More annual reports from Newlat Food S.p.A.:
2023 Report
Controlled Entities ___________________________ 98
Divestments and discontinued operations ___ Error!
Financial Instruments ________________________ 98
Share Based Payments ______________________ 109
Related Party Transactions ___________________ 111
Cash Flow Note _____________________________ 113
Capital and Leasing Commitments Error! Bookmark
19
20
Bookmark not defined.
21
22
23
24
25
not defined.
26
27
28
Parent Entity Disclosures _____________________ 114
Auditor’s Remuneration ______________________ 117
Events Occurring after Reporting Date _________ 117
Directors’ Declaration______________________________ 119
Independent Auditor’s Review Report ________________120
Shareholder Information ___________________________ 123
Contents
Appendix 4E _______________________________________ 4
Chairman’s Letter __________________________________ 6
Joint Managing Director’s Letter ____ Error! Bookmark not
defined.
Corporate highlights ________________________________ 11
Review of Operations ______ Error! Bookmark not defined.
Financial operating performance ____ Error! Bookmark not
defined.
Board of Directors _________ Error! Bookmark not defined.
Directors’ Report __________________________________ 39
Remuneration Report (Audited) _____________________ 44
Auditor’s Independence Declaration _________________ 64
Consolidated Statement of Profit or Loss and Other
Comprehensive Income ____________________________ 65
Consolidated Statement of Financial Position _________ 65
Consolidated Statement of Changes in Equity ________ 67
Consolidated Statement of Cash Flows ______________ 68
Notes to the Financial Statements __________________ 69
General Information _________________________ 69
1
Significant Accounting Policies ________________ 69
2
Segment Information ________________________ 73
3
Revenue ____________________________________ 74
4
Expenses ___________________________________ 75
5
Income Taxes _______________________________ 77
6
Key Management Personnel Compensation _____ 80
7
Dividends ___________________________________ 80
8
Earnings Per Share ____________________________ 81
9
Trade and Other Receivables ___________________ 81
10
Other Current Assets ________________________ 83
11
Financial Assets _____________________________ 84
12
Property and Equipment ______________________ 90
13
Intangible Assets ____________________________ 92
14
Trade and Other Payables ____________________ 94
15
Provisions __________________________________ 95
16
Issued Capital _______________________________ 97
17
Reserves ___________________________________ 98
18
3 | netwealth Annual Report 2023 For the year ended 30 June 2023
Appendix 4E
Report for the year ended 30 June 2023.
Netwealth Group Limited
ABN: 84 620 145 404
1. Details of the reporting period
Report for the year ended 30 June 2023 (FY2023).
7Previous corresponding period year ended 30 June 2022 (FY2022).
2. Results for announcement to the market
FY2023
$’000
FY2022
Increase/
Var %
$’000
(Decrease)
Revenue from ordinary activities
207,008
172,864
97,014
81,110
34,144
15,904
19.8%
19.6%
Profit from ordinary activities before tax
attributable to members
Net profit for the period attributable to
members
67,153
55,552
11,601
20.9%
Refer to the attached Annual Report (Directors’ report – Review of operations section), for further
commentary on the full year results.
3. Net tangible assets per ordinary security
Net tangible assets per ordinary security
47.8 cents
41.8 cents
Net tangible assets (NTA) used in the calculation of NTA per ordinary security are inclusive of both
right of use assets and lease liabilities.
FY2023
FY2022
4 | netwealth Annual Report 2023 For the year ended 30 June 2023
4. Dividends information
Final 2022 dividend per share (paid 29 Sep 2022)
Interim 2023 dividend per share (paid 24 Mar 2023)
Final 2023 dividend per share (to be paid 21 Sep
2023)
Final 2023 dividend dates
Ex-dividend date
Record date
Payment date
There is no dividend reinvestment plan.
5. Control gained/loss over entities
Not applicable.
Amount
per Share
(cents)
Franked
Amount
per Share
(cents)
%
Franked
10.00
11.00
13.00
4.28
4.71
5.57
100%
100%
100%
Tax rate
for
Franking
Credit
30%
30%
30%
22 August 2023
23 August 2023
21 September 2023
6. Details of associates and joint venture entities
Netwealth owns 25% of the equity of Xeppo Pty Ltd (Xeppo), a specialist fintech data solution provider.
Xeppo specialises in connecting, matching and reconciling data from a wide range of sources and
providing technology solutions to support the wealth management, accounting and mortgage
industries.
The Group re-classified our investment in Xeppo from an Investment in Associate to a Joint Venture
from August 2022 following a revised agreement with Xeppo. There is no significant change to the
accounting treatment from this reclassification.
7. Compliance statement
This report is based on the consolidated financial statements for the year ended 30 June 2023 which
have been audited by Netwealth Group Limited’s auditors, Deloitte Touche Tohmatsu, with the audit
report attached.
Matt Heine
CEO & Managing Director
16 August 2023
5 | netwealth Annual Report 2023 For the year ended 30 June 2023
About Netwealth
Netwealth Group Limited (Netwealth, “NWL” or the Group) is a financial services company listed on
the Australian Securities Exchange (ASX: NWL). Netwealth was created with an entrepreneurial spirit
to challenge the conventions of Australia’s financial services.
We are a technology company, a superannuation fund trustee and a wealth administration business.
Above all we exist to inspire people to see wealth differently and discover a brighter future.
Founded in 1999, Netwealth is one of the fastest growing wealth management businesses in Australia.
Our financial products are:
•
•
superannuation including accumulation and retirement income products;
investor directed portfolio services for self-managed superannuation and non-superannuation
investments;
• managed accounts;
• managed funds;
•
•
self-managed superannuation funds administration; and
non-custodial administration and reporting services.
Netwealth’s digital platform supports how our financial products are delivered to market. Financial
intermediaries and clients can invest and manage a wide array of domestic and international products
through the platform.
The platform is built, developed and maintained by our technology team. It is continuously enhanced
using feedback from financial intermediaries, clients and other users and receives wide industry
recognition as having market-leading functionality.
Supporting our financial products and technology platform is a significant investment in our people
and resources to administer support, execute our custodial services and manage risk and governance.
6 | netwealth Annual Report 2023 For the year ended 30 June 2023
Joint Letter from Chair and CEO & Managing Director
On behalf of the Board of Directors (the Board) of Netwealth Group Limited (Netwealth), we are
pleased to present the Annual Report for the year ended 30 June 2023.
Global capital markets in FY2023 demonstrated continuing volatility as investors reacted to
substantial and largely unexpected increases in official cash rates by federal reserve banks to tackle
persistently high single digit inflation. Despite this uncertain economic environment, coupled with
continuing geopolitical disruption, equity markets generally trended upwards while some other major
assets classes performed poorly.
The Australian wealth management market is estimated to have slightly declined in the 12 months to
March 2023 from $1,002 billion to $982 billion1. Net inflows over this same period were $14.2 billion, a
substantial reduction compared to $29.3 billion over the previous corresponding period. This decrease
is believed to be primarily due to investors seeking the safety of cash and term deposits off platform
and delayed transitions.
FY2023 was another milestone year for Netwealth across many financial and operating metrics.
Despite the very challenging backdrop, Netwealth’s Funds Under Administration (FUA), grew by 26.3%
or $14.6 billion to reach an all-time high of $70.3 billion as at 30 June 2023. Netweath delivered record
annual gross inflows of $18.7 billion and pleasingly, net inflows of $9.9 billion.
Netwealth was again recognised as the fastest growing platform, growing its market share by 1.0% to
6.7%1 as at March 2023.
Timothy Antonie
Independent
Non-Executive
Chair
Matthew Heine
CEO & Managing
Director (CEO)
1 Source: Plan for Life, Analysis of Wrap, Platform and Master Trust as at March 2023
7 | netwealth Annual Report 2023 For the year ended 30 June 2023
Total income increased by 21.6% over FY2022 to $214.7 million. The substantial increase in income
enabled Netwealth to absorb the annualised impact of the significant investment in platform and
service capability in FY2022 and continuing investment in FY2023 to maintain our leadership position,
continue to deliver on our client’s expectations and accelerate our whole of wealth roadmap and
vision.
EBITDA exceeded $100 million for the first time at an impressive EBITDA margin of 46.9% or 48.0%
excluding non cash share based payments. Operating net cashflow (before tax) conversion remained
very high at $106.3 million.
Netwealth achieved a record profit of $67.2 million, representing a 20.9% increase from the previous
year's result. Earnings per share increased by 20.6% to 27.5 cents per share.
The Board today declared a final fully franked dividend of 13 cents per share resulting in a total fully
franked dividends of 24 cents per share for FY2023, a 20% increase from the previous year. Our
dividend payout ratio of 87% reflects our continuing high conversion ratio of earnings to cashflow.
These record results are thanks to the outstanding performance of our Executive and growing
Netwealth team, with over 550 employees at 30 June 2023. The dedication and talent of our team is
the key driver or our continuing success. Our annual employee survey reflected high satisfaction
levels, with an overall score of 77%, positioning us among the top quartile of comparable businesses
and we are now certified with Work180 and recently ranked sixth in the Top 10 Workplaces for Women.
We welcomed Shanyn Payne to the Executive in July 2023 as our new Chief People Officer to further
enhance our leadership and culture to maximise outcomes for our team, clients and shareholders.
Netwealth received a number of accolades during the year and was rated No.1 in overall satisfaction
by advisers in the Investment Trends May 2023 Adviser Technology Needs Report, a recognition we
have held for 11 consecutive years. Additionally, we remain the leading platform for the High Net Worth
segment, which speaks to the strength and reliability of our platform.
Throughout the year, we successfully expanded our offer and introduced our new non-custodial
administration service as part of our whole of wealth strategy. The positive response received from our
clients has been encouraging, and we will continue to fine-tune and enhance this service from
customer feedback and expect to build substantial scale in the medium term.
Netwealth secured many new and important licensee and adviser relationships throughout the year
with client accounts increasing by over 10% and further transitions to occur. We enter FY2024 well
8 | netwealth Annual Report 2023 For the year ended 30 June 2023
positioned to continue to increase our market share. Our pipeline is strong and diverse with new
business opportunties from across the country and market segments and we expect continued
organic growth from existing channels and in particular from the High Net Worth segment.
We will continue to invest in our platform and service offering and are executing across many board
approved strategic initatives including: our whole of wealth strategy, trading capability, customised
reporting, systems migration and security, and generative artifical intelligence solutions.
We are also excited to be relaunching an upgraded Core product next month with an expanded
investment menu, made up of Australia’s leading asset consultants and managers, at a very
competitive fee. We expect this will significantly increase our presence in the the mass affluent and
emerging affluent segments in the market, resulting in incremental and profitable revenue streams.
Given we operate in the highly regulated financial services industry and the signficant trust placed in
us by our clients, sound governance is paramount to our sustained success and growth. We continue
to actively manage and enhance our systems, risk management framework and corporate governance
practices to meet regulatory changes and exceed the expectations of our community and
stakeholders. Additionally, our investment in cyber-security remains a priority, and we continue to
raise awareness among all stakeholders to mitigate potential risks. We welcome Jodie Henson to the
Executive as our new Chief Risk Officer. Jodie has immediately made a substantial contribution in
further enhancing the management of our risk environment.
Netwealth Superannuation Services Pty Ltd (NSS) has now been operating for 2 years under a
separate board of directors with the single purpose of administering our superannuation services.
NSS operates in a highly regulated environment and we thank Rita Harris, Chair of NSS and her team
for the effective discharge of their obligations and execution of their strategic objectives.
Our People and Corporate Sustainability Committee has again made great progress over the last 12
months under Kate Temby’s leadership. We continue to make progress on four key areas that are
important to our stakeholders: enhancing our core business; be ethical and transparent in our
dealings; foster diversity, talent and wellbeing; and partner with financial support organisations that
create lasting positive social and environmental impacts.
We are incredibly proud to share that, with Netwealth's financial support, over 100,000 school children
have participated in the Banqer Financial Literacy program. This innovative online virtual economy is
provided at no cost to schools all across Australia, empowering young minds with essential financial
knowledge and skills for their future.
We would also like to congratulate Matt West (GM Product & Strategy), and Dave Sutherland (GM
Investment Ops & Managed Accounts) on their promotions to the Executive. By bringing in new talent
(Jodie and Shanyn) and promoting from within, we aim to enrich our leadership with fresh insights,
diverse perspectives, and a wealth of experience. We believe that this dynamic blend of expertise will
further enhance our ability to navigate new challenges and seize opportunities for growth.
Netwealth continues to retain sufficient levels of capital to meet our regulatory requirements. Our
strong balance sheet and disciplined risk management strategies position us well to respond to both
risks and opportunities.
We extend our gratitude to our Board, management, and the entire team for their unwavering
dedication, commitment, and hard work, which have contributed to the record-breaking results we
achieved this year.
9 | netwealth Annual Report 2023 For the year ended 30 June 2023
Finally, on behalf of the Board, we express our sincere appreciation to our valued clients and
shareholders for your ongoing support. We look forward to working with you in FY2024 and for another
successful year.
Yours sincerely
Timothy Antonie
Chair
16 August 2023
Matt Heine
CEO & Managing Director
16 August 2023
10 | netwealth Annual Report 2023 For the year ended 30 June 2023
Corporate Highlights
Netwealth has continued to experience significant growth in FY2023. Some highlights for the year
were (comparative period being FY2022):
1
2
3
4
Directors consider these non-IFRS information to be a key metric in evaluating the operating performance of the Group.
Reconciliations to IFRS information are on pages 15-17.
Prior period comparison excludes non-recurring transaction of $0.5 million relating to acquisitions no longer pursued.
Plan For Life Media Release, Analysis of Wraps, Platforms and Master Trusts as at March 2023
Investment Trends, May 2023 Adviser Technology Needs Report
EPS – Earnings per share; CPS – Cents per share
11 | netwealth Annual Report 2023 For the year ended 30 June 2023
Operating and Financial Review
Operational performance highlights
Set out in the below table is a summary of key platform statistics for FY2023 and FY2022.
Consolidated Group for Year Ended
30 June 2023
30 June 2022
Variance
Variance %
FUA – Custodial - End of Period (EOP) ($ million)
70,146
55,652
14,494
FUA – Non-custodial (EOP) ($ million)
Total FUA
FUA inflows – Custodial ($ million)
FUA outflows – Custodial ($ million)
FUA net inflows – Custodial ($ million)
FUA net inflows – Non-custodial ($ million)
FUA Market Movement – Custodial ($ million)
FUA Market Movement – Non-custodial ($ million)
126
70,272
18,609
(8,844)
9,765
117
4,730
9
-
55,652
18,679
(5,690)
12,989
-
(4,476)
-
126
14,620
(70)
(3,154)
(3,224)
117
9,206
9
Platform revenue/average FUA (bps)
32.8 bps
32.0 bps
0.8 bps
FUM (EOP*) ($ million)
FUM net inflows ($ million)
Managed Account (EOP) ($ million)
Managed Account net inflows ($ million)
Managed Funds (EOP) ($ million)
Managed Funds net inflows ($ million)
Cash transaction account as % of FUA (EOP) ($
million)
15,960
1,959
13,592
1,590
2,368
369
6.4%
13,078
2,585
11,170
2,321
1,908
264
7.9%
2,882
(626)
2,422
(730)
460
105
-
Accounts (EOP*) (number)
127,507
115,642
11,865
Financial intermediaries (EOP) (number)
Average FUA/average number of Accounts ($
thousands)
3,512
521
3,327
507
Platform revenue/average number of accounts ($)
1,710
1,621
185
14
89
* EOP=End of Period
26.0%
100.0%
26.3%
(0.4%)
(55.4%)
(24.8%)
100.0%
205.7%
-
2.5%
22.0%
(24.2%)
21.7%
(31.5%)
24.1%
39.8%
-
10.3%
5.6%
2.8%
5.5%
12 | netwealth Annual Report 2023 For the year ended 30 June 2023
Netwealth achieved record Funds Under Administration (FUA) at 30 June 2023 of $70.3 billion, an
increase of $14.6 billion (26.3% increase) for FY2023. The Group posted record annual FUA gross
Inflows of $18.7 billion for FY2023.
FUA net inflows of $9.9 billion for FY2023, was a decrease of $3.1 billion in FUA net inflows on FY2022,
due to an elevated level of outflows that primarily related to clients partially withdrawing funds to
invest in off-platform investments including term deposits and other alternative investments and
large partial withdrawals from high net worth and large accounts.
Cash transaction account as a % of FUA reduced to 6.4% from 7.9%, reflecting a preference in term
deposits held by clients on the platform which increased to $1.9 billion at 30 June 2023 ($0.4 billion). A
significant number of clients may have also chosen to hold their term deposit holdings or other fixed
interest instruments off platform.
During the year, the new Wealth Accelerator – Multi-asset Portfolio Services including non-custodial
administration service went live for clients. It was launched successfully in April 2023 with $126 million
of non-custodial FUA onboarded by 30 June 2023.
Funds Under Management (FUM) at 30 June 2023 were $16.0 billion, an increase of $2.9 billion (22.0%)
from FY2022 including positive market movement of $0.9 billion.
Managed Account balance at 30 June 2023 was $13.6 billion, an increase of $2.4 billion (21.7%) for
FY2023. The increase for FY2023 included Managed Account net inflows of $1.6 billion and positive
market movement of $0.8 billion.
Total client accounts increased by 11,865 or 10.3% to 127,507 at 30 June 2023. Financial Intermediaries
using the platform increased by 185 or 5.6% to 3,512 at 30 June 2023.
Platform revenue per account increased to $1,710 in FY2023. Platform revenue/average FUA of 32.8
bps for FY2023, an increase of 0.8 bps, primarily from a higher cash margins rate.
Average account size increased to $521,000 for FY2023, up from $507,000 in FY2022.
13 | netwealth Annual Report 2023 For the year ended 30 June 2023
Review of FY2023 financial performance
Netwealth achieved total income of $214.7 million for FY2023, a 21.6% growth from prior year. Platform
revenues increased by $34.1 million (19.8%) to $207.0 million for FY2023. Strong FUA growth from both
new and existing clients combined with higher margins on cash during the year led to the higher
revenues.
Total operating expenses were $114.0 million for FY2023, an increase of $22.0 million or 23.9%
compared to prior year.
Employee benefits expenses, excluding share-based payment expenses, increased by $14.0 million to
$77.9 million, accounting for 68% of total operating expenses. The headcount as at year end was 553,
an increase of 38 roles in FY2023 compared to 113 new roles added in FY2022. Out of these 38 roles, 30
were in the technology team. Technology and communication expenses (non-employees) increased
by $5.4 million or 65.2%. These increases both align with our strategic focus on enhancing
functionality, scalability, and cyber security through investments in the technology team and platform
infrastructure.
Advertising and marketing expenses also grew, rising by 82% to $2.8 million, driven by the acceleration
of marketing initiatives following the reopening of the economy enabling the Group to reach a broader
segment of the industry.
Share based payment expense decreased by $0.7 million to $2.4 million for FY2023 as a limited number
of new employee options and rights were issued compared to prior financial year.
The Group delivered underlying EBITDA1 of $100.7 million for FY2023, an increase of $15.7 million
(18.4%) versus FY2022 with an EBITDA margin of 46.9%.
Record net profit after tax (NPAT) of $67.2 million was achieved, an increase of $11.6 million or 20.9%
over FY2022 with an NPAT margin of 31.3%.
Earnings per share (EPS) was 27.5 cents in FY2023, an increase of 20.6% over FY2022.
1 FY2022 underlying EBITDA excludes non-recurring transaction of $0.5M relating to acquisitions no longer pursued.
14 | netwealth Annual Report 2023 For the year ended 30 June 2023
Results of profit or loss for FY2023
Set out in the table below is the consolidated statement of profit or loss and other comprehensive
income for FY2023 presented in full to reflect other financial metrics.
Consolidated Group for Year Ended
30 June 2023
30 June 2022
Variance
Variance
$’000
$’000
$’000
%
Income
Platform revenue
207,008
172,864
Other income
Total income
Expenses
7,741
3,767
214,749
176,631
34,144
3,974
38,118
Employee benefits expenses
(77,886)
(63,840)
14,046
19.8%
105.5%
21.6%
22.0%
(22.0%)
65.2%
23.7%
(2.1%)
82.0%
14.6%
23.9%
19.1%
-
(9.5%)
9.9%
19.6%
16.8%
20.9%
-
(672)
5,405
1,184
(99)
1,278
823
21,965
16,153
(1.0%)
(46)
295
15,904
4,303
11,601
(0.2%)
4.7
20.6%
Share-based payment expense
(2,381)
Technology and communication
(13,689)
Professional and insurance
Brokerage, investment & custody
Advertising and marketing
Other costs and expenses
(6,186)
(4,567)
(2,835)
(6,461)
(3,053)
(8,284)
(5,002)
(4,666)
(1,557)
(5,638)
Total operating expenses
(114,005)
(92,040)
EBITDA
EBITDA margin
Interest on leases
Depreciation and amortisation
NPBT
100,744
46.9%
(451)
(3,279)
97,014
84,591
47.9%
(497)
(2,984)
81,110
Income tax expense
(29,861)
(25,558)
NPAT
NPAT margin
EPS (cents per share)
67,153
55,552
31.3%
27.5
31.5%
22.8
15 | netwealth Annual Report 2023 For the year ended 30 June 2023
Underlying profit or loss for FY2023
Set out in the table below is the reconciliation from EBITDA to underlying EBITDA and underlying
NPAT to reflect an adjustment of non-recurring costs in FY2022. There were no adjustments in
FY2023.
Consolidated Group for Period Ended
30 June 2023
30 June 2022
Variance
Variance
EBITDA
Add back: non-recurring
expense*
Underlying EBITDA
Underlying EBITDA margin
Interest on leases
Depreciation and
amortisation
$’000
100,744
-
100,744
46.9%
(451)
(3,279)
$’000
84,591
501
85,092
48.2%
(497)
(2,984)
Income tax expense
(29,861)
(25,558)
Addback: Tax impact from
non-recurring expense*
Underlying NPAT
Underlying NPAT margin
Underlying EPS (cents per
share)
-
(150)
67,153
31.3%
27.5
55,903
31.6%
22.9
$’000
16,153
(501)
15,652
(1.3%)
(46)
295
4,303
150
11,250
(0.3%)
4.6
%
19.1%
(100.0%)
18.4%
-
(9.5%)
9.9%
16.8%
100.0%
20.1%
-
20.1%
*Netwealth incurred $0.5 million of legal and consulting costs in FY2022 which are not recurring in nature as they related to
acquisitions no longer pursued. It has a tax impact of ($0.15 million).
EBITDA, underlying EBITDA and underlying NPAT are non-International Financial Reporting Standard
(IFRS) financial information and should not be considered in isolation from, or as a substitute for,
financial information prepared in accordance with IFRS.
Management considers that EBITDA provides valuable insights into the operating performance of the
Group by excluding certain non-cash expenses. It allows investors and stakeholders to assess the
underlying operational profitability of the business and facilitates comparability across different
companies within the industry.
The two tables above provide the reconciliation to IFRS financial information in this financial report
audited in accordance with Australian Auditing Standards.
16 | netwealth Annual Report 2023 For the year ended 30 June 2023
Underlying cash flow statement (pre-tax) FY2023
The table below sets out the summary of the underlying consolidated statement of cash flows.
Consolidated Group for Period Ended
30 June 2022
Variance
Variance
$’000
$’000
%
186,387
(96,415)
37,025
19.9%
(23,887)
(24.8%)
30 June
2023
$’000
223,412
(120,302)
3,152
320
2,832
885.0%
-
-
-
(3,080)
3,080
100.0%
(4,000)
4,000
100.0%
501
(501)
(100.0%)
106,262
83,713
22,549
26.9%
(4,990)
(1,952)
(3,695)
(1,910)
(1,295)
(35.0%)
(42)
(2.2%)
-
1,000
(1,000)
(100.0%)
Receipts from customers
Payment to suppliers and
employees
Dividends and interest
received
Adjustment for proceeds in
relation to leasehold*
Adjustment for proceeds of
non-recurring deposit
Adjustment for legal and
consulting costs**
Operating net cash flows
before tax
Investing activities
Payments and Interest on
lease
Adjustment for seed funding
for Managed Funds
Free cash flows before tax
99,320
79,108
20,212
25.6%
*Adjusted to exclude net cash received on leasehold incentives in FY2022.
