee;
•
is exposed, or has rights, to variable returns from its
involvement with the investee; and
• has the ability to use its power to affect its returns.
The Company reassesses whether or not it controls an
investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control
listed above.
When the Company has less than a majority of the voting
rights of an investee, it has power over the investee when
the voting rights are sufficient to give it the practical ability
to direct the relevant activities of the investee. The Company
74
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
1
b
Significant accounting policies (continued)
Basis of consolidation (continued)
considers all relevant facts and circumstances in assessing
whether or not the Company’s voting rights in an investee are
sufficient to give it control, including:
•
the size of the Company’s holding of voting rights relative
to the size and dispersion of holdings of the other vote
holders;
• potential voting rights held by the Company, other vote
holders or other parties;
•
rights arising from other contractual arrangements; and
• any additional facts and circumstances that indicate that
the Company has, or does not have, the current ability
to direct the relevant activities at the time that decisions
need to be made, including voting patterns at previous
shareholders’ meetings.
Consolidation of a subsidiary begins when the Company
obtains control over the subsidiary and ceases when the
Company loses control of the subsidiary. Specifically, 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
Company gains control until the date when the Company
ceases to control the subsidiary.
All intragroup assets and liabilities, equity, income, expenses
and cash flows relating to transactions between the members
of the Group are eliminated on consolidation.
c
Revenue recognition
The Group accounts for revenue under AASB 15 Revenue from
contracts with customers (AASB 15). Revenue is recognised
either at a point in time or over time, when (or as) the Group
satisfies performance obligations by transferring services to
its customers. If the Group performs a performance obligation
before it receives the consideration, the Group recognises
either a contract asset or a receivable in its statement of
financial position, depending on whether something other than
the passage of time is required before the consideration is
due. The Group’s significant income streams under AASB 15
include:
and commission income that is calculated using the effective
interest rate method on a financial asset is capitalised and
income is recognised in the income statement over the
expected life of the instrument.
Management fees
Management fees are fees from the provision of asset
management services per underlying investment agreements.
The fees are recognised over time as performance obligations
are met.
Performance fees
Performance fees are fees from managed funds and are
recognised when it is highly probable that a significant
reversal of the fee will not occur. Factors that are taken into
consideration for performance fees include:
•
•
the proportion of assets already realised
returns on assets realised to-date
• downside valuation on remaining unrealised assets and
reliability of those estimates
• nature of unrealised investments and their returns.
Lending upfront commission income
The Group receives upfront origination commission on the
settlement of loans originated by authorised brokers. Upfront
commissions are recognised upon the loans being settled
and are recognised net of clawbacks. The Group remits
100% of commissions net of any aggregation service fees to
authorised brokers.
Lending trail commission income and expense
The Group receives trail commission income from lenders
on loans they have settled that were originated by authorised
brokers. The trail commissions are received over the life of
the loans based on the individual loan balance outstanding.
The Group remits trail commission payments to authorised
mortgage originators (brokers) based on the individual loan
balance outstanding (and in accordance separate agreements
entered into with authorised brokers).
(i) Fees and commission income
Service fees
Fee and commission income includes fees from fund
management, brokerage, corporate advisory, underwriting and
property management. Where fee and commission income are
subject to clawback or meeting certain performance hurdles,
they are recognised as income when it is highly probable
those conditions will not significantly affect the outcome. Fee
The Group earns Software as a Service (SaaS) income for
subscription to its proprietary loan origination platform,
Infynity, and also provides compliance and licensing services
to its brokers. The Group charges a fee for both of these
services, with revenue recognised over time as the services
are provided.
75
MA Financial Group | 2022 Annual Report
Notes to the consolidated financial statements
For the year ended 31 December 2022
1
c
Significant accounting policies (continued)
Revenue recognition (continued)
(ii) Interest income
(iii) Dividend and distribution income
Interest income is calculated using the effective interest
method. The effective interest method calculates the
amortised cost of a financial instrument and allocates the
interest income or interest expense over the relevant period.
The effective interest rate is the rate that discounts estimated
future cash receipts or payments through the expected life of
the financial instrument or, when appropriate, a shorter period,
to the net carrying amount of the financial asset or liability.
Dividends and distributions are recognised as income when
the Group becomes entitled to the dividend or distribution.
The following table, summarises the main services provided by the Group, and provides information about the nature and timing
of the satisfaction of performance obligations in contracts with customers, and the related revenue recognition policies:
At a point in time revenue recognition:
Revenue recognition policy
Judgements used to identify
performance obligations
Type of service
Advisory
success fees
Nature, timing of satisfaction of
performance obligations, significant
payment terms
Fees from corporate advisory
contracts arise from providing
services relating to mergers
and acquisitions, restructurings,
capital fund raising and other
advisory services. Each service
has identifiable performance
obligations – being completion
of the merger and acquisition,
restructuring, or capital fund
raising. Amounts assigned to
each identifiable performance
obligation are based on the
standalone selling price of each
individual performance obligation.
Revenue is only recognised on
completion of the performance
obligations specified in the
contracts including any necessary
regulatory and shareholder
approvals. No amounts are
recognised if the performance
obligations are not met in full.
For contracts that have key
milestones defined, each key
milestone represents a separate
performance obligation.
The Group reviews its revenue
history to assess the following:
(1) the determination of the type
of fees;
(2) the timing of when revenue
was recognised and when
invoices were raised; and
(3) the key milestones that were
met and not met.
The Group considers that
control of the services are only
passed to the customer when the
transaction has completed, and
does not create an asset with
alternative use and the benefits
provided are consumed at
completion of the transaction. As
such Advisory success fees are
recognised at a point in time.
As the customer can only
benefit at the completion of the
trade, the Group recognises the
brokerage revenue at the point
in time when the brokerage
services are provided.
Estimates are made using
historical data for upfront
commissions that may be clawed
back by lenders in accordance
with individual contracts.
Equities
commission
and brokerage
income
The Group is remunerated for
the provision of security trading
services. Fees are defined within
the customer contracts.
Revenue, net of any rebates, is
recognised on trade date.
Recognised upon the loans
being settled net of estimated
clawbacks.
The Group receives upfront
origination commission on the
settlement of loans originated
by authorised brokers. Upfront
commissions are recognised
upon the loans being settled
and are recognised net of
clawbacks. The Group remits
100% of commissions net of
any aggregation service fees to
authorised brokers.
Lending
upfront
commission
income
76
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
1
c
Significant accounting policies (continued)
Revenue recognition (continued)
At a point in time revenue recognition (continued)
Type of service
Lending trail
commission
income
Nature, timing of satisfaction of
performance obligations, significant
payment terms
Revenue recognition policy
Judgements used to identify
performance obligations
The Group receives trail
commission income from lenders
on loans they have settled that
were originated by authorised
brokers. The trail commissions
are received over the life of the
loans based on the individual
loan balance outstanding. The
Group remits trail commission
payments to authorised mortgage
originators (brokers) based
on the individual loan balance
outstanding (and in accordance
separate agreements entered into
with authorised brokers).
On initial recognition, trail
commission income and
receivables are recognised
at the transaction price using
the expected value approach,
being the expected future
trail commission receivables
discounted to their net present
value. In addition, an associated
payable and expense to the
relevant brokers are also
recognised, calculated as the fair
value of the future trail commission
payable to brokers discounted to
their net present value.
The recognition of the contract
asset represents an estimate
of the commission income to
be received from lenders on
settled loans. The use of the
expected value approach of
estimating commission income
requires significant judgement
as assumptions are made using
a variety of inputs, including
the expected loan run-off rate
and the discount rate, that are
determined by management.
Revenue recognised at the time
the transaction is completed.
As the benefits of the transaction
will only be observable on
completion, transaction fees are
recognised at a point in time.
Facilitation
and
transaction
fees from
asset
management
services
The Group earns fees for
successful transactions relating
to assets and funds managed by
the Group such as the acquisition
and disposal of assets. These
fees can only be invoiced on
completion of the transaction.
The fee is based on a percentage
of the transaction and payable
as per the terms within the
underlying agreements.
Over time revenue recognition
Advisory
retainer fees
Fees for on-going performance
obligations as specified in each
contract. Retainer fees are
generally pre-defined within the
contract. Invoices are issued on a
monthly basis for ongoing work.
Revenue is recognised over time
as the Group provides services.
Performance
and
distribution
fees relating
to asset
management
services
Fees are earned for asset
management services when
the fund is managed such
that it exceeds performance
benchmarks. The benchmarks
and associated distribution fee
are defined within each trust
agreement.
The Group recognises distribution
fees and performance fees to the
extent that it is highly probable
that a significant reversal
of revenue will not occur in
subsequent periods.
As the Group performs its
obligations, the revenue is
recognised over time on a straight-
line basis in accordance with the
underlying contract. Services are
provided in equal amounts through
the course of the year.
The customer benefits as
the Group provides asset
management services, thus
the Group recognises the
performance and distribution
fees over time. Performance fees
are based on returns in excess
of a specified benchmark market
return, over the contract period.
In determining the amount to be
recognised, the Group considers
past performance across its
portfolio of assets and closely
monitors for any potential signs
of adverse impact on the fees.
77
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
1
c
Significant accounting policies (continued)
Revenue recognition (continued)
Over time revenue recognition (continued)
Type of service
Management,
administrative
and trustee
fees from
asset
management
services
Nature, timing of satisfaction of
performance obligations, significant
payment terms
The provision of asset
management services per
investment agreements. The
amounts charged for the separate
performance obligations are
determined based on the relevant
clauses of the investment
management contracts.
Revenue recognition policy
The performance obligations
represent a series of distinct
services. Revenue is recognised
as performance obligations
are met based on standalone
selling price of the performance
obligation.
Management
fees relating
to property
management
services
Fees for providing hotel and retail
property management services.
The amounts charged for the
separate performance obligations
are determined based on the
relevant clauses of the underlying
contracts.
The performance obligations
represent a series of distinct
services that have similar pattern
of transfer. As such, revenue is
recognised over time on a straight-
line basis throughout the year.
Service fees
The Group earns Software as a
Service income for subscription
to its proprietary loan origination
platform “Infynity” and also
provides compliance and licensing
services to its brokers.
The performance obligations
represent a series of distinct
services that have similar pattern
of transfer. As such, revenue is
recognised over time throughout
the year.
Judgements used to identify
performance obligations
The Group considers the
performance of these
management and trustee services
as a series of distinct services
that have similar pattern of
transfer. As such, the Group has
determined that recognising the
revenue over time on a straight-
line basis throughout the year is
the most appropriate depiction of
the transfer of services.
The Group considers the
performance of these
management services as a series
of distinct services that have
similar pattern of transfer. As
such, recognising the revenue
over time on a straight-line basis
throughout the year is the most
appropriate depiction of the
transfer of services.
The Group considers the
performance of these services as
a series of distinct services that
have similar pattern of transfer.
As such, recognising the revenue
over time throughout the year is
the most appropriate depiction of
the transfer of services.
d
Cash and cash equivalents
f
Loans receivable
Cash and cash equivalents includes cash on hand, deposits
held at call with financial institutions, other short term, highly
liquid investments with original maturities of three months or
less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value.
Loans receivable are recognised on settlement date, when
cash is advanced to the borrower. A credit loss allowance
for expected credit losses on loans receivable is recognised
upon inception of a loan. Please refer to note 16 for further
information.
e
Trade and other receivables
g
Contract assets and liabilities
Trade receivables are initially recognised at fair value and
subsequently measured at amortised cost using the effective
interest method, less any allowance for expected credit
losses. Trade receivables are generally due for settlement
within 30 days. The Group has applied the simplified
approach to measuring expected credit losses, which uses a
lifetime expected loss allowance. To measure the expected
credit losses, trade receivables have been grouped based on
days overdue.
78
The Group’s trail commission receivables, on initial
recognition, are recognised at transaction price using the
expected value method as a contract asset under AASB
15, being the expected future trail commission receivables
discounted to their net present value. In addition, an
associated payable and expense to the relevant brokers
are also recognised, initially measured at fair value being
the future trail commission payable to relevant brokers
discounted to their net present value. These calculations
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
1
g
Significant accounting policies (continued)
Contract assets and liabilities (continued)
require the use of assumptions which are determined by
management using a variety of inputs including external
actuarial analysis of historical information. Key assumptions
underlying the calculation include the expected loan run-off
rate and the discount rate. Refer to note 18 for details on
these key assumptions.
Subsequent to initial recognition and measurement both
the trail commission asset and trail commission payable are
measured at amortised cost. The carrying amount of the
trail commission asset and trail commission payable are
reassessed at each reporting period, to reflect actual and
revised estimated cash flows, by recalculating the carrying
amount with reference to the present value of estimated
future cash flows at the original effective interest rate. Any
resulting adjustment is recognised as income or expense in
the profit or loss.
h
Plant and equipment
Property, plant and equipment are stated at cost less
accumulated depreciation and accumulated impairment
losses.
Depreciation is calculated on a straight-line basis to realise
the net cost of each class of assets over its expected
useful life. The estimated useful lives, residual values and
depreciation method are reviewed at the end of each
reporting period, with the effect of any changes in estimate
accounted for on a prospective basis. The depreciation
periods are as follows:
• office equipment 3 years
•
•
furniture and fittings 7 years
leasehold improvements are amortised over the term of
the lease
The gain or loss arising on the disposal or retirement of an
item of property, plant and equipment is determined as the
difference between the sales proceeds and the carrying
amount of the asset and is recognised in profit or loss.
i
Leases
The Group recognises a right-of-use asset and a
corresponding lease liability at the commencement date in the
consolidated statement of financial position, except for short
term leases and leases of low value assets.
Right-of-use assets
Right-of-use assets are measured at cost and comprise
of the amount that corresponds to the amount recognised
for the lease liability on initial recognition together with any
lease payments made at or before the commencement date
(less any lease incentives received), initial direct costs and
restoration-related costs. The right-of-use asset is amortised
over the shorter of the asset’s useful life and the lease term on
a straight-line basis. Amortisation of right-of-use assets starts
at the commencement date of the lease and is recognised in
the consolidated statement of profit or loss.
The Group applies AASB 136 Impairment of Assets (AASB
136) to determine whether a right-of-use asset is impaired
and accounts for any identified impairment loss in accordance
with note 1(l).
Lease liabilities
The lease liability is initially measured at the present value of
the lease payments that are not paid at the commencement
date, discounted using the interest rate implicit in the lease
or, if that rate cannot be readily determined, the Group’s
incremental borrowing rate. Generally, the Group uses its
incremental borrowing rate as the discount rate. Interest on
lease liabilities is recognised in the consolidated statement of
profit or loss. Lease payments included in the measurement of
the lease liability comprise:
• Fixed lease payments (including in-substance fixed
payments), less any lease incentives receivable;
• Variable lease payments that depend on an index or
rate, initially measured using the index or rate at the
commencement date.
The lease liability is subsequently increased by the interest
cost on the lease liability and decreased by lease payment
made. It is remeasured when there is a change in future lease
payments arising from a change in an index or rate, a change
in the estimate of the amount expected to be payable under
a residual value guarantee, or as appropriate, changes in the
assessment of whether a purchase or extension option is
reasonably certain to be exercised or a termination option is
reasonably certain not to be exercised.
Lease payments are recognised as amortisation expense
of the right-of-use asset over the term of the lease unless
another systematic basis is more representative of the time
pattern in which economic benefits from the leased asset
are consumed.
79
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
1
i
Significant accounting policies (continued)
Leases (continued)
The Group remeasures the lease liability (and makes a
corresponding adjustment to the related right-of-use asset)
whenever:
• The lease term has changed or there is a significant event
or change in circumstances resulting in a change in the
assessment of exercise of a purchase option, in which
case the lease liability is remeasured by discounting the
revised lease payments using a revised discount rate.
• The lease payments change due to changes in an
index or rate or a change in expected payment under a
guaranteed residual value, in which cases the lease liability
is remeasured by discounting the revised lease payments
using an unchanged discount rate (unless the lease
payments change is due to a change in a floating interest
rate, in which case a revised discount rate is used).
• A lease contract is modified and the lease modification is
not accounted for as a separate lease, in which case the
lease liability is remeasured based on the lease term of the
modified lease by discounting the revised lease payments
using a revised discount rate at the effective date of the
modification.
The Group has applied judgement to determine the lease term
for some lease contracts in which it is a lessee that include
renewal options. The assessment of whether the Group is
reasonably certain to exercise such options impacts the lease
term, which significantly affects the amount of lease liabilities
and right-of-use assets recognised.
j
Investments in associates and joint ventures
An associate is an entity over which the Group has significant
influence. Significant influence is the power to participate in
the financial and operating policy decisions of the investee but
is not control or joint control over those policies.
A joint venture is a joint arrangement whereby the parties
that have joint control of the arrangement have rights to
the net assets of the joint arrangement. Joint control is the
contractually agreed sharing of control of an arrangement
which exists only when decisions about the relevant activities
require unanimous consent of the parties sharing control.
The results and assets and liabilities of associates or joint
ventures are incorporated in these consolidated financial
statements using the equity method of accounting.
Under the equity method, an investment in an associate
or a joint venture is initially recognised in the consolidated
statement of financial position at cost and adjusted thereafter
to recognise the Group’s share of the profit or loss and other
comprehensive income of the associate or joint venture.
When the Group’s share of losses of an associate or a joint
venture exceeds the Group’s interest in that associate or
joint venture, the Group discontinues recognising its share
of further losses. Additional losses are recognised only to
the extent that the Group has incurred legal or constructive
obligations or made payments on behalf of the associate or
joint venture. On acquisition of the investment in an associate
or a joint venture, any excess of the cost of the investment
over the Group’s share of the net fair value of the identifiable
assets and liabilities of the investee is recognised as
goodwill, which is included within the carrying amount of the
investment. Any excess of the Group’s share of the net fair
value of the identifiable assets and liabilities over the cost of
the investment, after reassessment, is recognised immediately
in profit or loss in the period in which the investment is
acquired.
When necessary, the entire carrying amount of the
investment (including goodwill) is tested for impairment in
accordance with AASB 136 as a single asset by comparing
its recoverable amount (higher of value-in-use and fair
value less costs of disposal) with its carrying amount. Any
impairment loss recognised forms part of the carrying amount
of the investment. Any reversal of that impairment loss is
recognised in accordance with AASB 136 to the extent that
the recoverable amount of the investment subsequently
increases.
k
Intangible assets
Intangible assets acquired in a business combination and
recognised separately from goodwill are initially recognised
at their fair value at the acquisition date (which is regarded as
their cost).
Subsequent to their initial recognition, intangible assets
acquired in a business combination are reported at cost
less accumulated amortisation and accumulated impairment
losses. Amortisation is recognised on a straight-line basis
over their estimated useful lives. The estimated useful life
and amortisation method are reviewed at the end of each
reporting period, with the effect of any changes in estimate
being accounted for on a prospective basis.
For intangible assets that have a finite useful life, an
assessment is made at each reporting date for indications of
impairment. An impairment loss is recognised for the amount
by which the asset’s carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of the asset’s
fair value less costs to sell and value-in-use. For the purposes
of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash inflows
which are largely independent of the cash inflows from other
assets or groups of assets (cash-generating units). Intangible
assets (other than goodwill) that suffered impairment are
reviewed for possible reversal of the impairment at each
reporting date.
80
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
1
k
Significant accounting policies (continued)
Intangible assets (continued)
Costs incurred in acquiring and developing software, that is
not cloud based (SaaS), that will contribute to the Group’s
future financial benefits are capitalised as software and are
amortised over the estimated useful life on a straight-line
basis. Costs capitalised include external direct costs of
materials, service, consultants spent on the projects and
internal costs of employees directly engaged in delivering
the projects. For software in the course of development,
amortisation commences once development is complete and
the software is in use. Costs incurred on the maintenance of
software is expensed as incurred and recognised in profit
or loss. Subsequent expenditure is recognised only when
it increases the future economic benefits embodied in the
specific asset to which it relates. All other expenditure,
including expenditure on internally generated goodwill and
brands is recognised in profit or loss.
Costs incurred on the maintenance of software is expensed
as incurred and recognised in profit or loss.
Derecognition of intangible assets
An intangible asset is derecognised on disposal, or when
no future economic benefits are expected from use or
disposal. Gains or losses arising from derecognition of an
intangible asset, measured as the difference between the net
disposal proceeds and the carrying amount of the asset, are
recognised in profit or loss when the asset is derecognised.
l
Impairment of tangible and intangible assets
other than goodwill
At the end of each reporting period, the Group reviews the
carrying amounts of its tangible and intangible assets to
determine whether there is any indication of impairment. If
any such indication exists, the recoverable amount of the
asset is estimated in order to determine the extent of the
impairment loss (if any). Where it is not possible to estimate
the recoverable amount of an individual asset, the Group
estimates the recoverable amount of the cash-generating
unit to which the asset belongs. When a reasonable and
consistent basis of allocation can be identified, corporate
assets are allocated to individual cash-generating units,
or otherwise they are allocated to the smallest group of
cash-generating units for which a reasonable and consistent
allocation basis can be identified.
The recoverable amount is the higher of fair value less costs
of disposal and value-in-use. In assessing value-in-use, the
estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks
specific to the asset for which the estimates of future cash
flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating
unit) is estimated to be less than its carrying amount, the
carrying amount of the asset (or cash-generating unit) is
reduced to its recoverable amount. An impairment loss is
recognised immediately in profit or loss, unless the relevant
asset is carried at a revalued amount, in which case the
impairment loss is treated as a revaluation decrease.
When an impairment loss subsequently reverses, the carrying
amount of the asset (or cash-generating unit) is increased to
the revised estimate of its recoverable amount, but so that
the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment
loss been recognised for the asset (or cash-generating unit)
in prior years. A reversal of an impairment loss is recognised
immediately in profit or loss, unless the relevant asset is
carried at a revalued amount, in which case the reversal of the
impairment loss is treated as a revaluation increase.
m
Goodwill
Goodwill arising on acquisition of a business is carried at cost
as established at the date of acquisition of the business less
accumulated impairment losses, if any.
For the purposes of impairment testing, goodwill is allocated
to each of the Company’s cash-generating units (or groups
of cash-generating units) that is expected to benefit from the
synergies of the combination.
