annualreport2019 Resimac
Group Ltd
ABN 55 095 034 003
Australian Credit Licence 247829
ASX: RMC
Contents
Who We Are
Message from the Chairman
Message from the CEO
Board of Directors
Directors’ Report
Remuneration Report
Financial Statements
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/ 6
/ 8
/ 11
/ 12
/ 22
/ 36
Notes to the Consolidated Financial Statements
/ 42
Directors’ Declaration
Independent Auditor's Declaration
Independent Auditor's Report
Environment, Social & Governance
Shareholder Information
Managing Your Shareholding
Corporate Information
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/ 132
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/ 138
/ 142
/ 144
/ 145
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2020 ANNUAL REPORT
5
5
Who
We Are
Resimac Group Ltd is one of Australia and
New Zealand’s most established non-
bank lenders. With 35 years experience in
delivering home finance solutions, we’re
proud to be servicing over 50,000 current
customers.
As a pioneer of the Residential Mortgage-
Backed Securities (RMBS) industry we
have one of Australia’s most respected
securitisation programs, having issued in
excess of A$30b in domestic and global
markets since 1987.
We have distribution to over 85% of
mortgage brokers, as well as our products
being available to consumers via our direct
channels.
Resimac is a profitable organisation with
diverse income streams - net interest
margin on principally funded loans, annuity
trail income on non-principally funded
loans and other fee income. We operate
a proprietary servicing platform and have
been issued a Standard & Poor’s (‘S&P’)
“STRONG” Servicer Ranking, which was
reaffirmed in February 2019.
Assets Under
Management
of almost
$15b
Our Service Proposition
ORIGINATION
Wholesale,
3rd Party,
Direct & White
Label
distribution
channels
SERVICING
Underwriting,
loan
management,
arrears
management
OPERATIONS
FUNDING
Support
functions,
geographies
Warehouse and
a global
capital
markets
programme
A full range of home loans from Prime Lending and Specialist Lending products
Strong funding capabilities - long standing warehouse relationships for short-term funding
Diversified long-term funding platform with global multi-currency issuance programmes
Well established white label arrangement with leading domestic banks
Assets Under Management of almost $15 billion
Diversified distribution platform originating $4 billion+ p.a.
Our Brand Ambassador
In FY20, we appointed Adam Gilchrist as an ambassador to
represent our corporate brand. Adam is also the face of our
homeloans.com.au launch campaign.
ADAM GILCHRIST &
SCOTT MCWILLIAM
RESIMAC GROUP LTD2020 ANNUAL REPORTWe understand the requirements of our customers, employees and stakeholders, and are building a best-in-class business that delivers against those requirements. 6
6
RESIMAC GROUP LTD
2020 ANNUAL REPORT
7
7
Message from
the Chairman
WARREN
MCLELAND
Chairman
Cost to Income Ratio
70.0%
65.0%
60.0%
55.0%
50.0%
45.0%
40.0%
35.0%
30.0%
68.2%
61.7%
56.6%
FY17
FY18
FY19
FY20
37.9%
Dear Shareholders,
As shareholders are acutely aware, FY20 was
Against this backdrop, Directors’ and management’s
Most importantly, our consistency and innovative
Management contribution
unique. The first half featured an increasingly
ambition is to continue to grow our home loan
philosophy is providing us with a competitive
severe competitive business environment, and the
portfolio above system, while simultaneously
advantage compared to narrow based non-banks. The
second was dominated by the ramifications from the
maximise our NIM, maintain our emphasis on low
number, size and variety of bond issues successfully
bushfires and the COVID-19 pandemic. Management’s
costs, embrace full digitalisation and build a significant
completed in FY20 was a major contributor to
ability to respond, adapt and resolve has enabled
asset financing business by 30 June 2023.
Resimac to weather this extraordinary array of
challenges, which is an incredible achievement.
Attaining that goal as a non-bank financial institution
will necessitate a paradigm shift in our market
Notwithstanding the myriad of complexities, Resimac
position. During this period, Resimac’s strategic
Group reported record financial results.
direction and focus will remain unchanged. At
The Board is continuing to be prudent in planning
for the next three to five years. Overall, we remain
positive in our outlook.
We are expecting the emergence of a recovery in
calendar year 2021, and a further upward move in
economic activity as measured by GDP, low interest
rates, housing construction and the consequent flow-
on of demand for home finance in 2022.
core is an incessant focus on organic growth in
mortgage lending, encapsulating a two-year strategic
acceleration of capital investment in automation/
digitalisation and our direct to borrower channel,
and incremental investment in our broker origination
channels.
Our ambition cannot be fulfilled without parallel
developments in our Treasury activities. Resimac’s
pedigree and leadership in domestic and international
funding and capital markets capabilities is as well-
known as it is established.
On behalf of my Director colleagues, it is with a
real sense of pride and pleasure that I extend my
congratulations to all our employees. The loyalty,
flexibility and adaptability of the Resimac team in
what has been the most demanding of years has been
exemplary.
Resimac’s success. Our depth and diversity with
investors globally is paramount and will be a never
ending development and growth objective for our
world-class team. Our historically long and enduring
In particular, I express our gratitude to our Chief
Australian bank funder partnerships continue to be
Executive Officer, Scott McWilliam, for his endurance,
pivotal in our success.
Board movements
calm and energy in providing clear leadership to
our team. Scott’s executive management team has
embraced the diverse scope of their responsibilities
As announced at the 2019 AGM, Chum Darvall AM
within and externally to customer and stakeholders.
resigned from the Resimac Group Board on 28
Resimac’s collegiate culture has proven its value in
February 2020. Chum served as Director from 2017
FY20!
and was Chairman from 13 November 2017.
On behalf of the Board and Resimac Group, I extend
my sincere thanks to Chum for his substantial
Warren McLeland
contributions.
Chairman
RESIMAC GROUP LTD2020 ANNUAL REPORT 8
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RESIMAC GROUP LTD
9
Message from
the CEO
Resilience. Agility. Transformation.
The effects of COVID-19 globally over the last 12
within 24 hours -
months have been highly visible. The impact on
speaks to the incredible
our business has been multi-faceted, affecting
agility and resilience of our
our teams across multiple jurisdictions, our broker
organisation.
network and our customer base of more than
50,000 borrowers. It has, however, confirmed
our agility and adaptability in such uncertain and
unprecedented times.
Resimac Group’s prudent response to the
pandemic is another point of pride. Whilst no
material changes were made to our credit policies,
we swiftly implemented additional support for
Amidst the turbulence, it was both encouraging
financial hardship applications. By the end of July
and promising to see how quickly our staff
2020, only 7% of our customers were in active
transitioned to a working-from-home model. The
payment deferrals, and this number is expected to
speed at which we were able to effect this material
materially decrease in the coming months.
change - running at better than 95% efficiency
$56.0m
$55.7m
$188.6m
37.9%
STATUTORY
NPAT
19%
NORMALISED
NPAT
NET INTEREST
INCOME
COST TO INCOME
RATIO (NORMALISED)
79%
60%
1,870bps
$4.7b
$12.4b
$14.9b
HOME LOAN
SETTLEMENTS
HOME LOAN
AUM
30%
21%
TOTAL
AUM
11%
1.8c
FY20 TOTAL
DIVIDEND
OF 3.0c*
FINAL
DIVIDEND
*20%
SCOTT
MCWILLIAM
CEO
The support we’ve provided to our network of
more than 12,000 brokers, including paying trail
commissions for loans on payment deferrals
and further digitisation of the loan origination
process, also recognises the continued
importance this channel holds for our business.
Record profits
Despite the macroeconomic challenges posed
by the pandemic, we are proud of the financial
results achieved. Our normalised NPAT increased
by 79% vs FY19 to $55.7 million. We achieved 30%
growth in settlements year-on-year, with our total
Assets Under Management (AUM) up by 11% to
$14.9 billion. Our strong AUM growth also drove a
60% increase to our net interest income.
Profit growth was driven by strong home loan
portfolio growth of 21% to $12.4 billion and higher
margins across the portfolio. This is despite
system growth only being circa 3%. The higher
net interest income combined with our continued
cost discipline resulted in a significantly lower
cost-to-income ratio of 37.9%, down from 56.6%
in FY19.
The growth in our portfolio is a testament to our
focus on consistent and timely credit decisioning,
with our overall service offering resonating well
with brokers and consumers alike.
Diversification of funding
Throughout FY20, Resimac Group continued to
bolster its funding capabilities through successful
diversification of banking and warehouse facilities.
In 2H20, we increased and extended more than
$2 billion of warehouse facilities. Additionally, we
issued two benchmark-sized and oversubscribed
RMBS deals in June and July.
The success of our funding program is
underpinned by our long-standing and diversified
panel of warehouse facilities, our multi-
jurisdiction investor and distribution platform, and
the performance of our portfolio over many years.
Executing on long-term vision
Our investment in digital transformation
continues. We have partnered with some of
the most respected and proven digital solution
and system providers to create a platform
for sustainable and scalable growth. Using
automation, digitisation and AI, the simple and
easy-to-use technology-based solutions will
positively transform the Resimac consumer and
broker experience.
RESIMAC GROUP LTD2020 ANNUAL REPORT 2020 ANNUAL REPORT
11
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10
Message from the CEO
Resilience. Agility. Transformation.
Building a Digital Non-Bank
Resimac's
'CUSTOMER FIRST'
Digital Strategy
Board of
Directors
Collaboration
Partnering with industry leading technology and data
providers
Automation
Utilise modern technologies and platforms to
automate and build scale
End-to-end Digitalisation
Re-designed processes for online convenience
Customer Centric
Technology-based solutions to deliver a seamless
digital experience
Engineer for the Future
Modern, sustainable and secure cloud-based
platforms
Our customers are already benefiting from our digital transformation. During Q4 of FY20, our end-to-end digital
loan origination process enabled brokers to continue doing business remotely.
Rebuilding our online application and user experience has also enabled us to launch a new direct-to-customer
online channel, homeloans.com.au. This new brand will enable Resimac Group to access a growing segment of
borrowers who prefer to self-service their home loans online.
Thanks to our Team
A special thanks to Resimac Group’s management team and staff for the invaluable role they have played in the
success of our business. I would also like to extend my sincere thanks to our Board for their service and support
over the last 12 months.
FY20 has allowed us to demonstrate both the strength and resilience of our business to the market. These
characteristics will help to ensure our continued growth and success as we move into FY21.
Scott McWilliam
Chief Executive Officer
Warren McLeland
Chairman
Non-Executive Director
Duncan Saville
Non-Executive Director
Susan Hansen
Independent
Non-Executive Director
Wayne Spanner
Independent
Non-Executive Director
RESIMAC GROUP LTD2020 ANNUAL REPORT 12
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RESIMAC GROUP LTD
13
Directors’
Report
Resimac Group Ltd and its Controlled Entities
The Directors of Resimac Group Ltd (“Resimac” or “the Company”) and its controlled entities ("the Group") submit
herewith the financial report for the financial year ended 30 June 2020. In order to comply with the provisions of the
Corporations Act 2001, the Directors’ Report as follows:
Information about the Directors
The names and particulars of the Directors of the Company during or since the end of the financial year are:
Mr Warren McLeland
Chairman since 28 February 2020
Non-Executive Director
Mrs Susan Hansen
Independent Non-Executive Director
since October 2016
Warren is a former stockbroker and investment banker
Susan is a Chartered Accountant and holds a Bachelor
with over 35 years of experience in domestic and
of Commerce degree and an MBA from the University
international financial services. In addition, Warren
of Cape Town. Susan has 35 years of experience
acts as an adviser in funds management and business
including a Big Four Accounting firm and an investment
strategy to companies operating in the Asia Pacific
bank (financial analysis and risk assessment). Susan is
region. Warren is the former Executive Chairman of
a Principal of a financial training organisation based in
Resimac Limited.
New Zealand.
Other listed directorships (last three years):
Other listed directorships (last three years):
§ Interim Chairman of Thorn Group Limited
§ Non-Executive director of Utilico Emerging Markets
(appointed Director August 2019)
Limited (since 2013)
§ Chairman of Somers Limited incorporated in
Bermuda (since 2010)
Special responsibilities:
§ Non-executive director of UIL Limited (resigned
§ Chair of the Audit Committee (since November
Mr Wayne Spanner
Independent Non-Executive Director
since 28 February 2020
Mr Duncan Saville
Non-Executive Director
since November 2017
Wayne is currently a Partner and the former Managing
Duncan is a Chartered Accountant and an experienced
Partner (2012-2020) of Norton Rose Fulbright
non-executive director and currently chairman of ICM
Australia. Wayne has extensive experience in
Limited, an international fund manager. He is a fellow
executive management and corporate governance
of the Institute of Chartered Accountants Australia
at Board level. Wayne is currently a Board member
and New Zealand, the Australian Institute of Company
and former Chairman of the University of Cape Town
Directors and the Financial Services Institute of
Trust Australia, a Board member of the Asia Society
Australasia.
Australia, a member of the Business Council of
Australia and a Councillor of the Australian British
Other listed directorships (last three years):
Chamber of Commerce.
§ Non-Executive director of West Hamilton Holdings,
Other listed directorships (last three years):
§ Nil
Special responsibilities:
§ Chair of the Remuneration and Nomination
Committee (appointed February 2020)
incorporated in Bermuda (since 2012)
§ Former Non-Executive director of Somers Limited
(retired 5 September 2018), incorporated in
Bermuda
§ Former Non-Executive director of Cue Energy
Resources Limited and New Zealand Oil and Gas
Limited, incorporated in New Zealand (resigned
§ Member of the Risk and Compliance Committee
from both on 14 December 2017)
(appointed July 2020)
§ Member of the Remuneration and Nomination
Committee (appointed July 2020)
Special responsibilities:
§ Member of the Remuneration and Nomination
Committee (appointed 21 February 2018; stepped
down on 29 January 2020)
Company Secretary
Mr Peter Fitzpatrick
since October 2016
Peter is a Chartered Accountant who worked for a
chartered accounting firm and oil explorer prior to
joining Resimac Limited in 1987. Peter is a member of
the Governance Institute of Australia and the Financial
Services Institute of Australasia.
The abovenamed directors held office during the
financial year or date of appointment except for:
§ Mr Cholmondelay (Chum) Darvall - resigned 28
February 2020
§ Mr Michael Jefferies - resigned 26 November 2019
September 2019)
Special responsibilities:
§ Chairman of Resimac Group Ltd (appointed 28
February 2020)
§ Chair of the Risk and Compliance Committee (since
February 2017)
§ Member of the Remuneration and Nomination
Committee (since November 2016)
§ Member of the Audit Committee (since August
2017)
2016)
§ Member of the Remuneration and Nomination
Committee (since November 2016)
§ Member of the Risk and Compliance Committee
(since November 2016)
§ Chair of Resimac NZ Home Loans Limited
Resimac is one of Australia
and New Zealand’s premier
non-bank home loan lenders.
RESIMAC GROUP LTD2020 ANNUAL REPORT 14
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RESIMAC GROUP LTD
15
Directors’ shareholdings
Shares options or rights granted to Directors & Senior Management
The following table sets out each director’s relevant
An aggregate of 3,900,000 share options (900,000 allocated to CEO and 375,000 for each eligible Executive), and a cash
interest in shares and rights of the Company or in a
component of up to $2.4m were granted on 15 August 2019.
related body corporate as at 30 June 2020:
Directors
Susan Hansen
Fully paid
ordinary
shares
199,941
Wayne Spanner
-
Warren McLeland
12,159,222
Duncan Saville
254,468,487
Number of
rights over
ordinary
shares
Nil
Nil
Nil
Nil
Remuneration of Key Management
Personnel
Information about the remuneration of Key
Management Personnel (KMP) is set out in the
Remuneration Report section of this Directors’
Report. The term ‘KMP’ refers to those persons having
authority and responsibility for planning, directing
and controlling the activities of the Company and its
controlled entities or indirectly, including any director
whether executive or otherwise of the consolidated
entity.
Directors’ Meetings
The following table sets out the number of Directors’ meetings (including meetings of committees of Directors) held
during the financial year and the number of meetings attended by each director (while they were a director or committee
member).
During the year, 9 Board meetings, 3 Audit, 4 Risk and Compliance and 5 Remuneration and Nomination Committee
meetings were held.
Committees
Board Meetings
Audit
Risk & Compliance
Remuneration &
Nomination
(A)
(B)
(A)
(B)
(A)
(B)
(A)
(B)
Chum Darvall1
Susan Hansen
Michael Jefferies2
Warren McLeland
Duncan Saville
Wayne Spanner3
6
9
4
9
9
3
6
9
4
9
9
3
-
3
2
3
-
-
-
3
2
3
-
-
2
4
-
4
-
-
2
4
-
4
-
-
3
5
2
5
3
2
3
5
2
5
3
2
(A) Number of meetings eligible to attend.
(B) Number of meetings attended.
1 Resigned as chairman on 28 February 2020
2 Resigned as Independent Non-Executive Director on 26 November 2019
3 Appointed Independent Non-Executive Director on 28 February 2020
RESIMAC GROUP LTD2020 ANNUAL REPORT 16
2020 ANNUAL REPORT
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17
Results & Dividends
Principal Activities
Debt Funding
The information appearing on pages 16 to 21 forms part of the Directors’ Report for the financial year ended 30 June
The Group is a residential mortgage lender and multi-
The Group maintains access to a diversified
2020 and is to be read in conjunction with the following information:
channel distribution business specialising in Prime and
funding platform supported by established funding
Specialist lending. The Group operates in targeted
relationships and the Board approved funding strategy.
Profit
Profit attributable to ordinary equity holders of the parent
Dividends
The following dividends have been paid by the Company or declared by the Directors since
the commencement of the financial year ended 30 June 2020:
(a) out of the profits for the year ended 30 June 2019 and retained earnings on the fully-paid
ordinary shares:
FY20
$’000
FY19
$’000
55,908
47,185
§ fully franked final dividend of 1.00 cents (FY18: 0.90 cents) per share paid on 30
6,087
3,594
September 2019.
(b) out of the profits for the half-year ended 31 December 2019 and retained earnings on the
fully-paid ordinary shares:
§ fully franked interim dividend of 1.20 cents (HY19: 1.00 cents) per share paid on 27
4,879
4,001
March 2020.
(c) out of the profits for the full year ended 30 June 2020 and retained earnings on the fully-
7,334
6,087
paid ordinary shares:
§ fully franked final dividend of 1.8 cents (FY19: 1.00 cents) per share declared on 25
August 2020.
§ fully franked one off special dividend of nil cents (FY19: 0.50 cents) per share.
The Company’s Dividend Reinvestment Plan (DRP) was applied to the interim and final
dividend.
market segments and asset classes in Australia and
New Zealand.
As a non-bank financial institution, the Group has
developed a high quality lending portfolio, loan
servicing capability, and funding platform through
a combination of organic growth and the Resimac/
Homeloans merger in 2016.
The Group’s core capabilities include:
§ Product manufacturing: Expertise in residential
mortgages gives the Group flexibility in providing a
range of products with attractive risk-return profiles
in Australia and New Zealand. The Group applies its
detailed knowledge of borrowers to develop new
products that address untapped demand;
§ Distribution: Distributing loans in Australia and
New Zealand through relationships with accredited
brokers and wholesale partners, and a direct-to-
customer channel;
§ Treasury and funding expertise: Strong long-term
relationships with global funding partners, the
Group is an experienced issuer in the global and
domestic term securitisation markets;
The following funding channels are used to support the
Group’s lending activities:
§ Corporate debt facility: Utilised for investment in
business growth;
§ Warehouse facilities: Third-party funders provide
limited-recourse financing to special purpose
vehicles established by the Group. At 30 June 2020,
the Group had four onshore and four offshore
warehouse funders;
§ Term securitisations: Loans that are initially funded
via a warehouse facility, are pooled and refinanced
by being sold to new funding vehicles that issue
limited-recourse independently rated asset-backed
securities to institutional investors in multiple
jurisdictions; and
§ Wholesale funding partners: Provide white-label
funding with the Group receiving net interest
margin.