**Adjusted to exclude $0.5 million of non-recurring legal and consulting costs in FY2022 as they relate to acquisitions no longer
actively being pursued.
Free cash flows before tax is a non-International Financial Reporting Standard (IFRS) financial
information and should not be considered in isolation from, or as a substitute for financial information
prepared in accordance with IFRS.
Management considers free cash flow to be a performance measure that provides useful information
to management and investors about the amount of cash generated by the Group (before tax) available
for strategic opportunities, dividends and for strengthening the Group’s financial position.
The table above provide the reconciliation to IFRS financial information in this financial report audited
in accordance with Australian Auditing Standards.
17 | netwealth Annual Report 2023 For the year ended 30 June 2023
Australia’s best rated and fastest growing platform
Netwealth continues to be recognised as a market leader in the platform segment for its product
offering, service, innovation and growth. During the year, Netwealth was:
• Rated No.1 by our clients for overall satisfaction in the Investment Trends May 2023 Adviser
Technology Needs Report for the 11th consecutive year.
• Rated No.1 for Managed Account in the Investment Trends December 2022 Platform Competitive
Analysis and Benchmarking Report.
• Netwealth became the 9th largest custodian by FUA in Australia, in the latest Australian Custodial
Services Association (ACSA) industry analysis dated 31 December 2022.
• Netwealth was the market leader for industry net funds flows: net inflows of $9.4 billion for the 12
months to 31 March 2023 accounted for 66.2% of industry net funds flows, compared to 45.6% for
the prior year. Netwealth’s market share increased by 1.0% for the 12 months to 31 March 2023 to
6.7%, according to the latest Plan for Life quarterly platform market update.
18 | netwealth Annual Report 2023 For the year ended 30 June 2023
Enhancements to our whole of wealth platform
We continue to heavily invest in our whole of wealth platform roadmap and vision, ensuring we lead in
meeting the current and future needs of our clients. Throughout FY2023 we continued to execute on
our strategic pillars and delivered on the following initiatives.
• Maintain market-leading technology position and constantly leverage technology advantages for
operational efficiency and superior adviser experience.
-
-
-
Xeppo Connect, a market-leading digital capability which connects Netwealth platform
technology to Xeppo’s aggregated portfolio and client data.
Cloud migration and SQL server upgrade.
Launched a developer portal which provides access to a suite of netwealth API’s.
•
Increase market share among affluent advisers and support Netwealth’s existing adviser base
with functionality to drive adviser efficiency.
-
Cash functionality improvements including real time payments through the OSKO network.
New reporting capability for advisers and clients which provides greater efficiency and ability
to store and utilise global settings.
- New ‘Activities and Tasks’ feature which allows advisers and clients to easily view, approve
and manage important tasks and alerts driving efficiency and engagement.
-
121 new managed models were added during the year, increasing the total number of
managed models available to 578 at 30 June 2023.
• Continue to offer the leading platform for high net worth (HNW) advisers by expanding the
feature-set to meet their evolving needs.
- New Multi-asset portfolio service (MAPs), including non-custodial administration.
-
-
Custom data feeds for Managed Discretionary Accounts, High Net Worth, and mid-market
institutional investors.
Integrated bank account and property feeds available across mobile and desktop.
19 | netwealth Annual Report 2023 For the year ended 30 June 2023
FY2024 Commentary and Outlook
Netwealth continued to gain market share in FY2023 (moving to 6.7%), and it achieved the highest
industry 12-month net funds flow. Netwealth enters FY2024 with a strong pipeline and high win rate for
new business across all key segments. Netwealth has successfully secured several important new
licensee relationships that will begin transitioning and funding new accounts.
As part of our ongoing strategic initiatives, we are committed to maintaining our market leadership by
continually investing in the enhancement of our technology capability and service levels, which play a
crucial role in supporting financial intermediaries to efficiently service and administer their client’s
wealth. Key Initiatives that will be delivered in the coming 12 months include:
• Continuing development of our client portal that offers Financial Intermediaries the option to
interact online with all clients, including non-Netwealth clients. The portal is designed to provide a
seamless user experience and incorporates features that encourage regular and meaningful
interactions between clients and their advisers.
• Ongoing enhancements to our domestic and international trading technology.
• Offering a market leading customisable reporting and advice illustration solution.
• A series of generative artificial intelligence (AI) experiments and potential platform features which
leverage the capabilities of AI to create innovative solutions, optimise processes, and deliver
exceptional value to its clients.
• Continuing to invest into platform infrastructure to ensure scalability and stability.
• Relaunching in September 2023, an upgraded Core product will significantly boost our presence in
both the mass affluent and emerging affluent segments. The relaunch is expected to generate
new streams of revenue and increase FUA net inflows. The enhanced Core product will feature:
‒ A significantly expanded investment menu of 48 Multi Asset managed models.
‒ A highly competitive pricing structure providing client value and incremental revenue for
Netwealth.
•
•
To address term deposits leakage both on and off platform, an additional Netwealth cash product
alternative to term deposits will be introduced, providing an option for advisers to offer differential
interest rates on cash products.
Executing our strategy of sound governance by actively managing and enhancing systems and
risk management framework to meet regulatory changes and ensuring a strong focus on cyber-
security to mitigate potential risks in the highly regulated financial services industry.
• Netwealth remains the market leading platform for the High Net Worth sector and in FY2024, we
will continue enhancing our whole of wealth offering, including building scale in our non-custodial
administration services.
20 | netwealth Annual Report 2023 For the year ended 30 June 2023
• Continue making great progress in the next 12 months in four key areas that are important to our
stakeholders: enhance our core business, ensure ethical and transparent dealings, foster
diversity, talent, and wellbeing, and establish partnerships with financial support organizations
that create lasting positive social and environmental impacts through our People and Corporate
Sustainability Committee.
Risk Management of Material Business Risks
An investment in Netwealth shares is subject to risk factors, some of which are specific to Netwealth’s
business activities and others that are of a more general nature. Any single risk, or a combination of
these risks, may have a material adverse impact on Netwealth’s business, financial performance or
operations. This section represents the potential material risks investors should consider.
This section does not purport to list risks that may be associated with an investment in a Netwealth
product (please refer to the product disclosure document(s) for risks associated with a Netwealth
product).
While Netwealth seeks to manage risks to prevent adverse outcomes, many of these risks are not
wholly in the control of Netwealth.
Risk type
Description
Managing the risk
Cyber, data &
privacy risk
The risk that measures taken by
Netwealth to prevent loss,
misuse, theft, corruption, or
destruction of data are
inadequate which could result in
a privacy breach, financial loss or
business continuity event.
The risk that systems that
support data are compromised.
Development
& technology
risk
The risk that system design
issues or coding errors lead to
system outages, financial loss or
breach of legislation.
• Dedicated infrastructure, security, and data governance
functions manage Netwealth’s technology and security
requirements.
• Cross team security and threat meetings across business
and the Executive including the use of external service
providers.
•
•
Regular upskilling of employees, the Executive, and Board
on cyber and data risks including reporting.
External audit and assessment of security frameworks
and application of process and policy to identify and
mitigate emerging cyber risks.
• Data Governance Policy to identify, classify, and
understand data sensitivity and ownership, including
supplier assessments.
•
•
•
•
Training, frameworks, and processes which reduce
likelihood of risk.
Iterative and incremental agile risk management
framework for managing software development.
Business continuity and disaster recovery policies and
programs detailing Netwealth’s plans for responding to
various disruption scenarios.
Insurance to protect the financial interests of Netwealth.
21 | netwealth Annual Report 2023 For the year ended 30 June 2023
Risk type
Description
Managing the risk
Environmental,
social &
governance
(ESG) risk
The risk that we are unable to
deliver sustainable long-term
outcomes for our clients,
investors, employees, and the
community leading to reputation
damage or financial loss.
•
•
Regular monitoring and oversight of the Corporate
Sustainability Framework by the People & Corporate
Sustainability Committee and the Board.
Publish our annual corporate sustainability plan and
quarterly updates of our progress to clients, investors, and
the community on the Netwealth public website.
Governance
risk
The risk that the Board fails to
consider all risks, including
management of conflicts in
executing its duties. This
includes the risk that the
interests of stakeholders may
differ.
Compliance
and legal risk
Liquidity risk
The risk of financial loss and/or
non-compliance with legislation,
regulation, policies, and
standards.
The risk that should an action be
brought against Netwealth,
Netwealth is unable to defend
the action, resulting in financial
loss
The risk that Netwealth is unable
to meet its financial obligations
resulting from insufficient liquid
assets.
• Questionnaires and workshops with clients, investors, and
the community as applicable to seek feedback.
• Monitoring developments with responsible investment
and environmental, social and governance matters
including implementation of appropriate governance
framework for relevant products offered by Netwealth.
•
Promoting open and transparent communication
between Netwealth and shareholders, through direct
contact and ASX announcements, Netwealth’s Corporate
Sustainability channel, ‘Contact Us’ form on the website
and an online form for whistleblowing disclosures.
• Appropriate policies, delegations and controls in place to
manage governance risk, including conflicts
management.
•
Ensuring the Board has the appropriate set of skills and
experience to discharge its duties.
• Annual General Meetings which enable shareholders to
raise questions and express concerns directly to the
Board.
• Oversight of compliance and regulatory matters by the
Group Risk and Compliance function and the Office of the
Trustee for Netwealth’s superannuation business.
• Monitoring regulatory change and implementing
appropriate controls.
• Oversight of regulatory and compliance matters to Board
Committees.
•
•
Internal and external legal advisors available if required.
The Finance team regularly monitors and projects cash
flow requirements. The Board reviews these projections
at each Board meeting and approves the 18 months cash
flow quarterly.
• Netwealth holds an allocation of capital as appropriate to
enable flexibility to deal with unanticipated business
conditions.
22 | netwealth Annual Report 2023 For the year ended 30 June 2023
Risk type
Description
Managing the risk
Market
performance
risk
The risk that the operating and
financial performance of
Netwealth is influenced by a
variety of general domestic and
international economic and
business conditions, including
financial markets performance,
geopolitical events, interest rates
or foreign exchange rates and
Government policies.
•
Regular monitoring by the CEO, the Executive Director,
the Executive and the Board of possible outcomes, the
likely timeframe and the likelihood of the outcome
occurring.
• Diversification of revenue streams which act in different
ways with market performance. For example, fees on
funds under administration may decrease in a depressed
market, however trading and holdings in cash may
increase, generating fees for these services.
Operational
risk
The risk that inadequate or failed
internal processes, people,
systems or external events may
give rise to failure or disruptions
(e.g.: fraud).
•
•
Regular monitoring of systems and controls as part of the
risk management framework.
Business continuity policies and controls in place,
including regular testing of continuity with management,
oversight of results by the Board and independent audit of
capability.
The risk that Netwealth is
impacted as a result of an error,
which may occur as a result of
human error, supplier error, or
system design error which gives
rise to financial losses.
People &
culture risk
Reputation &
brand risk
The risk that Netwealth suffers
from a loss of key personnel,
sustained underperformance by
key personnel and/or fail to
attract people that share
Netwealth’s cultural values.
The risk that certain issues or
events may adversely affect
Netwealth’s reputation, including
through:
• Negative publicity;
• Disputes; and
• Negative client experiences.
• Clear training, policies, controls, and approval processes
in place for all high-risk functions.
•
•
Reconciliations, peer review, and testing performed to
identify potential errors.
Policies and controls, such as identity access
management, segregation of duties, alerts, audits, and
reconciliations to reduce risk of fraud.
• Whistleblowing Policy encourages staff and eligible
whistleblowers to raise concerns to Netwealth.
• Oversight of policies and processes by the People and
Culture team which outline Netwealth’s employee
guidelines and benefits, particularly around the
succession planning and remuneration / incentive
management for key employees, along with employee
policies on employment process, induction, performance
and behaviour.
• Application of a Code of Conduct which all Netwealth
employees, and directors are expected to abide by.
•
•
•
Regular monitoring of media to understand external
perceptions of Netwealth’s reputation / brand.
Regular monitoring of operational risks to understand and
mitigate impact of any control failure (if applicable).
Existence of a Complaints Policy and a Whistleblowing
Policy to ensure open and transparent interactions with
clients and employees.
• Application of a Code of Conduct for suppliers.
23 | netwealth Annual Report 2023 For the year ended 30 June 2023
Risk type
Description
Managing the risk
Strategic risk
The risk that Netwealth fails to
continue to be a leader in
technology and service, resulting
in a loss of our competitive
position.
The risk that Netwealth fails to
achieve profitability objectives,
including through pricing /
margin pressure, uncontrolled
expenses, or third party actions
(including competitors).
• Netwealth’s Executive and Board regularly discuss
strategic direction at each Board meeting to remain
abreast of competitive market dynamics.
•
•
Strategic planning process considers multiple factors
including competitors, external opportunities, technology
opportunities, new products and services, profitability,
pricing and adviser / client demand.
Regular monitoring and reporting of progress against
budget, revenue and expenses.
24 | netwealth Annual Report 2023 For the year ended 30 June 2023
Corporate Sustainability
Over the past year a significant amount of work has been
undertaken to continue to shape Netwealth’s approach to
corporate sustainability and our overarching corporate
sustainability framework. Netwealth’s annual Corporate
Sustainability Report outlines the initiatives that have been
undertaken over the year to achieve the goals that were
committed to in FY2023 as well as to provide guidance on
future goals.
Netwealth continued to focus on four key areas that are
important to both the Group and stakeholders: enhancing
our core business; being genuine and transparent; fostering
diversity, talent, and wellbeing; and creating a positive
social and environmental impact.
Reflecting on FY2023, these are some of the highlights in each of the four key areas:
1. Enhance our core business
We continued to enhance our platform capability and offerings to meet the current and future needs
of our clients, we also invest into the platform infrastructure, scalability and cybersecurity.
Safeguarding the data of our stakeholders is of paramount importance to us. To ensure the utmost
security, we combine our in-house dedicated expertise with external consultants and advanced
applications to detect and monitor activities across our systems. In line with our ‘Defence in Depth’
strategy, we implemented multi-factor authentication across our platform, bolstering our defence
against potential threats and continue to enhance our data governance processes to manage,
monitor and protect our data assets effectively.
2. Be genuine and transparent
We maintain the highest standards of safeguarding the interests of our stakeholders and clients’.
Strong foundations have been established to manage risk and compliance, but we recognise the need
for continuous improvement to meet current industry practices and regulatory expectations.
We maintain a strong focus of the quality and transparency of our investment options. To provide
clarity to our clients and investors about the environmental, social and governance (ESG) strategies of
the managed funds available on our investment menu, Netwealth has partnered with Morningstar
Australia’s Sustainability Ratings. These ratings assists investors in assessing the relative risks of their
investment choices based on ESG factors. Netwealth’s investment menus now offer 217 funds that
have been rated by Sustainalytics. We are fully aware of the greenwashing issues in the marketing of
managed funds that claim to offer ESG strategies which is why we chose to partner with a specialist
research house that has a dedicated investment team focused on sustainability ratings.
This year we began the journey of understanding our carbon footprint. We have estimated our base
Scope 1 & 2 emissions and are in the process of creating a carbon reduction plan to enable us to take
a proactive approach on our environmental impact. We expect to finalise this plan in the first half of
FY2024. Our commitment to transparency and genuineness drives us to share our progress openly
with stakeholders in the coming years.
25 | netwealth Annual Report 2023 For the year ended 30 June 2023
3. Foster diversity, talent, and wellbeing
Our people are our most valuable asset. We foster a culture where our people embrace our core
values of collaboration, courage, and optimism. Our focus remains on enhancing the overall employee
experience, promoting well-being, and providing ample development opportunities.
This year, we achieved certification with Work180 and were ranked sixth in the Top 10 Workplaces for
Women. We were also certified a Family Friendly Workplace and Great Place to Work. As part of our
ongoing commitment to wellbeing, we prioritised proactively addressing psychosocial risks by
carefully measuring work-related factors, including workload, timeframe for tasks, and work/life
balance. To further enhance employee mental health, we have implemented a comprehensive
framework aimed at better understanding and preventing any adverse impact on mental wellbeing
caused by workplace factors.
In the annual employee survey completed, Netwealth continued to achieve high satisfaction from
employees with 80% participation rate and an overall 77% favourable score. This is amongst the top
quartile of comparable businesses.
To address pay equity Netwealth has a robust remuneration framework that uses industry data to job
match and benchmark every role within the organisation. On an annual basis we conduct a thorough
gender pay equality analysis in accordance with Workplace Gender Equality Agency (WGEA)
methodologies. We remain committed to working towards our targets for gender balance. Gender
diversity indicators for the year to 31 March 2023:
Board
Senior Executive (excluding Executive Directors)
Managers
All Employees (excluding Non-Executive Directors)
4. Create a positive social and environmental impact
FY2022 Actual
33%
29%
36%
43%
Gender diversity %
FY2023 Actual
33%
25%
40%
42%
FY2023 Target
30%
30%
40%
45%
Netwealth has continued to partner with Australian Communities Foundation (ACF) to provide
guidance and oversight over Netwealth’s Impact Fund. This year, Netwealth’s Impact Partners
comprised of Live4Life, People & Parks Foundation, and Food for Change. As part of our employee
benefits package, all full-time employees are granted one day of volunteer leave per calendar year to
participate in workplace volunteering activities. This year, our dedicated employees contributed a
total of 575.25 hours to such endeavours.
Additionally, we have extended support to our community partners, including Banqer Primary, The
Centre for Women’s Economic Safety (CWES), and Go Girl Go for IT. Our participation at the Go Girl
event involved providing live, in-person interactive seminars with Netwealth technology specialists.
Since 2017, we have financially supported Banqer Primary to deliver their program to over 100,000
Australian primary students.
26 | netwealth Annual Report 2023 For the year ended 30 June 2023
To understand our corporate sustainability efforts and achievements in FY2023, please explore the full
Netwealth Corporate Sustainability Report on our Corporate Shareholder website at:
https://www.netwealth.com.au/web/about-netwealth/corporate-sustainability/
The report offers detailed insights into our initiatives and performance indicators, reflecting our
commitment to creating a positive impact.
We value your feedback and look forward to sharing our growth and progress in coming years.
Please share your feedback with us through CSR@netwealth.com.au
27 | netwealth Annual Report 2023 For the year ended 30 June 2023
Corporate Governance
Netwealth operates in the highly regulated superannuation and investment sectors of the financial
services industry. The Netwealth Board believes that sound governance is fundamental to the ongoing
success and growth of Netwealth. Accordingly, the Board has created a framework of governance,
culture, and accountability for managing Netwealth, including adopting relevant internal controls, risk
management processes and corporate governance policies and practices. These policies and
processes are designed to meet the ASX Listing Rules, ASX Corporate Governance Principles and
Recommendations as well as the Group’s trustee, IDPS operator and responsible entity obligations to
the users of its financial products and services and to achieve high level of corporate governance for
the benefit of its shareholders and other stakeholders.
Shareholders can access information about Netwealth’s governance framework from Netwealth’s
public website. Information including the ASX announcements, shareholder meeting details,
corporate sustainability, and Netwealth’s governance policies can be located at
https://www.netwealth.com.au/web/about-netwealth/shareholders/. Shareholders can access this
information and communicate with Netwealth through the shareholder contact link. Netwealth
encourages electronic communication with shareholders, however we will provide hard copy
information on request.
Board of Directors
A high performing, effective Board is essential for the proper governance of Netwealth. The Board has
the following responsibilities:
• Represent and serve the interests of shareholders by overseeing and appraising Netwealth’s
strategies, values, policies, and performance.
• Define Netwealth’s purpose and develop and approve Netwealth’s corporate strategy, including to
establish performance objectives, operating budgets, and corporate sustainability targets.
• Select, appoint, and evaluate the performance of the CEO, the Executive Director, the Executive,
their direct reports and other key employees.
• Approve the Remuneration Policy, in accordance with Netwealth’s purpose, values, strategic
objectives and risk appetite.
• Determine the remuneration of the CEO, the Executive Director, the Executive, their direct reports
and other key employees.
• Approve the risk management framework, including Netwealth’s appetite for risk and the
implementation of appropriate systems to manage those risks.
• Review, ratify, and monitor the systems of risk management, internal control, and compliance.
• Develop and review Netwealth’s values, code of conduct and corporate governance policies.
• Approve and oversee major capital expenditure, acquisitions, divestitures and capital
management.
• Monitor and review management processes aimed at ensuring the integrity and accuracy of
financial and other reporting.
• Approve financial reports, forward looking statements, and other reports required by law.
• Satisfy itself that appropriate frameworks exist for relevant information to be reported to the
Board and where required, challenge the recommendations of the Executive.
• Communicate to shareholders, stakeholders and the market generally on Netwealth’s
performance and other material matters, as required.
28 | netwealth Annual Report 2023 For the year ended 30 June 2023
The responsibilities of the Board are detailed in Netwealth’s Board Charter, including setting out the
role and responsibility of the Chair. The Board Charter can be located at
https://www.netwealth.com.au/web/about-netwealth/shareholders/.
Directors are expected to attend all board meetings where possible, either in person or via
teleconference link. Details of Director attendance at Board meetings up to 30 June 2023 are included
on page 40.
Board committees
The Board has established committees to assist the Board in discharging its duties. The Board has
five committees: the Audit Committee, the Compliance and Risk Management Committee (CRMC),
the Remuneration Committee, the Nomination Committee, and the People and Corporate
Sustainability Committee1.
All Directors have access to agendas and papers of all committee meetings through Netwealth’s
board portal. All Directors, who are not members of a committee have an open invitation to attend the
meeting. The signed minutes of each committee are also tabled at a subsequent board meeting. The
Chair of each committee is invited by the Chair to report any relevant matters to the Board at each
scheduled board meeting. If required, matters can be escalated to the Board at any time, and Board
meetings can be called if required to consider a matter that requires consideration before the next
scheduled Board meeting.
Refer to the Group’s Corporate Governance Statement located on the Netwealth website for detailed
information on the responsibilities of each board committee.
1 The Corporate Sustainability Committee was updated on 16 August 2023 to rename the committee to the People and
Corporate Sustainability Committee.
29 | netwealth Annual Report 2023 For the year ended 30 June 2023
Director nomination and appointment
The Board is currently comprised of six Directors, comprising of an Independent Chair, the CEO, one
Executive Director and three Non-Executive Directors (all of whom are independent). Netwealth’s
Board Renewal and Performance Evaluation Policy requires that the Chair of the Board will at all times
be an independent Non-Executive Director. The majority of Netwealth’s Board are Independent.
When considering an appointment to the Board, the Board will consider the candidate’s skill,
judgement, diversity, and experience. The Board uses a skills matrix to assist an independent
assessment of the current Board and to identify any gaps in the collective skills of the Board
Each year the Board considers the Board skills matrix (see below) to ensure the skills and experience
on the Board will provide the judgement, experience and diversity that will best enable Netwealth to
achieve its strategic objectives.
The Board has authorised the Nomination Committee to assess a candidate’s independence having
regard to current and any previous employment and personal interests of the candidate. The
Nomination Committee must put this assessment to the Board for approval along with
comprehensive checks for new Directors on education, employment, character, criminal history and
bankruptcy, alongside, an assessment of independence and the ability for the candidate to have
sufficient time to meet their responsibilities to Netwealth. New Directors are required to make
statements that they are not a disqualified person and that they are fit and proper for the position. All
Directors make an annual declaration to this effect.
Non-Executive Directors are generally appointed for a term of three years and will stand for election at
the Annual General Meeting (AGM) which occurs three years after their last appointment date. For
each Director that is put forward for election, Netwealth will ensure that information about the
Director is made available to shareholders so that they can make an informed decision.
Board Director performance and training
Directors are required to comprehensively prepare for, attend and participate in Board meetings.
Every year each Director is requested to assess the Board’s performance. The Chair of the Board (or a
third party appointed by the Chair), collates the results of these assessments. A summary of this
performance review is provided to the Board for discussion. In addition to the Board discussion,
where appropriate, the Chair meets one-on-one with each Director to specifically address
performance and effectiveness of the Board as a whole and of the Director.