A cash-generating unit to which goodwill has been allocated
is tested for impairment annually, or more frequently where
there is indication that the unit may be impaired. If the
recoverable amount of the cash-generating unit is less than
its carrying amount, the impairment loss is allocated first to
reduce the carrying amount of any goodwill allocated to the
unit and then to the other assets of the unit pro rata based on
the carrying amount of each asset in the unit. Any impairment
loss recognised for goodwill is not reversed in subsequent
periods.
On disposal of the relevant cash-generating unit,
the attributable amount of goodwill is included in the
determination of the profit or loss on disposal.
n
Business combinations
Acquisitions of businesses are accounted for using the
acquisition method. The consideration transferred in a
business combination is measured at fair value, which is
calculated as the sum of the acquisition-date fair values of
the assets transferred by the Group, liabilities incurred by the
Group to the former owners of the acquiree and the equity
interests issued by the Group in exchange for control of the
acquiree. Acquisition-related costs are generally recognised
in profit or loss as incurred.
81
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
1
n
Significant accounting policies (continued)
Business combinations (continued)
At the acquisition date, the identifiable assets acquired and
the liabilities assumed are recognised at their fair value at the
date of acquisition.
comprehensive income are reclassified to profit or loss where
such treatment would be appropriate if that interest were
disposed of.
Goodwill is measured as the excess of the sum of the
consideration transferred, the amount of any non-controlling
interests in the acquiree, and the fair value of the acquirer’s
previously held equity interests in the acquiree (if any) over
the net of the acquisition-date amounts of the identifiable
assets acquired and the liabilities assumed. If, after
reassessment, the net of the acquisition-date amounts of the
identifiable assets acquired and liabilities assumed exceeds
the sum of the consideration transferred, the amount of any
non-controlling interests in the acquiree and the fair value of
the acquirer’s previously held interest in the acquiree (if any),
the excess is recognised immediately in profit or loss as a
bargain purchase gain.
Non-controlling interests that are present ownership interests
and entitle their holders to a proportionate share of the
entity’s net assets in the event of liquidation may be initially
measured either at fair value or at the non-controlling interests’
proportionate share of the recognised amounts of the
acquiree’s identifiable net assets. The choice of measurement
basis is made on a transaction-by-transaction basis.
When the consideration transferred by the Group in a
business combination includes assets or liabilities resulting
from a contingent consideration arrangement, the contingent
consideration is measured at its acquisition-date fair value
and included as part of the consideration transferred
in a business combination. Changes in fair value of the
contingent consideration that qualify as measurement
period adjustments are adjusted retrospectively, with
corresponding adjustments against goodwill. Measurement
period adjustments are adjustments that arise from additional
information obtained during the ‘measurement period’ (which
cannot exceed one year from the acquisition date) about facts
and circumstances that existed at the acquisition date.
The subsequent accounting for changes in the fair value of the
contingent consideration that do not qualify as measurement
period adjustments depends on how the contingent
consideration is classified. Contingent consideration that is
classified as equity is not remeasured at subsequent reporting
dates and its subsequent settlement is accounted for within
equity. Contingent consideration that is classified as an asset
or a liability is remeasured at subsequent reporting dates in
accordance with AASB 9 Financial Instruments (AASB 9), or
AASB 137 Provisions, Contingent Liabilities and Contingent
Assets, as appropriate, with the corresponding gain or loss
being recognised in profit or loss.
When a business combination is achieved in stages, the
Group’s previously held equity interests in the acquiree
is remeasured to its acquisition-date fair value and the
resulting gain or loss, if any, is recognised in profit or loss.
Amounts arising from interests in the acquiree prior to the
acquisition date that have previously been recognised in other
82
If the initial accounting for a business combination is
incomplete by the end of the reporting period in which the
combination occurs, the Group reports provisional amounts for
the items which the accounting is incomplete. Those provisional
amounts are adjusted during the measurement period (see
above), or additional assets or liabilities are recognised, to
reflect new information obtained about facts or circumstances
that existed at the acquisition date that, if known, would have
affected the amounts recognised at that date.
o
Financial instruments
Recognition and initial measurement
Financial assets and financial liabilities are recognised when
the Group becomes a party to the contractual provisions of
the instrument.
Financial assets and financial liabilities are initially measured
at fair value. Transactions costs that are directly attributable
to the acquisition or issue of financial assets and financial
liabilities (other than financial assets and financial liabilities
at fair value through profit or loss) are added to or deducted
from the fair value of the financial assets or financial liabilities,
as appropriate, on initial recognition. Transaction costs
directly attributable to the acquisition of financial assets
or financial liabilities at fair value through profit or loss are
recognised immediately in profit or loss.
Fair value measurement
When an asset or liability, financial or non-financial, is
measured at fair value, the fair value is based on the price that
would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the
measurement date; and assumes that the transaction will take
place either: in the principal market; or in the absence of a
principal market, in the most advantageous market.
Where one is available, the Group measures the fair value of
an instrument using the quoted price in an active market for
that instrument. A market is regarded as active if transactions
for the asset or liability take place with sufficient frequency
and volume to provide pricing information on an ongoing basis.
If there is no quoted price in an active market, then the Group
uses valuation techniques that maximise the use of relevant
observant inputs and minimise the use of unobservable inputs.
The chosen valuation technique incorporates all of the factors
that market participants would take into account in pricing a
transaction.
Assets and liabilities measured at fair value are classified,
into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements.
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
1
o
Significant accounting policies (continued)
Financial instruments (continued)
Classifications are reviewed at each reporting date and
transfers between levels are determined based on a
reassessment of the lowest level input that is significant to the
fair value measurement.
Financial assets carried at amortised cost
The amortised cost of a financial asset is:
•
the amount at which the financial asset is measured at
initial recognition;
Financial assets
• minus the principal repayments;
Financial assets are classified into the following categories:
• plus the cumulative amortisation using the effective
• amortised cost;
• equity instruments ‘at fair value through other
comprehensive income’ (FVTOCI); and
• financial assets ‘at fair value through profit or loss’ (FVTPL).
The classification depends on the nature and purpose of
the financial assets and is determined at the time of initial
recognition. All regular purchases or sales of financial assets
are recognised and derecognised on a trade date basis.
Regular way purchases or sales are purchases or sales of
financial assets that require delivery of assets within the
time frame established by regulation or convention in the
marketplace.
Classification of financial assets
A financial asset is measured at amortised cost if it meets both
of the following conditions and is not designated as at FVTPL:
• The financial asset is held within a business model whose
objective is to hold financial assets in order to collect
contractual cash flows; and
• The contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments of
principal and interest on principal amount outstanding.
A debt instrument is measured at FVTOCI if it meets both of
the following conditions and is not designated as at FVTPL:
• The financial asset is held within a business model whose
objective is achieved by both collecting contractual cash
flows and selling the financial assets; and
• The contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
The Group holds no debt instruments measured at FVTOCI.
All other financial assets are measured at FVTPL.
However, the Group may make the following irrevocable
election/designation at initial recognition of a financial asset:
• The Group may irrevocably elect to present subsequent
changes in fair value of an equity investment in other
comprehensive income if certain criteria are met such as, if
the equity instrument is not held for trading; and
• The Group may irrevocably designate a debt investment
that meets the amortised cost or FVTOCI criteria as
measured at FVTPL if doing so eliminates or significantly
reduces an accounting mismatch.
interest method of any difference between that initial
amount and the maturity amount; and
• adjusted for any loss allowance.
The effective interest method is a method of calculating the
amortised cost of a debt instrument and of allocating interest
income over the relevant period. The effective interest rate is
the rate that exactly discounts estimated future cash receipts
(including all fees and points paid or received that form an
integral part of the effective interest rate, transaction costs
and other premiums or discounts) excluding expected credit
losses, through the expected life of the debt instrument to
the gross carrying amount of the debt instrument on initial
recognition.
Interest income is recognised using the effective interest
method for debt instruments measured subsequently at
amortised cost. Interest income is calculated by applying
the effective interest rate to the gross carrying amount of a
financial asset. For financial assets that have subsequently
become credit-impaired, interest income is recognised by
applying the effective interest rate to the amortised cost of the
financial asset. If, in subsequent reporting periods, the credit
risk on the credit-impaired financial instrument improves so
that the financial asset is no longer credit impaired, interest
income is recognised by applying the effective interest rate
to the gross carrying amount of the financial asset. Interest
income is recognised in profit or loss and is included in the
investment income line item.
Fair value measurement
When an asset or liability, financial or non-financial, is
measured at fair value for recognition or disclosure purposes,
the fair value is based on the price that would be received
to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement
date; and assumes that the transaction will take place either:
in the principal market; or in the absence of a principal market,
in the most advantageous market.
Fair value is measured using the assumptions that market
participants would use when pricing the asset or liability,
assuming they act in their economic best interest. For
non-financial assets, the fair value measurement is based
on its highest and best use. Valuation techniques that are
appropriate in the circumstances and for which sufficient data
are available to measure fair value, are used, maximising the
use of relevant observable inputs and minimising the use of
unobservable inputs.
83
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
1
o
Significant accounting policies (continued)
Financial instruments (continued)
Assets and liabilities measured at fair value are classified,
into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements.
Classifications are reviewed at each reporting date and
transfers between levels are determined based on a
reassessment of the lowest level input that is significant to the
fair value measurement.
• Financial assets at FVTPL are measured at fair value at the
end of each reporting period, with any fair value gains or
losses recognised in profit or loss. Net gains and losses,
including any interest or dividend income earned on the
financial asset, are recognised in profit or loss in the ‘other
gains and losses’ line item. Fair value is determined in the
manner described in note 29.
Financial assets carried at FVTOCI
On initial recognition, the Group may make an irrevocable
election (on an instrument-by-instrument basis) to designate
investments in equity instruments as at FVTOCI on the basis that
they are held for strategic purposes. Designation at FVTOCI is
not permitted if the equity investment is held for trading.
A financial asset is held for trading if:
•
It has been acquired principally for the purpose of selling it
in the near term; or
• On initial recognition it is part of a portfolio of identified
financial instruments that the Group manages together
and has evidence of a recent actual pattern of short term
profit-taking; or
•
It is a derivative.
Investments in equity instruments at FVTOCI are initially
measured at fair value plus transaction costs. Gains and
losses relating to these financial assets will be recognised
in other comprehensive income. Dividends from such
investments are recognised as income in profit or loss when
the Group has the right to receive payments, unless the
dividend clearly represents a recovery of part of the cost of
the investment. The accumulated fair value reserve related to
these investments will never be reclassified to profit or loss.
Financial assets carried at FVTPL
Financial assets that do not meet the criteria for being
measured at amortised cost or FVTOCI are measured at
FVTPL. Specifically:
•
Investments in equity instruments are classified as FVTPL,
unless the Group designates an equity investment that
is neither held for trading nor a contingent consideration
arising from a business combination as at FVTOCI on
initial recognition.
• Debt instruments that do not meet the amortised cost
criteria or the FVTOCI criteria are classified as at FVTPL.
In addition, debt instruments that meet either the amortised
cost criteria or the FVTOCI criteria may be designated
as at FVTPL upon initial recognition if such designation
eliminates or significantly reduces a measurement or
recognition inconsistency that would arise from measuring
assets and liabilities or recognising the gains and losses on
them on different bases. The Group has not designated any
debt instruments as at FVTPL.
Impairment of financial assets
The Group recognises a loss allowance for expected
credit losses (ECL) on investments in debt instruments
that are measured at amortised cost or at FVTOCI and
loan commitments. No impairment loss is recognised for
investments in equity instruments. The amount of ECL is
updated at each reporting date to reflect changes in credit risk
since initial recognition of the respective financial instrument.
For trade receivables, the Group has elected to use the
simplified approach and has determined the loss allowance
based off the lifetime ECL. The expected credit losses on
these financial assets are estimated based on the Group’s
historical credit loss experience, adjusted for factors that
are specific to debtors, general economic conditions and
an assessment of both the current as well as the forecast
direction of conditions at the reporting date, including the time
value of money where appropriate.
For all other financial instruments, the Group recognises
lifetime ECL when there has been a significant increase in
credit risk since initial recognition. If, on the other hand, the
credit risk on the financial instrument has not increased
significantly since initial recognition, the Group measures the
loss allowance for that financial instrument at an amount equal
to 12 months ECL. The assessment whether lifetime ECL
should be recognised is based on significant increases in the
likelihood or risk of a default occurring since initial recognition
instead of on evidence of a financial asset being credit
impaired at the reporting date or an actual default occurring.
Lifetime ECL represents the expected credit losses that will
result from all possible default events over the expected life of
a financial instrument. In contrast, 12 month ECL represents
the portion of lifetime ECL that is expected to result from
default events on a financial instrument that are possible
within 12 months after the reporting date.
Financial assets, other than those at FVTPL, are assessed for
indicators of impairment at the end of each reporting period.
Financial assets are considered to be impaired where there
is objective evidence that, as a result of one or more events
that occurred after the initial recognition of the financial
asset, the estimated future cash flows of the investment
have been affected.
The Group has provided for commitments that are both drawn
and undrawn. The undrawn commitment is contingent on the
counterparty achieving contractual milestones. Once they
84
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
1
o
Significant accounting policies (continued)
Financial instruments (continued)
Impairment of financial assets (continued)
are achieved, the amount can be drawn upon and expected
to be met within 12 months. The Group has included a loss
allowance on the entire commitments based on the 12 month
ECL for these commitments.
The carrying amount of the financial asset is reduced by the
impairment loss directly for all financial assets.
Significant increase in credit risk
When determining whether the credit risk of a financial
asset has increased significantly since initial recognition and
when estimating ECL, the Group considers reasonable and
supportable information that is relevant and available without
undue cost or effort. This includes both quantitative and
qualitative information and analysis, based on the Group’s
historical experience and informed credit assessment
including forward-looking information. As part of the forward
looking assessment, the Group has considered economic
indicators such as economic forecast and outlook, GDP
growth, inflation, unemployment rates and interest rates.
The Group determines a significant increase in credit risk
based on the number of days past due. A non-trade receivable
loan is assessed to have increased in credit risk when the
number of days past due is over 90 days. This is based on
historical data.
In particular, the following information is taken in account
when assessing whether credit risk has increased significantly
since initial recognition:
• existing or forecast adverse changes in business, financial
or economic conditions that are expected to cause a
significant decrease in the debtor’s ability to meet its debt
obligations;
• an actual or expected significant deterioration in the
operating results of the debtor; and
• an actual or expected significant adverse change in
regulatory, economic, or technological environment of the
debtor that results in a significant decrease in the debtor’s
ability to meet its debt obligations.
The Group assumes that the credit risk on a financial
instrument has not increased significantly since initial
recognition if the financial instrument is determined to have
low credit risk at the reporting date. A financial instrument is
determined to have low credit risk if:
(i)
the financial instrument has a low risk of default;
(ii) the borrower has a strong capacity to meeting its
contractual cash flow obligations in the near term; and
(iii) adverse changes in economic and business conditions in
the longer term may, but will not necessarily, reduce the
ability of the borrower to fulfil its contractual cash flow
obligations.
For loan commitments, the date that the Group has become
a party to the irrevocable commitment is considered to be
the date of initial recognition for the purposes of assessing
the financial instrument for impairment. In assessing whether
there has been a significant increase in the credit risk since
initial recognition of a loan commitment, the Group considers
changes in the risk of a default occurring on the loan to which
a loan commitment relates; for financial guarantee contracts,
the Group considers the changes in the risk that the specified
debtor will default on the contract.
The Group regularly monitors the effectiveness of the criteria
used to identify whether there has been a significant increase
in credit risk and revises them as appropriate to ensure that
the criteria are capable of identifying significant increase in
credit risk before the amount becomes past due.
Definition of default
The Group considers the following as constituting an event
of default for internal credit risk management purposes as
historical experience indicates that receivables that meet
either of the following criteria are generally not recoverable.
• When repayments are at least 90 days past due; or
• When there is a breach of financial covenants by the
counterparty; or
•
Information developed internally or obtained from external
sources indicates that the debtor is unlikely to pay its
creditors, including the Group, in full (without taking into
account any collaterals held by the Group).
Write-off policy
The Group writes-off a financial asset when there is
information indicating that the counterparty is in severe
financial difficulty and there is no realistic prospect of
recovery. Any recoveries made are recognised in profit or loss.
Trade receivables are written-off when there is no reasonable
expectation of recovery. Indicators that there is no reasonable
expectation of recovery include, amongst others, the failure of
a debtor to engage in a repayment plan with the Group.
Measurement and recognition of credit losses
ECL is a probability-weighted estimate of credit losses.
Credit losses are measured as the present value of all cash
shortfalls (i.e. the difference between the cash flows due to
the entity in accordance with the contract and the cash flows
that the Group expects to receive). The components used in
measuring the ECL include:
(i) probability of default (PD): represents the possibility of a
default over the next 12 months;
85
MA Financial Group | 2022 Annual Report
Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
1
o
Significant accounting policies (continued)
Financial instruments (continued)
(ii)
loss given default (LGD): expected loss if a default occurs,
taking into consideration the mitigating effect of collateral
assets and time value of money;
(iii) exposure at default (EAD): the total exposure at time
of default.
For financial assets, the expected credit loss is estimated as
the difference between all contractual cash flows that are
due to the Group if the holder of the loan commitment draws
down the loan, and the cash flows that the Group expects to
receive, discounted at the original effective interest rate.
For undrawn loan commitments, the expected credit loss is
the present value of the difference between the contractual
cash flows that are due to the Group if the holder of the loan
commitment draws down the loan, and the cash flows that the
Group expects to receive if the loan is drawn down.
For contract assets, the trail commission receivable is mainly
from financial institutions with high credit ratings. Even when
forward looking assumptions are considered the ECL would
not be material.
The Group has applied the three stage model based on the
change in credit risk since initial recognition to determine the
loss allowance of its financial assets.
Stage 1: 12 month ECL
At initial recognition, ECL is collectively assessed and
measured by classes of financial assets with the same level
of credit risk as a product of the PD within the next 12 months
and LGDs with consideration to forward looking economic
indicators. Loss allowances for financial assets measured at
amortised cost are deducted from the gross carrying amount
of the assets.
Stage 2: Lifetime ECL
When the Group determines that there has been a significant
increase in credit risk since initial recognition but not
considered to be credit impaired, the Group recognises
a lifetime ECL calculated as a product of the PD for the
remaining lifetime of the financial asset and LGD, with
consideration to forward looking economic indicators. Similar
to Stage 1, loss allowances for financial assets measured at
amortised cost are deducted from the gross carrying amount
of the assets.
Stage 3: Lifetime ECL – credit impaired
At each reporting date, the Group assesses whether financial
assets carried at amortised cost and debt securities at
FVTOCI are credit-impaired. A financial asset is ‘credit
impaired’ when one or more events have a detrimental impact
on the estimated future cash flows of the financial asset have
occurred. For financial assets that have been assessed as
credit impaired, a lifetime ECL is recognised as a collective or
individually assessed (specific) provision, and interest revenue
is calculated by applying the effective interest rate to the
amortised cost instead of the carrying amount.
The Group recognises a loss allowance for expected
credit losses on investments in debt instruments that are
measured at amortised cost or at FVTOCI, as well as on
loan commitments. No impairment loss is recognised for
investments in equity interests. The amount of expected credit
losses is updated at each reporting date to reflect changes in
credit risk since initial recognition of the respective financial
instrument.
The Group applies the AASB 9 simplified approach to
measuring expected credit losses which uses a lifetime
expected loss allowance for all trade receivables. To measure
the expected credit losses, trade receivables have been
grouped based on the shared credit risk characteristics and
the days past due. The ECL is calculated based on actual credit
loss relating to revenue from experience over the past 3 years
adjusted for the Group’s forward looking expectations based
off economic indicators. The Group performed the calculations
of ECL rates separately for receivables arising from the
advisory business and other asset management fees as asset
management fees have historically been received in full.
Financial liabilities and equity instruments
Classification as debt or equity
Debt or equity instruments issued by a Group entity
are classified as either financial liabilities or as equity
in accordance with the substance of the contractual
arrangements and the definitions of a financial liability and an
equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual
interest in the assets of an entity after deducting all of its
liabilities. Equity instruments issued by a Group entity is
measured as proceeds received less direct issue costs.
Repurchase of the Company’s own equity instruments is
recognised and deducted directly in equity. No gain or loss
is recognised in profit or loss on the purchase, sale, issue or
cancellation of the Company’s own equity instruments.
Financial liabilities
Financial liabilities that are not designated as at FVTPL, are
subsequently measured at amortised cost using the effective
interest method. The effective interest method is a method
of calculating the amortised cost of a financial liability and
86
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
1
o
Significant accounting policies (continued)
Financial instruments (continued)
r
Taxation
The Company, together with eligible Australian resident wholly
owned subsidiaries, comprise a tax consolidated group (Tax
Group) with the Company as the head entity. As a result,
the Company is subject to income tax as the head entity of
the Tax Group. The consolidated current and deferred tax
amounts for the Tax Group are allocated to the members
of the Tax Group using the ‘separate taxpayer within group’
approach, with deferred taxes being allocated by reference to
the carrying amounts in financial statements of each member
entity and the tax values applying under tax consolidation.
Current tax liabilities and assets and deferred tax assets
arising from unused tax losses and relevant tax credits
arising from this allocation process are then accounted for as
immediately assumed by the head entity, as under Australian
taxation law the head entity has the legal obligation (or right)
to those amounts.
Entities within the Tax Group have entered into a tax funding
agreement and a tax sharing agreement with the head entity.
Under the terms of the tax funding agreement, the Company
and its subsidiaries have agreed to pay a tax equivalent
payment to or from the head entity equal to the tax liability
or asset assumed by the head entity for the period as noted
above. The amount arising under the tax funding arrangement
for each period is equal to the tax liability or asset assumed
by the head entity for that period and no contribution (or
distribution to) equity participants arises in relation to
income taxes.
The tax sharing agreement entered into between members of
the Tax Group provides for the determination of the allocation
of income tax liabilities between the entities should the head
entity default on its tax payment obligations.
Current tax
The current tax payable is based on taxable profit for the year.
Taxable profit differs from profit before tax as reported in the
consolidated statement of profit or loss because of items of
income or expense that are taxable or deductible in other
years and items that are never taxable or deductible. The
Group’s liability for current tax is calculated using tax rates
that have been enacted or substantively enacted by the end of
the reporting period.
of allocating interest expense over the relevant period.
The effective interest rate is the rate that exactly discounts
estimated future cash payments (including all fees and points
paid or received that form an integral part of the effective
interest rate, transaction costs and other premiums or
discounts) through the expected life of the financial liability, or
(where appropriate) a shorter period, to the amortised cost of
a financial liability.
