OFX Group Limited Annual Report 2019

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FY2019 Annual Report · OFX Group Limited

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Where
the world’s
moving

ANNUAL REPORT 2019
OFX GROUP LIMITED | ACN 165 602 273

The world
we live in is
constantly
changing.

With it, we’re moving to embrace new ways of moving money.

Global volatility has taken hold of the world’s headlines with

At OFX, we help people move money around the world quickly,

uncertainty more prevalent as a result of world events like

digitally, safely and efficiently and we never forget the power

Brexit and the US-China trade war.

Learning how to navigate these uncertainties is critical

for both personal and business customers as they present
both challenges and opportunities. OFX brings trust and

of the human touch. Access to 24/7 support means that

customers have access to localised and expert customer

service, wherever they are in the world.

We understand that your world never stops moving, so we

transparency to cross border transactions enabling clients to

won’t either.

maximise opportunities.

FINANCIAL HIGHLIGHTS

PG 04

EXECUTIVE TEAM

CHAIRMAN’S LETTER

CEO’S LETTER

PG 05

PG 07

DIRECTORS’ REPORT AND
FINANCIAL STATEMENTS

PG 10

INDEPENDENT AUDITOR’S
REPORT

PG 75

PG 12

SHAREHOLDER INFORMATION PG 82

CORPORATE INFORMATION

PG 85

FINANCIAL HIGHLIGHTS

FOR THE FINANCIAL YEAR ENDED 31 MARCH 2019

$118.7m

Net operating income

$32.2m

27.1%

$21.0m

Underlying EBITDA

Underlying EBITDA margin

Underlying net profit after tax (NPAT)

$23.7b

1,048.7

156.5

Turnover

Transactions (‘000s)

Active clients (‘000s)1

$17.6m

$1.67

Statutory NPAT

Share price at 31 March 2019

1Active Clients is the number of clients who have transacted at least once in the prior 12 months.

OFX Group Limited Annual Report 2019CHAIRMAN’S LETTER

FELLOW SHAREHOLDERS,
Despite a more subdued
operating environment,
especially in the second half of
the year, the leadership team
has performed well, continuing
to deliver growth in net operating
income and in earnings.

Market in Transition
The market in which OFX operates is very large and competition is
highly fragmented. Despite the large number of competitors, very few
international payments companies look the same or have the same
value proposition.

Given unprecedented liquidity, we have seen a lot of new entrants in
the last 5 years, attracted by what appear to be low barriers to entry,
and low cost of debt. They have largely adopted a strategy of
acquiring clients at all cost, but few are profitable, and very few
generate the kind of returns on capital that OFX does. As the cost of
debt increases, as privately-held firms look to exit, and as regulatory
obligations grow tougher, we expect market consolidation to increase.

We continue to focus on generating strong returns for our
shareholders, built on very strong financial, operational, and risk
foundations. To maintain and improve our returns, we will continue to
invest in our technology to improve the client experience, the
flexibility of our core infrastructure, our transaction monitoring and
regulatory disciplines and our productivity. At OFX we are building a
company that generates consistent, responsible growth.

How we are Differentiated
OFX provides a frictionless digital experience that our clients love, but
with localised, knowledgeable customer service available 24/7 for
what are important and often emotional financial transactions. In a
world where trust in institutions is on the decline, this is one of our
most critical competitive advantages.

We believe in building enduring relationships with our clients who
value our approach and transact many times over many years. 76% of
our revenue is generated from returning clients.

From a compliance standpoint, trust is as important for our
regulators, our banking partners and shareholders as it is for our
clients. We need to ensure we are the best in the industry with our
compliance processes and disciplines.

OFX has licences to operate in 55 jurisdictions. These licenses, and
the support we have from 16 banking partners, means we are under a
great deal of scrutiny to operate reliably, and always within the law.
We welcome that. Our track record over the last 12 months, during
which we saw a record number of audits and exams, remains very
strong. We are consistently highly rated with no material breaches.

We meet often with our regulators around the world to ensure we
have candid and open communication. In Australia, for example, we
have open dialogue with AUSTRAC and constantly seek feedback on
our performance. Not only do they regulate us, but we also have a
responsibility to support them. We provide information on potential
financial scams and illegal activities, and always assess how we can
do more to assist them. We don’t view these obligations as a burden,
we believe this is a competitive advantage.

This disciplined focus also applies to our banking partners. Banks
globally are under increased scrutiny from AML regulators and some
have incurred considerable fines. As a result, there is less appetite for
them to bank the international payments sector. Again, our
disciplined approach and compliance track record is a major
advantage, as is the fact we are a publicly listed company.

As I mentioned earlier, our business is built on solid financial
foundations, and we expect to see further market consolidation.

As disclosed during the year, we reached advanced discussions with
a UK-based international payments company. While a deal didn’t
materialise, the process was very beneficial. We learned a lot about

OFX Group Limited Annual Report 20196

where we are strong, and where we can be stronger. It reinforced to
all of us what a terrific company OFX is and that our growth prospects
are very promising.

The management team and Board look forward to a very
promising future.

OFX Culture
At the heart of OFX is the outstanding global team to whom we
express our deep thanks and appreciation. It operates within an
aligned and powerful client-centred culture. It encourages action and
execution, as well as openness and transparency and places a high
degree of importance in doing the right thing for clients, shareholders
and our regulators.

I want to thank all of our team members for their commitment, effort
and dedication. I also want to thank the exceptional leadership team,
who strive for excellence in everything they do and are passionate
about building an industry leading company. And finally, I want to
thank my fellow Board members for their counsel, effort and
commitment.

I would like to thank Melinda Conrad, our long serving Non-Executive
Director who retired from the Board on 28 September 2018, for her
contribution to OFX over 5 years. Melinda was a huge asset, and her
counsel was always lucid, forward-looking, and highly valued.

On 1 April we welcomed Connie Carnabuci to the Board. As a highly
respected international lawyer with excellent experience in
commercial partnerships in the digital space, and M&A in Asia, she is
already proving to be a valuable addition.

Steven Sargent
Chairman
21 May 2019

OFX Group Limited Annual Report 2019CEO’S LETTER

FY19 was another good year for
OFX – we grew revenue above
the market, with excellent
growth in North America and
Asia, managed our costs well
while increasing investment in
key areas, and delivered
significant improvements to our
client experience.

Overview
FY19 was another good year for OFX – we grew revenue above the
market, with excellent growth in North America and Asia, managed
our costs well while increasing investment in key areas, and delivered
significant improvements to our client experience. Our risk
management approach is stronger than ever, with good results
across our audit and regulatory engagements. Cash generation
remained strong, and we invested significant capital expenditure in
initiatives that will underpin our future growth. We added significant
talent to our Executive and senior management teams.

However, we fell short of our own performance expectations. While
the first half saw strong revenue growth, the second half saw market
activity drop substantially, and whilst we delivered a solid operating
performance, our growth rates slowed. In particular, we did not grow
active clients in the second half, which we had hoped we would.
Further, despite a lot of hard work, we were unable to execute an
inorganic opportunity.

So what did we learn? I would summarise it into a few valuable
lessons:

1. The fundamentals of the business remain sound, even in difficult
markets. This is reassuring, especially if markets remain difficult
for the next 12 months – we have a platform to operate the
business sustainably.

2. Our people are highly capable, and hungry for more. We took on
M&A, adopted new risk management approaches, executed

significant improvements to our client experience, tested our
pricing capability as well as new marketing techniques, delivered
great technology enhancements, and achieved our biggest year
ever of regional growth.

3. Our ability to leverage our platform – technology, risk management,
service, and operations – is highly valued, particularly by Enterprise
and Corporate clients.

4. The opportunities for us are significant, both organic and inorganic.
We will continue to focus on organic, but feel much more confident
to manage inorganic opportunities should they materialise.

FY19 Highlights
During FY19 we delivered a solid financial and operating
performance.

- Revenue grew in every region. By business we saw Corporate grow
revenue 16%, and Consumer grow by 4%. By region Asia was again
very strong at 19%, and North America was also strong at 20%. Our
UK Corporate business was a highlight in UK / Europe, growing at 14%.

- We invested to grow - underlying operating expenses increased

from $80.1m to $86.5m. Importantly, we invested in areas directly
correlated to growth, not administration. We split our operating
expenses into ‘revenue generating’ expenses and ‘revenue enabling’
expenses. Last year our revenue generating expenses grew 3x faster
than revenue enabling expenses – in other words, we spend to grow,
not to stand still.

OFX Group Limited Annual Report 20198

$118.7m

2019

2018

16%

118.7m

109.9m

Corporate fee & trading income growth

67.3

Net operating income grew from $109.9m to $118.7m

Net promoter score (NPS)

- Our Net Operating Income (NOI) margin, excluding International
Payments Solutions (IPS), remained stable at 55 basis points
despite Corporate, which is typically lower margin, growing faster
than Consumer.

During the year we hired Sarah Webb as President UK & Europe and
Yung Ngo as President Asia Pacific. Together with Mike Kennedy,
President of North America, we now have strong regional leaders
in place.

- We delivered strong improvements in our technology capability,

particularly in the client experience with updated app experiences
by region, particularly in North America, and further enhancements
to our desktop experience everywhere. Other technology
investments in transaction monitoring, pricing, treasury, our
payments engine, and security have all progressed well, and we are
set to benefit from them in FY20.

- Our service delivery continues to be a great strength, with our
overall global NPS score up from 59.8 to 67.3, and double digit
increases in every region.

- Our risk management continues to be a key strength, with losses

lower than forecast, strong results in our audits from regulators and
bankers, and significant progress in our regulatory engagements
generally.

Our Team
I am delighted with the talent we have added to the organisation at
every level, including in our regions. Our ability to grow will be a
function of us having the right leaders in place, supported by highly
capable teams, and we are heading very positively in that direction.

Their regional teams are well supported by strong global functions.
These include Selena Verth our Chief Financial Officer, Mark Shaw,
who is now the Chief Operating Officer, Wendy Glasgow our Chief
Technology Officer, Jill Rezsdovics our Chief People & Culture Officer,
and Freya Smith our Chief Legal Officer and Company Secretary.
Since the end of the financial year, Elaine Herlihy joined us as our new
Chief Marketing Officer. She brings a wealth of experience, especially
from her most recent role as Head of Marketing at PayPal, Australia.

These leaders have inherited strong teams – people who work for OFX
because they want to make a difference, because of their passion to
deliver an exceptional client experience, and because they see the
global opportunities. We now have over 360 staff, growing
engagement scores, and a global operating model designed to help
them deliver on the reasons they joined.

Outlook
For the year ahead our growth priorities are clear, building on our
focus areas for FY19 – improving the client experience, continuing our
geographic expansion, with emphasis on North America and Asia, and
building partnerships to help us grow and execute better. In

OFX Group Limited Annual Report 20199

19%

20%

12%

Revenue growth in Asia

Revenue growth in North America

Revenue growth in UK/Europe

particular, we will look to grow our base of Corporate and Enterprise
clients in every region. This will be supported by an increased
investment in expenses and capital expenditure, funded by strong
cash generation. We see ourselves as delivering strong, sustainable
growth, at attractive margins, not unsustainable growth.

We also expect further consolidation in the industry and are well
placed to take advantage of opportunities that are financially
attractive and align with our growth strategy.

We are grateful for the strong support from our clients, employees
and investors. We appreciate the trust of our regulators, partners, and
bankers, and know that this requires vigilance every day. My
assessment of the size of the opportunity is unchanged – it is huge
– and my enthusiasm to unlock it is undiminished.

Thank you also to the Board for their counsel, and support in building
a stronger OFX.

Finally, a huge thank you to the OFX team. You have delivered a great
client experience, you have worked tirelessly across the world to
deliver better cost outcomes, you have been creative in accessing
new growth. Your combination of high integrity and great team spirit
has been inspirational. It’s great to work with you all.

Skander Malcolm
Chief Executive Officer and Managing Director
21 May 2019

OFX Group Limited Annual Report 201910

EXECUTIVE TEAM

01.

06.

05.

09.

07.

10.

08.

04.

02.

03.

01.
SKANDER MALCOLM
Chief Executive Officer and Managing Director

Skander joined OFX in February 2017 and has
more than 25 years’ experience in financial
services across consumer payments,
consumer finance, joint ventures, partnerships,
commercial lending and leasing, and digital.
He has worked in Australia & New Zealand, the
UK, the US, the Middle East, Africa, and Eastern
Europe. As President and CEO of GE Capital
(A&NZ), he led a team of more than 4,500
employees in delivering Australia and New
Zealand’s largest consumer finance and
commercial lending and leasing business.
Before that, while in the UK, he helped launch
the country’s first and largest digital personal
loan business, Hamilton Direct Bank, which grew
to more than £3 billion in its first five years.

He holds a Bachelor of Economics from the
University of Sydney and is a Member of the
Australian Institute of Company Directors.

02.
SELENA VERTH
Chief Financial Officer

Selena joined OFX in October 2017 and has
more than 20 years’ experience in finance,

analytics, M&A and risk across various roles.
Her most recent role was Head of Finance –
Platforms, Superannuation and Investments
and Head of Wealth Analytics and Insight at BT
Financial Group Australia. Prior to this, Selena
held a number of senior finance roles within
GE, including Leader, Financial Planning and
Analysis and Commercial Finance for GE Global
Growth and Operations, A&NZ; and Director of
Business Development for GE Australia.

Selena has a Bachelor of Commerce, Executive
MBA from the Australian Graduate School of
Management, is a fellow of CPA Australia and is
a Graduate of the Australian Institute of
Company Directors.

03.
MARK SHAW
Chief Operating Officer

Risk & Compliance function for the Australia
Division at ANZ. Mark held several other senior
roles within ANZ including Head of Compliance
in both Australia and New Zealand. Before
joining ANZ in 2007, Mark worked at Suncorp
managing the group’s governance, policy and
regulatory training frameworks, and
overseeing compliance and operational risk
teams across Australia.

Mark holds bachelor degrees in Computer
Science and Law from the University of
Queensland and has also completed all three
levels of the Chartered Financial Analyst (CFA)
program.

04.
WENDY GLASGOW
Chief Technology Officer

Mark joined OFX in January 2018 as Chief Risk
Officer and was appointed Chief Operating
Officer effective 1 March 2019. In his role Mark
will be responsible for the Group’s global
operations and risk functions. Mark has over 16
years’ experience in financial services
including a solid track record in senior risk,
compliance and regulatory affairs roles,
gained at leading Australian and New Zealand
banks. Most recently he led the Operational

Wendy joined OFX in February 2018 and has
over 16 years’ experience in the technology
industry, leading global teams to deliver
business critical products to Australian and
international markets.

Most recently, Wendy spent several years at
Google, leading Data Platforms and Consulting
across APAC markets. This included launching
Google’s advanced data products and working
with top partners developing and

OFX Group Limited Annual Report 201911

Innovation & Payments Strategy, and Senior
Vice President, Head of Wealth Management
Strategy and Implementation.

09.
JILL REZSDOVICS
Chief People & Culture Officer

Jill joined OFX in October 2018 and has 25
years’ experience in human resources and
operational roles largely in the financial
services industry. Jill spent over 16 years at
Morgan Stanley as the COO and Head of HR for
Australia as well as regional and divisional
roles in Asia, North America and Europe. Prior
to joining OFX, Jill was the General Manager
Human Resources Wealth at the
Commonwealth Bank of Australia.

Jill holds a Master of Commerce (advanced
specialisation in Human Resources) from the
University of New South Wales and a Bachelor
of Commerce from the University of
Newcastle.

10.

FREYA SMITH
Chief Legal Officer and Company Secretary

Freya joined OFX in September 2015. She has
over 12 years’ experience in legal practice and
governance. Freya holds a Bachelor of
Commerce and Bachelor of Laws (Honours), a
Master of Laws (High Distinction) and a
Graduate Diploma of Applied Corporate
Governance from the Governance Institute of
Australia. Freya is admitted in the High Court
of Australia, Federal Court of Australia and
Supreme Court of New South Wales and is a
member of the Association of Corporate
Counsel and an Associate of the Governance
Institute of Australia.

Freya is also currently Chair and a Non-
Executive Director of the Sydney Fringe
Festival.

implementing integrated data, analytics and
marketing strategies to drive business growth.

In addition to a Bachelor of Information
Technology, Wendy also holds a Bachelor
degree and Graduate Certificate in Laws from
the Queensland University of Technology.

Wendy is also currently a Director on the
Barnardos Australia Technology Advisory
Board.

Mike has a Master of Business Administration,
with distinction, from Harvard Business School
and a Master of Science, Industrial Engineering
and Bachelor of Science, Industrial
Engineering, with distinction from Stanford
University.

05.
ELAINE HERLIHY
Chief Marketing Officer

07.
SARAH WEBB
President, UK and Europe

Elaine commenced her role as Chief Marketing
Officer at OFX in May 2019 and has 20 years’
experience in strategic marketing, brand,
communications and sales in FinTech,
Banking, Superannuation and Media (B2C and
B2B). Her most recent role was with PayPal
Australia where she was the Marketing
Director. In this role, Elaine was responsible for
driving customer growth and engagement
across both the consumer and merchant
portfolios and building the PayPal brand in
Australia. Prior to joining PayPal, Elaine spent
eight years at Westpac Group leading brand
and marketing functions across both Westpac
Bank and BT Financial Group’s Superannuation
business. Prior to that, Elaine worked in a
variety of marketing and communications
roles over a nine-year period at Reuters in
London.

Elaine holds a Bachelor of Commerce from
University College Dublin and a Higher Diploma
in Marketing Practice from the Smurfit
Graduate School of Business in Dublin. Elaine
is also an Independent Director of Mine Wealth
and Wellbeing Services and the PayPal Giving
Fund in Australia.

06.
MIKE KENNEDY
President, North America

Mike joined OFX in September 2017.

With 20 years’ financial services and
payments experience, Mike is an accomplished
executive in both large corporate
environments and early stage start-ups. Most
recently, Mike was the co-founder and CEO of
the high growth digital payments company,
Zelle / clearXchange - the largest bank
focused digital P2P payments network in the
USA. Mike has also held a number of senior
positions with McKinsey & Co and Wells Fargo,
including Executive Vice President, Head of

Sarah Webb joined OFX in December 2018 as
President, UK & Europe and has more than 20
years’ experience in payments and a track
record of developing client relationships,
product initiatives and building profitable
businesses. Most recently, Sarah held the role
of Managing Director, Global Payments
Networks at Barclays, where she led a team
responsible for managing strategic
partnerships across credit and debit portfolios
globally as well as leading the Barclaycard
PSD2 programme. Before joining Barclays,
Sarah was Head of Global Product
Management, Commercial Payments,
at American Express.

Sarah holds a Bachelor of Science degree in
Maths with Management from Imperial College,
University of London.

08.
YUNG NGO
President, Asia Pacific

Yung joined OFX in March 2019 as President,
Asia Pacific.

Yung has over 20 years’ financial services
experience having held senior management
positions at Westpac, St George Bank and GE
Capital leading large scale operations across
retail banking, home lending and commercial
finance. He has extensive experience driving
growth across multiple channels including
direct to consumer and businesses, business
partnerships, third party as well as call centre
distribution.

Prior to joining OFX, Yung led Westpac
Premium’s business in NSW, UK and Asia.

Yung holds a Bachelor of Jurisprudence and a
Bachelor of Laws from UNSW and is also a
graduate of the Australian Institute of
Company Directors. He is also a Non-Executive
Director of Settlement Services International
Limited.

OFX Group Limited Annual Report 2019Directors’
Report and
Financial
Statements

FOR THE YEAR ENDED 31 MARCH 2019

CONTENTS

PG 14
DIRECTORS’ REPORT

PG 26
REMUNERATION REPORT

PG 46
AUDITOR’S INDEPENDENCE
DECLARATION

PG 47
FINANCIAL STATEMENTS

PG 51
NOTES TO THE FINANCIAL STATEMENTS

PG 54
RESULTS FOR THE YEAR

Consolidated Statement
of Comprehensive Income

Consolidated Statement
of Financial Position

Consolidated Statement
of Changes in Equity

Consolidated Statement
of Cash Flows

PG 47

PG 48

PG 49

PG 50

About this Report

PG 51

2. Net Operating Income

Segment Information

PG 52

3. Expenses

4. Income Taxes

PG 54

PG 55

PG 56

5. Deferred Income Tax Assets/(Liabilities) PG 57

6. Earnings per Share

PG 58

PG 58
FINANCIAL ASSETS AND LIABILITIES

PG 65
OTHER ASSETS AND LIABILITIES

PG 68
CAPITAL STRUCTURE

7. Cash and Cash Equivalents, Client

12. Property, Plant and Equipment

PG 65

17. Capital Management

Liabilities, and Deposits due from Financial
Institutions
PG 58

8. Other Receivables (Current Assets) PG 59

13. Intangible Assets

PG 66

18. Ordinary Share Capital

14. Other Creditors and Accruals

19. Dividends

(Current Liabilities)

PG 68

9. Derivative Financial Instruments

at Fair Value through Profit or Loss PG 59

15. Provisions

PG 66

PG 67

10. Fair Values of Financial Assets

and Liabilities

11. Financial Risk Management

PG 59

PG 60

16. Operating Lease Commitments

PG 67

PG 69
OTHER ITEMS

PG 74
DIRECTORS’ DECLARATION

PG 75
INDEPENDENT AUDITOR’S REPORT

20. Events Occurring After Balance Sheet

Date

21. Related Party Information

22. Share-Based Payments

23. Key Management Personnel

24. Remuneration of Auditors

PG 69

PG 70

PG 72

PG 73

25. Parent Entity Financial Information PG 73

PG 82
SHAREHOLDER INFORMATION

PG 85
CORPORATE INFORMATION

DIRECTORS’ REPORT

FOR THE FINANCIAL YEAR ENDED 31 MARCH 2019

01.