The performance of the Chair of the Board Is reviewed by the Board, CEO and the Executive Director
within the annual Board Performance Review survey. The Board keeps up to date with relevant
market and industry developments through a range of training and briefings. In FY2023, each Director
was required to complete at least 20 hours of continuous professional development (CPD), and all
have met this requirement. The Company Secretary collects Directors’ training registers annually and
retains this information. The Company Secretary annually assesses the fit and proper requirements of
the Board in reference to key criteria listed in the Netwealth Fit & Proper Policy. This includes
reviewing the skills, expertise and knowledge of the Board, as well as CPD requirements and any
disclosed conflicts of interest. The Board are required to take all reasonable steps to avoid actual,
potential or perceived conflicts of interest, and each Director is required to disclosure any conflicts to
the Company Secretary at each Board meeting.
30 | netwealth Annual Report 2023 For the year ended 30 June 2023
Board skills matrix
Category
Explanation
i
e
n
o
t
n
A
y
h
t
o
m
T
i
i
e
n
e
H
l
e
a
h
c
M
i
i
e
n
e
H
w
e
h
t
t
a
M
s
i
w
e
L
d
y
v
a
D
n
a
m
e
e
r
F
y
l
l
a
S
y
b
m
e
T
e
t
a
K
Strategy
Product
Financial
acumen
People and
change
management
Legal, regulatory
and governance
Risk
management
and audit
Investments
Cyber Security
and technology
Corporate
Sustainability
Other
Skills Ratings:
●
◕
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Ability to contribute to and challenge the strategic direction of Netwealth,
including assessing and debating the strategic business plans, and contributing
to achieving Netwealth’s strategic objectives.
Understanding of Netwealth’s products and clients, including product basics of
Superannuation, IDPS and other financial products.
Understanding of key administration and accounting controls, financial records,
statements and presentations.
Strong financial literacy and analytical thinking skills.
Understanding of people management, Service agreements – terms, conditions and
monitoring.
Knowledge of remuneration plans, including Fixed, STI and LTI.
Knowledge of a Director’s legal requirements and understanding of Board
responsibilities, composition and the Director appointment and removal process.
Understanding of applicable legal requirements and regulation, including basic
principles of Corporation and Trust law and governing documentation such as the
Constitution.
Ability to understand and contribute to debate on law as applicable to Netwealth’s
products and services.
Understanding of the requirements applicable to an ASX listed company.
Ability to participate in debate as to the content of Netwealth’s Board policies and to
the delegation of duties to Netwealth’s CEO, the Executive Director and Executive.
Understanding of Netwealth’s Risk Management Framework.
Ability to understand and contribute to debate on the Netwealth’s risk and control
framework.
Understanding of investment risk management and monitoring.
Understanding of the role of Netwealth’s internal and external auditors.
Awareness of fraud, corruption issues.
Ability to debate management proposals, issues and policies relating to investments
Understanding of and ability to debate investment issues and recommendations
Ability to contribute to debate on the strategic direction of Netwealth’s information
technology.
Understanding of cyber protection, cyber risk management and principles of
business continuity.
High level knowledge of IT infrastructures, systems, processes and growth
requirement.
Understanding of principles of business continuity.
Understanding of how Netwealth can provide sustainable solutions to its products
and services.
Understanding of social, environmental and governance implication in decision
making.
● ● ● ● ● ●
◕ ◕ ● ● ◕ ◕
● ● ◕ ◕ ● ●
● ● ● ● ● ●
◕ ◕ ◕ ● ◕ ◕
● ● ◕ ● ● ◕
◕ ◕ ● ◕ ◕ ●
◕ ◕ ◕ ◕ ● ◕
● ◕ ● ◕ ◕ ●
Competent in dealing with media.
Commitment to Netwealth’s company values.
•
•
• Meets the Netwealth Investments Limited’s Fit and Proper Person requirements.
● ● ● ● ● ●
Expert level of skill and can lead a debate on the subject
Experienced level of skill and is comfortable in making decisions
31 | netwealth Annual Report 2023 For the year ended 30 June 2023
Financial reporting
The Audit Committee assists the Board in reviewing and monitoring the accuracy and integrity of
Netwealth’s financial reports and statements. The Audit Committee reviews the financial reports and
statements with the Chief Financial Officer (CFO), the CEO, the Executive Director, and Netwealth’s
external auditor to ensure their accuracy, compliance with accounting standards and compliance with
other policies and laws.
Netwealth’s external auditor, Deloitte, appointed since April 2017, is invited regularly to Netwealth’s
Audit Committee meetings and at least annually presents to the Audit Committee without members
of the Executive present. The Audit Committee conducts a formal annual performance assessment of
the external auditor, oversees regular rotation of the external audit partner and may consider whether
to commence an external tender for the audit.
Ms Lani Cockrem, the lead audit engagement partner was appointed in the 2022 financial year to
comply with Corporations Act 2001 requirements and promote independence through auditor
rotation.
After considering relevant factors including tenure, audit quality, capability, experience and
independence, the Audit Committee recommended to the Board, which resolved to reappoint Deloitte
for the 30 June 2023 financial year audit.
Deloitte will attend Netwealth’s AGM in November 2023.
Director shareholding requirements
To align with shareholder’s interests, it is a condition of employment that Non-Executive Directors of
the NWL Group Board are expected to directly or indirectly own shares in Netwealth with a total value
equal to at least one year’s remuneration. It is expected that a Non-Executive Director will own the
shares within 3 years of their appointment. Non-Executive Directors must abide by Netwealth’s
Trading Policy and seek approval and disclose any trading in Netwealth shares.
32 | netwealth Annual Report 2023 For the year ended 30 June 2023
Directors’ Information and Experience
The Directors bring to the Board a breadth of expertise and skills, including industry and business
knowledge, financial management skills and corporate governance experience.
Name and title
Profile
Timothy Antonie
Independent
Non-Executive
Director
Chair
Matthew Heine
CEO & Managing
Director (CEO)
Michael Heine
Executive Director
(ED)
•
•
•
•
•
Timothy has been a Director of Netwealth since November 2015 and was appointed as the
independent Chair of Netwealth (and its related entities, excluding Netwealth
Superannuation Services Pty Ltd (NSS)) from 17 February 2021.
Timothy commenced his career at Price Waterhouse (now PwC) and qualified as a
chartered accountant. He subsequently worked at several investment banks, including at
UBS Investment Bank as a Managing Director, where he advised major Australian
companies in large scale mergers, acquisitions, sales and restructures and equity
transactions, as well as day-to-day equity market facing matters. Timothy is a principal of
Stratford Advisory Group providing independent financial advice to Australian and
international corporations.
Timothy holds a Bachelor of Economics (majoring in Accounting) from Monash University.
Timothy is currently the chair of Breville Group Ltd and the lead independent Director of
Premier Investments Ltd.
Timothy is a member of the Group Remuneration Committee, and the Netwealth
Investments Limited (NIL) Investment Committee and the chair of the Group Nomination
Committee.
• Matthew joined Netwealth in July 2001 and was appointed a Director in March 2004. He
was appointed Joint Managing Director in January 2015, became Managing Director in Oct
2022 then promoted to CEO & Managing Director from June 2023.
• Matthew has been instrumental in the development of the Netwealth platform and
products as well as the distribution, branding and marketing of the Group. Matthew’s role
and experience in the sales, marketing and strategy field brings a firsthand understanding
of the industry and client base.
• Matthew holds a Diploma of Financial Services and an Advanced Diploma of Management.
• Matthew is a member of the People and Corporate Sustainability Committee.
• Michael has been a Director of Netwealth since its establishment in 1999.
• Michael was instrumental in the establishment of Netwealth in 1999. Michael acted as sole
Managing Director from 1999 to 2014 and acted as Joint Managing Director together with
his son Matthew from January 2015 until October 2022. Michael remains part of Executive
Team as an Executive Director.
• Michael has experience in Australian and European financial markets, including
commodity trading, international financing, mortgage lending and property development.
Michael was instrumental in the establishment of the Heine Brothers funds management
business in 1982 and was its Managing Director from 1982 to 1999 when the company was
acquired by ING (then Mercantile Mutual).
• Michael is a member of NIL Investment Committee, NSS Audit Risk and Compliance
Committee and NSS Superannuation Investment Committee.
33 | netwealth Annual Report 2023 For the year ended 30 June 2023
Name and title
Profile
Davyd Lewis
Independent
Non-Executive
Director
Sally Freeman
Independent
Non-Executive
Director
Kate Temby
Independent
Non-Executive
Director
• Davyd has been a Director of Netwealth since July 2009.
• Davyd was a partner of Mallesons Stephen Jaques for 20 years until his retirement in 2008.
Davyd’s role included Partner in Charge of the Melbourne centre, Managing Partner
Practice of Mergers & Acquisitions, Property and Construction, Dispute Resolution and
Intellectual Property, National Practice Team Leader of the Mergers & Acquisitions Group
and was responsible for supervising the relationship with 50 of the firm’s biggest clients.
• Davyd holds a Bachelor of Economics, a Bachelor of Laws and a Master of Laws (majoring
in securities markets and takeovers).
• Davyd is a member of the Audit Committee and Nomination Committee. Davyd is the
Chair of the CRMC, the Remuneration Committee and the NSS Audit Risk and Compliance
Committee.
• Sally joined Netwealth as a Director in October 2019.
• Sally’s executive career comprised over 30 years’ experience in the accounting and
consultancy industries culminating in a number of leadership roles with KPMG: Global
Executive–- Risk Consulting Services, Australia Managing Partner Risk Consulting, Partner
in Charge Board Advisory and Managing Partner Internal Audit.
• Sally holds a Bachelor of Commerce, is a graduate of the Australian Institute of Company
Directors, a Fellow of Chartered Accountants Australia and New Zealand and a member of
Chief Executive Women.
• Sally is currently a Director of Regional Investment Corporation, Eastern Health,
Melbourne Football Club and Regis Aged Care, Suburban Rail Link Authority and Aioi
Nissay Dowa Insurance Company Australia.
• Sally is a member of the CRMC, Remuneration Committee, Nomination Committee, NSS
Audit Risk and Compliance Committee and NSS Superannuation Investment Committee.
Sally is the Chair of the Audit Committee.
• Kate joined Netwealth as a Director in February 2021.
• Kate is a Managing Director with Metlife Investment Management. Kate is a member of
the Investment Committee for Conscious Investment Management (a private equity
impact fund), Melbourne Grammar School and was a Board member of Melbourne Girls
Grammar and Chair of the Marketing Committee from January 2016 to September 2020.
• Kate holds a Bachelor of Commerce, is a member of the Australian Institute of Company
Directors and the Chartered Accountants Australia and New Zealand.
• Kate was formerly a partner with Affirmative Investment Management, a Managing
Director at Goldman Sachs and Co-Head of Asia Pacific Ex-Japan Asset Management
Institutional Sales. Prior to this, Kate was a Consultant in Financial Risk Management at
Price Waterhouse (now PwC).
• Kate is currently a Director at Affirmative Investment Management Aust. Pty Ltd and Jakol
Investments Pty Ltd.
• Kate is a member of the Audit Committee, Compliance and Risk Management Committee,
Remuneration Committee and the Nomination Committee. Kate is the Chair of the People
& Corporate Sustainability Committee and NIL Investment Committee.
34 | netwealth Annual Report 2023 For the year ended 30 June 2023
Executive Leadership Information and Experience
Profiles of Netwealth’s senior management team are set out below.
Name and title
Profile
• Refer to Board of Directors section
Matthew Heine
CEO & Managing
Director
Michael Heine
Executive Director
Grant Boyle
Chief Financial
Officer and Joint
Company Secretary
John Hanrahan
Chief Information
Officer
• Refer to Board of Directors section
• Grant joined Netwealth in May 2017.
• Grant has more than 30 years’ experience in financial services and the accounting
profession. Most recently the Chief Financial Officer of EMR Capital, Grant has
held several Chief Financial Officer and Chief Operating Officer roles within
financial services, including at BlackRock, Powerwrap and Phillip Capital.
• Prior to entering the funds/Platform space, Grant was a finance manager with ANZ
Group Finance and a manager in the Corporate Recovery and Insolvency division
of Ernst & Young.
• Grant holds a Bachelor of Business (Accounting) from Latrobe University and a
member of Chartered Accountants Australia & New Zealand.
•
•
•
John joined Netwealth in May 2012.
John has responsibility for application development, technology infrastructure,
business analysis, project management and technology vendor management.
John has more than 30 years of experience in financial services technology. Prior
to joining Netwealth, John led the Australian technology team for BlackRock.
John holds a Bachelor of Business (Banking and Finance) from Monash University.
35 | netwealth Annual Report 2023 For the year ended 30 June 2023
Name and title
Profile
•
•
•
•
Jodie joined Netwealth in February 2023.
Jodie is responsible for managing Netwealth’s Legal, Risk and Compliance team.
Jodie has over 20 years’ experience across the financial services industry in
compliance, risk management, corporate governance, legal advice, and regulatory
change. Prior to joining Netwealth, Jodie held roles with Westpac, Morningstar,
ANZ and Standard & Poor’s.
Jodie holds a Bachelor of Law/Arts from Deakin University, a Masters of Law from
Monash University and is a graduate of the Corporate Governance Institute and
the Australian Institute of Company Directors.
• Shanyn joined Netwealth in July 2023.
• Shanyn has more than 20 years’ Human Resources experience across several
industries, including financial services, tech and retail. Most recently Shanyn was
the Chief People Officer of Finder, and she has held several HR Executive roles
including at Afterpay and Online Education Services.
• Shanyn holds a Bachelor of Behavioural Science from LaTrobe University, a
Graduate Diploma in Human Resources from Deakin University an MBA from
Deakin University and is a certified member of the Australian Human Resources
Institute.
• Alistair joined Netwealth in May 2002.
• Having previously held a leadership role within Netwealth’s IT Development Team
and as General Manager for Operations, Alistair is currently responsible for key
strategic projects within Netwealth.
• Alistair has over 20 years’ experience in the financial services industry and has
played an important role in establishing and achieving scalability for many
administrative processes across Netwealth’s Platform.
• Alistair holds a Bachelor of Commerce.
• Amanda joined Netwealth in February 2004.
• Amanda is the General Manager for Service, Administration & Support. Her
department is responsible for administering Netwealth’s Superannuation and
Multi Asset Portfolio Services and is the primary point of contact for financial
advisers, members and investors.
• Amanda’s role is to lead a customer focussed administration, improvement and
service team committed to the provision of a best practice service.
• Amanda has just under 20 years’ experience in the financial services industry.
• Amanda holds a diploma of Financial Planning and Management.
Jodie Henson
Chief Risk Officer
Shanyn Payne
Chief People Officer
Alistair Densley
General Manager,
Transformation and
Special Projects
Amanda Atkinson
General Manager,
Service,
Administration and
Support
36 | netwealth Annual Report 2023 For the year ended 30 June 2023
Name and title
Profile
• Damian joined Netwealth in October 2019 and is responsible for managing
Netwealth’s National Sales & Distribution Team.
• He brings more than 25 years of financial services experience working with major
global and Australian wealth management firms in range of executive leadership
roles.
• Damian holds a Bachelor of Finance from the University of Illinois and an MBA
from Bond University.
• Matt joined Netwealth in August 2020.
• Matt has responsibility for Product Management, Investment Governance &
Research, and strategy implementation.
• He has over 20 years’ experience in wealth management and financial services
industry.
• Matt holds a Bachelor of Commerce and MBA.
• David joined Netwealth in July 2013.
• During his time at Netwealth, David has managed multiple teams across the
Investment Operations division including Corporate Actions & Managed
Accounts.
• David holds a Bachelor of Commerce (Finance & Marketing) and a diploma of
Financial Planning.
• Stephen joined Netwealth in May 2017 and was appointed Head of Legal in
February 2020.
• He was also appointed as Joint Company Secretary in December 2022.
• He has 15 years’ experience in legal practice, primarily in financial services. Prior to
joining Netwealth, Stephen spent 10 years at one of Australia’s leading law firms.
• Stephen has a Bachelor of Commerce and a Bachelor of Laws from the Australian
National University.
Damian Holland
General Manager,
Sales &
Distributions
Matt West
General Manager,
Product and
Strategy
David Sutherland
General Manager,
Investment
Operations and
Managed Accounts
Stephen Masterman
Head of Legal and
Joint Company
Secretary
37 | netwealth Annual Report 2023 For the year ended 30 June 2023
Netwealth’s values
At Netwealth the Board, Executive and employees pride ourselves on living our shared values, which
impact the way we work and communicate.
Netwealth’s values were formulated by Netwealth Board, Executive and employees and captures the
unique point of difference that we bring to the market. The values were approved by the Board and
form part of the Group Annual Strategic Plan. We believe the values strongly represent why Netwealth
was successful in the past and encourage our team to embrace these values as we believe they will
ensure Netwealth’s continued success.
During induction, new employees are introduced to the values and employees are recognised across
the business where they demonstrate exceptional alignment to one or more values as part of
Netwealth’s value awards presented periodically at Town Hall meetings. The performance review
process is aligned to providing our team continual feedback and measurement of overall performance
against our values. Netwealth’s values are:
We are curious and look to
challenge assumptions, explore
new possibilities, and
enthusiastically learn.
We are optimistic and look to be
positive, drive for solutions and
demonstrate passion and pride.
We are courageous and look to act,
overcome barriers, and stand up for
the right outcomes.
We are collaborative and look to
consider other’s priorities, share
knowledge, help others, and
communicate effectively and
respectfully.
We are agile and look to adapt
to change, focus on agreed
priorities, and execute quickly
and efficiently.
We are genuine and look to be
open, honest, and transparent, act
with integrity, ensure compliance
with regulations, and demonstrate
professionalism consistently.
38 | netwealth Annual Report 2023 For the year ended 30 June 2023
Directors’ Report
The Directors present their report on Netwealth Group Limited “the Company” and its controlled
entities for the year ended 30 June 2023 (FY2023). The consolidated entity is referred to as “the Group
or Netwealth”. In order to comply with the provisions of the Corporations Act 2001, the directors report
as follows:
Directors
The Directors (unless stated otherwise) in office since the start of the financial year to the date of this
report are:
Non-Executive Directors:
•
Timothy Antonie (Chair)
• Davyd Lewis
• Sally Freeman
• Kate Temby
Executive Directors:
• Matthew Heine
• Michael Heine
Details of the qualifications, experience and special responsibilities of the Directors and qualifications
and experience of the Company Secretaries at the date of this report are set out on pages 33 to 37 of
this Annual Report.
Principal Activities
The principal activities of the Group are to provide Financial Intermediaries and clients with wealth
administration and management services including managed funds, investor directed portfolio
services, a superannuation master fund, managed accounts service, self-managed superannuation
and non-custodial administration services. There were no significant changes to the principal
activities of the Group during the financial year that are not otherwise disclosed in this Annual Report.
State of affairs
There were no other significant changes in the state of affairs during the year that are not otherwise
disclosed in this Annual Report.
Dividends
On 24 August 2022, the Company declared a final dividend and paid on 29 September 2022 a fully
franked dividend of 10.0 cents per share, representing a total dividend of $24,831,369.
On 15 February 2023, the Company declared an interim dividend and paid on 24 March 2023 a fully
franked dividend of 11.0 cents per share, representing a total dividend of $26,827,372.
The Company does not have a Dividend Reinvestment Plan.
39 | netwealth Annual Report 2023 For the year ended 30 June 2023
Operating and Financial Review
Information on the operating and financial performance of the Group, its strategic and sustainability
initiatives, risks and outlook are set out on pages 12 to 24 of this Annual Report.
External outlook
Despite the challenging economic environment, Netwealth remains in an excellent financial position
to manage the resulting future risks and opportunities. It is highly profitable with significant recurring
revenues, exceptional cash generation, has low capital expenditure and has no external borrowings.
The Directors actively monitor global economic conditions and exercise prudent risk management to
continuously manage their impact on the Group’s operations.
Subsequent Events to Reporting Date
In the opinion of the Board, there are no other matters or circumstances which have arisen between
30 June 2023 and the date of this Report that have significantly affected or may significantly affect the
operations of the Group, the results of those operations and the state of affairs for the Group in
subsequent financial periods.
Directors’ meetings
During the financial year, 21 Board of Directors’ meetings were held. Attendances by each Director
during the year of Board meetings and Committee meeting where the Director is a member were as
follows:
Board of
Directors’
meetings
Audit
Committee
Remuneration
Committee
Nomination
Committee
Compliance
& Risk
Committee
(A)
(B)
(A)
(B)
(A)
(B)
(A)
(B)
(A)
(B)
People and
Corporate
Sustainability
Committee
(B)
(A)
Directors
Timothy Antonie
Davyd Lewis
Sally Freeman
Kate Temby
Michael Heine
Matthew Heine
21
21
21
21
21
21
21
21
21
19
19
21
-
13
13
13
-
-
-
13
13
13
-
-
12
12
12
12
-
-
12
12
12
10
-
-
3
3
3
3
-
-
3
2
3
3
-
-
-
10
10
10
-
-
-
10
10
8
-
-
-
-
-
4
-
4
-
-
-
4
-
4
(A) Number of meetings held during the time the director held office and was eligible to attend as a member
(B) Number of meetings attended as a member
Indemnification of Directors, Officers and Auditors
It is the Group’s policy that its employees should be protected from any liability they incur as a result
of acting in the course of their employment in their respective capacities, subject to appropriate
conditions.
During the financial year, the Company has paid premiums for insurance for the benefit of the
Directors and Executive team. In accordance with common commercial practice, the insurance policy
prohibits disclosure of the nature of the liability insured against and the amount of the premium.
40 | netwealth Annual Report 2023 For the year ended 30 June 2023
The company has not otherwise, during or since the end of the financial year, except to the extent
permitted by law, indemnified or agreed to indemnify the auditor of the company against a liability
incurred as such by auditor.
Key Management Personnel (KMPs) and Employee Share and Option Plans
Information about the remuneration of KMPs is set out in the remuneration report section of this
Directors’ report.
During the year, eligible employees who had served 3 or more years were offered ordinary shares
valued at $1,000 as a gift for no consideration resulting in 13,950 new ordinary shares issued at $13.22
(FY2022: 11,033 employee gift shares)
A number of employees were granted performance rights as part of the Group’s long-term incentive
plan during the year. This resulted in the Group issuing 72,050 performance rights at an exercise price
of $nil during the year (FY2022: 60,913 performance rights). There was no new issue of options in
FY2023 (FY2022: 2,270,000 options).
Shares, options and performance rights granted to Directors and KMPs during the year:
Issuing entity
Executive Director
Matthew Heine
Senior Executive
Grant Boyle
Type
Number
Class of shares
Rights
27,231
Ordinary
Shares
Rights
75
6,893
Ordinary
Ordinary
Details of unvested options or rights as at the date of this report are:
Issuing entity
Type
Number
Class of shares
Exercise price
of the equity
Vesting
date
Netwealth Group
Limited
Netwealth Group
Limited
Netwealth Group
Limited
Options
1,935,000
Ordinary
$15.74
30 Jun 24
Rights
50,748
Ordinary
nil
30 Jun 24
Rights
72,050
Ordinary
nil
30 Jun 25
41 | netwealth Annual Report 2023 For the year ended 30 June 2023
Details of vested options but not yet exercised as at the date of this report are:
Issuing entity
Type
Number
Class of shares
Exercise price
of the equity
Expiry date
of equity
Netwealth Group
Limited
Options
512,139
Ordinary
$7.5544
30 Jun 37
Environmental Regulations
The Group does not believe that its operations are currently subject to any other particular and
significant environmental regulation under a law of the Commonwealth of Australia or of an Australian
State or Territory. To the best of the Directors’ knowledge, the Group has not incurred any material
environmental liability during the year.
The Group is aware that the International Sustainability Standards Board (ISSB) in June 2023,
published its first two IFRS Sustainability Disclosure Standards, IFRS S1 General Requirements for
Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures.
The standards are effective for annual reporting periods beginning on or after 1 January 2024. Based
on the second design consultation paper released by Treasury, the mandatory climate-related
financial disclosures are expected to phase in over a 4-year period with the Group anticipating it will
be categorised under group 2 with its first financial year of reporting in FY2026 as the Group has more
than 250 employees and consolidated revenue of $200 million or more.