Other financial liabilities
Borrowings are initially recognised at fair value of the
consideration received less directly attributable transaction
costs, and subsequently measured at amortised cost using
the effective interest method. Trade and other payables are
carried at amortised cost and represent liabilities for goods
and services provided to the Group that are unpaid.
p
Provisions
Provisions are recognised when:
•
•
the Group has a present obligation (legal or constructive)
as a result of a past event;
it is probable that the Company will be required to settle
the obligation; and
• a reliable estimate can be made of the amount of the
obligation.
The amount recognised as a provision is the best estimate of
the consideration required to settle the present obligation at
the end of the reporting date, taking into account the risks and
uncertainties surrounding the obligation. When a provision is
measured using the cash flows estimated to settle the present
obligation, its carrying amount is the present value of those
cash flows.
q
Employee benefits
Employee benefit liabilities represents accrued wages,
salaries, bonus, annual and long-service leave entitlements
recognised in respect of employee services up to the end of
the reporting date.
Liabilities recognised in respect of short term employee
benefits are measured at the amounts expected to be paid
when the liabilities are settled by the Group in respect of
services provided by employees up to the reporting date.
Liabilities recognised in respect of long term employee
benefits are measured as the present value of the estimated
future cash outflows to be made by the Group in respect of
services provided by employees up to the reporting date.
87
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
1
r
Significant accounting policies (continued)
Taxation (continued)
Deferred tax
Deferred tax is recognised on temporary differences
between the carrying amounts of assets and liabilities in the
consolidated financial statements and the corresponding tax
bases used in the computation of taxable profit. Deferred tax
liabilities are generally recognised for all taxable temporary
differences.
Deferred tax assets are generally recognised for all
deductible temporary differences to the extent that it is
probable that taxable profits will be available against which
those deductible temporary differences can be utilised. Such
deferred tax assets and liabilities are not recognised if the
temporary difference arises from goodwill or from the initial
recognition (other than in a business combination) of other
assets and liabilities in a transaction that affects neither the
taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary
differences associated with investments in subsidiaries and
associates, and interests in joint ventures, except where
the Group is able to control the reversal of the temporary
difference and it is probable that the temporary difference
will not reverse in the foreseeable future. Deferred tax assets
arising from deductible temporary differences associated
with such investments and interests are only recognised
to the extent that it is probable that there will be sufficient
taxable profits against which to utilise the benefits of the
temporary differences and they are expected to reverse in the
foreseeable future.
The carrying amount of deferred tax assets is reviewed at the
end of each reporting period and reduced to the extent that
it is no longer probable that sufficient taxable profits will be
available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax
rates that are expected to apply in the period in which the
liability is settled or the asset realised, based on tax rates (and
tax laws) that have been enacted or substantively enacted by
the end of the reporting period. The measurement of deferred
tax liabilities and assets reflects the tax consequences that
would follow from the manner in which the Group expects,
at the end of the reporting period, to recover or settle the
carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a
legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes
levied by the same taxation authority and the Group intends to
settle its current tax assets and liabilities on a net basis.
Current and deferred tax for the year
Current and deferred tax are recognised as an expense or
income in the profit or loss, except when they relate to items
that are recognised in other comprehensive income or directly
in equity, in which case the current and deferred tax are also
recognised in other comprehensive income or directly in
equity, respectively. Where current tax or deferred tax arises
from the initial accounting for a business combination, the tax
effect is included in the accounting for business combination.
Tax governance
The Board approved Tax Governance Policy for the Group
outlines a tax control framework to provide guidance on how
all tax risks are identified, managed and reported. The Tax
Governance Policy is supported by tax related procedures
and processes, which ensure the Group effectively manages
its tax risk.
s
Goods and services tax
Revenues, expenses and assets are recognised net of the
amount of goods and services tax (GST), except:
(i) where the amount of GST incurred is not recoverable
from the taxation authority, it is recognised as part of the
cost of acquisition of an asset or as part of an item of
expense; or
(ii) for receivables and payables which are recognised
inclusive of GST.
The net amount of GST recoverable from, or payable to, the
taxation authority is included as part of receivables or payables.
Cash flows are included in the cash flow statement on a
gross basis. The GST component of cash flows arising from
investing and financing activities which is recoverable from, or
payable to, the taxation authority is classified within operating
cash flows.
t
Share-based payment transactions
Equity-settled share-based payments to employees and
others providing similar services are measured at the fair
value of the equity instruments at the grant date. Details
regarding the determination of fair value of equity-settled
share-based transactions are set out in note 34.
The fair value determined at the grant date of the equity
settled share-based payments is expensed on a straight-
line basis over the vesting period, based on the Group’s
estimate of equity instruments that will eventually vest, with a
corresponding increase in equity. At the end of each reporting
period, the Group revises its estimate of the number of equity
instruments expected to vest. The impact of the revision of
the original estimates, if any, is recognised in profit or loss
such that the cumulative expense reflects the revised
estimate, with a corresponding adjustment to the share-based
payment reserve.
88
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
1
t
Significant accounting policies (continued)
Share-based payment transactions (continued)
Equity-settled share-based payment transactions with parties
other than employees are measured at the fair value of goods
or services received, except where that fair value cannot be
estimated reliably, in which case they are measured at the fair
value of the equity instruments granted at the date the entity
obtains the goods or the counterparty renders the service.
u
Earnings per share
Basic earnings per share is calculated by dividing the Group’s
profit after income tax by the weighted average number of
ordinary shares outstanding during the financial year.
Diluted earnings per share is calculated by dividing the
Group’s profit after income tax adjusted by profit attributable
to all the dilutive potential ordinary shares by the weighted
average number of ordinary shares and potential ordinary
shares that would be issued on the exchange of all the dilutive
potential ordinary shares into ordinary shares.
v
Contributed equity
Foreign operations
The results and financial position of subsidiaries that have a
functional currency different from the presentation currency
are translated into Australian dollars as follows:
• Assets and liabilities for each statement of financial
position item presented are translated at the closing rate
at the date of that statement of financial position.
•
Income and expenses for each statement of
comprehensive income item are translated at average
exchange rates (unless this is not a reasonable
approximation of the cumulative effect of the rates
prevailing on the transaction dates, in which case
income and expenses are translated at the dates of the
transactions).
• Foreign currency differences are recognised in other
comprehensive income. When an international operation
is disposed of, in part or in full, the relevant amount in the
foreign currency translation reserve is transferred to profit
or loss or to non-controlling interest as part of the profit or
loss on disposal.
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares are shown in
equity as a deduction from the proceeds.
x
Comparatives
w
Foreign currency
Both the presentation currency and the functional currency
of the Company and its controlled Australian entities are
Australian dollars. A number of foreign controlled entities have
a functional currency other than Australian dollars.
Foreign currency transactions are translated into the
functional currency using the exchange rates prevailing at the
date of the transactions.
Foreign exchange differences arising on translation are
recognised in profit or loss. At the end of each reporting
period, monetary items denominated in foreign currencies
are re-translated at the rates prevailing at that date. Non-
monetary items carried at fair value that are denominated in
foreign currencies are re-translated at the rates prevailing at
the date when the fair value was determined. Non-monetary
items that are measured in terms of historical costs in a
foreign currency are not re-translated.
Comparatives in the Financial Report have been realigned
to the current year presentation. For clearer presentation,
the Group has realigned/reclassified the revenue and
expense categories disclosed in the condensed consolidated
statement of profit or loss and other comprehensive income
and reclassified cashflow movements in distributions from
investments and amounts advanced to third parties from
investing activities to operating activities in the condensed
consolidated statement of cash flows. There has been no
effect on the comparative year results, net assets or equity
due to the reclassification.
y
Rounding off
The Group is of a kind referred to in ASIC Corporations
(Rounding in Financial/Directors’ Reports) Instrument 2016/191
and in accordance with that Instrument, amounts in the
Directors’ Report and the Financial Report have been rounded
off to the nearest thousand dollars, unless otherwise stated.
89
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
2
Application of new and revised Australian Accounting Standards
New accounting standards, amendments and interpretations that are effective in the current financial year
The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards
Board (the AASB) that are relevant to the Group’s operations and mandatorily effective on or after 1 January 2022, including:
• AASB 2020-9 Amendments to Australian Accounting Standards – Tier 2 Disclosures: Interest Rate Benchmark Reform
(Phase 2)
The new and revised Standards and Interpretations adopted during the year do not materially affect the Group’s accounting
policies or any of the amounts recognised in the consolidated financial statements.
Accounting standards and interpretations issued but not yet effective
Effective for annual reporting
periods beginning on or after
Expected to be initially applied
in the financial year ending
1 January 2023
31 December 2023
1 January 2023
31 December 2023
1 January 2023
31 December 2023
1 January 2023
31 December 2023
1 January 2025
31 December 2025
Standard/interpretation
AASB 2020–1 Amendments to Australian Accounting
Standards – Classification of Liabilities as Current or Non-
Current
AASB 2021–2 Amendments to Australian Accounting
Standards – Disclosure of Accounting Policies and Definition
of Accounting Estimates
AASB 2021–5 Amendments to Australian Accounting
Standards – Deferred Tax related to Assets and Liabilities
arising from a Single Transaction
AASB 2022–1 Amendments to Australian Accounting
Standards – Initial Application of AASB 17 and AASB 9 –
Comparative Information
AASB 2014–10 Amendments to Australian Accounting
Standards – Sale or Contribution of Assets between an
Investor and its Associate or Joint Venture,
AASB 2015–10 Amendments to Australian Accounting
Standards – Effective Date of Amendments to AASB 10 and
AASB 128 and AASB 2017–5 Amendments to Australian
Accounting Standards – Effective Date of Amendments to
AASB 10 and AASB 128 and Editorial Corrections, AASB
2021–7 Amendments to Australian Accounting Standards –
Effective Date of Amendments to AASB 10 and AASB 128 and
Editorial Corrections
90
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
3
Segment information
AASB 8 Operating Segments requires the ‘management
approach’ to disclose information about the Group’s
reportable segments. The financial information is reported on
the same basis as used by senior management and the Board
of Directors for evaluating operating segment performance
and for deciding how to allocate resources to operating
segments. The segment note is prepared on the same basis
as the Group’s non-IFRS (Underlying) financial measures.
Please refer to the Directors’ Report for an explanation of why
the Directors believe the Underlying measures are useful.
The Board of Directors is considered to be the Chief
Operating Decision Maker (CODM).
The Group is organised into the following business segments:
• Asset Management
• Lending & Technology
• Corporate Advisory and Equities (CA&E)
The Corporate Services segment represents the unallocated
costs associated with the central executives and corporate
support functions. Items of income and expenses within the
Corporate Services segment also include the net result of
managing the Group’s liquidity and funding requirements.
3.1
Services from which reportable segments
derive their revenues
The Asset Management segment incorporates the provision
of asset management services, principal co-investment and
strategic investments.
The Lending & Technology segment includes the provision
of Lending Platforms for loan funding, residential mortgages
and Financial Technology being mortgage aggregation
services. During the year, the Group expanded its Lending
& Technology segment by acquiring Finsure Holding Pty Ltd
and its subsidiaries (Finsure), a leading Australian mortgage
aggregator, and MA Money Financial Services Pty Ltd and its
subsidiaries (MA Money), a residential mortgage lender. MA
Money was formerly known as MKM NewCo Pty Ltd.
The Corporate Advisory and Equities segment provides
corporate advice, underwriting and institutional stockbroking
services.
The main items of profit or loss and other comprehensive
income used by management to assess each business are
Underlying revenue, Underlying earnings before interest, tax,
depreciation and amortisation (EBITDA) and Underlying net
profit after tax.
Information regarding these segments is presented in section
3.2. The accounting policies of the reportable segments are
the same as the Group’s reporting policies, with the exception
of adjustments made to the Underlying results.
As announced on 9 June 2022, the Group amended the
Underlying treatment of mark to market movements of
investments by removing any unrealised gains or losses
from Underlying revenue. The Underlying results for the year
ended 31 December 2022 reflect this revised approach with
comparatives restated accordingly.
EBITDA from Priority Income Fund (PIF) strategies have been
reclassified from Lending & Technology to Asset Management
given they are third-party managed funds. The Underlying
results for the year ended 31 December 2022 reflect this
revised approach with comparatives restated accordingly.
91
MA Financial Group | 2022 Annual Report
Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
3
Segment information (continued)
3.2
Segment results
Depreciation, amortisation and net interest expense are not disclosed by segment as they are not provided to the CODM and are
only reported on a Group basis. Assets and liabilities are not disclosed as they are not provided to the CODM. The following is an
analysis of segment performance:
Asset
Management
$’000
Lending &
Technology
$’000
CA&E
$’000
Corporate
Services
$’000
Total
Underlying
segment
$’000
Adjustments4
$’000
Statement of
comprehensive
income
$’000
31 December 2022
Revenue1
Staff costs
Non-staff costs
EBITDA2
Depreciation and amortisation
Interest expense3
Profit before tax
Income tax expense
Net profit after income tax
Other comprehensive income
Total comprehensive income
31 December 2021
Revenue1
Staff costs
Non-staff costs
EBITDA2
Depreciation and amortisation
Interest expense3
Profit before tax
Income tax expense
Net profit after income tax
Other comprehensive income
Total comprehensive income
197,790
41,096
61,550
1,363
301,799
31,143
332,942
(74,299)
(19,428)
(39,987)
(22,323)
(156,037)
(20,014)
(6,057)
(7,581)
(5,390)
(39,042)
(11,010)
(7,949)
103,477
15,611
13,982
(26,350)
106,720
12,184
(167,047)
(46,991)
118,904
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(11,121)
(6,120)
(17,241)
(7,834)
(32,860)
(40,694)
87,765
(26,796)
(26,329)
10,215
61,436
(16,581)
-
899
60,969
(16,114)
44,855
899
61,436
(15,682)
45,754
132,261
13,515
68,637
375
214,788
13,947
228,735
(60,065)
(4,008)
(40,650)
(15,292)
(120,015)
(14,068)
(1,690)
(6,038)
(2,073)
(23,869)
(9,570)
(3,099)
(129,585)
(26,968)
58,128
7,817
21,949
(16,990)
70,904
1,278
72,182
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(4,710)
(5,297)
60,897
(18,269)
(4,242)
(9,223)
(12,187)
(8,952)
(14,520)
48,710
1,600
(16,669)
42,628
(10,587)
-
16,024
42,628
5,437
32,041
16,024
48,065
1 Revenue refers to total income on the consolidated statement of profit or loss and other comprehensive income.
2 Statutory EBITDA is not an IFRS measure but has been presented to provide a comparable measure to the Underlying result.
3
Interest expense is referred to as finance costs in the statement of profit or loss.
4 Refer to the reconciliation of the Underlying segment to statutory measures.
92
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
3
Segment information (continued)
3.2
Segment results (continued)
A reconciliation of the Underlying segment measures to the statutory measures is as follows:
Statutory result for the year ended 31 December 2022
332,942
118,904
44,855
45,754
Note
Revenue1
$’000
EBITDA
$’000
NPAT
$’000
Comprehensive
income
$’000
Differences in measurement
Business acquisition adjustments
Net gains/(losses) on investments
Adjustments relating to associates
Credit investments
Software development adjustments
Differences in classification
Adjustments relating to Lending Trusts1
Interest income
Expense allocations
Tax on adjustments
Total adjustments
(a)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
-
(149)
3,716
(149)
9,836
(149)
14,773
14,773
14,773
(2,255)
-
(353)
3,162
(353)
3,162
(33,494)
(32,183)
(1,150)
(8,868)
-
(1,150)
-
-
(10,688)
(12,155)
(31,143)
(12,184)
16,581
Underlying results for the year ended 31 December 2022
301,799
106,720
61,436
Statutory result for the year ended 31 December 2021
228,735
72,182
32,041
48,065
Differences in measurement
Business acquisition adjustments
Equity issued to staff
Net gains/(losses) on investments
Adjustments relating to associates
Credit investments
Differences in classification
Adjustments relating to Lending Trusts2
Interest income
Expense allocations
Tax on adjustments
Total adjustments
(a)
(b)
(c)
(d)
(e)
(g)
(h)
(i)
7,943
12,109
12,109
-
-
2,831
622
(1,946)
(1,946)
2,831
622
2,831
622
(2,651)
(1,429)
(1,429)
(9,346)
(9,213)
(86)
(5,317)
-
(86)
-
-
(1,600)
7,849
(13,947)
(1,278)
10,587
Underlying results for the year ended 31 December 2021
214,788
70,904
42,628
9,836
2,623
12,569
(353)
3,162
-
-
-
15,682
61,436
(1,946)
(10,411)
(11,609)
(1,429)
-
-
-
(5,437)
42,628
-
-
-
-
-
-
1 Revenue refers to total income on the condensed consolidated statement of profit or loss and other comprehensive income.
2 Lending Trusts refers to three residential mortgage-backed securitisation trusts, two specialty lending trusts and two credit funds in the Priority
Income Fund strategies that the Group manages and consolidates.
93
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
3
Segment information (continued)
3.2
Segment results (continued)
Differences in measurement
Differences in classification
(a) The acquisition of Armada Funds Management in 2017,
(g) The Underlying treatment records the net distributions
received from the Lending Trusts in Underlying revenue.
As such interest and other expenses are reclassified to
interest income to reflect this net position.
(h) Interest income on cash and bank balances of $1.2
million (31 December 2021: $0.1 million) is reclassified to
Underlying net interest expense.
(i) The Underlying adjustment reclassifies expenses that
are fully recoverable against revenue to reflect the net nil
impact to the Group. These costs include RetPro direct
site management expenses and Finsure sponsorship
expenses.
RetPro in 2021 and Finsure on 7 February 2022 for cash
and shares gives rise to noncash IFRS expenditure
relating to the amortisation of intangible assets of $6.1
million (31 December 2021: $4.2 million) and share-based
payment expenses to vendors, who are now employees
of the Group, of $2.3 million (31 December 2021: $6.2
million). Furthermore, one-off costs of $1.4 million (31
December 2021: $1.8 million) associated with the Group’s
acquisition of Finsure have been excluded from the
Underlying result.
(b) Since IPO in 2017 the Underlying measure included the
expensing of the full value of the share-based payment
equity awards issued to staff as part of the annual
bonus awards in the year of grant as opposed to over
the vesting period (up to 5 years) per IFRS. Following
the completion of a full vesting cycle, in 2022 this
adjustment was removed in order to align to the Statutory
treatment.
(c) Following a change in approach announced on 9 June
2022, the Underlying treatment no longer includes
unrealised gains and losses on financial investments.
Instead, only realised gains or losses on disposal of
financial investments are recognised in Underlying
revenue. During the year, unrealised losses on financial
investments of $2.6 million have been excluded for
the Underlying result (31 December 2021: $10.4 million
gain). The adjustment also removes the foreign currency
translation gain for the Group’s offshore entities of $0.2
million (31 December 2021: nil).
(d) The Underlying treatment records dividends and
distributions receivable from associates in Underlying
Revenue as opposed to the IFRS treatment of recording
the Group’s share of accounting profit or loss of an
associate. Underlying Revenue also recognises the
realised gains/ losses on any disposal of an investment in
associate.
(e) The Underlying approach only recognises the ECL
provision for all Lending & Technology division and PIF
strategy receivables and specific provisions individually
assessed against non-Lending & Technology division
receivables.
(f) Following a change in IFRS accounting standards, the
Underlying treatment capitalises and amortises certain
software development costs that would previously have
been capitalised prior to the accounting standard change.
94
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
3
Segment information (continued)
3.3
Revenue for major products and services
The table below represents a disaggregation of fee and commission income by operating segment:
Revenue type
Operating Segment
31 Dec 2022
Consolidated
$'000
31 Dec 2021
Consolidated
$'000
Fee and commission income
Management fees
Distribution fees
Transaction fees
Performance fees
Upfront commission income
Trail commission income
Service fees
Corporate advisory services
Equity services
Asset Management
Asset Management
Asset Management
Asset Management
Lending & Technology
Lending & Technology
Lending & Technology
CA&E
CA&E
Total fee and commission income
3.4
Geographical information
The Group primarily operates in Australia.
3.5
Information about major customers
85,155
5,988
34,466
56,132
198,072
236,028
14,970
64,232
5,709
700,752
73,570
5,693
28,807
24,951
-
-
-
60,717
8,231
201,969
No single customer contributed 10% or more to Group revenue in 2022. In 2021, two funds managed by the Group contributed
more than 10% to Group revenue with fees of $27.3 million and $25.7 million respectively.
95
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
4
Fee and commission income
Fee and commission income is accounted for in accordance with AASB 15
31 Dec 2022
Consolidated
$’000
31 Dec 2021
Consolidated
$’000
Timing of revenue recognition
At a point in time
Advisory success fees
Lending upfront commission income
Lending trail commission income
Lending other commission income
Equities commission and brokerage income
Facilitation and transaction fees
Total revenue earned at a point in time
Over time
Advisory retainer fees
Service fees
Performance fees
Distribution fees
Management fees
Total revenue earned over time
Total fee and commission income
Fee and commission income by segment
At a point in time
Asset Management
Lending & Technology
Corporate Advisory and Equities
Total revenue earned at a point in time
Over time
Asset Management
Lending & Technology
Corporate Advisory and Equities
Total revenue earned over time
Total fee and commission income
5
Fee and commission expense
Lending fee and commission expense
Other fee and commission expense
Total fee and commission expense
6
Interest income
Interest income on cash and bank balances
Interest income on loans receivable – effective interest rate method
Interest income on loans receivable held at FVTPL
Interest income on leases
Total interest income
96
58,480
198,072
234,145
1,883
5,709
34,466
532,755
5,752
14,970
56,132
5,988
85,155
167,997
700,752
34,466
434,100
64,189
532,755
147,275
14,970
5,752
167,997
700,752
(417,305)
(26,204)
(443,509)
1,808
56,508
270
47
58,633
57,891
-
-
-
8,231
28,807
94,929
2,826
-
24,951
5,693
73,570
107,040
201,969
28,807
-
66,122
94,929
104,214
-
2,826
107,040
201,969
-
(20,502)
(20,502)
86
30,488
47
-
30,621
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
31 Dec 2022
Consolidated
$’000
31 Dec 2021
Consolidated
$’000
Investment income
7
Dividends and distributions from investments
Realised gains from disposal of investments
Net (loss)/gain from financial instruments held at fair value
Total investment income
Other income
8
Other income
Outgoings recovery
Net foreign exchange gains
Total other income
Employee expenses
9
Salary, superannuation and bonuses
Termination benefits
Amortisation of share-based payments (refer to note 34)
Other employment expenses¹
Total employee expenses
1,155
6,748
(1,030)
6,873
489
6,919
1,396
8,804
132,913
1,506
15,722
16,906
167,047
1
Includes recruitment fees, payroll tax, life insurance, workers compensation, fringe benefits tax and leave entitlements.