Principal Risks
The Group’s key risks include, but are not limited to:
§ Risk management: Operating with a holistic
enterprise risk management and governance
framework utilising the three lines of defence model;
and
§ Funding risk: The funding platform currently comprises
a mix of warehouse facilities, term securitisations and
corporate debt. The Group depends on these sources to
fund mortgage originations;
§ Collections management: Specialised collections
§ Capital and liquidity requirements: The Group is
processes based on deep experience, analytical
capabilities and a solution-based approach to
customer management.
required to maintain sufficient liquidity levels under
Australian Financial Services Licence requirements;
A risk exists that the Group could be required to
contribute additional ‘first loss’ equity capital to support
the credit position of senior ranking note holders in the
warehouse facilities and term securitisations which
could impact the Group’s profitability, ability to grow
and/or could force it to raise additional capital;
RESIMAC GROUP LTD2020 ANNUAL REPORT 18
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RESIMAC GROUP LTD
2020 ANNUAL REPORT
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§ Regulatory and licence compliance: The Group
The Group is focused on a number of growth
The Group generated a net profit after tax (NPAT)
Total home loan settlements across the Group’s direct
is subject to extensive regulation in each of the
strategies to continue to drive revenue and
of $56,007,000 for the year ended 30 June 2020. To
and third party distribution channels were $4.7 billion, up
jurisdictions in which it conducts its business. The
profitability.
reflect the Group’s normalised earnings the NPAT has
30% on prior year.
Business Strategy
Review of Operations
Group holds seven Australian Credit Licences. Changes
in laws or regulations in a market in which the Group
operates could impact the business. The Group is
licensed and/or registered to operate a number of its
services across a range of jurisdictions. Changes to
these licensing regimes, the revocation of existing
licences, an inability to renew or receive necessary
licences or a change in capital requirements could have
a material adverse effect on the Group’s business,
operating and financial performance; and
1. Organic lending growth
The Group is well-positioned to continue to build
upon strong volume growth, driven by:
§ Capitalising on the Group’s unique position as
a non-bank lender with customers favourably
viewing the Group as an alternative to the major
lenders;
§ Opportunity to grow volume in the Specialist and
Prime segments of the residential mortgages
been adjusted to separate one-off items. Management
believe the disclosure of the normalised NPAT provides
additional insight into the underlying performance for
the year, by excluding one off, non-recurring revenue
items
The following table reconciles the unaudited normalised
earnings to the statutory NPAT for the year in
accordance with International Financial Reporting
Standards (IFRS).
§ Macroeconomic environment: A material downturn,
market;
a sustained outbreak of higher inflation, shocks to the
§ Launch of the new direct to consumer digital
Unaudited non-IFRS information
financial system, a material increase in unemployment,
channel homeloans.com.au;
Statutory NPAT
decreases in house prices, higher interest rates, general
reduction in demand for credit and/or a reduction in
borrowers’ ability to service their debt (credit risk).
§ COVID-19: The extent of the economic impact of
the pandemic is unclear however is certain to have
significant impact on the macroeconomic environment
in the foreseeable future. An effective risk management
framework prior to COVID-19 has assisted the Group
§ Continuing development Broker and Wholesale
relationships;
§ Further investment in the Group's brand
positioning;
§ Pursuing diversification opportunities in
Australia and New Zealand.
Non-recurring other income - rebate1
Tax effect of normalised items
Normalised NPAT
2. Growth through acquisition
Total interest and other income of $471,303,000
increased 1% on prior year.
FY20
$’000
56,007
(385)
116
55,738
manage the current uncertainty through a stable funding
§ Management has demonstrated an ability to
program, conservative credit policies and low arrears
identify and execute profit accretive acquisitions
rates. The Group will continue to monitor the effects of
in targeted markets consistent with the Group’s
COVID-19 on business performance and take action as
strategy;
required.
§ Bushfires: In December 2019, parts of Australia were
impacted by bushfires. The Group included a collective
provision for potential economic loss as a result of this
event in the half year accounts. The impacted customers
will be provided ongoing assistance where required,
however a loss provision related directly to bushfire
impacted customers is not required at 30 June.
§ On 1 January 2020 Resimac acquired 60%
of International Acceptance Investment Pty
Ltd and its controlled entities (“IA Group”), a
Operating expenses of $62,244,000 increased 1% on
prior year.
Loan impairment expense increased to $22,012,000,
finance company participating in both secured
driven by management overlay for potential future
commercial and consumer lending. The
economic loss from the impact of COVID-19.
investment aligns with Resimac’s diversification
strategy and facilitates expansion into new
secured asset classes.
Net interest income of $188,625,000 increased 60% on
COVID-19 poses.
prior year.
The Group’s assets under management at 30 June 2020
comprise:
§ On balance sheet home loans and advances to
customers of $12.4 billion2, up 21% compared to 30
June 2019; and
§ White label portfolio of $2.5 billion, down 23%
compared to 30 June 2019 in line with the Group’s
strategy to cease originating white label loans;
§ Combined these make up the total assets under
management of $14.9 billion.
The Group’s net assets increased 23% from 30 June
2019, driven by growth in our assets under management.
COVID-19
The ongoing impact of COVID-19 continues to present
challenges to the Group’s customers and the workforce
globally. Resimac’s conservative approach to credit risk
and strong funding relationships have insulated the
impacts of COVID-19. Resimac’s key priority remains
the safety of employees, and supporting customers and
the broader community through the ongoing challenges
Resimac implemented a companywide work from home
environment from March 2020, supported by remote
working capabilities. The Group’s ongoing investment
in IT infrastructure enabled seamless continuity of
operations and high-quality customer service was
maintained. As employees transition to an office working
environment, a broad range of measures to protect
the health and wellbeing of the individuals have been
considered. These include staged returns by groups,
regular office deep cleaning and strict social distancing
protocols. The Group also offers employees confidential
access to an employee assistance program (EAP).
1 RMBS Rebate Singapore MSA Grant Scheme
2 On balance sheet home loans AUM excludes c$100m of Non Core loans held at 30 June 2020, which are included in the consolidated financial statements
RESIMAC GROUP LTD2020 ANNUAL REPORT 20
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RESIMAC GROUP LTD
21
Resimac will continue to support customers
throughout their home loan journey, particularly during
this unprecedented period. Resimac provided financial
assistance to customers impacted by COVID-19 in the
form of hardship payment moratoriums and repayment
flexibility.
During the year, the Group utilised the following
Federal/State tax concessions:
1. Delayed PAYG Company Tax Instalments for FY20
until 1st December 2020: $12.2m
2. Victorian Payroll Tax relief: $0.07m
Funding Programmes
§ The RESIMAC Premier Series 2019-2 transaction
was settled on 29 August 2019 and is a multi-
currency prime issue with a total issuance size of $1
billion equivalent.
§ The RESIMAC Bastille Series 2019-1 NC transaction
was settled on 24 October 2019 and is a multi-
currency non-conforming issue with a total issuance
size of $1 billion equivalent.
§ The Avoca Series 2019-1 transaction was settled
on 15 November 2019 and is a domestic prime issue
with a total issuance size of $472.5 million.
§ The RESIMAC Triomphe Trust – Warehouse Series
No.8 was settled on 20 February 2020 and is a
domestic prime warehouse with a total facility size
of $500 million.
§ The RESIMAC Premier Series 2020-2 transaction
was settled on 3 June 2020 and is a domestic prime
issue with a total issuance size of $500 million.
Indemnification of Officers &
Auditors
During the financial year, the Company paid
a premium in respect of a contract insuring
the Directors of the Company, the Company
Secretary and all executive officers of the
Company against a liability incurred as such a
Director, Secretary or executive officer to the
extent permitted by the Corporations Act 2001.
The contract of insurance prohibits disclosure of
the nature of the liability and the amount of the
premium.
The Company has not otherwise, during or since
the financial year, except to the extent permitted
by law, indemnified or agreed to indemnify an
officer or auditor of the Company against a
liability incurred.
Subsequent Events
Final Dividend Declared
The Board of Resimac Group Ltd has declared a fully franked final dividend of $0.018 per share. The Record Date is 28
August 2020. The payment date will be 25 September 2020. The dividend has not been provided for in this financial
report.
Non-Audit Services
Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are
outlined in Note 28 to the financial report.
The Directors are satisfied that the provision of non-audit services during the year, by the auditor is compatible with the
general standard of independence for auditors imposed by the Corporations Act 2001.
The Directors are of the opinion that the services as disclosed in Note 28 to the financial report do not compromise the
external auditor’s independence, based on advice received from the Audit Committee, for the following reasons:
§ All non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity
of the auditors; and
§ None of the services undermine the general principles as set out in APES Code of Ethics for Professional Accountants
issued by the Accounting Professional and Ethical Standards Board, including reviewing or auditing the auditor’s own
work, acting in a management or decision making capacity for the Company, acting as advocate for the Company or
jointly sharing economic risks and rewards.
Auditor's Independence Declaration
The auditor's independence declaration is included on page 132 of this financial report.
The Group’s net assets
Rounding Off of Amounts
increased by 23%
from 30 June 2019,
driven by growth in our
assets under management.
Unless otherwise indicated, the Company has rounded off amounts in this Directors’ Report and the accompanying
financial statements to the nearest thousand dollars in accordance with ASIC Corporations Instrument 2016/191.
RESIMAC GROUP LTD2020 ANNUAL REPORT 22
22
RESIMAC GROUP LTD
23
Remuneration
Report
2020
(Audited)
CONTENTS
Section
Details
1
2
3
4
5
6
7
8
9
Executive Summary
Remuneration Principles
Remuneration Activities
Key Management Personnel
KMP Remuneration Policy
Long-Term & Short-Term Incentive Plans
FY20 Outcomes
Statutory Remuneration
Non-Executive Director Remuneration
10
Other Remuneration Information
1. Executive Summary
This Remuneration Report sets out the remuneration strategy and framework that applies to Resimac KMPs, Directors
and employees for the year ended 30 June 2020.
Resimac’s mission is to be Australia’s leading non-bank lender. This mission is facilitated by promoting a culture
of transparency and establishing a responsible remuneration framework that provides positive outcomes for our
customers, shareholders and employees. To ensure Resimac operates within industry best practice.
The Board’s remuneration strategy is aligned to the following objectives:
§ To attract and retain talented employees;
§ To provide fair and equitable remuneration to all employees in line with the Company’s Diversity & Inclusion Policy;
§ To promote and reward behaviours within the business that are in the interest of customers and shareholders;
§ To reinforce a culture of continual employee development;
§ To ensure Resimac operates within industry best practice.
2. Remuneration Principles
The following principles provide the basis of the remuneration framework at Resimac:
§ Total remuneration for KMP is achieved by a balance of fixed and variable components
§ Key Performance measures for Resimac management are linked to both financial and non-financial measures, and
designed to be in the best interest of customers and shareholders
§ Fixed and variable remuneration for KMP are periodically benchmarked to ensure remuneration is in line with the
external market
§ Fair and equitable remuneration is applied to all employees regardless of gender, sexual identity, age, religion, ethnicity
or disability.
3. Remuneration Activities
A number of activities were carried out during FY20 to ensure KMPs and employees’ remuneration were in line with the
Board’s remuneration strategy and the external market.
These activities included:
§ Employee Diversity & Inclusion survey and analysis
§ Pay parity reporting and analysis
§ Introduction of a new LTI plan, established for KMPs and Executives
§ Fixed remuneration review which resulted in a freeze for Directors and all employees in response to the COVID-19
pandemic.
Page
23
23
23
24
25
25
27
28
30
32
RESIMAC GROUP LTD2020 ANNUAL REPORT 24
2020 ANNUAL REPORT
2525
4. Key Management Personnel
5. KMP Remuneration Policy
The KMP are the people who have the authority and responsibility for planning, directing, implementing and controlling
The total remuneration of the KMP comprise a fixed
5.3. Long-Term Incentives (LTI)
the activities of the Resimac business. The KMP are:
Name
Current
Position
Term as KMP
Scott McWilliam
Chief Executive Officer (CEO)
Jason Azzopardi
Chief Financial Officer (CFO)
Andrew Marsden
General Manager Treasury and Securitisation
Full Term
Full Term
Full Term
component and an at-risk variable component. The
at-risk variable component is comprised of a short-
term incentive and a long-term incentive.
Remuneration is based on the:
§ role in which they are performing (i.e.
The LTI is a combination of an equity arrangement of
options over ordinary shares and a cash component
(pursuant to the Resimac Group Ltd Employee Share
Option and Rights Plan Rules) where an allocation is
considered each year.
accountability, responsibility, qualifications, skill
The aim of the LTI is:
and experience required); and
§ market benchmarking.
The KMP remuneration arrangements are as follows:
Name
Current
Position
Term as KMP
period (i.e. 1 July to 30 June). Performance is
§ Granted 900,000 Options pursuant to the Resimac
measured against predetermined Key Performance
Group Employee Share Options and Rights Plan;
Danielle Corcoran
General Manager Governance, Change and Culture
Full Term
5.1. Fixed Remuneration
Former
Mary Ploughman
Joint Chief Executive Officer (Joint CEO)
Ceased 17 July 20191
1 Mary Ploughman ceased being Joint CEO on 18 January 2019, however remained employed until 17 July 2019.
The Directors classified as KMP and required to be disclosed as part of this report are:
The fixed component includes base salary and
superannuation and is known as Total Fixed
Remuneration (TFR). This amount is subject to an
annual review by the Remuneration and Nomination
Committee.
5.2. Short-Term Incentive (STI)
The STI is assessed by way of financial and non-
financial measures at the end of each performance
Warren McLeland
Chairman, Non-Executive Director
Susan Hansen
Independent Non-Executive Director
Duncan Saville
Non-Executive Director
Full Term
Full Term
Full Term
Wayne Spanner
Independent Non-Executive Director
Appointed 28 February 2020
Former
Indicators (KPIs) set by the Remuneration and
Nomination Committee at the beginning of the
performance period.
KPIs include:
§ Strategic;
§ Financial metrics;
§ Innovation and technology initiatives and
enhancements to allow for scale and digitalisation;
§ Operational efficiency and effectiveness;
§ People and culture; and
Chum Darvall
Chairman, Independent Non-Executive Director
Ceased 28 February 2020
§ Risk and compliance ensuring appropriate controls,
attestations and obligations adherence.
Michael Jefferies
Independent Non-Executive Director
Ceased 26 November 2019
§ to retain key senior talent;
§ to align long term Company performance with
shareholders expectations; and
§ to ensure continual regulatory and compliance
adherence.
6. Long-Term & Short-Term
Incentive Plans
6.1. Long-Term Incentive Plan (LTI)
FY18 LTI Plan: CEO
The CEO, Scott McWilliam, was offered an LTI in FY18.
The details of the offer are as follows:
§ Grant Date 18 August 2017;
§ Exercise price of $0.55 per option;
§ Options vest in equal tranches of 300,000 on each
anniversary of the Grant Date;
» First tranche of 300,000 vested on 1 July 2018
and is exercisable,
» Second tranche of 300,000 vested on 1 July
2019 and is exercisable,
» Third tranche of 300.000 vested on 1 July 2020
and is exercisable,
§ Exercise period is 3 years for every tranche
vesting;
§ Vesting condition is 100% tenure.
RESIMAC GROUP LTD2020 ANNUAL REPORT 26
26
RESIMAC GROUP LTD
27
FY20 LTI Plan: KMPs and Executives
Effective 1 July 2018 Mr McWilliam became eligible
Remuneration for KMPs is benchmarked against both the external market and internal relativities. The Remuneration and
7. FY20 Outcomes
Pursuant to the Resimac Group Limited Employee
Share Option & Rights Plan Rules the CEO, CFO and
eligible Executives received options over ordinary
shares, and a combined total cash component of up to
$2.4m was offered. 3,900,000 options were granted
on 15 August 2019 (900,000 allocated to the CEO and
375,000 for each eligible Executive).
for a STI up to 75% of their TFR. Mr McWilliam’s
performance against predetermined KPIs will be
assessed by the Remuneration and Nomination
Committee at the end of each performance period.
Any STI awarded will be paid in cash; 66.7% at the
end of the performance period with the remaining
33.3% in cash deferred for 12 months subject to a
look back being undertaken by the Remuneration and
The vesting date for all options is 31 August 2022,
Nominations Committee.
Nominations Committee have determined that KMPs will not receive an increase in fixed remuneration for FY21 however
will remain eligible to participate in the short-term incentive plan for FY20 and FY21. The long-term incentive plan
granted to eligible executives remains in place.
4.1. Overview of Company Performance
The table below summarises details of Resimac’s performance for key financial measures over the past four financial
years post merger between Resimac and Homeloans.
Mr Azzopardi, Mr Marsden and Ms Corcoran are eligible
to be awarded a STI and his performance against
predetermined KPIs is assessed by the CEO and the
Remuneration and Nomination Committee at the end
of each performance period. Any STI awarded will
be paid 100% in cash at the end of the performance
period.
In determining the STI payable to the KMP for FY20,
the Remuneration and Nomination Committee
undertook a review of each person’s performance
against their individual KPIs for the FY20 performance
period in July 2020.
KPIs and relevant measurements will be set at the
commencement of the performance period and will
be assessed by the Remuneration and Nomination
Committee at the end of each performance period.
Financial year ended 30 June
FY20
FY19
FY18
FY17
NPAT ($’000)
56,007
47,185
25,332
15,780
Total dividends per share (cents)
Dividend payout ratio (%)
Closing share price (cents as at 30 June)
Basic earnings per share (cents)
Return on equity (ROE) (%)3
Return on assets (%)1
2.70
19.6
101.0
13.75
25.5
4.3
1.90
16.1
64.0
1.65
2.752
25.9
62.6
57.0
43.0
11.75
6.37
4.39
17.3
4.4
17.2
11.2
2.8
2.3
subject to the Group achieving Net Profit After Tax
(NPAT) performance hurdles, digital transformation
hurdles, compliance hurdles and remaining employed
with the Group until the vesting date.
6.2. Short-Term Incentive Plan (STI)
Both executive KMPs have a contractual short-term
incentive (STI) whereby they have an opportunity to
earn up to a capped percentage of their TFR.
The Group applies its
detailed knowledge of
borrowers to develop
new products that address
untapped demand.
1 ROA based on statutory NPAT and total assets. As a result of the requirement under AASB 10 – Consolidated Financial Statements, the parent Company
exercises control over the Special Purpose Vehicles (SPVs) and securitisation trusts, therefore significant assets have been added to the consolidated
statement of financial position without any appreciable increase in net profit.
2 In October 2016, the Board of Resimac Group Ltd (formerly Homeloans Ltd) paid a final dividend of 2.0 cents per share to existing Homeloans Ltd
shareholders prior to the completion of the merger with Resimac Limited.
3 ROE based on normalised NPAT and average shareholders’ equity per consolidated statement of financial position.
RESIMAC GROUP LTD2020 ANNUAL REPORT 28
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RESIMAC GROUP LTD2020 ANNUAL REPORT
30
30
RESIMAC GROUP LTD
31
9. Non-Executive Director Remuneration
9.1. Overview of Non-Executive Directors' Remuneration Arrangements
9.1.1. Policy Objectives
and the Board is not intending to increase this pool at the
§ To be market competitive: aim to set Directors’
fees competitive with Non-Executive Directors in
comparable companies;
§ To ensure complementary skills: aim to ensure that
the mix of Directors at any one time is diverse and
adequate to carry out the objectives of the business;
and
AGM to be held in November 2020.