The Group is closely monitoring the progress of these standards and upcoming legislative
requirements and will continue to assess their potential impacts on the Group’s reporting processes,
governance practices, assurance requirements and stakeholder engagement.
The Group is committed to meeting the growing expectations of its stakeholders, including
customers, shareholders, its people and the community to address environmental impact responsibly.
Transparency and accountability are at the core of our corporate sustainability approach and the
Group has in place a comprehensive corporate sustainability framework which reflects our core
values of being genuine, agile, collaborative, curious, courageous and optimistic.
A summary of our corporate sustainability initiatives is set out in pages 25 to 27 of this report. The full
annual Corporate Sustainability, quarterly progress report and latest initiatives are available on the
Company’s website at
https://www.netwealth.com.au/web/about-netwealth/corporate-sustainability/
Corporate governance
Netwealth is committed to being ethical, transparent and accountable. We believe this is essential for
the long-term performance and sustainability of our Company and supports the interests of our
shareholders, clients and other stakeholders.
A summary of the corporate governance statement is set out in pages 28 to 32 For the full corporate
governance statement and disclosure policies, please visit our website below.
https://www.netwealth.com.au/web/about-netwealth/shareholders/
42 | netwealth Annual Report 2023 For the year ended 30 June 2023
Proceedings on behalf of the Group
No person has applied for leave of court to bring proceedings on behalf of the Group or intervene in
any proceedings to which the Group is a part for the purpose of taking responsibility on behalf of the
Group for all or any part of those proceedings. The Group was not a party to any such proceedings
during the year.
Non-audit services
During the year, Deloitte Touche Tohmatsu, the Group’s auditor has performed internal controls
assurance services in addition to its statutory duties. Details of the amounts paid or payable to the
auditor for audit and non-audit services provided during the year are set out in Note 28 to the financial
statements.
The Directors, in accordance with advice received from the Audit Committee, are satisfied that the
provision of those non-audit services during the year did not compromise the auditor independence
requirements of the Corporations Act 2001 for the following reasons:
• All non-audit services have been approved in accordance with the Company’s non-audit services
policy to ensure that they do not impact the impartiality and objectivity of the auditor; and
• None of the services undermine the general principles relating to auditor independence as set
out in APES 110 Code of Ethics for Professional Accountants, including reviewing or auditing the
auditor’s own work, acting in a management or a decision making capacity for the Group, acting
as advocate for the Group or jointly sharing economic risk and rewards.
Rounding of amounts
The Group is of a kind referred to in the Australian Securities and Investments Commissions
Corporations (Rounding in Financials/Directors’ Reports) Instrument 2016/191 and therefore the
amounts contained in the financial statements have been rounded to the nearest thousand dollars,
unless otherwise stated.
Auditor’s independence declaration
A copy of the auditor’s independence declaration as required under s307C of the Corporations Act
2001 is set out on page 64.
Signed in accordance with a resolution of the Board of Directors:
Timothy Antonie
Chair
16 August 2023
43 | netwealth Annual Report 2023 For the year ended 30 June 2023
Davyd Lewis
Independent
Non-Executive
Chair of
Remuneration
Committee
Remuneration Report (audited)
Letter from the Remuneration Committee Chair
On behalf of the Board, I am pleased to present Netwealth’s FY2023 Remuneration Report.
Netwealth’s performance in FY2023
Netwealth's robust risk management framework and resilient culture have positioned the Group to
effectively respond and adapt to both short and long-term disruptions. Despite facing challenges from
uncertain economic conditions in a higher interest rate environment, Netwealth navigated FY2023
without major disruptions and achieved remarkable growth, with record total income increasing by
21.6% to $214.7 million and record NPAT increasing by 20.9% to $67.2 million. This exceptional
performance was primarily driven by a 26.3% increase in Funds Under Administration (FUA) to $70.3
billion at the end of the financial year.
Review of the Remuneration framework and policy
The Remuneration Committee recognises the importance of maintaining an appropriate
remuneration structure that embeds values aligned behaviour, aligns with our strategic objectives, is
attractive to our employees, is compliant and transparent and meets the expectations of our
shareholders, employees, clients and the communities in which we operate.
During the year, we have reviewed our remuneration structure. We have had regard to the feedback
from our stakeholders and we have looked at the remuneration structures of other Australian-based
ASX-listed companies of comparable size. As a result of that review, the Board has revised the
remuneration mix of our senior executives to increase slightly the proportion of performance-based
remuneration. This remuneration framework will apply from FY2024 onwards. We have also adopted a
more structured bonus pool system that rewards other employees at all levels based on the success
of the Group and their personal performance. Strict behavioural, governance and performance
gateways measured against our values will continue to apply to all our performance-based
remuneration. Our values are embedded into our performance framework and holds all employees to
account for behaviours that are in the best interests of the company, our people, our community and
our shareholders.
For senior executives, 65% of Short Term Incentives (STIs) will be based on a Net Profit After Tax
(NPAT) metric and 25% will be based on their contribution to the effective execution of the Board's
FY2024 business plan. Our business plans are detailed and comprehensive and have a wide range of
very specific strategic initiatives. The Board ensures that the objectives of the business plan are set
aggressively. Our senior executives are individually responsible for the delivery of these initiatives and
the Board makes a quantitative assessment of the delivery of each initiative each year and attributes
this level of delivery to the senior executives. The remaining 10% of the STI will be based on individual
values-based performance ratings.
Our Long Term Incentives (LTIs) for FY2024 will be based on three metrics: EPS growth (35%),
comparative Total Shareholder Return (TSR) (35%) and contribution to the effective execution of the
Board’s business plans over the vesting period (30%). The Remuneration Report provides further
information in relation to our revised performance-based remuneration framework.
From 1 January 2024, Netwealth will become subject to the Australian Prudential Regulation Authority
(APRA) revised Prudential Standard, CPS 511 Remuneration (CPS 511) and it is currently expected that
the Federal Government’s Financial Accountability Regime (FAR) will apply to companies operating
44 | netwealth Annual Report 2023 For the year ended 30 June 2023
the superannuation sector, such as Netwealth, from early 2025. CPS 511 and FAR will both affect our
remuneration arrangements, and we will be revising our remuneration framework accordingly in the
coming months. Corporate sustainability is already central to our company strategy, and we will
continue to invest in and progress towards the measurement of these initiatives and give
consideration to how our performance-based remuneration can assist in promoting these objectives.
FY2023 STIs
In assessing executive team performance, the Board determined that, overall, the executive team had
performed strongly, and this was reflected in Netwealth’s excellent results for the year. Even so, due to
the aggressive nature of our strategic targets, while substantial progress was made, the targets were
not fully met. This was due in part to the difficulty of recruiting in a tight labour market.
For CEO Matt Heine, the maximum STI was equal to 50% of fixed remuneration. For the other
members of the executive team, including CFO Grant Boyle, the maximum STI was equal to 25% of
fixed remuneration. The STIs had personal behavioural and performance gateways and a corporate
performance gateway that required the Group to achieve at least 95% of budget NPAT. These
gateways were all achieved. The STIs also had three personal and corporate performance conditions
that determined the proportion of the STI that was payable. The first condition had a 50% weighting on
NPAT compared to budget NPAT. Under this condition, 42% of the STI was achieved and payable. The
second condition had a 25% weighting and was based on individual values and performance ratings.
The full 25% was payable to the CEO and CFO under this condition. The third condition had a 25%
weighting and was based on the CEO’s and CFO’s contribution to strategic initiatives. Under this
condition, 19% of the STI was achieved and payable.
Cash bonuses for other non-sales and distribution employees were based on a bonus pool
arrangement where the size of the pool was determined from the financial performance of Netwealth
combined with the individual employee’s performance and behavioural ratings. Sales and distribution
employees earned a cash-based bonus based on their sales targets and upon meeting expected
behavioural standards.
FY2023 LTIs
During the year, rights were granted to Matt Heine, the other members of the executive team and a
number of key employees. In the case of Matt Heine, this grant was approved by shareholders at the
2022 Annual General Meeting. The rights are subject to personal behavioural, performance gateways,
and corporate performance conditions based on TSR and EPS growth over a three-year vesting period
ending on 30 June 2025. Shareholders will be asked to approve another LTI award at this year’s annual
general meeting.
The Board believes this Remuneration Report will assist our shareholders and other stakeholders to
understand our remuneration policy, objectives and practices. We are committed to engaging with
you and welcome your feedback.
Yours faithfully
Davyd Lewis
Chair of the Remuneration Committee
16 August 2023
45 | netwealth Annual Report 2023 For the year ended 30 June 2023
Introduction
Remuneration Objectives
Remuneration Governance
Remuneration Framework
Remuneration Mix of KMPs
Contents
A.
B.
C.
D.
E.
F. Overview of the Group Performance
G.
H. Non-Executive Directors Remuneration
I.
J.
Executive Remuneration
Other Information
Previous Comments or Resolutions in Relation to Remuneration Report
A. Introduction
This FY2023 Remuneration Report for Netwealth is prepared in accordance with the requirements of
the Corporations Act 2001 and its regulations. The report outlines the remuneration arrangements in
place for the Key Management Personnel (KMP) of Netwealth. KMP are the individuals who have
authority and responsibility for planning, directing and controlling the activities of Netwealth, as
defined under AASB 124 Related Party Disclosure. The following table lists Netwealth’s KMP for
FY2023:
Name
Position
Non-Executive Directors
Timothy Antonie
Independent Non-Executive Chair
Davyd Lewis
Independent Non-Executive Director
Sally Freeman
Independent Non-Executive Director
Kate Temby
Independent Non-Executive Director
Executive Directors
Matthew Heine
Chief Executive Officer & Managing Director (CEO)
Michael Heine
Executive Director
Senior Executive
Grant Boyle
Chief Financial Officer (CFO) & Joint Company Secretary
All KMP held office for the full year.
46 | netwealth Annual Report 2023 For the year ended 30 June 2023
B. Remuneration Objectives
The Board is committed to a remuneration framework targeted on driving excellent client service and
solutions, integrity and a performance culture. Netwealth’s objectives for remuneration of all
employees include the following:
•
to promote achievement of the Netwealth’s strategic objective of building short, medium and
long-term shareholder and enterprise value;
•
•
• while remuneration arrangements are designed to promote and reward performance, they must
also promote conduct consistent with the Board’s risk appetite and protection of the interests of
Netwealth’s stakeholders;
the structure for remuneration must be consistent with and promote adherence to Netwealth’s
ethics, values, policies and procedures;
employees are to be fairly remunerated for work undertaken, having regard to the remuneration of
employees in comparable positions in comparable organisations;
remuneration levels should attract and retain high-quality employees;
total remuneration of executives and other senior employees should be appropriately balanced
between fixed remuneration and at risk/variable remuneration based on corporate and individual
performance;
there must be no gender bias in remuneration; and
•
• when setting the levels of remuneration, Netwealth’s long term financial soundness and its
•
•
prospective financial position and performance are to be considered.
Netwealth’s objectives for remuneration of Non-Executive Directors include:
•
•
remuneration must be enough to attract and retain high quality Non-Executive Directors;
remuneration for Non-Executive Directors must not create a conflict with their obligation to bring
an independent judgement to matters before the Board;
remuneration for each Non-Executive Director should be appropriate based on their role and
responsibilities, including the time commitment involved; and
there must be no gender bias in remuneration.
•
•
C. Remuneration Governance
The Board is responsible for establishing Netwealth’s remuneration policy (the Remuneration Policy)
and determining Non-Executive Director remuneration, Senior Executive remuneration and
Netwealth’s incentive structures. The Board is assisted by the Remuneration Committee (the
Committee). The Committee is comprised of Netwealth’s four independent Non-Executive Directors.
The Committee’s responsibilities include:
•
•
•
•
•
•
•
•
reviewing and making recommendations to the Board on the Remuneration Policy;
annually reviewing the performance of the CEO and the other Executive Director (ED);
determining whether the CEO has met the conditions for payment of STIs and LTIs under the
terms of his contract and/or under the terms of relevant STI and LTI schemes;
annually reviewing and recommending remuneration arrangements for the CEO, the ED, the
CEO’s direct reports, other persons determined by APRA to be ‘responsible persons’ and the Non-
Executive Directors;
approving remuneration packages over a threshold amount;
approving major changes in remuneration-related policies;
reviewing and recommending changes and developments in relation to the STI and LTI schemes;
overseeing the operation of the LTI schemes and recommending whether offers are to be made
under the schemes;
47 | netwealth Annual Report 2023 For the year ended 30 June 2023
•
•
•
•
•
reviewing and recommending bonuses, including bonuses for other employees, bonuses for sales
and distribution staff and STIs for senior executives;
reviewing and making recommendations on remuneration by gender and addressing any pay gap;
reviewing and recommending changes to board remuneration;
reviewing and recommending the Remuneration Report;
ensuring remuneration for Non-Executive Directors does not create a conflict with their
obligations; and
• where applicable, approving the appointment of remuneration advisers for the purposes of the
Corporations Act.
D. Remuneration Framework
The Board reviews the structure and the effectiveness of Netwealth’s remuneration arrangements
annually to ensure the alignment with business performance values and strategy. The Board monitors
changing market conditions as well as any regulatory and corporate governance developments and
alters remuneration arrangements if appropriate to respond to changing conditions. The
remuneration framework is structured to use fixed remuneration, a cash bonus pool, STIs and LTIs to
promote Netwealth’s values and financial performance.
Purpose of each remuneration component in promoting Netwealth’s performance
Fixed remuneration
STIs and bonus pool (at risk)
LTIs (at risk)
• Attract and retain high-
• STIs reward senior
• Motivate and reward
quality employees, who will
enable Netwealth to
achieve its strategic
objectives, by providing
market competitive base
remuneration
commensurate with the
employee’s individual
skills, complexity of role
and experience.
executives for their role in
the effective execution of
Netwealth’s business plan
and achievement of
financial targets,
consistent with the
promotion of Netwealth’s
ethics, values and
controls.
• STIs reward sales and
distribution staff for net
sales performance.
• A bonus pool, the size of
which is based on
Netwealth’s financial
performance, is allocated
to staff at all levels as a
reward for personal
performance that has
contributed to Netwealth’s
success.
senior executives for their
role in achieving earnings
growth and contributing to
the effective execution of
Netwealth’s business plan
consistent with the
Board’s risk appetite, the
protection of the interests
of all of Netwealth’s
stakeholders and the
promotion of Netwealth’s
ethics, values and
controls.
• Motivate and reward
employees for their role in
achieving earnings growth
while promoting
Netwealth’s ethics, values
and controls.
48 | netwealth Annual Report 2023 For the year ended 30 June 2023
The table below summarises the elements of Netwealth’s remuneration framework in FY2023.
Fixed remuneration
Fixed
•
Each employee’s fixed remuneration is set having regard to their individual
responsibilities, skills and experience and with consideration to the remuneration
paid to employees of comparable companies, particularly companies within the
financial services industry. To be market competitive, roles are benchmarked at
least annually with reference to peer companies within the industry.
Remuneration reviews normally occur annually and apply from 1 July.
Performance-based remuneration
STIs
Purpose & Execution
STIs for CEO
(At risk)
Maximum target amount
•
50% of fixed remuneration
FY2023 Outcomes
•
86% of maximum
target amount was
achieved.
Form and time of payment
• Cash bonus – STI earnt is paid over 2 years:
‒ 50% within 30 days after the release of the
FY2023 annual report; and
‒ 50% within 30 days after the release of the
FY2024 annual report, subject to continuously
being employed until after the release of the
FY2024 annual report and subject to a malus
clawback condition.
Performance metrics
NPAT metric
• Based on Netwealth’s FY2023 NPAT relative to
budget NPAT.
• Between 95% and 105% of budget, a proportionate
amount is paid.
• NPAT is determined net of the bonus expense.
Individual values rating metric
• Based on individual values ratings in FY2023.
Contribution to effective execution of business plan
metric
• Based on individual contribution to effective
execution of Board approved annual strategic
initiatives in FY2023 which are assessed by the Board
on a quarterly basis.
Weighting
% Outcomes
50%
42%
25%
25%
25%
19%
49 | netwealth Annual Report 2023 For the year ended 30 June 2023
STIs for CFO and
other members
of the Executive
Leadership
Team who
report to the
CEO (Executive)
(At risk)
Maximum target amount
•
25% of fixed remuneration
•
For the CFO, 86% of
maximum target
amount was achieved.
Form and time of payment
• Cash bonus – STI earnt is paid over 2 years:
‒ 50% within 30 days after the release of the
FY2023 annual report; and
‒ 50% within 30 days after the release of the
FY2024 annual report, subject to continuously
being employed until after the release of the
FY2024 annual report, and subject to a malus
clawback condition.
•
This does not apply to the GM Sales & Distribution
who instead receives a sales target based STI – see
below.
Performance metrics
NPAT metric
• Based on Netwealth’s FY2023 NPAT relative to
budget NPAT.
• Between 95% and 105% of budget, a proportionate
amount is paid.
• NPAT is determined net of the bonus expense.
For the Chief Risk Officer (CRO), the NPAT metric
does not apply and is replaced by a metric based on
the Board’s assessment of the CRO’s contribution to
the effective management of Netwealth’s legal, risk
and compliance functions in FY2023 which are
assessed by the Board on a quarterly basis.
Individual values rating metric
• Based on individual values ratings in FY2023.
Contribution to effective execution of business plan
metric
• Based on individual contribution to effective
execution of board approved annual strategic
initiatives in FY2023 which are assessed by the Board
on a quarterly basis.
Weighting
% Outcomes
50%
42%
25%
25%
For the CFO,
25%.
For the CFO,
19%
STIs for Sales
and Distribution
staff (At risk)
Bonus cash pool
bonus for other
employees
•
•
•
For sales and distribution staff, STIs are cash bonuses based on pre-agreed
performance targets. Part of each individual’s STI is payable based on the first 6
months’ performance and the balance is payable after the end of the financial year.
The performance targets are based mainly on fee-earning FUA and FUM.
In FY2023, Netwealth adopted a bonus pool arrangement. The size of the pool was
based on Netwealth’s financial performance in FY2023.
From the bonus pool, individual bonuses were based on the employee’s
performance rating. The employee must be currently employed (or on approved
leave) at the time of the payment.
50 | netwealth Annual Report 2023 For the year ended 30 June 2023
LTIs
Purpose & Execution
FY2023 position
Options (At
risk)
Offers of options
•
•
•
•
The Netwealth Employee Incentive Plan (NEIP),
under which all LTIs are offered, provides that
incentive securities may be in the form of options.
To date there have been two offers of options under
NEIP, referred to here as the ‘FY2020 Options’ and
the ‘FY2022 Options’.
Vesting Period
•
The vesting conditions are tested over a 3 financial
year vesting period.
• Upon exercise, the options convert to ordinary
shares on a one for one basis.
Gateway conditions
•
The holder must be either continuously employed or
hold office with Netwealth until the vesting date.
The options are subject to a ‘gateway’ condition
based on personal behaviour and performance
measured against our values.
If the employee does not meet the personal and
behavioural gateway condition, all their options
lapse, unless the Board determines otherwise.
Conditions
• Options must be exercised within 15 years of date of
grant.
• Options do not confer the right to attend and vote
at meetings, and do not confer the right to
participate in dividends.
• Should a liquidity event or change of control event
occur, the Board has a discretion to automatically
exercise all vested and unvested options.
• Options held by senior executives and the CEO have
corporate performance metrics – see below.
Options held by others are not subject to the
corporate performance metrics.
•
FY2020 Options
• An offer of options was
made under the NEIP to
select senior and key
employees in FY2020.
The exercise price of
the FY2020 Options is
$7.5544.
The FY2020 Options
vested on 30 June 2022.
57,558 FY2020 Options
were exercised during
FY2023, leaving a
remainder of 518,033
FY2020 Options vested
and outstanding at 30
June 2023.
•
•
•
FY2022 Options
• An offer of options was
made under the NEIP to
select senior and key
employees in FY2022.
The exercise price of
the FY2022 Options is
$15.74.
1,935,000 FY2022
Options remain on issue
at 30 June 2023.
The FY2022 Options will
potentially vest on 30
June 2024.
•
•
Current Year
•
There were no new
options issued during
FY2023.
Corporate performance metrics
TSR Metric
•
a financial metric which is based on Netwealth’s TSR Rank in the
relevant comparator group (S&P/ASX 300 Diversified Financials
Index) over the Vesting Period.
EPS Metric
•
financial metric which is based on Netwealth’s average annual
growth of EPS over the Vesting Period.
Weighting
50%
50%
51 | netwealth Annual Report 2023 For the year ended 30 June 2023
LTIs
Purpose & Execution
Rights (At risk)
Offers of rights
•
•
The NEIP also provides that incentive securities may
be in the form of rights (zero exercise price options).
To date there have been two offers of rights under
the NEIP, referred to here as the ‘FY2022 Rights’ and
the ‘FY2023 Rights’;
• A further offer of rights will be made in FY2024
under revised terms – see below.
Maximum target amount
• CEO - 50% of fixed remuneration.
• Senior executives – 25% of fixed remuneration.
•
Target amount is based on value of shares at the
time of issue of the rights.
Vesting Period
•
The vesting conditions are tested over 3 financial
years.
• Upon exercise, the rights convert to ordinary shares
on a one for one basis.
FY2023 position
FY2022 Rights
• Performance rights
issued under the NEIP
to CEO Matthew Heine
and members of the
Executive in FY2022
Rights that will probably
vest on 30 June 2024.
FY2023 Rights
• Performance rights
issued under the NEIP
to CEO Matthew Heine
and members of the
Executive in FY2023
Rights that will probably
vest on 30 June 2025.
Gateway conditions
•
•
•
The holder must be either continuously employed or
hold office with Netwealth until vesting date.
The Rights are subject to a ‘gateway’ condition
based on personal behaviour and performance
measured against our values.
If the employee does not meet the personal and
behavioural gateway condition, all their rights lapse,
unless the Board determines otherwise.
Performance metrics
Weighting
EPS metric
• Based on Netwealth’s EPS growth over the Vesting Period.
Individual value rating metric
• Based on individual ratings over the vesting period.
Contribution to effective execution of business plan metric
• Based on individual contribution to effective execution of the Board
50%
25%
25%
approved business plans over the vesting period.
• Under the NEIP, the Board may reduce benefits in a range of circumstances such as
where an employee participant has acted fraudulently or dishonestly or engaged in
gross misconduct, has brought Netwealth into disrepute, has breached their duties
or obligations to Netwealth or is convicted of an offence in connection with the
affairs of Netwealth.
The reduction of benefits may be implemented through various means, including
the forfeiture of unvested or vested rights, options, or shares. Additionally,
participants may be required to repay or treat as a debt any dividends received on,
or proceeds from the sale of, performance securities granted under the NEIP.
•
Reduction of
benefits
52 | netwealth Annual Report 2023 For the year ended 30 June 2023
Effective from 1 July 2023 the Board has revised the STI and LTI framework. The table below
summarises these changes.
Performance-based remuneration
STIs
Purpose & Execution
STIs for
CEO for
FY2024
(At risk)
75% of fixed remuneration
Maximum target amount
•
Form and time of payment
• Cash bonus – STI earnt is paid over 2 years:
‒ 50% within 30 days after the release of the FY2024 annual report; and
‒ 50% within 30 days after the release of the FY2025 annual report, subject to
continuously being employed and subject to a malus clawback condition.
Performance metrics
NPAT metric
• Based on Netwealth’s FY2024 NPAT relative to budget NPAT.
• Between 95% and 105% of budget, a proportionate amount is paid.
• NPAT is determined net of the bonus expense.
Contribution to effective execution of business plan metric
• Based on individual contribution to effective execution of the Board
approved strategic initiatives in FY2024 which are assessed by the Board
on a quarterly basis.
Individual value rating metric
• Based on individual ratings in FY2024.
Maximum target amount
•
35% of fixed remuneration
Form and time of payment
• Cash bonus – STI earnt is paid over 2 years:
Weighting
65%
25%
10%
‒ 50% within 30 days after the release of the FY2024 annual report; and
‒ 50% within 30 days after the release of the FY2025 annual report, subject to
continuously being employed and subject to a malus clawback condition.
Head of Distribution
•
The Head of Distribution is entitled to participate in sales bonuses (see above), but is
not entitled to an STI under this framework.