Finance costs
10
Interest on unsecured notes¹
Interest on mortgage trust warehouse notes¹
Fund preferred unit distribution¹
Interest on lease liabilities
Other finance costs
Total finance costs
7,766
6,456
22,803
3,513
156
40,694
1 Refer to note 26 for more detail on the unsecured note program, fund preferred units and mortgage trust notes.
Other expenses
11
Professional services
Insurance
Fund administration and operational costs
Charitable donations
Occupancy and office expenses
Other expenses
Total other expenses
9,252
2,704
2,912
453
1,925
6,464
23,710
1,009
2,500
4,070
7,579
32
5,317
532
5,881
99,193
716
14,937
14,739
129,585
5,205
-
8,946
250
119
14,520
5,892
2,487
1,023
787
1,821
2,163
14,173
The charitable donations paid by the Group in 2022 and 2021 were principally made to the MA Foundation, a registered charity,
and were made in response to staff elections.
97
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
31 Dec 2022
Consolidated
$’000
31 Dec 2021
Consolidated
$’000
12
Income tax expense
12.1
Income tax expense
Current tax expense
Deferred tax benefit
Total income tax expense
12.2 Reconciliation of income tax expense to prima facie tax payable
Profit before tax from continuing operations
Prima facie income tax expense at the Australian corporate tax rate of 30%
Effect of income that is subject to/(exempt from) tax
Non-deductible expenses
Prior year over adjustment
Foreign tax – controlled entities
Foreign Income Tax Offset
Total income tax expense
12.3
Income tax benefit/(expense) recognised in other comprehensive income
Deferred Tax
Fair value remeasurement of investments
Share of revaluations in associates
Income tax benefit/(expense) in other comprehensive income
12.4 Current tax assets and liabilities
Current tax liabilities
Income tax payable
12.5 Deferred tax balances
Net deferred tax liability
(17,575)
1,461
(16,114)
60,969
(18,291)
1,127
(670)
2,211
(493)
2
(22,380)
5,711
(16,669)
48,710
(14,613)
(2,459)
(719)
1,116
-
6
(16,114)
(16,669)
1,583
(1,532)
51
3,849
3,849
15,539
15,539
(5,842)
(3,669)
(9,511)
7,047
7,047
1,280
1,280
98
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
12
Income tax expense (continued)
Opening
balance
$’000
Opening
balance
adjustments
$’000
Recognised
in profit or
loss
$’000
Recognised
in other
comprehensive
income
$’000
Recognised
in equity
$’000
Acquisitions/
disposals
$’000
Closing
balance
$’000
Share-based payments
2,883
-
2,650
(3,485)
1,285
1,716
31 December 2022
Temporary differences
Property, plant and equipment
Financial assets
Investments in associates and
joint ventures
Deferred revenue
Provisions
Loss allowance
Expense accruals
Intangible assets
Other
Total
31 December 2021
Temporary differences
Property, plant and equipment
Financial assets
Investments in associates and
joint ventures
Deferred revenue
Provisions
Loss allowance
Expense accruals
Intangible assets
Share-based payments
Other
Total
-
-
-
-
-
-
-
(556)
(183)
(2,673)
(3,252)
2,420
712
1,987
286
(945)
-
1,202
4
1,583
(948)
3,437
(1,532)
37
413
(29)
207
(7,559)
547
305
828
867
(359)
151
(1,280)
2,094
1,134
51
(352)
5,561
(149)
(4,548)
1,682
579
1,409
(2,756)
1,673
806
3,905
-
-
-
-
-
-
-
-
-
-
-
(204)
-
98
(5,842)
1,145
1,296
738
133
578
1,273
1,210
(556)
5,711
(3,669)
-
-
-
-
-
-
-
(9,511)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
617
617
-
-
-
(1,215)
2,606
(1,716)
(7,655)
(18,429)
464
300
3,844
1,288
2,587
5,609
(13,307)
(13,791)
-
73
5,533
732
(17,538)
(15,539)
-
-
-
-
-
-
-
(556)
(183)
(2,673)
(3,252)
2,420
712
1,987
(2,002)
(3,485)
-
-
2,883
867
(2,002)
(1,280)
99
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
31 Dec 2022
Consolidated
$’000
31 Dec 2021
Consolidated
$’000
Cash and cash equivalents
13
Cash and cash equivalents at the end of the financial year are reflected in the related items in the statement of financial
position as follows:
Cash and bank balances
Cash and cash equivalents at the end of the financial year
144,589
144,589
242,861
242,861
13.1
Reconciliation of profit for the year to net cash flows from operating activities
Profit after income tax
44,855
32,041
Adjustments to profit after income tax:
Income tax expense recognised in profit or loss
Share-based payments
Non-cash interest and investment income
Share of profit of associates
Net foreign exchange gains
Net losses/(gains) from financial instruments held at fair value
Realised gains from disposal of investments
Loss allowance expense
Loss on disposal of fixed assets
Interest expense on leases
Intangible amortisation
Amortisation of right-of-use assets
Depreciation of non-current assets
Total adjustments to profit after income tax
Changes in assets and liabilities:
Change in trade and other receivables
Change in loans receivable
Change in other assets
Change in contract assets and contract liabilities
Change in trade and other payables
Change in provisions
Total changes in assets and liabilities
Cash generated from operations
Income taxes paid
Net cash used in operating activities
16,114
15,721
-
(1,389)
(1,396)
1,030
(6,748)
1,887
38
3,513
7,353
8,073
1,815
46,011
(28,826)
(334,310)
6,890
(11,456)
14,612
(325)
16,669
14,865
(52)
(3,187)
(532)
(4,070)
(2,500)
1,222
70
250
5,170
2,805
975
31,685
12,624
(119,017)
(7,686)
-
11,730
14,079
(353,415)
(88,270)
(262,549)
(21,249)
(283,798)
(24,544)
(20,231)
(44,775)
100
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
14
Receivables
Accounts receivable
Performance fees receivable
Management fees receivable
Commissions receivable
Interest receivable
Receivables from associates
Other receivables
Loss allowance on receivables (note 16)
Total receivables
31 Dec 2022
Consolidated
$’000
31 Dec 2021
Consolidated
$’000
11,461
28,048
7,089
31,950
2,176
5,468
3,436
(1,145)
88,483
9,106
10,716
7,535
-
780
5,590
3,732
(954)
36,505
Fees receivable disclosed above include amounts that are past due at the end of the reporting period for which the Group has
not recognised a loss allowance because the amounts are still considered recoverable. See below table for an aged analysis of
receivables.
14.1
Ageing of receivables
$’000
31 December 2021
Accounts receivable
Performance fees receivable
Management fees receivable
Interest receivable
Receivables from associates
Other receivables
Total receivables
31 December 2022
Past due
Not past
due
60 – 90
days
90+
days
Total past
due
Total
Receivables
Loss
allowance on
receivables
Total
receivables
net of loss
allowance
8,920
10,716
7,370
780
2,925
3,396
40
-
-
-
-
-
146
-
165
-
186
-
165
-
2,665
2,665
336
336
9,106
10,716
7,535
780
5,590
3,732
34,107
40
3,312
3,352
37,459
(11)
-
-
-
(775)
(168)
(954)
Accounts receivable
10,167
96
1,198
1,294
11,461
(138)
Performance fees receivable
25,749
Management fees receivable
7,030
Commission receivable
Interest receivable
Receivables from associates
Other receivables
Total receivables
31,950
2,176
3,103
3,059
-
-
-
-
-
-
2,299
2,299
28,048
59
-
-
59
7,089
-
-
31,950
2,176
5,468
3,436
2,365
2,365
377
377
-
-
-
-
(710)
(297)
83,234
96
6,298
6,394
89,628
(1,145)
88,483
Accounts receivable, performance and management fees receivable and receivables from associates aged 90+ days primarily
relate to fees receivable from funds managed by the Group.
101
9,095
10,716
7,535
780
4,815
3,564
36,505
11,323
28,048
7,089
31,950
2,176
4,758
3,139
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
15
Loans receivable
Current
Commercial loans1
Loans to associates
Loss allowance (note 16)
Total loans receivable – current
Non-current
Commercial loans1
Residential mortgages2
Loans to associates
Loans to employees
Loss allowance (note 16)
Total loans receivable – non-current
Total loans receivable
31 Dec 2022
Consolidated
$’000
31 Dec 2021
Consolidated
$’000
320,486
-
(684)
319,802
296,451
241,046
-
2,211
(4,028)
535,680
855,482
157,277
12,393
(514)
169,156
170,070
-
4,318
823
(1,918)
173,293
342,449
1 Commercial loans are provided to Australian corporates. The loans have terms of between three months and ten years and are either fully or
partially secured against the assets of the borrowers.
2 Residential mortgages were acquired as part of the Group’s acquisition of MA Money.
15.1
Loans receivable by industry
Consolidated
31 December 2022
Financial services
Professional services
Residential mortgages
Other
31 December 2021
Financial services
Professional services
Other
Loans receivable
$’000
Loss allowance
$’000
454,652
149,275
241,046
15,221
860,194
218,559
107,764
18,558
344,881
(2,379)
(1,162)
(1,134)
(37)
(4,712)
(939)
(747)
(746)
(2,432)
Total
$’000
452,273
148,113
239,912
15,184
855,482
217,620
107,017
17,812
342,449
16
Loss allowance
For receivables and loans receivable, the Group bears the risk
that the future circumstances of customers might change,
including their ability to repay their loans in part or in full. The
Group periodically assesses exposures to determine whether
the credit risk of a receivable or loan receivable has increased
significantly since initial recognition. The assessment, which
requires judgement, considers both quantitative and qualitative
information that is based on the Group’s historical experience
and informed credit assessment including forward-looking
information, such as economic forecast and outlook, GDP
growth, unemployment rates and interest rates.
102
At the reporting date the Group undertook a review of its
receivables, loans receivable and expected credit losses. The
review considered the macroeconomic outlook, counterparty
credit quality, the type of collateral held and exposure at
default as at the reporting date as well as considering the
ongoing impacts of COVID-19. No significant changes were
made to the model inputs and forward-looking information
from the previous reporting period and the accounting
policies of the Group remained consistent with prior periods.
The Group’s loss allowance provisions are a determination of
probabilities of default and a determination of losses that may
be incurred should a default occur.
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
16
Loss allowance (continued)
The table below presents the gross exposure and related ECL allowance for assets subject to impairment requirements of AASB 9.
Consolidated
31 December 2022
Receivables
Loans receivable
31 December 2021
Receivables
Loans to associates
Loans receivable
Gross exposure
for asset
$’000
Loss
allowance
$’000
89,628
860,194
949,822
37,459
16,711
328,170
382,340
(1,145)
(4,712)
(5,857)
(954)
(458)
(1,974)
(3,386)
Total
$’000
88,483
855,482
943,965
36,505
16,253
326,196
378,954
16. 1 Movement in credit loss allowance by asset category
Balance as at 1 January 2021
(963)
(275)
(1,029)
(2,267)
Receivables
$’000
Loans to
associates
$’000
Loans
receivable
$’000
Total
$’000
Credit loss allowance recognised in the statement of
profit or loss
Amounts recovered
Balance as at 31 December 2021
Credit loss allowance recognised in the statement of
profit or loss
Additions through business combinations
Reclassifications and other movements
Balance as at 31 December 2022
16.2 Movement in credit loss allowance by ECL stage
Balance as at 1 January 2021
Net credit impairment charges
Amounts recovered
Balance as at 31 December 2021
Net credit impairment charges
Additions through business combinations
Balance as at 31 December 2022
(94)
103
(954)
(133)
-
(58)
(1,145)
Stage I
$’000
(2,267)
(1,222)
103
(3,386)
(1,160)
(700)
(5,246)
(183)
-
(458)
91
-
367
-
(945)
-
(1,222)
103
(1,974)
(3,386)
(1,845)
(1,000)
107
(1,887)
(1,000)
416
(4,712)
(5,857)
Lifetime ECL
Stage II
$’000
Stage III
$’000
-
-
-
-
(30)
(300)
(330)
-
-
-
-
(281)
-
(281)
Total ECL
$’000
(2,267)
(1,222)
103
(3,386)
(1,471)
(1,000)
(5,857)
103
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
17
Other assets
Prepayments
Deposits
Leasehold improvements in progress
Other
Total other assets
18
Contract assets and liabilities
Contract assets
Trail commission receivable – current
Trail commission receivable – non-current
Total contract assets
Contract liabilities
Trail commission payable – current
Trail commission payable – non-current
Total contract liabilities
Net contract assets
31 Dec 2022
Consolidated
$’000
31 Dec 2021
Consolidated
$’000
3,442
5,027
521
96
9,086
139,280
467,952
607,232
131,061
440,304
571,365
35,867
1,510
3,537
7,245
2,029
14,321
-
-
-
-
-
-
-
Through its mortgage aggregation platform, Finsure, the Group receives trail commissions from lenders on loans that
have settled and were originated by the Group. The Group also makes trail commission payments to authorised brokers.
The carrying amount of the trail commission receivable (contract asset) and trail commission payable (contract liability)
are reassessed at each reporting period, to reflect actual and revised estimated cash flows, by recalculating the carrying
amount with reference to the present value of estimated future cash flows at the original effective interest rate. Any resulting
adjustment is recognised as income or expense in the profit or loss.
The key assumptions underlying the fair value calculations of trail commission receivable and the corresponding payable to
authorised brokers at the reporting date are summarised in the following table:
Discount rate
Run-off rates¹
31 Dec 2022
Consolidated
$’000
4.75%
Between 12.0% and 33.0%
1 The run-off rates refer to the expected loan book attrition rates. Run-off rates are then stratified into time-bands, by managed loan portfolio,
and applied to each loan according to the age of that particular loan. Comparatives have not been presented as Finsure was acquired during
the financial year.
31 Dec 2022
Consolidated
$’000
31 Dec 2021
Consolidated
$’000
700
-
-
700
700
5,380
620
6,700
19
Restricted cash
Equities clearing collateral
Rental bank guarantees
Other collateral
Total restricted cash
104
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
20 Other financial assets and liabilities
Financial assets – current
Financial assets held at FVTPL (equity securities)
Financial assets held at FVTOCI (equity securities)
Consolidated managed fund investments1
Total financial assets – current
Financial assets – non-current
Financial assets held at FVTPL (non-equity securities)
Financial assets held at FVTOCI (equity securities)
Total financial assets – non-current
Total financial assets
Financial liabilities – current
Consolidated managed fund investments1
Total financial liabilities – current
Total financial liabilities
31 Dec 2022
Consolidated
$’000
31 Dec 2021
Consolidated
$’000
640
11,600
154,860
167,100
15,479
13,733
29,212
196,312
116,419
116,419
116,419
605
3,200
-
3,805
23,992
42,042
66,034
69,839
-
-
-
1 Net consolidated managed fund investments of $38.4 million at 31 December 2022 represents financial assets and liabilities of funds managed
by the Group, that are deemed to be controlled by the Group at the reporting date as a result of a strategic co-investment held by the Group in
the fund. Refer to further information in note 37.2.
Refer to note 29.6 for further details regarding the fair value of financial assets and financial liabilities.
31 Dec 2022
Consolidated
$’000
31 Dec 2021
Consolidated
$’000
21
Property, plant and equipment
The below table sets out the carrying value of the Group’s property, plant and equipment:
Office equipment – at cost
Less accumulated depreciation
Total office equipment
Furniture and fixtures – at cost
Less accumulated depreciation
Total furniture and fixtures
Lease improvements – at cost
Less accumulated depreciation
Total leasehold improvements
Total property, plant and equipment
5,269
(2,419)
2,850
1,840
(468)
1,372
3,673
(1,922)
1,751
5,973
3,605
(2,520)
1,085
1,114
(306)
808
1,695
(1,553)
142
2,035
105
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
21
Property, plant and equipment (continued)
21.1 Movement in carrying value of property, plant and equipment
The below table sets out the movement in carrying value of the Group’s property, plant and equipment:
Consolidated
Assets for own use
Balance as at 1 January 2021
Additions
Depreciation expense
Balance as at 31 December 2021
Additions
Additions through business
combinations (note 37)
Disposals
Depreciation expense
Balance as at 31 December 2022
22
Right-of-use assets
Right-of-use assets – at cost
Less accumulated amortisation
Total right-of-use assets
Balance at the beginning of the year
Additions
Additions through business combinations (note 37)
Lease modification
Amortisation expense
Balance at the end of the year
Office
equipment
$’000
Furniture
and fixtures
$’000
Leasehold
improvements
$’000
540
1,052
(507)
1,085
3,117
2
(5)
(1,349)
2,850
529
349
(70)
808
575
124
(33)
(102)
1,372
381
159
(398)
142
1,973
-
-
(364)
1,751
Total
$’000
1,450
1,560
(975)
2,035
5,665
126
(38)
(1,815)
5,973
31 Dec 2022
Consolidated
$’000
31 Dec 2021
Consolidated
$’000
71,038
(9,265)
61,773
9,874
60,263
990
(1,281)
(8,073)
61,773
17,287
(7,413)
9,874
5,338
7,341
-
-
(2,805)
9,874
A commercial lease commenced during the year for the rental of office premises in Sydney. The lease term is 7 years with
renewal terms included in the contract. Renewal is at the specific option of the Group.
23
Investments in associates and joint ventures
BE ES I LLC
BE OLD I LLC
MA Kincare Fund1
Redcape Hotel Group
Other associates2
22,415
8,274
-
57,086
3,811
91,586
19,401
2,068
7,594
84,339
6,991
120,393
1 During the year, the Group obtained control of the MA Kincare Fund resulting in the derecognition of the investment as an associate.
2 Other associates represents the aggregate of the Group’s remaining associates, that are not considered individually material to the Group, and
therefore have not been separately disclosed. As at 31 December 2021 other associates included the Group’s investment in MA Money. During the
year, the Group acquired 100% of MA Money resulting in the derecognition of the investment as an associate.
106
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
23
Investments in associates and joint ventures (continued)
Impairment of investments in associates
In line with the Group’s accounting policies, after application
of the equity method of accounting, the Group’s investments
in associates were assessed for impairment at the reporting
date. The Group performs an assessment to determine
whether there is any objective evidence that its investments
in associates is impaired. The main indicators of impairment
23.1 Details of ownership interest
are significant financial difficulty of the investee, significant
changes in the technological, market, economic or legal
environment and a significant or prolonged decline in fair
value below cost.
Further information on the Group’s material investments in
associates is provided below.
Material associates
Place of incorporation
Principal activity
BE ES I LLC
United States of America
Specialty finance
BE OLD I LLC
United States of America
Specialty finance
MA Kincare Fund
Australia
Credit funds management
Redcape Hotel Group
Australia
Owner and operator of hotels
Proportion of ownership interest
and voting power held by the Group
2022
49.6%
49.9%
-
10.8%
2021
49.7%
50.0%
25.5%
14.9%
23.2 Reconciliation of movements in carrying values of investments in associates
$’000
BE ES I
LLC
BE OLD I
LLC
MA Kincare
Fund
Redcape
Hotel Group
Other
associates
Total
Opening balance as at 1 January 2021
-
-
9,037
58,232
8,020
75,289
Acquisition
Disposal and capital returns
Share of profit/(loss)
Share of other comprehensive income
Less dividends/distributions received
19,142
2,068
-
22,568
-
43,778
-
388
-
(130)
-
-
-
-
(1,434)
(6,500)
1,275
1,841
(377)
(317)
(8,311)
3,187
-
12,232
-
12,232
(1,283)
(4,034)
(335)
(5,782)
Closing balance as at 31 December 2021
19,400
2,068
7,595
84,339
6,991
120,393
1,609
5,659
620
-
2,859
10,747
-
(8,827)
(23,313)
(4,680)
(36,820)
Acquisition
Disposal and capital returns
Share of profit/(loss)
Share of other comprehensive income
Less dividends/distributions received
Foreign currency translation reserve
-
2,422
-
(2,205)
1,189
310
-
(103)
340
Closing balance as at 31 December 2022
22,415
8,274
747
-
(731)
(1,359)
1,389
2,204
-
2,204
(135)
(5,413)
(127)
(7,983)
-
-
-
127
1,656
57,086
3,811
91,586
The Group also has interests in a number of individually immaterial associates. The unrecognised share of losses for investments
in associates that have a nil carrying value for the year ended 31 December 2022 is $2.2 million (2021: $1.8 million).
107
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
23
Investments in associates and joint ventures (continued)
23.3 Summarised financial information for the Group’s material associates
BE ES I
LLC
BE OLD I
LLC
MA Kincare
Fund
Redcape
Hotel Group
Other
associates
$’000
31 December 2022
Assets and liabilities
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
3,511
4,986
39,392
38,809
(2,487)
(670)
(420)
(26,978)
39,996
16,147
The above net assets include the following:
Cash and cash equivalents
2,678
1,534
Revenue, expenses and results
Revenue
Profit/(loss) for the year
Other comprehensive income for the year
Total comprehensive income for the year
31 December 2021
Assets and liabilities
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
The above net assets include the following:
Cash and cash equivalents
Revenue, expenses and results
Revenue
Profit/(loss) for the year
Other comprehensive income for the year
Total comprehensive income for the year
5,302
5,030
-
5,030
3,329
32,404
(3,213)
-
32,520
2,630
1,389
1,315
-
1,315
4,094
700
-
700
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
33,354
174,341
1,276,318
841,126
(96,199)
(1,081,426)
(685,383)
(97)
528,090
(66,056)
19,246
176,482
210,219
(4,748)
31,509
26,761
5,122
(3,181)
-
(3,181)
130
31,172
90,387
31,380
1,276,554
677,227
(1,702)
(80,343)
(830,647)
-
(668,624)
(9,099)
29,808
558,759
(72,132)
19
18,802
69,988
3,949
3,909
145,068
109,984
1,332
(25,662)
-
82,074
-
3,909
83,406
(25,662)
The following information outlines the level of control the
Group has over its material associates and the resultant
accounting treatment.