03.

04.

05.

02.

The Directors present their report on the
consolidated entity consisting of OFX Group
Limited (OFX or the Company) and the entities
it controlled at the end of, or during, the year
ended 31 March 2019 (the Consolidated Entity
or the Group).

1. Directors

The Directors of the Company during the
financial year and up to the date of this
report are:

01.
STEVEN SARGENT
Chairman – BBus, FAICD, FTSE Member of the
Audit, Risk and Compliance Committee and
Remuneration and Nomination Committee

Age: 58
Appointed: 4 August 2016
Independent director
Residence: Sydney, Australia

Steve was appointed Vice President and
Officer of General Electric Company in 2008
and was a member of GE’s Global Corporate
Executive Council, the first Australian to ever
be appointed to such positions in GE’s history.

CURRENT DIRECTORSHIPS
Director: Origin Energy Limited,
Nanosonics Limited.

Other: The Great Barrier Reef Foundation,
Chair of the Origin Foundation

INTEREST IN SHARES
100,000 ordinary shares

02.
JOHN ALEXANDER (‘SKANDER’)
MALCOLM
Chief Executive Officer and Managing Director –
BEcom

Age: 50
Appointed: 1 February 2017
Not independent
Residence: Sydney, Australia

President and CEO of GE Capital (A&NZ), he
led a team of more than 4,500 employees in
delivering Australia & New Zealand’s largest
consumer finance and commercial lending
and leasing business. Before that, while in the
UK, he helped launch the country’s first and
largest digital personal loan business,
Hamilton Direct Bank, which grew to more
than £3 billion in its first five years.

CURRENT DIRECTORSHIPS
Director: Nil

Other: Member of the Australian Institute
of Company Directors

INTEREST IN SHARES
2,623,979 ordinary shares (of which
2,568,769 have been issued under the
Company’s Executive Share Plan)

03.
GRANT MURDOCH
Non-Executive Director – MCom (Hons), FAICD,

CAANZ. Chair of the Audit, Risk and Compliance

Steve joined OFX in August 2016 and has over
36 years’ global corporate experience in
industries including financial services, mining
and energy. Steve’s prior professional
experience includes 22 years at General
Electric, including a number of leadership
positions as President and CEO GE Australia
and NZ and President and CEO GE Capital
Asia Pacific.

Committee

Age: 67
Appointed: 19 September 2013
Independent director
Residence: Brisbane, Australia

Grant joined the OFX Group in September 2013
and has over 35 years’ experience in
accounting and corporate finance. Grant’s

OFX Group Limited Annual Report 201915

and renewable energy sectors. Connie is also
currently the General Counsel for the ABC.
Prior to her role at the ABC, Connie was a
Partner at Freshfields Bruckhaus Deringer in
Hong Kong leading the firm’s IP/TMT practice
in Asia. She also served as Co-head of the
firm’s global technology practice. Before
moving to Hong Kong, Connie practiced in
Australia for 11 years, including as a Partner at
Mallesons Stephen Jacques (now King and
Wood Mallesons). She began her career as
Associate to the Honourable Justice Wilcox,
Federal Court of Australia.

CURRENT DIRECTORSHIPS
Director: Nil
Other: Member of the UNSW Business School
Advisory Council, Graduate of the Australian
Institute of Company Directors

INTEREST IN SHARES
17,116 ordinary shares

07.
MELINDA CONRAD
MBA (Harvard), FAICD

Former Non-Executive Director and Chair of the

Remuneration and Nomination Committee

Age: 50
Appointed: 19 September 2013
Ceased: 28 September 2018
Residence: Sydney, Australia

Melinda joined the OFX Group in September
2013 and has over 20 years’ experience in
business strategy and marketing. Melinda’s
prior professional experience includes
executive roles at Harvard Business School,
Colgate-Palmolive, and several retail
businesses.

CURRENT DIRECTORSHIPS
Director: Melinda is a Director of ASX Limited,
Caltex Australia Limited, Stockland
Corporation Limited, the George Institute for
Global Health and the Centre for Independent
Studies.

INTEREST IN SHARES
100,000 ordinary shares (as at 28 September
2018)

prior professional experience includes Head
of Corporate Finance for Ernst & Young
Queensland and is a graduate of the Kellog
Advanced Executive Program at the North
Western University, Chicago, United States.

CURRENT DIRECTORSHIPS
Director: ALS Limited, Redbubble Limited, UQ
Holdings Limited, Lynas Corporation Limited
Other: Senator of the University of
Queensland; Adjunct Professor School of
Business, Economics and Law at the
University of Queensland; member of
Queensland State Council of Australian
Institute of Company Directors; Trustee of
the Endeavour Foundation Disability
Research Fund.

PREVIOUS DIRECTORSHIPS
Director: Cardno Limited (resigned 6
November 2015) QIC Limited (resigned 30
Sept 2017)

INTEREST IN SHARES
245,000 ordinary shares)

04.
DOUGLAS SNEDDEN
Non-Executive Director – BEC (ANU), MAICD.

Chair of the Remuneration and Nomination

Committee and Member of the Audit, Risk and

Compliance Committee

Age: 61
Appointed: 16 March 2015
Independent director
Residence: Sydney, Australia

Doug joined the OFX Group in March 2015 and
has over 30 years’ experience in finance,
consulting, strategic management and
outsourcing. Doug has previously worked as
Country Managing Director of Accenture
Australia.

CURRENT DIRECTORSHIPS
Director: Chairman of Odyssey House NSW,
Chairman of Chris O’Brien Lifehouse,
Chairman of isentia Group Limited, and
Securities Industry Research Centre of
Asia-Pacific (Sirca) Limited
Other: Member of the National Library of
Australia Council, Director of Frisk Pty Ltd,
Member of the Australian Institute of
Company Directors

INTEREST IN SHARES
100,000 ordinary shares

05.
LISA FRAZIER
Non-Executive Director – MBA, Bachelor of

Chemical Engineering, GradDip Finance and

Investment, GAICD. Member of the Audit, Risk

and Compliance Committee. Lisa also serves as

an independent director on the Company’s wholly

owned subsidiary boards in the US and Canada.

Age: 50
Appointed: 1 April 2018
Independent director
Residence: San Francisco, USA

Lisa joined OFX on 1 April 2018 and has 18
years’ experience in digital and technology
specialising in digital disruption, product
innovation, customer experience, data
analytics and marketing across the B2B and
B2C sectors.

Lisa has founded her own startup and has held
executive roles at multiple start-up companies in
San Francisco. She has also led digital and agile
transformation programs for large companies,
such as the Commonwealth Bank of Australia.
As a partner at McKinsey & Company in New
York, Lisa focused on digital transformation
and the development of new business models
in Technology, Media and Telecom.

Lisa is currently the Head of Innovation for
Wells Fargo focused on researching,
developing and applying emerging
technologies to Financial Services

CURRENT DIRECTORSHIPS
Director: Nil
Other: Graduate of the Australian Institute of
Company Directors

INTEREST IN SHARES
54,645 ordinary shares

06.
CONNIE CARNABUCI
Non-Executive Director – Bachelor of Commerce

(Marketing) (with Merit) and Bachelor of Laws.

Member of the Remuneration and Nomination

Committee, GAICD

Age: 55
Appointed: 1 April 2019
Independent director
Residence: Sydney, Australia

Connie joined OFX in April 2019 and has over
30 years’ experience in legal practice,
management and strategy, including
significant private practice advice and deal
experience in Asia in the technology,
telecoms, new media (digital online), FMCG

OFX Group Limited Annual Report 201916

FOR THE FINANCIAL YEAR ENDED 31 MARCH 2019

The following persons were Directors of the Group either during the year and as at the date of this Report:

Steven Sargent
Chairman and Non-Executive Director

John Alexander (‘Skander’) Malcolm
Managing Director and Chief Executive Officer

Lisa Frazier
Non-Executive Director

Grant Murdoch
Non-Executive Director

Melinda Conrad
Non-Executive Director (resigned 28 September 2018)

Connie Carnabuci
Non-Executive Director (appointed 1 April 2019)

Douglas Snedden
Non-Executive Director

The background, qualifications and experience of each of the Directors as at the date of this Report is included on pages 14 and 15.

2. Company Secretaries

Freya Smith

Naomi Dolmatoff (resigned 31 May 2018)

Naomi was appointed as an additional Company Secretary in October
2017 to cover the period of maternity leave for Ms Smith. Naomi is an
experienced Company Secretary and has worked with ASX-listed
entities in the financial services and mining and resources industries.
Naomi holds a Bachelor of Commerce (Finance) with distinction and a
graduate Diploma in Applied Corporate Governance. Naomi is also an
Associate of both the Governance Institute of Australia and the
Institute of Chartered Secretaries and Administrators (UK).

Freya is the Chief Legal Officer and Company Secretary. Freya was
appointed as Company Secretary on 11 October 2016. She has over 12
years’ experience in legal practice and governance. Freya holds a
Bachelor of Commerce and Bachelor of Laws (Honours), a Master of
Laws (High Distinction) and a Graduate Diploma of Applied Corporate
Governance from the Governance Institute of Australia. Freya is
admitted in the High Court of Australia, Federal Court of Australia and
Supreme Court of New South Wales and is a member of the Association
of Corporate Counsel and an Associate of the Governance Institute of
Australia. Freya is also currently a Non-Executive Director and Chair of
the Sydney Fringe Festival.

3. Directors’ meetings

The following table shows meetings held between 1 April 2018 and 31 March 2019 and the number attended by each Director or Committee member.

Director

S Sargent

S Malcolm1

M Conrad

G Murdoch2

D Snedden

L Frazier3

Board

Audit, Risk and
Compliance Committee

Remuneration and
Nomination Committee

Eligible

Attended

Eligible

Attended

Eligible

Attended

By
invitation

1 Mr Malcolm is not a member; however he attended the Audit, Risk and Compliance Committee and

2 Mr Murdoch is not a member; however he attended the Remuneration and Nomination Committee

the Remuneration and Nomination Committee meetings at the invitation of the committees.

meetings at the invitation of the committee.

3 Lisa Frazier was appointed as a member of the Audit, Risk and Compliance Committee effective
28 September 2018. Ms Frazier also attended the Remuneration and Nomination Committee
meetings at the invitation of the Committee.

OFX Group Limited Annual Report 2019FOR THE FINANCIAL YEAR ENDED 31 MARCH 2019

4. Directors’ interests

The relevant interest of each Director in the equity of the Company as at the date of this Report is outlined in the table below. All interests are
ordinary shares unless otherwise stated.

Director

S Sargent

S Malcolm

M Conrad4

G Murdoch

D Snedden

L Frazier

C Carnabuci

Type

Opening balance

Issued5

Acquisition

Disposals/forfeitures

Closing balance

Ordinary

100,000

1,904,136

100,000

245,000

100,000

17,116

691,603

28,240

54,645

100,000

2,623,979

100,000

245,000

100,000

54,645

17,116

There were no disposals of shares by the Directors during the year or share transactions up to the date of this report.

5. Principal activities

The Group’s principal activity during the year was the provision of international payments and foreign exchange services.

6. Dividend and distributions

Dividends paid or determined by the Company during and since the end of the year are set out in Note 19 to the Financial Statements.

Per share (cents)

Total amount ($’000)

Franked6

Payment date

Final 2019

Interim 2019

Final 2018

3.28

8,133

100%

2.64

6,403

100%

3.00

7,230

100%

21 June 2019

14 December 2018

22 June 2018

7. Operating and financial review

A summary of financial results for the year ended 31 March 2019 is
outlined below.

As required for statutory reporting purposes, the consolidated financial
statements of the Consolidated Entity have been presented for the
financial year ended 31 March 2019.

The Group’s statutory financial information for the year ended 31 March
2019 and for the comparative year ended 31 March 2018 present the
Group’s performance in compliance with statutory reporting
obligations.

To assist shareholders and other stakeholders in their understanding of
the Group’s financial information as a publicly listed entity, additional
underlying financial information for the years ended 31 March 2019 and
31 March 2018 are provided in the Operating and Financial Review
section of this Report.

The reconciliation and the underlying information have not been
audited.

4 As at 28 September 2018.
5 Shares were granted in accordance with the Executive Share Plan and are restricted until

performance measures have been met and the corresponding loan in respect of those shares has
been repaid.

6 All dividends are fully franked at the corporate tax rate of 30%.

OFX Group Limited Annual Report 201918

FOR THE FINANCIAL YEAR ENDED 31 MARCH 2019

STATUTORY RESULTS

Net operating income7

EBITDA8

Less depreciation and amortisation

Less income tax expense

Net profit after tax

EBITDA margin

Earnings per share (basic) (cents)

$,000

2019

118,743

27,911

(5,832)

(4,468)

17,611

23.5%

7.28

$,000

2018

109,923

29,825

(4,919)

(6,219)

18,687

27.1%

7.79

Growth

8.0%

(6.4%)

18.6%

(28.2%)

(5.8%)

The results were impacted by a significant item. The table below sets out the underlying financial results for the year ended 31 March 2019 which
has been adjusted for the significant item. An explanation of the significant item and reconciliation to statutory results is provided below.

UNDERLYING RESULTS

Net operating income

Underlying EBITDA

Less depreciation and amortisation

Less income tax expense

Underlying net profit after tax

Underlying EBITDA margin

Underlying earnings per share (basic) (cents)

$,000

2019

118,743

32,229

(5,832)

(5,433)

20,964

27.1%

8.67

$,000

2018

109,923

29,825

(4,919)

(6,219)

18,687

27.1%

7.79

Growth

8.0%

8.1%

18.6%

(12.6%)

12.2%

“Underlying” measures of profit exclude significant items of revenue and expenses in order to highlight the underlying financial performance
across reporting periods. The Company incurred non-operating expenses of $4.3 million related to corporate action costs from discussions
with Currencies Direct.

The following table reconciles underlying earnings measures to statutory results.

Year ended 31 March 2019

Statutory profit

Corporate action costs

Underlying profit

$,000

EBITDA

27,911

4,318

32,229

Profit before tax

Income tax

Profit after tax

22,079

4,318

26,397

(4,468)

(965)

(5,433)

17,611

3,353

20,964

7 Net operating income is the combination of interest income and net income. The Group actively
uses its cash balances as part of its hedging strategy making the interest income integral to its
earnings.

8 Earnings before interest expense, taxation, depreciation and amortisation (EBITDA) is a non-IFRS,
unaudited measure.

OFX Group Limited Annual Report 201919

North America fee and trading revenue increased 20% in the year
ended 31 March 2019. Asia grew fee and trading income by 19%, whilst
the European business saw good growth with fee and trading revenue
up 12% for the year ended 31 March 2019.

The Group invested in additional revenue generating full time
equivalent (FTE) resources and promotional expenses across all
regions, executing good cost controls to achieve annual positive
operating leverage for the year on an underlying EBITDA basis.

$,000

2019

181,263

32,457

213,720

(155,151)

58,569

$,000

2018

203,078

10,189

213,267

(155,826)

57,441

Strong fee and trading income growth across all regions delivered an
8.0% increase in NOI for the year ended 31 March 2019. This growth was
driven by increasing client engagement, with active clients dealing
12.6% more on an annualised basis resulting in an 8.8% increase in
transactions and an 11.9% increase in turnover. NOI margins were
stable at 55 basis points excluding International Payment Services.
Although active clients declined 3.3% to 156,485, the Group delivered
active client growth in North America, Asia and Corporate during the 12
months to 31 March 2019.

The Group invested in technology during the year to deliver a better
client experience. The Group has delivered a streamlined localised
website, a new award-winning mobile application, additional features
for our Global Currency Account and continued investment in our API
technology.

The Group saw good growth across all our regions. Australia and New
Zealand continue to be the highest contributor to fee and trading
income and grew at 5% in the year ended 31 March 2019.

As at 31 March 2019

Cash and cash equivalents

Deposits due from financial institutions

Total cash

Cash held for subsequent settlement of client liabilities

Net cash held

The Group’s financial position remains strong. The balance sheet
consists predominantly of cash and client liabilities, with the cash
position net of client liabilities remaining in line with FY18. The Group
currently has no external debt. The financial position provides a good

platform to pursue future growth opportunities and, coupled with our
regulatory record, provides our banking partners with assurance on our
ability and diligence.

OFX Group Limited Annual Report 201920

FOR THE FINANCIAL YEAR ENDED 31 MARCH 2019

8. Strategy

Our mission remains simple: to provide trusted international money
services to consumers and businesses who value a seamless digital
experience at a competitive price, with a personal ‘always on’ support team.

OFX’s strategy relies on six key pillars of growth. We will continue to focus
on delivery of critical initiatives against each of these pillars, including:

propositions. In addition, we will be investing further in our APIs,
partner referral program, and our partner Marketing.

• Reliable and scalable systems: continuing to improve our technology
platform to enable operations at scale, lowering costs, and enhancing
security for our clients and shareholders.

• Customer experience: strengthening our Corporate client experience.

• Risk management: building trust through strong risk management

• Geographic expansion: continuing to invest in the North American and
Asian regions, as well as driving incremental growth from Corporates
in the UK market.

• Partnerships: building a better Enterprise experience, working with
existing Enterprise partners and prospects to drive stronger value

across regulators, clients, bankers, and partners.

• People: greater emphasis to build our Global Operating Model so that
our teams can serve customers locally and grow their global career
with OFX.

9. Risks

The potential risks associated with the Group’s business are outlined below.
This list does not cover every risk that may be associated with the Group,
and the occurrence or consequences of some of the risks described are
partially or completely outside the control of the Group, its Directors and
senior management. There is also no guarantee or assurance that the
risks will not change or that other risks will not emerge:

• Regulatory compliance – The international payments market is highly
regulated. There is a risk that any new or changed regulations, for
example, banking and financial services licensing regulations, could
require the Group to increase its spending on regulatory compliance and/
or change its business practices, which could adversely affect the Group’s
profitability. There is a risk that such regulations could also make it
uneconomic for the Group to continue to operate in places that it currently
does business. There is a risk that the Group may not comply with all
applicable laws or have adequate compliance procedures in place to
manage or prevent breaches of applicable laws. There is also a risk that
the Group is required to pay significant penalties if it fails to maintain or
follow adequate procedures in relation to on-boarding of clients or to
detect and prevent money laundering, financing of terrorism, breaches
anti-bribery laws or contravenes sanctions, as has been imposed on other
companies by governmental authorities. In addition, there is a risk that
evidence of a serious failure by the Group to comply with laws may cause
one or more of the counterparty banks, partnerships or affiliates to cease
business with the Group. Regulators, counterparty banks, partnerships
and affiliates may interpret regulations differently to the way in which the
Group interprets certain regulations.

• Information technology (IT) - The Group depends on the performance,
reliability and availability of its technology platform and communications
systems. There is a risk that these systems may be adversely affected by
events including damage, equipment faults, power failure, computer
viruses, misuse by employees or contractors, external malicious
interventions such as hacking, fire, natural disasters or weather
interventions. Events of that nature may cause part of the Group’s
technology platform, apps or websites to become unavailable. The

Group’s operational processes or disaster recovery plans may not
adequately address every potential event and its insurance policies may
not cover loss or damage that the Group suffers as a result of a system
failure. This in turn could reduce the Group’s ability to generate income,
impact client service and confidence levels, increase cost burden, impact
the Group’s ability to compete and cause damage to the Group’s
reputation and, potentially, have a material adverse effect on its financial
position and performance. Further, there is a risk that potential faults in
the Group’s technology platform could cause transaction errors that could
result in legal exposure from clients, damage to the Group’s reputation or
cause a breach of certain regulatory requirements (including those
affecting any required licence) and, potentially, have a material adverse
effect on the Group’s financial position and performance.

• Data security and Privacy – The Group’s business relies on the effective
processing and storage of information using its core technologies and IT
systems and operations. If the Group’s data security controls are
ineffective, the Group’s IT systems could be exposed to cyber-attacks
which may result in the unauthorised access to or loss of critical or
sensitive data, loss of information integrity, breaches of obligations or
client agreements and website and system outages. Any interruptions to
these operations would impact the Group’s ability to operate and could
result in business interruption, the loss of customers and revenue,
damaged reputation and weakening of competitive position and could
therefore adversely affect the Group’s operating and financial
performance. The Group is subject to privacy laws in Australia and other
jurisdictions in which it conducts its business. Group operations in the
European Union are required to comply with the European General Data
Protection Regulation. These laws generally regulate the handling of
personal information and data collection. Such laws impact the way the
Group can collect, use, analyse, transfer and share personal and other
information that is central to many of the services the Group provides.
Any actual or perceived failure by the Group to comply with relevant laws
and regulations may result in the imposition of fines or other penalties,
client losses, a reduction in existing services, and limitations on the
development of technology and services making use of such data. Any of

OFX Group Limited Annual Report 201921

advantage is its ability to offer many clients more attractive exchange
rates and transaction fees than they regularly receive from competitors
such as many major banks. Competitors could potentially lower their
spreads and transaction fees to compete with the Group, which could
result in a reduction in, or slowing in the growth of, the Group’s transaction
turnover, a reduction in margins, increased marketing expense or a failure
to capture or reduction in market share. Any of these outcomes could
materially impact the Group’s income and earnings.