Chief Risk Officer (CRO)
•
For the CRO, the NPAT metric does not apply and is replaced by a metric based on the
Board’s assessment of the CRO’s contribution to the effective management of
Netwealth’s legal, risk and compliance functions in FY2024 which are assessed by the
Board on a quarterly basis.
STIs for the
CFO and
other
members of
the
Executive
for FY2024
(At risk)
53 | netwealth Annual Report 2023 For the year ended 30 June 2023
Performance metrics
NPAT metric
• Based on Netwealth’s FY2024 NPAT relative to budget NPAT.
• Between 95% and 105% of budget, a proportionate amount is paid.
• NPAT is determined net of the bonus expense.
Contribution to effective execution of business plan metric
• Based on individual contribution to effective execution of the Netwealth
business plan for FY2024 which are assessed by the Board on a quarterly
basis.
Individual value rating metric
• Based on individual performance ratings in FY2024.
Weighting
65%
25%
10%
LTIs
Purpose & Execution
Rights from
FY2024 (At
risk)
Maximum target amount
• CEO: 75% of fixed remuneration
• CFO and other members of the executive: 35% of fixed remuneration
Form of payment
• Performance rights (zero exercise price options) valued based on the market value of
shares at the time of offer.
Vesting Period
•
Gateway conditions
•
The vesting conditions are tested over 3 financial years, FY2024, FY2025 and FY2026;
The holder must be either continuously employed or hold office with Netwealth until
vesting date.
The Rights are subject to a ‘gateway’ condition based on personal behaviour and
performance measured against our values.
If the employee does not meet the personal and behavioural gateway condition, all their
rights lapse, unless the Board determines otherwise.
•
•
Performance metrics
EPS metric
• Based on Netwealth’s EPS compound annual growth rate (CAGR) over the
Vesting Period.
• Between 12.5% CAGR in EPS and 15% CAGR in EPS, a proportionate
amount of rights vest.
TSR metric
• Based on Netwealth’s TSR Rank in the relevant comparator group
(S&P/ASX 300 Diversified Financials Index) over the Vesting Period.
• Between 50th percentile and 75th percentile, a proportionate amount of
rights vest.
TSR must be positive for rights to vest under this metric.
•
Contribution to effective execution of business plan metric
• Based on individual contribution to effective execution of the Board
approved business plan over the vesting period which is assessed by the
Board quarterly.
Weighting
35%
35%
30%
54 | netwealth Annual Report 2023 For the year ended 30 June 2023
Upcoming changes to the FY2024 Remuneration Framework
The Australian Prudential Regulation Authority (APRA) has released an updated Prudential Standard
511 Remuneration (CPS 511) the objective of which is to ensure that remuneration arrangements
appropriately incentivise individuals to manage the risks they are responsible for and that there are
appropriate consequences for poor risk outcomes. Revised CPS 511 will apply to Netwealth from 1
January 2024. Also, it is currently expected that the Federal Government’s Financial Accountability
Regime (FAR) will apply to companies operating the superannuation sector, such as Netwealth, from
early 2025. As result of CPS 511 and FAR, the Board is reviewing Netwealth’s remuneration framework
and further changes will be made in coming months.
E. Remuneration Mix of KMPs
Remuneration mix refers to the proportion of total KMP remuneration that is made up of each
remuneration component.
The ‘Fixed’ component is base salary plus superannuation. The ‘At Risk’ component is the amount of
the maximum STI payable to the KMP and the value of options and rights issued to the KMP expensed
for the year. The LTIS were part of the FY2023 Rights offer described above.
CEO
Matthew
Heine
ED Michael
Heine
CFO Grant
Boyle
The remuneration mix for Michael Heine is 100% fixed as he has elected not to participate in the STI or
LTI, due to his substantial shareholding in Netwealth.
55 | netwealth Annual Report 2023 For the year ended 30 June 2023
F. Overview of the Group Performance
The following table sets out Netwealth’s NPAT, dividend payments, EPS and share price over five
years:
Financial period ended 30 June
2023
2022
2021
2020
2019
NPAT ($ million)
67,153
55,552
54,103
43,661
34,295
Ordinary dividends (cents per
share)
24.0
20.0
18.6
14.7
12.1
Special dividends (cents per share)
-
-
-
-
-
EPS (cents)
27.5
22.8
22.6
18.4
14.4
Netwealth share price*
$13.84
$12.16
$17.15
$8.97
$8.00
*Closing price for the last trading day in the financial year. Dividends (cents per share) and EPS (cents) rounded to 1 decimal place.
Netwealth delivered solid FY2023 earnings with NPAT and EPS having increased by 20.9% and 20.6%
respectively compared to the prior year. Netwealth increased its full year dividend by 20.0% to 24.0
cents per share. The compound annual growth rate on EPS since FY2019 was 17.8% reflecting the
continued success in executing Netwealth’s long-term strategy in delivering sustainable returns to its
shareholders.
56 | netwealth Annual Report 2023 For the year ended 30 June 2023
G. Executive Remuneration
The table below sets out details of the remuneration of the CEO, ED and the CFO (the three KMP who
are employee executives) for FY2023 and FY2022.
CEO & Managing
Director
Matthew Heine
2022
2023
$
$
Executive Director
CFO
Michael Heine
2023
$
2022
$
Grant Boyle
Total
2023
$
2022
$
2023
$
2022
$
772,500
344,900
-
-
722,500
220,313
-
-
44,207
-
-
-
62,047
-
-
-
422,500
97,003
992
-
372,500
58,750
1,082
-
1,239,207
441,903
992
-
1,157,047
279,063
1,082
-
29,377
79,401
770
(2,870)
11,342
8,808
41,489
85,339
27,500
27,500
4,642
6,205
27,500
27,500
59,642
61,205
-
112,925
129,579
118,521
99,548
112,616
129,224
-
-
-
-
-
-
-
-
-
-
-
-
69,463
29,103
28,340
54,796
69,272
29,023
-
-
182,388
158,682
146,861
154,344
181,888
158,247
-
-
-
-
-
1,535,302
1,391,102
49,619
65,382
686,243
621,731
2,271,164
2,078,215
Short term benefits
Cash salary1
STI2
Employee share gift3
Other
Long term benefits
Leave4
Post-employment
benefits
Superannuation5
Share-based payments
FY2020 Options
FY2022 Options6
FY2022 Rights6
FY2023 Rights6
Termination benefits
Termination payments
Total
% Performance related
46%
40%
0%
0%
33%
34%
41%
37%
1.
Following the Remuneration Committee’s review, the Board approved increases in Matthew Heine’s and Grant Boyle’s cash salaries to align with
comparable companies within the industry for an equivalent role.
2. Matthew Heine’s maximum STI and LTI entitlements are each 50% of his fixed remuneration (refer section E). Michael Heine waived his STI
payments for FY2022 and FY2023. Grant Boyle’s maximum STI and LTI entitlements are each 25% of his fixed remuneration (refer section E).
Under its Employee Gift Plan, Netwealth made an offer to grant $1,000 worth of ordinary shares to all eligible employees including Grant Boyle.
Long term benefits related to long service leave entitlements accrued for the year, net of leave taken.
Superannuation payments are made in accordance with the relevant statutory requirements.
3.
4.
5.
6. Options or Rights on ordinary shares issued during FY2022 and FY2023 are subject to vesting conditions (refer section D).
57 | netwealth Annual Report 2023 For the year ended 30 June 2023
Service agreements
The remuneration and other terms of employment for the executive KMPs are formalised in
employment contracts, which are reviewed annually. The CEO, ED and CFO are entitled to receive pay
in lieu of notice of resignation, in addition to any leave entitlements upon cessation of employment.
All services agreements are for unlimited duration but may be terminated immediately in the event of
serious misconduct, in which case the executive is not entitled to any payment in lieu of notice. The
following table outlines the key contractual arrangement for the CEO, ED and CFO.
Position
CEO
ED
CFO
How unvested
equity is treated on
leaving Netwealth
Contractual
term
Employer Notice
period
Employee Notice
period
Post-employment restraints
Ongoing
Six months
Six months
Six-month non-competition period
Ongoing
Six months
Six months
Six-month non-competition period
Ongoing
Six months
Six months
Six-month non-competition period
Executive KMPs who resign or are terminated will forfeit all their unvested equity, unless the
Board determines otherwise.
If the executive KMP is terminated due to redundancy or they are classified as a ‘good leaver’,
unvested equity will not be forfeited unless the Board determines otherwise.
On an executive KMP’s death or total and permanent disability, their unvested equity will vest
unless the Board determines otherwise.
H. Non-Executive Directors Remuneration
The table below sets out details of the annual fees and the remuneration of the Non-Executive
Directors for FY2023.
Board Fees
Board - Chair
- Members
Netwealth Superannuation Services (NSS) Board – Members
Audit Committee - Chair
Remuneration Committee - Chair
Compliance and Risk Management Committee - Chair
People and Corporate Sustainability Committee – Chair
Nomination Committee - Chair
NIL Investment Committee - Chair
NSS Audit Risk & Compliance Committee – Chair
$250,000
$125,000
$20,0001
$20,000
$15,000
$20,000
$10,000
-
$15,000
$15,000
Superannuation The fees set out above include superannuation payment in accordance with the
relevant statutory requirements. Superannuation is paid up to the relevant
concessional contributions cap, with the remainder paid in cash.
58 | netwealth Annual Report 2023 For the year ended 30 June 2023
Other benefits
Non-Executive Directors are entitled to reimbursement for business-related
expenses, including travel expenses and all receive the benefit of coverage under
a Director and Officers insurance policy. Netwealth has paid premiums to insure
each Director and officer under a Directors and Officers Insurance policy. Further
disclosure of information relating to this policy is not permitted under the contract
of insurance.
1 NSS is the trustee of the Netwealth Superannuation Master Fund. The two Non-Executive Directors, Sally Freeman and Davyd
Lewis who are also Directors of NSS received an additional fee of $20,000.
The table below sets out the total Non-Executive Director benefits paid for FY2023 and FY2022.
Fees and
allowances
Post-employment
benefits
Timothy Antonie
Board and
Committee fees
$
2023
2022
226,244
227,273
Davyd Lewis
2023*
191,538
Sally Freeman
Kate Temby
2022
2023
2022
2023
2022
179,545
149,321
150,000
135,747
131,818
Superannuation
Total
$
23,756
22,727
20,112
17,955
15,679
15,000
14,253
13,182
$
250,000
250,000
211,650
197,500
165,000
165,000
150,000
145,000
*Davyd Lewis was paid an additional $16,650 (including super) for his temporary appointment to the Due Diligence
Committee during FY2023. This amount is included in the total above.
The Non-Executive Directors are not eligible to participate in the NEIP.
The total remuneration paid to all Non-Executive Directors must not exceed the maximum aggregate
amount approved by shareholders. The shareholder approved limit is $1,000,000, which was last
approved at the FY2021 AGM.
59 | netwealth Annual Report 2023 For the year ended 30 June 2023
I. Other information
KMP share movements
The table below sets out the holdings and changes of holdings of ordinary shares for each KMP in
FY2023.
Ordinary shares
Balance at
beginning of
financial
period
Purchase of
shares
Sale of
shares
Other changes
during the year
Balance at end
of financial
period
FY2023
Number
Number
Number
Number
Number
Non-Executive Directors
Timothy Antonie
105,000
Davyd Lewis
Sally Freeman
Kate Temby
-
-
-
159,161
9,500
-
3,000
-
-
-
-
Executive Directors
Michael Heine
112,544,990
Matthew Heine
3,736,405
Senior executive
Grant Boyle1
65,089
-
-
-
(5,600,000)
-
-
-
-
-
-
-
-
105,000
159,161
9,500
3,000
106,944,990
3,736,405
75
65,164
1 During the financial year, the Group, under its Employee Gift Plan made an offer to all eligible employees including
Grant Boyle to grant $1,000 worth of ordinary shares.
60 | netwealth Annual Report 2023 For the year ended 30 June 2023
KMP option and rights holdings
The table below sets out the holdings of options and rights issued under the NEIP to each KMP.
Type of
equity
Equity
Granted
Exercise
Price
Equity fair
value at
grant date
(for FY2023
grants only)
Grant date
First date
exercisable
Date of
expiry
Vested
Lapsed/
Forfeited
Exercise
d/Sold
Vested
as at 30
June
2023
Non-
exercisa
ble as at
30 June
2023
FY2023
Number
Executive Directors
Michael
Heine
Options
-
-
Matthew
Heine
FY2020
Options
132,373
$7.5544
FY2022
Options
FY2022
Rights
FY2023
Rights
75,000
$15.740
23,825
30,257
-
-
Senior executive
Grant
Boyle
FY2020
Options
FY2022
Options
FY2022
Rights
FY2023
Rights
66,667
$7.5544
75,000
$15.740
6,353
8,510
-
-
Number
Number
Number Number
Number
-
-
-
-
-
-
-
-
-
-
-
12/11/19
30/06/22
30/06/34
78,232
27/10/21
30/06/24
19/11/36
27/10/2021
30/06/24
27/10/36
$13.09
23/11/2022
30/06/25
27/10/37
17/10/19
30/06/22
30/06/34
39,400
27/09/21
30/06/24
27/09/36
27/09/21
30/06/24
27/09/36
$12.36
11/10/22
30/06/25
27/09/37
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
75,000
23,825
30,257
-
75,000
6,353
8,510
Non-Executive Directors are not entitled to options and rights under the NEIP.
Employee Share Gift Plan
Under the Group’s Employee Gift Plan, all eligible permanent and part time employees of the Group may
be offered the opportunity to receive, for no consideration, up to $1,000 in shares at market value.
Employees who receive employee gift shares are restricted from dealing in those shares until the earlier of
three years from grant date or the date the employees ceases employment. The operation of this plan is
assessed annually by the Board.
During FY2023, the Group made offers under its Employee Gift Plan to grant $1,000 worth of shares to all
eligible permanent and part time employees that have been employed by the Group for a continuous
period of 3 years as at 1 July 2022, resulting in 13,950 new ordinary shares being issued at $13.22 on 14
September 2022 (FY2022: 11,033 ordinary shares).
61 | netwealth Annual Report 2023 For the year ended 30 June 2023
Overview of unvested equity awards
All awards are subjected to the employee’s continued employment, individual values ratings and
malus and clawback provisions.
Vesting Period
Equity plan
Grant Date
Start Date
End Date
Vesting Conditions
FY2022
Options
FY2022
Options – CEO
27 Sep 2021
01 Jul 2021
30 Jun 2024
• Personal and behavioural
performance gateway which must
be met.
• Proportions vesting:
‒ 50% based on Netwealth’s TSR
Rank in the relevant
comparator group during the
vesting period; and
‒ 50% based on Netwealth’s
average annual growth of EPS
over the vesting period.
19 Nov 2021
01 Jul 2021
30 Jun 2024
• Personal and behavioural
performance gateway which must
be met.
• Proportions vesting:
‒ 50% based on Netwealth’s TSR
Rank in the relevant
comparator group during the
vesting period; and
‒ 50% based on Netwealth’s
average annual growth of EPS
over the vesting period.
FY2022 Rights
27 Sep 2021
01 Jul 2021
30 Jun 2024
• Personal and behavioural
performance gateway which must
be met.
• Proportions vesting:
‒
‒ 50% based on Netwealth’s EPS
growth over the vesting period.
25% based on individual values
ratings.
25% based on individual
contribution to delivery of their
strategic initiatives.
‒
FY2022 Rights
19 Nov 2021
01 Jul 2021
30 Jun 2024 Same as above FY2022 Rights
FY2022 Rights
– CEO
27 Oct 2021
01 Jul 2021
30 Jun 2024 Same as above FY2022 Rights
FY2023 Rights
11 Oct 2022
01 Jul 2022
30 Jun 2025 Same as above FY2022 Rights
FY2023 Rights -
CEO
23 Nov 2022
01 Jul 2022
30 Jun 2025 Same as above FY2022 Rights
62 | netwealth Annual Report 2023 For the year ended 30 June 2023
J. Previous comments or resolutions in relation to Remuneration Report
At the 23 November 2022 annual general meeting, no comments were made or questions asked in
relation to the FY2022 Remuneration Report and the Remuneration Report was adopted by a vote of
99% in favour.
63 | netwealth Annual Report 2023 For the year ended 30 June 2023
Auditor’s Independence Declaration
64 | netwealth Annual Report 2023 For the year ended 30 June 2023
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
For the year ended 30 June 2023.
Consolidated Group for Year Ended
Note
30 June 2023
$’000
Restated
30 June 2022
$’000
Income
Revenue1
Other income
Total income
Expenses
Employee benefits expenses
Share-based payment expense
Brokerage, investment & custody1
Technology and communication expenses
Client transactions & communication
Professional fees
Insurance
Advertising & Marketing
Depreciation
Amortisation
Interest expense
Other operating expenses
Share of associate and joint venture NPAT
Total expenses
Profit before income tax
Income tax expense
Profit for the period
Total comprehensive income for the period
Total comprehensive income attributable to:
Members of the parent entity
Earnings per share
Basic (cents per share)
Diluted (cents per share)
4
4
5
13
5
6
9
9
207,008
7,741
214,749
(77,886)
(2,381)
(4,567)
(13,689)
(1,419)
(3,158)
(3,028)
(2,835)
(2,637)
(642)
(451)
(4,665)
(377)
(117,735)
97,014
(29,861)
67,153
67,153
172,864
3,767
176,631
(63,840)
(3,053)
(4,666)
(8,284)
(1,304)
(2,594)
(2,408)
(1,557)
(2,618)
(366)
(497)
(3,941)
(393)
(95,521)
81,110
(25,558)
55,552
55,552
67,153
55,552
27.5
27.5
22.8
22.8
1During the year, the Group has revised the classification and disclosure of brokerage expenses. $3.2 million brokerage expenses,
previously included net of the Group’s revenue in Platform revenue, have been reclassified as expenses under Brokerage,
investment & custody (FY2022 $3.3M). Comparative figures have been reclassified to be consistent with current period
disclosure. Refer to Note 2 Significant Accounting Policies.
The accompanying notes form part of these financial statements
65 | netwealth Annual Report 2023 For the year ended 30 June 2023
Consolidated Statement of Financial Position
As at 30 June 2023.
Consolidated Group as at
Note
30 June 2023
30 June 2022
$’000
$’000
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Financial assets at FVTPL*
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Lease assets
Financial Assets at FVTPL*
Investment in associates & joint venture
Deferred tax assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Provisions
Current tax liabilities
Lease liability
Other current liabilities
Total current liabilities
Non-current liabilities
Lease liability
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained earnings
Total equity
10
11
12
15
16
13
12
14
6
17
18
13
13
18
19
20
109,482
17,837
8,569
491
136,379
1,445
6,506
12,830
917
1,614
2,194
25,506
161,885
11,804
7,439
4,978
1,437
83
25,741
12,149
946
13,095
38,836
88,376
14,727
10,024
1,086
114,213
1,560
2,215
14,643
-
1,991
1,582
21,991
136,204
8,635
6,417
1,090
1,501
-
17,643
13,586
732
14,318
31,961
123,049
104,243
27,228
6,772
89,049
123,049
26,563
4,576
73,104
104,243
*Fair value through Profit & Loss
The accompanying notes form part of these financial statements
66 | netwealth Annual Report 2023 For the year ended 30 June 2023
Consolidated Statement of Changes in Equity
For the year ended 30 June 2023.
Consolidated Group
Note
Issued
capital
$’000
Reserves
Retained
earnings
Total
$’000
$’000
$’000
Balance at 1 July 2021
26,398
1,688
65,095
93,181
Shares issued and fully paid during the period
165
Total comprehensive income for the period
Amounts recognised on issue of employee
shares
Dividends paid or provided for
Balance at 30 June 2022
Balance at 1 July 2022
-
-
-
165
55,552
55,552
2,888
-
2,888
-
(47,543)
(47,543)
-
-
-
26,563
4,576
73,104
104,243
26,563
4,576
73,104
104,243
Shares issued and fully paid during the period
665
Total comprehensive income for the period
Amounts recognised on issue of employee
shares
Dividends paid or provided for
8
-
-
-
-
-
-
665
67,153
67,153
2,196
-
2,196
-
(51,208)
(51,208)
Balance at 30 June 2023
27,228
6,772
89,049
123,049
The accompanying notes form part of these financial statements.
67 | netwealth Annual Report 2023 For the year ended 30 June 2023
Consolidated Statement of Cash Flows
For the year ended 30 June 2023.
Consolidated Group for Year Ended
Note
30 June 2023
30 June 2022
$’000
$’000
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Dividends received
Interest received
Interest paid on lease
Income tax paid
Net cash generated by operating activities
25
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sale of Investments
Purchase of Investments
Purchase of intangibles
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Payment of lease liabilities
13
Loan to joint venture
Dividends paid
Net cash used in financing activities
Net increase in cash held
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
The accompanying notes form part of these financial statements.
223,412
(120,302)
29
3,123
(451)
(26,585)
79,226
(709)
1,177
(526)
(4,932)
(4,990)
479
(1,501)
(900)
(51,208)
(53,130)
21,106
88,376
109,482
186,387
(96,415)
7
313
(498)
(30,189)
59,605
(1,136)
361
(1,064)
(1,856)
(3,695)
-
(1,412)
-
(47,543)
(48,955)
6,955
81,421
88,376
68 | netwealth Annual Report 2023 For the year ended 30 June 2023
Notes to the Financial Statements
1 General Information
The Financial Report of Netwealth Group Limited which covers ‘the Company’ as an individual entity
(disclosed in Note 26) and its controlled entities (together referred to as ‘the Group’) for the year
ended 30 June 2023 as required by the Corporations Act 2001 was authorised for issue in accordance
with a resolution of the Directors on 16 August 2023. The Company is limited by shares and
incorporated and domiciled in Australia.
Registered office of the company and principal place of business:
Netwealth Group Limited
Level 6, 180 Flinders Street
MELBOURNE VIC 3000
The principal activities of the Group are to provide Financial Intermediaries and clients with financial
services including managed funds, investor directed portfolio services, a superannuation master fund,
separately managed accounts, self-managed superannuation administration services and non-
custodial administration service.
2 Significant Accounting Policies
Basis of preparation
This consolidated financial report for the year ended 30 June 2023
•
•
is for the consolidated entity consisting of Netwealth Group Limited and its controlled entities
(trading on the ASX under the symbol ‘NWL’);
is presented in Australian dollars, with all values rounded to the nearest thousand dollars, or in
certain cases, the nearest dollar, in accordance with the Australian Securities and Investment
Commission Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191;
• has been prepared on a going concern basis using historical costs except for financial
instruments required to be measured at fair value through profit or loss (FVTPL), in accordance
with Australian Accounting Standards (AASBs) and Interpretations issued by the Australian
Accounting Standards Board, and the Corporations Act 2001;
•
complies with International Financial Reporting Standards as issued by the International
Accounting Standards Board; and
• has accounting policies and methods of computation which are consistent for all periods
presented, unless stated.
Principles of consolidation
The consolidated financial statements incorporate the financial statements of the Company and
entities controlled by the Company and its subsidiaries. Control is achieved when the Company:
• has power over the investee;
69 | netwealth Annual Report 2023 For the year ended 30 June 2023
•
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.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and
ceases when the Company loses control of the subsidiary.
The financial statements of all the entities are prepared for the same reporting period as the parent
entity with consistent accounting policies.
Profit or loss and each component of other comprehensive income are attributed to the owners of the
Company.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions
between members of the Group are eliminated in full on consolidation.
Critical accounting estimates and key sources of estimation uncertainty
In the application of the Group's accounting policies, the Directors are required to make judgements,
estimates and assumptions about the carrying amounts of assets and liabilities that are not readily
apparent from other sources. The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant. Actual results may differ from these
estimates.
The estimates and underlying assumptions are evaluated on an ongoing basis and are based on
historical experience and other factors, including reasonable expectations of future events. Revisions
to accounting estimates are recognised in the period in which the estimate is revised if the revision
affects only that period, or in the period of the revision and future periods if the revision affects both
current and future periods.