9.1.3. Regular Reviews of Directors’ Fees
The Board reviews the level of Directors’ fees annually to
ensure the fees are in line with market and are suitable
for the level of skill and expertise required to carry out
the duties of directors in a listed environment and with
an Australian Financial Services Licence and several
§ To safeguard independence: to exclude any
Australian Credit Licences.
performance related element in order to preserve the
independence of the Non-Executive Directors.
The agreed fee structure is that a fee is paid to reflect
the Chairman’s responsibilities. Each Director receives
9.1.2. Aggregate Fees Approved by Shareholders
a base fee and if a Director chairs a Board committee,
At the Annual General Meeting (AGM) of shareholders
held on 25 November 2016, the shareholders approved
the maximum aggregate fee pool per annum for non-
an additional fee is applied. Superannuation is payable
in addition to the base fee where a Director is paid via
the Resimac employee payroll system. No fee is paid for
executives of $550,000. This amount is the current pool
committee membership.
In June 2020 the Remuneration and Nominations Committee assessed the current level of fees paid to Directors and
resolved not to increase fees. The 2020 fee levels inclusive of superannuation where applicable were as follows:
Name
Position
Warren McLeland1
Chairman and Risk and Compliance Chair
Maximum Fee ($)
131,400 p.a.
Susan Hansen
Independent Non-Executive Director, Audit Chair and New Zealand Chair
135,131 p.a.
Wayne Spanner2
Independent Non-Executive Director and Remuneration and Nomination Chair
82,125 p.a.
Duncan Saville3
Non-Executive Director
70,000 p.a.
1 Warren McLeland’s FY20 fee reflects the going forward increased fee of additional $45,000 from 28 February 2020 (appointed Chairman).
2 Wayne Spanner’s commenced on 28 February 2020.
3 Duncan Saville’s fee is exclusive of superannuation.
9.1.4. Board Skills & Performance Review
The Board undertakes from time to time a review of the skills that each director holds and is then summarised in a
skills matrix. In addition, the Board carries out an assessment of the performance of the Board as a whole and of each
committee. The last review was conducted in March 2018. These assessments are conducted in-house however, if any
Board member wishes to have an independent review, the appropriate consultant will be appointed.
9.1.5. Non-Executive Director Remuneration
The fees paid or payable to the Non-Executive Directors in relation to the 2020
financial year are set out below:
Short-Term
Benefits
Post-Employment
Benefits
Fees
Superannuation1
Current
($)
Warren McLeland2
FY20
FY19
Susan Hansen
FY20
FY19
Wayne Spanner3
FY20
FY19
Duncan Saville
FY20
FY19
90,000
75,000
127,056
112,399
25,288
-
70,000
70,000
($)
8,550
7,125
8,075
9,342
Total
($)
98,550
82,125
135,131
121,741
2,283
27,571
-
-
-
-
70,000
70,000
Proportion
performance
related
(%)
-
-
-
-
-
-
-
-
Former
($)
($)
($)
(%)
Chum Darvall4
FY20
FY19
Michael Jefferies5
FY20
FY19
Total Remuneration
FY20
FY19
80,000
131,400
28,359
70,000
420,703
458,799
7,600
5,700
2,694
6,650
87,600
137,100
31,053
76,650
29,202
28,817
449,905
487,616
-
-
-
-
-
-
1 Australian superannuation is paid where applicable. New Zealand Kiwisaver is not paid.
2 Appointed Chairman on 28 February 2020, fee reflects a prorated increase received from this date.
3 Appointed Independent Non-Executive Director on 28 February 2020, FY20 fee is prorated.
4 Resigned as Chairman on 28 February 2020.
5 Resigned as Independent Non-Executive Director on 26 November 2019.
RESIMAC GROUP LTD2020 ANNUAL REPORT 32
32
RESIMAC GROUP LTD
33
10. Other Remuneration Information
10.1.4. KMP Share Ownership
10.1. Remuneration Governance
10.1.2. Remuneration & Nomination Committee
The table below sets out the number of shares held directly, indirectly or beneficially by the current and former KMP
10.1.1. Remuneration Governance &
Responsibility
The Resimac Board of Directors has responsibility
for setting and overseeing the Company’s
remuneration policies, practices and structure.
The Board considers recommendations made by
the Remuneration and Nomination Committee.
The remuneration framework and matters
considered by the Remuneration and Nomination
Committee and the Board include:
§ Review of Board size and composition (mix
of skills, qualifications, experience and other
competencies);
§ Identification and recommendation of
candidates to the Board for nomination as
members of the Board or its Committees;
§ Development and implementation process for
induction and orientation of new Directors;
§ Review and approval of Company objectives
and appropriate KPIs relevant to the KMP
annual short-term incentive arrangement, and
evaluate KMP performance in light of those
KPIs;
§ Review and approval of the remuneration
of KMP, Directors and senior management
(including total fixed remuneration, short-term
incentives and long-term incentives);
§ Approval of executive recruitment practices;
§ Succession planning; and
§ Diversity and inclusion in the workplace.
The Board has established a Remuneration and
Nomination Committee. This Committee has a
formal charter and is available on the Company’s
website www.resimac.com.au.
The Remuneration and Nomination Committee
members are:
§ Wayne Spanner – Chair; and
§ Susan Hansen
§ Warren McLeland
Committee changes:
§ Chum Darvall resigned 28 February 2020,
§ Duncan Saville stepped down 29 January 2020
and;
§ Michael Jefferies resigned 26 November 2019
as members.
The Remuneration and Nomination Committee
reviews and makes recommendations to the
Board on remuneration governance, policies,
practices and structure which will apply to
the KMP, senior management and the non-
executive directors. The Committee also
makes recommendations to the Board on the
Company’s overall remuneration framework.
The Remuneration and Nomination Committee
receives regular reports from Human Resources
and ensures it is abreast of all regulatory change.
The Committee meets at least 4 times per year.
10.1.3. Services From Remuneration Consultants
The Remuneration and Nomination Committee
may request advice from independent external
consultants where appropriate. These
consultants will be engaged directly by the
Remuneration and Nomination Committee.
The Company did not engage any remuneration
consultants during the year.
(including their related parties):
Non-Executive Directors
Warren McLeland
Susan Hansen
Wayne Spanner
Duncan Saville
Senior Executives
Scott McWilliam
Jason Azzopardi
Andrew Marsden
Danielle Corcoran
Former
Chum Darvall1
Michael Jefferies2
Mary Ploughman3
Held at
1 July 2019
11,996,695
107,023
-
Net
change
162,527
92,918
-
Held at
30 June 2020
12,159,222
199,941
-
253,913,646
554,841
254,468,487
266,017,364
810,286
266,827,650
1,001,600
-
1,001,600
25,000
165,000
190,000
-
8,152
-
-
82,199
90,351
1,034,752
247,199
1,281,951
1,787,078
1,714,691
N/A
3,501,769
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
270,553,885
1,057,485
268,109,601
1 Resigned as Chairman on 28 February 2020.
2 Resigned as Independent Non-Executive Director on 26 November 2019.
3 Ceased as KMP on 17 July 2019.
RESIMAC GROUP LTD2020 ANNUAL REPORT 34
34
RESIMAC GROUP LTD
35
10.1.5. Share Trading Restrictions
Set out below are the notice periods for each KMP.
Details regarding loans outstanding at the reporting date to KMP and their related parties, where the aggregate loan
Resimac Securities Trading Policy reflects the
Corporations Act 2001 prohibition on KMP
and their closely related parties entering into
any arrangement that would have the effect of
Scott McWilliam
Notice Period / Termination Payment:
§ Six months’ notice (or payment in lieu)
balance exceeded $100,000 at any time during the reporting period, are outlined below.
Name
Balance
1 July 2019
Balance
30 June 2020
Interest payable
for the year1
Highest balance
during the year
limiting the KMP’s exposure to risk relating to
§ May be terminated immediately for serious
Non-Executive Director
($)
($)
($)
($)
an element of their remuneration that remains
misconduct
subject to restrictions on disposal.
Resimac Directors, management team, and
certain members of their immediate family
and controlled entities are also required to
obtain consent and clearance in writing for
security trading during trading windows from
the Chairman or another Director. All other
employees must adhere to the Securities
Trading Policy and are restricted from trading
within the blackout periods.
The policy is available on the Corporate
Governance section of the Company’s website
at www.resimac.com.au. Breaches of the policy
are subject to disciplinary action, which may
include termination of employment.
Jason Azzopardi
Notice Period / Termination Payment:
§ Three months’ notice (or payment in lieu)
§ May be terminated immediately for serious
misconduct
Andrew Marsden
Notice Period / Termination Payment:
§ Three months’ notice (or payment in lieu)
§ May be terminated immediately for serious
misconduct
Danielle Corcoran
Notice Period / Termination Payment:
§ Three months’ notice (or payment in lieu)
§ May be terminated immediately for serious
10.1.6. Further Information on Remuneration
misconduct
10.1.6.1. Service Agreements
Each KMP has entered into an employment
contract with the Company. These contracts
have unlimited duration however may be
terminated with relevant notice.
All KMPs are entitled to receive payment in lieu
of notice of any accrued statutory entitlement
(i.e. annual and long service leave) on cessation
of their employment.
10.1.7. Related Party Transactions
Loans to KMP and their related parties are secured
residential mortgage loans provided in the ordinary
course of the Resimac Group Ltd mortgage lending
business. All loans have normal commercial terms.
No amounts have been written down or recorded as
specific provisions as the balances are considered
fully collectable.
Duncan Saville
5,211,424
9,548,343
257,496
9,759,652
Executive Director
Scott McWilliam2
Jason Azzopardi2
Danielle Corcoran
1 Interest charged on an arm’s-length basis.
2 Loan originated during FY20.
($)
-
-
($)
($)
($)
1,500,000
3,494
1,503,375
1,577,079
37,403
1,652,412
398,897
379,201
13,850
400,119
5,610,321
13,004,623
312,243
13,315,558
10.1.7.1. Other Transactions & Balances With KMP
From time to time, Directors of the Company or its controlled entities, or their Director-related entities, may purchase
goods or services from the Group. These purchases are on the same terms and conditions as those entered into by other
Group employees or customers and are trivial or domestic in nature.
This Directors’ report, including the remuneration report, is signed in accordance with a resolution of the Directors made
pursuant to s.298 (2) of the Corporations Act 2001.
On behalf of the Directors of Resimac Group Ltd.
Warren McLeland
Chairman
Sydney
25 August 2020
RESIMAC GROUP LTD2020 ANNUAL REPORT
36
36
RESIMAC GROUP LTD
37
Financial
Statements
Consolidated Statement of Profit or Loss
for the year ended 30 June 2020
Interest income
Interest expense
Net interest income
Fee and commission income
Fee and commission expense
De-recognition of investment in Associate (Finsure)
Gain on disposal of subsidiary (Paywise)
Other income
Employee benefits expense
Other expenses
Loan impairment expense
Profit before tax
Income tax expense
PROFIT AFTER TAX
Attributable to:
Owners of the parent
Non-controlling interest
Consolidated Statement of Comprehensive Income
for the year ended 30 June 2020
Note
FY20
$’000
FY19
$’000
56,007
47,185
-
(39)
(657)
(2,065)
522
(3,995)
(157)
(508)
(800)
1,199
669
(4,231)
Note
FY20
$’000
FY19
$’000
1
459,305
445,233
2
(270,680)
(327,380)
PROFIT AFTER TAX
Other comprehensive income, net of income tax
Items that will not be reclassified subsequently to profit or loss:
Reversal of prior year reserve on trust wind up
Fair value movement on investment in BNK Banking Corporation Limited (“BNK”)
through OCI, net of tax
188,625
117,853
Items that may be reclassified subsequently to profit or loss:
1
2
1
2
2
2
11,340
18,982
(36,088)
(31,515)
-
-
5,810
13,104
658
4,540
(35,886)
(37,658)
(26,358)
(24,208)
(22,012)
(2,966)
80,279
63,942
3
(24,272)
(16,757)
56,007
47,185
55,908
47,185
99
-
56,007
47,185
Changes in fair value of cash flow hedges
Tax effect
Currency translation differences
Other comprehensive income, net of tax
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
55,207
42,954
Attributable to:
Owners of the parent
Non-controlling interest
Earnings per share
Basic
Diluted
55,112
42,954
95
-
55,207
42,954
FY20
cents per
share
FY19
cents per
share
21
21
13.75
13.72
11.75
11.75
Notes to the consolidated financial statements are included on pages 42 to 130.
RESIMAC GROUP LTD2020 ANNUAL REPORT 38
2020 ANNUAL REPORT
39
39
Consolidated Statement of Financial Position
as at 30 June 2020
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Notes to the consolidated financial statements are included on pages 42 to 130.
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1
Consolidated Statement of Cash Flows
for the year ended 30 June 2020
Cash flows from operating activities
Interest received
Interest paid
Receipts from loan fees and other income
Payments to suppliers and employees
Payments of net loans to borrowers
Income tax paid
Net cash used in operating activities
Cash flows from investing activities
Payment for plant, equipment and intangible assets
Repayment of loans to related parties
Payments for new investments
Acquisition of subsidiary (IA Group)
Cash acquired on acquisition of subsidiary (IA Group)
Proceeds on disposal of Paywise
Cash on disposal of Paywise
Net cash used in investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Proceeds of loans sold to external party (Athena)
Proceeds from exercise of options
Payment of lease liabilities
Swap payments
Payment of dividends
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FY20
$’000
FY19
$’000
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(263,991)
(318,583)
46,728
51,674
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(150,270)
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(9,079)
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4
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(279)
(2,456)
(2,408)
(3,000)
(6,000)
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(2,000)
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(7,027,463)
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(2,090)
(9,949)
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Net cash provided by financing activities
3,635,724
1,715,774
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year (1 July)
Effects of exchange rate changes on cash balances held in foreign currencies
141,505
24,900
224,790
198,905
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Notes to the consolidated financial statements are included on pages 42 to 130.
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RESIMAC GROUP LTD2020 ANNUAL REPORT
42
2020 ANNUAL REPORT
43
43
Notes to the Consolidated
Financial Statements
About This Report
for the year ended 30 June 2020
About This Report
Resimac Group Ltd (“Resimac” or “the Company”) is a
§ is presented in Australian dollars with all values
for-profit company limited by shares incorporated and
rounded to the nearest thousand dollars ($’000)
domiciled in Australia whose shares are publicly traded
unless otherwise stated, in accordance with ASIC
on the Australian Securities Exchange. The nature of
Corporations (Rounding in Financial/Directors’
the operations and principal activities of Resimac and its
Reports) Instrument 2016/191;
entities that it controls (referred to as “the Group”) are
described in the segment information.
§ presents reclassified comparative information where
required for consistency with the current year’s
The consolidated general purpose financial report of the
presentation;
Group for the year ended 30 June 2020 was authorised
for issue in accordance with a resolution of the Directors
on 25 August 2020. The Directors have the power to
amend and reissue the financial report.
§ adopts all new and amended Accounting Standards and
Interpretations issued by the AASB that are relevant
to the Group and effective for reporting periods
beginning on or before 1 July 2019. Refer to Note 32
The financial report is a general purpose financial report
for further details.
which:
§ has been prepared in accordance with the
requirements of the Corporations Act 2001,
Australian Accounting Standards (AAS) and other
Key Judgements & Estimates
authoritative pronouncements of the Australian
In the application of the Group’s accounting policies, the
Accounting Standards Board (AASB) and International
Directors are required to make judgements, estimates
Financial Reporting Standards (IFRS) as issued by the
and assumptions about the carrying value of assets
International Accounting Standards Board (IASB);
and liabilities that are not readily apparent from other
§ has been prepared on a historical cost basis, except
for investments held by associates and certain
financial instruments which have been measured at
sources.
The estimates and associated assumptions are based on
historical experience and various other factors that are
fair value. The carrying values of recognised assets and
believed to be reasonable under the circumstances, the
liabilities that are the hedged items in fair value hedge
results of which form the basis of making judgements.
relationships, which are otherwise carried at amortised
Actual results may differ from these estimates.
cost, are adjusted to record changes in the fair values
attributable to the risks that are being hedged;
Judgements and estimates which are material to the financial report are
found in the following notes:
Note
Relates to
1
Recognition of revenue from contracts with customers
1 & 15
Net present value (“NPV”) of future trail commission: recognition
of future commissions receivable and payable
7
11
17
Impairment of other financial assets
Goodwill impairment
Provisions – long service leave
22 & 23
Impairment of financial assets
Basis of Consolidation
The consolidated financial statements comprise the financial statements of
the Group. A list of controlled entities (subsidiaries) at year end is contained in
Note 24.
The financial statements of subsidiaries are prepared for the same reporting
period as the parent Company, using consistent accounting policies.
Adjustments are made to bring into line any dissimilar accounting policies that
may exist.
Subsidiaries are consolidated from the date on which control is obtained to
the date on which control is disposed.
The Group controls an investee if and only if the Group has:
§ power over the investee (i.e. existing rights that give it the current ability to
direct the relevant activities of the investee);
§ exposure, or rights, to variable returns from its involvement with the
investee; and
§ the ability to use its power over the investee to affect its return.
In preparing the consolidated financial statements, all inter-company
balances and transactions, income and expenses and profits and losses
resulting from intra-Group transactions have been eliminated.
The acquisition of subsidiaries is accounted for using the acquisition method.
Refer to Note 24 for detail on the consolidation of special purpose vehicles.
RESIMAC GROUP LTD2020 ANNUAL REPORT 44
44
RESIMAC GROUP LTD
2020 ANNUAL REPORT
45
45
Foreign Currency
The Notes to the Financial Statements
As at the reporting date, assets and liabilities
The notes include information required to understand
of overseas subsidiaries are translated into
the financial statements and is material and relevant
Loans and advances: The Group granted COVID-19
hardship payment moratoriums to 10% of home loan
customers. In line with regulatory guidance, these loans
were not deemed in arrears during the moratorium
period. Therefore, management have raised a COVID-19
overlay based on forward looking macroeconomic
Australian dollars at the rate of exchange
at the balance sheet date and the income
statements are translated at the average
exchange rates for the year. The exchange
differences arising on the retranslation are
taken directly to a separate component of
environment. This provision is in addition to the AASB
equity.
to the operations, financial position and performance
of the Group. Information is considered material and
relevant if, for example:
§ the amount in question is significant because of its
size or nature;
§ it is important for understanding the results of the
Group;
Notes to the Consolidated Financial Statements
About this Report (for the year ended 30 June 2020)
COVID-19
COVID-19 has significantly impacted equity, debt,
Key statements of financial position items and related
commodity markets and the overall global economy. The
disclosures impacted by COVID-19 were:
Group has considered the impact of COVID-19 and other
market volatility in preparing its financial statements.
While the specific areas of judgement as noted on the
previous page remain unchanged, COVID-19 resulted
in the application of further judgement within those
identified areas. Given the rapidly evolving nature
of COVID-19 and the subsequent economic impact,
changes to the estimates and outcomes applied in the
measurement of the Group’s assets and liabilities may
arise in the future. Other than adjusting events that
provide evidence of provisions that existed at the end
of the reporting period, the impact of events that arise
after the reporting period will be accounted for in future
reporting periods.