• Intellectual Property risk - The Group relies on certain intellectual property
(IP) such as trademarks, licences, software and proprietary technology to
conduct its business. There is a risk that the actions taken by the Group to
register and protect its IP may not be adequate, complete or enforceable,
and may not prevent the misappropriation of the Group’s IP and
proprietary information. If the Group’s IP has been compromised, the
Group may need to protect its rights by initiating litigation such as
infringement or administrative proceeds, which may be time consuming,
unpredictable and costly. Any failure by the Group to protect its IP rights may
adversely impact the Group’s business, operations and future financial
performance. There is a risk that the Group may infringe the IP rights of third
parties. Third parties may enforce their IP rights and prevent the Group from
using the IP, which may adversely impact the business and operations of the
Group and damage the reputation of the Group.

• Reputational damage - Maintaining the strength of the Group’s reputation
is important to retaining and increasing the client base, preserving
healthy relationships with its banks, partnerships, and other service
providers, and successfully implementing the Group’s business strategy.
There is a risk that unforeseen issues or events may adversely affect the
Group’s reputation. This may impact on the future growth and profitability
of the Group.

these events could adversely impact the Group’s business, financial
condition and financial performance as well as cause reputational damage.

• Relationships with banking counterparties - The Group relies on banks to
conduct its business, particularly to provide its network of local and global
bank accounts and act as counterparties in the management of foreign
exchange and interest rate risk. There is a risk that one or more of these
banks may cease to deal with the Group. The loss of a significant banking
relationship, or the loss of a number of banking relationships at the same
time, particularly as the Group grows, could prevent or restrict the Group’s
ability to offer foreign exchange and payment services in certain
jurisdictions, increase operating costs for the Group, increase time taken
to execute and settle transactions and reduce the Group’s ability to
internally net out transactions, all of which could materially impact
profitability. In addition, there is a risk that a loss or reduction in the
services provided by the Group’s banks could restrict its ability to actively
manage its foreign exchange and interest rate risk in certain jurisdictions.
As a result, the Group may have to increase the level of foreign exchange
and interest rate exposure within existing operations, reduce or withdraw
certain services it offers to clients or change its business model to reduce
the level of risk within the business to acceptable levels, all of which could
also materially impact profitability.

• Fraud - There is a risk that, if the Group’s services are used to transfer
money in connection with a fraud or theft, the Group may be required to
take steps to recover the funds involved and may in certain circumstances be
liable to repay amounts that it accepted for transfer, even after it has
made the corresponding international payment. The Group has a range of
fraud prevention controls in place to mitigate this risk.

• Foreign exchange rate fluctuations - Changes in value in currencies can
affect the average transaction size entered into by the Group’s clients
and, potentially, the number of transactions. The Group offers services in
over 50 currencies and movements in any of them may adversely impact
the Group’s performance. In addition, as the Group reports in Australian
Dollars, a strengthening of the Australian Dollar against other currencies
will also have a negative impact on the reported earnings of the Group
that relate to its income earned in geographies outside Australia (which
may increase over time, potentially substantially).

• Credit – The Group enters into forward exchange contracts with some of
its clients and its banking counterparties. There is a risk that, in the event
a client or counterparties fail to make payment upon settlement of these
contracts, the Group will be exposed to the mark-to-market value of the
transactions.

• Competition - The market for the provision of foreign exchange and
payment services is highly competitive. The major existing competitors of
the Group include banks, money transfer organisations and other
specialist providers. New competitors, services and business models
which compete with the Group are likely to arise in the future. A
substantial increase in competition for any of these reasons could result
in the Group’s services becoming less attractive to consumer or business
clients and partnerships, require the Group to increase its marketing or
capital expenditure or require the Group to lower its spreads or alter other
aspects of its business model to remain competitive, any of which could
materially adversely affect the Group’s profitability and financial
condition. A key aspect of the Group’s business model and competitive

OFX Group Limited Annual Report 201922

FOR THE FINANCIAL YEAR ENDED 31 MARCH 2019

10. State of affairs and significant changes in the state of affairs

In the Directors’ opinion there have been no significant changes in the state
of affairs of the Group during the year. A further review of matters affecting
the Group’s state of affairs is contained on pages 17 and 18 in the Operating
and Financial Review.

11. Events subsequent to balance date

Ms Connie Carnabuci was appointed to the Board of OFX Group Limited
effective 1 April 2019.

As at the date of this Report, the Directors are not aware of any other
circumstance that has arisen since 31 March 2019 that has significantly

12. Outlook

affected or may significantly affect the Group’s operations in future
financial years, the results of those operations in future financial years, or
the Group’s state of affairs in future financial years.

Our outlook remains positive. We can drive strong and consistent earnings
growth by:

• Servicing 3 core segments being Consumers, Corporates and Enterprise
Clients.

• Continued investment in the client experience focused on Corporates and
Enterprise.

• Geographic expansion, with an emphasis on North America and Asia; and

• Focused effort on partnerships to discover new use cases.

We have a strong balance sheet, superior service delivery, an experienced
and ambitious team, with a clear mandate from our Board and our
shareholders to grow.

13. Likely developments and expected results

While the impacts of foreign exchange market conditions make accurate
forecasting challenging, it is currently expected that the combined net
profit for the financial year ending 31 March 2020 will increase versus the
financial year ended 31 March 2019. The Group continues to focus on 3
core segments being Consumer, Corporate and Enterprise clients.
Consumer growth will be driven by acquiring new customers and using our
Client Relationship Marketing (CRM) to activate inactive customers.

We will continue to focus on growing our Corporate clients with a more
focused acquisition spend and introducing a corporate CRM. In FY19
corporate revenue was up 16% and is a significant contributor to our
lifetime revenue with each corporate generating 8x higher lifetime revenue
than a consumer.

Enterprise is also a very valuable segment as it allows mass acquisition of
consumer clients but it takes time to win and onboard new Enterprise
clients. We are happy with how the pipeline is growing and expect a larger
impact from Enterprise in FY20.

Our focus on geographic expansion remains consistent. We see strong
growth coming from North America and Asia. Revenue in the United States

was up 20% and revenue in Asia was up 19% in FY19. The growth in these
regions is across all our key segments of Consumer and Corporate. We
expect strong corporate growth out of the UK/Europe region and the
Australia & New Zealand region will continue to be the largest single
contributor of net profit for the Group.

While we grow top line growth, we are also investing in our future with our
capital expenditure focused on improving our client experience and
ensuring we have reliable and scalable systems. Client experience includes
continued focus on our website, mobile app, Global Currency Account and
investment in API technology to enable our Enterprise clients.

Accordingly, the Group’s result for FY20 is expected to be up on the result in
FY19. The Group’s short-term outlook remains subject to the range of
challenges outlined in Section 9 (Risks), including market conditions, the
impact of volatility in the foreign exchange markets, the cost of its client
acquisition through online channels, potential regulatory changes and tax
uncertainties. OFX is well positioned to deliver continued growth in the short
to medium term.

OFX Group Limited Annual Report 201923

14. Environment, social and governance

OFX is an innovative, market leading online payments company that
encourages sustainable business practices in all of its locations and
despite its relatively small size, operates in many countries around the
world with a diverse workforce of employees who are dedicated to our
mission to be a trusted international money services provider. OFX is
committed to being a responsible business and takes its corporate social
responsibilities seriously. We recognise the environmental and social
impacts of our activities and seek to manage them appropriately.

Environment

OFX is a service-based organisation, with an environmental footprint that is
relatively small, primarily comprised of the energy used by our offices, as
well as the typical consumables of an office-based business. OFX
considers environmental sustainability in its office rental decisions. The
offices OFX occupies have occupancy detection sensors which turn lights
off when a space is not being used. The frequent use of virtualisation
technologies in all offices and data centres minimises the need for travel to
multiple sites reducing our reliance on commercial air travel. OFX promotes
e-communications and investment through new applications and
web-based reporting. This enables paper consumption to be cut, as well as
reducing mail costs. We encourage our employees and stakeholders to use
email, recycled or carbon-neutral paper, and recycle paper waste. We
operate waste recycling bins in all our offices. We reduce our plastic
consumption by using water dispensers or water filtered taps to replace
plastic bottles. We understand that there is always room for improvement
and continuously monitor our office activities to take steps towards a
better and more environmentally friendly office.

Social Diversity and Inclusion

As a growing global organisation, OFX benefits from having a diverse mix
of extraordinary individuals from diverse ethnic backgrounds, aged from 19
to 60 and with wide ranging experience and skills. Our future growth and
innovation comes from the talent, motivation and enthusiasm of our
people across the world. We work with our management teams and
determine areas of interest to guide, build and motivate our teams with
in-house training and conferences. Employees also participate in external
training courses, conferences and tradeshows to grow our business and
improve the leadership skills and knowledge of our employees.

OFX provides a safe and healthy workplace for its people and visitors.
Employees are encouraged to observe and practice safe working methods
to support a healthy and safe work culture and environment. A state-of-
the-art, healthy workplace makes a significant contribution to the
satisfaction and productivity of employees, as well as to their ability to
engage with the needs of our clients. OFX also offers an Employee
Assistance Program and subsidised health memberships. We adhere to the
principles of good office design and ensure that our various locations have
a similar look and feel – a strategy that maximises collaboration and
growth.

In FY19 OFX held its first Hackathon (the Concept). The OFX Hackathon
plays a critical role in fostering OFX’s culture of innovation, empowerment
and collaboration. The Hackathon provides employees with opportunities

to collaborate cross-functionally and identify creative and innovative
solutions to market opportunities, with products developed during
Hackathons having potential long-term value to OFX. Various ideas that
were ‘hacked’ were developed into prototypes, and then showcased at the
conclusion of each event for potential implementation as future OFX
products. The OFX Hackathon helped build employee engagement and
deepened employee understanding of the needs of OFX’s customers.

Governance and Conduct

OFX is committed to being ethical, transparent and accountable. We
believe this is essential for the long-term performance and sustainability of
the Company and supports the interests of shareholders. The OFX Board of
Directors is responsible for ensuring that the Company has an appropriate
corporate governance framework to protect and enhance company
performance and build sustainable value for shareholders. This corporate
governance framework acknowledges the ASX Corporate Governance
Council’s Corporate Governance Principles and Recommendations (ASX
Principles and Recommendations) and is designed to support business
operations, deliver on strategy, monitor performance and manage risk. The
Corporate Governance Statement addresses the recommendations
contained in the third edition of the ASX Principles and Recommendations
and is available on the website at https://www.ofx.com/en-au/investors/
corporate-governance/. This statement should be read in conjunction with
OFX’s website and the Directors’ Report, including the Remuneration Report.

OFX has a Code of Conduct and Anti-Bribery and Corruption Policy (ABC
Policy) which outlines the Group’s commitment to appropriate and ethical
corporate practices. The Code of Conduct and the ABC Policy cover matters
such as compliance with laws and regulations, responsibilities to
shareholders and the community, sound employment practices,
confidentiality, conflicts of interest, giving and accepting business
courtesies and the protection and proper use of OFX’s assets. All directors,
officers and employees are required to comply with the Code of Conduct
and the ABC Policy.

OFX also has a Whistleblower Policy that documents OFX’s commitment to
maintaining an open working environment which enables employees and
contractors to report instances of unethical, unlawful or undesirable
conduct without fear of intimidation or reprisal. OFX also provides an
external confidential Online Reporting Portal which can be used for
reporting unacceptable conduct.

Privacy and Data Security

Ensuring the privacy and security of our customers’ data and our corporate
data is paramount for our business. At OFX, we all have a responsibility to
protect customer and corporate information from misuse, loss,
unauthorised disclosure or damage.

OFX recognises the importance of data privacy and we have a number of
strategies to manage our privacy risks, including compliance with relevant
global data privacy regulations, including the EU General Data Protection
Regulation (GDPR), mandatory training on privacy awareness for all
employees, and the ongoing maintenance and development of policies
and procedures.

OFX Group Limited Annual Report 201924

FOR THE FINANCIAL YEAR ENDED 31 MARCH 2019

We take the security of our customers’ data seriously. We have a dedicated
security specialist team and we design, build and manage the security for
our global data via:

• Technology: We use a range of technologies and security controls to
minimise the threat, likelihood and impact of unauthorised access to our
networks and systems. Such technologies and controls include logging
and monitoring capabilities to pre-empt and proactively prepare for
internal and external threats and industry-standard infrastructure
configuration. We continuously invest in our security capabilities,
including maintaining and enhancing our existing technologies to ensure
we stay ahead of new security threats.

• Process: We employ an information asset-focused approach to cyber
security risk management, ensuring appropriate ownership and oversight
of systems, data and risks. Cyber security subject matter experts provide
oversight, and our risk and internal audit functions independently assure.
We also have security processes that include technical reviews of
projects, and due diligence of third parties to ensure the presence and
assess the effectiveness of security controls at critical points.

• People: Cyber security is as much about people as it is about technology.
We deliver programs designed to foster a strong cyber security culture
including regular cyber security drills.

15. Insurance and indemnification of Directors and Officers

The Directors of the Company and such other officers as the Directors
determine are entitled to receive the benefit of an indemnity contained in
the Constitution of the Company, to the extent allowed by the Corporations
Act 2001 (Cth).

The Company has entered into a standard form Deed of Indemnity,
Insurance and Access with the Non-Executive Directors against liabilities
they may incur in the performance of their duties as Directors of the
Company, to the extent permitted by the Corporations Act 2001 (Cth). The

indemnity operates only to the extent that the loss or liability is not covered
by insurance.

During the year the Company has paid premiums in respect of contracts
insuring the Directors and Officers of the Company against liability incurred
in that capacity to the extent allowed by the Corporations Act 2001 (Cth).
The terms of the policies prohibit disclosure of the details of the liability and
premium paid.

16. No officers are former auditors

No officer of the Consolidated Entity has been a partner of an audit firm or
a Director of an audit company that is the auditor of the Company and the
Consolidated Entity for the financial year.

17. Non-audit services

PricewaterhouseCoopers (PwC) continues in office as the external auditor
in accordance with section 327 of the Corporations Act 2001 (Cth).

The Company may decide to employ the external auditor on assignments
additional to its statutory audit duties where the auditor’s expertise and
experience with the Company and/or the Group are important.

The Audit, Risk and Compliance Committee is required to pre-approve all
audit and non-audit services provided by the external auditor. The
committee is not permitted to approve the engagement of the auditor for
any non-audit services that may impair or appear to impair the external
auditor’s judgement or independence in respect of the Company.

The Board has considered the non-audit services provided during the year
by the auditor and, in accordance with written advice provided by resolution
of the Audit, Risk and Compliance Committee, is satisfied that the provision
of those non-audit services during the year by the auditor is compatible
with, and did not compromise, the auditor independence requirements of

the Corporations Act 2001 for the following reasons:

• All non-audit services were subject to the corporate governance
procedures adopted by the Group and have been reviewed by the Audit,
Risk and Compliance Committee to ensure that they do not impact the
integrity and objectivity of the auditor; and

• The non-audit services provided do not undermine the general principles
relating to auditor independence as set out in APES110 Code of Ethics for
Professional Accountants, as they did not involve reviewing or auditing
the auditor’s own work, acting in a management or decision-making
capacity for the Group, acting as an advocate for the Group or jointly
sharing risk or rewards.

Details of the amounts paid or payable to PwC for audit and non-audit
services provided during the year are set out in Note 24 to the Financial
Statements.

OFX Group Limited Annual Report 201925

2019

101,962

430,605

532,567

2018

338,920

Year ended 31 March 2019

Taxation services

Other professional services

Total remuneration for non-audit services

18. Auditors’ independence declaration

A copy of the Auditor’s Independence Declaration as required under section
307C of the Corporations Act 2001 (Cth) in relation to the audit for the year
ended 31 March 2019 is on page 46 of this Report.

19. Chief Executive Officer/Chief Financial Officer declaration

The Chief Executive Officer and the Chief Financial Officer have given the
declarations to the Board concerning the Group’s Financial Statements and
other matters as required under section 295A(2) of the Corporations Act
2001 (Cth).

20. Rounding off

The Company is of the kind referred to in Australian Securities and
Investments Commission Legislative Instrument 2016/191, relating to the
“rounding off” of amounts in the Directors’ Report. In accordance with that
Instrument, amounts in the Directors’ Report and the financial statements
are rounded off to the nearest thousand dollars, unless otherwise stated.

OFX Group Limited Annual Report 201926

REMUNERATION REPORT
LETTER FROM THE CHAIR OF THE REMUNERATION AND NOMINATION COMMITTEE

AS AT 31 MARCH 2019

DEAR SHAREHOLDER
On behalf of the Board and as the new Chair of the Remuneration and
Nomination Committee, I am pleased to present the OFX Group Limited
(OFX or the Company) FY19 Remuneration Report.

The Remuneration Report sets out the remuneration information
for OFX’s KMP and describes OFX’s remuneration framework.

FY19 Remuneration Outcomes

As foreshadowed in the Chairman’s letter and CEO’s letter, while the
OFX Executive team has delivered strong results in FY19; continuing to
deliver revenue growth above the market while also achieving
performance improvements across key non-financial areas;
performance is below expectations. Remuneration outcomes for FY19
are appropriately reflective of this performance, including Short-Term
Incentive (STI) outcomes for Executive KMP.

The Company’s STI plan was amended in FY19. The plan now features a
Company multiplication factor, driven by four Company performance
measures (Company Performance Measures). FY19 Company
Performance Measures were set at Underlying EBT (40%); NOI (20%);
Active Clients (20%); and Leadership and Culture (20%). With this
model, weight has been given to key financial metrics with a heavier
EBT weighting. The Leadership and Culture metric was incorporated to
ensure there is a measure to reflect alignment around customer as well
as talent management, risk management outcomes and culture. All
staff, including Executive KMP, also have individual performance
measures to be equally weighted.

OFX has retained the amended Executive Share Plan (ESP) as approved
by shareholders at the 2018 AGM as its Long-Term Incentive plan (LTI).
Key elements within the ESP were redesigned in FY18 to focus on growth in
the Company’s share price and to align the interests of Executive KMP with
shareholders. No shares vested under the ESP in FY19.

OFX also introduced a global employee share plan in FY19 to encourage
greater share ownership across the Company and to align employees
at all levels with the shareholder experience (Employee Share Scheme).
The Employee Share Scheme has been recognised as a leading global
plan by Employee Ownership Australia, winning the 2018 Award for
Best New Employee Share Plan. OFX also undertook a comprehensive
review of wider Company incentive schemes, including global
commission plans.

OFX has strengthened its Board with the appointment of Connie
Carnabuci as a Non-Executive Director. We also welcomed Sarah Webb,
President, UK and Europe, Yung Ngo, President, APAC, Elaine Herlihy,
Chief Marketing Officer and Jillian Rezsdovics, Chief People & Culture

Officer to the Executive team. With these new Executive hires, the
Board believes that OFX has an Executive Team capable of driving and
delivering OFX’s strategic growth objectives.

Looking Ahead to FY20

The Board remains cognisant of the need to ensure that the remuneration
mix for Executive KMP is appropriately balanced, as well as to ensure that
OFX’s approach to remuneration is transparent and simple, while
continuing to drive alignment to shareholder value creation.

The Board believes the current structure for “at risk” STI and LTI creates
a clear alignment of Executive KMP interests with that of shareholders
and will also ensure that, over the medium term, Executive KMP are
encouraged to think and act like shareholders.

The Board will continue to set incentive targets which reflect OFX’s
focus on delivering superior risk adjusted returns for investors and
sustained performance over the long term. The Board will also monitor
OFX’s culture to ensure that behaviours reflect our values and that
decisions are made in the best interests of all stakeholders.

There is no planned increase to Non-Executive Director remuneration
in FY20.

Yours sincerely

Douglas Snedden
Remuneration and Nomination Committee Chair
21 May 2019

OFX Group Limited Annual Report 2019INTRODUCTION

The Directors of OFX Group Limited (the Company) present the
Remuneration Report for the Company and its controlled entities
(collectively the Group or OFX) for the financial year ended 31 March
2019 prepared in accordance with the requirements of the Corporations
Act 2001 (Cth) (the Corporations Act) and audited as required by
section 308(3C) of the Corporations Act.

THE REMUNERATION REPORT IS DIVIDED INTO THE FOLLOWING SECTIONS:

1. Key Management Personnel

PG 28

7. Legacy LTI Plans

2. Remuneration Philosophy and Link to Business Strategy

PG 29

8. Executive KMP Service Agreements

3. Changes in FY19

PG 33

9. Remuneration Governance

4. Company Performance FY19

PG 34

10. Non-Executive Director Remuneration

5. Performance and Remuneration Outcomes for FY19

PG 35

11. Statutory Disclosures

6. Loans to Executive KMP

PG 38

12. Outlook

PG 39

PG 40

PG 41

PG 43

PG 44

PG 45

OFX Group Limited Annual Report 201928

1. Key Management Personnel

The Remuneration Report outlines the remuneration arrangements in
place for the Key Management Personnel (KMP) of the Group, which
comprises all Directors (Executive and Non-Executive) and those
Executives who have authority and responsibility for planning, directing
and controlling the activities of the Group. In this report “Executive
KMP” refers to members of the Group Executive Team that are KMP and
includes Mr Skander Malcolm, as an Executive Director.