Details of investment in BE ES I LLC and BE OLD I LLC
At 31 December 2022, the Group owns 49.6% of BE ES I LLC
and 49.9% of BE OLD I LLC. Both entities are special purpose
vehicles established for the purposes of facilitating credit
investments in North America. The Group is considered to
have significant influence over these investments as a result of
its participation in the financial and operating policy decisions.
108
Details of investment in Redcape Hotel Group
At 31 December 2022, the Group has a 10.8% direct equity
investment in Redcape Hotel Group (Redcape) and funds
managed by the Group own a further 28.2% of Redcape.
During the year, the Group sold 19.5 million of units in Redcape
for $30.1 million. The Group earns trustee, asset manager,
performance and hotel operator fees from Redcape, as well
as investment returns on its direct investment. The Group
is considered to have significant influence over Redcape as
a result of participating in the financial and operating policy
decisions of Redcape through its roles as responsible entity,
asset manager and hotel operator.
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
23
Investments in associates and joint ventures (continued)
23.3 Summarised financial information for the Group’s material associates (continued)
Details of investment in Redcape Hotel Group (continued)
Redcape owns or operates 35 hotels in New South Wales and
Queensland. Redcape assessed their assets for impairment
at 31 December 2022, including considering the impact of
COVID-19 on their operations. The Directors are satisfied that
the impairment testing performed by Redcape is reasonable,
and that no additional impairment is required for the Group’s
investment in Redcape.
24
Intangible assets
Redcape has recognised a decrease in its net assets at 31
December 2022, of which the Group’s share of the decrease
has been equity accounted.
Intangible assets
Customer
relationships,
brand names
and trademarks
$’000
Management
rights and
agreements
$’000
Goodwill
$’000
Software
$’000
Total
$’000
31 December 2022
Cost
Balance at 1 January 2022
Additions through business combinations (note 37)
Additions
14,010
114,159
-
-
22,939
4,182
41,131
44,000
-
-
-
2,300
160,459
4,017
4,017
Balance at 31 December 2022
128,169
44,000
22,939
10,499
205,607
Amortisation and impairment losses
Balance at 1 January 2022
Amortisation expense for the year
Balance at 31 December 2022
-
-
-
-
(3,405)
(11,318)
(2,716)
(1,918)
(1,232)
(13,236)
(7,353)
(3,405)
(14,034)
(3,150)
(20,589)
Carrying amount at 31 December 2022
128,169
40,595
8,905
7,349
185,018
31 December 2021
Cost
Balance at 1 January 2021
Additions
Additions through business combinations
Balance at 31 December 2021
Amortisation and impairment losses
Balance at 1 January 2021
Amortisation expense for year
Balance at 31 December 2021
9,827
-
4,183
14,010
-
-
-
Carrying amount at 31 December 2021
14,010
-
-
-
-
-
-
-
-
16,263
3,595
29,685
-
6,676
587
-
22,939
4,182
587
10,859
41,131
(7,077)
(4,241)
(989)
(929)
(8,066)
(5,170)
(11,318)
(1,918)
(13,236)
11,621
2,264
27,895
109
MA Financial Group | 2022 Annual Report
Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
24
Intangible assets (continued)
During the year, as a result of the acquisitions of Finsure and
MA Money, goodwill of $114.2 million, customer relationships
of $27.0 million, brand names of $17.0 million and software
of $2.3 million was recognised. Refer to note 37 for further
details of the acquisitions.
Included in the deferred tax liability of the Group as at 31
December 2022 is an amount of $13.9 million (31 Dec 2021:
$1.8 million) relating to the intangible assets recognised from
the acquisition of subsidiaries.
Impairment assessment of intangible assets
The Group assesses whether goodwill is impaired at least
annually. For the purposes of impairment testing, goodwill is
allocated to the Group’s cash-generating units (CGUs). The
CGUs align with the Group’s operating segments as disclosed
in note 3 and are consistent with the comparative period. The
recoverable amount of each CGU is determined based on
the value in use calculations that utilise five-year cash flow
projections plus a terminal value based on the financial
The following CGUs represent the carrying amounts of goodwill:
forecasts approved by management. In determining these
cash flow projections, management considers:
• current and expected performance of each CGU;
• Board and management-approved budgets and strategic
plans; and
• changes in Australian and international economic and
market environments.
The relevant assumptions in deriving the value in use of the
CGUs are as follows:
•
the budgeted net profit before tax for each CGU for each
year within the cash flow projection period;
•
the pre-tax discount rate; and
• growth rates, which are consistent with long term trends in
the industry segments in which the CGUs operate.
No impairment charge was recognised during the year as the
recoverable amount of each CGU was determined to be in
excess of the carrying amount.
31 Dec 2022
31 Dec 2021
31 Dec 2022
31 Dec 2021
31 Dec 2022
31 Dec 2021
Terminal growth rates
Pre-tax discount rates
$’000
$’000
Asset management
Lending & Technology
CA&E
Total
11.5%
12.0%
10.0%
11.5%
-
10.0%
12.5%
13.0%
11.0%
12.5%
-
11.0%
12,684
114,159
1,326
128,169
12,684
-
1,326
14,010
Sensitivity analysis
Amortisation of intangible assets
Management considered, for all CGUs, that reasonable
changes in key assumptions, such as an increase in the
discount rate by 2.5% and a decrease in the growth rate by
1%, leaving all other assumptions constant, would not result in
the carrying amount exceeding the value in use for any of the
CGUs. The sensitivity analysis was done on the basis that a
reasonably possible change in each key assumption would not
have a consequential impact on other assumptions.
Goodwill is allocated to cash-generating units (CGUs) and is
not amortised. For intangible assets which are amortised, the
useful lives for the current and comparative periods are as
follows:
• Management rights: the forecast profile of the profit
generated
• Customer relationships and property management
agreements: the expected life of the contracts
• Software and trademarks: 3 to 10 years
• Brand names: indefinite useful life
Useful lives and residual values are reviewed at each financial
year end and adjusted if appropriate.
110
MA Financial Group | 2022 Annual Report
Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
Trade and other payables
25
Current
Accounts payable and accrued expenses
Accrued commissions
Other liabilities
GST payable
Total trade and other payables – current
Non-current
Other liabilities
Total trade and other payables – non-current
Total trade and other payables
Borrowings
26
Current
Unsecured notes
Unsecured notes – limited recourse
Mortgage trust notes
Total borrowings – current
Non-current
Unsecured notes
Unsecured notes – limited recourse
Fund preferred units
Total borrowings – non-current
Total borrowings
31 Dec 2022
Consolidated
$’000
31 Dec 2021
Consolidated
$’000
26,187
37,541
11,674
2,163
77,565
240
240
77,805
-
30,030
216,475
246,505
65,000
60,000
568,584
693,584
940,089
21,053
2,824
8,723
1,378
33,978
229
229
34,207
25,000
30,030
-
55,030
40,000
25,000
286,290
351,290
406,320
During the year, the Group entered into a $40.0 million working capital facility with a major domestic bank. At 31 December 2022,
the undrawn facility amount was $40.0 million.
Information about the Group’s exposure to interest rate and liquidity risk is included in notes 29.3.2 and 29.5.
(a)
Unsecured notes programme
Except for the obligation to pay periodic interest and repay the principal, the terms of the unsecured notes, including the
limited recourse notes, do not include any material undertakings or obligations which, if not complied with, would result in an
acceleration of the amount owing.
(i)
Unsecured notes
Classification
Issue
Maturity date
Amount ($m)
Interest rate per annum
Issue costs ($'000)
MA Bond IV
Non-current
2020
Sep 2024
40.0
5.85%
9.0
MA Bond VI
Non-current
2022
Aug 2027
25.0
5.75%
9.3
During the year the Group raised $25.0 million through the issue of a new unsecured note (MA Bond VI). The proceeds were used
to repay MA Bond II that matured in September 2022.
111
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
26
Borrowings (continued)
(ii)
Unsecured notes – limited recourse
Classification
Issue
Maturity date
Amount ($m)
Interest rate per annum
Issue costs ($'000)
MACI Bond
Current
2019
May 2024
30.0
MACPI Bond
Non-current
2021
Dec 2027
60.0
RBA + 4.35%
RBA + 4.00%
10.5
9.4
The limited recourse notes have been designed and issued
principally for investors under the Significant Investor Visa (SIV)
programme. The notes constitute unsecured, unsubordinated
obligations of issuing special purpose Group entities (issuing
entities). The issuing entities invest the proceeds of the note
issuances in a diversified portfolio of financial assets. The
notes have sole recourse to the assets of the relevant issuing
entities and are not guaranteed by the Group.
MACI Bond
The MACI Bond has a five-year stated maturity, however
can be redeemed at the option of the note holders subject
to a minimum 12 month holding period following issue. This
redemption feature was designed to provide for the individual
requirements of the SIV investors to align with the timing of
when the SIV investors receive their permanent residency
status. The interest rate is calculated at a margin of 4.35%
over the RBA cash rate and resets in February and August of
each year. No redemptions of the MACI Bond has occurred
during the year ended 31 December 2022 (2021: nil).
MACPI Bond
The MACPI Bond has a six-year maturity with the interest
rate calculated at a margin of 4.00% over the RBA cash rate
and resets in February and August of each year. An additional
$35.0 million was raised during the year (2021: $25.0 million).
The MACPI Bond facilitates investments for note investors
with assets ringfenced for the benefit of those investors.
(b)
Fund preferred units
MA Priority Income Fund (PIF) and MA USD Priority
Income Fund (USD PIF)
The Group manages the PIF and USD PIF. The Funds
provide investors with exposure to a diversified portfolio of
credit investments via an investment in Class A Units (Fund
Preferred Units) in MA Master Credit Trust and MA USD
Master Credit Trust (MCTs). As a co-investment, the Group
holds Class B Units in the respective MCTs. The MCTs are
consolidated entities of the Group.
Fund Preferred Units receive a preferential distribution from
the realised profits of the MCTs. The Class B Units held by the
Group receive any excess distributable profits after paying
the preferential distribution on the Fund Preferred Units and
any MCT expenses. The Class B Units held by the Group
also provides investors with a “first loss” capital buffer which
affords the Fund Preferred Units preferential treatment on
distribution and wind-up of the MCTs. The Group’s maximum
economic exposure is limited to the value of the Class B Unit.
Redemptions of the Fund Preferred Units are at the discretion
of the MCTs trustee and require the consent of the Group.
Therefore the units are treated as non-current liabilities as
the Group has an unconditional right to defer settlement for at
least 12 months after the end of the reporting period.
Classification
Fund Preferred Units:
31 December 2022 ($m)
31 December 2021 ($m)
PIF
Non-current
544.8
279.8
USD PIF
Non-current
23.8
6.5
Fund Preferred Units preferential distribution
RBA cash rate + 4.00%
SOFR1 + 3.50%
Class B Units "first loss" co-investment:
31 December 2022 ($m)
31 December 2021 ($m)
1 Secured Overnight Financing Rate
10%
54.5
28.0
10% reducing to 5%
2.4
2.0
112
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
26
Borrowings (continued)
(c)
Mortgage trust notes
Mortgage trust notes were acquired as part of the Group’s
acquisition of MA Money during the year. MA Money originates
loans to customers across Australia which are funded via
mortgage trust notes in warehouse trusts. The notes are
collaterised by residential mortgages, advances and cash
residing in the warehouse trusts. If the facilities under which
the mortgage trust notes are issued are not renewed, or
should there be a default under the existing terms and
conditions, the funders of the mortgage trust notes will not
have a right of recourse against the Group.
As at 31 December 2022, the unutilised mortgage trust note
facilities is $208.5 million.
31 Dec 2022
Consolidated
$’000
31 Dec 2021
Consolidated
$’000
27
Lease liabilities
Current
Lease liabilities
Total lease liabilities – current
Non-current
Lease liabilities
Total lease liabilities – non-current
Total lease liabilities
27.1 Movement in lease liabilities
Opening balance at the beginning of the year
Interest on lease liabilities
Payment of lease liabilities
Additions through business combinations (note 37)
Lease modification
Additions1
Closing balance at the end of the year
1 Additions in the current year is made up of the new office lease in Sydney.
27.2
Lease liabilities maturity analysis – contractual undiscounted cashflows
Less than one year
One to five years
More than five years
Total undiscounted lease liabilities at the end of the year
6,219
6,219
58,733
58,733
64,952
10,285
3,513
(8,895)
1,633
(1,578)
59,994
64,952
10,266
46,563
27,384
84,213
6,598
6,598
3,687
3,687
10,285
5,874
250
(3,184)
-
-
7,345
10,285
2,236
7,540
3,452
13,228
113
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
28
Provisions
Current
Salaries and wages
Provision for annual leave
Provision for long service leave
Total provisions – current
Non-current
Provision for long service leave
Total provisions – non-current
Total provisions
29
Financial instruments
29.1
Financial risk management objectives
31 Dec 2022
Consolidated
$’000
31 Dec 2021
Consolidated
$’000
33,817
7,661
3,527
45,005
1,624
1,624
46,629
34,257
5,790
2,414
42,461
1,239
1,239
43,700
The Group’s activities expose it to a variety of financial and
non-financial risks. Financial risks include credit risk, liquidity
risk and market risks (the latter of which includes currency
risk, interest rate risk and equity price risk). The Group’s
overall risk management framework operates to identify and
assess all the risks to which the Group is exposed, including
financial risks, with the aim of maintaining the Group’s
exposure within the parameters set out in its Risk Appetite
Statement.
The Group’s overall risk management framework is
summarised in its Corporate Governance Statement, available
on the Group’s website, and in the Sustainability Report.
These documents outline the role of the Board, the Audit and
Risk Committee, the Group’s Risk Appetite Statement and the
Risk Management Statement which describes the approach
to risk management – including responsibilities, governance,
methods for risk identification treatment and reporting, and
coordination across the Group.
The practical management of financial risks typically takes
place within the Group’s business units, led by senior
managers, with oversight and support from the Group’s
Finance function. This is carried out with reference to various
operational policies and procedures.
Financial assets and liabilities are accounted for in accordance
with AASB 9 and comprises of the following categories.
31 Dec 2022
Consolidated
$’000
31 Dec 2021
Consolidated
$’000
Financial assets
Cash and cash equivalents
Restricted cash
Receivables
Loans receivable
Listed and unlisted equity securities
Investments in associates and joint ventures
Deposits
Total financial assets
Financial liabilities
Trade and other payables
Other financial liabilities
Unsecured notes
Mortgage trust notes
Fund preferred units
Lease liabilities
Total financial liabilities
114
144,589
700
88,483
855,482
196,312
91,586
5,027
1,382,179
77,805
116,419
155,030
216,475
568,584
64,952
1,199,265
242,861
6,700
36,505
342,449
69,839
120,393
3,537
822,284
34,207
-
120,030
-
286,290
10,285
450,812
MA Financial Group | 2022 Annual Report
Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
29
Financial instruments (continued)
29.2 Capital management
The capital structure of the Group consists of net cash (cash
and bank balances offset by the unsecured notes detailed in
note 26) and equity (comprising contributed equity, retained
earnings and reserves).
The Group manages its capital with the aim of ensuring that
the Group will be able to continue as a going concern while
maximising the return to shareholders through the optimisation
of the debt and equity balance. The Group’s overall capital
management strategy remains unchanged from 2021.
The Group’s subsidiaries have satisfied all externally imposed
capital requirements throughout the financial year, as per the
requirements set out below:
• MA Moelis Australia Securities Pty Ltd, is an ASX market
participant and therefore has an externally imposed capital
requirement.
• Certain other subsidiaries of the Company hold an
Australian Financial Services Licence and therefore have
externally imposed separate capital requirements.
• MA Money has a contractual obligation to hold a minimum
amount of capital at all times.
During the year, the Group entered into a $40.0 million
revolving working capital facility with a major domestic bank.
The facility was undrawn at 31 December 2022. In accordance
with the terms of the Group’s corporate debt facility, the
Group is required to comply with certain covenants. During
the year ended to 31 December 2022, the Group was
compliant with these covenants.
The Group’s borrowings comprise unsecured notes of $155.0
million (2021: $120.0 million), mortgage trust notes $216.5
million (2021: nil) and fund preferred units $568.6 million
(2021: $286.3 million).
The maturity dates of the unsecured notes are shown in the
table below. Except for the obligation to pay periodic interest
and repay the principal at the end of the term, the terms of
the unsecured notes do not include any material undertakings
or obligations which, if not complied with, would result in
an acceleration of the amount owing. The MACI Bond note
can be redeemed at the option of noteholders subject to a
minimum 12 month holding period and are treated as current
borrowings. The MACPI Bond cannot be redeemed at the
option of the note holders and must be held to maturity.
Notes
Unsecured notes
Current
MA Bond II
Non-current
MA Bond IV
MA Bond VI
Unsecured notes – limited recourse
Current
MACI Bond
Non-current
MACPI Bond
Total unsecured notes
Maturity date
31 Dec 2022
$’000
31 Dec 2021
$’000
14 September 2022
-
25,000
30 September 2024
8 August 2027
40,000
25,000
40,000
-
16 May 2024
30,030
30,030
1 December 2027
60,000
155,030
25,000
120,030
115
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
29
Financial instruments (continued)
29.3 Market risk
29.3.1 Currency risk
The Group’s investment of capital in foreign operations, for
example, subsidiaries or associates with functional currencies
other than the Australian dollar – exposes the Group to
the risk of changes in foreign exchange rates. Variations in
the value of these foreign operations arising as a result of
exchange differences are reflected in the foreign currency
translation reserve in equity.
The Group manages its exposure to income denominated in
foreign currency when foreign currency income is recognised
or received in cash. Foreign currency debtors and foreign
currency bank balances are periodically reviewed relative
to the Group’s balance sheet and liquidity requirements.
Revenue received in foreign currency may be retained in
those currencies, in order to meet future foreign currency
denominated expenses, and exposes the Group to unrealised
foreign currency gains or losses.
The net carrying amounts of the Group’s foreign currency denominated financial assets and liabilities at the end of the year are
set out below:
Assets
Liabilities
31 Dec 2022
$’000
31 Dec 2021
$’000
31 Dec 2022
$’000
31 Dec 2021
$’000
37,241
218
3,906
1,216
42,581
4,450
242
882
670
6,244
36,117
7,405
43
43
109
34
80
66
36,312
7,585
Currency
United States Dollar
Chinese Yuan
Great British Pound
Hong Kong Dollar
Total
Foreign currency sensitivity analysis
The Group’s exposure to foreign exchange risk is measured using sensitivity analysis. The following table summarises the
sensitivity on the Group’s profit before tax from a reasonably possible change in foreign exchange rates against the Australian
dollar at the year end. The sensitivity is assessed against the foreign currencies that have the most impact on the Group.
Sensitivity
+/-10%
+/-10%
+/-10%
+/-10%
31 Dec 2022
$’000
+/-
31 Dec 2021
$’000
+/-
112/(112)
18/(18)
386/(386)
111/(111)
627/(627)
(296)/296
21/(21)
80/(80)
60/(60)
(135)/135
Currency
United States Dollar
Chinese Yuan
Great British Pound
Hong Kong Dollar
Total
116
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
29
Financial instruments (continued)
29.3 Market risk (continued)
29.3.2
Interest rate risk
Interest rate risk is the risk to the Group’s earnings and capital from changes in market interest rates. The financial instruments
held that are predominately impacted by interest rate risk consists of cash, loans receivable and borrowings. The Group’s
exposure to interest rate risk for the financial assets and liabilities is set out as follows:
Floating
interest rate
$’000
Fixed
interest rate
$’000
Non-interest
bearing
$’000
31 December 2022
Financial assets
Cash and cash equivalents
Restricted cash
Receivables
Loans receivable
Listed and unlisted equity securities
Investments in associates and joint
ventures
Deposits
144,589
700
-
-
-
-
698,259
155,049
-
-
-
-
-
-
Total financial assets
843,548
155,049
Financial liabilities
Trade and other payables
Other financial liabilities
Unsecured notes
Mortgage trust notes
Fund preferred units
Lease liabilities
Total financial liabilities
31 December 2021
Financial assets
Cash and cash equivalents
Restricted cash
Receivables
Loans receivable
Listed and unlisted equity securities
Investments in associates and joint
ventures
Deposits
Total financial assets
Financial liabilities
Trade and other payables
Unsecured notes
Fund preferred units
Lease liabilities
Total financial liabilities
-
-
90,030
216,475
568,584
-
875,089
242,861
6,700
-
212,279
-
-
-
-
-
65,000
-
-
64,952
129,952
-
-
-
126,895
-
-
-
461,840
126,895
-
55,030
286,290
-
341,320
-
65,000
-
10,285
75,285
Total
$’000
144,589
700
88,483
855,482
196,312
91,586
5,027
1,382,179
77,805
116,419
155,030
216,475
568,584
64,952
-
-
88,483
2,174
196,312
91,586
5,027
383,582
77,805
116,419
-
-
-
-
194,224
1,199,265
-
-
36,505
3,275
69,839
120,393
3,537
233,549
34,207
-
-
-
34,207
242,861
6,700
36,505
342,449
69,839
120,393
3,537
822,284
34,207
120,030
286,290
10,285
450,812
117
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
29
Financial instruments (continued)
29.3 Market risk (continued)
29.3.2
Interest rate risk (continued)
Interest rate sensitivity analysis
The table below demonstrates the impact of a 1% change in interest rates, with all other variables held constant, on the profit for
the year.
Impact on profit before tax for the year
+/-1%
(315)/315
1,357/(1,357)
Change in
interest rates
31 Dec 2022
$’000
+/-
31 Dec 2021
$’000
+/-
29.3.3 Equity price risk
Equity price risk is the risk that the fair value of a financial instrument will fluctuate as a result of changes in market prices
(other than those arising from interest rate or currency risk). The Group is exposed to equity price risk on its holdings in equity
investments.
The table below demonstrates the sensitivity of the Group’s profit before tax and other comprehensive income for the year to a
reasonably possible change in market prices:
Impact on profit before tax for the year
Impact on other comprehensive income for the year
Change in
market prices
+/-5%
+/-5%
31 Dec 2022
$’000
+/-
31 Dec 2021
$’000
+/-
806/(806)
1,230/(1,230)
1,267/(1,267)
2,262/(2,262)
The methods and assumptions used in preparing the sensitivity analysis above have not changed significantly from the prior year.