As a consequence of COVID-19 and in preparing financial
statements, management:
§ Considered the financial impact on the Group
and areas of the financial statements affected to
determine the disclosures required, and evaluate
if any additional areas of judgement or estimation
uncertainty beyond what has been disclosed existed;
§ Updated forward-looking information (including
macroeconomic information) when measuring
expected credit losses to assess any significant
increase in credit risk, and for the impairment analysis
of financial and non-financial asset classes and
disclosures;
9 Expected Credit Loss (ECL) model provision at each
reporting period. Refer to note 6 and note 23.
Intangible assets: The Group conducted impairment
testing on goodwill at the reporting date to assess
whether the impact of COVID-19 has led to an asset
impairment. This testing requires an estimation of the
recoverable amount of the affected cash generating unit
to which the goodwill is allocated using a value in use
discounted cash flow methodology. Refer to note 11.
Property, plant and equipment and right-of-use assets:
Property, plant and equipment and right-of-use assets
were subject to impairment testing. Management
concluded no impairment was required.
Derivative assets and liabilities: Given recent market
volatility, the Group reviewed the appropriateness of
credit valuation adjustment to its valuations. The impact
of changes of inputs to the valuations is also considered
in terms of the classification of exposures in the fair value
hierarchy and transfers within the fair value hierarchy.
§ Assessed the measurement of assets and liabilities and
Hedge accounting: An assessment considering if
determined the impact thereon as a result of market
forecasted cash flows in cash flow hedge relationships
inputs and variables impacted by COVID-19;
remain highly probable at the reporting date. At 30
§ Evaluated information available after the reporting
date but before the issuance of the financial
statements (e.g. decisions regarding COVID-19) and
June 2020, the modelling of the hedged future cash
flows determined cash flow hedge relationships
remained highly probable and hedge accounting remains
updated the disclosures in the financial statements;
appropriate.
§ Reviewed external market communications to identify
other COVID-19 related impacts;
Investment in other financial assets: When assessing
the fair value of equity investments at 30 June 2020,
§ Reviewed public forecasts and experience from
the impact of COVID-19 on each of the investments
previous downturns.
operating model was considered.
Transactions in foreign currencies are
§ it helps to explain the impact of significant changes
initially recorded in the functional currency
in the Group’s business – for example, acquisitions
at the exchange rates ruling at the date
of the transaction. Monetary assets and
liabilities denominated in foreign currencies
are translated at the rate of exchange
ruling at the balance sheet date. Exchange
differences arising from the application of
these procedures are taken to the income
statement, with the exception of differences
on foreign currency borrowings that provide
a hedge against a net investment in a foreign
entity, which are taken directly to equity until
and impairment write-downs; or
§ it relates to an aspect of the Group’s operations
that is important to its future performance.
The notes are organised into the following sections:
Key numbers: provides a breakdown of individual
line items in the financial statements that the
Directors consider most relevant and summarises
the accounting policies, judgements and estimates
relevant to understanding these line items;
the disposal of the net investment, and then
Capital: provides information about the capital
recognised in the income statement. Tax
management practices of the Group and shareholder
charges and credits attributable to exchange
returns for the year;
differences on those borrowings are also
recognised in equity.
Other Accounting Policies
Significant and other accounting policies
that summarise the measurement basis
relevant to an understanding of the financial
statements are provided throughout the
notes to the financial statements.
Risk: details the Group’s exposure to various financial
risks, explains how these affect the Group’s financial
position and performance, and what the Group does
to manage these risks;
Group structure: explains the Group structure and
how changes have affected the financial position and
performance of the Group;
Unrecognised items: provides information regarding
items not recognised in the financial statements
but could potentially have an impact on the Group’s
financial position and performance; and
Other: provides information on items which require
disclosure to comply with AAS and other regulatory
pronouncements however, are not considered
critical in understanding the financial performance or
position of the Group.
RESIMAC GROUP LTD2020 ANNUAL REPORT 46
2020 ANNUAL REPORT
47
47
Notes to the Consolidated
Financial Statements
Segment Information
for the year ended 30 June 2020
Segment Information
AASB 8 Operating Segments requires operating
and expenses of IA Group from 1 January 2020 to 30
segments to be identified on the basis of internal reports
June 2020 are included in the FY20 consolidated financial
about components of the Group that are regularly
statements.
reviewed by the Board and executive management team
(the chief operating decision makers (CODM)) in order
to allocate resources to the segment and to assess its
performance.
Management have assessed the impact of IA Group on
its Group results as not material, and therefore does not
represent a reportable segment for the year ended 30
June 2020, notwithstanding IA Group is considered an
The Group has identified three reportable segments
operating segment.
based on the nature of the products and services
provided, the type of customers for those products and
services, the geographies where the business operates
and the existence of discrete and separate reporting and
management teams. The following summary describes
the operations in each of the Group’s reportable
segments.
The Group’s reportable segments under AASB 8 are:
1. Australian Lending Business
2. New Zealand Lending Business
Whilst the nature of the customers and products are
similar to the Australian Lending segment, given the
different jurisdiction and market conditions, management
believe it is appropriate to distinguish the result of New
Zealand from Australia.
Separating the Australian and New Zealand trading
business is supported by the operation of a dedicated
NZ board, NZ segment monthly management reporting,
Represents the distribution and lending businesses
separate regulatory requirements/oversight, and
currently captured under the Resimac and State
employees solely accountable for the NZ business
Custodians brands.
including a locally based Head of NZ.
The segment contains the bulk of the Australian based
3. Paywise Business
income and expense. It incorporates the new business
settled through the Australian distribution channels,
the margin net of funding costs of the on-balance
sheet home loan portfolios, and the upfront and trail
commission on the white label loan portfolio.
On 1 January 2020, Resimac purchased a controlling
stake in IA Group who specialise in both Australian based
secured commercial and consumer lending. The income
On 24 May 2019, the Group sold its 100% equity stake
in its wholly owned subsidiary Paywise Pty Limited for
total cash consideration of $14 million in a management
buyout agreement. The economic effective date of this
transaction is 30 April 2019.
The income and expenses of Paywise up to 30 April 2019
are included in the comparative column below.
Information regarding these segments is presented below. The accounting policies of the reportable segments are the
same as the Group’s accounting policies.
The following is an analysis of the Group’s revenue and results by reportable operating segments:
Australian
Lending
New Zealand
Lending
Paywise1
Consolidated
FY20
$’000
FY19
$’000
FY20
$’000
FY19
$’000
FY20
$’000
FY19
$’000
FY20
$’000
FY19
$’000
Revenue from external customers
447,982
439,646
23,321
22,056
Total segment revenue
447,982
439,646
23,321
22,056
Segment results before tax,
depreciation, amortisation, finance
costs and impairment
106,740
69,498
3,227
2,834
Depreciation and amortisation
(1,021)
(1,090)
Loan impairment
(21,653)
(3,041)
Finance costs
(6,283)
(4,334)
(11)
(359)
(361)
(11)
75
(263)
Segment results before income tax
77,783
61,033
2,496
2,635
Income tax expense2
PROFIT AFTER TAX
-
-
-
-
-
-
-
7,053
471,303
468,755
7,053
471,303
468,755
432
109,967
72,764
(158)
(1,032)
(1,259)
-
-
(22,012)
(2,966)
(6,644)
(4,597)
274
80,279
63,942
(24,272)
(16,757)
56,007
47,185
1 FY19 includes Paywise segment for the period from 1 July 2018 to 30 April 2019.
2 Income tax expense is grouped on a consolidated basis, not by reportable operating segment.
RESIMAC GROUP LTD2020 ANNUAL REPORT 48
48
RESIMAC GROUP LTD
49
Notes to the Consolidated Financial Statements
Segment Information (for the year ended 30 June 2020)
The following is an analysis of the Group’s assets and liabilities by reportable operating segment:
Australian
Lending
New Zealand
Lending
Paywise
Consolidated
FY20
$’000
FY19
$’000
FY20
$’000
FY19
$’000
FY20
$’000
FY19
$’000
FY20
$’000
FY19
$’000
Notes to the Consolidated
Financial Statements
Key Numbers
for the year ended 30 June 2020
Segment assets
12,444,285
10,210,822
582,406
505,635
12,444,285
10,210,822
582,406
505,635
Segment liabilities
(12,201,825) (10,019,239)
(555,347)
(488,099)
Net assets excl. tax
242,460
191,583
27,059
17,536
-
-
-
-
-
-
-
-
Tax liabilities3
NET ASSETS
3 Tax liabilities are grouped on a consolidated basis, not by reportable operating segment.
13,026,691
10,716,457
1. Revenue
13,026,691
10,716,457
1.1. Revenue Streams
The Group generates revenue primarily from net interest margin on principally funded loans, annuity trail income on non-
principally funded loans and other fee income.
(12,757,172)
(10,507,338)
269,519
209,119
(27,833)
(12,995)
241,686
196,124
Revenue from contracts with customers
Interest income
Loans and advances
Bank deposits
Discount unwind on NPV of trail commission
Other income
Total revenue
Recognition & Measurement
Interest Income - Loans & Advances
FY20
$’000
FY19
$’000
11,340
18,982
454,962
438,895
1,625
2,718
3,152
3,186
459,305
445,233
658
4,540
471,303
468,755
Revenue arising from issuing residential loans are initially
which revenue is recognised is referred to as the effective
recognised at the fair value of the consideration received
interest rate and is equivalent to the rate that effectively
or receivable when it is probable that future economic
discounts estimated future cash flows throughout the
benefits will flow to the Group and these benefits can be
estimated life of the net carrying value of the loan.
measured reliably.
Acquisition costs are also spread across the estimated
Loans and advances are initially recognised at fair value.
life of the loan.
Subsequent to initial recognition, the loans are measured
Loans and advances in arrears or under a COVID-19
at amortised cost using the effective interest method
hardship payment moratorium at 30 June 2020 do not
over the estimated actual (but not contractual) life of
impact interest income. Interest income continues to
the mortgage loan, taking into account all income and
accrue on loans in arrears or under hardship payment
expenditure directly attributable to the loan.
moratoriums. Consideration for potential future credit
Interest income on loans and advances is recognised as it
accrues using the effective interest method. The rate at
losses on loans in arrears or under hardship payment
moratoriums is reflected in Note 23.
RESIMAC GROUP LTD2020 ANNUAL REPORT
50
2020 ANNUAL REPORT
5151
Notes to the Consolidated Financial Statements
Key Numbers (for the year ended 30 June 2020)
Interest Income - Bank Deposits
This comprises interest income on funds invested. Interest income
is recognised as it accrues, using the effective interest method.
Other Incomes
Other income includes various items including but not limited to:
§ changes in fair value of interest rate swaps through profit or
loss; and
§ payment received under operating leases as income on a
straight-line basis over the lease (office sub-lease).
Revenue From Contracts with Customers
Revenue is based on the consideration specified in a contract
with a customer. The Group recognises revenue when it transfers
control over a good or service to a customer.
The following table provides information about the nature and
timing of the satisfaction of performance obligations in contracts
with customers, including significant payment terms, and the
related revenue recognition policies.
Resimac Group Ltd is a for-profit
Company limited by shares
incorporated and domiciled in
Australia whose shares are publicly
traded on the Australian
Securities Exchange.
CLASSIFICATION & MEASUREMENT OF REVENUE
Timing
Type of
service
Nature, timing of satisfaction of
performance obligations, significant
payment terms, significant judgements
used
Revenue Recognition Policy under
AASB 15
At a point in
Mortgage
Commission from originating white label
Once the Group has referred a
time
origination
loans.
revenue
The performance obligations are satisfied
at the point in time the loan is settled.
Non-ongoing performance conditions are
attached to the upfront fee.
successful loan application to the
lender, its performance obligations
have been met. As such, revenue is
recognised at the point in time the
loan is settled. The expected value is
estimated based on historic experience.
Provisions for clawback of the upfront
fee are recognised within a period of
time post-settlement and is a variable
consideration.
At a point in
Loan
Trail commission income on white label loans,
Revenue is recognised at the point
time
management
based on the individual monthly loan balance
in time the loan is being settled and
revenue
outstanding each month. Trail ceases once
performance obligations are satisfied
the loan is discharged.
according to the contracts with the
The contracts with the funders include
funders.
performance obligations which must be
The present value of the trailing
satisfied in order to be paid trail commission
commission receivable is recognised
(e.g. the loan not being in arrears).
as a contract asset and measured
using the expected value method with
variable consideration at a point in time.
At a point in
Net loan fees
Loan fees paid by the borrower such as
Revenue is recognised when the
time
application, discharge, settlement fees etc.
transaction is completed and the
The performance obligation for these fees is
performance obligations are met.
met at a point in time (settlement, discharge
etc) when the fee is charged to the borrower.
1.2. Disaggregation of Revenue From Contracts with Customers
In the following table, revenue from contracts with customers is disaggregated by primary geographical market, major
service lines and timing of revenue recognition. The table also includes a reconciliation of the disaggregated revenue
with the Group’s reportable segments (See “Segment Information” on page 47).
RESIMAC GROUP LTD2020 ANNUAL REPORT 52
52
RESIMAC GROUP LTD
2020 ANNUAL REPORT
53
53
Notes to the Consolidated Financial Statements
Key Numbers (for the year ended 30 June 2020)
Australian
Lending
New Zealand
Lending
Paywise
Consolidated
FY20
$’000
FY19
$’000
FY20
$’000
FY19
$’000
FY20
$’000
FY19
$’000
FY20
$’000
FY19
$’000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Primary geographical markets
Australia
New Zealand
Major service lines
Mortgage origination
Loan management
Salary packaging
Vehicle financing commission
Net loan fees
10,934
13,130
-
-
10,934
13,130
-
7,307
-
-
2,532
7,150
-
-
3,627
3,448
10,934
13,130
Timing of revenue recognition
Service transferred at a point in time
10,934
13,130
Revenue from contracts with
customers
10,934
13,130
-
406
406
-
-
-
-
406
406
406
406
-
295
295
-
-
-
-
295
295
295
295
Interest income
Other income
External revenue as reported in
segment information
434,497
422,305
24,808
22,756
2,551
4,211
(1,893)
(995)
447,982
439,646
23,321
22,056
Recognition & Measurement
1.3. Assets Related to Contract with Customers
The Group has recognised the following assets related to contracts with customers.
Contract assets - present value of future trail commission receivable
Current
Non-current
5,557
10,934
18,687
-
406
295
5,557
11,340
18,982
-
-
2,679
2,878
-
7,307
-
-
-
4,033
2,532
7,150
2,679
2,878
3,743
5,557
11,340
18,982
5,557
11,340
18,982
5,557
11,340
18,982
172
459,305
445,233
1,324
658
4,540
FY20
$’000
11,587
30,367
41,954
FY19
$’000
14,940
33,708
48,648
7,053
471,303
468,755
date.
Initial Recognition
Key Judgements
Expected value of future trail commission receivable is
recognised on the origination of white label settlements.
This represents the NPV of the expected future trail
commission receivable under the origination and
management agreement, less ongoing servicing costs
not covered by transaction fees.
The initial expected value of trail commission receivable
is determined by using the discounted cash flow valuation
technique.
Subsequent Measurement
Subsequent to initial recognition, the future trail
commission receivable is measured at expected value.
The carrying amounts of the trail commissions receivable
are adjusted to reflect actual and revised estimated
cash flows by recalculating the carrying amount through
computing the present value of estimated future cash
flows at the effective interest rates. The resulting
adjustment is recognised as income or expense in the
statement of comprehensive income.
A remeasurement of the underlying cash flows relating to
the trail commission receivable occurs at each reporting
Key Estimates & Assumptions
The key estimates and assumptions underlying the
remeasurement of the estimated future cash flows
include the:
§ prepayment rate; and
§ discount rate.
The recognition of the future trail commission
receivable and payable (and resulting revenue/
expense) is an area of management judgement due
to the different recognition criteria existing within
the accounting standards. Decisions around key
inputs potentially have a material impact on the
balances.
Management judgement is required with respect to
the determination of:
§ Prepayment rate
Of all the key inputs for NPV modelling, it is
prepayment or run-off rates to which the model
is most sensitive. In observing prior years’ actual
run-off performance, there can be variations over
time of up to 25% on individual seasoning bands
and variations of over 10% for year-on-year overall
run-off.
In order to manage both volatility of rates over time
and the uncertainty associated with this modelling,
a conservative run-off buffer of 25% is included in
the valuation by management.
§ Discount rates
For the purposes of the valuation technique
required by the standard, the discount rate is set
each year and remains unchanged for that tranche
of loans for the remainder of the loan’s life.
The discount rate is currently set at 6%,
incorporating risk free rates and estimates of the
credit risk associated with the counterparties
FY20
FY19
providing the trail income, and remains unchanged
Weighted average loan life (years)
Discount rate
3.5
6%
3.1
6%
compared with FY19.
Given trail income receivables are due from strongly
rated major financial institutions, this credit risk is
Contract Assets - Present Value of Future Trail Commission Receivable
Weighted average loan life.
regarded as appropriate.
The contract assets primarily relate to the Group’s rights to consideration for trail commission. The Group receives trail
commissions from lenders on white label settled loans over the life of the loan based on the loan balance outstanding. The
contract assets are transferred to receivables when the rights become unconditional.
The methodology in calculating the weighted average
loan life uses the commonly accepted Standard and
Poor’s definition.
RESIMAC GROUP LTD2020 ANNUAL REPORT 54
2020 ANNUAL REPORT
55
55
Notes to the Consolidated Financial Statements
Key Numbers (for the year ended 30 June 2020)
2. Expenses
Interest
Bond and warehouse facilities
Amortisation – bond issue costs
Discount unwind on NPV of trail commission
Corporate facility
Interest on lease liabilities
Fee and commission
Mortgage origination
Loan management
Borrowing costs
Other financing costs
Employee benefits
Remuneration, bonuses, superannuation and on-costs
Share-based payments
Other
Marketing
IT
Audit and other professional fees
Rent and occupancy costs
Insurance
Depreciation and amortisation
Depreciation charge of right-of-use assets
Other
Loan impairment
Recognition & Measurement
2.1. Interest
Bond & Warehouse Facilities
2.2. Fee & Commission
Mortgage Origination
Borrowing costs are recognised in the profit or loss in
Upfront commission payments for white label home
FY20
$’000
FY19
$’000
259,467
317,198
8,517
1,311
767
618
6,987
1,525
1,670
-
270,680
327,380
434
1,788
22,898
19,353
6,730
6,026
5,777
4,597
the period in which they are incurred.
Borrowing costs include:
§ interest on deposits;
§ coupon payments on notes issued; and
§ other interest paid on non-securitised funding
facilities and are recognised under the effective
interest rate method. See further detail under Note 1.
Deferred Costs
Transaction costs representing mortgage insurance
premiums and upfront broker commissions related to
originating on balance sheet loans are capitalised on
the statement of financial position of the Group. These
costs are amortised to the statement of profit or loss
over the period over which the Group is expected to
36,088
31,515
receive interest income.
35,305
37,614
581
44
35,886
37,658
3,277
6,561
5,719
1,395
1,369
1,032
1,920
5,085
3,570
4,826
3,745
4,011
1,017
1,259
-
5,780
26,358
24,208
22,012
2,966
391,024
423,727
The amortisation rate closely aligns with the rate of
reduction of the underlying mortgage portfolio. The
rate of reduction of the outstanding mortgage portfolio
is calculated based on the historical behaviour of the
portfolio over the past 10 years.
On a consolidated basis these transaction costs are
included as part of the amortised cost of the loans per
Note 6.