The notes to the financial statements set out areas involving a higher degree of judgement or
complexity, or areas where assumptions are significant to the consolidated Financial Report such as:
•
Judgement and estimates have been used to determine the inputs to measure the fair value of
the loan, call and put options in relation to the investment in Xeppo (Note 14)
• Choice of inputs, estimates and assumptions used in the measurement of expected credit loss
including the probability for loss (Note 10).
• Determination of significant influence over associates or joint control over arrangements,
including the assessment of whether certain rights are protective or substantive in nature and
whether the level of involvement in an investee’s relevant activities is sufficient to significantly
affect the returns generated (Note 14).
• Determination whether the investment in associates and joint venture are impaired by assessing
its going concern and future profitability (Note 14).
• Determination on the expected life of tangible assets with the exception for leasehold assets by
using available historical data (Note 15).
• Determination on the expected life of intangible assets such as software by assessing historical
usage data of similar software (Note 16).
• Customisation and configuration costs undertaken in implementing Software as a Service (SaaS)
arrangements may result in the development of new software code that enhances, modifies, or
70 | netwealth Annual Report 2023 For the year ended 30 June 2023
creates additional capability to existing on-premises software enabling it to connect with the
cloud-based software applications (referred to as bridging modules or APIs). Judgement was
applied in determining whether the additional code meets the definition of and recognition
criteria as an intangible asset under AASB 138 Intangible Assets following the latest guidance
issued by IFRS Interpretation Committee in March 2021 (Note 16).
Judgement was used to estimate the number of equity instruments granted under the Employee
Incentive Plan that are likely to vest at the end of the vesting period by assessing market,
company performance, strategic initiatives likely to be achieved and service conditions expected
to be achieved during the vesting period (Note 23).
•
Change in Disclosures
During the year, the Group revised the classification and disclosure of brokerage expenses. Brokerage
expenses were previously netted against the Group's revenue. However, to provide a more accurate
representation of the economic substance of the transactions, brokerage expenses have now been
reclassified as an expense under Brokerage, Investment, and Custody expense in the Consolidated
Statement of Profit or Loss and Other Comprehensive Income.
Moreover, certain other operating expenses have also been reclassified in the prior period to enhance
the relevance and accuracy of financial information. These revised classifications ensure that the
financial statements present a more meaningful and transparent view of the Group's operating
performance. To ensure consistency and comparability, comparative figures have been reclassified to
align with the current period disclosure.
FY2022 Financial Report Reallocation in FY2023 Post-Reallocation
30 June 2022
$’000
30 June 2022
$’000
Income
Revenue
Other Income
Total income
Expenses
Brokerage, investment & custody
Other expenses
Total expenses
Profit before income tax
Profit for the period after tax
169,538
3,767
173,305
-
(92,195)
(92,195)
81,110
55,552
3,326
-
3,326
(4,666)
1,340
(3,326)
-
-
172,864
3,767
176,631
(4,666)
(90,855)
(95,521)
81,110
55,552
71 | netwealth Annual Report 2023 For the year ended 30 June 2023
Investment in Associates & Joint Ventures
During the year, the Group and Xeppo entered into a new shareholders agreement, resulting in a $2.5
million convertible loan facility provided to Xeppo (Note 14). Following this revised agreement, the
Group conducted a reassessment of its investment in Xeppo, leading to its reclassification from an
investment in an associate to a joint venture.
This reclassification was based on the joint control exercised by both Netwealth and non-Netwealth
shareholders over the rights to the net assets of the arrangement. Key strategic and operational
decisions related to the joint arrangement now necessitate unanimous consent from all parties
involved, both Netwealth and non-Netwealth shareholders collectively controlling the joint venture.
The accounting treatment for investments in joint ventures adheres to the equity method as outlined
in IAS 28 Investments in Associates and Joint Ventures for the group's financial statements. Initially,
investments in associates or joint ventures are recognized at cost in the Consolidated Statement of
Financial Position. Subsequently, the carrying amount of the investment is adjusted to reflect the
Group's share of the profit or loss after the date of acquisition. The Group's share of the profit or loss
is recognised in the statement of profit or loss.
Foreign currency translation
The functional currency in the Group is determined as the currency of the primary economic
environment in which Netwealth operates in. The Group’s financial statement are presented in
Australian dollars (the presentation currency), which is also the Group’s functional currency.
At initial recognition, a foreign currency transaction is translated into the Group’s functional currency
using the spot exchange rate between the functional currency and the foreign currency at the date of
the transaction. Where a foreign currency transaction is over a period of time, an average exchange
rate can be used unless the exchange rate fluctuates significantly during the period.
At the end of each reporting period, the foreign currency monetary assets and liabilities are translated
using the closing spot exchange rate.
Foreign exchange gains and losses arising from the settlement or translation is measured at fair value
and recognised as part of income or loss.
All subsidiaries and joint ventures use the same functional currency as the Group.
72 | netwealth Annual Report 2023 For the year ended 30 June 2023
3 Segment Information
The operating segment has been determined based on the separate internal financial reports that are
reviewed and used regularly by the Board of Directors and the Executive Management Team,
identified as the Chief Operating Decision Makers (CODM), to assess performance and in determining
the allocation of resources to the operating segment. The accounting policies adopted for internal
reporting to the CODM are consistent with those adopted in the financial statements.
The Group reassessed its operating segments and determined that the 'Data and Advice Tech
Solutions segment,' previously identified as an operating segment following the Group’s investment in
Xeppo, does not yet meet the definition of an operating segment prescribed by the Accounting
Standard AASB 8 Operating Segments. Therefore, the Group continues to operate and disclose one
reportable segment, 'Platform Operations segment.'
The Group’s operations are solely based in Australia.
Key Accounting Policies
An Operating segment is a component of an entity:
• which engages in multiple business activities from which it may earn revenue and incur expenses
• whose operating results are regularly reviewed by the entity’s chief operating decision maker to make
decisions about resources to be allocated to the segment and assess its performance; and
•
for which discrete financial information is available.
73 | netwealth Annual Report 2023 For the year ended 30 June 2023
4 Revenue
Revenue and other income
Platform Revenue
Administration fees
Ancillary fees
Transaction fees
Management fees
Consolidated Group
Restated
30 June 2023
30 June 2022
$’000
$’000
97,942
74,330
22,559
12,177
85,530
50,337
25,883
11,114
Total Revenue from Contracts with Customers
207,008
172,864
Other income
Cost of capital recovery
Net loss on disposal of investments
Unrealised investment gain/(loss)
Dividends and distributions received
Interest received
Other Income
Total other income
Total income
4,482
(109)
193
34
3,123
18
7,741
214,749
3,395
(7)
(145)
38
313
173
3,767
176,631
Netwealth does not have an individual customer who makes up more than 10% of Netwealth’s
Platform revenue. Ancillary fees include revenues earned on the cash transaction account.
Key Accounting Policies
Revenue is measured by reviewing each revenue contract and its respective services to client to determine its
performance obligation while allocating the transaction price to each performance obligation either over time
or at a point in time. The performance obligations identified are:
Platform revenue
•
Administration fee is recognised over time as the client receives and obtain the benefits of accessing the
platform. The amount is calculated based on the daily value of the client account balances and are
received monthly in arrears direct from customer accounts on the platform.
74 | netwealth Annual Report 2023 For the year ended 30 June 2023
Key Accounting Policies continued
•
Ancillary fee is recognised either over time or once the service has been provided to and received by the
client. The amount is based on the agreed contractual rate and is received monthly, in arrears.
•
Transaction fees are recognised once the transaction has been completed and the client received
confirmation of the transaction. The amount is based on an agreed contractual rate and is collected
monthly in arrears.
• Management fees are recognised over time as the client receives and obtains the benefit of having the
client’s funds being managed based off a contractual percentage of the value of the client account
balance being managed.
Other income
• Gain from disposal/loss of investments is recognised when the asset has been disposed.
• Unrealised gains from investments is recognised when the fair value of the underlying asset has
increased/decreased but not been disposed.
• Dividend revenue is recognised when the right to receive a dividend has been established.
•
Cost of capital recovery is recognised over time for the capital received and reserved by trustee of the
Netwealth Superannuation Master Fund to meet its Operational Risk Financial Requirement (ORFR)
capital requirements.
Interest revenue is accrued on a time basis, by reference to the principal outstanding and the effective
•
5 Expenses
5.1 Employee benefits expenses
Salaries and wages (including payroll tax)
Contributed superannuation
Other employee benefits expenses
Total employee benefits expenses
Consolidated Group
30 June 2023
30 June 2022
Restated
$’000
66,552
5,865
5,469
77,886
$’000
55,462
4,770
3,608
63,840
75 | netwealth Annual Report 2023 For the year ended 30 June 2023
5.2 Other operating expenses
Admin and other overhead expenses
Travel and entertainment expenses
Product expenses
Acquisition related consulting expenses
Total other operating expenses
Key Accounting Policies
Short-term employee benefits
Consolidated Group
30 June 2023
30 June 2022
Restated
$’000
2,593
1,126
946
-
4,665
$’000
2,636
399
405
501
3,941
Current liabilities for wages and salaries (other than termination benefits) that are expected to be settled
wholly within 12 months after the end of the annual reporting period for the employees’ services rendered.
They are measured at the amounts expected to be paid when the obligation is settled.
Other long-term employee benefits
Long service leave are long-term employee benefits, where they are not expected to be settled wholly within 12
months after the end of the annual reporting period for the employees’ services rendered. It is measured at the
present value of the probability on expected future payments to be made to employees and are discounted at
rates determined by reference to Group of 100 (G100) discount rate.
They are presented as non-current provisions in its statement of financial position, except where the Group
does not have an unconditional right to defer settlement for at least 12 months after the end of the reporting
period, in which case the obligations are presented as current provisions.
Retirement benefit obligations
All employees of the Group receive defined contribution superannuation entitlements, for which the Group
pays the fixed superannuation guarantee contribution to the employee’s superannuation fund of choice in
accordance with relevant statutory requirements.
Other operating expenses
•
Admin and other overhead expenses are incidental operational costs such as cleaning, postage & courier.
These are recorded at the amounts at which the obligation will be settled.
• Merger and acquisition consulting expense are direct costs which are not capitalised when the related
project does not proceed.
76 | netwealth Annual Report 2023 For the year ended 30 June 2023
6
Income Taxes
a) The components of tax expense/(income) comprise:
Current tax
Deferred tax
Over provision from prior years
b) The prima facie tax on profit before income tax is
reconciled to income tax as follows:
Prima facie tax before income tax at 30%
Other non-allowable items
Income tax expense attributable to entity
c) The components of deferred tax assets comprise:
Expenditure deductible over 5 years
Lease liability
Provisions
Other temporary differences
d) The components of deferred tax liabilities comprise:
Property, equipment and intangible assets
Right-of-use assets
Other temporary differences
Consolidated Group
30 June 2023
30 June 2022
$’000
$’000
29,258
612
(9)
29,861
29,102
759
29,861
26,951
(1,350)
(43)
25,558
24,331
1,227
25,558
Consolidated Group
30 June 2023
30 June 2022
$’000
$’000
90
4,076
2,492
541
7,199
1,016
3,849
140
5,005
157
4,526
2,122
318
7,123
999
4,393
149
5,541
77 | netwealth Annual Report 2023 For the year ended 30 June 2023
Effective tax rate
Consolidated Group
The effective tax rate for the year ended 30 June 2023 is 30.8%.
30 June 2023
30 June 2022
30.8%
31.5%
Opening
Balance
Charged to
Income
30 Jun
2021
Charged
Directly to
Equity
Transferred
to Assets
Held for
Sale
Closing
Balance
30 Jun
2022
$’000
$’000
$’000
$’000
$’000
845
(688)
1,958
(283)
13
272
127
164
(734)
120
(272)
60
2,932
(1,350)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
157
2,122
(1,017)
133
-
187
1,582
Opening
Balance
Charged to
Income
30 Jun
2022
Charged
Directly to
Equity
Transferred
to Assets
Held for
Sale
Closing
Balance
30 Jun
2023
$’000
$’000
$’000
$’000
$’000
157
(67)
2,122
(1,017)
133
187
1,582
370
1
94
214
612
-
-
-
-
-
-
-
-
-
-
-
-
90
2,492
(1,016)
227
401
2,194
Deferred tax assets/liabilities
Expenditure deductible over 5
years
Provisions
Property, plant & equipment
and intangible assets
Leases
Tax losses
Other temporary difference
Deferred tax assets/liabilities
Expenditure deductible over 5
years
Provisions
Property, plant & equipment
and intangible assets
Leases
Other temporary differences
78 | netwealth Annual Report 2023 For the year ended 30 June 2023
Key Accounting Policies
The income tax expense/(income) for the year comprises current income tax payable/receivable and deferred
tax expense/(income).
Current tax
The Group's current tax is calculated using tax rates that have been enacted or substantively enacted by the
end of the reporting period.
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 recognised for taxable temporary differences associated with investments in
subsidiaries and associates, 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.
Offsetting within tax consolidated group
Netwealth and its wholly owned subsidiaries have applied the tax consolidation legislation which
result in these entities being taxed as a single entity. The deferred tax assets and deferred tax
liabilities of these entities have been offset in the consolidated financial statements.
Key Accounting Policies
Netwealth Group Limited and its wholly-owned Australian subsidiaries formed an income tax consolidated
group under the tax consolidation legislation with effect from 30 June 2018. Netwealth Group Limited is the
head entity of the Group.
The tax consolidated group has entered a tax funding arrangement which sets out the funding obligations of
members of the tax-consolidated group in respect of tax amounts. The amounts payable or receivable under
the tax-funding arrangement between the company head entity and the entities in the tax consolidated group
are determined using the ‘standalone taxpayer method’ approach for allocation of the tax contributions
payable or receivable by each member of the tax-consolidated group. This approach results in the tax effect of
transactions being recognised in the legal entity where the transaction occurred and does not affect
transactions that do not have tax consequences to the group.
Each entity in the Group recognises its own current and deferred tax assets and liabilities. Current tax
liabilities/(assets) and deferred tax assets arising from unused tax losses and tax credits in the subsidiaries are
immediately transferred to the head entity as under Australian taxation law, the head entity has the legal
obligation (or right) to these amounts.
79 | netwealth Annual Report 2023 For the year ended 30 June 2023
7 Key Management Personnel Compensation
Consolidated Group
30 June 2023
30 June 2022
$
$
Short term employee benefits
2,384,952
2,125,828
Post-employment benefits
Share based payments
174,931
487,930
215,409
494,478
Key management personnel compensation
3,047,813
2,835,715
The remuneration paid to KMP of the Group during the year, was paid by Netwealth Group Services
Pty Ltd, a subsidiary of the Company. The remuneration disclosures are provided in the
‘Remuneration Report’ on pages 44 to 63 of the Annual Report.
8 Dividends
Dividends paid or declared by the Company in the year ended 30 June 2023 were:
Cents Per Share
Total Amount
% Franked Date of Payment
2023
Interim 2023 ordinary
Total dividend
2022
Final 2022 ordinary
Total dividend
$’000
26,827
26,827
24,381
24,381
11.00
11.00
10.00
10.00
100%
24 Mar 2023
100%
29 Sep 2022
During the year, the Company declared on 15 February 2023 and paid on 24 March 2023 a fully franked
dividend of 11.00 cents per share representing a total dividend of $26,827,000. There is no dividend
reinvestment plan.
Franking credits
Franking credits available as at 30 June 2023 to shareholders of the Company amount to $38,922,005
(2022: $35,474,890) at the 30 percent corporate tax rate.
80 | netwealth Annual Report 2023 For the year ended 30 June 2023
Subsequent events
Since the end of the financial year, the Company declared the following dividend on 16 August 2023.
The dividend has not been provided for as at 30 June 2023 and there are no tax consequences.
Cents Per
Share
Total Amount
$’000
% Franked Date of Payment
13.0
13.0
31,706
100%
21 Sep 2023
31,706
Final 2023 ordinary
Total dividend
9 Earnings Per Share
Basic earnings per share (EPS) is calculated by dividing the profit/(loss) attributable to owners of the
Company by the weighted average number of ordinary shares on issue during the year.
Diluted EPS is determined by adjusting the profit/(loss) attributable to owners of the Company and the
weighted average number of ordinary shares on issue for the effects of all dilutive ordinary shares. The
basic and diluted EPS are summarised below. The basic and diluted earnings per share are similar as
total dilutive options were less than 0.2% of total ordinary shares on issue as at 30 June 2023.
Basic earnings per share
Diluted earnings per share
Consolidated Group
30 June 2023
30 June 2022
Cents per Share
Cents per Share
27.5
27.5
22.8
22.8
The earnings and weighted average number of ordinary shares used in the calculation of basic and
diluted earnings per share are as follows:
Profit for the year attributable to owners of the Company
Profit for the year attributable to owners of the Company
Consolidated Group
30 June 2023
30 June 2022
$’000
67,153
67,153
$’000
55,552
55,552
30 June 2023
30 June 2022
Number
Number
Weighted average number of issued ordinary shares
243,867,831
243,810,451
Add: Weighted average number of dilutive ordinary shares:
FY2020 Options Vested deemed to be issued at no consideration
221,206
-
Weighted average number of ordinary shares and potential
ordinary shares used in calculation of diluted earnings per share
244,089,037
243,810,451
81 | netwealth Annual Report 2023 For the year ended 30 June 2023
10 Trade and Other Receivables
Products account receivables
Trade and sundry receivables
Total current receivables
Total trade and other receivables
Consolidated Group
30 June 2023
30 June 2022
$’000
17,704
133
17,837
17,837
$’000
14,630
97
14,727
14,727
Trade and other receivables classified as financial assets*
17,837
14,727
* Refer to Note 22 for further information about Financial Assets
The table below presents the provision matrix by referencing to past provision rates and
considerations for future outlooks.
Not past
due
$’000
1-30
days
$’000
31-60
days
$’000
61-90
days
$’000
Over 90
days
$’000
Total
$’000
Products accounts receivable
17,367
19
20
277
21
17,704
Expected Credit Loss (ECL)
Probability
0.10%
0.50%
0.75%
1.00%
3.00%
ECL Allowance
17
-
-
3
-
20
The table below presents the gross exposure and related expected credit losses allowance for assets,
subject to impairment requirements of AASB 9.
2023
2022
Gross
Exposure
$’000
ECL Allowance
$’000
Gross
Exposure
$’000
ECL Allowance
$’000
Trade receivables
Total
17,704
17,704
20
20
14,630
14,630
15
15
82 | netwealth Annual Report 2023 For the year ended 30 June 2023
Key Accounting Policies
Measurement of Trade and Other Receivables
Product accounts receivable and trade and sundry receivable are measured at amortised cost. The above
receivable only arises when the Group has provided the services to clients where the consideration for the
service remains unpaid at the end of the financial year.
Expected credit losses (ECL)
Trade receivables reviewed on an ongoing basis where individual debts that are known to be uncollectible are
written off when identified. A simplified approach expected credit loss model is used to calculate the expected
losses on trade receivable using a provision matrix which is based of historical provision rate and future
outlooks.
Trade and Other receivables are assessed for ECL on a collective basis. A simple credit loss model is applied
using probability of default, exposure at default and forward looking information. Management has annually
reviewed and determined the Expected Loss Probability for each of the following aging category as:
Debtors Aging Category
ECL Probability
Not past due
1-30 days
31-60 days
61-90 days
Over 90 days
0.10%
0.50%
0.75%
1.00%
3.00%
11 Other Current Assets
Accrued income
Prepayments
Other receivables
Total other current assets
Consolidated Group
30 June 2023
30 June 2022
$’000
4,604
3,878
87
8,569
$’000
4,223
5,115
686
10,024
83 | netwealth Annual Report 2023 For the year ended 30 June 2023
12 Financial Assets
FVTPL* financial assets
Total financial assets
FVTPL* financial assets comprise at fair value:
Netwealth managed funds
Netwealth wrap and super accounts
Convertible Loan and Call Option held at FVTPL
Other investments
Total FVTPL financial assets
* Fair Value through Profit or Loss (FVTPL)
Refer to Note 22 for further information about Financial Assets.
Consolidated Group
30 June 2023
30 June 2022
$’000
1,408
1,408
$’000
1,086
1,086
Consolidated Group
30 June 2023
30 June 2022
$’000
$’000
-
491
917
-
1,408
20
1,003
-
63
1,086
84 | netwealth Annual Report 2023 For the year ended 30 June 2023
13 Leases
Right-of-use assets
Balance as at 30 June 2021
Initial recognition of new lease
Depreciation
Balance as at 30 June 2022
Depreciation
Total right-of-use assets as at 30 June 2023
Lease liability
Balance as at 30 June 2021
Initial recognition of new lease
Payment of lease liabilities
Interest on leases
Balance as at 30 June 2022
Payment of lease liabilities
Interest on leases
Total lease liability as at 30 June 2023
Current
Non-current
Total lease liability as at 30 June 2023
Property
$’000
Office
Equipment
Total
$’ 000
$’ 000
16,382
-
(1,798)
14,584
(1,798)
12,786
-
73
(14)
59
(15)
44
Property
$’000
Office
Equipment
$’ 000
16,382
73
(1,812)
14,643
(1,813)
12,830
Total
$’ 000
16,426
-
16,426
-
73
73
(1,894)
496
15,028
(1,937)
450
13,541
1,422
12,119
13,541
(15)
(1,909)
1
497
59
15,087
(15)
(1,952)
1
45
15
30
45
451
13,586
1,437
12,149
13,586
85 | netwealth Annual Report 2023 For the year ended 30 June 2023
Amounts recognised in Statement of Comprehensive Income
Depreciation charge of right-of-use assets
Interest expense on lease liabilities
Amounts recognised in Statement of Cash Flows
Total cash outflows for leases
Undiscounted lease payments to be paid
Year 1
Year 2
Year 3
Year 4
Year 5
> 5 years
Total
30 June 2023
30 June 2022
$’000
1,813
451
$’000
1,812
497
30 June 2023
30 June 2022
$’000
(1,501)
$’000
(1,412)
Property
$’000
Office
Equipment
Total
$’ 000
$’ 000
1,825
1,777
1,825
1,876
1,931
6,150
15
15
16
-
-
-
1,840
1,792
1,841
1,876
1,931
6,150
15,384
46
15,430
Short-term leases
Payments associated with short-term leases are directly expensed within ‘Other operating expenses’
in the consolidated income statement. Short-term leases are leases with a contractual term of 12
months or less. For the year ended 30 June 2023, $0.1 million of short-term lease payments has been
recognised in the income statement.
86 | netwealth Annual Report 2023 For the year ended 30 June 2023
Key Accounting Policies
At the lease commencement date, the Group recognises the “Right of Use assets” (ROU) with the equivalent
lease liability measured at cost less incentives received at commencement date. The ROU depreciates in a
straight line over the lease term. The lease liability is measured at the present value of the lease’s future lease
payments from commencement date, discounted using the Group’s incremental borrowing rate.
Lease liability is subsequently remeasured when there is a change in future lease payments arising from a
change in lease term, an index or rate, change in amount payable under a residual value guarantee, lease term
or termination penalties. When it is remeasured, a corresponding adjustment is made to the carrying value of
the ROU asset.
Lease which are less than 12 months are treated as short term leases and expensed to the profit and loss
statement.
In determining the lease term, management considers all facts and circumstances that create an economic
incentive to exercise an extension option. Such option is only included in the lease term if the lease is
reasonably certain to be extended. The assessment is reviewed if an event of significant change in
circumstances occurs which affects this assessment that is within the control of the Group.
14
Investment in Associates & Joint Venture
(i) Share in Associate & Joint Venture
Consolidated Group
30 June 2023
30 June 2022
Equity investments with no provisions for impairment
Share of Associate and Joint Venture NPAT
Total Investment in Associates & Joint Venture
The Group’s associates & joint venture at the balance date are:
Associates & Joint
Venture
Ownership
Interest
Nature of activities
$’000
2,567
(953)
1,614
Financial
Reporting
Date
Xeppo Pty Limited
25%
Fintech Data Solutions Provider
30 June
$’000
2,567
(576)
1,991
Carrying Value
30 June 2023
$’000
1,614
87 | netwealth Annual Report 2023 For the year ended 30 June 2023
Xeppo Pty Ltd
The Group has a 25% interest in an unlisted entity, Xeppo, an Australian specialist Fintech data
solutions provider based in Adelaide.