29.4 Credit risk management
Credit risk refers to the risk that a counterparty to a financial
instrument will fail to meet its contractual obligations resulting
in financial loss to the Group. The Group’s primary credit risk
exposures relate to its lending activities.
The Group mitigates its credit risk by ensuring cash deposits
are held with high credit quality financial institutions. The
Group assesses the creditworthiness of counterparties and
obtains sufficient collateral, where appropriate, as a means
of mitigating the risk of financial loss from defaults. For
all commercial loans receivable, the Group only transacts
with counterparties that the Group considers to have an
acceptable level of credit risk through a shadow rating
process using publicly available financial information. The
Group’s exposure and the shadow credit ratings of its
counterparties are continuously monitored.
Maximum exposure to credit risk
The carrying amount of the Group’s financial assets and
contract assets represents the maximum credit exposure. The
table below shows the Group’s maximum exposure to credit
risk at the reporting date.
Note
13
19
14
15
18
20
23
17
31 Dec 2022
Consolidated
$’000
31 Dec 2021
Consolidated
$’000
144,589
700
88,483
855,482
607,232
196,312
91,586
5,027
1,989,411
242,861
6,700
36,505
342,449
-
69,839
120,393
3,537
822,284
Cash and cash equivalents
Restricted cash
Receivables
Loans receivable
Contract assets
Listed and unlisted equity securities
Investments in associates and joint ventures
Deposits
Total
118
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
29
Financial instruments (continued)
29.4 Credit risk management (continued)
Receivables
The Group’s exposure to credit risk is influenced mainly by the
individual characteristics of each customer. The Group does
not require collateral in respect of trade and other receivables.
At each reporting period, the Group reviews the recoverable
amount of each receivable on an individual basis to ensure that
adequate loss allowance is made for irrecoverable amounts.
Contract assets
The Group’s contract assets relate mainly to high credit
quality financial institutions. The Group bears the risk of non-
payment of future trail commissions by lenders should they
not maintain solvency. However, should a lender not meet its
obligations as a debtor then the Group is under no obligation
to pay out any future trail commissions to brokers.
Loans receivable
The Group provides commercial loans which are secured by
charges over the assets of the borrowers.
Credit risk analysis is focused on ensuring that risks have
been fully identified and that the downside risk is properly
understood and acceptable. Prior to providing lending
facilities to counterparties, each loan is subjected to approval
from the relevant Fund or Group, which assess the credit risks
of the borrower and determines whether the lending is aligned
with the Group’s lending strategy. The detailed due diligence
performed on the counterparty includes an assessment of:
• borrower’s experience in the industry;
• borrower’s credit policy to ascertain their underwriting
practices;
•
internal shadow rating calculations using public market
comparable transactions and financial information of
the borrower;
• historical loan performance, nature of risk and yield;
• alignment to the Group’s risk appetite; and
• securitisation of assets and undertakings.
To mitigate the Group’s exposure to loan defaults,
securitisation and collateral are negotiated and documented
in executed loan agreements to protect the interests of
the Group. Monthly monitoring of all borrowers’ financial
performance (including arrears balances, ageing of arrears
and losses incurred) is performed and any exceptions
reported to senior management. Senior management use the
information collated to review individual loan exposures, make
decisions on reducing commitments, and where required
refinancing options to refinance out of certain exposures no
longer aligned to the Group’s risk appetite.
The Group completes an assessment of whether there is a
significant increase in credit risk when an amount becomes
more than 90 days past due on a case by case basis due to
the fact that:
•
the majority of the counterparties for commercial loans
made are through the Group’s managed funds, and
therefore the credit risk is lower compared to external
counterparties; and
• historically there have been no defaults from loans
described above despite being over 90 days with amounts
being repaid in full within a reasonable period.
Residential mortgages
The group manages credit risk arising from residential loans by
obtaining security over residential mortgage property for each
loan. In monitoring the credit risk, loans are grouped according
to their credit characteristics using credit risk classifications.
This includes the use of the Loan to Value Ratio (LVR) and days
in arrears to assess its exposure to credit risk.
Under the Group’s monitoring procedures, a significant increase
in credit risk is identified before the exposure has defaulted at
the latest when the exposure becomes 30 days past due.
119
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
29
Financial instruments (continued)
29.4 Credit risk management (continued)
The table below provides an analysis of the gross carrying amount of loans receivable by past due status that are over 30 days
past due.
Gross carrying amount
Consolidated
$’000
Loss allowance
Consolidated
$’000
Credit
impaired
31 December 2022
Current (not past due)
1 – 30 days past due
31 – 60 days past due
61 – 90 days past due
More than 90 days past due
Total loans receivable
31 December 2021
Current (not past due)
Total loans receivable
839,980
12,232
4,914
60
3,008
(4,294)
(37)
(330)
-
(51)
860,194
(4,712)
344,881
344,881
(2,432)
(2,432)
The table below summarises the loans receivable and the loss allowance by stage.
31 December 2022
Loans receivable
Loss allowance
Total
31 December 2021
Loans receivable
Loss allowance
Total
Stage I
$’000
Lifetime ECL
Stage II
$’000
Stage III
$’000
852,212
(4,331)
847,881
344,881
(2,432)
342,449
4,974
(330)
4,644
-
-
-
3,008
(51)
2,957
-
-
-
No
No
No
No
Yes
No
Total
$’000
860,194
(4,712)
855,482
344,881
(2,432)
342,449
120
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
29
Financial instruments (continued)
29.5 Liquidity management
Liquidity risk is the risk that financial obligations of the
Group cannot be met as and when they fall due without
incurring significant costs. The Group manages liquidity risk
by monitoring forecast cash requirements, both short and
longer term, against its current liquid assets. Consideration is
given to the cash flow requirements over the next 12 months,
regulatory obligations such as Australian Financial Services
Licence requirements and financial covenants attached to any
relevant contractual obligations of the Group.
The following table details the Group’s remaining contractual
maturity for its non-derivative financial assets and financial
liabilities. The table reflects the undiscounted cash flows of
financial assets and financial liabilities based on the earliest
date on which the Group can be required to pay. Mortgage
trust notes issued by the Group’s consolidated mortgage
warehouse trusts are excluded in the table as, under such
arrangements, the note holder recourse is limited to the assets
of the relevant mortgage warehouse trust to which the liability
relates and the repayment profile of the mortgage trust notes
is matched to the repayments collected from the loan assets.
Financial liabilities
$’000
Less than
1 month
1–3
months
3–12
months
1–5
years
5+
years
Total
31 December 2022
Trade and other payables
Other financial liabilities
Unsecured notes
Fund preferred units
Lease liabilities
73,226
4,339
-
-
-
-
-
-
-
116,419
240
-
-
-
155,030
568,584
-
-
-
-
77,805
116,419
155,030
568,584
541
1,256
4,422
33,556
25,177
64,952
Total financial liabilities
73,767
5,595
120,841
757,410
25,177
982,790
31 December 2021
Trade and other payables
31,831
2,147
-
229
-
34,207
Unsecured notes
Fund preferred units
Lease liabilities
-
-
-
-
55,030
40,000
25,000
120,030
-
286,290
-
286,290
325
316
868
7,181
1,595
10,285
Total financial liabilities
32,156
2,463
55,898
333,700
26,595
450,812
The amounts included above for variable interest rate instruments for both non-derivative financial assets and liabilities are subject to
change if changes in variable interest rates differ to those estimates of interest rates determined at the end of the reporting period.
29.6 Fair value of financial assets and financial liabilities
Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between
market participants at the measurement date, regardless of
whether that price is directly observable or estimated using
another valuation technique. In estimating the fair value
of an asset or liability, the Group takes into account the
characteristics of the asset or liability if market participants
would take those characteristics into account when pricing
the asset or liability at the measurement date. Fair value for
measurement and/or disclosure purposes is determined
on such a basis except for measurements that have some
similarities to fair value but are not fair value, such as value in
use in AASB 136 Impairment of Assets.
In addition, for financial reporting purposes, fair value
measurements are categorised into level 1, 2 or 3 based on the
degree to which the inputs to the fair value measurements are
observable and the significance of the inputs to the fair value
measurement in its entirety, which are described as follows:
• Level 1 inputs are quoted prices (unadjusted) in active
markets for identical assets or liabilities that the entity can
access at the measurement date;
• Level 2 inputs are inputs, other than quoted prices
included within Level 1, that are observable for the asset or
liability, either directly or indirectly; and
• Level 3 inputs are unobservable inputs for the asset or
liability.
121
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
29
Financial instruments (continued)
29.6 Fair value of financial assets and financial liabilities (continued)
Valuation processes
The Group has an established control framework with respect
to the measurement of fair values. This includes a valuation
function that has overall responsibility for overseeing all
significant fair value measurements, including level 3 fair
values, and reports directly to the Chief Financial Officer. The
valuation function regularly reviews significant unobservable
inputs and valuation adjustments. Significant valuation issues
are reported to the Group’s Audit and Risk Committee.
Some of the Group’s financial assets and financial liabilities
are measured at fair value at the end of each reporting period.
The following table summarises the levels of the fair value
hierarchy and provides information about how the fair values of
these financial assets and financial liabilities are determined (in
particular, the valuation techniques and inputs used):
Mandatorily
at FVTPL
FVTOCI-equity
instruments
Total
Level 1
(a)
Level 2
(b)
Level 3
(c)
Total
31 December 2022
Loans receivable
Non-equity securities
Equity securities
Consolidated managed fund
investments
Financial assets measured
at fair value
31 December 2021
Loans receivable
Non-equity securities
Equity securities
Financial assets measured
at fair value
6,223
15,479
640
-
-
6,223
15,479
-
-
-
6,223
6,223
550
14,929
15,479
25,333
25,973
528
25,445
-
-
25,973
154,860
-
154,860
154,860
-
154,860
22,342
180,193
202,535
528
180,855
21,152
202,535
5,482
23,992
-
-
5,482
23,992
-
-
-
5,482
5,482
315
23,677
23,992
605
45,242
45,847
1,004
44,843
-
45,847
30,079
45,242
75,321
1,004
45,158
29,159
75,321
Valuation techniques and key inputs
(a) Quoted bid prices in an active market.
(b) Inputs other than quoted prices, that are observable,
such as unit prices or based on recent transactions.
(c) Short term held assets or valued using a discounted cash
flow valuation technique with inputs that are not based
on observable market data (unobservable inputs) but are
based on assumptions by reference to historical company
and industry experience.
Level 3 assets consist of loans receivable classified as FVTPL
and unlisted investments where a best estimate valuation
approach is used. Loan valuations are sensitive to changes
in credit spreads and discount rates in determining their
fair value. Changes in either of these inputs would have an
impact on the net profit of the Group. The valuation of unlisted
investments is sensitive to variations in unobservable inputs
such as cash flow projections and discount rates. An increase
or a decrease to the inputs into the valuations would result in
an increase or a decrease the net profit of the Group.
The carrying amount of the Group’s financial assets (cash and
cash equivalents, restricted cash, trade receivables, loans
receivable at amortised cost, receivables and contract assets)
and financial liabilities (unsecured notes, fund preferred
units, trade payables and contract liabilities) is assumed to
approximate their fair value at the current and prior reporting
date and are not presented in the table above.
The Group reviewed its valuation techniques and key inputs
for its level 2 and level 3 assets on the estimated fair values,
including a consideration of the ongoing impact of COVID-19.
The review considered the most recent independent
valuations, quoted unit prices of recent equity transactions,
expected duration the assets are likely to be held for and
the macroeconomic outlook for the industries each asset
operates in. As a result of the review, no significant change
in the fair values of the assets was identified and the Group
considers the fair values adopted to be appropriate at the end
of the year.
122
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
29
Financial instruments (continued)
29.6 Fair value of financial assets and financial liabilities (continued)
Reconciliation of balances in level 3 of the fair value hierarchy
During the period there were no transfers between level 1, level 2 and level 3 fair value hierarchies. The following table
summarises the movements in level 3 of the fair value hierarchy for the financial instruments measured at fair value by the Group.
Balance at the beginning of the year
Purchase, issuances and other additions
Sales, settlements and repayments
Fair value movements recognised in profit or loss
Closing balance at the end of the year
31 Dec 2022
Consolidated
$’000
31 Dec 2021
Consolidated
$’000
29,159
3,053
(11,057)
(3)
21,152
10,752
25,172
(6,689)
(76)
29,159
Changing inputs to the level 3 valuations to reasonably possible alternative assumptions would not change significantly amounts
recognised in profit or loss, total assets, total liabilities or total equity. There are no equity investments classified at Level 3 (2021:
nil) and no gains and losses are reported in other comprehensive income.
30
Contributed equity
Ordinary share capital
Treasury shares
Total contributed equity
31 Dec 2022
Consolidated
$’000
31 Dec 2021
Consolidated
$’000
354,057
(78,970)
275,087
311,178
(56,188)
254,990
Contributed equity
31 Dec 2022
Number of shares
31 Dec 2021
Number of shares
31 Dec 2022
$’000
31 Dec 2021
$’000
Ordinary share capital
Balance at the beginning of the year
169,591,372
151,141,070
Ordinary shares issued
6,376,921
18,450,302
Share buy-back and cancellation
(894,360)
Equity transaction costs
Transfer from share-based payment reserve
on vesting of awards
-
-
-
-
-
311,178
44,188
(4,104)
(131)
2,926
Balance at the end of the year
175,073,933
169,591,372
354,057
Treasury shares
Balance at the beginning of the year
(13,066,811)
(8,606,109)
Ordinary shares issued for staff equity awards
(2,668,356)
(5,367,928)
On market purchases of shares
Off market purchases of shares
(1,496,448)
-
(577,006)
(512,858)
Shares allocated upon exercise of options
16,666
406,458
Shares allocated under employee share plans
1,868,944
1,590,632
(56,188)
(19,417)
(9,920)
-
103
6,452
188,620
123,756
-
(1,622)
424
311,178
(34,041)
(25,637)
(2,560)
(2,355)
1,219
7,186
Balance at the end of the year
(15,346,005)
(13,066,811)
(78,970)
(56,188)
Contributed equity at the end of the year
159,727,928
156,524,561
275,087
254,990
123
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
30
Contributed equity (continued)
The Company had authorised share capital amounting to
175,073,933 ordinary shares at 31 December 2022 (2021:
169,591,372). Ordinary shares entitle the holder to participate
in dividends and the proceeds on the winding up of the
Company in proportion to the number of and amounts paid
on the shares held. The fully paid ordinary shares have no
par value.
On a show of hands every member present at a meeting in
person or by proxy shall have one vote and upon a poll each
share shall have one vote.
Institutional Placement and Share Purchase Plan
On 15 December 2021, the Group announced an Institutional
Placement (Placement) to raise approximately $100.0 million
and a Share Purchase Plan (SPP) of $20.0 million. On the 21
December 2021, the Group issued 12,903,226 new shares
under the Placement at a share price of $7.75 per share.
On 28 January 2022, the Group closed its SPP and issued
2,581,679 new shares on 4 February 2022 at an issue price of
$7.75 per share.
Share buy-back
On 20 October 2022, the Group announced an on-market
share buy-back of up to $25.0 million. The program started
on 4 November 2022 and will end on 3 November 2023.
During the year, the Company purchased 894,360 shares at
an average price of $4.59 per share. Shares acquired under
the buy-back were subsequently cancelled resulting in a
reduction of the paid-up share capital of the Company.
Shares purchased on-market for the purpose of an employee
incentive scheme
During the year, the Company purchased 1,000,000 shares
on-market (2021: 577,006 shares) and 496,448 shares from
its employees during a staff trading window (2021: 512,858
shares) in order to meet the Group’s shared based payment
awards. The average price of all share purchases during the
year was $6.63 (2021: $4.51).
Shares issued under a Long Term Incentive Plan
During the year, the Company issued 2,668,356 (year ended
31 Dec 2021: 4,285,000) fully paid ordinary shares in order
for eligible employees of the Group to acquire loan funded
shares in the Company as part of the Long Term Incentive
(LTI) plan. The average issue price of the shares was $7.28
(year ended 31 Dec 2021: $4.38). The purchase price of the
shares acquired by eligible employees under the LTI was fully
funded by a limited recourse loan provided by the Company.
The shares are subject to vesting conditions, including
performance conditions and continuous employment, and
carry the same rights as other fully paid ordinary shares. Refer
to note 34.5 for further details.
31
Earnings per share
Basic earnings per share
Diluted earnings per share
31 Dec 2022
Consolidated
Cents
28.0
26.9
31 Dec 2021
Consolidated
Cents
22.3
21.2
The earnings used in the calculation of basic and diluted earnings per share is the Group’s profit after tax.
Weighted average number of ordinary shares (net of treasury shares) used in
calculating basic earnings per share
160,413,092
143,846,347
31 Dec 2022
31 Dec 2021
Potential equity shares1
Share options
Share rights
Restricted shares
Salary sacrifice shares
2,899,198
341,964
2,857,404
21,967
4,010,697
971,164
2,634,796
16,143
Total potential equity shares
6,120,533
7,632,800
Total weighted average number of ordinary shares (net of treasury shares) and
potential equity shares used in calculating diluted earnings per share
166,533,625
151,479,148
1 Refer to note 34 for detail of the terms and conditions of plans impacting diluted earnings per share.
124
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
32
Dividends
Details of the Group’s fully franked dividend payments:
2020 final dividend (10 cents per share paid 3 March 2021)
2021 interim dividend (5 cents per share paid on 22 September 2021)
2021 final dividend (12 cents per share paid on 11 March 2022)
2022 interim dividend (6 cents per share paid on 21 September 2022)
Dividends paid
Dividends not recognised at the end of the financial year
31 Dec 2022
Consolidated
$’000
31 Dec 2021
Consolidated
$’000
-
-
20,466
10,452
30,918
14,907
7,719
-
-
22,626
Since the end of the financial year, the Directors have resolved to pay a fully franked dividend of 14 cents per share, payable on
22 March 2023. The aggregate amount of the proposed dividend expected to be paid from retained profits, but not recognised
as a liability at the end of the year is $24.6 million. This amount has been estimated based on the number of shares eligible to
participate as at 31 December 2022.
Franking credits
Franking credits available for the subsequent financial year1
55,255
47,881
1 Calculated at a corporate tax rate of 30% (2021: 30%)
33
Reserves
Share-based payment reserve (refer to note 34)
Associates OCI reserve
FVTOCI reserve
Foreign currency translation reserve
Total reserves
Associates OCI reserve
Balance at the beginning of the year
Share of other comprehensive income of associates
Income tax relating to the revaluation of associates
Balance at the end of the year
FVTOCI reserve
Balance at the beginning of the year
Net (gain)/loss arising on revaluation of financial assets
Income tax relating to loss/(gain) arising on revaluation of financial assets
Balance at the end of the year
FCTR reserve
Balance at the beginning of the year
Foreign exchange movement on translation of foreign operations
Balance at the end of the year
31 Dec 2022
Consolidated
$’000
31 Dec 2021
Consolidated
$’000
38,974
21,424
(6,598)
211
54,011
19,815
3,141
(1,532)
21,424
(5,677)
(2,504)
1,583
(6,598)
-
211
211
34,353
19,815
(5,677)
-
48,491
11,253
12,231
(3,669)
19,815
(13,139)
13,304
(5,842)
(5,677)
-
-
-
125
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
34
Share-based payments
Share-based payment reserve
Balance at the beginning of the year
Amortisation of share options
Amortisation of share rights
Amortisation of restricted shares
Amortisation of loan funded shares
Amortisation of share appreciation rights
Amortisation of deferred remuneration on business acquisitions
Vesting of share-based payments
Balance at the end of the year
31 Dec 2022
Consolidated
$’000
31 Dec 2021
Consolidated
$’000
34,353
27,027
59
1,044
8,641
3,963
1,215
800
(11,101)
38,974
107
1,249
7,907
2,802
596
2,200
(7,535)
34,353
The component of annual bonus expected to be paid in
shares has been accounted for as a share-based payment,
with the amounts accruing over the expected vesting period
of between 1 to 3 years. The profit or loss impact (after tax)
of the estimated share component for services received for
the year ended 31 December 2022 was $3.5 million (2021:
$2.5 million). The accounting standards require the value of
the share-based component to be determined when there
is a shared understanding of the terms and conditions of
the scheme and so the estimate of the accrual to date could
change until this grant date is achieved.
34.1
Employee share options
The Group has granted options to certain employees of the Group. For accounting purposes, fair value of the options is
amortised as an expense over the vesting period of the options.
Number of options
Weighted average exercise price
$
31 Dec 2022
31 Dec 2021
31 Dec 2022
31 Dec 2021
Balance at the beginning of the year
2,875,391
3,851,450
Granted during the year
Forfeited during the year
Exercised during the year
Balance at the end of the year
-
(16,668)
250,000
(98,334)
(872,310)
(1,127,725)
1,986,413
2,875,391
3.41
-
3.35
3.14
3.53
3.22
4.34
3.25
3.00
3.41
No share options were issued, forfeited or exercised since the
end of the reporting period. 351,747 employee share options
were exercisable as at year end.
Chair options
On 18 February 2021, the Chair and Non-Executive Director,
Mr Jeffrey Browne exercised 390,625 options at an exercise
price of $3.00 per option. No further options are held by
Mr Browne.
2017 share options
Prior to the listing of the Company, a number of employees
were provided the opportunity to purchase options (share
option), with each share option carrying the right to acquire
one share in the Company at a future date. As a result of
the offer, the Company issued 5,468,750 share options on
8 April 2017.
126
Each share option is exercisable for a period of one year,
commencing on the first exercise date applicable to the
relevant tranche (exercise window) as set out in the table
below. Each share option expires if it is not exercised within
the relevant exercise window. The vesting period of the share
options runs from the grant date to the first exercise date as
shown in the table below. Unless otherwise determined by the
Board, a share option holder must continue to be employed by
the Group in order to exercise the share option.
Share options do not carry any dividend entitlement. Shares
issued on exercise of share options will rank equally with
other shares of the Company on and from issue. There are
no inherent participating rights or entitlements inherent in the
share option and share option holders will not be entitled to
participate in new issues of capital offered to shareholders
during the life of the share option. The issue price of the share
option was paid by the recipient on receipt of the share option.