Amortisation – Bond Issue Costs
Transaction costs incurred by the Group in facilitating
the issue of debt securities by the special purpose
vehicles, are capitalised on the statement of financial
position of the parent entity as bond issue costs. These
costs are amortised to the statement of profit or loss
over the average expected life of the debt securities
using the effective interest method.
On a consolidated basis, these costs are included as part
of the amortised cost of the debt securities.
loans to mortgage originators, are recognised
at settlement as the services performed by the
originator are principally performed upfront.
Loan Management
For white label home loans, trail commission
payments to brokers and commissioned staff based
on the loan book balance outstanding.
Borrowing Costs
Fees directly related to public RMBS deals.
Other Financing Costs
Other financing costs include trustee and servicer
fees, liquidity fees, rating agency fees, and other
financing related fees.
2.3. Employee Benefits
Employee benefits expense includes remuneration,
bonuses, superannuation, and associated on-costs
as incurred.
The policy relating to share-based payments is set
out in Note 31.
2.4. Other
This mainly comprises bank fees, general
administration expenses and unrecoverable GST.
These items are expensed when incurred.
2.5. Loan Impairment
Loan impairment expenses relates to the movement
in the:
§ specific provision;
§ collective provision movements for loan
impairment; and
§ direct loan write-offs recognised during the year.
See Note 6 for detail on impairment of loans and
advances.
RESIMAC GROUP LTD2020 ANNUAL REPORT 56
56
RESIMAC GROUP LTD
57
Notes to the Consolidated Financial Statements
Key Numbers (for the year ended 30 June 2020)
3. Income Tax
3.1. Income tax recognised in profit or loss
Current tax
In respect of the current year
In respect of prior years
Translation loss on foreign currency assets and liabilities
Deferred tax
In respect of the current year
In respect of prior years
FY20
$’000
FY19
$’000
26,754
15,368
35
22
(175)
(14)
26,811
15,179
(2,494)
(45)
(2,539)
2,368
(790)
1,578
Total income tax expense recognised in the current year
24,272
16,757
The income tax expense for the year can be reconciled to the accounting profit as follows:
Profit before tax
Income tax expense calculated at 30% (FY19: 30%)
Effect of expenses that are not deductible in determining taxable profit
Effect of different tax rates of subsidiaries operating in other jurisdictions
Share-based payments
Difference in tax and accounting treatment of Paywise disposal
Other items
Adjustments recognised in the current year in relation to the deferred tax of prior years
Adjustments recognised in the current year in relation to the current tax of prior years
Income tax expense recognised in profit or loss
80,279
63,942
24,084
19,183
344
1
(54)
-
(93)
98
(8)
-
(1,609)
58
24,282
17,722
(45)
35
(790)
(175)
24,272
16,757
The tax rate used for FY20 and FY19 reconciliations above is the corporate tax rate of 30% payable by corporate entities in
Australia on taxable profits under tax law in that jurisdiction.
3.2. Current tax assets and liabilities
Current tax payable
FY20
$’000
FY19
$’000
(24,293)
(6,690)
(24,293)
(6,690)
3.3. Deferred Tax Balances
The following is the analysis of deferred tax assets (DTA) and deferred tax liabilities (DTL) presented in the consolidated
FY20
$’000
FY19
$’000
20,989
15,615
(24,529)
(21,920)
(3,540)
(6,305)
Current
year
recognised
in profit
or loss
$’000
Opening
balance
$’000
Previously
unrecognised
in profit
or loss
$’000
Recognised
directly in
equity
$’000
Recoup
tax loss
against tax
liability
$’000
Acquisition
of IA Group
$’000
Closing
balance
$’000
statement of financial position:
Deferred tax assets
Deferred tax liabilities
FY20
DT in relation to:
Doubtful debts
Plant, equipment and software
Deferred mortgage insurance
Employee entitlements
Net provision for lease make good
Other accrued expenses
Blackhole expenditure
Discount on loan
Tax losses carried forward
4,111
82
358
1,069
60
2,142
437
(1)
103
5,330
(49)
(106)
39
-
(164)
(203)
-
77
Trail commission payable
7,091
(799)
Lease liability
Shares
Share-based payments
Lease incentives
DT in relation to:
Capitalised incentive commission
Loans and advances
Deferred bond issue cost
Derivatives
Unpaid superannuation
92
41
-
30
40
-
173
-
15,615
4,338
10,513
(4,219)
2,736
(1,663)
(40)
1,942
1,743
(116)
170
(7)
Trail commission receivable
14,594
(2,001)
Accrued income and other
(1)
21,920
(6,305)
113
1,844
2,494
-
-
-
(1)
-
-
-
-
-
25
7
-
13
-
44
(1)
-
-
-
-
-
-
(1)
45
(8)
-
-
-
-
-
-
-
-
-
145
282
157
-
576
(13)
-
(3)
156
-
-
-
140
436
-
-
-
-
-
-
-
-
(106)
-
-
-
-
-
149
(31)
-
23
-
4
-
-
342
-
35
-
-
-
9,582
2
252
1,130
60
1,982
234
(1)
416
6,317
319
323
343
30
(106)
522
20,989
-
-
-
-
-
-
-
-
-
-
-
-
(3)
-
629
626
12,441
(2,476)
2,617
(1,337)
(50)
12,593
741
24,529
(106)
(104)
(3,540)
RESIMAC GROUP LTD2020 ANNUAL REPORT 58
2020 ANNUAL REPORT
59
59
Notes to the Consolidated Financial Statements
Key Numbers (for the year ended 30 June 2020)
Current
year
recognised
in profit
or loss
$’000
Opening
balance
$’000
Previously
unrecognised
in profit
or loss
$’000
Recognised
directly in
equity
$’000
Recoup
tax loss
against tax
liability
$’000
Disposal of
Paywise
$’000
Closing
balance
$’000
3.5. Deferred Tax
Deferred tax is recognised on temporary differences
between the carrying amounts of assets and liabilities
in the consolidated financial statements and the
corresponding tax base used in the computation of
taxable profit.
The measurement of DTLs and DTAs reflects the tax
consequences that would follow from the manner in
which the Group expects, at the end of the reporting
period, to recover or settle the carrying amount of
its assets and liabilities.
Deferred tax liabilities (DTLs) are generally recognised
3.6. Current and Deferred Tax for the Year
FY19
DT in relation to:
Doubtful debts
Plant, equipment and software
Deferred mortgage insurance
Employee entitlements
Net provision for lease make good
Other accrued expenses
Blackhole expenditure
Discount on loan
Tax losses carried forward
1,199
2,170
374
1,461
446
1,173
60
2,405
701
-
964
368
(171)
(88)
27
-
(28)
(264)
3
-
(1,196)
-
(3)
-
(166)
-
(4)
-
Trail commission payable
11,356
(1,598)
(2,667)
Lease Liability
Derivatives
Shares
Lease incentives
28
(5)
-
30
64
5
(1,743)
-
-
-
899
-
-
-
-
-
-
-
-
-
(861)
-
-
-
-
-
-
(12)
-
4,111
82
358
(128)
1,069
-
(69)
-
-
-
-
-
-
-
-
60
2,142
437
(1)
103
7,091
92
-
41
30
-
-
-
-
-
-
-
-
-
-
-
885
-
18,993
(3,425)
(1,938)
3,055
(861)
(209)
15,615
DT in relation to:
Capitalised incentive commission
Loans and advances
Deferred bond issue cost
Derivatives
Unpaid superannuation
11,915
(3,339)
2,277
(1,176)
-
1,368
(880)
455
712
(40)
Trail commission receivable
17,266
(2,672)
(2,790)
-
-
-
-
-
Accrued income and other
(63)
-
62
20
-
4
(1,199)
-
-
-
26,880
(1,057)
(2,728)
(1,175)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10,513
(4,219)
2,736
(1,663)
(40)
14,594
(1)
21,920
(7,887)
(2,368)
790
4,230
(861)
(209)
(6,305)
Recognition & Measurement
Income tax expense represents the sum of the tax currently payable and deferred tax.
3.4. Current Tax
Tax payable is based on taxable profit for the year. Taxable profit differs from ‘profit before tax’ as reported in the consolidated
statement of profit or loss and other comprehensive income due to a mix of timing and non-assessable items. The Group's
current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
for all taxable temporary differences.
Deferred tax assets (DTAs) are generally recognised for
all deductible temporary differences to the extent that
it is probable that taxable profits will be available against
which those deductible temporary differences can be
utilised. Such DTAs and DTLs are not recognised if the
temporary difference arises from the initial recognition
(other than in a business combination) of assets and
liabilities in a transaction that affects neither the taxable
profit nor the accounting profit.
In addition, DTLs are not recognised if the temporary
difference arises from the initial recognition of goodwill.
DTLs are recognised for taxable temporary differences
associated with investments in subsidiaries and
associates, and interests in joint ventures, except
where the Group is able to control the reversal of
the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable
future.
DTAs arising from deductible temporary differences
associated with such investments and interests are only
recognised to the extent that it is probable that there
will be sufficient taxable profits against which to utilise
the benefits of the temporary differences and they are
expected to reverse in the foreseeable future.
The carrying amount of DTAs is reviewed at the end of
each reporting period and reduced to the extent that
it is no longer probable that sufficient taxable profits
will be available to allow all or part of the asset to be
recovered.
DTLs and DTAs are measured at the tax rates that are
expected to apply in the period in which the liability is
settled or the asset realised, based on tax rates (and tax
laws) that have been enacted or substantively enacted
by the end of the reporting period.
Current and deferred tax are recognised in the
statement of comprehensive income, except when
they relate to items that are recognised in other
comprehensive income or directly in equity, in
which case, the current and deferred tax are also
recognised in other comprehensive income or
directly in equity respectively. Where current tax or
deferred tax arises from the initial accounting for a
business combination, the tax effect is included in
the accounting for the business combination.
3.7. Tax Effect Accounting by Members of the Tax
Consolidated Group
Resimac Group Ltd and its wholly-owned Australian
controlled entities have implemented the tax
consolidation legislation. The head entity Resimac
Group Ltd, and the controlled entities in the tax
consolidated group continue to account for their
own current and deferred tax amounts. The Group
has applied the group allocation approach in
determining the appropriate amount of current
taxes and deferred taxes to allocate to members
of the tax consolidated group. The current and
deferred tax amounts are measured in a systematic
manner that is consistent with the broad principles in
AASB 112 Income Taxes.
In addition to its own current and deferred tax
amounts, the head entity also recognised current
tax liabilities (or assets) and the deferred tax assets
arising from unused tax losses and unused tax
credits assumed from controlled entities in the
Resimac tax consolidated group.
RESIMAC GROUP LTD2020 ANNUAL REPORT 60
60
RESIMAC GROUP LTD
61
Notes to the Consolidated Financial Statements
Key Numbers (for the year ended 30 June 2020)
3.8. Nature of the Tax Funding Agreement
Members of the Group have entered into a tax funding agreement. Under the funding agreement
the allocation of tax within the Group is based on a group allocation. The tax funding agreement
requires payments to/from the head entity to be recognised via an inter-entity receivable (payable)
which is at call.
The allocation of taxes under the tax funding agreement is recognised as an increase or decrease in
the subsidiaries’ intercompany accounts with the tax consolidated group head company, Resimac
Group Ltd. The amounts receivable or payable under the tax funding agreement are due upon
receipt of the funding advice from the head entity, which is issued as soon as practical after the end
of each financial year.
Key Judgement
The Group’s accounting for taxation requires management’s judgement in assessing whether
deferred tax assets and certain deferred tax liabilities are recognised on the statement of
financial position. Deferred tax assets, including those arising from unrecouped tax losses,
capital losses and temporary differences, are recognised only where it is considered more
likely than not that they will be recovered, which is dependent on the generation of sufficient
future taxable profits.
Assumptions about the generation of future taxable profits depend on management’s
estimates of future cash flows. These depend on estimates of future income, operating costs,
capital expenditure, dividends and other capital management transactions.
Judgements and assumptions are also required about the application of income tax legislation.
These judgements and assumptions are subject to risk uncertainty, hence there is a possibility
that changes in circumstances will alter expectations, which may impact the amount of
deferred tax assets and deferred tax liabilities recognised on the statement of financial
position and the amount of other tax losses and temporary differences not yet recognised.
In such circumstances, some or all of the carrying amounts of recognised deferred tax assets
and liabilities may require adjustment, resulting in a corresponding credit or charge to the
consolidated statement of profit or loss and other comprehensive income.
3.9. COVID-19 Tax Relief
During the year, the Group utilised the following Federal/State COVID-19 tax concessions:
1. Delayed PAYG Company Tax Instalments for FY20 until 1st December 2020: $12.2m
2. Victorian Payroll Tax relief: $0.07m
4. Cash & Cash Equivalents
Cash at bank and on hand
Cash collections account1
Restricted cash2
Reconciliation of profit after tax to the net cash flows from operating activities
Profit after tax
Non-cash items
Depreciation and amortisation
Depreciation charge of right-of-use assets
Amortisation of bond issue costs
Gain on derecognition of investment in Finsure, net of tax
Gain on disposal of Paywise
Fair value movement on interest rate swaps
Loan impairment movement
Net loss on disposal of non-current assets
Present value of future trail commission income
Present value of future trail commission expense
Share-based payments expense
Discount on mortgage
(Increase)/decrease in assets
Trade and other receivables
Loans and advances
Other assets
Impairment allowance account
Increase/(decrease) in liabilities
Trade and other payables
Current tax payable
Interest-bearing liabilities
Provisions
Deferred tax liabilities
Note
FY20
$’000
FY19
$’000
27,757
10,566
336,730
212,723
1,500
1,501
22
365,987
224,790
56,007
47,185
2
2
2
2
2
1,032
1,920
8,517
-
-
3,271
22,012
-
6,694
(2,104)
581
(442)
1,259
-
6,987
(4,067)
(13,104)
(419)
2,966
59
8,939
(4,924)
44
-
2,147
(3,389)
(3,583,219)
(1,718,453)
23
(2,254)
(176)
(537)
(380)
(7,126)
19,522
4,133
(13,007)
(9,218)
168
(4,357)
20
1,403
Net cash flows used in operating activities
(3,483,869)
(1,688,418)
1 Cash collections account includes monies in the Special Purpose Vehicles and securitisation trusts on behalf of members in those Trusts and various
clearing accounts. These funds are not available for operational use.
2 Cash held in trust as collateral.
RESIMAC GROUP LTD2020 ANNUAL REPORT
62
2020 ANNUAL REPORT
63
63
Notes to the Consolidated Financial Statements
Key Numbers (for the year ended 30 June 2020)
Recognition & Measurement
Cash comprises cash on hand and demand deposits. Cash
Cash at bank earns interest at floating rates based on
equivalents are short-term, liquid investments readily
daily bank deposit rates. Short-term deposits are made
convertible to known amounts of cash, not subject to
for varying periods of between one day and three months,
significant risk of changes in value, and have a maturity of
depending on the immediate cash requirements of the
three months or less at the date of acquisition.
Group, and earn interest at the respective short-term
deposit rates.
5. Trade & Other Receivables
Current
Fee and commission receivable
Prepayments
GST receivable
Deferred consideration for sale of Paywise
Sundry receivable
Non-current
Deferred consideration for sale of Paywise
Recognition & Measurement
Note
22
22
FY20
$’000
1,050
2,088
641
750
445
4,974
FY19
$’000
2,493
2,029
1,153
1,000
3,024
9,699
1,000
1,000
All receivables are derived from the normal course of
Deferred consideration for sale of Paywise
business. No maturity dates are specified as they are
normally settled within twelve months. There are no long
term outstanding receivables as at the reporting date.
Trade receivables are recognised initially at fair value
and subsequently measured at amortised cost using
the effective interest method, less an allowance for
impairment. Trade receivables are due from Australian
financial institutions and management believe no risk
exists to its collectability.
Fee & Commission Receivable
Under the terms of the sale of Paywise to Howjack
Holdings Pty Ltd in April 2019, deferred consideration of
two $1m instalments were payable in April 2020 and April
2021. Due to cashflow impacts resulting from COVID-19,
the acquirer Howjack Holdings Pty Ltd requested the $1m
instalment payable in April 2020 be delayed into quarterly
$250,000 instalments. This deferred arrangement was
granted on the condition no repayments would be made
to secured lenders prior to all deferred consideration
instalments are paid to the Group. The 1st instalment of
$250,000 was received during the year.
Upfront and trail commission have settlement terms of
30 days. This is initially recognised at the fair value of the
Management believe the deferred consideration remains
fully collectable at 30 June 2020.
consideration receivable.
Sundry Receivable
This relates to amounts received within the SPV’s on the last day of the reporting period.
6. Loans & Advances
Gross loans and advances
Loans and advances
Capitalised incentive costs
Capitalised mortgage insurance costs
Deferred mortgage fee
Loans from related parties
Less: allowance for impairment
Current
Non-current
Impairment allowances
Collective allowance
Specific allowance
Movement in impairment allowances
Balance at 1 July
Adoption of AASB 9
Acquisition of IA Group
Provided for during the year
§ Specific
§ Collective
Written off
Balance at 30 June
Note
FY20
$’000
FY19
$’000
12,518,394
10,337,020
41,624
35,263
94
214
(17,400)
(14,137)
(2)
(2)
12,542,710
10,358,358
(36,698)
(16,445)
22
12,506,012
10,341,913
2,884,823
2,382,422
9,657,887
7,975,936
12,542,710
10,358,358
30,641
10,869
6,057
5,576
36,698
16,445
16,445
-
495
1,891
20,121
(2,254)
6,594
7,422
-
2,511
455
(537)
36,698
16,445
RESIMAC GROUP LTD2020 ANNUAL REPORT 64
64
RESIMAC GROUP LTD
65
Notes to the Consolidated Financial Statements
Key Numbers (for the year ended 30 June 2020)
Recognition & Measurement
All loans and advances are initially recognised at fair value plus directly attributable
transaction costs, and subsequently measured at amortised cost using the effective
interest method.
Amortised cost is calculated by taking into account any fees paid or received
between parties to the contract that are an integral part of the effective interest
rate, transactions costs, and all other premiums or discounts on acquisition, over the
period to maturity.
Gains and losses are recognised in the statement of comprehensive income when
the loans and advances are derecognised or impaired, as well as through the
amortisation process.
Loans Past Due but Not Impaired
Payment terms of these loans have not been renegotiated, however no further
advances are provided until payment is made. The Group is in direct contact with
relevant borrowers to enter into payment arrangements which will bring the account
fully up to date within an acceptable period.
For Prime Insured loans expected recoverable amounts are adjusted to reflect lower
than 100% Lenders Mortgage Insurance (LMI) recovery where applicable e.g. due
to costs associated with maintaining the security value within the terms of the LMI
agreement (i.e. other than fair wear and tear). They are also reduced by the amount
of higher rate (penalty) interest and fees related to loans in arrears which are not
covered by LMI.
Loans with payments outstanding less than one month are generally rectified by
the borrower within a short period of time, i.e. within the same month. Loans in this
category are less likely to be representative of loans with underlying repayment
problems.
Impairment & Provisioning
AASB 9 requires an Expected Credit Loss model (ECL) at each reporting date
to reflect changes in credit risk since initial recognition of the trade receivables.
Impairment policy of loans and advances is included in Note 22.
COVID-19
The long-term impact to the mortgage portfolio of the
The COVID-19 provision overlay is based on the following
COVID-19 pandemic remains difficult to forecast. The
portfolio analysis:
timeframe for the economy to return to pre pandemic
levels is unknown, driving a sustained period of higher
unemployment and lower GDP, which may impact property
prices.