The following table details the Group’s KMP during FY19 and up to the
date of this report. On 20 November 2018, the Company announced the

resignation of Mr Adam Smith as the Company’s Chief Operating Officer
and the appointment of Mr Mark Shaw to the role effective 1 March
2019. In his new role Mr Shaw has taken responsibility for all Group
operations as well as oversight of the Group’s risk function. The
composition of Executive KMP was accordingly reviewed and amended
effective 1 April 2019 to include the roles of CEO, CFO and COO.

Name

Non-Executive Directors

Roles

Steven Sargent

Melinda Conrad

Grant Murdoch

Douglas Snedden

Lisa Frazier

Connie Carnabuci

Executive Director

Skander Malcolm

Executive KMP

Selena Verth

Adam Smith

Mark Shaw

Craige Pendleton-Browne

Wendy Glasgow

Chairman and Non-Executive Director

Non-Executive Director, retired 28 September 2018

Non-Executive Director

Non-Executive Director, appointed 1 April 2019

Managing Director and Chief Executive Officer (CEO)

Chief Financial Officer (CFO)

Chief Operating Officer (COO) (ceased 28 February 2019)

Chief Operating Officer (COO) (effective 1 March 2019)

Chief Technology Officer (CTO) (ceased 30 April 2018)

Chief Technology Officer (CTO) (ceased to be Executive KMP on 31 March 2019)

OFX Group Limited Annual Report 20192. Remuneration Philosophy and Link to Business Strategy

2.1 Remuneration Strategy

OUR MISSION

OUR STRATEGY

To become the trusted international
money services provider by con-
sumers and businesses, who value
a seamless digital experience at a
competitive price; with a personal,
always on support team

Our strategy remains simple: to de-
liver a competitively priced and well
supported product in the markets in
which we operate. Our team will be
focused on critical initiatives in our 6
key pillars of growth:
• Customer experience
• Geographic expansion
• Partnerships
• Reliable and scalable systems
• Risk Management
• People

OUR REMUNERATION
STRATEGY

To attract, retain and motivate the
best people to drive a great culture
that delivers on our business strat-
egy and contributes to sustainable
long-term returns

2.2 Remuneration principles

CULTURE

Align reward to our
strong risk, high
performance and
diverse and inclusive
culture

ALIGNMENT TO
PERFORMANCE

Reward performance
aligned with business
strategy and align
Executive and
shareholder interests

COMPETITIVE

Attract, retain and
motivate appropriately
qualified and
experienced individuals
who will contribute to
the Group’s financial
and operational
performance

SIMPLE AND
TRANSPARENT

Simple structures with
clear expectations

SUSTAINABLE

Motivate Executives to
deliver results with both
short and long-term
horizons at the same
time meeting OFX’s
values

OFX Group Limited Annual Report 201930

2. Remuneration Philosophy and Link to Business Strategy
(Continued)

2.3 Executive KMP Remuneration Components
Total Fixed Remuneration (TFR)

Performance Conditions

Remuneration Strategy

TFR takes into account the size and complexity of the role, as
well as skills and experiences of the Executive KMP. Includes
cash, non-financial benefits, and superannuation for Australian
based Executive KMP. Outside Australia TFR is base salary only.

Set to attract, retain and motivate the right talent to deliver on
the Group’s strategy and contribute to the Group’s financial and
operational performance.

Short Term Incentive (STI)

Delivered as a combination of a cash award and deferred equity issued as performance rights.

Performance rights are issued under the Global Equity Plan as approved by shareholders at the 2018 Annual General Meeting.

Performance Conditions

Remuneration Strategy

Calculated using:

• Company Performance Measures;

• Individual performance measures; and

• Percentage of TFR.

There is no overall Company financial gateway, however, the
Board maintains absolute discretion as to whether any STI
awards will be paid.

Company Performance Measures are reviewed and reset by the
Board annually with Threshold/Target/Maximum levels set for
each measure.

Company Performance Measures for FY19:

• Underlying Earnings Before Tax (EBT) (40%)

• Net Operating Income (NOI) (20%)

• Active Clients1 (20%)

• Leadership and Culture (20%)

Underlying EBT has been used as it represents a more accurate
reflection of business performance.

Assessment for Threshold/Target/Maximum levels to follow a
straight line from 90% to 110%, with the vesting scale ranging
from 50% (for 90% of Target) through to 110% (for 110% or more
of Target).

Individual performance measures to be equally weighted.

Annual “at risk” incentive opportunity awarded on the achievement
of performance conditions over a 12-month period.

Performance conditions are clearly defined and measurable and
designed to support the financial and strategic direction of the
Group and in turn translate to shareholder return.

For FY19 the Company Performance Measures are largely
determined by financial metrics with one KPI set for Leadership
and Culture based on measurements including talent
management and delivery, risk management outcomes, Net
Promoter Score (NPS) outcomes and employee engagement
scores.

Individual performance measures are specific to the Executive
KMP’s role.

Threshold/Target/Maximum targets for each measure are set by
the Board to provide a challenging but purposeful incentive. The
Board also has the discretion to adjust STI outcomes up or down to
be satisfied that individual outcomes are appropriate.

The part allocation of STI into a deferred equity encourages
Executive KMP to behave like shareholders from the grant date.
Performance rights vest after 12 months with a further 12 month
holding lock. Full share ownership will occur 12 months earlier than
in FY18, but inability to sell for a further 12 months will deliver the
full shareholder experience.

The fair value of the performance rights is determined based on
the market price of the Company’s shares at the grant date, with
an adjustment made to account for the vesting period over two
years and expected dividends during that period that will not be
received by the participants.

1 Active Clients is the number of clients who have transacted at least once in the prior 12 months.

OFX Group Limited Annual Report 201931

Long Term Incentive (LTI)
Executive Share Plan (ESP)

Three-year incentive opportunity delivered through restricted Company shares – allocated upfront, pursuant to a non-recourse company loan.

Performance Conditions

Remuneration Strategy

Vesting condition: Underlying EBITDA “Gateway”where EBITDA
over the 3-year performance period must be accretive for
shares to vest.

Performance condition: Absolute Total Shareholder Return (TSR)
Compound Annual Growth Rate (CAGR). Loan forgiveness is
then granted as follows:

• 10% forgiveness for 10% TSR CAGR;

• 20% forgiveness for 15% TSR CAGR; and

• 30% forgiveness for 20% TSR CAGR.

Loan forgiveness is capped at 30%.

Executive KMP must either settle their loan at the end of the
loan period, or surrender all shares in full settlement of the loan.

Grants made to Executive KMP under the ESP for FY19 will be
tested on an underlying EBITDA basis.

Designed to encourage sustainable, long-term value creation and
align Executive KMP with shareholders.

This form of incentive delivers immediate share ownership, linking
a significant portion of remuneration to OFX’s share price and
returns generated for shareholders.

Allocation of shares upfront encourages Executive KMP to behave
like shareholders from the grant date. The shares are restricted
and subject to risk of forfeiture during the vesting/performance
periods and while the loan remains outstanding and links
remuneration to Underlying EBITDA performance over three years
and Absolute TSR.

The Underlying EBITDA Gateway and Absolute TSR CAGR
performance condition are designed to encourage Executive KMP
to focus on the key performance drivers which underpin
sustainable growth in shareholder value. The Underlying EBITDA
Gateway provides a ‘counterbalance’ to the Absolute TSR CAGR
performance condition, designed to check that the quality of the
share price growth is supported by the Group’s earnings
performance, and not market factors alone.

Substantial benefit from the ESP is only achieved through loan
forgiveness. If the Absolute TSR CAGR threshold of 10% is not
achieved there is no loan forgiveness and the Executive KMP has
to repay the full loan amount, less any after-tax dividend
payments applied against the loan.

OFX Group Limited Annual Report 201932

2.4 Remuneration delivery and mix
The Executive KMP remuneration mix is structured so that a substantial
portion of remuneration is delivered as OFX securities through either
deferred STI or LTI. The total remuneration correlates to performance.

The following diagram (which is not to scale) sets out the remuneration
structure and delivery timing for Executive KMP.

Year 1

Year 2

Year 3

1. FIXED REMUNERATION

Salary and other
benefits (including
statutory superannuation)

100%

2. STI (Target is 115% of TFR for CEO and 60% of TFR
for other Executive KMP)

Cash STI

CEO

EXECUTIVE KMP

12 months deferred
vesting

12 month holding lock
post vesting

50%

30%

70%

CEO: 50% cash. 50%
deferred into
performance rights.

KMP: 70% cash.
Executive KMP: 30%
deferred into
performance rights.

3. LTI (92% of TFR for CEO and 40% of TFR for each
other Executive KMP)

Subject to 3-year
performance period.

Subject to 3-year performance period.

Portion of loan may be forgiven at the end of
the 3-year performance period according to the
schedule below:

• 10% forgiveness for 10% Absolute TSR CAGR;
• 20% forgiveness for 15% Absolute TSR CAGR; and
• 30% forgiveness for 20% Absolute TSR CAGR.

OFX Group Limited Annual Report 201933

Remuneration mix
TARGET2

CEO

32%

19%

30%

Executive
KMP

50%

3. Changes in FY19

21%

20%

Fixed

STI (cash)

STI Deferred

LTI

The Company’s STI plan was amended for FY19. The minimum earnings
before tax (EBT) gateway has been removed and replaced with a
Company pool, driven by four Company performance measures to be
reviewed and reset annually with Threshold/Target/Maximum levels for
each metric (Company Performance Measures).

FY19 Company Performance Measures were set at:

Notwithstanding individual performance, or that of the Company, the
Board may determine, in its discretion not to award any STI award in
respect of a financial year if the Board determines that the Company or
any of the Company’s employees has been involved in a serious
compliance breach, whether of any laws, regulations, internal policies
or procedures or the Company’s Code of Conduct.

• Underlying EBT (40%);

• NOI (20%);

• Active Clients (20%); and

• Leadership and Culture (20%).

With this model, more weight has been given to financial measures and
with the combination of heavier EBT weighting and other aligned
financial measures, the Board considered there was no longer a
requirement for a plan gateway.

All staff, including Executive KMP, also have individual performance
measures to be equally weighted. The STI opportunity is communicated
at target, that is, the amount that would be awarded if the overall STI
pool generated by the Company Performance Measures were to equal
100%, and an individual performance rating of ‘Meets Expectations’ is
achieved. Individual performance measures are capped at 120% for
performance deemed by the Company to have substantially exceeded
expectations. The maximum STI opportunity that may be awarded is
132% of target (110% for Company Performance Measures) multiplied
by individual performance (120%). The minimum STI opportunity is zero
where Company Performance Measures are 0%; and/or an individual
performance of ‘Does Not Meet Expectations’.

2 Target mix accounts for partial loan forgiveness under the ESP for ‘on target’ performance.

For certain employees, including Executive KMP, there will be a
component of the total STI award that is deferred. The purpose of the
STI deferral is to drive further alignment between employee and
shareholder interests, and to provide a clear focus on long-term
sustainable growth.

The design methodology of the new STI plan seeks to:

• Offer a simple program that works for all stakeholders including

Executives and employees.

• Reflect the key financial drivers of business success.

• Align how the Executive team and other employees are assessed

and rewarded.

• Provide an opportunity for all employees to share in the success
of the Company while protecting shareholders if results fall below
expectations.

• Deliver a vehicle to provide ownership of Company stock to senior

employees in addition to Executives.

• Provide both immediate rewards and deferred rewards to protect the

Company over time.

OFX Group Limited Annual Report 201934

4. Company Performance FY19

5-year Group Performance

The Group’s FY15-FY19 annual financial performance measures
compared with short term and long term remuneration outcomes is
set out below.

Performance metrics3

Net operating income4

EBITDA

Underlying EBITDA

Active Clients

Basic earnings per share5

Underlying basic earnings per share6

Dividend per share7

Closing share price

2015

$90.1m

$34.5m

142,500

10.11cps

2016

2017

2018

2019

$103.9m

$105.1m

$109.9m

$118.7m

$33.1m

$36.1m

$27.8m

$29.8m

$27.9m

$32.2m

150,900

156,700

161,900

156,500

9.09cps

9.95cps

8.17cps

7.79cps

7.28cps

8.67cps

$0.05875

$0.07184

$0.05900

$0.05800

$0.05640

$2.41

$2.02

$1.48

$1.69

$1.67

3. These are not calculations based on constant currency.
4. Net operating income, a non-IFRS measure, is the combination of ’Fee and trading income’ and

“Fee and commission expense’ and ’Interest income’.

5 For the calculation of EPS refer to Note 6 of the financial statements.

6. Underlying basic earnings per share is the basic earnings per share calculation utilising the

underlying NPAT of the Group.

7. This represents dividends distributed in the period.

OFX Group Limited Annual Report 20195. Performance and Remuneration Outcomes for FY19

Actual remuneration earned during FY19 for Executive KMP is set out
below. This information has not been prepared in accordance with
accounting standards but has been provided to ensure shareholders

are able to clearly understand the remuneration outcomes for
Executive KMP over the financial year, albeit derived from prior years.

5.1 Fixed Remuneration

Regular reviews of remuneration levels are a key element of the
Board’s role, and a comprehensive market review was conducted for

each Executive KMP in FY19 which resulted in the below amendments
to base salary for Executive KMP.

Name

S Malcolm

A Smith8

S Verth

W Glasgow9

C Pendleton-Browne10

M Shaw11

% increase

2.4

3.0

The Board believes that these changes result in appropriate, market-
competitive fixed remuneration.

The value of the Deferred STI that vests, depends on the company
share price at the time of vesting.

In addition to Fixed Remuneration and the cash component of STI,
actual pay received includes equity that has vested from equity made
in prior periods, whether from Deferred STI or from LTI vesting.

The actual STI is dependent on OFX and individual performance.

With respect to LTI, the table below shows no value was crystallised in
FY19 from previous year allocations.

Remuneration paid in FY19

Name

S Malcolm

A Smith8

S Verth

W Glasgow9

C Pendleton-Browne10

M Shaw11

Fixed remuneration

Non monetary
benefits (if any)

665,261

349,393

377,287

308,796

60,883

28,634

Cash bonus

210,543

96,140

80,861

7,781

Deferred STI
(vested over 2019)

LTI
(vested over 2019)

Actual FY19
remuneration paid

875,804

349,393

473,427

389,657

60,883

36,415

8 Ceased to be KMP 28 February 2019.
9 Ceased to be KMP on 31 March 2019.
10.Ceased to be KMP on 30 April 2018.
11 Commenced KMP on 1 March 2019.

OFX Group Limited Annual Report 201936

5.2 STI

The STI Plan is aligned to shareholder interests by:

Encouraging Executive KMP to achieve year-on-year performance in
a balanced and sustainable manner through a mix of financial and
non-financial performance measures.

Mandatory deferral of STI award into performance rights acting as
a retention mechanism (50% deferred for CEO and 30% deferred for
other Executive KMP).

COMPANY PERFORMANCE
MEASURES

INDIVIDUAL PERFORMANCE
MEASURES

TARGET STI %

4 Company Performance Objectives
reviewed and set by the Board annually

Threshold
Target
Max

Payout

50%
100%
110%

Does not meet
Mostly meets
Meets
Exceeds
Outstanding

1
2
3
4
5

0%
75%
100%
110%
120%

TFR
(TFR is base

salary outside

Australia)

STI
Min = 0%

Max = 132%

FY19 STI outcomes
STI achieved by Executive KMP for FY19 is set out in the table below:

Executive KMP

S Malcolm

S Verth

A Smith

M Shaw

C Pendleton-Browne

W Glasgow

STI at target

765,612

227,013

18,372

210,030

Company
Performance
Measures

55%

Individual
Performance

STI
achievement

STI
achievement $

Cash $

STI portion
deferred $

100%

110%

100%

55%

61%

55%

421,086

210,543

137,343

96,140

41,203

11,115

7,781

3,334

115,516

80,861

34,655

Bonus Pool Calculation

FY19 Actual

% Achieved

Payout rate

Funding

FY18 Actual

Underlying EBT

NOI

Active Clients

Leadership and Culture

TOTAL

26.4

118.7

156,485

97%

94%

86%

72%

34.5%

14.5%

24.9

109.9

161,906

See commentary

6.0%

55.0%

YOY %

6.1%

8.0%

-3.3%

As Active Clients decreased during the period, pay out on this metric
was determined at 0%. The Leadership and Culture metric was
considered and the Board determined it appropriate to allocate an
appropriate % achievement to this metric based on demonstrated
performance in talent management, risk management outcomes, Net
Promoter Score (NPS) outcomes and employee engagement scores
with appropriate reduction in pay out for failure to meet growth targets.

Mr Malcolm’s individual performance was assessed by the Board on the
Company Performance Measures as set out in the table above and the
following Individual performance measures:

• Yearly transaction number increase by 18%; and

• Structured Talent Management Program development and implementation,
initially for the top 40 leadership at OFX globally. This includes identifying
top 40 roles, building clear succession plans for Executives and
driving Board visibility to Top 40 roles and succession planning.

OFX Group Limited Annual Report 2019

5.3. LTI (Executive Share Plan)

How performance translates into LTI outcomes

The LTI Plan is aligned to shareholder interests by:

Encouraging Executive KMP to make sustainable business decisions
with allocation of shares upfront encouraging Executive KMP to
behave like shareholders from the grant date. Shares are restricted
and subject to risk of forfeiture during the vesting/performance
periods and while the loan remains outstanding.

The EBIDTA Gateway and Absolute TSR CAGR performance condition
encourage Executive KMP to focus on the key performance drivers
which underpin sustainable growth in shareholder value with poten-
tial loan forgiveness (on a sliding scale to a maximum of 30%) for
growth in Absolute TSR CAGR.

LTI Outcomes for FY19

No shares under the ESP vested in FY19, however Executive KMP were
issued grants under the ESP for FY19 as outlined in the table below.

Fixed Remuneration x Grant % x Gross-up Factor (2) divided by the share

acquisition price (being the 5 day VWAP for the period prior to and

From FY19, as approved by shareholders at the Company’s AGM in
August 2018, in order to reward good performance, part of the loan may
be forgiven at the end of the 3-year performance period upon the
achievement of specified performance conditions.

For FY19 Executive KMP were offered a single grant of shares. The value
of the grants was determined by reference to a set % of TFR. The
number of shares that each Executive KMP received was determined
using the following formula:

including 22 June 2018).

The Gross-up Factor replaced the previously used Fair Value Factor
(Black Scholes).

Australian Accounting Standards require the ESP awards be treated as
options for accounting purposes due to the structure of the plan. The
number and value of notional options held by Executive KMP under the
ESP during the financial year ended 31 March 2019 is set out in the
table below.

Issuance

Grant date

Vesting date

Expiry date

Price per share at
grant date

Share-based loan
(tranche 1)

Share-based loan
(tranche 2)

Share-based loan
(tranche 3)

30 Sept 2016

7 June 2019

6 June 2021

30 Sept 2016

7 June 2020

6 June 2022

30 Sept 2016

7 June 2021

6 June 2023

FY18 share-based loan

22 Sept 2017

7 June 2020

6 June 2022

FY19 share-based loan

22 June 2018

7 June 2021

6 June 2023

0.74

0.81

0.87

0.65

0.53

Performance
achieved

To be
determined

% vested

–

Current KMP

S Malcolm

S Verth

W Glasgow

M Shaw

Former KMP

A Smith12

Held at 1 April
2018

Granted during
the year

Exercised
during the year

Forfeited during
the year

Held at 31
March 2019

Value of options
at grant date $

1,877,166

220,370

691,603

170,985

158,209

500,000

161,910

2,568,769

1,649,362

391,355

248,868

158,209

84,687

(661,910)

471,318

12 A Smith ceased to be KMP and an employee on 28 February 2019. Shares forfeited following
A Smith ceasing to be an employee will be dealt with in accordance with the terms of the ESP.

OFX Group Limited Annual Report 201938

6. Loans to Executive KMP

The details of non-recourse loans provided to Executive KMP under the
ESP during FY19 are set out below.

Under the ESP, Executive KMP acquire shares in the Company funded
by a non-recourse loan from the Company. These loans are provided for
the sole purpose of Executive KMP acquiring shares in the Company.
The amount of the loan is equal to the issue price multiplied by the total
number of shares issued. The loan is ‘interest free’ in that there is no
annual interest charge to the participant on the loan. However, the
notional value of this interest is taken into account in the overall
structure of the program. The participant is obliged to pay a portion of

the post-tax value of any dividends received during the loan term
toward repayment of the loan amount. To access the shares,
participants must repay their loan in full. Following the end of the
vesting period, assuming the EBITDA ‘gateway’ is achieved, the
participant can either repay the loan directly or sell some or all of their
shares and apply the proceeds to repay the loan. Shares remain
restricted until the loan is repaid, and it is important that the loan
obligation is always taken into account alongside the face value of
shares under the ESP awards.

Name

Current KMP

S Malcolm

S Verth

W Glasgow

M Shaw

Former KMP

A Smith

Held at 1 April
2018 $

Advances
during the
year $

Loan
forgiveness
during the
year $

Repayments
during
the year $

Held at 31
March 2019 $

Interest free
value $

Highest
indebtedness
during the
year $

3,373,792

1,225,866

396,067

303,071

280,425

(65,880)

4,533,778

350,237

4,599,659

(9,002)

690,136

(2,235)

278,191

48,214

12,507

699,138

280,425

1,044,105

286,985

(1,313,858)

(17,233)

127,131

1,331,090

OFX Group Limited Annual Report 20197. Legacy LTI Plans

OFX’s LTI changed in FY17 from the Legacy LTI Plan to the ESP to align
with market practice, while continuing to support the Group’s strategy.
The Legacy LTI Plan remains a legacy plan. The Legacy LTI Plan issued
performance rights, service rights and share options to Executive KMP.
The Legacy LTI Plan will continue to operate until all issuances on foot

vest or lapse in accordance with relevant vesting conditions as
determined by the Board.