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
34
Share-based payments (continued)
34.1
Employee share options (continued)
2017 share options (continued)
The table below provides the details of options issued on 8 April 2017:
Numbers of
options at
beginning
of year Acquired by
72,749 Employees
1,151,308 Employees
1,151,334 Employees
2,375,391
Grant date
share price
Exercise
price of
option Issue price
Earliest date
of exercise Expiry date
$2.35
$2.35
$2.35
$3.00
$3.15
$3.35
$0.03
8/04/2021 7/04/2022
$0.03 8/04/2022 7/04/2023
Options
forfeited
during the
year
-
-
Options
exercised
during the
year
72,749
Number of
options at
year end
-
799,561
351,747
$0.01 8/04/2023 7/04/2024
16,668
-
1,134,666
16,668
872,310
1,486,413
Fair value of share options granted
The weighted average value of the share option at the time of
grant was $0.0375.
The fair value of the share option was calculated using a
Black-Scholes model, adjusted for expectations of forfeiture
due to employee departures. The assumptions used in
calculating the fair value are shown below and are common to
all tranches of share options, unless otherwise stated:
• Dividend yield 4.0%
• Risk-free rate 2.5%
• Expected volatility of 30%, calculated based on the
volatility of comparable listed entities
• Expected life of option is the maximum term up to last day
of the exercise window
• Forfeiture assumptions for the options granted to
employees are that 16%, 20% and 23% of share options
are forfeited for tranches 1, 2 and 3 respectively.
2020 share options
During 2020, the Group granted share options to non-Australian domiciled Group employees. The terms of the 2020 share
options plan are the same as the 2017 share options plan unless otherwise stated below. The table below provides a summary of
the details of options issued during 2020:
Numbers of
options at
beginning
of year Acquired by
83,334 Employees
83,334 Employees
83,332 Employees
250,000
Grant date
share price
Exercise
price of
option Issue price
Earliest date
of exercise Expiry date
$3.09
$3.09
$3.09
$4.04
$4.04
$4.04
$0.00 13/03/2024 13/03/2025
$0.00 13/03/2025 13/03/2026
$0.00 13/03/2026 13/03/2027
Options
forfeited
during
the year
Options
exercised
during
the year
-
-
-
-
-
-
-
-
Number of
options at
year end
83,334
83,334
83,332
250,000
The weighted average value of the 2020 share options at the
time of grant was $0.85.
• Risk-free rate 0.67%.
• Expected volatility of 42.78%.
The fair value of the share options was calculated using a
Monte-Carlo model, adjusted for expectations of forfeiture
due to employee departures. The assumptions used in
calculating the fair value are shown below and are common to
all tranches of share options, unless otherwise stated:
• Performance hurdle of 8% per annum increase in total
shareholder return.
• Expected life of option is the maximum term up to last day
of the exercise window
•
• Forfeiture assumptions for the options granted to
employees are that 20%, 25% and 30% of share options
are forfeited for tranches 1, 2 and 3 respectively.
127
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
34
Share-based payments (continued)
34.1
Employee share options (continued)
2021 share options
During 2021, the Group granted share options to non-Australian domiciled Group employees. The terms of the 2021 share
options plan are the same as the 2020 share options plan unless otherwise stated below. The table below provides a summary of
the details of options issued during 2021:
Numbers of
options at
beginning of
year
Acquired by
Grant date
share price
125,000
Employees
125,000
Employees
$4.40
$4.40
250,000
Exercise
price of
option
$4.34
$4.34
Issue
price
Earliest date
of exercise
Expiry date
$0.00 10/03/2025 10/03/2026
$0.00 10/03/2026 10/03/2027
Options
forfeited
during the
year
Options
exercised
during the
year
-
-
-
-
-
-
Number of
options at
year end
125,000
125,000
250,000
The weighted average value of the share options at the time of
grant was $1.48.
The fair value of the share options was calculated using a
Monte-Carlo model, adjusted for expectations of forfeiture
due to employee departures. The assumptions used in
calculating the fair value are shown below and are common to
all tranches of share options, unless otherwise stated:
• Performance hurdle of 8% per annum increase in total
shareholder return.
• Risk-free rate 0.67%.
• Expected volatility of 42.78%, based on historical MAF
share price volatility over the expected term of the plan.
• Expected life of option is the maximum term up to last day
of the exercise window.
• Forfeiture assumptions for the options granted to
employees are that 20%, 25% and 30% of share options
are forfeited for tranches 1, 2 and 3 respectively.
34.2 Share rights
Share rights awarded include those granted to staff on
commencement of employment and as part of the bonus
incentive scheme, the vesting of which are subject to
continuous employment conditions. The value of these
grants are amortised over the vesting period, on the basis
that employees do not leave prior to vesting. The value of
the grant has been determined by reference to the trading in
the Company’s shares. The amortising period commences
from the date employees first had an expectation of receiving
an equity component to their bonus incentive scheme.
Determination of this date required a degree of judgement.
Share rights granted as sign-on incentive
The Company has periodically granted share rights to senior
executives commencing employment with the Group. The
share rights are priced with reference to the trading price of
the Company’s shares at the time the offer of employment
is made. Vesting is subject to continuous employment, with
terms varying on a case by case basis. Amortisation of the
expense commences on the day the senior executive starts
their employment.
Share rights granted as part of the annual bonus incentive
scheme
Share rights have been granted to employees in connection
with their 2017 and 2018 annual bonus which entitles the
employees to ordinary shares in the Company in the future for
no payment. The share rights vest over a prescribed vesting
period, and are conditional on continuous employment, unless
otherwise determined by the Board.
In 2022, promotion-based awards were issued to selected
employees in the form of performance rights to better align
their interests with shareholders. The number of performance
rights granted was determined by dividing the face value
of the performance based equity opportunity by the 5-day
VWAP up to and including the grant date, rounded to the
nearest number. Rights granted are subject to a vesting period
of three years and a service condition, unless otherwise
determined by the Board. The amortising period has been
assessed to commence at the grant date of the right.
128
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
34
Share-based payments (continued)
34.2 Share rights (continued)
The table below sets out the movement in share rights during the year:
Balance at the beginning of the year
Granted during the year
Forfeited during the year
Vested during the year
Balance at the end of the year
34.3 Restricted shares
Restricted shares – staff bonus incentive scheme
From 2019, as part of the annual staff bonus incentive
scheme, the share-based component of short term incentive
remuneration was delivered in the form of restricted shares,
issued to employees as part of their annual bonus awards.
The restricted shares were priced at the 5-day VWAP of the
shares in the Company at the end of the respective financial
years. The restricted shares vest over a prescribed vesting
Number of
share rights
Grant date fair value
$’000
31 Dec 2022
31 Dec 2021
31 Dec 2022
31 Dec 2021
971,164
2,060,394
179,784
-
(5,474)
(4,459)
(803,510)
(1,084,771)
341,964
971,164
4,625
2,735
(64)
(3,612)
3,684
9,339
-
(23)
(4,691)
4,625
period of 10 months to 34 months, and are conditional on
continuous employment, unless otherwise determined by
the Board. The amortisation period has been assessed to
commence from the date employees first had an expectation
of receiving an equity component to their annual bonus (being
1 January of each financial year).
Number of
restricted shares
Grant date fair value
$’000
31 Dec 2022
31 Dec 2021
31 Dec 2022
31 Dec 2021
Balance at the beginning of the year
Granted during the year
Forfeited during the year
Vested during the year
2,634,796
1,354,739
1,310,986
1,762,090
(42,696)
-
(1,045,682)
(482,033)
12,763
10,675
(305)
(5,116)
Balance at the end of the year
2,857,404
2,634,796
18,017
6,748
8,416
-
(2,401)
12,763
Restricted shares – 2022 staff bonus incentive scheme
34.4 Loan funded share plan (LFSP)
As at 31 December 2022, the Group has estimated short term
incentive component of the expected 2022 annual bonuses,
including an estimate of the amount of bonuses to be paid in
cash and the share-based component, which is anticipated
to be delivered in the form of restricted shares. The profit or
loss impact (after tax) of the estimated equity component for
services received for the year ended 31 December 2022 was
$2.4 million (2021: $2.5 million). The estimate of the cost of
the restricted share awards could change up until the grant
date is achieved.
During 2020 and 2021 the Group issued retention LFSP
awards for certain employees that enabled the employees
to invest in shares of the Company in order to more closely
align their long term interests with shareholders of the Group.
During 2022, the Group issued a new Long Term Incentive
(LTI) LFSP award. The Group provides an interest free
and limited recourse loan to the employees that is used to
acquire shares in the Company. The loans to employees are
secured on the shares which are not transferable until the
loan is fully paid. LFSP shares rank equally in all respects
with all shareholder entitlements for the same class of shares
including dividends.
The total expense recorded for the period in respect of the
retention LFSP awards and LTI LFSP awards was $4.0 million
(2021: $2.9 million).
129
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
34
Share-based payments (continued)
34.4 Loan funded share plan (LFSP) (continued)
Number of loan
funded shares
Grant date fair value
$’000
31 Dec 2022
31 Dec 2021
31 Dec 2022
31 Dec 2021
Balance at the beginning of the year
7,915,184
3,480,000
37,253
Granted during the year
Forfeited during the year
2,668,356
4,435,184
(109,100)
-
19,417
(451)
17,333
19,920
-
Balance at the end of the year
10,474,440
7,915,184
56,219
37,253
Retention LFSP awards
The shares issued under the retention LFSP awards have been treated as ‘in substance options’ and have been valued using a
Monte-Carlo pricing methodology with key inputs shown below.
Retention LFSP awards
Vesting period
Share price at grant date
Expected volatility1
Risk-free rate
Fair value per security
2021 Grant
2020 Grant
Tranche 1
Tranche 2
Tranche 1
Tranche 2
Tranche 3
4 years
$4.34
42.78%
0.67%
$1.45
5 years
$4.34
42.78%
0.67%
$1.51
4 years
$4.04
42.78%
0.67%
$0.75
5 years
$4.04
42.78%
0.67%
$0.86
6 years
$4.04
42.78%
0.67%
$0.94
Performance hurdle (total shareholder return)
8% p.a.
8% p.a.
8% p.a.
8% p.a.
8% p.a.
Forfeiture assumptions
10%
13%
20%
25%
30%
LTI LFSP awards
During 2022 the Group issued LTI LFSP awards for senior
employees including KMP. The LTI LFSP awards are granted
to ensure alignment with the creation of ongoing shareholder
value. Shares granted are subject to a vesting period of five
years, a service condition, unless otherwise determined by the
Board, and an EPS performance condition based on average
growth in underlying EPS over the vesting period. The shares
issued under the LTI LFSP awards have been treated as ‘in
substance options’ and have been valued using a Black-
Scholes pricing methodology with key inputs shown below.
LTI LFSP awards
Vesting period
Share price at grant date
Expected volatility1
Risk-free rate
Fair value per security
Performance hurdle (total shareholder return)
Forfeiture assumptions
1 Based on historical MAF share price volatility over the expected term of the plan.
Grant
5 years
$7.91
40.71%
2.73%
$0.02
7.5% – 12.0%
20.0%
130
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
34
Share-based payments (continued)
34.4 Loan funded share plan (LFSP) (continued)
2023 LTI LFSP awards
The 2023 LTI LFSP awards are expected to be granted in
March 2023 and will be based on a 5-day VWAP up to and
including the grant date. The accounting standards require
the value of the plan to be determined when there is a shared
understanding of the terms and conditions of the plan. As at
31 December 2022, the Group has estimated the cost of the
2023 LTI LFSP awards using a Black-Scholes model adjusted
for the likelihood of the EPS performance condition and
service condition being met at the conclusion of the vesting
period. The profit or loss impact (after tax) for the year ended
Balance at the beginning of the year
Granted during the year
Forfeited during the year
Vested during the year
Balance at the end of the year
31 December 2022 was $0.7 million (2021: $0.9 million). The
estimate of the cost of the 2023 LTI LFSP awards could
change up until the grant date is achieved.
34.5 Share appreciation rights plan
During 2022 Share Appreciation Rights (SAR) were granted
under the LTI plan to senior executives, Managing Directors
and equivalent. A SAR is an ‘in substance option’ which gives
the holder a right to shares in the future equivalent to the uplift
in the share price between the grant date and vesting date.
Number of share
appreciation rights
Grant date fair value
$’000
31 Dec 2022
31 Dec 2021
31 Dec 2022
31 Dec 2021
-
1,757,411
(34,278)
-
1,723,133
-
-
-
-
-
-
13,883
(271)
-
13,612
-
-
-
-
-
The SARs issued under the LTI plan have been valued using a Black-Scholes pricing methodology with key inputs shown below.
The resulting value is amortised over the vesting period on a probability adjusted basis.
LTI SAR awards
Vesting period
Share price at grant date
Expected volatility1
Risk-free rate
Dividend yield
Forfeiture assumptions – Service condition
1 Based on historical MAF share price volatility over the expected term of the plan.
Grant
5 years
$7.91
40.71%
2.73%
2.15%
20.0%
2023 LTI SAR awards
34.6 Salary sacrifice share plan
The 2023 LTI SAR awards are expected to be granted in
March 2023 and will be based on a 5-day VWAP up to and
including the grant date. The accounting standards require
the value of the plan to be determined when there is a shared
understanding of the terms and conditions of the plan. As at
31 December 2022, the Group has estimated the cost of the
2023 LTI SAR using a Black-Scholes model adjusted for the
likelihood of the service condition being met at the conclusion
of the vesting period. The profit or loss impact (after tax) for
the year ended 31 December 2022 was $0.4 million (2021:
$0.4 million). The estimate of the cost of the plan could
change up until the grant date is achieved.
From 2020, all permanent full and part-time employees of the
Group were invited to participate in the annual salary sacrifice
share offer which allowed employees to receive up to $5,000
worth of shares in the Company by sacrificing an equivalent
amount of their pre-tax salary or cash bonus award. 25,576
shares were issued under the 2022 arrangement, priced at
$7.908, being the 5-day VWAP of the Company’s shares on
grant date (2021: 17,296 shares at $4.3389). The shares are
restricted from being sold by employees until at least 1 July of
the year following issue or when the participant is no longer
employed by the Group.
131
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
34
Share-based payments (continued)
34.6 Salary sacrifice share plan (continued)
Balance at the beginning of the year
Granted during the year
Vested during the year
Balance at the end of the year
Number of salary
sacrifice shares
Grant date fair value
$’000
31 Dec 2022
31 Dec 2021
31 Dec 2022
31 Dec 2021
16,143
25,576
22,675
17,296
(19,752)
(23,828)
21,967
16,143
69
202
(99)
172
91
75
(97)
69
35
Key management personnel compensation
The aggregate compensation made to both Executive and Non-Executive Directors and other members of Key Management
Personnel (KMP) of the Company and the Group is set out below. There were 11 KMP in 2022 (2021: 10 KMP).
Short-term benefits
Share-based payments
Annual leave
Long service leave
31 Dec 2022
$
6,318,881
3,099,136
129,325
94,331
31 Dec 2021
$
6,954,199
1,661,420
162,664
111,370
Total key management personnel compensation
9,641,673
8,889,653
36
Related party transactions
Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been
eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and other related
parties are disclosed below.
36.1
Loans to related parties
Loans to employees
The Group has provided interest-free loans to certain
senior employees that are used for investment purposes,
primarily for investment in funds managed by the Group. The
investments purchased have been designated as restricted
and are unable to be sold without the approval of the Group.
51% of distributions received on the investments are allocated
against the loan balance. The loans are repayable over a
maximum term of five years.
36.2 Transactions with Key Management Personnel
In 2019 Mr Pridham and Mr Biggins entered into property
management service arrangements with the Group on the
same terms offered to third-party investors in a property
managed by the Group. Total management fees payable by
Mr Pridham and Mr Biggins for 2022 amounted to $69,352
and $15,506 respectively (2021: $69,542 and $15,506
respectively).
132
31 Dec 2022
$
2,211,317
31 Dec 2021
$
823,140
36.3 Transactions with funds managed by the Group
The Group is involved in the management of various funds,
through its role as a trustee, manager, financial advisor and
underwriter, and charges fees for doing so. The Group also
invests in some of the funds which it manages.
36.4 Transactions with associates
Transactions between the Group and its associates principally
arise from KMP transactions and investments in the associate.
The amounts below for KMP are recorded at the entry price
paid or committed for the relevant investment in accordance
with AASB 124 Related Party Disclosures and have not been
adjusted for subsequent valuation changes.
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
36
Related party transactions (continued)
36.4 Transactions with associates (continued)
Related party investments in associates
KMP
31 Dec 2022
$’000
Group
31 Dec 2022
$’000
KMP
31 Dec 2021
$’000
BE ES I LLC
BE OLD I LLC
MA Kincare Fund
Redcape Hotel Group
Other associates
Related party fees from associates
Trustee and management fees
Performance fees
Receivables from associates
Current
-
-
-
7,757
7,808
15,565
22,415
8,274
-
57,086
3,811
91,586
-
-
400
7,376
7,808
15,884
31 Dec 2022
$’000
6,884
43,925
50,809
Group
31 Dec 2021
$’000
19,401
2,068
7,594
84,339
6,991
120,393
31 Dec 2021
$’000
5,836
6,040
11,876
Accounts receivable and fees receivable from associates
5,468
5,590
37
Acquisitions and disposals of subsidiaries
37.1
Business acquisitions
On 7 February 2022, the Group acquired 100% of the issued
share capital of Finsure Holding Pty Ltd and its subsidiaries
(Finsure) for a consideration of $152.2 million, obtaining
control of Finsure. Finsure is a leading Australian mortgage
aggregator.
The Group acquired 47.5% of MA Money in October 2020.
The Group acquired the remaining 52.5% interest of MA
Money on 1 March 2022 for cash consideration of $11.3
million, obtaining control of MA Money.
Finsure and MA Money qualify as businesses as defined in
AASB 3 Business Combinations.
If new information obtained within one year of the date of
acquisition about facts and circumstances that existed at
the date of acquisition identifies adjustments to the below
amounts, or any additional provisions that existed at the date
of acquisition, then the accounting for the acquisition
will be revised.
Since the last reporting period, the Group remeasured the
fair value of the acquired net assets in Finsure. The below
remeasurements were made which subsequently resulted in a
$0.5 million decrease to goodwill.
• decrease to receivables of $0.7m;
•
•
•
•
increase to the fair value of contract assets by $8.5
million;
increase to payables by $4.4 million;
increase to contract liabilities by $3.3 million; and
increase to deferred tax liabilities by $0.7 million.
133
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
37
Acquisitions and disposals of subsidiaries (continued)
37.1
Business acquisitions (continued)
The table below represents the aggregated details of the businesses acquired during the year. The purchase price allocation for
the current year’s business acquisitions is provisional as at 31 December 2022.
Finsure
$’000
MA Money
$’000
Total
$’000
Fair value of net assets acquired
Cash and cash equivalents
Receivables
Loans receivable
Contract assets
Fixed assets
Right-of-use assets
Identifiable intangible assets
Trade and other payables
Lease liabilities
Borrowings
Contract liabilities
Income tax payable
Provisions
Deferred tax assets/(liabilities)
Total fair value of net assets acquired
Consideration
Cash
Settlement of loans
Investment as associate
Total consideration transferred
Goodwill recognised on acquisition
Net cash outflow arising on acquisition
Cash consideration
Less: cash and cash equivalent balances acquired
Total net cash outflow arising on acquisition
8,222
24,125
-
441,087
126
990
46,300
(32,876)
(1,633)
8,442
237
198,294
-
-
-
-
(1,725)
-
-
(197,098)
(415,236)
-
(903)
(18,663)
51,539
152,225
-
-
152,225
100,686
152,225
8,222
144,003
-
340
(2,351)
1,126
7,265
11,349
4,818
4,571
20,738
13,473
11,349
8,442
2,907
16,664
24,362
198,294
441,087
126
990
46,300
(34,601)
(1,633)
(197,098)
(415,236)
340
(3,254)
(17,537)
58,804
163,574
4,818
4,571
172,963
114,159
163,574
16,664
146,910
Goodwill
Acquisition related costs
The goodwill of $114.2 million arising from the acquisition
consists of:
•
the experience and employment of key management; and
Business acquisition costs of $3.0 million comprising legal
fees and due diligence costs were included in the Group’s
consolidated statement of profit or loss (31 December 2022:
$1.2 million and 31 December 2021: $1.8 million).
• assembled workforce of existing employees.
None of the goodwill is expected to be deductible for income
tax purposes.
134
MA Financial Group | 2022 Annual Report
Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
37
Acquisitions and disposals of subsidiaries (continued)
37.1
Business acquisitions (continued)
37.2
Consolidated managed fund investments
The Group regularly provides seed and growth capital to
funds managed by the Group. At each reporting period
investments in funds managed by the Group are assessed
for control. Determining whether the Group has control over
managed fund investments requires the use of judgement and
is an assessment of the Group’s power over the activities of
the funds and exposure to significant variability in returns from
the funds. Managed fund investments where such interests
are interests in controlled entities are consolidated by the
Group. Where it is determined that control does not exist,
the Group’s investments are recognised as either associates
or other financial assets in the consolidated statement of
financial position.
Contribution to the Group’s results
Finsure contributed $30.1 million of revenue and $16.9 million
to the Group’s profit before tax for the period between the
date of acquisition and the reporting date.
MA Money contributed $11.7 million of revenue and $5.5
million loss to the Group’s profit before tax for the period
between the date of acquisition and the reporting date.
If the acquisition of Finsure and MA Money had occurred on 1
January 2022, Group revenue contribution for the year ended
31 December 2022 would have been $32.2 million and $13.4
million respectively, and Group profit before tax contribution
would have been $17.5 million profit and $6.3 million loss
respectively. The Directors of the Group consider these
‘pro-forma’ numbers to represent an approximate measure of
the performance of the combined Group for the year ended
31 December 2022 and to provide a reference point for
comparison in future years.