§ Segment the portfolio by Australia and NZ
§ Segment the portfolios by Prime and Specialist
§ Segment the Prime book by LMI and Non LMI loans
§ Segment Prime and Specialist portfolios by Dynamic
The Group discloses expected future credit losses using
LVR
an expected credit loss (ECL) model, in line with AASB
9 requirements. The ECL model includes a base case
macroeconomic forecast assuming the following:
§ A contraction in Australian GDP of 5-6% in 2020, with GDP
growth of 4-5% in 2021, in line with April and June IMF
forecasts
§ A decline of 10% in property prices in FY21, stabilising in
FY22 and beyond
The COVID-19 overlay was derived by analysing the
hardship portfolio with three sequential steps:
1. Exclude mortgage insured (LMI) prime loans
Prime loans originated at LVR 80% and above, are fully
mortgage insured against default by the borrower.
Mortgage insured loans who have applied for COVID-19
hardship payment moratoriums were excluded from
§ Unemployment rate to stabilise at c10-11% by Dec 2020.
overlay calculations as the credit risk to the Group is
Whilst the ECL model forecasts expected credit loss
incorporating macroeconomic forecasts and portfolio
performance over the previous 48 months, the ECL model
does not include expected delinquencies from customers
on COVID-19 hardship payment moratoriums. Regulatory
guidance for lenders outlines customers under COVID-19
payment moratoriums were not considered in arrears during
the moratorium. Due to payment moratoriums being applied
to a wide range of customers and it was not linked specifically
to credit assessments, these moratoriums are not
indicators of a significant increase in credit risk in isolation.
Consequently, the Group had to apply overlays separately for
the purposes of determining whether a significant increase
in credit risk has happened.
minimal.
2. Stressing underlying security values by 10-20%
Given the uncertainty of the impact of the pandemic on
future property prices, the Group believe it is appropriate
to incorporate potential future decline in property
prices. Security stress bands were determined with the
assistance of the Corelogic Hedonic Tiered Home Value
Index (HVI). The HVI provides 12 month rolling average of
historical price movements in Australian housing based
on the 25%, 50%, and 75% quartile. The HVI indicates
the 75% quartile (top 25% of house values) historically
realise the largest swings in property values during
periods of property value growth or decline. The bands
used for stressing underlying security values are outlined
The Group believe it prudent to raise a COVID-19 overlay
in Note 23.
given the ECL model does not fully capture credit risk of
loans currently in hardship payment moratoriums related
to the pandemic. The overlay at 30 June 2020 is $16.4m
and is included as part of the Collective Provision in FY20.
3. Assume 33% of customers in hardship default
For the purposes of the COVID-19 overlay, under a
stressed property price scenario, the Group has assumed
33% of customers under a hardship payment moratorium
at 30 June 2020 will default at some time in the future.
The disclosure of COVID-19 overlay details are included
in Note 23.
RESIMAC GROUP LTD2020 ANNUAL REPORT 66
2020 ANNUAL REPORT
67
67
Notes to the Consolidated Financial Statements
Key Numbers (for the year ended 30 June 2020)
Security Properties Repossessed
As at 30 June 2020, the Group had exercised their right to liquidate 41 residential properties (FY19: 46) being the
security for securitised loans. The Group intends to sell these properties with the proceeds to go towards clearing the
Balance at the beginning of the period
8. Non-Current Assets: Right-of-Use Assets
Additions1
Acquisition of IA Group
Depreciation
Foreign exchange
Balance at 30 June 2020
Right-of-use assets at cost
Less: accumulated depreciation
Total right-of-use assets
FY20
$’000
-
14,015
191
(1,920)
(7)
12,279
14,256
(1,977)
12,279
FY19
$’000
-
-
-
-
-
-
-
1 Includes the right-of-use assets on transition to AASB 16 Leases as at 1 July 2019 and the additions during the year.
Right-of-Use Assets
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease
transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise
a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation
starts at the commencement date of the lease.
The right-of-use assets are presented as a separate line in the consolidated statement of financial position.
The Group applies AASB 136 to determine whether a right-of-use asset is impaired and accounts for any identified impairment
loss as described in Note 9.
outstanding balance of the underlying loans. It is expected that the outstanding balance will be recovered in full (unless a
Stage 3 specific provision has been raised against the specific loan).
7. Other Financial Assets
Listed shares – BNK Banking Corporation Limited (ASX: BBC)
Unlisted shares – Athena
Unlisted shares – Positive Group
Short-term investment
Current
Non-current
Note
22
22
22
22
FY20
$’000
1,921
2,000
3,000
260
7,181
260
6,921
7,181
FY19
$’000
2,860
2,000
-
260
5,120
260
4,860
5,120
Listed Shares
Unlisted Shares
BNK represents an investment the Group intends to hold
Investments that are not traded in an active market,
for long term strategic purposes. As permitted by AASB
however classified as fair value through profit or loss
9, the Group designated this investment at the date of
(FVTPL) and disclosed at fair value at the end of each
initial application as measured at fair value through other
reporting period.
comprehensive income. The accumulated fair value
reserve related to this investment will not be reclassified
to profit or loss. Dividends from this investment continue
to be recognised in profit or loss as other income when
the Group’s right to receive payment is established. At
30 June 2020, the Group held 4,468,902 shares in BNK at
a share price of $0.43.
The fair value testing conducted on the unlisted shares,
included assessing the impact of COVID-19 on the
current business models, and potential future impacts.
The fair value assessments included comparisons against
forecasted operating performance at time of investment.
Short-Term Investment
Term deposit with fixed or determinable payments and
fixed maturity date which the Group has the intent and
ability to hold to maturity.
RESIMAC GROUP LTD2020 ANNUAL REPORT 68
2020 ANNUAL REPORT
6969
Notes to the Consolidated Financial Statements
Key Numbers (for the year ended 30 June 2020)
9. Plant & Equipment
Carrying amounts of:
Plant and equipment
Balance at 1 July 2019
Additions
Acquisition of IA Group
Depreciation expense
Foreign exchange
Balance at 30 June 2020
Balance at 1 July 2018
Additions
Disposals and write-offs
Disposal of Paywise
Depreciation expense
Foreign exchange
Balance at 30 June 2019
FY20
$’000
2,192
2,192
Plant and
equipment
at cost
$’000
2,110
211
494
(622)
(1)
2,192
FY19
$’000
2,110
2,110
Total
$’000
2,110
211
494
(622)
(1)
2,192
2,625
2,625
588
(56)
(164)
(884)
588
(56)
(164)
(884)
1
1
2,110
2,110
Recognition & Measurement
Plant and equipment stated at cost less accumulated depreciation and impairment losses.
Depreciation & Amortisation
Depreciation is recognised to write off the cost or valuation of assets less their residual values over their
useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation
method are reviewed at the end of each reporting period, with the effect of any changes in estimate
accounted for on a prospective basis.
The following useful lives are used in the calculation of depreciation:
Leasehold improvement and office furniture
Office machines and computer equipment
Years
5
3-5
Derecognition
Impairment
An item of plant and equipment is
At each reporting date, the Group reviews
derecognised upon disposal or when no
the carrying amounts of plant and equipment
future economic benefits are expected to
to determine whether there is any
arise from the continued use of the asset.
indication that those assets have suffered
Any gain or loss arising on the disposal or
an impairment loss. If any such indication
retirement of an item of plant and equipment
exists, the recoverable amount of the asset
is determined as the difference between the
is estimated to determine the extent of the
sale proceeds and the carrying amount of the
impairment loss (if any).
asset and is recognised in profit or loss.
10. Other Assets
Reinsurance claim receivable
Other
Current
Non-current
Recognition & Measurement
Reinsurance Claim Receivable
FY20
$’000
3,339
288
3,627
288
3,339
3,627
FY19
$’000
2,907
238
3,145
238
2,907
3,145
Prime Insurance Group Ltd was purchased as part of the RHG Mortgage Corporation Limited
(RHG) acquisition in 2014. Its sole purpose is to provide insurance service and re-insurance
facilities for the RHG mortgage assets and process any shortfall claims received.
The reinsurance claim receivable is available to utilise against the reinsurance claim reserve
amount in Note 16.
RESIMAC GROUP LTD2020 ANNUAL REPORT 70
70
RESIMAC GROUP LTD
2020 ANNUAL REPORT
71
71
Notes to the Consolidated Financial Statements
Key Numbers (for the year ended 30 June 2020)
11. Goodwill & Intangible Assets
Goodwill
Balance at 1 July
FY20
$’000
FY19
$’000
21,766
21,766
Additional amounts recognised from business combinations occurring in the current year
5,664
-
Balance at 30 June
Other intangible assets
Balance at 1 July
Additions
Disposals and write offs
Acquisition of IA Group
Disposal of Paywise
Amortisation for the year
Balance at 30 June
27,430
21,766
1,691
68
-
114
-
(410)
1,463
332
1,868
(2)
-
(132)
(375)
1,691
Indicators of Impairment
The minimum indicators of impairment have been
considered by management. These include both
Key Judgements & Assumptions
The key assumptions used for assessing the
recoverable amount of the Australian Lending Business
internal and external sources of information such as:
CGU are set out below:
§ significant changes (historical and future) in
the market, economic, legal or technological
environment which would have an adverse impact
on the Group;
§ interest rate changes which impact the discount
rate used in modelling;
§ evidence of a worsening financial position;
§ plans to discontinue operations; and
§ economic conditions as a result of COVID-19.
Management have assessed that there are no such
indicators which would impair the goodwill balance as
at 30 June 2020.
Inputs to Impairment Calculations
Cash Flow Projections
Growth rate for 4 year forecast
period (p.a)
FY20
FY19
5.3%
10.0%
Discount rate (post-tax)
11.0%
11.0%
Terminal growth rate
2.0%
2.0%
The post-tax discount rate of 11% has been determined by
estimating the cost of equity that applies to the Australian
lending segment, and the terminal growth rate of 2%
reflects management’s assumption of growth in profit
before tax after four years.
Management conducted the following when testing the
impairment of goodwill:
§ considered the macroeconomic impact of COVID-19,
For VIU calculations, cash flow projections are based
and considered outcomes where future cash flows are
on corporate plans and business forecasts prepared
reduced or operating costs increase;
by management and approved by the Board. Cash flow
§ the assumptions and cash flow forecasts used to test for
Total goodwill and other intangible assets
28,893
23,457
projections are for four years and a terminal growth
impairment include the potential impact of COVID-19;
rate beyond this has been applied.
§ budgets, forecasts and other assumptions from
11.1. Goodwill
Recoverable Amount of the Asset
Goodwill arising on an acquisition of a business is carried at
The recoverable amount is equal to the greater of:
cost as established at the date of acquisition of the business
(less accumulated impairment losses, if any).
§ fair value less costs to sell; and
§ value in use (‘VIU’).
Impairment Testing
It is not always necessary to determine both the fair value
For the purposes of impairment testing, goodwill is allocated
less cost to sell and its VIU. If either of these amounts exceed
to each of the Group's cash-generating units (CGU’s or
the carrying amount of the CGU, there is no impairment of
groups of CGU’s) that is expected to benefit from the
the goodwill and it is not necessary to estimate the other
synergies of the combination.
amount.
A CGU to which goodwill has been allocated is tested for
As a result, the VIU methodology is considered to be most
impairment annually, or more frequently when there is an
appropriate as there is no readily available market outside
Impairment Assessment
In assessing VIU, the estimated future cash flows are
discounted to their present value using a discount rate
that reflects current market assessments of the time
value of money and the risks specific to the CGU.
Goodwill arising from the business combination in
the prior period of $21.7m has been allocated for
impairment testing purposes to the Australian Lending
Business segment. This segment is considered to be
the CGU that is expected to benefit from the synergies
of the business combination. The IA Group goodwill
of $5.7m is considered a separate CGU, and the
indication that the unit may be impaired. If the recoverable
specific business sales of an equivalent sized business to the
associated goodwill has been tested for impairment
amount of the CGU is less than its carrying amount, the
Australian Lending business segment.
accordingly.
impairment loss is allocated first to reduce the carrying
amount of any goodwill allocated to the unit and then to
the other assets of the unit pro rata based on the carrying
amount of each asset in the unit. Any impairment loss
for goodwill is recognised directly in profit or loss. An
impairment loss recognised for goodwill is not reversed in
subsequent periods.
The VIU calculation requires management to estimate future
Furthermore, each unit or group of units to which the
cash flows expected to arrive from the CGU and a suitable
goodwill is allocated shall:
discount rate in order to calculate present value. For IA
Group, management have determined that the fair value
§ represent the lowest level at which the goodwill is
monitored for internal management purposes; and
less cost to sell (FV) is considered most appropriate, as the
§ not exceed the operating segments.
controlling interest was purchased at arms-length in the
current financial year.
The allocation of goodwill to these CGU’s is considered
appropriate.
previous impairment testing have been revised to reflect
the economic conditions at the balance date, especially
to address increased risk and uncertainty.
In assessing the VIU for goodwill impairment assessment,
the potential impact of COVID-19 on cash flows and profit
growth have been considered under different scenarios:
1) Base case: Current management view of
macroeconomic environment
2) Stress scenario: Assumes severe macroeconomic
downturn, resulting in a sustained downturn in Resimac
profitability of -5% CAGR over next 4 years. The stress
scenario indicated sufficient headroom remains for
goodwill impairment purposes.
The volatility in the current financial markets due to
COVID-19 introduces challenges as discount rates
become more unpredictable. Discount rates ranging
from 10-20% were applied on the base case and stress
scenarios.
RESIMAC GROUP LTD2020 ANNUAL REPORT 72
2020 ANNUAL REPORT
73
73
Notes to the Consolidated Financial Statements
Key Numbers (for the year ended 30 June 2020)
Management note on the stress scenario and applied a
11.2. Other intangible assets
discount rate of 20%, the recoverable amount of the CGU
exceeded the recorded carrying value for the Australian
Lending Business segment.
For IA Group, using the Calibration methodology within
the FV concept, management believe there are no
indicators of impairment mainly due to the following:
Intangible assets with finite useful lives that are
acquired separately are carried at cost less accumulated
amortisation and accumulated impairment losses.
Amortisation is recognised on a straight-line basis over
their estimated useful lives.
The estimated useful life and amortisation method are
§ IA Group have outperformed initial NPAT expectations;
reviewed at the end of each reporting period, with the
and
§ robust portfolio management and cost controls are
embedded to protect the business in the current
COVID-19 macroeconomic environment.
effect of any changes in estimate being accounted for
on a prospective basis. Intangible assets with indefinite
useful lives that are acquired separately are carried at
cost less accumulated impairment losses.
Therefore, management believe potential impacts of
COVID-19 have been adequately considered for goodwill
Intellectual property
impairment testing purposes at 30 June 2020.
Impairment charge
Based upon the impairment testing performed, there is
no impairment charge for FY20 (FY19: nil).
Software
IA brand name
Useful life
7 years
3-5 years
2 years
12. Trade & Other Payables
Revenue collected in advance
Collections owed to trusts
Other creditors and accruals
Commissions
Note
FY20
$’000
326
7,900
FY19
$’000
462
8,043
13,371
11,769
4,294
5,020
22
25,891
25,294
Current
25,891
25,294
Recognition & Measurement
Trade creditors and other payables, are generally settled
to the Group prior to the end of the financial year, are
within 30 day terms and are unsecured. Trade creditors
unpaid, and arise when the Group becomes obliged to
and other payables are carried at amortised cost and
make future payments in respect of the purchase of
represent liabilities for goods and services provided
these goods and services.
Collections owed to trusts
Other creditors and accruals
Relates to loan repayments received from borrowers that
Other creditors and accruals are unsecured payables
reside in clearing accounts not yet allocated to a trust at
relating to expenses arising in the ordinary course
balance date.
of business. They are usually paid within 30 days of
recognition
13. Interest Bearing Liabilities
Debt securities on issue
Corporate debt facility
Issuance facilities
Debt securities on issue - related parties
Current
Non-current
Note
FY20
$’000
FY19
$’000
12,421,861
10,232,170
5,000
30,000
258,755
186,051
-
2,400
20
12,685,616
10,450,621
2,917,692
2,403,643
9,767,924
8,046,978
12,685,616
10,450,621
Recognition & Measurement
All borrowings are initially recognised at fair value of the
13.1. Debt Securities on Issue
consideration received less direct transaction costs,
and subsequently measured at amortised cost using the
effective interest method.
Amortised cost is calculated by taking into account any
fees paid or received between parties to the contract
that are an integral part of the effective interest rate,
transaction costs, and all other premiums or discounts on
acquisition, over the period to maturity.
Gains or losses are recognised in the statement of profit
or loss when the liabilities are derecognised and also
through the amortisation process.
For further detail on the amortised cost basis of
accounting see Note 1 and 2. Details of the Group’s
interest-bearing liabilities are set out in Note 22.
Warehouse Facilities
The warehouse facilities provide funding for the initial
financing of loans and advances to customers within
the warehouse Special Purpose Vehicles (SPV). Refer to
Note 24 for the consolidation of the SPVs. The security
for advances under these facilities is a combination
of fixed and floating charges over all assets of the
warehouse SPVs. If the warehouse facility is not renewed
or should there be a default under the existing terms and
conditions, the warehouse facility funder will not have
a right of recourse against the remainder of the Group.
Warehouse facilities are secured against the underlying
mortgages only.
During the financial year there were no breaches to the
warehouse agreements. All warehouse facilities were
renewed, at equal or higher limits, on or before their
maturity date.
RESIMAC GROUP LTD2020 ANNUAL REPORT 74
74
RESIMAC GROUP LTD
Notes to the Consolidated Financial Statements
Key Numbers (for the year ended 30 June 2020)
Bonds
RMBS provide duration funding for loans and advances (securitised assets) originated
by the Group. The RMBS notes generally have a legal final maturity of 31.5 years from
issue, and a weighted average life of up to 6 years.
The RMBS SPV security is a combination of fixed and floating charges over all assets
of the RMBS SPV. Credit losses arising from securitised assets will not result in the
bondholders having a right of recourse against the Group (as Originator, Manager or
Servicer).
During the year ended 30 June 2020, AUD $3.47 billion of new Residential Mortgage
Backed Securities (RMBS) and Medium Term Notes (MTNS) were issued (FY19: AUD
$3.35 billion and NZD $250 million). These RMBS issuance paid down warehouse
facilities creating capacity to underwrite new mortgages. During the financial year,
there were no breaches to the terms of the RMBS.
Collateral
Certain RMBS and warehouse SPV’s are supported by cash collateral reserves.
13.2. Corporate Debt Facility
As at 30 June 2020, the Company had a $30 million corporate facility with National
Australia Bank maturing in September 2021. The Group had an undrawn balance
of $25 million at 30 June 2020 (FY19: $10 million). In accordance with the terms of
the Group’s corporate debt facilities, the Group is required to comply with certain
covenants. During the period and as at 30 June 2020, the Group was compliant with
these covenants.
The corporate debt facility is secured by a first-ranking charge over the trust assets of
the Group. See Note 23.7 for further detail.
13.3. Issuance Facilities
The Group maintains a series of subsidiary SPV’s for the purpose of raising financing
for its RMBS-related credit risk retention (“CRR”) obligations. CRR is a mandatory
requirement for the Group’s RMBS issuance activities in the U.S., European, Japanese
and U.K. jurisdictions where, in general, the Group is required to hold an economic
interest of at least 5% in value of an RMBS issuance. The subsidiary SPV’s hold a 5%
vertical strip of bonds of an individual RMBS issuance and raises secured financing
from banks and credit investors.