In August 2022, the Group and Xeppo entered into a revised shareholder agreement. As part of this
agreement, the Group provided Xeppo with a $2.5 million convertible loan facility, carrying an annual
interest rate of 5% and a maturity date of 30 June 2026. The primary objective of this loan was to
support Xeppo's strategic initiatives.
Under the terms of the agreement, at the earlier of the loan maturity or the Group exercising its
option, the outstanding loan will be converted into shares at a fixed price of $3 per share, to be issued
by Xeppo. Additionally, the revised agreement granted the Group a "First call option," allowing the
Group to acquire shares in Xeppo up to 50% of its ordinary shares on a fully diluted basis.
Furthermore, the agreement introduced a final put-call option for shareholders. The Group received a
call option, which provides the right to acquire any remaining shares from non-Netwealth
shareholders. Conversely, non-Netwealth shareholders received a put option, granting them the right
to sell any remaining shares in Xeppo after 30 June 2026 at the higher of $3 per share or three times its
net profit after tax.
These strategic financial arrangements were established to strengthen the partnership between the
Group and Xeppo and support for Xeppo's growth initiatives.
Following the revised agreement, the Group conducted a reassessment of its investment in Xeppo.
The assessment revealed that the Group does not currently exercise control over Xeppo, as Xeppo
retains its Managing Director as the chief operating decision maker with the authority to direct both
strategy and resource allocations. Consequently, the Group reclassified its investment in Xeppo from
an associate to a joint venture status, as significant decisions still necessitate unanimous consent
from both Netwealth and non-Netwealth shareholders. This reclassification had no material impact on
the accounting treatment.
The carrying value of the associate and joint venture represents the cost of the shares of the
associate and joint venture at the date of investment, adjusted for the Group’s share of the profit or
loss since the date of acquisition (refer Note 2 for the accounting policy).
As at 30 June 2023, Xeppo has drawn $0.9 million under the loan facility and no options have been
exercised.
(ii) Financial Assets at Fair Value through Profit and Loss
Netwealth has recognised the convertible loan and first call option to Xeppo, on aggregated basis as a
Financial Asset held at FVTPL in accordance with AASB 9.
Consolidated Group
30 June 2023
30 June 2022
$’000
917
917
$’000
-
-
Loan and call option held at FVTPL
Total Financial Assets at Fair Value through P&L
88 | netwealth Annual Report 2023 For the year ended 30 June 2023
Key Accounting Policies
If an entity holds, directly or indirectly, 20 percent or more of the voting power of the investee, it is presumed that
the entity has significant influence.
Significant influence
It is where the acquirer has the power to of significant influence over the investee, but this does not equate to
control over the investee, which relates to the ability to direct.
Joint venture
It is where there is an agreed sharing of control of an arrangement, where decision about relevant activities
requires the unanimous consent of the parties sharing control and all parties have rights to the net assets of the
arrangement.
Investments in associates or joint venture – Equity Method
Investments in associates and joint ventures are recognised initially in the consolidated statement of financial
position at cost and if the cost of investment is greater than the net assets of the investee, goodwill is included as
part of the cost of the investment in associate.
Recognition of Share of Profit or Loss from investment in associate or joint venture
After the initial recognition, the Group’s share of the investee’s profit or loss is to be recognised in its profit or loss,
which will either increase or decrease the carrying amount of the investment in associate or joint venture. When
the Group’s share of losses of an associate or joint venture exceeds the Group’s interest in that associate joint
venture (which includes any long-term interests that, in substance, form part of the Group’s net investment in the
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.
The requirements of AASB 136 are applied to determine whether it is necessary to recognise any impairment loss
with respect to the Group’s investment in an associate or joint venture. When necessary, the entire carrying
amount of the investment (including goodwill) is tested for impairment in accordance with AAASB 136 as a single
asset, by comparing its recoverable amount (higher of value in use and fair value less costs of disposal) with it
carrying amount. Any impairment loss recognised is not allocated to any asset, including goodwill that 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.
Valuation Methodology
The fair value of the convertible loan and first call option was determined using a discounted cash flow (DCF)
model, relying on management's forecast of the loan schedule. The model then incorporated an implied risk
premium above the risk-free rate that results in a net present value (NPV) across the instruments.
89 | netwealth Annual Report 2023 For the year ended 30 June 2023
15 Property and Equipment
Carrying amount of:
Leasehold improvements
Equipment
Total property and equipment
Cost
Balance at 30 June 2021
Additions
Disposals
Balance at 30 June 2022
Additions
Disposals
Balance at 30 June 2023
Accumulated depreciation
Balance at 30 June 2021
Depreciation expense
Disposals
Balance at 30 June 2022
Depreciation expense
Disposals
Balance at 30 June 2023
Consolidated Group
30 June 2023
30 June 2022
$’000
315
1,130
1,445
Leasehold
Improvements
$’000
Equipment
$’000
495
366
-
861
-
-
861
(431)
(56)
-
(487)
(59)
-
(546)
3,015
770
(137)
3,648
709
(186)
4,171
(1,841)
(749)
128
(2,462)
(765)
186
(3,041)
$’000
374
1,186
1,560
Total
$’000
3,510
1,136
(137)
4,509
709
(186)
5,032
(2,272)
(805)
128
(2,949)
(824)
186
(3,587)
90 | netwealth Annual Report 2023 For the year ended 30 June 2023
Leasehold
Improvements
$’000
Equipment
$’000
374
315
1,186
1,130
Total
$’000
1,560
1,445
Net carrying amount
At 30 June 2022
At 30 June 2023
Key Accounting Policies
Each class of property and equipment is carried at cost less, any accumulated depreciation and impairment
losses.
Leasehold improvements
Leasehold improvements are measured on the cost basis and are therefore carried at cost less accumulated
depreciation and any accumulated impairment losses.
Repairs and maintenance are recognised as an expense in profit or loss during the financial period in which
they are incurred.
Depreciation
The depreciable amount of all fixed assets is depreciated on a straight-line basis over the asset’s useful life to
the Group commencing from the time the asset is held ready for use. Depreciation is recognised in profit or
loss.
The depreciation rates used for each class of depreciable assets are:
Class of fixed asset
Leasehold improvements
Equipment
Office equipment
Computer equipment
Laptop computers and hardware
Depreciation rate in use
Over the duration of the lease
20%
25% to 33%
33.33%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each
reporting period.
Gains or losses on disposal
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains
or losses are included in profit or loss in the period in which they arise.
An item of property and equipment is derecognised upon disposal or when no future economic benefits are
expected to arise from the continued use of the asset.
91 | netwealth Annual Report 2023 For the year ended 30 June 2023
16
Intangible Assets
Carrying amount of:
Non-contractual customer relationships
Software and website developments costs
Software – Work in Progress (WIP)
Total intangibles
Consolidated Group
30 June 2023
30 June 2022
$’000
-
2,070
4,436
6,506
$’000
60
2,155
-
2,215
Total
Customer
relationship
Software and
website
Software - Work
in Progress
$’000
$’000
$’000
$’000
Cost
Balance at 30 June 2021
300
Additions
Disposals
Transfer
Balance at 30 June 2022
Additions
Disposals
Balance at 30 June 2023
-
-
-
300
-
-
300
383
1,570
(73)
744
2,624
497
-
3,121
458
286
-
(744)
-
4,436
-
1,141
1,856
(73)
-
2,924
4,933
-
4,436
7,857
Customer
relationship
$’000
Software and
website
Software - Work
in progress
Total
$’000
$’000
$’000
Accumulated amortisation and impairment
Balance at 30 June 2021
Amortisation
Disposals
Balance at 30 June 2022
Amortisation
Disposals
Balance at 30 June 2023
(180)
(60)
-
(240)
(60)
-
(300)
(236)
(306)
73
(469)
(582)
-
(1,051)
-
-
-
-
-
-
-
(416)
(366)
73
(709)
(642)
-
(1,351)
92 | netwealth Annual Report 2023 For the year ended 30 June 2023
Key Accounting Policies
Intangible assets acquired separately
Intangible assets with finite useful lives that are acquired separately are carried 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. Intangible assets with indefinite useful lives that are acquired separately are carried at cost less
accumulated impairment losses.
Customisation and Configuration costs in Software as a Service (SaaS) arrangements
Customisation and configuration costs in SaaS arrangements are capitalised when the software upgrade results
in new codes written that are separately identifiable, have measurable costs, and meets the condition for having
obtained control of the intellectual property from the upgrade. The development on the existing SaaS code
enhances and creates new additional capabilities and it is probable that future economic benefits will be
obtained. Judgement was applied in determining whether the additional code meets the definition of and
recognition criteria as an intangible asset under AASB 138 Intangible Assets following the latest guidance issued
by IFRS Interpretation Committee in March 2021.
Intangibles - Work In Progress (WIP)
Intangibles – WIP is recognised when it can be demonstrated that there is an intention to complete the work in
progress and it is feasible that the intangible assets will be ready for use or sale and the amount can be reliably
measured.
Derecognition of intangible assets
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use.
Gains or losses arising are measured as the difference between the net disposal proceeds and the carrying
amount of the asset and are recognised in profit or loss.
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 that those assets have suffered an impairment loss. If any such
indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the
impairment loss.
Intangible assets with either indefinite useful lives or not yet available for use are tested for impairment at least
annually. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying
amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in profit
or loss.
When an impairment loss subsequently reverses, the carrying amount of the asset 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 in prior years. A
reversal of an impairment loss is recognised immediately in profit or loss.
93 | netwealth Annual Report 2023 For the year ended 30 June 2023
Key Accounting Policies cont…
Amortisation
The amortisation amount of all intangibles is amortised on a straight-line basis over the intangible’s estimated
useful life to the Group commencing from the time the asset is held ready for use. Amortisation is recognised
in profit or loss.
The amortisation rates used for each class of amortisable assets are:
Class of Intangibles
Customer relationships
Existing software and website
Amortisation rate (currently in use)
20%
20%
17 Trade and Other Payables
Consolidated Group
30 June 2023
30 June 2022
$’000
$’000
10,685
1,119
11,804
7,794
841
8,635
Measured at amortised cost:
Trade payables
GST payables
Total trade and other payables measured at amortised
cost
Financial liabilities at amortised costs classified as trade
and other payables
Total trade and other payables at amortised cost
11,804
8,635
Less:
GST payable
Total financial liabilities as trade and other payables
Key Accounting Policies
Measurement of Trade and Other Payables
1,119
10,685
841
7,794
Trade creditors and other payables are initially measured at amortised cost. The above liabilities only arises
when the goods and services the Group have been received in full, remain unpaid at the end of the financial
year and remains the Group’s present obligation to make payments to the supplier.
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Taxation Office (ATO).
Receivables and payables are stated inclusive of the amount of GST receivables or payable. The net amount of
GST recoverable from, or payable to, the ATO is included as part of trade and other payables in the statement
of financial position.
94 | netwealth Annual Report 2023 For the year ended 30 June 2023
Key Accounting Policies cont…
Cash flows are presented on a gross basis. The GST component of operating cash flows is included in receipts
from customers or payments to suppliers.
18 Provisions
Employee benefits
Other provisions
Total provisions
Current
Non-current
Total provisions
Consolidated Group
30 June 2023
30 June 2022
$’000
8,294
91
8,385
7,439
946
8,385
$’000
7,061
88
7,149
6,417
732
7,149
Analysis of provisions consolidated Group
Balance at 30 June 2022
Additional amounts raised during the year
Amount used or reversed during the year
Balance at 30 June 2023
Employee
Benefits
$’000
Other
Provisions^
Total Provisions
$’000
$’000
7,061
4,766
(3,533)
8,294
88
3
-
91
7,149
4,769
(3,533)
8,385
^A provision recognised for the cost to make good premises that the Group has an obligation under existing lease
commitments.
95 | netwealth Annual Report 2023 For the year ended 30 June 2023
18.1 Provision for employee benefits
Current
Annual leave
Long service leave
Total current employee provisions
Non-current
Long service leave
Total non-current employee provisions
Total employee provisions
Key Accounting Policies
Provisions
Consolidated Group
30 June 2023
30 June 2022
$’000
$’000
4,491
2,857
7,348
946
946
8,294
3,850
2,478
6,328
733
733
7,061
Provision for employee benefits represents amounts accrued for annual leave and long service leave.
The current portion for this provision includes the total amount accrued for annual leave entitlements and the
amount accrued for long service leave is a pro-rata amount accrued based on the current years of service,
adjusted for an assumed rate of salary increase and discounted to allow for when the leave is expected to be
taken.
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 Group 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 period, taking into account the risks and uncertainties surrounding the
obligation. When the effect of the time value of money is material, provision is discounted using the current
pre-tax rate that reflects the risks specific to the liability.
96 | netwealth Annual Report 2023 For the year ended 30 June 2023
19
Issued Capital
Issued capital comprised:
243,891,092 Fully Paid Ordinary shares
(June 2022: 243,813,690)
Total share capital
Reorganisation reserve
Issued capital
Consolidated Group
30 June 2023
30 June 2022
$’000
883,267
883,267
(856,039)
27,228
$’000
882,604
882,604
(856,041)
26,563
The Company recognised in FY2018 a Reorganisation Reserve of $856 million to reflect the market
value of $3.70 per Fully Paid Ordinary share from the restructure of equity at listing.
Consolidated group
30 June 2023
30 June 2022
Number
Number
Fully Paid Ordinary shares
At the beginning of the reporting period
243,813,690
243,802,657
Vested Options converted to Fully Paid Ordinary shares
Shares issued during the year
63,452
13,950
-
11,033
At the end of the reporting period
243,891,092
243,813,690
Shares with value
243,891,092
243,813,690
On 14 September 2022, 13,950 ($184,419) Fully Paid Ordinary shares were issued at no cost to eligible
employees as part of the Employee Gift Offer.
On 12 October 2022, 57,558 ($434,816) Options which vested at 30 June 2022 were exercised and
converted to Fully Paid Ordinary shares.
On 2 March 2023, 5,894 ($44,523) Options which vested at 30 June 2022 were exercised and converted
to Fully Paid Ordinary shares.
The Company has issued share capital amounting to 243,891,092 Fully Paid Ordinary shares (2022:
243,813,690 shares) of no par value.
At shareholders’ meetings each Ordinary share is entitled to one vote when a poll is called, otherwise
each Ordinary shareholder has one vote on a show of hands.
97 | netwealth Annual Report 2023 For the year ended 30 June 2023
20 Reserves
Share reserve
Consolidated Group
30 June 2023
30 June 2022
$’000
6,772
$’000
4,576
The Share reserve records the fair value of shares granted via Share-based payment transactions.
Key Accounting Policies
The grants under the Employee Share Plan result in the recognition of employment expenses with a corresponding
increase in share reserve. The transition costs of an equity transaction are accounted for as a deduction from
equity to the extent they are incremental costs directly attributable to the equity transactions that otherwise
would of been avoided. The costs of an equity transaction that is abandoned are recognised as an expense.
21 Controlled Entities
Note
Country of
Incorporation
Percentage Owned
Subsidiaries of Netwealth Group Limited
Netwealth Holdings Limited
(a)
Australia
Wealthtech Pty Ltd
Australia
Subsidiaries of Netwealth Holdings Limited
Netwealth Investment Limited
Netwealth Group Services Pty Ltd
Netwealth Fiduciary Services Pty Ltd
Netwealth Superannuation Services Pty Ltd
(a)
(a)
Australia
Australia
Australia
Australia
30 June
2023
%
30 June
2022
%
100
100
100
100
100
100
100
100
100
100
100
100
(a) Parties to a Deed of Cross Guarantee with Netwealth Group Limited as detailed in Note 27.
Wealthtech is not operational as of 30 June 2023.
98 | netwealth Annual Report 2023 For the year ended 30 June 2023
22 Financial Instruments
The carrying amount for each category of financial instruments, measured in accordance with AASB 9
Financial Instruments, as detailed in the accounting policies to these financial statements, are as
follows:
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial assets at FVTPL
Loan and call option held at FVPTL
Consolidated Group
30 June 2023
30 June 2022
$’000
$’000
109,482
17,837
491
917
88,376
14,727
1,086
-
Total financial assets
128,727
104,189
Financial liabilities
Trade and other payables
Total financial liabilities
10,685
10,685
7,794
7,794
99 | netwealth Annual Report 2023 For the year ended 30 June 2023
Key Accounting Policies
Initial recognition and measurement
Financial Instruments are recognised when the Group becomes a party to the contractual provisions of the
instrument. For financial assets, this is equivalent to the date that the Group commits itself to either purchase
or sell the asset. Financial liabilities are derecognised if the Group’s obligations in the specified in the contract
expire, discharge or cancelled.
Financial instruments are initially measured at fair value. Fair value reflects the price that would be received to
sell an asset or paid to transfer a liability in an open, actively traded in, market transaction at the measurement
date. If the market for the financial instrument is unlisted or no market quotes are available, fair values is
obtained using discounted cash flow analysis or other valuation techniques, using inputs based on market
condition prevailing at the measurement date.
Transaction costs that are directly attributable to the acquisition or issue of financial instruments (other than
those classified at fair value) are adjusted against 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 and loss.
Classification of Financial assets
Debt instruments that meet the following conditions are measures subsequently at amortised cost:
•
The financial asset is held within a business model whose objective is to hold financial assets in order to
collect contractual cash flows;
•
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.
By default, all other financial assets are measured subsequently at fair value through profit or loss (FVTPL).
A financial asset is held for trading if either:
•
•
It has been acquired principally for the purpose of selling it in the near term;
On initial recognition, it is apart of a portfolio or identified financial instruments that the Group manages
together and has evidence of a recent actual pattern of short-term profit-taking;
•
It is a derivative.
Financial assets at FVTPL
Financial assets that do not meet the criteria for being measured at amortised cost are measured at FVPTL/
Specifically:
•
Investments in equity instruments are classified as at FVTPL, unless the Group designates an equity
investment that is either held for trading nor a contingent consideration arising from a business
combinations as at FVTOCI on initial recognition.
•
Debt instrument that do not meet the amortised cost criteria of the FVTOCI criteria are classified as at
FVTPL. In addition, debt instrument that meet either the amortised cost criteria or the FVTOCI criteria
may be designated at as FVTPL upon initial recognition if such designated eliminates or significantly
reduces a measurement or recognition inconsistency (so called ‘accounting mismatch’) that would arise
from measuring assets or liabilities or recognising the gains and losses on them on different bases. The
Group has not designated any debt instruments as at FCTPL.
100 | netwealth Annual Report 2023 For the year ended 30 June 2023
Key Accounting Policies cont…
Cash & cash equivalent
Cash and cash equivalents with no fixed maturity are short-term instruments in nature or are payable on
demand whose carrying value is equivalent to fair value.
FVTPL financial assets
FVTPL financial assets includes trading assets including financial investments classified as FVTPL or FVTOCI
are measured at fair value quoted at the bid price at the end of the period on active markets where available
(e.g.: listed securities). If quoted prices on active markets are not available, then fair values are estimated on
the basis of other recognised valuation techniques.
Derecognition of financial assets
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire,
or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to
another party.
Financial liabilities and equity instruments
Debt and 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.
The Group’s financial instruments consist of deposits with banks, local money markets investments,
short term investments, loan to joint venture and accounts receivable and payable. For the year
ended 30 June 2023, the Group did not utilise derivatives, does not have any external borrowings and
has not traded in financial instruments including derivatives other than listed and unlisted securities.
The financial instruments the Group has exposes it to the following risks:
• Capital management
• Credit risk
•
• Market risk
•
Interest rate risk
Liquidity risk
In relation to the exposure of the above risks, their objectives, policies, and process and measuring
and the management of capital are outlined in the disclosures below.
101 | netwealth Annual Report 2023 For the year ended 30 June 2023
22.1 Capital management
The Board controls the capital of the Group to ensure that the Group can fund its operations and
continue as a going concern while maintaining an appropriate debt to equity ratio.
The Group’s capital and debt includes share capital, retained earnings, and financial liabilities,
supported by financial assets. The Group’s financial liabilities are Trade and Other Payables.
The Board manages the Group’s capital by assessing the Group’s financial risks and commitments and
adjusting its capital structure in response to these risks and the market.
Under the Registrable Superannuation Entity (RSE) licence granted by APRA, the licensed entity is
required to maintain sufficient level of capital known as Operational Risk Financial Requirements
(ORFR) to cover operational risk. At 30 June 2023, NSS as the licensed entity and trustee for
Netwealth Superannuation Master Fund held cash of $58.5 million to meet this requirement.
Under ASIC’s RG166 capital requirements for Australian Financial Services Licensees, NIL as the
licensed entity was also required to maintain an additional $17.1 million in net tangible assets as at 30
June 2023.
Both licensed entities satisfied these requirements at all times during the year.
There were no changes in the strategy adopted by the Group to manage its capital during the financial
year.
22.2 Credit risk
Exposure to credit risk relating to financial assets arises from the potential non-performance by
counterparties of contract obligations that could lead to a financial loss to the Group. The Group’s
objective in managing credit risk is to minimise the credit losses incurred, mainly on trade and other
receivables. There is no significant credit risk exposure on fair value through profit and loss (FVTPL)
financial assets.
Credit risk is managed through maintaining procedures ensuring, to the extent possible, that
customers and counterparties to transactions are of sound credit worthiness and the monitoring of
the financial stability of significant customers and counterparties. Such monitoring is used in
assessing receivables for impairment. Credit terms are generally 30 days from the date of invoice.
The maximum exposure to credit risk by class of recognised financial assets at the end of the
reporting period is equivalent to the carrying value of those financial assets as presented in the
statement of financial position.
102 | netwealth Annual Report 2023 For the year ended 30 June 2023
The Group has no significant concentration of credit risk with respect to any single counterparty or
group of counterparties and the exposure to credit risks are as below:
Credit rating
and expected
credit loss
approach
Note
Gross
Carrying
Value
Loss
Carrying
Value
$’000
$’000
$’000
2023
Cash and cash equivalents
Lifetime ECL
Trade and other receivables
Lifetime ECL
Loan and call option held at
FVPTL
N/A
(i)
(ii)
(iv)
109,482
17,837
917
-
-
-
109,482
17,837
917
(i)
(ii)
(iii)
Cash and cash equivalents, directly or indirectly through the Netwealth Wrap Service are
held with large reputable financial institutions within Australia where the credit risk is
considered low.
The Group determines the expected credit losses on these items based on historical
credit loss using probability of default, exposure at default and forward-looking
expectations.
Loan and call option held at FVTPL relates to the convertible loan and first option with
Xeppo.
The Group has not experienced material credit losses on these financial assets. As such, no
provision for expected credit loss has been made in this financial statement.
22.3 Liquidity risk management
Liquidity risk arises from the possibility that the Group might not be able to meet its financial
obligations as they fall due. The Group manages this risk through the following mechanisms:
• preparing forward-looking cash flow analysis in relation to its operational, investing and financing
activities;
• maintaining a reputable credit profile;
• managing credit risk related to financial assets;
•
•
only investing surplus cash with major financial institutions; and
comparing the maturity profile of financial liabilities with the realisation profile of financial assets.
Cash flows realised from financial assets reflect management’s expectation as to the timing of
realisation. Actual timing may therefore differ from that disclosed.
103 | netwealth Annual Report 2023 For the year ended 30 June 2023
Year 1
Year 2
Year 3
Year 4
Year 5
Total
More
than 5
Years
$’000
$’000
$’000
$’000
$’000
$’000
$’000
2023
Trade & other payables
10,685
Total expected outflows
10,685
Cash and cash equivalents
109,482
Trade and other
receivables
Financial assets at FVTPL
Loan and call option held
at FVPTL
17,837
491
-
Total anticipated inflows
127,810
Net inflow of financial
instruments
117,125
-
-
-
-
-
-
-
-
-
-
-
-
-
917
917
917
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Year 1
Year 2
Year 3
Year 4 Year 5
10,685
10,685
109,482
17,837
491
917
128,727
118,042
Total
-
-
-
-
-
-
-
-
More
than 5
Years
$’000
$’000
$’000
$’000
$’000
$’000
$’000
2022
Trade & other payables
Total expected outflows
Cash and cash
equivalents
Trade and other
receivables
Financial assets at
FVTPL
7,794
7,794
88,376
14,727
1,086
Total anticipated inflows
104,189
Net inflow of financial
instruments
96,395
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,794
7,794
88,376
14,727
1,086
104,189
96,395
104 | netwealth Annual Report 2023 For the year ended 30 June 2023
22.4 Market risk
Market risk is the risk of adverse changes in the value of the Group's trading position because of
changes on market prices largely due to demand and supply factors (other than those arising from
interest rate risk) for securities. The Group’s exposure to securities price risk arises mainly from FVTPL
financial assets.