37.3 Subsidiaries
Details of the Group’s material subsidiaries at the end of the financial year are as follows:
Name of subsidiary
Principal activity
Place of
incorporation
and operation
Proportion of ownership interest
and voting power held by the Group
31 Dec 2022
31 Dec 2021
Eastern Credit Management Pty Ltd
Asset Management
Australia
MA Asset Management Ltd
Asset Management
Australia
MA Hotel Management Pty Ltd
Asset Management
Australia
MA Investment Management Pty Ltd
Asset Management
Australia
MA Visa Fund Manager Pty Ltd
Asset Management
Australia
MAAM Holdings Pty Ltd
MAAM RE Limited
Asset Management
Australia
Asset Management
Australia
Redcape Hotel Group Management Ltd
Asset Management
Australia
RetPro Pty Ltd
Asset Management
Australia
RetPro Management Pty Ltd
Asset Management
Australia
Western Funds Management Pty Ltd
Asset Management
Australia
MA Credit Investments Pty Ltd
Asset Management
Australia
MA Credit Portfolio Investments Pty Ltd
Asset Management
Australia
MA Master Credit Trust
Asset Management
Australia
MA Asset Management (Hong Kong) Ltd
Asset Management
Hong Kong
MAAM Commercial Consulting (Shanghai) Co Ltd Asset Management
China
MA Eagle I LLC
Finsure Holding Pty Ltd
Asset Management
USA
Lending & Technology Australia
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
135
MA Financial Group | 2022 Annual Report
Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
37
Acquisitions and disposals of subsidiaries (continued)
37.3 Subsidiaries (continued)
Name of subsidiary
Principal activity
Place of
incorporation
and operation
Proportion of ownership interest
and voting power held by the Group
31 Dec 2022
31 Dec 2021
Finsure Finance & Insurance Pty Ltd
Lending & Technology Australia
Beagle Finance Pty Ltd
MAKM Holdings Pty Ltd
MA Money Financial Services Pty Ltd (formerly
MKM NewCo Pty Ltd)
Lending & Technology Australia
Lending & Technology Australia
Lending & Technology Australia
MKM Securitisation Trust No. 3
Lending & Technology Australia
MKM Securitisation Trust No. 5
Lending & Technology Australia
MOE Disbursement Trust
Lending & Technology Australia
MA Moelis Australia Advisory Pty Ltd
MA Moelis Australia Securities Pty Ltd
CA&E
CA&E
Australia
Australia
MAFG Operations Pty Ltd
MAFG Finance Pty Ltd
Administration Entity
Australia
Administration Entity
Australia
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
-
-
-
-
-
100%
100%
100%
100%
100%
38
Parent entity disclosures
As at, and throughout, the year ended 31 December 2022 the parent entity of the Group was MA Financial Group Limited.
Results of the parent company
Profit for the year
Total comprehensive income for the year
Financial position of the parent entity
Current assets
Non-current assets
Total assets
Current liabilities
Total liabilities
Net assets
Total equity of the parent entity comprising of:
Contributed equity
Reserves
Retained earnings
Total equity
31 Dec 2022
Company
$’000
31 Dec 2021
Company
$’000
46,499
46,499
160,938
190,097
351,035
115
115
46,482
46,482
275,520
37,804
313,324
1,919
1,919
350,920
311,405
275,087
36,348
39,485
350,920
254,990
32,153
24,262
311,405
The parent entity had no contingent liabilities, contractual commitments or guarantees with third parties as at 31 December 2022
(2021: nil) other than those already disclosed in the financial statements.
136
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
39
Deed of cross guarantee
The Company and certain wholly owned subsidiaries listed below (the Closed Group) have entered into a Deed of Cross
Guarantee (Deed) effective 21 December 2022.
Pursuant to ASIC Corporations (Wholly-owned Companies) Instrument 2016/785, the wholly-owned subsidiaries listed below
are relieved from the Corporations Act 2001 (Cth) requirements for preparation, audit and lodgement of financial reports, and
Directors’ reports.
The subsidiaries to the Deed are:
• Beagle Finance Pty Ltd
• Eastern Credit Management Pty Ltd
• Finsure Finance & Insurance Pty Ltd
• Finsure Holding Pty Ltd
• MAAM Holdings Pty Ltd
• MAFG Operations Pty Ltd
Set out below is the statement of profit or loss, statement of comprehensive income, statement of financial position and a
summary of movements in accumulated losses of the entities party to a Deed of Cross Guarantee.
Statement of profit or loss
Fee and commission income
Fee and commission expense
Net fee and commission income
Investment income
Other income
Total income
Employee expenses
Marketing and business development
Information, technology and data
Depreciation and amortisation
Finance costs
Credit loss allowance
Other expenses
Total expenses
Loss before tax
Income tax benefit
Loss after income tax
Other comprehensive loss, net of income tax
Items that will not be classified subsequently to profit or loss:
Fair value loss on investments in equity instruments designated at FVTOCI
Total other comprehensive loss
Total comprehensive loss
31 Dec 2022
$’000
461,413
(417,575)
43,838
75,638
58,735
178,211
134,710
9,091
6,878
13,456
3,390
(255)
15,120
182,390
(4,179)
1,236
(2,943)
(93)
(93)
(3,036)
137
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
39
Deed of cross guarantee (continued)
Statement of financial position
Assets
Current assets
Cash and cash equivalents
Receivables
Loans receivable
Other assets
Contract assets
Total current assets
Non-current assets
Restricted cash
Loans receivable
Contract assets
Other financial assets
Property, plant and equipment
Right-of-use assets
Investments in associates and joint ventures
Intangible assets
Goodwill
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Contract liabilities
Lease liabilities
Provisions
Total current liabilities
Non-current liabilities
Contract liabilities
Lease liabilities
Provisions
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Accumulated losses
Total equity
138
31 Dec 2022
$’000
67,819
43,106
3,436
4,015
139,279
257,655
700
2,174
467,954
65,859
5,223
60,881
89,826
45,638
98,829
837,084
1,094,739
156,695
131,061
5,512
40,560
333,828
440,302
58,390
1,298
11,201
511,191
845,019
249,720
275,087
39,231
(64,598)
249,720
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
39
Deed of cross guarantee (continued)
Summary of movements in accumulated losses
Accumulated losses at beginning of the financial year
Loss for the year
Accumulated losses at end of the financial year
40
Structured entities
31 Dec 2022
$’000
(61,655)
(2,943)
(64,598)
A structured entity is an entity that has been designed such
that voting or similar rights are not the dominant factor in
determining who controls the entity and the relevant activities
are directed by means of contractual arrangements.
transfers the risk of credit losses on loan portfolios to the
capital providers of the trusts. The Group’s exposure to losses
is limited to its investment in the warehouse trusts and its
rights to current and future residual income from its trusts.
The Group assesses at inception and at each reporting date,
whether the structured entity should be consolidated based
on the Group’s consolidation accounting policy. Structured
entities are classified as subsidiaries and consolidated when
control exists.
Consolidated structured entities
The Group considers its wholly owned entities that originate
residential mortgages via notes in mortgage warehouse trusts
to be structured entities. These trusts are special purpose
vehicles where third-party funders provide limited-recourse
financing to the trusts. The facility arrangement partially
Unconsolidated structured entities
The Group has an interest in a structured entity when it has
a contractual or non-contractual involvement that exposes
it to variable returns from the performance of the entity.
The Group’s interest includes investments held in securities
or units issued by these entities and fees earned from
management of the assets within these entities.
The following table presents, by asset class, the carrying
value and maximum exposure to loss (before the benefit of
collateral and credit enhancements) of the Group’s interests in
unconsolidated structured entities:
Real estate
$’000
Hospitality
$’000
Credit
$’000
Equities
$’000
Total
$’000
31 December 2022
Carrying value of assets
Financial assets held at FVTOCI
Financial assets held at FVTPL
Total carrying value of assets
Maximum exposure to loss
Financial assets held at FVTOCI
Financial assets held at FVTPL
Total maximum exposure to loss
31 December 2021
Carrying value of assets
Financial assets held at FVTOCI
Financial assets held at FVTPL
Total carrying value of assets
Maximum exposure to loss
Financial assets held at FVTOCI
Financial assets held at FVTPL
Total maximum exposure to loss
837
640
1,477
837
640
1,477
668
605
1,273
668
605
1,273
3,040
-
3,040
3,040
-
3,040
3,117
-
3,117
3,117
-
3,117
3,754
14,985
18,739
3,754
14,985
18,739
31,399
23,677
55,076
31,399
23,677
55,076
5,453
-
5,453
5,453
-
5,453
7,850
-
7,850
7,850
-
7,850
13,084
15,625
28,709
13,084
15,625
28,709
43,034
24,282
67,316
43,034
24,282
67,316
139
MA Financial Group | 2022 Annual Report Notes to the consolidated financial statements (continued)
For the year ended 31 December 2022
40
Structured entities (continued)
Unless otherwise specified, the Group’s maximum exposure to
loss is the total of its on-balance sheet positions at reporting
date. There are no off-balance sheet arrangements which
would expose the Group to potential losses in respect of
unconsolidated structured entities.
During the year, the Group earned management, performance,
transaction and upfront fee income of $9.9 million (2021: $8.9
million) and gains or losses from revaluing financial assets held
at FVTPL from interests held of $1.4 million (2021: $1.0 million).
41
Auditor’s remuneration
Audit and review services
Auditors of the Group
Audit and review of financial statements – Group
Audit and review of financial statements – controlled entities
Other auditors
Audit and review of financial statements – controlled entities
Total audit and review services
Assurance services
Auditors of the Group
Regulatory assurance services
Other assurance services
Total assurance services
Other services
Auditors of the Group
Advisory services
Taxation
Other services in relation to the Group
Total other services
Total auditor remuneration
31 Dec 2022
Consolidated
$
31 Dec 2021
Consolidated
$
628,763
343,645
972,408
22,783
995,191
100,913
-
100,913
106,551
618,537
65,728
790,816
1,886,920
541,000
62,000
603,000
32,000
635,000
-
90,000
90,000
425,000
-
-
425,000
1,150,000
Effective 21 June 2022, KPMG was appointed as auditor for
the Company (2021: Deloitte Touche Tohmatsu). Comparative
amounts shown in the table above relate to fees paid to the
previous auditor Deloitte Touche Tohmatsu. During the year
ended 31 December 2022, total other services paid or payable
to KPMG included fees of $604,490 for engagements prior to
KPMG’s appointment as auditor of the Company.
42
Commitments
Group. At 31 December 2022, $54.5 million (2021: $28.0
million) and $2.4 million (2021: $2.0m) has been invested
by the Group in MCT and USD MCT respectively. Refer to
note 26(b) for further information.
43
Contingent assets and liabilities
The Group has no contingent assets and liabilities at 31
December 2022 (2021: nil).
At 31 December 2022, the Group had undrawn loan
commitments of $144.4 million (2021: $104.5 million).
Subsequent to 31 December 2022, $28.0 million of this
commitment was either cancelled or drawn upon.
At 31 December 2022, the Group has the following capital
commitments:
44
Events after the reporting date
There were no material events subsequent to 31 December
2022 and up until the authorisation of the financial statements
for issue, that have not been disclosed elsewhere in the
financial statements.
• The Group has committed to a co-investment in class B
units in MCT and USD MCT, consolidated entities of the
140
MA Financial Group | 2022 Annual Report Directors’ declaration
For the year ended 31 December 2022
In the Directors’ opinion:
(a) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and
payable; and
(b) the financial statements and notes set out on pages 70 to 140 are in accordance with the Corporations Act 2001 (Cth)
including:
(i) complying with the Australian Accounting Standards, and
(ii) giving a true and fair view of the Company’s and the consolidated Group’s financial positions as at 31 December 2022
and their performance for the financial year ended on that date.
Note 1 (a) includes a statement that the financial report complies with International Financial Reporting Standards.
The Directors have been given declarations by the joint CEO’s and CFO required by section 295A of the Corporations Act 2001 (Cth).
This declaration is made in accordance with a resolution of the Directors.
Jeffrey Browne
Independent Chair and Non-Executive Director
Julian Biggins
Director and Joint Chief Executive Officer
Sydney
23 February 2023
Sydney
23 February 2023
141
MA Financial Group | 2022 Annual Report
Independent auditor’s report
For the year ended 31 December 2022
Independent Auditor’s Report
To the shareholders of MA Financial Group Limited
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of MA
Financial Group Limited (the Company).
In our opinion, the accompanying Financial
Report of the Company is in accordance with
the Corporations Act 2001, including:
•
•
giving a true and fair view of the Group’s
financial position as at 31 December
2022 and of its financial performance for
the year ended on that date; and
complying with Australian Accounting
Standards and the Corporations
Regulations 2001.
The Financial Report comprises:
•
•
consolidated statement of financial position as at
31 December 2022;
consolidated statement of profit or loss and other
comprehensive income, consolidated statement
of changes in equity, and consolidated statement
of cash flows for the year then ended;
• notes including a summary of significant
accounting policies; and
• Directors’ Declaration.
The Group consists of the Company and the entities
it controlled at the year-end or from time to time
during the financial year.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the
audit of the Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics
for Professional Accountants (including Independence Standards) (the Code) that are relevant to our
audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in
accordance with these requirements.
142
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and
logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by
a scheme approved under Professional Standards Legislation.
142
MA Financial Group | 2022 Annual Report Independent auditor’s report (continued)
For the year ended 31 December 2022
Key Audit Matters
The Key Audit Matters we identified are:
• Advisory success fees revenue recognition;
• Acquisition accounting; and
• Trail commission
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.
Advisory success fees revenue recognition ($58.4m)
Refer to Note 4 to the Financial Report
The key audit matter
How the matter was addressed in our audit
Advisory success fees revenue recognition is a
key audit matter due to the:
•
•
significance of this revenue to the
Group’s results; and
the judgement required with respect to
assessing the timing of revenue
recognition, specifically when the Group
satisfied its performance obligation as
stipulated by the conditions of the
underlying contracts, which may vary.
In assessing this key audit matter, we involved
senior audit team members who understand
the Group’s business, industry and the
economic environment in which it operates.
Our procedures included:
•
•
•
•
•
assessing the Group's revenue recognition
policy against AASB 15 Revenue from
Contracts with Customers requirements;
obtaining an understanding of processes,
systems and controls for advisory success
fee revenue. We also tested key controls
such as the manual review and approval by
management of key revenue calculations
and customer invoices;
for a sample of transactions, checking
recorded revenue to evidence of deal
completion, customer invoices, bank
statements and the relevant features of the
underlying signed customer contracts;
for a sample of invoices issued to
customers shortly prior to, and post, year-
end, checking:
•
•
the timing of fee revenue recorded
against evidence of deal completion,
the details of the service description
on the customer invoice and signed
customer contracts;
the accuracy of the fee by comparing
to the underlying contracts;
assessing the adequacy of disclosures in
the financial report using our understanding
obtained from our testing and against the
requirements of the accounting standard.
143
143
MA Financial Group | 2022 Annual Report Independent auditor’s report (continued)
For the year ended 31 December 2022
Acquisition accounting ($146.9m)
Refer to Note 37 to the Financial Report
The key audit matter
How the matter was addressed in our audit
During the financial year, the Group acquired
100% of Finsure for consideration of $152.2m,
and the remaining 52.5% interest in MKM for
consideration of $11.3m, resulting in the
recognition of contract assets and contract
liabilities, customer contracts and other
intangible assets, and goodwill.
These acquisitions are considered to be a key
audit matter due to the:
•
size of the acquisitions having a significant
impact on the Group’s financial statements;
• Group’s judgement and the inherent
uncertainty relating to the determination of
the fair values of assets and liabilities
acquired in the transaction requiring
significant audit effort. The Group engaged
an external valuation expert to assess the
fair value of certain assets and liabilities,
including customer contracts and other
intangible assets; and
•
complexity of the Group’s valuation model
used to determine the fair value of acquired
intangibles assets.
These factors drive additional audit effort, most
notably on the feasibility of key assumptions.
The key assumptions we focused on in the
valuations of intangible assets included forecast
earnings, discount rates and useful lives.
We involved our valuation specialists to
supplement our senior audit team members in
assessing this key audit matter.
Our procedures included:
•
•
•
evaluating the accounting treatment of the
acquisitions by the Group against the
requirements of AASB 3 Business
Combinations;
inspecting the underlying transaction
agreements to understand the terms of the
acquisition and nature of the assets and
liabilities acquired;
assessing the accuracy of the calculation and
measurement of consideration paid to acquire
Finsure and MKM based on the underlying
transaction agreements and the Group’s bank
statements;
• working with our valuation specialists,
assessing the Group’s external expert reports
and:
•
•
•
considering the objectivity, competence
and scope of the Group’s external
valuation experts;
evaluating the valuation methodology,
used to determine the fair value of assets
and liabilities acquired, against accounting
standard requirements and observed
industry practices;
assessing the key assumptions in the
Group’s external valuation expert reports
prepared in relation to the identification
and valuation of customer contracts and
other intangible assets, including:
•
evaluating the reasonableness of
forecast earnings through
challenging and sensitising key
assumptions and by checking for
consistency with the Group’s
valuation model used as part of the
pre-acquisition due diligence
process;
•
assessing key customer contracts,
including their useful lives, by using
144
144
MA Financial Group | 2022 Annual Report Independent auditor’s report (continued)
For the year ended 31 December 2022
our industry experience and
knowledge of the terms and
conditions of a sample of the
underlying agreements;
•
•
•
independently developing a discount rate
range considered comparable using publicly
available market data for relevant entities,
adjusted by risk factors specific to the Group
and the industries in which it operates;
recalculating the goodwill balance recognised
as a result of the transaction and compared it
to the goodwill amount recorded by the
Group; and
assessing the adequacy of disclosures in
the financial report using our understanding
obtained from our testing and against the
requirements of the accounting standard.
Trail commission ($35.9m)
Refer to Note 18 to the Financial Report
The key audit matter
How the matter was addressed in our audit
Post-acquisition of the Finsure business, the
Group recognised a contract asset using the
expected value method representing the net
present value of future trail commission
receivable under AASB 15 Revenue from
Contracts with Customers. The Group also
recognised a corresponding trail commission
payable under AASB 9 Financial Instruments as
representation of the net present value of trail
commission payments to brokers.
This is a key audit matter due to the size of
the contract assets and contract liabilities,
and significant judgement applied to assess
the Group’s estimation of the value of trail
commissions receivable and payable. We
focused on the key inputs and assumptions
the Group applied in their net present value
(NPV) model, including:
•
•
•
discount rates, which are judgemental in
nature and may vary between different
underlying cohorts of trail commissions;
percentage of commissions paid to
brokers; and
loan book run-off rate assumptions,
reflecting the expected loan attrition
Working with our valuation specialists, our
procedures included:
•
•
•
•
•
evaluating the Group’s processes and
testing key controls such as the review and
approval of assumptions used in the
Group’s NPV model for estimating the
value of the trail commissions receivable
and payable;
assessing the completeness and accuracy
of the loan data and commission
percentage used in the Group’s NPV model
by testing a sample of the data to external
underlying documents such as lender
commission statements and contracts with
lenders and brokers;
assessing the appropriateness of the
methodology adopted in the Group’s NPV
model against accepted industry practice
and the requirements of the accounting
standards;
recalculating the trail commission
receivable and payable;
assessing the key assumptions by:
•
independently developing discount
145
145
MA Financial Group | 2022 Annual Report Independent auditor’s report (continued)
For the year ended 31 December 2022
rate of the portfolio over time, which is
subject to change.
We involved our valuation specialists in
assessing this key audit matter.
rate ranges considered comparable
using publicly available market data for
comparable entities, adjusted by risk
factors specific to the Group;
comparing the loan book run-off rate
assumptions to contracted maturities
in the relevant portfolio;
challenging the run-off rate by
comparing to historical internal
information and available industry
market data, and using our knowledge
of the current economic environment;
evaluating the sensitivity of the NPV
model calculations by considering
reasonably possible changes to the
discount rate and loan book run-off
rate; and
•
•
•
•
assessing of the adequacy of disclosures
against the requirements of the accounting
standards.
Other Information
Other Information is financial and non-financial information in MA Financial Group Limited’s annual
reporting which is provided in addition to the Financial Report and the Auditor’s Report. The Directors
are responsible for the Other Information. The Other Information we obtained prior to the date of this
Auditor’s Report was the Directors’ Report, Operating and Financial Review and Remuneration
Report. The Messages from the Chair and Managing Director, Sustainability Report and Additional
Shareholder Information are expected to be made available to us after the date of the Auditor's
Report.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not
express an audit opinion or any form of assurance conclusion thereon, with the exception of the
Remuneration Report and our related assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other
Information. In doing so, we consider whether the Other Information is materially inconsistent with
the Financial Report, or our knowledge obtained in the audit, or otherwise appears to be materially
misstated. We are required to report if we conclude that there is a material misstatement of this
Other Information, and based on the work we have performed on the Other Information that we
obtained prior to the date of this Auditor’s Report we have nothing to report.
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
• preparing the Financial Report that gives a true and fair view in accordance with Australian
Accounting Standards and the Corporations Act 2001;
•
implementing necessary internal control to enable the preparation of a Financial Report that
gives a true and fair view and is free from material misstatement, whether due to fraud or
error; and
146
146
MA Financial Group | 2022 Annual Report Independent auditor’s report (continued)
For the year ended 31 December 2022
•
assessing the Group and Company’s ability to continue as a going concern and whether the
use of the going concern basis of accounting is appropriate. This includes disclosing, as
applicable, matters related to going concern and using the going concern basis of accounting
unless they either intend to liquidate the Group and Company or to cease operations, or have
no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
•
•
to obtain reasonable assurance about whether the Financial Report as a whole is free from
material misstatement, whether due to fraud or error; and
to issue an Auditor’s Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Australian Auditing Standards will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error. They are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic decisions of users taken
on the basis of the Financial Report.
A further description of our responsibilities for the audit of the Financial Report is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our
Auditor’s Report.
Report on the Remuneration Report
Opinion
Directors’ responsibilities
In our opinion, the Remuneration Report
of the Group for the year ended 31
December 2022, complies with Section
300A of the Corporations Act 2001.
The Directors of the Company are responsible for the
preparation and presentation of the Remuneration
Report in accordance with Section 300A of the
Corporations Act 2001.
Our responsibilities
We have audited the Remuneration Report included in
pages 46 to 66 of the Directors’ report for the year
ended 31 December 2022.
Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
KPMG
Shaun Kendrigan
Partner
Sydney
23 February 2023
147
147
MA Financial Group | 2022 Annual Report 05 Additional InformationMA Financial Group | 2022 Annual Report Additional information
For the year ended 31 December 2022
Dividend details
MA Financial Group Limited aims to pay an interim and final dividend following its half-year and full-year financial results
announcements respectively.
The payment date for the dividend following the announcement of the 2022 results is 22 March 2023.
Share registry details
The following information is correct as at 13 February 2023.
Registered holder
MOELIS & CO INTERNATIONAL HOLDINGS LLC
MAGIC TT PTY LTD
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