Legacy performance rights, service rights and options as vested and
on foot as at 31 March 2019 are set out below.

Issuance

Grant date

Vesting date

Price per share at
grant date

Performance
achieved

% vested

Retention rights tranche 1

20 October 2014

7 June 2019

Retention rights tranche 2

20 October 2014

7 June 2019

Retention rights tranche 3

20 October 2014

7 June 2019

FY15 performance rights

FY16 performance rights

26 June 2015

7 June 2018

14 June 2016

7 June 2019

Service rights Executive A

16 October 2015

7 June 2017

Service rights Executive B

Share options tranche 1

20 Nov 2015

20 Nov 2018

1 June 2015

30 June 2018

Share options tranche 2

1 June 2015

30 June 2019

2.21

1.84

1.94

2.51

2.42

0.52

0.50

N/A

To be
determined

–

100%

–

The grants under the Legacy LTI Plan have the following vesting conditions:

Performance rights

Issuance

Retention rights tranche 113

Retention rights tranche 213

Retention rights tranche 3

FY15 performance rights

Issuance

FY16 performance rights13

EPS CAGR

14%

17%

EPS CAGR

17%

Vesting Level (EBITDA CAGR)

100%

19%

22%

25%-100%

14%-19%

17%-22%

Vesting Level (NOI CAGR)

100%

22%

25%-100%

17%-22%

0% Performance Period

<14%

<17%

54 Months

36 Months

0% Performance Period

<17%

36 Months

Service rights

Share options

Service rights are issued in certain circumstances as part of the initial
employment arrangements for employees. The only vesting condition
is ongoing employment at the vesting date. On vesting, each service
right is convertible into one ordinary share of the Company. No exercise
price is payable.

On vesting, each share option is convertible into one ordinary share of
the Company. An exercise price of $2.49 is payable in order for the
options to vest and must be exercised within 12 months of the vesting
date. There were no share options issued during the year ended 31
March 2019.

Further information on share-based payments is set out in Note 22 of
the Financial Statements.

13 The performance period of these tranches was modified in the 2017 financial year to align with

tranche 3.

OFX Group Limited Annual Report 201940

8. Executive KMP Service Agreements

Contractual arrangements for Executive KMP

The main employment terms and conditions for Executive KMP as at
31 March 2019 are set out below.

Contract Components

CEO

Other Executive KMP

Basis of contract

Ongoing (no fixed term)

Notice period

6 months

Post-employment restraints

Maximum 6 month post-employment
non-compete and non-solicitation
restraint

Maximum 12 months post-employment
non-compete and non-solicitation
restraint

Treatment of STI and LTI

Upon termination, if the CEO is
considered a good leaver, the CEO will be
entitled to a pro-rata STI award. Board
discretion applies to the treatment of any
unvested LTI.

Upon termination, if the Executive KMP
is considered a good leaver, the Exec-
utive KMP may be entitled to a pro-rata
STI award. Board discretion applies to
the treatment of any unvested LTI

OFX Group Limited Annual Report 20199. Remuneration Governance

9.1 Role of the Remuneration and Nomination Committee

9.4 Malus and Clawback

The STI and LTI arrangements are subject to malus and clawback
provisions that enable the Company to reduce or claw back awards
where it is appropriate to do so. The Board retains wide discretion to
adjust formulaic incentive outcomes up or down (including to zero)
prior to their finalisation. Malus refers to the exercise of downward
discretion. Clawback refers to the Board’s power to recover awards or
payments that have been made, granted or vested (including the
forfeiture of vested equity awards, or the demand of the return of
shares or the realised cash value of those shares) where the Board
determines that the benefit obtained was inappropriate (for example,
as a result of fraud, dishonesty or breach of employment obligations by
the recipient or any employee of the Group). The Board has not
encountered circumstances in this or prior periods that have required
the application of the clawback provisions.

9.5 Change of Control

If a change of control occurs prior to the vesting of share rights that are
not subject to performance hurdles the Board has discretion to bring
forward vesting dates where it considers it appropriate to do so. If a
change of control occurs prior to the vesting of STI or LTI that is subject
to performance hurdles, the Board has discretion to determine that
some or all of the unvested shares will vest. In exercising this
discretion, the Board may have regard to any matter the Board
considers relevant, including the extent to which the vesting conditions
have been satisfied (or estimated to have been satisfied) at the time
the change of control occurs or the proportion of the performance
period during which the vesting conditions are tested has passed at the
time the change of control occurs.

The Remuneration and Nomination Committee (Remuneration
Committee) is responsible for reviewing and making recommendations
to the Board on the Company’s remuneration packages for Non-
Executive Directors, the CEO, and Executives. It is also responsible for
reviewing the Company’s recruitment policies, superannuation
arrangements, Board and Executive succession planning and
performance evaluations. The Charter of the Remuneration and
Nomination Committee is available on the Group’s website at www.ofx.
com/en-au/investors/corporate-governance/.

To assist in performing its duties, the Remuneration Committee seeks
independent advice from external consultants on various remuneration
related matters. The Remuneration Committee follows protocols
around the engagement and use of external remuneration consultants
to ensure compliance with the relevant Executive remuneration
legislation.

In FY19, Watkins Group Consulting was engaged as an independent
specialist to provide data and scenarios on the Company’s
remuneration framework. Watkins Group Consulting did not make any
remuneration recommendations, as defined by the Corporations Act
2001 (Cth).

9.2 Board discretion

The Company has a structured and objective approach to
remuneration. However, the Remuneration Committee and the Board
are able to exercise judgement and discretion as is required to provide
remuneration outcomes for Executive KMP that appropriately reflect
the performance of the Group and the achievement of real and tangible
results that are consistent with the Group’s strategic priorities, are in
line with Group values, and enhance shareholder value.

9.3 Cessation of employment

Participants are not eligible for any STI cash payment or any deferred
STI which are subject to restriction if they are terminated due to
misconduct or poor performance, nor in general, if they resign or retire
without a managed transition approved by the Board. In certain
appropriate circumstances allowed for under Executive Service
Agreements, the Board may deem an Executive KMP to be a “good
leaver” and exercise discretion to allow eligibility for a pro-rata cash
payment in respect of the current performance year and may
determine that deferred STI previously awarded is retained.

In general, all ESP shares are forfeited and surrendered in full
settlement of the loan if a participant ceases employment prior to the
end of the performance period. The Board, however, has absolute
discretion in appropriate circumstances to deem an Executive KMP to
be a “good leaver” and determine that some or all of a participant’s ESP
share awards be retained.

OFX Group Limited Annual Report 201942

9.6 Other Equity/Share Plans

The Company introduced a global employee share plan in FY19 in which
all employees can be awarded shares on an annual basis (Employee
Share Scheme). The Employee Share Scheme was introduced to
encourage greater share ownership across the company. For FY19
eligibility for the award was subject to a service requirement. For the
FY19 award, shares were allocated to employees on a restricted basis
(the shares cannot be traded until the earlier of cessation of
employment or three years). Directors and Executives are not eligible
for the Employee Share Scheme.

OFX’s Employee Share Scheme has been recognised as a leading
global employee share plan by Employee Ownership Australia, winning
the 2018 Award for Best New Employee Share Plan.

9.7 Minimum shareholding requirements for Non-
Executive Directors

A minimum shareholding requirement for Non-Executive Directors was
introduced in FY19. The minimum shareholding requirement seeks to
align the interests of the Board and shareholders with a minimum
shareholding requirement for Non-Executive Directors. Each Non-
Executive Director must establish and maintain a level of share
ownership equal to one times the Non-Executive Director annual base

fee. For the purposes of calculating the minimum holding, this does not
include any higher fee for acting as Chair or for membership of any
Board Committees. The minimum holding must be reached within three
years of appointment. At the date of this Remuneration Report, all
Non-Executive Directors either met the minimum requirement or were
on track to meet it within the required time.

9.8 Securities Trading Policy

All Directors and employees are required to comply with the Group’s
Securities Trading Policy in undertaking any trading in the Company’s
shares and may not trade if they are in possession of any inside
information. Directors and employees can only trade during the
specified trading windows immediately following the release of the half
year and full year results and the Annual General Meeting. In addition,
Directors and certain restricted employees may only trade during the
trading windows with prior written clearance as set out in the Policy.
The Policy prohibits employees who participate in any equity-based
plan from entering into any transaction in relation to unvested
securities which would have the effect of limiting the economic risk of
an unvested security.

OFX Group Limited Annual Report 201910. Non-Executive Director Remuneration

10.1 Fee framework

10.2 Fee pool

The Board seeks to set fees for the Non-Executive Directors that reflect
the demands which are made on and the responsibilities of the
Directors, and at a level which will attract and retain directors of the
highest quality.

Non-Executive Director fees will be reviewed from time to time and they
may seek the advice of external remuneration advisors for this
purpose. There were no changes in fees during FY19.

The maximum payable to be shared by all Non-Executive Directors is
currently set at $1,000,000 per annum, which was approved by
shareholders in General Meeting prior to the Company’s listing on the
ASX in 2013. To preserve independence, Non-Executive Directors do not
receive any equity as part of their remuneration and do not receive any
performance related compensation. Non-Executive Directors receive
superannuation contributions where required by Superannuation
Guarantee legislation.

Fees applicable for FY19

Role

Chairperson fee

Base Director fee

Committee Chair fee

Committee Member fee

Statutory Non-Executive Director fees for the year ended 31 March 2019
Details of the fees paid to the Non-Executive Directors for the year ended 31 March 2019 are outlined below:

Short-term employee benefits
Cash salary and fees

Post-employment benefits
Superannuation

Non-Executive Director

2018

2019

200,000

100,000

25,000

15,000

Total

2018

2019

S Sargent

M Conrad14

G Murdoch

D Snedden15

L Frazier16

Total Non-Executive
Director

210,130

127,854

114,155

118,721

–

210,046

63,927

114,155

123,288

111,872

2018

19,870

12,146

10,845

11,279

–

19,954

230,000

6,073

10,845

11,712

10,628

140,000

125,000

130,000

70,000

125,000

135,000

–

122,500

570,860

623,288

54,140

59,212

625,000

682,500

Director shareholdings

Details of the Directors’ and their affiliates’ shareholdings in OFX Group Limited are set out below:

S Sargent

S Malcolm

M Conrad18

G Murdoch

D Sneddon

L Frazier

C Carnabuci

Type

Ordinary

Opening balance

Issued

Acquisition

100,000

1,904,136

691,60317

28,240

100,000

245,000

100,000

17,116

54,645

Disposals/
forfeitures

Closing balance

100,000

2,623,979

100,000

245,000

100,000

54,645

17,116

14 Resigned effective 28 September 2018.
15 Appointed Chair of the Remuneration and Nomination Committee effective 28 September 2018.
16 Appointed as a Member of the Audit, Risk and Compliance Committee effective 28 September 2018.

17 Shares were granted in accordance with the Executive Share Plan and are restricted until

performance measures have been met and the corresponding loan in respect of those shares
has been repaid.

Ms Frazier was also paid a fee of AUD15,000 for FY19 for her service as an independent director of
the Company’s wholly owned subsidiaries in the US and Canada.

18 As at 28 September 2018.

OFX Group Limited Annual Report 201944

11. Statutory Disclosures

The table below details the remuneration paid to Executive KMP and has been prepared in accordance with the accounting standards.

Short-term employee benefits

Post-employ-
ment benefit

Long-term
benefits

Share-based payments

Current KMP

Year

Cash salary
and fees

Cash bonus

Other

Super-
annuation

Long service
leave

Deferred STI25

Performance
rights

S Malcolm

S Verth

2019

2018

2019

2018

642,713

210,543

630,059

306,375

356,488

96,140

161,987

120,587

W Glasgow19

2019

289,505

80,861

M Shaw20

Former KMP

A Smith21

C Pendle-
ton-Browne22

2018

2019

2018

2019

2018

38,500

28,333

328,982

7,781

330,059

115,188

2019

58,271

2018

330,136

3,000

M Ledsham23

2019

2018

251,375

Total KMP
remuneration

2019

1,704,292

395,325

2018

1,742,116

545,150

Transactions of KMP

20,415

2,133

59,091

19,941

20,411

10,024

19,291

3,658

20,411

19,940

2,612

19,940

545

388

301

889

860

11,122

(37,087)

30,271

9,922

3,990

5,497

3,207

3,778

Share loan

Total

(147,114)

787,781

304,259

1,291,450

(12,951)

470,398

35,719

332,307

22,171

417,325

42,158

1,883

38,343

(73,343)

279,257

26,192

10,443

506,489

60,883

(77,293)

(65,749)

210,894

(208,272)

(65,749)

(48,611)

83,140

2,822

77,762

(209,354)

2,053,987

84,625

(34,793)

38,039

(259,373)

218,923

2,334,687

Shares held in the Company by Executive KMP at the end of the financial year, excluding shares granted under the ESP, are set out below.

Current KMP

S Malcolm

S Verth

W Glasgow

M Shaw

Former KMP

A Smith24

Held at 1 April 2018

Exercise of share options or
rights during the period

Other movements

Held at 31 March 2019

26,970

5,800

52,222

92,829

28,240

55,210

5,800

52,222

92,829

19 W Glasgow ceased to be a KMP on 31 March 2019.
20 M Shaw commenced to be a KMP on 1 March 2019.
21 A Smith ceased to be a KMP on 28 February 2019.

22 C Pendleton-Browne ceased to be a KMP on 30 April 2018.
23 M Ledsham ceased to be a KMP on 13 April 2017.
24 A Smith ceased to be a KMP on 28 February 2019. The balance above is reflective of the known

balance at resignation date.

25 The amounts for deferred STI payments reflect the accounting expense on a fair value basis.

OFX Group Limited Annual Report 2019

12. Outlook

The Group will continue to review and adjust its reward mechanisms
annually, as required, to ensure that its long-term growth aspirations
are met.

This Directors’ Report is made in accordance with a resolution of the
Directors. On behalf of the Board 21 May 2019.

Steven Sargent
Chairman
21 May 2019

Skander Malcolm
Chief Executive Officer and Managing Director
21 May 2019

OFX Group Limited Annual Report 201946

Auditor’s Independence Declaration
As lead auditor for the audit of OFX Group Limited for the year ended 31 March 2019, I declare that to
the best of my knowledge and belief, there have been:

(a)

no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and

(b)

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

This declaration is in respect of OFX Group Limited and the entities it controlled during the period.

Elizabeth O'Brien
Partner
PricewaterhouseCoopers

Sydney
21 May 2019

PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au

Liability limited by a scheme approved under Professional Standards Legislation.

OFX Group Limited Annual Report 2019FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 MARCH 2019

Fee and trading income

Fee and commission expense

Net income

Interest and other income

Net operating income

Employment expenses

Promotional expenses

Information technology expenses1

Occupancy expenses

Other operating expenses1

Earnings before interest expense, tax, depreciation and amortisation (EBITDA)

Depreciation and amortisation expense

Net profit before income tax

Income tax expense

$,000

2019

128,744

(11,487)

117,257

$,000

2018

119,022

(10,662)

108,360

1,486

1,563

118,743

109,923

(50,314)

(17,562)

(5,134)

(4,429)

(13,393)

27,911

(5,832)

22,079

(4,468)

(46,104)

(16,127)

(5,177)

(4,018)

(8,672)

29,825

(4,919)

24,906

(6,219)

Notes

Net profit attributable to ordinary shareholders

17,611

18,687

Other comprehensive income

Other comprehensive income that may be reclassified to profit and loss

Exchange differences on translation of foreign operations, net of hedging

107

(29)

Total comprehensive income attributable to ordinary shareholders

17,718

18,658

Earnings per share attributable to ordinary shareholders:

Basic

Diluted

CENTS

7.28

7.10

CENTS

7.79

7.69

The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.

1 Comparative information has been restated to conform with presentation in the current year.

OFX Group Limited Annual Report 201948

FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 MARCH 2019

ASSETS

Cash held for own use

Cash held for settlement of client liabilities

Deposits due from financial institutions

Derivative financial assets

Prepayments

Other receivables

Property, plant and equipment

Intangible assets

Current tax assets

Deferred income tax assets

Total assets

LIABILITIES

Client liabilities

Derivative financial liabilities

Other creditors and accruals

Provisions

Current tax liabilities

Deferred income tax liabilities

Total liabilities

Net assets

EQUITY

Ordinary share capital

Retained earnings

Notes

Foreign currency translation reserve

Share-based payments reserve

Total equity attributable to shareholders

The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.

$,000

2019

26,112

155,151

32,457

9,118

3,346

3,585

3,202

11,019

2,796

206

$,000

2018

47,252

155,826

10,189

12,930

2,874

1,882

3,874

7,246

–

215

246,992

242,288

157,194

6,419

6,162

5,474

379

175,628

71,364

29,113

41,586

291

374

156,867

10,690

6,133

4,562

944

179,294

62,994

24,360

37,608

184

842

71,364

62,994

OFX Group Limited Annual Report 2019FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 MARCH 2019

$,000

Notes

Ordinary share
capital

Retained earnings

Foreign currency
translation reserve

Share-based
payments reserve

Total equity

Balance at 1 April 2017

Net profit

Other comprehensive income

Total comprehensive income

Transactions with shareholders in their
capacity as shareholders:

Dividends paid

Expenses related to share-based payments

Balance at 31 March 2018

Net profit

Other comprehensive income

Total comprehensive income

Transactions with shareholders in their
capacity as shareholders:

Forfeited Executive Share Plan shares

Dividends paid

Expenses related to share-based payments

Balance at 31 March 2019

24,360

–

24,360

–

4,753

–

4,753

29,113

31,636

18,687

–

18,658

(12,715)

–

(12,715)

37,608

17,611

–

17,611

–

(13,633)

–

(13,633)

41,586

213

–

(29)

–

184

–

107

–

291

1,264

–

(422)

842

–

(468)

374

57,473

18,687

(29)

18,658

(12,715)

(422)

(13,137)

62,994

17,611

107

17,718

4,753

(13,633)

(468)

(9,348)

71,364

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

OFX Group Limited Annual Report 201950

FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 MARCH 2019

CASH FLOWS FROM OPERATING ACTIVITIES

Profit from ordinary activities after income tax

Adjustments to profit from ordinary activities

Depreciation and amortisation

Movement in share-based payment reserve

Foreign exchange revaluation

Fair value changes on financial assets and liabilities through profit or loss

Movement in foreign currency translation reserve

Operating cash flow before changes in working capital

CHANGES IN ASSETS AND LIABILITIES

(Increase) in prepayments and other receivables

Decrease in deferred tax assets

Decrease/(increase) in cash held for client liabilities

Increase in amounts due to clients

Increase/(decrease) in accrued charges and creditors

Increase/(decrease) in deferred tax liabilities

Increase in provisions

(Decrease)/increase in tax provision

Net cash flows from operating activities

CASH FLOWS FROM INVESTING ACTIVITIES

Payments for property, plant and equipment

Payments for intangible assets

Cash deposited with financial institutions

Net cash flows from investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from sale of shares

Dividends paid

Net cash flows from financing activities

Net (decrease)/increase in cash held for own use

Cash held for own use at the beginning of the year

Exchange gains on cash held for own use

Cash held for own use at the end of the year

Including cash held for settlement of client liabilities (classified as operating activities)

Cash held for settlement of client liabilities at the beginning of the year

Cash inflows from clients

Cash outflows to clients

Exchange gain on cash held for client liabilities

Cash held for settlement of client liabilities at the end of the year

Total cash and cash equivalents

The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

Notes

$,000

2019

$,000

2018

17,611

18,687

5,832

(468)

(37)

(459)

107

22,586

(2,175)

675

327

281

912

(3,740)

18,904

(1,137)

(7,826)

(22,268)

(31,231)

4,753

(13,633)

(8,880)

(21,207)

47,252

26,112

4,919

(422)

(665)

4,563

(29)

27,053

(221)

(39,902)

39,973

(914)

(22)

2,799

3,182

31,952

(243)

(4,867)

(75)

(5,185)

(12,715)

14,052

32,535

665

47,252

155,826

115,924

23,710,122

21,160,084

(23,706,516)

(21,122,033)

(4,281)

155,151

181,263

1,851

155,826

203,078

OFX Group Limited Annual Report 2019NOTES TO THE FINANCIAL STATEMENTS
ABOUT THIS REPORT

FOR THE YEAR ENDED 31 MARCH 2019

About this Report

OFX Group Limited (the Group or the Company) is a company limited by
shares, incorporated and domiciled in Australia. Its shares are publicly
traded on the Australian Securities Exchange. This financial report
presents the consolidated performance, position and cash flows of the
Company and its subsidiaries. The Group is for-profit for the purpose of
preparing the financial statements. The accounting policies explained
in this report are consistent for all the periods presented unless
otherwise stated. The Directors have the power to amend and reissue
the financial report.

The financial report is a general purpose financial report which:

- Is prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board
and the Corporations Act 2001 (Cth). Consequently, this financial
report has also been prepared in accordance with and complies with
IFRS as issued by the IASB.

- Has been prepared under the historical cost convention except for
derivatives and share-based payments which are measured at fair
value.

- Presents reclassified comparative information where required for

consistency with the current year’s presentation.

- Is presented in Australian dollars with all values rounded to the
nearest thousand dollars in accordance with ASIC Legislative
Instrument 2016/191 unless otherwise indicated.