13.4. Debt Securities on Issue - Related Parties
In line with its ordinary course of business, the Group issues debt securities to related
party investors. A performance guarantee in respect to timely payment of interest and
principal on these debt securities is provided. Subordinated notes in one controlled
entity (SPV), which were held by a related party is nil as at 30 June 2020 (FY19:
$2,400,000).
75
FY19
$’000
-
-
-
-
-
-
-
-
-
-
-
-
-
FY20
$’000
-
14,803
497
618
(2,289)
(7)
13,622
1,566
12,056
13,622
1,920
618
(2,289)
2,224
10,322
3,688
16,234
14. Lease Liabilities
Lease liabilities included in the Statement of Financial Position
Balance as at 1 July 2019
Addition1
Acquisition of IA Group
Interest incurred
Payment of lease liabilities
Foreign exchange
Balance as at 30 June 2020
1 Includes the lease liabilities on transition to AASB 16 Leases as at 1 July 2019 and the additions during the year.
Current
Non-current
Amounts recognised in Statement of Comprehensive Income
Depreciation charge of right-of-use assets
Interest expense on lease liabilities
Amounts recognised in Statement of Cash Flows
Total cash outflows for leases
Maturity analysis – contractual undiscounted cashflows
Less than one year
One to five years
More than five years
Total undiscounted lease liabilities as at 30 June 2020
RESIMAC GROUP LTD2020 ANNUAL REPORT 76
2020 ANNUAL REPORT
77
77
Notes to the Consolidated Financial Statements
Key Numbers (for the year ended 30 June 2020)
14.1. Leases
The lease liability is subsequently measured by increasing
Policies applicable prior to 1 July 2019
The Group has applied AASB 16 using the cumulative
catch-up approach and therefore comparative
information has not been restated and is presented under
AASB 117. The details of accounting policies under both
AASB 117 and AASB 16 are presented separately below.
Policies applicable from 1 July 2019
The Group assesses whether a contract is or contains a
lease, at inception of the contract. The Group recognises
a right-of-use asset and a corresponding lease liability
with respect to all lease arrangements in which it is the
lessee, except for short-term leases (defined as leases
with a lease term of 12 months or less) and leases of low
value assets. For these leases, the Group recognises the
the carrying amount to reflect interest on the lease
liability (using the effective interest method) and by
reducing the carrying amount to reflect the lease
payments made.
The Group remeasures the lease liability and makes a
corresponding adjustment to the related right-of-use
asset whenever:
Leases are classified as finance leases whenever the terms
Minimum lease payments made under finance leases
of the lease transfer substantially all the risks and rewards
are apportioned between the finance expense and the
of ownership to the lessee. All other leases are classified as
reduction of the outstanding liability. The finance expense
operating lease.
Payments made under operating leases are recognised in
the profit or loss on a straight-line basis over the term of
the lease. Lease incentives received are recognised as an
is allocated to each period during the lease term so as
to produce a constant periodic rate of interest on the
remaining balance of the liability.
§ The lease term has changed or there is a significant
integral part of the total lease expense, over the term of
event or change in circumstances resulting in a change
the lease.
in the assessment of exercise of a purchase option,
in which case the lease liability is remeasured by
discounting the revised lease payments using a revised
discount rate.
15. Other Financial Liabilities
lease payments as an operating expense on a straight-
§ The lease payments change due to changes in an
line basis over the term of the lease unless another
index or rate or a change in expected payment under
systematic basis is more representative of the time
a guaranteed residual value, in which cases the lease
Present value of future trail commission payable
pattern in which economic benefits from the leased
liability is remeasured by discounting the revised lease
assets are consumed.
payments using an unchanged discount rate
The lease liability is initially measured at the present
value of the lease payments that are not paid at the
commencement date, discounted by using the rate
implicit in the lease. If the rate cannot be readily
determined, the lessee uses its incremental borrowing
rate.
§ A lease contract is modified and the lease modification
is not accounted for as a separate lease, in which case
the lease liability is remeasured based on the lease
term of the modified lease by discounting the revised
lease payments using a revised discount rate at the
effective date of the modification.
The Group did not make any such adjustments during the
Lease payments included in the measurement of the
year presented.
lease liability comprise:
§ Fixed lease payments (including in-substance fixed
payments), less any lease incentives receivable;
§ Variable lease payments that depend on an index or
rate, initially measured using the index or rate at the
commencement date
§ The amount expected to be payable by the lessee
under residual value guarantees;
§ The exercise price of purchase options, if the lessee is
reasonably certain to exercise the options; and
§ Payments to penalties for terminating the lease, if
the lease term reflects the exercise of an option to
terminate the lease
The lease liability is presented as a separate line in the
consolidated statement of financial position.
Variable rents that do not depend on an index or rate are
not included in the measurement of the lease liability
and the right-of-use asset. The related payments are
recognised as an expense in the period in which the event
or condition that triggers those payments occurs and are
included in “Other expenses” in profit or loss (see note 2).
The Group has applied judgement to determine the lease
term for some lease contracts in which it is a lessee that
include renewal options. The assessment of whether
the Group is reasonably certain to exercise such options
impacts the lease term, which significantly affects
the amount of lease liabilities and right-of-use assets
recognised.
Note
FY20
$’000
FY19
$’000
20,797
22,901
22
20,797
22,901
5,750
7,032
15,047
15,869
20,797
22,901
Current
Non-current
Recognition & Measurement
The Group makes trail commission payments to
mortgage originators based on monthly loan balances
outstanding.
Initial Recognition
Fair value of future trail commission payable is recognised
on the origination of white label loans. This represents
the NPV of the expected future trail commission payable
under the origination and management agreement, less
ongoing servicing costs not covered by transaction fees.
Subsequent Payment
Subsequent to initial recognition, the future trail
commission payable is measured at amortised cost.
The carrying amounts of the trail commissions payable
are adjusted to reflect actual and revised estimated
cash flows by recalculating the carrying amount through
computing the present value of estimated future cash
flows at the effective interest rates. The resulting
adjustment is recognised as income or expense in the
statement of comprehensive income.
A remeasurement of the underlying cash flows relating
to the trail commission payable occurs at each reporting
date.
Key Estimates & Assumptions
Refer to Note 1 for the key estimates and judgements
underlying the remeasurement of the estimated future
cash flows.
RESIMAC GROUP LTD2020 ANNUAL REPORT 78
2020 ANNUAL REPORT
7979
Notes to the Consolidated Financial Statements
Key Numbers (for the year ended 30 June 2020)
16. Other Liabilities
Reinsurance claim reserve
Non-Current
The reinsurance claim reserve offsets with the reinsurance claim receivable amount in Note 10.
17. Provisions
Employee benefits
Make good
Other
Current
Non-current
Employee
benefits
$'000
Make
good
$'000
Balance at 1 July 2019
Additional provisions recognised
3,571
1,859
Reductions resulting from remeasurement or settlement without cost
(1,389)
Acquisition of IA Group
Balance at 30 June 2020
75
4,116
414
100
-
-
514
FY20
$’000
3,339
3,339
FY19
$’000
2,907
2,907
3,339
2,907
FY20
$’000
4,116
514
-
FY19
$’000
3,571
414
65
4,630
4,050
3,902
728
4,630
Other
$'000
65
-
3,305
745
4,050
Total
$’000
4,050
1,959
(65)
(1,454)
-
-
75
4,630
Recognition & Measurement
Provisions are recognised when:
§ the Group has a present obligation (legal or
constructive) as a result of a past event;
§ it is probable that the Group will be required to
settle the obligation; and
Liabilities recognised in respect of employee
benefits expected to be settled within 12 months,
are measured at their nominal values using the
remuneration rate expected to apply at the time of
settlement.
Liabilities recognised in respect of employee
§ a reliable estimate can be made of the amount of
benefits which are not expected to settle within 12
the obligation.
The amount recognised as a provision is the
best estimate of the consideration required to
settle the present obligation at the end of the
months are measured at the present value of the
estimated future cash outflows to be made by the
Group in respect of services provided by employees
up to the reporting date.
reporting period, taking into account the risks
The liability for long service leave is recognised in
and uncertainties surrounding the obligation.
the provision for employee benefits. It is measured
When a provision is measured using the cash flows
as the present value of expected future payments
estimated to settle the present obligation, its
for the services provided by employees up to the
carrying amount is the present value of those cash
reporting date.
flows (when the effect of the time value of money is
material).
17.1. Employee Benefits
A liability is recognised for benefits accruing to
employees in respect of:
§ wages and salaries;
§ annual leave;
§ long service leave; and
§ on-costs relating to the above
where the liability can be measured reliably and
payment is probable.
Expected future payments are discounted using
market yields at the reporting date on high quality
corporate bonds with terms to maturity that match,
as closely as possible, the estimated future cash
outflows.
17.2. Make Good
Where a condition of the Group’s lease premises
is to return the property in its original condition at
the end of a lease term. The Group recognises a
provision for the make good as the expected cost of
the refurbishment at the end of the lease.
RESIMAC GROUP LTD2020 ANNUAL REPORT 80
80
RESIMAC GROUP LTD
81
Notes to the Consolidated
Financial Statements
Capital
for the year ended 30 June 2020
18. Capital Management
The Group’s Capital Management Objectives
The Group manages its capital to ensure that entities
The capital structure of the Group consists of net debt
19. Dividends
Declared and paid during the period (fully franked at 30 percent)
Final dividend for FY19: $0.010 (FY18: $0.009)
Special dividend for FY19: $0.005 (FY18: Nil)
Interim dividend for HY20: $0.012 (Interim FY19: $0.01)
Proposed and unrecognised as a liability (fully franked at 30 percent)
Final dividend for FY20: $0.018 (FY19: $0.01)
in the Group will be able to continue as a going concern
(borrowings as detailed in Note 13 offset by cash and
Special dividend for FY20: Nil (FY19: $0.005)
while maximising the return to stakeholders through the
bank balances) and equity of the Group (comprising
optimisation of the debt and equity balance.
issued capital, reserves, retained earnings and non-
controlling interests as detailed in Note 20).
Franking credit balance
The Group operates a warehouse to securitisation
funding model for its lending business and as such makes
The Group is not subject to any externally imposed
decisions on the amount of capital invested in the notes
capital requirements.
or warehouses based on alternate sources of funding and
the expected return on amounts invested and with regard
to the Company's cost of capital.
The Board is responsible for monitoring and approving
the capital management framework within which
management operates. The purpose of the framework is
to prudently manage capital whilst optimising the debt
and equity structure.
Franking credits available for future years at 30% adjusted for the payment of
income tax and dividends receivable or payable
Impact on the franking account of dividends proposed before the financial report
was issued but not recognised as a distribution to equity holders during the
period.
Issued capital
Reserves
Retained earnings
The Group manages its capital through various means, including:
§ adjusting the amount of ordinary dividends paid to shareholders;
§ maintaining a dividend reinvestment plan;
§ raising or repaying capital; and
§ reinvesting profits.
Note
20
20
20
FY20
$’000
FY19
$’000
120,354
119,007
(7,556)
(7,197)
128,694
84,314
241,492
196,124
20. Issued Capital & Reserves
Share capital
Reverse acquisition reserve1
1 As a result of reverse acquisition accounting, an equity account was created as a component of equity. This account called ‘Reverse acquisition reserve’ is
similar in nature to share capital. The Reverse acquisition reserve is not available for distribution.
Issued capital as at 30 June 2020 was $181,895,006 (407,449,337 ordinary shares).
During the period, the Company issued 1,059,184 shares for $1,017,019 in respect of the Resimac Dividend
Reinvestment Plan (DRP), and 600,000 shares for $510,000 to satisfy exercise of employee share options.
FY20
$’000
FY19
$’000
4,058
3,594
2,029
-
4,879
4,001
10,966
7,595
7,334
-
7,334
4,058
2,029
6,087
19,170
17,312
(3,143)
(2,609)
FY20
$’000
FY19
$’000
181,895
180,548
(61,541)
(61,541)
120,354
119,007
RESIMAC GROUP LTD2020 ANNUAL REPORT 82
2020 ANNUAL REPORT
8383
Notes to the Consolidated Financial Statements
Capital (for the year ended 30 June 2020)
20.1. Fully Paid Ordinary Shares
20.2. Reserves (Net of Income Tax) and Retained Earnings
Balance at 1 July 2018
Issue of shares under a dividend reinvestment plan
Balance at 30 June 2019 and 1 July 2019
Issue of shares under the DRP:
§ FY19 Dividend on 30 September 2019
§ HY20 Dividend on 27 March 2020
Exercise of options – proceeds received
No. of
shares –
Thousands
$’000
399,348
177,340
6,442
3,208
405,790
180,548
789
270
600
693
324
330
Balance at 30 June 2020
407,449
181,895
Fully paid ordinary shares, which have no par value, carry one vote per share and carry a right to dividends.
Treasury shares
Treasury shares held in Resimac Group Ltd by Resimac EST Pty Ltd as Trustee for the Resimac Group Limited Employee
Share Trust, are for the benefit of eligible employees of the Resimac Group Employee Share Option and Rights Plan.
Shares issued to employees are recognised on a first-in-first-out basis.
Balance at 30 June 2019 and 1 July 2019
Subscription of shares by the Trust (average price: $0.85 per share)
Allocation of shares under LTI#1
Balance at 30 June 2020
No. of
shares –
Thousands
-
600
$’000
-
510
(600)
(510)
-
-
Reserves
Cash flow
hedge
reserve
$'000
Foreign
currency
translation
reserve
$'000
Retained
earnings
$'000
Fair value
reserve
$'000
Share-
based
payment
reserve
$'000
Other
reserve
$'000
Non-
controlling
interest
$'000
Balance at 1 July 2018
49,937
(3,041)
Adoption of AASB 9, net of income tax
(5,213)
-
Adjusted balance as at 1 July 2018
44,724
(3,041)
Profit after tax
47,185
-
Changes in fair value of cash flow hedges, net of tax
Currency translation differences
Fair value movement on investment through OCI,
net of tax
Equity dividends
Share-based payments
-
-
-
(7,595)
-
(2,835)
-
-
-
-
(13)
-
(13)
-
-
669
-
-
-
-
-
-
-
-
-
(2,065)
-
-
Balance at 30 June 2019
84,314
(5,876)
656
(2,065)
Balance at 1 July 2019
84,314
(5,876)
656
(2,065)
Adoption of AASB 16, net of income tax
(339)
-
-
-
Adjusted balance as at 1 July 2019
83,975
(5,876)
656
(2,065)
Profit after tax
55,908
Acquisition of non-controlling interest
Changes in fair value of cash flow hedges, net of tax
Currency translation differences
Fair value movement on investment through OCI,
net of tax
Equity dividends
Share-based payments
Option to acquire shares of subsidiary
Reallocation
-
-
-
-
(10,966)
-
-
(223)
-
-
365
-
-
-
-
-
-
-
-
-
(504)
-
-
-
-
-
-
-
-
-
(657)
-
-
-
223
43
-
43
-
-
-
-
-
45
88
88
-
88
-
-
-
-
-
-
402
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(188)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
99
99
-
(4)
-
-
-
-
-
Balance at 30 June 2020
128,694
(5,511)
152
(2,499)
490
(188)
194
RESIMAC GROUP LTD2020 ANNUAL REPORT 84
84
RESIMAC GROUP LTD
85
Notes to the Consolidated Financial Statements
Capital (for the year ended 30 June 2020)
20.3. Nature & Purpose of Reserves
of the Group's New Zealand operations
Calculation of Earnings Per Share
from its functional currency to the Group's
presentation currency are recognised
directly in other comprehensive income
and accumulated in the foreign currency
translation reserve.
Share-based payment reserve
The share-based payments reserve is
used to recognise the value of equity-
settled share-based payments provided to
employees, including KMP, as part of their
remuneration. Refer to Note 31 for further
details of these plans.
20.4. Retained earnings
See Note 19 in respect of payment of
dividends.
Cash flow hedge reserve
The cash flow hedging reserve represents
the cumulative effective portion of gains
or losses arising on changes in fair value
of hedging instruments entered into for
cash flow hedges. The cumulative gain or
loss arising on changes in fair value of the
hedging instruments will be reclassified
to profit or loss only when the hedged
transaction affects the profit or loss, or
included as a basis adjustment to the non-
financial hedged item, consistent with the
Group’s accounting policy.
Foreign currency translation reserve
Exchange differences relating to the
translation of the results and net assets
21. Earnings Per Share
FY20
$’000
FY19
$’000
Profit attributable to ordinary equity holders of the parent ($'000)
55,908
47,185
WANOS1 used in the calculation of basic EPS (shares, thousands)
406,536
401,433
Dilutive effect of shares options
1,100
241
WANOS1 used in the calculation of diluted EPS (shares, thousands)
407,636
401,674
Earnings per share
Basic (cents per share)
Diluted (cents per share)
1 Weighted average number of shares
21.1. Basic Earnings Per Share
§ From 27 March 2020 to 11 May 2020 (51,134,070)
Basic earnings per share is calculated as net profit
attributable to the ordinary equity holders of the
parent, adjusted to exclude any costs of servicing
w The number of Resimac shares on issue
(406,578,693) at 26 March 2020; plus
w Additional shares issued on 27 March 2020 under
equity (other than dividends), divided by the WANOS
the DRP (270,644)
adjusted for any bonus element.
21.2. Diluted Earnings Per Share
Diluted earnings per share is calculated by:
§ dividing the net profit attributable to ordinary
equity holders of the parent; by the:
multiplied by the ratio of days outstanding
(46/366).
§ From 12 May 2020 to 30 June 2020 (55,662,478)
w The number of Resimac shares on issue
(406,849,337) at 11 May 2020; plus
w Additional shares issued on 27 March 2020 under
§ WANOS outstanding during the year, plus
the LTI (600,000)
§ the WANOS that would be issued on the
multiplied by the ratio of days outstanding
conversion of all the dilutive potential ordinary
(50/366).
options or rights into ordinary shares.
21.3. Calculation of WANOS
Twelve months to 30 June 2020
Twelve months to 30 June 2019
The number of Resimac shares issued:
§ From 1 July 2018 to 11 October 2018 (112,692,648)
The number of Resimac Group shares issued:
The number of Resimac ordinary shares on issue
§ From 1 July 2019 to 29 September 2019
(100,893,180)
The number of Resimac ordinary shares on issue
of 405,790,153 multiplied by the ratio of days
outstanding (91/366); plus
§ From 30 September 2019 to 26 March 2020
(198,845,864)
w The number of Resimac shares on issue
(405,790,153) at 29 September 2019; plus
of 399,347,732 multiplied by the ratio of days
outstanding (103/365); plus
§ From 12 October 2018 to 24 March 2019
(179,788,553)
w The number of Resimac shares on issue
(399,347,732) at 11 October 2018; plus
w Shares issued on 12 October 2018 under the
DRP (791,425)
multiplied by the ratio of days outstanding
w Additional shares issued on 30 September 2019
(164/365).
13.75
13.72
11.75
11.75
under the DRP (788,540)
multiplied by the ratio of days outstanding
(179/366).
§ From 25 March 2019 to 30 June 2019 (108,951,877)
w The number of Resimac shares on issue
(400,139,157) at 24 March 2019; plus
w Additional shares issued on 25 March 2019 under
the DRP (5,650,996)
multiplied by the ratio of days outstanding
(98/365).