The Group balance sheet is not materially exposed to movements in market prices. The fair value of
financial assets and liabilities approximates their carrying value and the methods calculating fair value
is consistent with how financial instruments are measured at fair value.
22.5 Interest rate risk
Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of
the reporting period whereby a future change in interest rates, such as the cash rate set by the
Reserve Bank of Australia (RBA) and will affect future cash flows and the Group’s income.
The Group also manages interest rate risk by ensuring that, whenever possible, payables are paid
within pre-agreed credit terms.
Sensitivity analysis
The following table illustrates sensitivities to the Group’s exposures to changes in interest rates. The
table indicates the impact on how profit and equity values reported at the end of the reporting period
would have been affected by changes in the relevant risk variable that management considers to be
reasonably possible.
These sensitivities assume that the movement in a variable is independent of other variables.
Year ended 30 June 2023
+/- 0.5% cash rate
Year ended 30 June 2022
+/- 0.5% cash rate
Consolidated Group
Profit (Before Tax)
$’000
Profit (After
Tax)
$’000
+486/-486
+341/-341
+18,887/-18,887 +13,221/-13,221
The Group earns interest on cash and cash equivalents held at approximately 1.35% p.a on the
balances from the client’s cash transaction account. Further increases in the RBA cash rate have
limited impact on the margins earned in the cash transaction account as the benefit of any increases
in interest earned from the rate changes are passed on to clients. With the RBA interest rate at 4.10%
as at 30 June 2023, there is significant downside protection to 0.65% before rate decreases have an
impact on the Group’s revenues.
105 | netwealth Annual Report 2023 For the year ended 30 June 2023
The Group holds foreign currency in United States Dollars (USD) which is exposed to foreign exchange
risk. As the Group does not hold substantial amounts of cash in USD, the impact on profit from foreign
exchange risk is not material.
Key Accounting Policies
Initial recognition and measurement on foreign currency
At initial recognition, a foreign currency transaction is translated into the Group’s function currency using the
spot exchange rate between the functional currency and the foreign currency at the date of the transaction.
Where a foreign currency transaction is over a period of time, an average exchange rate can be used unless the
exchange rate fluctuate significantly during the period.
Subsequent measurement on foreign currency
At the end of each reporting period, the foreign currency monetary assets and liabilities are translated using
the closing spot exchange rate.
Foreign exchange gains and losses arising from the settlement or translation is measured at fair value and
recognised as part of income or loss.
Foreign exchange risk
As the Group is holding cash in a foreign currency, it is exposed to foreign currency translation movements
which is captured as part of income or loss.
22.6 Fair value of financial instruments
The fair values of financial assets and financial liabilities that are measured at amortised cost are
presented in the following table:
Financial assets
Cash & cash equivalent
Trade & other receivables
Total financial assets
Financial liabilities
Trade & other payables
Total financial liabilities
For all in the above table, the carrying value approximates their fair value
Net Carrying Value
30 Jun 2023
30 Jun 2022
$’000
$’000
109,482
17,837
127,319
10,685
10,685
88,376
14,727
103,103
7,794
7,494
106 | netwealth Annual Report 2023 For the year ended 30 June 2023
Financial instruments measured at fair value
The financial instruments recognised at fair value in the statement of financial position have been
analysed and classified using a fair value hierarchy reflecting the significance of the inputs used in
making the measurements. The fair value hierarchy consists of the following levels:
• Unadjusted quoted prices in active markets for identical assets or liabilities (Level 1). The listed
and unlisted investments are valued by reference to the quoted prices in active markets and are
deemed to be Level 1 instruments in accordance with AASB 13 fair value hierarchy of
measurement. In this regard, there is no subjectivity in relation to their value.
•
•
In valuing investments that maybe included in Level 2 of the hierarchy, valuation techniques, such
as comparison to similar investments for which market observable prices are available, are
adopted to determine the fair value of these investments.
Fair value for investments that maybe included in Level 3 are determined using valuation
techniques that include inputs for the asset or liability that are not based on observable market
data (unobservable inputs).
Level 1
Level 2
Level 3
Total
$’000
$’000
$’000
$’000
2023
Financial assets
FVTPL financial assets:
Listed investments
Loan and Call Option at FVTPL
Other
Total FVTPL financial assets
2022
Financial assets
FVTPL financial assets:
Listed investments
Other
Total FVTPL financial assets
5
-
-
5
12
-
12
-
-
486
486
-
917
-
5
917
486
917
1,408
-
1,074
1,074
-
-
-
12
1,074
1,086
107 | netwealth Annual Report 2023 For the year ended 30 June 2023
The listed investments are valued by reference to the quoted prices in active markets for identical
securities and are deemed to be Level 1 securities in accordance with AASB 13 fair value hierarchy of
measurement. In this regard, there is no subjectivity in relation to their value as listed investments.
In valuing investments that maybe included in Level 2 of the hierarchy, valuation techniques, such as
comparison to similar investments for which market observable prices are available, are adopted to
determine the fair value of these investments.
Level 3 inputs are unobservable inputs for the asset or liability with the reconciliation shown in the
table below:
Reconciliation of Level 3 fair value measurements
30 June 2023
Opening balance
Loan and Call Option at FVTPL
Closing balance
Loan to Joint Venture
$’000
-
917
917
In August 2022, the Group and Xeppo entered into a revised shareholder agreement (refer to Notes 2
and 14). As part of this agreement, the Group provided Xeppo with a $2.5 million convertible loan
facility, carrying an annual interest rate of 5% and a maturity date of 30 June 2026. As at 30 June 2023,
the principal amount plus interest accrued was $0.9 million.
Under the terms of the agreement, at the earlier of the loan maturity or the Group exercising its
option, the outstanding loan will be converted to shares at a fixed price of $3 per share, to be issued by
Xeppo. Additionally, the revised agreement granted the Group a "First call option," allowing the Group
to acquire shares in Xeppo up to 50% of its ordinary shares on a fully diluted basis at anytime until its
maturity at 30 June 2026.
The fair value of the loan and call option, recognised as financial instruments, was determined using a
discounted cash flow (DCF) approach applied to the forecasted loan schedule, in conjunction with a
Black Scholes model applied to the call option. This valuation is categorised as Level 3 due to the
unlisted nature of the loan and call option, which lacks observable arm’s length transactions.
As at 30 June 2023, the fair value of the loan and call option was $0.9 million.
108 | netwealth Annual Report 2023 For the year ended 30 June 2023
23 Share Based Payments
Netwealth Equity Incentive Plan (NEIP)
The Group operates an equity-settled share-based compensation plan for which the Board, under the
NEIP may make offers of ‘incentive securities” in the form of rights, options, restricted shares or a
combination of these to selected employees in exchange for their services. The value of the employee
services rendered for the grant of these incentive securities is recognised as an expense over the
vesting period, with the amount determined by the fair value of these incentive securities granted. The
NEIP does not apply to Non-Executive Directors.
As at 30 June 2023, the Group had the following share-based payment arrangements:
Options Granted
During the year, the Company did not issue any ordinary share options to employees under the NEIP
(2022: 2,270,000).
The following unvested options remain outstanding at the end of the reporting period:
Series
Grant date
Number
Plan
Vesting Date
Exercise
Price
Fair Value
at Grant
Date
Series 16
23 September 2021
1,485,000
Options - LTI
30 June 2024
$15.74
$3.14
Series 17
23 September 2021
375,000
Options - LTI
30 June 2024
$15.74
$2.78
Series 18
27 October 2021
75,000
Options - LTI
30 June 2024
$15.74
$4.52
The following vesting conditions apply to all the LTI Scheme Options:
•
•
The holder must be either continuously employed by or hold office continually until the end of the
vesting period;
In each of the three financial years ending from the year the options are issued, the holder must
achieve performance ratings of ‘achieving’ and achieve all minimum KPIs as detailed in the
performance plan applicable for the relevant year.
In relation to Series 17 and 18 options, there are additional vesting conditions which only applies to
those participants in the LTI Scheme Options:
•
•
50% of Options are subject to achieving a Total Shareholder Return relative to the Group’s ranking
in the Comparator Group (being the ASX 300 Diversified Financial Index);
50% of Options are subject to the Group achieving the target EPS growth rate over the vesting
period.
109 | netwealth Annual Report 2023 For the year ended 30 June 2023
Rights Granted
During the year, the Company granted and issued 72,050 performance rights under the NEIP.
The following performance rights remains outstanding at the end of the reporting period:
Series
Grant date
Number
Plan
Vesting Date Weighted
Average Fair
Value at
Grant Date
Series 19
23 September 2021
22,237
Rights - LTI
30 June 2024
$14.66
Series 20
27 October 2021
23,825
Rights - LTI
30 June 2024
$17.40
Series 21
19 November 2021
4,686
Rights - LTI
30 June 2024
$16.27
Series 22
12 September 2022
34,512
Rights - LTI
30 June 2025
$12.37
Series 23
11 October 2022
5,059
Rights - LTI
30 June 2025
$11.15
Series 24
23 November 2022
30,257
Rights - LTI
30 June 2025
$13.09
Series 25
27 June 2023
2,222
Rights - LTI
30 June 2025
$12.37
The following vesting conditions apply to the FY2023 LTI Scheme Rights:
•
•
•
•
•
The holder must be either continuously employed by or hold office continually until 30 June 2025;
In each of the three financial years ending with the FY2025, the holder must achieve performance
ratings of ‘achieving’ and achieve all minimum KPIs as detailed in the performance plan applicable
for the relevant year;
25% of the Rights are based on the company values ratings over the vesting period;
25% of the Rights are based on the individual contribution to delivery of strategic initiatives over
the vesting period; and
50% of Rights are subject to the Group achieving the target EPS growth rate over the vesting
period.
Vested options
On 12 October 2022, 57,558 ($434,816) Options which vested at 30 June 2022 were exercised and
converted to Fully Paid Ordinary shares.
On 2 March 2023, 5,894 ($44,523) Options which vested at 30 June 2022 were exercised and converted
to Fully Paid Ordinary shares.
In total 63,452 Options were exercised and converted to Fully Paid Ordinary shares during the year
(2022: nil).
110 | netwealth Annual Report 2023 For the year ended 30 June 2023
The following vested options that remain outstanding at the end of the reporting period:
Series
Grant date
Number
Plan
Expiry Date
Exercise
Price
Fair Value at
Grant Date
Series 14
17 October 2019
433,907
Options - LTI
30 June 2034
$7.5544
$2.73
78,232
Options - LTI
30 June 2034
$7.5544
$3.00
Series 15
12 November
2019
Key Accounting Policies
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.
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 vest,
with a corresponding increase in equity. At the end of each reporting period, the Group reviews the market,
performance and service conditions to revise its estimate of the number of equity instruments expected to
vest at the end of the vesting period. The impact of the revision to the original estimates is recognised in profit
or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to
the equity-settled employee benefits reserve.
24 Related Party Transactions
The Group’s main related parties are as follows:
24.1 Entities exercising control over the Group
The parent entity, which exercises control over the Group is Netwealth Group Limited.
24.2 Key management personnel
For details of disclosures relating to key management personnel, refer to the Remuneration Report on
pages 44 to 63 and Note 7.
24.3 Other related parties
Other related parties include immediate family members of key management personnel and entities
that are controlled or jointly controlled by those key management personnel, individually or
collectively with their close family members.
Transactions between related parties are on normal commercial terms and conditions no more
favourable than those available to other parties unless otherwise stated. Balances and transactions
between the Company and its subsidiaries, which are related parties of the Company, have been
eliminated on consolidations and are not disclosed in this note.
111 | netwealth Annual Report 2023 For the year ended 30 June 2023
Related parties
Netwealth Investments Limited is the Responsible Entity and receives management and ancillary fee
revenues for managing the operations of Netwealth Managed Investment Schemes (Netwealth Global
Specialist Series) and Netcash.
Consolidated Group
30 June 2023
30 June 2022
$
$
Management and ancillary fees:
Management and ancillary fee revenues
14,033,055
12,946,952
Distributions:
Distribution income
-
654
In FY2023, Netwealth Investments Ltd divested its holdings in the Netwealth Managed Investment
Schemes
Netwealth Investments Limited holds investments in Netwealth products as follows:
Financial assets at FVTPL
Netwealth Managed Investment Schemes
Consolidated Group
30 June 2023
30 June 2022
$
-
$
19,658
Netwealth Wrap and Super Accounts
760,356
1,003,654
Related parties with Associate and Joint Venture
Netwealth Investments Limited has a distribution agreement with Xeppo where it pays for the usage
of Xeppo API and licenses. The Group has provided a convertible loan facility to Xeppo on an annual
interest rate of 5%.
Loan held at FVTPL
Interest earned on Loan
Active License Fees:
Consolidated Group
30 June 2023
30 June 2022
$
17
$
-
Technology and communication expenses
111,000
84,000
112 | netwealth Annual Report 2023 For the year ended 30 June 2023
25 Cash Flow Note
Reconciliation of cash flow from operations with profit after income tax
Profit for the year
Consolidated Group
30 June 2023
30 June 2022
$’000
67,153
$’000
55,552
Income tax expense recognised in profit or loss
29,861
25,558
Depreciation & amortisation
Share based payment expense
Unrealised (gain)/loss on investments
Adjustments on make good provision
Interest on Loan
Loss on disposal of assets
Gain on disposal of investments
Share of Associate’s & Joint Venture NPAT
Movements in working capital
Increase in trade & other receivables
Decrease in other assets
Increase in trade & other payables
Increase in provisions
Cash generated from operations
Income tax paid
Net cash generated by operating activities
Reconciliation of liabilities arising from financing activities
3,279
2,381
(165)
3
(17)
-
109
377
2,984
3,053
144
(21)
-
9
8
393
102,981
87,680
(3,170)
1,455
3,312
1,233
(332)
1,173
627
646
105,811
89,794
(26,585)
(30,189)
79,226
59,605
30 June 2022
Cash Flows
Non-Cash Changes
30 June 2023
$’000
Lease liabilities
15,087
(1,501)
Total liabilities from
financing activities
15,087
(1,501)
Acquisitions New Leases
-
-
-
-
$’000
13,586
13,586
113 | netwealth Annual Report 2023 For the year ended 30 June 2023
Key Accounting Policies
Cash and cash equivalents includes:
•
•
•
cash on hand
deposits held at-call with banks; and
other short-term highly liquid investments with original maturities of three months or less,
(including products managed via the Netwealth platform).
26 Parent Entity Disclosures
The accounting policies of the parent entity, which have been applied in determining the financial
information shown below, are the same as those applied in the consolidated financial statements.
Refer to Note 2 for a summary of the significant accounting policies relating to the Group.
Statement of Financial Position
Parent Entity
30 June 2023
30 June 2022
$’000
$’000
367
5,397
52,257
58,021
14,119
14,119
335
4,864
49,876
55,075
14,095
14,095
43,902
40,980
883,267
882,603
(829,580)
(831,777)
(9,785)
43,902
51,270
51,270
(9,846)
40,980
47,212
47,212
Assets
Cash and cash equivalents
Current assets
Investment in subsidiaries
Total assets
Liabilities
Current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained earnings
Total equity
Statement of profit or loss and comprehensive income
Total Profit for the year
Total Comprehensive Profit for the year
114 | netwealth Annual Report 2023 For the year ended 30 June 2023
Contractual commitments: At 30 June 2023, the parent entity had not entered into any contractual
commitments for the acquisition of property and equipment or any operating leases (2022: nil).
Contingent liabilities: At 30 June 2023, the parent entity does not have contingent liabilities (2022:
nil).
27 Deeds of Cross Guarantee (DOCG)
The wholly owned Australian subsidiaries identified in Note 21 have a deed of cross guarantee with
NGL in accordance with ASIC Corporations (Wholly-Owned Companies) Instrument 2016/785 and are
relieved from the Corporations Act 2001 requirement to prepare and lodge an audited financial report
and directors’ report. The nature of the deed of cross guarantee is such that each company which is
party to the deed guarantees to each creditor payment in full of any debt in accordance with the deed
of cross guarantee. The following wholly-owned subsidiaries became a party to the Deed of Cross
Guarantee since April 2019 and remained during the year ended 30 June 2023.
• Netwealth Holdings Limited
• Netwealth Group Services Pty Ltd
• Netwealth Fiduciary Services Pty Ltd
In the directors’ opinion, there are reasonable grounds to believe that the company and the
companies to which ASIC Corporations (Wholly-Owned Companies) Instrument 2016/785 applies to,
will as a group, be able to meet any liabilities to which they are, or may become, subject to because of
the deed of cross guarantee.
Set out below is the statement of profit or loss and other comprehensive income, statement of
financial position and summary of movements in retained earnings of the entities party to a Deed of
Cross Guarantee.
Statement of profit or loss and other comprehensive income
Revenue
Other income
Expense
Profit before income tax
Income tax expense1
Profit for the period
Total comprehensive income for the period
Consolidated Group
30 June 2023
30 June 2022
$’000
120,476
53,703
$’000
96,270
51,255
(113,927)
(91,407)
60,252
(2,917)
57,335
57,335
56,118
(2,684)
53,434
53,434
115 | netwealth Annual Report 2023 For the year ended 30 June 2023
Statement of financial position
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Financial assets at FVTPL
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Lease assets
Investment in subsidiaries
Financial Assets at FVTPL
Investment in associates & joint venture
Deferred tax assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Provisions
Current tax liabilities
Lease liability
Other current liabilities
Total current liabilities
Non-current liabilities
Lease liability
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained earnings
Total equity
Consolidated Group as at
30 June 2023
30 June 2022
$’000
$’000
13,341
3,459
3,924
117
20,841
1,445
6,506
12,830
76,179
917
1,614
2,188
101,679
122,520
9,320
7,439
4,978
1,437
83
23,257
12,149
946
13,095
36,352
86,168
27,228
6,545
52,395
86,168
10,749
3,685
5,760
972
21.166
1,560
2,155
14,643
65,179
-
1,991
1,566
87,094
108,260
7,753
6,417
1,090
1,501
-
16,761
13,586
732
14,318
31,079
77,181
26,563
4,349
46,269
77,181
116 | netwealth Annual Report 2023 For the year ended 30 June 2023
Summary of movements in retained earnings
Retained Earnings at beginning of financial year
Profit for the year
Dividends paid
Retained earnings at end of financial year
Consolidated Group
30 June 2023
30 June 2022
$’000
46,269
57,335
$’000
40,378
53,434
(51,209)
(47,543)
52,395
46,269
1Dividends of $53.1m included in Other income as shown in the “Statement of profit or loss and other
comprehensive income” relate to dividends from NIL to the DOCG group. As a result, these dividends
have been treated as non-assessable income in arriving at the tax expense for the DOCG group.
28 Auditor’s Remuneration
Fees payable for audit and review of financial reports
Auditor of the Group - Deloitte
Consolidated Group
Subsidiaries
Total audit and review of financial reports
Assurance services
Auditor of the Group - Deloitte
Statutory assurance services
Other services
Auditor of the Group - Deloitte
Audit and review of the Funds
Audit on Internal Controls – GS007
Audit of IDPS and Investor Statements
Consolidated Group
30 June 2023
30 June 2022
$
$
143,359
89,883
114,489
84,795
233,242
199,284
32,592
30,747
271,730
152,465
31,702
309,151
107,514
29,907
Total fees paid to group auditor
721,731
676,603
117 | netwealth Annual Report 2023 For the year ended 30 June 2023
29 Events Occurring after Reporting Date
In the opinion of the Board, there are no other matters or circumstances which have arisen between
30 June 2023 and the date of this report that have significantly affected or may significantly affect the
operations of the Group, the results of those operations and the state of affairs for the Group in
subsequent financial periods.
118 | netwealth Annual Report 2023 For the year ended 30 June 2023
Directors’ Declaration
The Directors declare that:
a.
b.
c.
the attached financial statements and notes in accordance with the Corporations Act 2001,
comply with Accounting Standards, Corporation Regulations 2001 and other mandatory
professional reporting requirements;
the attached financial statements and notes thereto give a true and fair view of the financial
position and performance of the consolidated entity; and
in the Directors’ opinion, there are reasonable grounds to believe that the Company will be
able to pay its debts as and when they become due and payable.
Signed in accordance with a resolution of the Directors made pursuant to s.295(5) of the Corporations
Act 2001.
On behalf of the Directors
Timothy Antonie
Chair
16 August 2023
119 | netwealth Annual Report 2023 For the year ended 30 June 2023
Independent Auditor’s Report
120 | netwealth Annual Report 2023 For the year ended 30 June 2023
121 | netwealth Annual Report 2023 For the year ended 30 June 2023
122 | netwealth Annual Report 2023 For the year ended 30 June 2023
123 | netwealth Annual Report 2023 For the year ended 30 June 2023
Five Years Financial Information Summary
We prepare our Consolidated Financial Report in accordance with Australian Accounting Standards
Board (AASB) and in AU dollars. The information in this section has been presented on underlying
basis to exclude non-recurring expenses. The Directors consider it appropriate to include these non-
International Financial Reporting Standard (IFRS) financial information as they assist users of this
financial report to understand key financial metrics relevant to the operations of the Group.
Income Statement
Total income2
Total expenses2
Income tax expense
NPAT
Statement of Financial Position
Total assets
Net assets
Cash Flow Information
Underlying Operating Net Cash Flows Before Tax
Capital Expenditure
Shareholder Value
Market Capitalisation3
Dividend (cents) – fully franked
Dividend payout ratio
Net tangible assets per ordinary share
Basic earnings per share
Other Information
No. of Employees (full time equivalent)2
Underlying EBITDA
Underlying NPAT
Underlying EBITDA Margin %
Underlying NPAT Margin %
2023
$’000
2022
$’000
2021
$’000
2020
$’000
20191
$’000
214,749
176,631
148,298
126,750
100,481
(117,735)
(29,861)
67,153
(95,521)
(25,558)
55,552
(71,067)
(23,128)
54,103
(64,005)
(19,084)
43,661
(50,398)
(14,882)
35,201
161,885
123,049
136,204
104,243
106,262
(5,642)
83,712
(2,992)
131,117
93,181
78,100
(1,088)
111,892
76,029
64,462
(919)
81,425
63,847
49,499
(741)
3,375,131
24.0
87%
47.8
27.5
2,964,735
20.0
88%
41.8
22.8
4,155,211
18.6
84%
37.9
22.6
2,132,084
14.7
80%
31.9
18.4
1,901,439
12.1
80%
26.7
14.8
485
100,744
67,153
46.9%
31.3%
455
85,092
55,903
48.2%
31.6%
364
79,349
54,103
53.5%
36.5%
317
66,153
43,661
52.2%
34.4%
271
51,963
35,986
51.7%
35.8%
1 FY2019 was based on continuing operations and leases has not been restated to reflect the changes of AASB 16
Leases from into effect from FY2020 onwards.
2 During the year, the Group has revised the classification and disclosure of brokerage expenses. $3.2 million brokerage
expenses, previously included net of the Group’s revenue in Platform revenue, have been reclassified as expenses
under Brokerage, investment & custody. All comparative figures have been reclassified to be consistent with current
period disclosure.
3 Information presented as at end of period.
124 | netwealth Annual Report 2023 For the year ended 30 June 2023
Shareholder Information
Ordinary Shares (ASX Listed)
The shareholder information set out below was applicable at 27 July 2023.
Distribution of shareholdings
Range
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001 and over
There were no holder of less than a marketable parcel of ordinary shares.
Top 20 Holders
Rank Name
Ordinary
Shares
Number of
shareholders
1,692,576
4,735,011
2,061,116
3,736,158
231,666,232
4,679
2,134
292
167
36
Ordinary
shares
% of Issued
Capital
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Heine Brothers Pty Ltd
HSBC Custody Nominees (Australia) Limited
J P Morgan Nominees Australia Pty Limited
Leslie Max Heine Pty Ltd
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