AASB 9 Financial Instruments and AASB 15 Revenue from Contracts
with Customers are mandatory on or after 1 January 2018, and were
adopted by the Group in the current year but did not have a material
impact on the Group.

Critical estimates and judgements

Preparing the financial report requires judgement in applying the
accounting policies and calculating certain critical accounting
estimates. The Group’s critical accounting estimates and significant
judgements are:

- Fair value of certain financial instruments (Note 10),

- Share-based payments (Note 22), and

- Intangible Assets (Note 13).

Basis of consolidation

The consolidated financial report comprises the assets and liabilities of
all subsidiaries of OFX Group Limited as at 31 March 2019 and the
results of all subsidiaries for the year then ended. A list of controlled
entities at year end is contained in Note 21.

Subsidiaries are all those entities over which the Group has the power
to direct the relevant activities, exposure to significant variable returns
and the ability to utilise power to affect the Group’s own returns. The

determination of control is based on current facts and circumstances
and is continuously assessed.

Intercompany transactions, balances and unrealised gains on
transactions between group companies are eliminated. Unrealised
losses are also eliminated unless the transaction provides evidence of
the impairment of the asset transferred.

Accounting policies of subsidiaries have been changed where necessary to
ensure consistency with the policies adopted by the Group.

Investments in subsidiaries are accounted for at cost in the separate
financial statements of OzForex Limited in accordance with AASB 127
Separate Financial Statements.

New accounting standards and interpretations

AASB 16 Leases

AASB 16 Leases will replace the current standard on lease accounting,
AASB 117. AASB 16 introduces a single lessee accounting model and
requires the lessee to recognise assets and liabilities for all leases with
a term of more than 12 months, unless the underlying asset is of low
value. A lessee is required to recognise a right-of-use asset
representing its right to use the underlying leased asset and a lease
liability representing its obligations to make lease payments. An
assessment of the impact of the standard has been undertaken by the
Group. Based upon current leases, adopting the standard would result
in the recognition of a right of use asset with a value of $12 million and
a corresponding liability of $13.7 million at 31 March 2019, and reduce
2019 net profit after tax by $0.4 million. The standard is mandatory for
financial years commencing on or after 1 January 2019 and the Group
will adopt the standard commencing 1 April 2019.

Functional and presentation currency

Foreign operations are measured in the Group’s financial statements
using the currency of the primary economic environment in which the
foreign operation operates (the functional currency). The functional
currencies of overseas subsidiaries are listed in Note 21.

The Group’s financial statements are presented in Australian dollars,
which is the Group’s presentation currency.

GST

Revenues, expenses and fixed assets are recognised net of the
associated GST, unless the GST is not recoverable from the relevant
taxation authority. Receivables and creditors are presented including
the GST. The net GST recoverable from, or payable to, each taxation
authority is presented in other receivables or other payables.

Cash flows are presented including GST. The GST components of the
cash flows arising from investing or financing activities which are
recoverable from, or payable to the taxation authority, are presented as
operating cash flows.

OFX Group Limited Annual Report 201952

NOTES TO THE FINANCIAL STATEMENTS
SEGMENT INFORMATION

FOR THE YEAR ENDED 31 MARCH 2019

NOTE 1. SEGMENT INFORMATION

The operating segments presented below reflect how senior
management and the Board of Directors (the chief operating decision
makers) allocate resources to the segments and review their
performance. The chief operating decision makers examine the
performance both from a product and geographic perspective and has
identified five reportable segments.

The two products are international payment services and international
payment solutions:

• International payment services are monitored by geographic region

(based on client location) and provide bank to bank currency transfers
servicing businesses and consumers.

• International payment solutions are monitored globally and provide
strategic partners with a package which includes: OFX IT platform;
client service; compliance sophistication; banking relationships; and
payments capabilities.

Segments are managed on an underlying basis. Segment EBIDTA
excludes $4.3 million of corporate action costs.

SEGMENT FEE AND TRADING INCOME – 2019 V 2018 ($’000)

140

120

100

0
0
0
$

International payment services

$64,399 $61,247

$128,744

$119,022

$23,178 $20,718

$26,858 $22,421

$7,166

$6,008

$7,143

$8,628

A&NZ

Europe

North
America

Asia

International
payment solutions

Total

SEGMENT EBITDA – 2019 V 2018 ($’000)

0
0
0
$

International payment services

$21,097

$18,193

$32,229

$29,825

$6,442

$4,997

$1,001

$2,062

$1,018

$1,573

$2,671

$3,000

A&NZ

Europe

North America

Asia

International
payment solutions

Total

OFX Group Limited Annual Report 2019NOTES TO THE FINANCIAL STATEMENTS
SEGMENT INFORMATION (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2019

SEGMENT EBITDA

Corporate action costs

GROUP EBITDA

Depreciation and amortisation

Net profit before income tax

Income tax expense

NET PROFIT

2019

Segment assets

Intergroup eliminations

Deferred tax assets

Total assets

Segment liabilities

Intergroup eliminations

Deferred tax liabilities

Total liabilities

2018

Segment assets

Intergroup eliminations

Deferred tax assets

Total assets

Segment liabilities

Intergroup eliminations

Deferred tax liabilities

Total liabilities

International payment services

Australia &
New Zealand

139,381

Europe

North America

40,398

(3,946)

56,031

(6,541)

Asia

29,582

(8,119)

(111,649)

(30,183)

(38,506)

(13,517)

18,606

–

161,832

(4,937)

32,546

(12,081)

56,049

–

17,550

(8,886)

(118,444)

(28,144)

–

(47,883)

25,904

(10,629)

$,000

2018

29,825

(4,919)

24,906

(6,219)

18,687

Consolidated

265,392

(18,606)

206

246,992

(193,855)

18,606

(379)

(175,628)

267,977

(25,904)

215

242,288

(205,100)

25,904

(98)

(179,294)

$,000

2019

32,229

(4,318)

27,911

(5,832)

22,079

(4,468)

17,611

International
payment
solutions

–

OFX Group Limited Annual Report 2019

NOTES TO THE FINANCIAL STATEMENTS
RESULTS FOR THE YEAR

FOR THE YEAR ENDED 31 MARCH 2019

NOTE 2. NET OPERATING INCOME

Fee and trading income

Fee and trading income consists of the foreign currency transaction
margins, fees charged on low-value transactions and changes in
exchange rates between the time when a client rate is agreed and a
subsequent hedge transaction is entered into by the Group.

Fee and commission expense

Fee and commission expenses are transactional banking fees and
commissions paid to strategic and referral partners.

Interest income

Fee and trading income is presented inclusive of realised and
unrealised income earned from the sale of foreign currency contracts
to clients.

Interest income is recognised using the effective interest rate method,
which spreads fees and costs associated with an interest bearing
receivable across its life.

Realised margin and fees on foreign exchange contracts

Unrealised gains/(losses) on foreign exchange contracts

Revaluation of foreign exchange assets and liabilities

Fee and trading income

Fee and commission expense

Net income

Interest and other income

Net operating income

$,000

2019

127,481

1,251

$,000

2018

122,501

(4,204)

725

128,744

119,022

(11,487)

117,257

1,486

118,743

(10,662)

108,360

1,563

109,923

OFX Group Limited Annual Report 2019NOTES TO THE FINANCIAL STATEMENTS
RESULTS FOR THE YEAR

FOR THE YEAR ENDED 31 MARCH 2019

NOTE 3. EXPENSES

Refer to Note 22 for details of the Group’s share-based payments, Note
15 for details of the employee provisions and Notes 12 and 13 for details
on property, plant and equipment and intangible assets.

EMPLOYMENT EXPENSES

Salaries and related costs including commissions

Employee short-term incentives

Share-based payments

Defined contribution plan

Total employee compensation expense

Other employment expenses (on-costs, recruitment and staff training)

Total employment expenses

OCCUPANCY EXPENSES

Operating lease rentals

Other occupancy expenses

Total occupancy expenses

OTHER OPERATING EXPENSES

Professional fees

Communication

Compliance

Insurance

Travel

Bad and doubtful debts

Non-recoverable GST

Other expenses

Total other operating expenses1

DEPRECIATION AND AMORTISATION

Depreciation of furniture, fittings and leasehold improvements

Depreciation of computer equipment

Amortisation of acquired software

Amortisation of internally generated software

Total depreciation and amortisation

1 Comparative information has been restated to conform with presentation in the current year.

$,000

2019

$,000

2018

(42,528)

(38,657)

(2,041)

(2,833)

(2,972)

(47,488)

(2,826)

202

(2,283)

(43,571)

(2,533)

(50,314)

(46,104)

(2,979)

(1,450)

(4,429)

(5,839)

(588)

(2,135)

(1,041)

(1,379)

(816)

(244)

(1,351)

(13,393)

(1,255)

(524)

(3,293)

(760)

(5,832)

(2,652)

(1,366)

(4,018)

(2,047)

(665)

(1,995)

(822)

(862)

(663)

(224)

(1,394)

(8,672)

(1,261)

(581)

(2,295)

(782)

(4,919)

OFX Group Limited Annual Report 201956

NOTES TO THE FINANCIAL STATEMENTS
RESULTS FOR THE YEAR (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2019

NOTE 4. INCOME TAXES

Income tax expense is the tax payable on the current period’s taxable
income adjusted for changes in deferred income tax. Changes in
deferred tax assets and liabilities are due to temporary timing
differences and unused tax losses.

Current income tax is based on tax laws enacted or substantively
enacted in each jurisdiction of the Group’s operations at the end of the
reporting period. If required, provisions are established for the amounts
expected to be paid to the tax authorities.

Deferred income tax is provided in full, using the liability method at the
tax rates expected to apply when the assets are recovered or the
liabilities are settled. Deferred tax assets and liabilities arise on
temporary differences between the tax base of assets and liabilities
and their carrying amounts. In addition, deferred tax assets may be
recognised due to unused tax losses. Amounts are only recognised to
the extent it is probable future taxable amounts will be available to use
those temporary differences or tax losses.

Deferred tax assets and liabilities are offset when:

• There is a legally enforceable right to offset current tax assets and

liabilities; and

a) Income tax expense

• The deferred tax balances relate to the same taxation authority.

Current tax assets and liabilities are offset when:

• There is a legally enforceable right to offset; and

• There is an intention to settle on a net basis.

Current and deferred taxes attributable to amounts recognised directly
in equity are also recognised directly in equity.

Tax consolidation

The tax consolidation legislation was adopted by the Group as of 15
October 2013. As a consequence, OzForex Limited and its wholly-
owned Australian controlled entities are taxed as a single entity. The
Group has a tax year ending on 30 September.

Offshore Banking Unit

OzForex Limited, a subsidiary of OFX Group Limited, was declared an
Offshore Banking Unit (OBU) on 10 October 2015. In accordance with
Australian income tax legislation, assessable offshore banking (OB)
income derived by the OBU is taxable at a concessional rate of 10%. OB
income includes revenue earned on foreign exchange transactions with
offshore counterparties, excluding those with any AUD component.

Current tax expense

Adjustments to current tax of prior years

Total current tax expense

Deferred income tax expense/(benefit)

Total income tax expense

b) Reconciliation of income tax expense to prima facie tax payable

Net profit before income tax

Prima facie income tax expense at 30% (2018: 30%)

Effect of different offshore tax rates1

Decrease in tax expense as a result of operating as an OBU in the current period

Entertainment

Research and Development tax credits

Other items1

Total income tax expense

1 Comparative information has been restated to conform with presentation in the current year.

$,000

2019

4,273

(97)

4,176

292

4,468

$,000

2018

6,237

(18)

6,219

$,000

2019

$,000

2018

22,079

24,906

6,624

(446)

(1,007)

(27)

(276)

(400)

4,468

7,472

(235)

(995)

(149)

126

6,219

OFX Group Limited Annual Report 2019NOTES TO THE FINANCIAL STATEMENTS
RESULTS FOR THE YEAR (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2019

NOTE 5. DEFERRED INCOME TAX ASSETS/(LIABILITIES)

DEFERRED INCOME TAX ASSETS

The balance comprises temporary differences attributable to:

Provisions and accrued expenses

Corporate action costs deemed capital for taxation

Tax credit carry forward

Unrealised foreign exchange loss

Property, plant and equipment

Total deferred income tax assets – before offset

Offset deferred income tax liabilities (refer Note 4 for accounting policy)

Net deferred income tax assets – after offset

DEFERRED INCOME TAX LIABILITIES

The balance comprises temporary differences attributable to:

Intangible assets

Financial instruments

Property, plant and equipment

Total deferred income tax liabilities – before offset

Offset deferred income tax assets (refer Note 4 for accounting policy)

Net deferred income tax liabilities – after offset

Net deferred income tax (liabilities)/assets

$,000

2019

$,000

2018

1,552

844

144

2,615

(2,409)

206

(1,979)

(731)

(78)

1,241

348

174

–

1,776

(1,561)

215

(966)

(635)

(58)

(2,788)

(1,659)

2,409

(379)

1,561

(98)

(173)

117

OFX Group Limited Annual Report 201958

NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL ASSETS AND LIABILITIES

FOR THE YEAR ENDED 31 MARCH 2019

NOTE 6. EARNINGS PER SHARE

Earnings per share

Basic earnings per share shows the profit attributable to each ordinary
share. It is calculated as the net profit attributable to ordinary
shareholders divided by the weighted average number of ordinary
shares in each year.

Diluted earnings per share shows the profit attributable to each
ordinary share if all the dilutive potential ordinary shares had been
ordinary shares.

There are no discontinued operations of the Group.

(a) Earnings per share

Basic

Diluted

(b) Earnings

Net profit attributable to ordinary shareholders used to calculate basic and diluted earnings per share

Cents

2019

7.28

7.10

$,000

2019

17,611

Cents

2018

7.79

7.69

$,000

2018

18,687

Number

Weighted average number of ordinary shares used to calculate basic earnings per share

241,805,920

240,000,000

Dilutive potential ordinary shares

Weighted average number of ordinary shares used as the denominator in calculating diluted
earnings per share

6,324,297

3,032,889

248,130,217

243,032,889

NOTE 7. CASH AND CASH EQUIVALENTS, CLIENT LIABILITIES, AND DEPOSITS DUE FROM FINANCIAL INSTITUTIONS

Cash and cash equivalents includes cash on hand and deposits held at
short call with financial institutions with an original maturity of less
than 3 months (together, ‘cash held for own use’) and cash held for
subsequent settlement of client liabilities.

using the effective interest method and are shown in cash net of client
receivables, which are recognised in other receivables (refer Note 8).
Gross client liabilities total $157,194,000 as at 31 March 2019 (2018:
$156,867,000).

Cash held for subsequent settlement of client liabilities represents
transactions in progress where amounts have been received by the
Group but the corresponding payment has not yet occurred. They are
unsecured and short term in nature and are recognised initially at their
fair value. Client liabilities are initially measured at amortised cost

Deposits due from financial institutions are primarily short-term
deposits with an original maturity of greater than 3 months, but less
than 12 months, are accounted for at the gross value of the
outstanding balance and are held at amortised cost.

Cash held for own use

Cash held for settlement of client liabilities

Cash and cash equivalents

Deposits due from financial institutions

Cash held for subsequent settlement of client liabilities

Net cash held1

$,000

2019

26,112

155,151

181,263

32,457

(155,151)

58,569

$,000

2018

47,252

155,826

203,078

10,189

(155,826)

57,441

1 Includes $31,103,417 (2018: $28,552,027) which is held as collateral by counterparties for over-the-counter derivative transactions and as bank guarantees for property leases.

OFX Group Limited Annual Report 2019NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL ASSETS AND LIABILITIES (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2019

NOTE 8. OTHER RECEIVABLES (CURRENT ASSETS)

Other receivables include client receivables, GST receivables and other
debtors. Other debtors includes rental deposits and interest receivable.
Client receivables includes amounts settled on behalf of OFX Group
customers that are yet to be received. All receivables are recognised at

amortised cost, less any impairment. Interest is recognised in the
Statement of Comprehensive Income using the effective interest
method.

Client receivables

GST receivables

Other debtors

Other receivables

$,000

2019

2,043

502

1,040

3,585

$,000

2018

1,041

283

558

1,882

NOTE 9. DERIVATIVE FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT AND LOSS

Derivative instruments entered into by the Group include forward
foreign exchange contracts. They are principally used to offset foreign
currency contracts with clients and as hedges over the Group’s net
investment in foreign operations.

Derivatives are recognised at trade date and are initially and
subsequently measured at fair value. Movements in the carrying
amounts of derivatives are recognised in net fee and trading income
within the Consolidated Statement of Comprehensive Income.

Value of forward contracts – assets

Value of forward contracts – liabilities

Net financial instruments at fair value

$,000

2019

9,118

(6,419)

2,699

$,000

2018

12,930

(10,690)

2,240

NOTE 10. FAIR VALUES OF FINANCIAL ASSETS AND LIABILITIES

OFX Group has categorised its financial instruments that are either
measured in the Statement of Financial Position at fair value or of
which the fair value is disclosed, into a three-level hierarchy based on
the priority of the inputs to the valuation.

A financial instrument’s categorisation within the valuation hierarchy is
based on the lowest level input that is significant to the fair value

measurement. Cash and cash equivalents, deposits due from financial
institutions, other receivables, client liabilities, other creditors and
accruals are excluded from the fair value hierarchy as these
instruments are held at amortised cost. Their fair value approximates
the carrying value as they are short term in nature.

Level

Instruments

LEVEL 1 - Traded in active markets and fair value
is based on recent unadjusted quoted prices.

None – the Group does not hold any of these
instruments.

Valuation process

Not applicable.

LEVEL 2 - Not actively traded and fair value is
based on valuation techniques which
maximise the use of observable market prices.

LEVEL 3 - Not actively traded and fair value is
based on at least one input which is not
observable in the market due to illiquidity or
complexity.

Over-the-counter derivatives.

Forward foreign exchange contract valuations
are based on observable spot exchange rates
and the yield curves of the respective currencies.

None – the Group does not hold any of these
instruments.

Not applicable.

OFX Group Limited Annual Report 2019

NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL ASSETS AND LIABILITIES

FOR THE YEAR ENDED 31 MARCH 2019

NOTE 11. FINANCIAL RISK MANAGEMENT

Risk management

The Group is exposed to the following risks, and manages this in the following ways:

Type of risk

How the risk is managed

MARKET RISK – Market risk is comprised of both foreign currency
risk and interest rate risk.

FOREIGN CURRENCY RISK – Arises from exposure to changes in
foreign exchange rates between the time of agreeing rates with
a client and either a corresponding hedge being taken out with a
counterparty or an international payment settlement. Settlement
typically occurs between 12 to 24 hours after the deal is entered or
up to 12 months later for forward contracts with clients.

The Group is also exposed to the interest rate risk embedded in
forward contracts offered to its clients to lock in exchange rates up
to 12 months in advance.

INTEREST RATE RISK – Exposure to non-traded interest rate risk
results from cash and term deposits held in different currencies.

CREDIT RISK – The risk that creditors (clients and financial
institutions) will not make payments on their receivables and
derivatives respectively, when they fall due.

To manage the movement in foreign exchange rates, the Group
aggregates transactions and nets out buy transactions against sell
transactions.

The Group then enters into forward foreign exchange hedging
contracts with counterparty banks once exposure to a single
currency reaches or exceeds a defined threshold.

Settlement of client liabilities between 12 and 24 hours of receipt of
client cash results in low exposure to non-traded interest rate risk.

The Group typically does not payout client deals until associated
funds have been received.

In exceptional circumstances, senior management have the
discretion to authorise same-day payments, which can result in
funds being paid prior to clearance of customer funds. These
transactions would only be approved for clients with a low risk
of default and are pro-actively monitored to ensure timely
settlement.

For forward deals part payments are required to be made by
clients. Active monitoring of client balances ensures that
adequate collateral is held.

The Group sets credit limits and obtains collateral with well-rated
banking counterparties as security (where appropriate).

LIQUIDITY RISK – The risk that the Group is unable to meet the
obligations of its financial liabilities when they are due

Regular forecasts of the Group’s liquidity requirements. Surplus
cash is maintained in highly liquid instruments.

Continuous review of currency requirements in operating
jurisdictions. Active maintenance of cash balances in currencies
and geographical locations necessary to fund these requirements.

Risk is managed on a globally consolidated basis for the Group. Risks in subsidiaries are subject to the same risk acceptance policies as the
parent entity.

OFX Group Limited Annual Report 2019NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL ASSETS AND LIABILITIES (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2019

NOTE 11. FINANCIAL RISK MANAGEMENT (CONTINUED)

(a) Market risk

The main component of the Group’s market risk is exposure to foreign
exchange rate fluctuations.

The Group’s sensitivity to foreign exchange fluctuations risk by major
currency held on the Consolidated Statement of Financial Position is
shown below:

Movement in exchange rate (basis points)1

31 March 2019
+/-500
Sensitivity of profit before tax

31 March 2019
+/-500
Sensitivity of equity after tax

31 March 2018
+/-500
Sensitivity of profit before tax

31 March 2018
+/-500
Sensitivity of equity after tax

$,000

CAD

EUR

GBP

NZD

SGD

USD

Other

Total

(2)

(3)

(5)

(4)

(18)

252

(10)

(134)

206

(15)

(51)

(1)

(11)

159

(14)

(43)

(4)

(174)

(27)

(b) Interest rate risk

The Group’s sensitivity to movements in interest rates is as follows.

Movement in interest rate (basis points)1

31 March 2019
+/-50
Sensitivity of profit before tax

31 March 2019
+/-50
Sensitivity of equity after tax

31 March 2018
+/-500
Sensitivity of profit before tax

31 March 2018
+/-500
Sensitivity of equity after tax

$,000

AUD

CAD

EUR

GBP

NZD

SGD

USD

Other

Total

460

130

199

1,069

345

102

134

795

421

278

1,066

316

184

779

1 Impact of positive movement shown. The impact of a negative movement is the inverse.

OFX Group Limited Annual Report 201962

NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL ASSETS AND LIABILITIES (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2019

NOTE 11. FINANCIAL RISK MANAGEMENT CONTINUED

MAXIMUM EXPOSURE TO CREDIT RISK AND CREDIT QUALITY OF
FINANCIAL ASSETS

The amounts shown represent the maximum exposure of the Group to
credit risk at the end of the reporting period. This is equal to the
carrying amount of each class of financial assets in the table below.

Cash and cash equivalents

Deposits due from financial institutions

Derivative assets - with financial institutions

Derivative assets - with clients

Other receivables

Total gross credit risk

The Group uses internal credit ratings to manage the credit quality of
its financial assets. The Group’s financial assets held with financial
institutions are investment grade (between Aaa-Baa3). There are no
balances that are past due or impaired as at 31 March 2019 (2018: nil).

Rating

Investment grade

Unrated1

Unrated

$,000

2019

181,263

32,457

4,333

4,784

3,585

226,422

$,000

2018

203,078

10,189

7,766

5,164

1,882

228,079

2019 CREDIT RISK EXPOSURE - ($’000)

2018 CREDIT RISK EXPOSURE - ($’000)

$218,053

$4,784

$3,585

$221,033

$5,164

$ 1,882

Financial institution

Customers

Other receivables

Financial institution

Customers

Other receivables

2019 CREDIT RISK EXPOSURE BY GEOGRAPHY - ($’000)

2018 CREDIT RISK EXPOSURE BY GEOGRAPHY - ($’000)

$67

$48,936

$75

$68,358

NOTE 11. FINANCIAL RISK MANAGEMENT (CONT.)

$108,318

$54,011

$ 109,845

$15,090

$37,945

$11,856

ANZ

Asia

Europe

North America

Other

ANZ

Asia

Europe

North America

Other

1 Unrated balances relate to amounts due from entities that are not graded by the Company or by a public ratings agency.

OFX Group Limited Annual Report 2019NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL ASSETS AND LIABILITIES (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2019

(c) Credit risk (continued)
For trading credit risk, the Group assesses the credit quality of the
customer, taking into account its financial position, past experience,
external credit agency reports and credit references. Individual
customer risk limits are set based on internal approvals in accordance
with delegated authority limits set by the Board. The compliance with
credit limits by credit approved customers is regularly monitored by
line credit management. Sales to non-account customers are settled
in cash, mitigating credit risk.

The Group applies historical lifetime past due information to provide for
expected credit losses prescribed by AASB 9, which permits the use of
past due information to determine the lifetime expected loss provision
for all client receivables arising from a financial instrument. The loss
allowance provision as at 31 March 2019 is determined as set out
below, which incorporates past experience and forward-looking
information about the client, including the likelihood of recovery.

2019

Expected loss rate (%)

Gross carrying amount ($’000)

Provision ($’000)

Current

3.5%

1,059

More than 30
days past due

More than 60
days past due

More than 90
days past due

More than 120
days past due

1.7%

152

15.9%

25.4%

97.8%

368

453

443

Total

2,043

544

The loss allowance for client receivables as at 31 March 2018 reconciles to the opening loss allowance on 1 April 2018 and to the closing loss
allowance as at 31 March 2019 as follows:

Closing loss allowance as at 31 March 2018 (calculated under AASB 139)

Amounts restated through opening retained earnings1

Opening loss allowance as at 1 April 2018 (calculated under AASB 9)

Increase in loss allowance recognised in profit or loss during the year

Closing loss allowance as at 31 March 2019

$,000

2019

482

544

(d) Liquidity risk
MATURITY PROFILE OF OBLIGATIONS

The table below summarises the maturity profile of the Group’s
financial liabilities as at 31 March 2019 based on contractual
undiscounted repayment cash flows. Derivatives are included in the

less than 3 months column at their fair value, as they are frequently
settled in the short term. Liquidity risk on these items is not managed
on the basis of contractual maturity, since they are not held for
settlement according to such maturity and will frequently be settled in
the short term at fair value. Derivatives designated in a hedging
relationship are included according to their contractual maturity.

$,000

2019

On demand

3 months or less

3 to 12 months

1 to 5 years

Over 5 years

Total

Other liabilities2

(1,725)

(162,236)

(814)

Derivative financial instruments

Inflows

(Outflows)

Total

2018

–

(1,725)

948,457

(945,353)

(159,132)

72,173

(72,560)

(387)

2,291

(2,310)

(833)

Other liabilities2

(1,618)

(160,013)

(944)

(388)

Derivative financial instruments

Inflows

(Outflows)

Total

–

(1,618)

860,691

(860,348)

(159,670)

290,924

(289,247)

733

45,810

(45,590)

(168)

1 The restatement on transition to AASB 9 as a result of applying the expected credit risk model was immaterial.
2 Excludes items that are not financial instruments and non-contractual accruals and provisions.

–

(164,775)

1,022,921

(1,020,223)

(162,077)

(162,963)

1,197,425

(1,195,185)

(160,723)

OFX Group Limited Annual Report 201964

NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL ASSETS AND LIABILITIES (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2019

Financial instruments, derivatives and hedging activity
The Group adopted AASB 9 Financial Instruments from 1 April 2018 and
implemented the expected credit loss model for the impairment of its
financial assets measured at amortised cost. Under hedge accounting,
changes in the fair value of qualifying instruments during the hedging
period are recognised in other comprehensive income, consistent with
the previous policy of the Group. Information about the Group’s
hedging activities can be found in (iii) below.

business model where collecting contractual cash flows while
holding the asset is incidental to achieving the business model’s
objective of managing performance on a fair value basis as
determined by prevailing and expected foreign currency exchange
rates. The Group is primarily focused on fair value information to
assess the assets’ performance and make decisions, resulting in
derivative financial instruments being measured at fair value through
profit or loss.

Information about the impairment of client receivables, their credit
quality and the Group’s exposure to credit risk can be found in (c)
above. The change to expected credit loss provisioning is undertaken
prospectively, with losses incurred by the Group prior to the change
accounted for in accordance with the previous policy.

The change in accounting policy results in the Group recognising credit
losses earlier as the measurement of expected credit losses is based
on reasonable and supportable information that is available without
undue cost or effort at the reporting date about past events, current
conditions and forecasts of future economic conditions, rather than on
specific loss events.

Accounting policy – financial instruments

The Group classifies its financial assets in the following categories:
financial assets at amortised cost and financial assets at fair value
through profit or loss. The classification depends on the purpose for
which the financial assets were acquired, which is determined at initial
recognition based upon the business model of the Group.

(i) Financial assets at amortised cost

The Group classifies its financial assets at amortised cost if the asset is
held with the objective of collecting contractual cash flows and the
contractual terms give rise on specified dates to cash flows that are
solely payments of principal and interest. These include client
receivables and bank term deposits. Bank term deposits are
non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. They are financial assets at
amortised cost. Refer to Note 8 for details relating to client receivables.

(ii) Financial assets through profit or loss

The Group holds forward foreign exchange contracts within a

(iii) Hedging activity

Financial instruments entered into by the Group for the purpose of
managing foreign currency risk associated with its net investment in
foreign operations qualify for hedge accounting. Instruments are
initially recognised at fair value on the date a derivative contract is
entered into and are subsequently remeasured to their fair value at
the end of each reporting period. The full fair value of hedging
derivatives is classified as an asset or liability.

At inception of the hedge relationship, the Group documents the
economic relationship between hedging instruments and hedged
items including whether changes in the cash flows of the hedging
instruments are expected to offset changes in the cash flows of
hedged items. The Group documents its risk management objective
and strategy for undertaking its hedge transactions.

Hedges of net investments in foreign operations are accounted for
similarly to cash flow hedges. Any gain or loss on the hedging
instrument relating to the effective portion of the hedge is recognised
in other comprehensive income and accumulated in reserves in
equity. The gain or loss relating to the ineffective portion is recognised
immediately in profit or loss within unrealised gains/(losses).

Gains and losses accumulated in equity are reclassified to profit or
loss when the foreign operation is partially disposed of or sold.

The effects of applying hedge accounting on the Group’s financial
position and performance are as follows:

Hedging instrument – forward foreign exchange contracts

Carrying amount

Notional amount British Pounds

Notional amount US Dollars

Notional amount Canadian Dollars

Notional amount New Zealand Dollars

Notional amount Hong Kong Dollars

Maturity date

Hedge ratio

Change in value of outstanding hedge instruments since 1 April

Change in value of hedged item used to determine hedge effectiveness

$,000

2019

(1,198)

3,327

6,073

1,626

2,001

31,755

$,000

2018

(281)

2,241

4,855

1,472

1,552

30,000

Apr 2019 – Oct 2020 Apr 2018-Feb 2019

1:1

(1,198)

1,198

1:1

(281)

281

OFX Group Limited Annual Report 2019NOTES TO THE FINANCIAL STATEMENTS
OTHER ASSETS AND LIABILITIES

FOR THE YEAR ENDED 31 MARCH 2019

Weighted average hedge rate

– British Pounds

– US Dollars

– Canadian Dollars

– New Zealand Dollars

– Hong Kong Dollars

2019

2018

A$1 : GBP 0.5406

A$1 : US$0.7252

A$1 : CA$0.9443

A$1 : NZ$1.0512

A$1 : HK$5.5400

A$1 : GBP 0.5693

A$1 : US$0.7741

A$1 : CA$0.9887

A$1 : NZ$1.0684

A$1 : HK$6.0511

NOTE 12. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is measured at cost less accumulated depreciation and impairment losses.

Assets are depreciated on a straight-line basis over their estimated useful lives, as follows:

Asset class

Furniture and fittings

Leasehold improvements

Computer equipment

YEAR ENDED 31 MARCH 2018

Cost

Less accumulated depreciation

Net carrying amount

MOVEMENT

Balance at 31 March 2017

Additions

Depreciation

Balance at 31 March 2018

YEAR ENDED 31 MARCH 2019

Cost

Less accumulated depreciation

Net carrying amount

MOVEMENT

Balance at 31 March 2018

Additions

Disposals

Depreciation

Balance at 31 March 2019

Useful life

5 to 10 years

Up to 5 years

3 years

$,000

Total

11,153

(7,279)

3,874

5,473

243

(1,842)

3,874

12,260

(9,058)

3,202

3,874

1,137

(30)

(1,779)

3,202

$,000

Furniture, fittings and
leasehold improvements

Computer
equipment

7,488

(4,324)

3,164

4,396

(1,261)

3,164

8,240

(5,579)

2,661

3,164

757

(5)

(1,255)

2,661

3,665

(2,955)

710

1,077

214

(581)

710

4,020

(3,479)

541

710

380

(25)

(524)

541

OFX Group Limited Annual Report 201966

NOTES TO THE FINANCIAL STATEMENTS
OTHER ASSETS AND LIABILITIES (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2019

NOTE 13. INTANGIBLE ASSETS

Costs directly incurred in acquiring and developing certain software are
capitalised and amortised on a straight-line basis over the estimated
useful life, three years. Costs incurred on software maintenance are
expensed as incurred.

YEAR ENDED 31 MARCH 2018

Cost

Less accumulated amortisation

Net carrying amount

MOVEMENT

Balance at 1 April 2017

Additions

Amortisation

Balance at 31 March 2018

YEAR ENDED 31 MARCH 2019

Cost

Less accumulated amortisation

Net carrying amount

MOVEMENT

Balance at 1 April 2018

Additions

Amortisation

Balance at 31 March 2019

NOTE 14. OTHER CREDITORS AND ACCRUALS (CURRENT LIABILITIES)

Accrued charges and sundry liabilities

Trade creditors

Other liabilities

Total other liabilities

$,000

Internally
generated
software

2,423

(167)

2,256

2,423

(167)

2,256

9,147

(1,189)

7,958

2,256

6,724

(1,022)

7,958

$,000

Acquired
separately
software

10,680

(5,690)

4,990

5,456

2,444

(2,910)

4,990

11,782

(8,721)

3,061

4,990

1,102

(3,031)

3,061

$,000

2019

4,435

1,720

6,162

$,000

Total

13,103

(5,857)

7,246

5,456

4,867

(3,077)

7,246

20,929

(9,910)

11,019

7,246

7,826

(4,053)

11,019

$,000

2018

4,601

181

1,351

6,133

OFX Group Limited Annual Report 2019

NOTES TO THE FINANCIAL STATEMENTS
OTHER ASSETS AND LIABILITIES (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2019

NOTE 15. PROVISIONS

Employee provisions

Leasehold makegood provision

The Group has a Short Term Incentive Plan available to all employees
including Executive KMP. The Short Term Incentive Plan is accrued as a
liability and expensed over the annual service period until it is paid.

When the long service leave is not expected to be settled within 12
months of year end, the liabilities are measured as the present value of
expected future payments using the projected unit credit method.

The Group holds a provision for makegood costs anticipated to be
incurred in respect of office leases in Australia, Hong Kong, London,
and Canada. The provision is being accrued on a straight-line basis
over the lease terms.

Carrying amount at beginning of the period

Additional provisions made

Release of provisions

Carrying amount at the end of the period

Employee provisions

Annual leave

Short term
incentives

Long service
leave

Leasehold
makegood

1,418

3,044

(2,918)

1,544

2,655

3,315

(2,655)

3,315

351

(65)

368

138

(29)

247

Total

4,562

6,579

(5,667)

5,474

All employee provisions are current liabilities apart from $181,426 (2018: $199,559) of long service leave which is non-current. All leasehold
makegood provisions are current.

NOTE 16. OPERATING LEASE COMMITMENTS

The Group leases offices under non-cancellable operating leases with
original terms expiring within one to seven years. The leases have
various escalation and extension clauses. The Group has no other
commitments.

Within one year

Between one and five years

After more than five years

Total operating lease commitments

$,000

2019

3,065

6,147

–

9,212

$,000

2018

2,817

6,284

9,101

OFX Group Limited Annual Report 2019
68

NOTES TO THE FINANCIAL STATEMENTS
CAPITAL STRUCTURE

FOR THE YEAR ENDED 31 MARCH 2019

NOTE 17 . CAPITAL MANAGEMENT

The Group’s capital management strategy is to maximise shareholder
value by optimising the level and use of capital, defined as share
capital plus reserves. The Group’s capital management objectives are to:

• Support the Group’s business and operational requirements

• Meet externally imposed capital requirements

• Safeguard the Group’s ability to continue as a going concern.

The Group has continued to meet its internal and externally imposed
capital requirements this year and no breaches have occurred.

NOTE 18. ORDINARY SHARE CAPITAL

Ordinary shares are classified as equity and measured based on the
proceeds from issuing the shares less the directly attributable
incremental costs, net of tax.

There are 242,522,677 fully paid ordinary shares (2018: 240,000,000).
Ordinary shares entitle the holder to vote and to receive dividends and

the proceeds of the Company if it is liquidated in proportion to the
number of shares held.

There are 6,064,717 (2018: 3,303,088) restricted ordinary shares
issued to KMP in connection with the Executive Share Plan. Refer to
Note 22 for further information.

NOTE 19. DIVIDENDS

Dividends are recognised as a liability and a reduction to retained
earnings when declared. All dividends recognised in the year were fully
franked (2018: all).

Final dividend from the preceding year $0.030 (2018: $0.029) per share)

Interim dividend $0.0264 (2018: $0.024) per share)

Total dividends recognised and paid

$,000

2019

(7,230)

(6,403)

(13,633)

$,000

2018

(6,960)

(5,755)

(12,715)

On 21 May 2019, the Board determined a dividend of $0.0328 per share
($8,133,000) as the final dividend for 2019. This dividend was
determined after 31 March 2019 and so is not reflected in this financial

report. As the Company is a holding company with no trading profits,
this dividend will be funded through the profits of the subsidiaries.

Ex-dividend date

Record date

Payment date

Franked dividends

Franking credits available for subsequent financial years based on a tax rate of 30% (2018: 30%)

6 June 2019

7 June 2019

21 June 2019

$,000

2018

7751

$,000

2019

3,214

The above amounts represent the balance of the franking account as
at the end of the financial period, adjusted for the franking credits that

will arise from paying the current tax liability, but before taking account
of the final declared dividend for 2019.

1 A review of the franking account comparative information has been restated resulting in a reduction in the franking account balance. OFX is currently in the process of updating relevant filings with the ATO.

OFX Group Limited Annual Report 201969

NOTES TO THE FINANCIAL STATEMENTS
OTHER ITEMS

FOR THE YEAR ENDED 31 MARCH 2019

NOTE 20. EVENTS OCCURRING AFTER BALANCE
SHEET DATE

Other than the dividends presented in Note 19, there were no material
post balance sheet events occurring after the reporting date requiring
disclosure in these financial statements

NOTE 21. RELATED PARTY INFORMATION
Subsidiaries

The following entities are wholly owned subsidiaries of the Group and
all have a 31 March year end:

Country of incorporation

Functional currency

Entity

CanadianForex Limited

OzForex (HK) Limited

OFX (Shanghai) Co. Ltd

OzForex Limited

OFX Australia Pty Limited

OFX Group Pty Limited

OFX Singapore PTE. Limited

NZForex Limited

UKForex Limited

Canada

Hong Kong

China

Australia

Singapore

New Zealand

United Kingdom

OFX Payments Ireland Limited

Ireland

USForex Incorporated

United States

CAD

HKD

CNY

AUD

SGD

NZD

GBP

EUR

USD

OFX Group Limited Annual Report 201970

NOTES TO THE FINANCIAL STATEMENTS
OTHER ITEMS (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2019

NOTE 22. SHARE-BASED PAYMENTS

The Group has a number of employee share-based payment plans
including the Legacy LTI Plans; the Executive Share Plan (ESP), the
Global Equity Plan; and the Employee Share Scheme. The nature of the
issuances under the Plans are listed below:

Issuance

Description

Executive Share Plan

Performance Rights

Executives are provided with an interest free, non-recourse loan from the Group for the sole purpose of
acquiring shares in the Company. Executives may not deal with the shares while the loan remains outstanding
and any dividends paid on the shares are applied (on an after-tax basis) towards repaying the loan. Executives
are entitled to exercise the voting rights attached to the shares from the date of allocation. If the Executive
leaves the Group within the vesting period the shares allocated are returned to the Group, subject to discretion
retained by the Directors.

Performance rights were issued under the Group’s Legacy LTI Plan and are currently issued under the Group’s
Global Equity Plan. Performance rights are issued to employees eligible to received deferred STI awards and
also to eligible employees as reward for performance. Performance rights are granted at no cost and are settled
in shares on a one-for-one basis.

Employee Share Scheme

The Board has discretion to gift shares to Employees and/or to offer a matching plan. Shares, where issued, are
issued under the Group’s Global Equity Plan and are held in a holding lock for the earlier of, 3 years or when the
employee ceases employment.

Service rights (legacy)

Share options (legacy)

Service rights are issued to employees at the discretion of the Board. The service rights vesting condition is
ongoing employment at the vesting date. There are no performance hurdles. Service rights are granted at no
cost and are settled in shares on a one-for-one basis.

Share options are issued at the discretion of the Board. Share options vesting condition is ongoing employment
at the vesting date. There are no performance hurdles. Share options are subject to an exercise price and are
settled in shares on a one-for-one basis.

For details on the vesting conditions of share issuances, refer to the Remuneration Report.

The share based payment expense/(income) within employee benefits expenses is as follows:

Legacy LTI Plan – Performance rights

Legacy LTI Plan – Service rights

Legacy LTI Plan – Share options

ESP – Share loan

STI – Performance rights

ESS - Employee Share Scheme

Total share based payment expense

2019

(91,999)

(107,894)

38,407

108,425

(53,061)

2018

(731,642)

16,192

30,936

192,002

291,008

(201,504)

OFX Group Limited Annual Report 2019NOTES TO THE FINANCIAL STATEMENTS
OTHER ITEMS (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2019

NOTE 22. SHARE BASED PAYMENTS (CONTINUED)

Accounting for share based payments

The fair value determined at the grant date of the award is recognised
as a share based payment expense in the income statement with an
offsetting increase in equity over the relevant performance period. The
expense recognised is reduced to take account of the expense
attributable to participating employees who do not remain in the
employment of the Group throughout the vesting period.

Shares issued under the ESP are accounted for as options and as such
the amounts receivable from employees in relation to these loans are
not recognised in the financial statements. Settlement of share loans
upon vesting is recognised as contributed equity.

The options are measured at fair value at the date of grant using the
Black-Scholes option pricing model. The fair values include
assumptions in the following areas: risk free rate, volatility, estimated
service periods and expected achievement of hurdles. The expected
life of the options is based on historical data and is not necessarily
indicative of exercise patterns that may occur. The expected volatility
reflects the assumption that the historical volatility is indicative of
future trends, which may also not necessarily reflect the actual
outcome.

Executive Share Plan

The ESP was established to incentivise Executives to deliver on the

business strategy and contribute to sustainable long term returns.
Detailed remuneration disclosures are provided in the Remuneration
Report section of the Directors’ Report.

Under the ESP, eligible Executives are provided with an interest free,
non-recourse loan from the Group for the sole purpose of acquiring
shares in the company. Executives may not deal with the shares while
the loan remains outstanding and any dividends paid on the shares are
applied (on an after-tax basis) towards repaying the loan. Executives
are entitled to exercise the voting rights attached to the shares from
the date of allocation. If the Executive leaves the Group within the
vesting period the shares allocated are returned to the Group, subject
to discretion retained by the Directors.

For the FY19 share based loan the Board has implemented a gateway
level of minimum performance below which no benefit accrues, being
accretive underlying EBITDA over the three-year performance period.

Where the gateway EBITDA level of performance is met, there is a
target measure being absolute TSR (Total Shareholder Return). There is
a set performance matrix that determines loan forgiveness.

The assumptions underlying the options’ valuations issued during the
year are outlined in the table below.

Performance
period (years)

Vesting
date

7 June 2021

Grant date
share price

$1.77

Fair value
at grant date

$0.54

Dividend
yield

4.19%

Risk free
interest rate

2.11%

Share price
volatility

47.82%

Short Term Incentive performance rights
The fair value of the performance rights is determined using the
Black-Scholes option pricing model with the following assumptions:

Deferral period
(years)

Vesting
date

Grant date
share price

Fair value
at grant date

13 June 2019

23 May 2019

$1.77

$1.78

$0.18

Dividend
yield

4.19%

4.35%

Risk free
interest rate

2.11%

2.05%

Share price
volatility

28.52%

27.95%

Estimated future proposed performance rights issues

Deferral period
(years)

Vesting
date

Grant date
share price

Fair value
at grant date

To be determined

$1.65

$0.23

Dividend
yield

4.19%

Risk free
interest rate

1.31%

Share price
volatility

34.92%

OFX Group Limited Annual Report 201972

NOTES TO THE FINANCIAL STATEMENTS
OTHER ITEMS (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2019

Legacy LTI Plan

PERFORMANCE RIGHTS

There were no new issuances of performance rights under the legacy
LTI plan during the year ended 31 March 2019.

SERVICE RIGHTS

There were no new issuances of service rights under the legacy LTI plan
during the year ended 31 March 2019.

There were no cancellations during the year ended 31 March 2019.

SHARE OPTIONS

There were no share options issued during the year ended 31 March 2019.

Share based payments outstanding

Legacy LTI Plan – Performance rights

Legacy LTI Plan – Share options

ESP – Share loan

STI – Performance rights

Balance at
start of the year

Granted
during the year

Exercised
during the year

Forfeited
during the year

Balance at end
of the year

748,336

205,193

3,303,088

2,761,629

456,679

(193,840)

554,496

(117,988)

87,205

(661,910)

5,402,807

456,679

NOTE 23. KEY MANAGEMENT PERSONNEL

In accordance with the requirements of AASB 124 Related Party
Disclosures, the KMP include Non-Executive Directors and members of
the Group Executive Team who have authority and responsibility for

planning, directing and controlling the activities of OFX Group Limited.
A summary of KMP compensation is set out in the table below

Key management personnel remuneration

Remuneration

Short-term employee benefits

Post-employment benefits

Long-term employee benefits

Share-based payments

Total remuneration paid to key management personnel

Detailed remuneration disclosures of individual KMP are provided in the Remuneration Report.

Shareholdings

The total number of shares in the Company held during the year by the
Directors and other KMP, including their personal related parties, are set
out below.

Number of options and rights for fully paid ordinary shares

Number of fully paid ordinary shares

Number of restricted ordinary shares

2019

2,722,904

142,352

2,822

(131,592)

2,736,486

2018

2,858,126

138,765

(34,793)

286,488

3,240,586

Number

2019

641,701

715,706

Number

2018

953,529

698,099

6,064,717

3,303,088

OFX Group Limited Annual Report 2019NOTES TO THE FINANCIAL STATEMENTS
OTHER ITEMS (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2019

NOTE 23. KEY MANAGEMENT PERSONNEL (CONTINUED)
Outstanding loans

transactions during the financial year nor balances owing to or from
KMP as at 31 March 2019.

The total loan amount outstanding from KMP in relation to the ESP is
$5,780,451

Other transactions with KMP

All transactions with KMPs are made on normal commercial terms and
conditions and in the ordinary course of business. There were no

In the normal course of business, the Group occasionally enters into
transactions with various entities that have Directors in common with
the Group. Transactions with these entities are made on commercial
arm’s length terms and conditions. The relevant Directors do not
participate in any decisions regarding these transactions.

NOTE 24. REMUNERATION OF AUDITORS

(A) PWC

Audit and review of financial statements

Taxation services

Other professional fees

Total remuneration of PwC

(B) NON-PWC AUDITORS

Audit and review of financial reports

Taxation services

Total remuneration of non-PwC auditors

NOTE 25. PARENT ENTITY FINANCIAL INFORMATION
Dividends are recognised as income when the Company becomes entitled to the dividend.
The ultimate parent entity is OFX Group Limited.

Summary financial information

STATEMENT OF FINANCIAL POSITION

Investment in subsidiaries

Total assets

Share based payments reserve

Ordinary share capital

Total equity

Profit or loss for the year (intercompany dividends received)

Total comprehensive income

Earnings per share attributable to ordinary shareholders:

Basic earnings per share

Diluted earnings per share

2019

397,007

101,962

430,605

929,574

40,122

104,010

144,132

2019

29,487

374

29,113

29,487

13,633

Cents

5.64

5.49

2018

397,145

338,920

–

736,065

32,533

79,745

112,278

2018

25,202

842

24,360

25,202

12,715

Cents

5.30

5.23

OFX Group Limited Annual Report 201974

DIRECTORS’ DECLARATION

IN THE DIRECTORS’ OPINION:

(a) the financial statements and notes for the year ended 31 March 2019 are in accordance with the Corporations Act 2001, including;

(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirement, and

(ii) giving a true and fair view of the consolidated entity’s financial position as at 31 March 2019 and of its performance for the financial year

ended on that date, and

(b) there are reasonable grounds to believe that OFX Group Limited will be able to pay its debts as and when they become due and payable, and

(c) ‘About this Report’ on page 51 confirms that the financial statements also comply with International Financial Reporting Standards as issued by

the International Accounting Standards Board.

The Directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required by section 295A of the
Corporations Act 2001.

This declaration is made in accordance with a resolution of the Directors.

On behalf of the Board:

Steven Sargent
Chairman
21 May 2019

Skander Malcolm
Chief Executive Officer and Managing Director
21 May 2019

OFX Group Limited Annual Report 201975

Independent auditor’s report
To the members of OFX Group Limited

Report on the audit of the financial report

Our opinion

In our opinion:

The accompanying financial report of OFX Group Limited (the Company) and its controlled entities
(together the Group) is in accordance with the Corporations Act 2001, including:

giving a true and fair view of the Group's financial position as at 31 March 2019 and of its
financial performance for the year then ended

complying with Australian Accounting Standards and the Corporations Regulations 2001.

What we have audited
The Group financial report comprises:

•

the consolidated statement of financial position as at 31 March 2019

the consolidated statement of comprehensive income for the year then ended

the consolidated statement of changes in equity for the year then ended

the consolidated statement of cash flows for the year then ended

the notes to the financial statements, which include a summary of significant accounting policies

the directors’ declaration.

Basis for opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report.

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

Independence
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant
to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities
in accordance with the Code.

PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo NSW 2000, GPO BOX 2650 Sydney NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au

Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au

Liability limited by a scheme approved under Professional Standards Legislation.

OFX Group Limited Annual Report 201976

Our audit approach

An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.

We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial report as a whole, taking into account the geographic and management
structure of the Group, its accounting processes and controls and the industry in which it operates.

Materiality

•

For the purpose of our audit we used overall Group materiality of $1.106 million, which represents
approximately 5% of the Group’s profit before tax.

• We applied this threshold, together with qualitative considerations, to determine the scope of our audit and
the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements on the
financial report as a whole.

• We chose Group profit before tax because, in our view, it is the key financial statement metric used in

assessing the performance of the Group.

• We utilised a 5% threshold based on our professional judgement, noting it is within the range of commonly

acceptable thresholds.

Audit Scope

•

Our audit focused on where the Group made subjective judgements; for example, significant accounting
estimates involving assumptions and inherently uncertain future events.

The Group comprises multiple legal entities globally. Most of the Group’s accounting systems are centralised
in the corporate head office located in Sydney, where our audit was predominantly undertaken.

Our overall audit approach considered each legal entity’s contribution to the Group’s financial report
balances.

OFX Group Limited Annual Report 201977

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report for the current period. The key audit matters were addressed in the
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. Further, any commentary on the outcomes of a
particular audit procedure is made in that context. We communicated the key audit matters to the
Audit, Risk and Compliance Committee.

Key audit matter

How our audit addressed the key audit matter

Recognition of fee and trading income

Fee and trading income consists of the margin
generated from foreign currency spreads, fees
charged on low-value transactions and changes in
exchange rates between the time when a client rate
is agreed and a subsequent hedge transaction is
entered into by the Group. Fee and trading income
is presented inclusive of realised and unrealised
income earned from the sale of foreign currency
contracts to customers.

This was a key audit matter because it represents
the most significant element of revenue in the
Consolidated Statement of Comprehensive Income.

See Note 2 to the financial statements for further
information.

Our audit procedures included, among others, evaluating
the design and performing tests over the operating
effectiveness of relevant revenue controls, including
reconciliation controls between the transaction recording
system, general ledger and bank statements.

In addition, we:

•

Performed data assurance techniques to recalculate
realised margin on foreign exchange contracts
recognised within fee and trading income;
Compared a sample of foreign exchange rates utilised
within the Group’s transaction recording system to
independently obtained foreign exchange rates;
Agreed a sample of individual foreign exchange
transactions recorded by the Group throughout the
financial year to underlying deal tickets and bank
statements;
Tested material reconciling items in cash account
reconciliations at 31 March 2019;
Agreed the dates of a sample of foreign exchange
transactions to the corresponding deal ticket and bank
statements to determine whether the relevant
transactions were recorded in the correct period;
Compared the valuations of approximately 99% of
derivative financial instruments at balance date to our
own independently derived valuations. This involved
sourcing independent inputs from market data
providers;
Examined supporting documentation for a sample of
manual journals related to fee and trading income.

OFX Group Limited Annual Report 201978

Key audit matter

How our audit addressed the key audit matter

Capitalisation of internally generated
intangible assets

During the year the Group capitalised $7.8m in
intangible assets, comprising $6.7m in internally
generated assets. The amounts capitalised related
predominantly to employment expenses for
website, application and software development.

The capitalisation of internally generated costs was
a key audit matter due to the magnitude of amounts
capitalised and judgement applied by the Group in
assessing whether the criteria for capitalisation as
set out in the Australian Accounting Standards had
been met. In particular, the technical feasibility of
the project and the likelihood of the project
delivering sufficient future economic benefits.

The Group’s judgements also included determining
whether capitalised costs were of a developmental
nature rather than research nature (the latter which
would result in the costs being expensed), and
whether costs including employment expenses,
were directly attributable to the relevant projects.

See Note 13 to the financial statements for further
information.

Client liabilities

The client liabilities balance consists of cash
received from customers in relation to foreign
exchange transactions which await settlement.
There are amounts within this balance that have
been static for an extended period of time and they
comprise part payments awaiting full payment from
clients prior to remittance and cash received where
the client has not yet been identified.

This was a key audit matter due to the magnitude of
client liabilities which represents 90% of the
Group’s total liabilities at balance date. We have
also considered the inherent uncertainties
associated with the static transactions and the
manual nature of the process to determine the
balance at year-end.

See Note 7 to the financial statements for further
information.

Our testing of capitalised internally generated intangible
assets included, amongst others:

•

Discussing project plans with management and
project leaders to develop an understanding of the
nature and feasibility of key projects and activities
performed;
Reviewing management’s assessment in support of the
recognition and measurement of these as intangible
assets, and the likelihood of the projects delivering
sufficient future economic benefits;
Inspecting business cases of key projects and
analysing the assumptions applied to determine the
feasibility of the projects and assumed future
economic benefits;
On a sample basis, agreeing capitalised payroll costs to
supporting payroll records and assessing the Group’s
determination of these costs as capitalised or expensed
with reference to the requirements of Australian
Accounting Standards.

Our testing of client liabilities included an assessment of
the design and testing of the operating effectiveness of key
reconciliation controls between the transaction recording
system, general ledger and bank statements.

In addition, we performed the following procedures
amongst others:

•

Agreed a sample of client liabilities to individual deal
tickets and cash receipts;
Considered the post year-end settlement rates of the
total balance between 1 April 2019 and 30 April 2019;
Inspected the customer complaints log to identify
significant matters raised concerning client liabilities;
Tested material reconciling items in cash account
reconciliations at 31 March 2019;
Analysed the breakdown of client liabilities at 31
March 2019 to consider the age profile of unallocated
client liabilities;
Considered the appropriateness of the Group’s policy
to derecognise certain unidentified client liabilities
that date back 5 years or more.

OFX Group Limited Annual Report 201979

Key audit matter

How our audit addressed the key audit matter

Together with our tax specialists, our procedures over
taxation related balances included, amongst others,
evaluating the analysis conducted by the Group for
judgements made in respect of the ultimate amounts
expected to be paid to tax authorities. This was made in the
context of our understanding of the business, and
assessing the appropriateness of the tax provisions in light
of the requirements of Australian Accounting Standards.

We also considered the Group’s OBU arrangements, tested
the classification of OBU and non-OBU transactions on a
sample basis against guidance provided in relevant tax
legislation, and reviewed and assessed the projects and
expenses that are eligible for concessional treatment
together with our tax specialists.

Taxation

The Group is liable for tax in a number of
jurisdictions, and in some cases, the final tax
treatment is uncertain until it is resolved with the
relevant tax authority. Consequently, the Group has
made judgements about the occurrence and
quantum of tax exposures, and associated liabilities,
which are subject to the future outcome of
assessments by relevant tax authorities and in
certain instances, legal processes.

In addition, OzForex Limited, a subsidiary of OFX
Group Limited, is deemed an Offshore Banking
Unit (OBU) meaning that eligible transactions
recorded in the OBU are subject to a concessional
tax rate of 10%. The subsidiary is also eligible for
Research and Development tax credits (R&D
Credits) on eligible expenditure which further
reduces the Group’s tax expense. The Group made
adjustments during the financial year to estimate
the amount of concessional credits, however,
because the relevant self-assessment tax claims are
filed with the Australian Tax Office in arrears, the
exact amount of the claims are not known with
certainty at year-end.

See Notes 4 and 5 to the financial statements for
further information.

Other information

The directors are responsible for the other information. The other information comprises the
information included in the annual report for the year ended 31 March 2019, but does not include the
financial report and our auditor’s report thereon.

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

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

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

OFX Group Limited Annual Report 201980

Responsibilities of the directors for the financial report

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

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

Auditor’s responsibilities for the audit of the financial report

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

A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This description forms part of our
auditor's report.

Report on the remuneration report

Our opinion on the remuneration report

We have audited the remuneration report included in pages 26 to 45 of the directors’ report for the
year ended 31 March 2019.

In our opinion, the remuneration report of OFX Group Limited for the year ended 31 March 2019
complies with section 300A of the Corporations Act 2001.

OFX Group Limited Annual Report 201981

Responsibilities

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

PricewaterhouseCoopers

Elizabeth O'Brien
Partner

Sydney
21 May 2019

OFX Group Limited Annual Report 201982

SHAREHOLDER INFORMATION

THE SHAREHOLDER INFORMATION SET OUT BELOW IS CURRENT AS AT 30 APRIL 2019

Corporate Governance Statement

In accordance with ASX Listing Rule 4.10.3 and the 3rd edition ASX
Corporate Governance Council’s Principles and Recommendations, the
2019 Corporate Governance Statement, as approved by the Board, is
available on the Company’s website at: https://www.ofx.com/en-au/

investors/corporate-governance/. The Corporate Governance
Statement sets out the extent to which OFX has followed the ASX
Corporate Governance Council’s 29 Recommendations during the 2019
financial year.

Substantial Shareholders

The number of securities held by substantial shareholders (holding not
less than 5%) and their associates as shown in substantial shareholder

notices received by the Company pursuant to Section 671B of the
Corporations Act 2001 as at 30 April 2019 are shown below.

Name

Number Held

% of Issued Capital

Pendal Group Limited (formerly BT Investment Management Limited)

Microequities

Renaissance Smaller Companies Pty Ltd

Selector Funds Management Limited

24,154,772

20,931,883

15,710,057

18,361,957

9.96%

8.72%

6.55%

7.57%

Distribution of Security Holders

The table below includes ordinary shares issued under the Company’s
Executive Share Plan.

Number of shares

1 – 1,000

1,001 – 5,000

5,001 – 10,000

10,001 – 100,000

100,001 – 999,999,999

Total

Total holders of ordinary shares

Number of ordinary shares

% of issued capital

920

1,934

940

1,074

4,936

510,739

5,737,999

7,399,207

27,597,092

207,342,357

248,587,394

18.64

39.18

19.04

21.76

1.38

100

There were 257 holders of less than a marketable parcel of ordinary shares, based on the Company’s closing market price of $1.53
on 30 April 2019.

OFX Group Limited Annual Report 201983

Twenty largest security holders of ordinary shares as at 30 April 2019

The table below includes ordinary shares issued under the Company’s Executive Share Plan.

Rank

Name

Units

% of Units

10.

11.

12.

13.

14.

15.

16.

17.

18.

19.

HSBC Custody Nominees (Australia) Limited

JP Morgan Nominees Australia Pty Limited

National Nominees Limited

Citicorp Nominees Pty Limited

Mr Matthew Gilmour

G and A Lord Pty Ltd

Microequities Asset Management Pty Ltd

BNP Paribas Nominees Pty Ltd

BNP Paribas Noms Pty Ltd

Bond Street Custodians Limited

Solium Nominees (Australia) Pty Ltd

Bond Street Custodians Limited

Mr John Alexander Malcolm

M & J Gilmour Pty Ltd

Solium Nominees (Australia) Pty Ltd

Powerwrap Limited

Bond Street Custodians Limited

SM & RW Brown Pty Ltd

Citicorp Nominees Pty Limited

Richard Kimber

20.

Invia Custodian Pty Limited

Totals: Top 20 holders of fully paid ordinary shares

Total remaining holders balance

Unquoted Equity Securities

66,402,808

49,862,709

15,901,045

12,510,197

9,245,200

9,100,000

8,563,641

6,988,164

4,102,387

4,003,594

2,661,394

2,625,000

1,932,376

1,610,000

671,485

630,526

550,000

447,880

433,218

367,013

26.71

20.06

6.40

5.03

3.72

3.66

3.44

2.81

1.65

1.61

1.07

1.06

0.78

0.65

0.27

0.25

0.22

0.18

0.17

0.15

199,158,637

49,428,757

80.12

19.88

Securities issued under OFX’s Long Term Incentive Plan and/or Executive Share Plan are subject to vesting conditions which, if met, entitle the
holder to ordinary fully paid shares in the Company.

Fully paid ordinary shares (unquoted)

Performance rights

Number held

Number of holders

6,064,717

814,076

OFX Group Limited Annual Report 201984

SHAREHOLDER INFORMATION

THE SHAREHOLDER INFORMATION SET OUT BELOW IS CURRENT AS AT 30 APRIL 2019

Service rights

Service rights holders do not have any voting rights attaching to
service rights.

Share options

Option holders do not have any voting rights attaching to options.

Voting Rights

Ordinary fully paid shares

The voting rights are governed by clause 37 of the Company’s
Constitution, which provides that every member present personally or
by proxy, attorney or representative at a general meeting of the
Company shall, on a show of hands have one vote, and on a poll shall
have one vote for every share held.

Performance rights

Performance right holders do not have any voting rights attached to
the performance rights issued under the Company’s Global Equity Plan
or legacy incentive plans.

Buyback

There is no current on market buy-back.

Review of operations and activities

A review of the Company’s operations and activities during the
reporting period is available within the Directors’ Report.

OFX Group Limited Annual Report 2019CORPORATE INFORMATION
NOTES

DIRECTORS

COMPANY SECRETARY

ANNUAL GENERAL MEETING

Mr Steven Sargent (Chairman)

Ms Freya Smith

13 August 2019

Mr John (“Skander”) Malcolm (Chief Executive
Officer and Managing Director)

Room III, Establishment Hotel,
252 George Street, Sydney

Mr Grant Murdoch

Mr Douglas Snedden

Ms Lisa Frazier

Ms Connie Carnabuci

PRINCIPAL REGISTERED OFFICE
IN AUSTRALIA

SHARE REGISTER

AUDITOR

Level 19
60 Margaret Street
Sydney NSW 2000
Australia

Ph: +61 2 8667 8000
Fax: +61 2 8667 8080

Email: investors@ofx.com.au

LINK MARKET SERVICES LIMITED
Level 12, 680 George Street
Sydney NSW 2000
Australia

Ph: 1300 554 474

Email:registrars@linkmarketservices.com.au

PRICEWATERHOUSECOOPERS
One International Towers Sydney
Watermans Quay

Barangaroo NSW 2000 Australia

SECURITIES EXCHANGE LISTING

WEBSITE ADDRESS

OFX Group Limited shares are listed on the

www.ofx.com

Australia Securities Exchange: OFX

OFX Group Limited Annual Report 201986

NOTES

OFX Group Limited Annual Report 2019