RESIMAC GROUP LTD2020 ANNUAL REPORT 86
2020 ANNUAL REPORT
8787
Notes to the Consolidated
Financial Statements
Risk
for the year ended 30 June 2020
22. Financial Assets & Financial Liabilities
The Group holds the following financial instruments:
Financial assets
Cash and cash equivalents
Trade and other receivables
Loans and advances
Short-term investment
Investment securities – BNK
FVOCI-equity instrument
Investment securities – Athena
Investment securities – Positive Group
Derivative financial assets
FVTPL
FVTPL
FVTPL
Basis of measurement
Amortised cost
Amortised cost
Note
4
5
FY20
$’000
FY19
$’000
365,987
224,790
5,974
10,699
Amortised cost
6
12,506,012
10,341,913
Amortised cost
7
7
7
7
260
1,921
2,000
3,000
260
2,860
2,000
23
52,592
56,575
12,937,746
10,639,097
Financial liabilities
Trade and other payables
Interest-bearing liabilities
Amortised cost
12
25,891
25,294
Amortised cost
13
12,685,616
10,450,621
Present value of trail commission payable
Amortised cost
Derivative financial liabilities
FVTPL
15
23
20,797
22,901
3,277
1,565
12,735,581
10,500,381
22.1. Fair Values Measurements & Valuation Processes
22.1.1. Fair Value Hierarchy
The different levels have been defined as follows:
§ Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
§ Level 2: inputs other than quoted prices included within level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices); and
§ Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The following assets and liabilities are measured at fair value by the Group for financial reporting purposes:
Financial assets
Listed shares - BNK Banking
Corporation Limited (ASX: BBC)
Unlisted shares - Athena
Unlisted shares - Positive
Interest rate swaps
Cross currency swaps
Financial liabilities
Interest rate swaps
Fair value
hierarchy
Level 1
Level 3
Valuation technique(s)
and key input(s)
Most recent traded price and other available
market information
Recent acquisition value, recent
transactions and other available information
FY20
$’000
1,921
FY19
$’000
2,860
2,000
2,000
Level 3
Acquisition value within 12 months of year end
and other available information
3,000
-
Level 2
Level 2
Discounted cash flow
Forward interest rates, contract interest rates
Discounted cash flow
Forward interest rates, contract interest rates
3,330
2,775
49,262
53,800
Level 2
Discounted cash flow
Forward interest rates, contract interest rates
3,277
1,565
In the year to 30 June 2020 there has been no change
22.2. Financial assets and liabilities
in the fair value hierarchy or the valuation techniques
22.2.1. Recognition and initial measurement
applied to any of the balances above.
For further information on the use of derivatives refer to
Note 23 Financial risk management.
22.1.2. Fair value of financial assets and liabilities that are
not measured at fair value (but fair value disclosures are
required)
With the exception of the future trail commission payable
that is initially recognised at fair value and subsequently
carried at amortised cost, management consider that
the carrying amounts of financial assets and liabilities
recognised in the consolidated financial statements
approximate their fair values.
Loans and advances and receivables (including trade and
other receivables, bank balances and cash) are non-
derivative financial assets with fixed or determinable
payments that are not quoted in an active market which
are initially recognised when they are originated. All
other financial assets and financial liabilities are initially
recognised when the Group becomes a party to the
contractual provisions of the instrument.
A financial asset (unless it is a trade receivable without
a significant financing component) or finance liability is
initially measured at fair value plus, for an item not at
FVTPL, transaction costs that are directly attributable
to its acquisition or issue. A trade receivable without a
significant financing component is initially measured at
the transaction price.
RESIMAC GROUP LTD2020 ANNUAL REPORT 88
2020 ANNUAL REPORT
89
89
Notes to the Consolidated Financial Statements
Risk (for the year ended 30 June 2020)
22.2.2. Classification & Subsequent Measurement
All financial assets not classified as measured at
In assessing whether the contractual cash
22.2.2.4. Financial Assets – Subsequent measurement
22.2.2.1. Financial assets
On initial recognition, a financial asset is classified as
measured at:
§ amortised cost
§ fair value through other comprehensive income
(FVOCI) – debt instrument
§ fair value through other comprehensive income
(FVOCI) – equity instrument
§ fair value through profit or loss (FVTPL)
Financial assets are not reclassified subsequent to their
initial recognition unless the Group changes its business
model for managing financial assets, in which case all
affected financial assets are reclassified on the first day
amortised cost or FVOCI as described above are
measured as FVTPL. This includes all derivative financial
assets and investment securities. On initial recognition,
the Group may irrevocably designate a financial asset
that otherwise meets the requirements to be measured
at amortised cost or at FVOCI as at FVTPL if doing so
eliminates or subsequently reduces an accounting
mismatch that would otherwise arise.
22.2.2.2 Financial assets – Business model assessment
The Group determines the business model at the level
that reflects how groups of financial assets are managed.
In determining the business model, all relevant evidence
that is available at date of assessment is used including:
of the first reporting period following the change in the
§ how the performance of the financial assets held within
business model.
that business model are evaluated and reported to the
Group’s KMP
§ the risks that affect the performance of the business
model (and the financial assets held within that
business model) and, in particular, the way in which
those risks are managed; and
flows are solely payments of principal
and interest, the Group considers the
contractual terms of the instrument. This
includes assessing whether the financial
asset contains a contractual term that could
change the timing or amounts of contractual
cash flows such that it would not meet this
condition. In making this assessment, the
Group considers:
§ contingent events that would change the
amount or timing of cash flows;
§ terms that may adjust the contractual
coupon rate, including variable-rate
features;
§ prepayment and extension features; and
§ terms that limit the Group’s claim to cash
flows from specified assets (e.g. non-
recourse features).
A prepayment feature is consistent with
the solely payments of principal and
A financial asset is measured at amortised cost if it meets
both of the following conditions and is not designated as
at FVTPL:
§ it is held within a business model whose objective is to
hold assets to collect contractual cash flows; and
§ its contractual terms give rise on specified dates to
cash flows that are solely payments of principal and
interest on the principal amount outstanding.
A debt investment is measured at FVOCI if it meets both
of the following conditions and is not designated as at
FVTPL:
§ it is held within a business model whose objective is
achieved by both collecting contractual cash flows and
selling financial assets; and
§ its contractual terms give rise on specified dates to
cash flows that are solely payments of principal and
interest on the principal amount outstanding.
On initial recognition of an equity investment that is
not held for trading, the Group may irrevocably elect to
present subsequent changes in the investment’s fair
value in OCI. This election is made on an investment-by-
investment basis.
§ how managers of the business are compensated (for
interest criterion if the prepayment amount
example, whether compensation is based on the fair
value of the assets managed or on the contractual cash
flows collected).
Financial assets that are held for trading or are managed
and whose performance is evaluated on a fair value basis
are measured at FVTPL.
22.2.2.3. Financial assets – Assessment whether
contractual cash flows are solely payments of principal
and interest
For the purpose of this assessment, ‘principal’ is
defined as the fair value of the financial asset on initial
recognition. ‘Interest’ is defined as consideration for the
time value of money and for the credit risk associated
with the principal amount outstanding during a particular
period of time and for other basic lending risks and costs
(e.g. liquidity risk and administrative costs), as well as a
profit margin.
substantially represent unpaid amounts
of principal and interest on the principal
amount outstanding, which may include
reasonable additional compensation
for early termination of the contract.
Additionally, for a financial asset acquired
at a discount or premium to its contractual
par amount, a feature that permits or
requires prepayment at an amount that
substantially represents the contractual
par amount plus accrued (but unpaid)
contractual interest (which may also include
reasonable additional compensation for
early termination) is treated as consistent
with this criterion if the fair value of the
prepayment feature is insignificant at initial
recognition.
and gains and losses
Financial
assets at
FVTPL
Financial
assets at
amortised cost
Debt
investments at
FVOCI
Equity
investments at
FVOCI
These assets are subsequently
measured at fair value. Net gains
and losses, including any interest or
dividend income, are recognised in
profit or loss. However, see Note 23.3
for derivatives designated as hedging
instruments.
These assets are subsequently
measured at amortised cost using
the effective interest method.
The amortised cost is reduced by
impairment loss. Interest income,
foreign exchange gains and losses and
impairment are recognised in profit or
loss. Any gain or loss on derecognition
is recognised in profit or loss.
These assets are subsequently
measured at fair value. Interest
income is calculated using the
effective interest method. Other
net gains and losses are recognised
in OCI. On derecognition, gains
and losses accumulated in OCI are
reclassified to profit or loss.
These assets are subsequently
measured at fair value. Dividends are
recognised as income in profit or loss
unless the dividend clearly represents
a recovery of part of the cost of the
investment. Other net gains and
losses are recognised in OCI and are
never reclassified to profit or loss.
RESIMAC GROUP LTD2020 ANNUAL REPORT 90
90
RESIMAC GROUP LTD
91
Notes to the Consolidated Financial Statements
Risk (for the year ended 30 June 2020)
22.2.2.5. Financial liabilities – Classification,
accordance with the Group’s documented
subsequent measurement and gains and
risk management or investment strategy,
losses
Financial liabilities are classified as either
and information about the grouping is
provided internally on that basis; or
financial liabilities at FVPTL or other financial
§ it forms part of a contract containing one
liabilities.
Financial liabilities at FVTPL
Financial liabilities are classified as at FVTPL
or more embedded derivatives, and AASB 9
permits the entire combined contract to be
designated as at FVTPL.
where the liability is either held for trading or
Financial liabilities at FVTPL are stated at
designated at fair value through profit or loss.
fair value with any gains or losses arising on
A financial liability is held for trading if:
remeasurement recognised in profit or loss.
The net gain or loss recognised in profit or
§ it has been incurred principally for the
loss incorporates any interest paid on the
purpose of repurchasing it in the near term;
financial liability and is included in the ‘other
or
gains and losses' line item.
§ on initial recognition it is a part of a
portfolio of identified financial instruments
that the Group manages together and has a
recent actual pattern of short-term profit-
taking; or
§ it is a derivative that is not designated and
effective as a hedging instrument.
A financial liability other than a financial
liability held for trading may be designated as
at FVTPL upon initial recognition if:
§ such designation eliminates or significantly
reduces a measurement or recognition
inconsistency that would otherwise arise;
or
§ the financial liability forms part of a group
of financial assets or financial liabilities or
Other financial liabilities
Other financial liabilities (including
borrowings and trade and other payables) are
subsequently measured at amortised cost
using the effective interest method.
The effective interest method is a method of
calculating the amortised cost of a financial
liability and of allocating interest expense over
the relevant period. The effective interest rate
is the rate that exactly discounts estimated
future cash payments (including all fees and
points paid or received that form an integral
part of the effective interest rate, transaction
costs and other premiums or discounts)
through the expected life of the financial
liability, or (where appropriate) a shorter
both, which is managed and its performance
period, to the net carrying amount on initial
evaluated on a fair value basis, in
recognition.
22.2.3. Derecognition
22.2.3.1. Financial assets
The Group derecognises a financial asset when
the contractual rights to the cash flows from
the financial asset expire, or it transfers the
rights to receive the contractual cash flows in
a transaction in which substantively all of the
risks and rewards of ownership of the financial
asset are transferred or in which the Group
neither transfers nor retains substantially all of
the risks and rewards of ownership and it does
not retain control of the financial asset.
The Group enters into transactions whereby
it transfers assets recognised in its statement
of financial position, but retains either all or
substantially all of the risks and rewards of
the transferred assets. In these cases, the
transferred assets are not derecognised.
22.2.3.2. Financial liabilities
22.2.4. Offsetting
Financial assets and financial liabilities are offset
and the net amount presented in the statement of
financial position when, and only when, the Group
currently has a legally enforceable right to set off
the amounts and it intends either to settle them
on a net basis or to realise the asset and settle the
liability simultaneously.
22.2.5. Impairment of financial assets
The Group recognises loss allowances for expected
credit loss (ECL) on:
§ Financial assets measured at amortised cost
§ Contract assets
§ Lease receivable
The Group measures loss allowances for a financial
instrument at an amount equal to the lifetime ECL
for stage 2 or stage 3 assets if the credit risk on
that financial instrument has increased significantly
since recognition, or if the financial instrument is a
The Group derecognises a financial liability
purchased or originated credit-impaired financial
when its contractual obligations are discharged
asset. If the credit risk on a financial instrument has
or cancelled, or expire. The Group also
not increased significantly since initial recognition
derecognises a financial liability when its terms
(except for a purchased or originated credit-
are modified and the cash flows of the modified
impaired financial asset), the Group measures
liability are substantially different, in which case
the loss allowance for that financial instrument
a new financial liability based on the modified
at an amount equal to a 12 month ECL for stage 1
terms is recognised at fair value.
On derecognition of a financial liability, the
difference between the carrying amount
extinguished and the consideration paid
(including any non-cash assets transferred or
liabilities assumed) is recognised in profit or
loss.
assets. The Group applies a simplified approach for
measuring the loss allowance at an amount equal to
lifetime ECL for trade receivables, contract assets
and lease receivable in certain circumstances.
RESIMAC GROUP LTD2020 ANNUAL REPORT 92
2020 ANNUAL REPORT
93
93
Notes to the Consolidated Financial Statements
Risk (for the year ended 30 June 2020)
Significant increase in credit risk
§ observable changes in national or local
An asset moves to stage 2 when its credit risk has
increased significantly since initial recognition.
When determining whether the credit risk of a
financial asset has increased significantly since
the initial recognition and when estimating ECLs,
the Group considers reasonable and supportable
information that is relevant and available without
undue cost effort. This includes both quantitative
and qualitative information and analysis, based on
the Group’s historical experience and informed
credit assessment and including forward-looking
information. As part of the forward-looking
assessment, the Group has considered factors
including macro-economic forecast and outlook,
GDP growth, unemployment rates and interest
rates.
Credit-impaired financial assets
The movement between stage 2 and 3 will be
based on whether financial assets are credit-
impaired at the reporting date. A financial asset
is credit-impaired when one or more events that
have a detrimental impact on the estimated future
cash flows of the financial assets have occurred.
Evidence that a financial asset is credit-impaired
includes the following observable data:
§ significant financial difficulty of the borrower; or
§ breach of contract, such us a default or
delinquency in interest or principal payments; or
§ it becoming probable that the borrower will
enter bankruptcy or financial re-organisation; or
§ past experience of collecting payments; or
§ an increase in the number of delayed payments
in the portfolio past the average credit period; or
economic conditions that correlate with default
on receivables.
Definition of default
The Group considers that default has occurred at
90 days past due.
Measurement of ECLs
ECLs are a probability-weighted estimate of credit
losses. Credit losses are measured as the present
value of all cash shortfalls (i.e. the difference
between the cash flows due to the entity in
accordance with the contract and the cash flows
that the Group expects to receive). The key inputs
used in measuring ECL include:
a) probability of default: the PD is the likelihood of
default, applied to each underlying exposure
b) loss given default: the LGD is the magnitude of
the expected credit loss in the event of default,
taking into consideration the mitigating effect
of collateral assets and time value of money
c) exposure at default: the EAD represents the
estimated exposure in the event of a default
The ECL is determined with reference to the
following stages:
Stage 1: 12 month ECL
At initial recognition, for financial assets without
a significant increase in credit risk (SICR), or for
financial assets where an increase in credit risk is
considered to be low, ECL is determined based on
PD over the next 12 months, adjusted for forward
looking estimates (FLE).
Stage 2: Lifetime ECL not credit impaired
Where there has been a SICR, the ECL is determined with
reference to the financial asset’s lifetime PD and the
lifetime losses associated with that PD, adjusted for FLE.
The Group assesses whether there has been a SICR since
initial recognition based on qualitative, quantitative, and
reasonable and supportable FLE that includes management
judgement. Use of more alternative criteria could result in
significant changes to the timing and amount of ECL to be
recognised. Lifetime ECL is generally determined based on
the average maturity of the financial asset.
Stage 3: Lifetime ECL credit impaired
Financial assets are classified as stage 3 where they are
determined to be credit impaired, which generally matches
the Group’s definition of default which includes exposures
that are at least 90 days past due, and where the obligor is
unlikely to pay without recourse against available collateral.
The ECL for credit impaired financial assets is generally
measured as the difference between the discounted
contractual and discounted expected cash flows from the
individual exposure. For credit impaired exposure that are
modelled collectively, ECL is measured as the product of
the lifetime PD, LGD, and EAD, adjusted for FLE. Interest
income is determined with reference to the financial asset’s
amortised cost carrying value, being the financial asset’s net
carrying value after the ECL provision.
Stage 3: Impaired Assets
Outside of the ECL, where assets are more than 90 days
past due and a shortfall between the loan balance and the
underlying security has been identified, a specific provision is
raised for the shortfall.
RESIMAC GROUP LTD2020 ANNUAL REPORT 94
94
RESIMAC GROUP LTD
95
Notes to the Consolidated Financial Statements
Risk (for the year ended 30 June 2020)
23. Financial Risk Management
23.1. Financial Risk Management Objectives
The Group's Corporate Treasury function:
§ implements and executes treasury and funding strategy;
§ co-ordinates access to domestic and international financial markets; and
§ monitors and manages the financial risks relating to the operations of the Group
through internal monitoring tools which analyse exposures by degree and magnitude of
risks.
These risks include:
§ market risk (including currency risk and interest rate risk);
§ economic risk;
§ interest rate risk;
§ credit risk; and
§ liquidity risk.
23.2. Derivative Financial Instruments
The Group seeks to minimise the effects of currency and interest rate risks by using
derivative financial instruments to hedge risk exposures.
The use of financial derivatives is governed by the Group's Interest Rate Risk Management
Policy approved by the board of directors, which provide written principles on:
§ foreign exchange risk;
§ interest rate risk;
§ credit risk;
§ the use of financial derivatives and non-derivative financial instruments; and
§ the investment of excess liquidity.
Compliance with policies and exposure limits is reviewed by the Board on a continuous
basis. The Group does not enter into or trade financial instruments, including derivative
financial instruments, for speculative or proprietary purposes.
The table below summarises the Group’s exposure to financial risks and how these risks are managed.
Risk
Exposure arising from
Measurement
Management
Market risk -
currency
Recognised financial assets and liabilities
not denominated in Australian dollars
Cash flow
forecasting
Cross currency interest rate
swaps
Foreign currency denominated profit or
losses
Sensitivity
analysis
Cash flow management and
matching
Market risk -
interest rate
Mismatch in interest rates between
assets and liabilities
Investments in equity securities
Sensitivity
analysis
Sensitivity
analysis
Interest rate swaps
Equity investments not held
for trading
Market
risk – equity
investment
valuation
Credit risk
Mortgage portfolio and funding SPV-level
exposures, counterparty risk
Credit risk
analysis
Liquidity risk
Borrowings, derivative financial liabilities
Rating agency
criteria and
analyses
Rolling cash flow
forecasts
Diversification, adaptive
capital structures, strong
collections/portfolio
management, rating agency
provisions in transactions
documents
Availability of committed
credit lines and borrowing
facilities, securitisation,
capital relief transactions,
structuring terms of
obligations
Recognition & Measurement
Derivatives are initially recognised at fair value at the date the derivative contracts are entered into and are
subsequently remeasured to their fair value at each reporting period.
The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and
effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the
nature of the hedge relationship.
RESIMAC GROUP LTD2020 ANNUAL REPORT 96
2020 ANNUAL REPORT
97
97
Notes to the Consolidated Financial Statements
Risk (for the year ended 30 June 2020)
23.3. Hedge Accounting
23.3.1. Cash Flow Hedges
23.4. Market Risk
The Group designates certain hedging instruments,
The effective portion of changes in the fair value of
Market risk is the risk of an adverse impact on the Group’s
which includes derivatives in respect of foreign currency
derivatives that are designated and qualify as cash flow
earnings resulting from changes in market factors, such
risk, as cash flow hedges.
hedges is recognised in other comprehensive income
as interest rates and foreign exchange rates.
At the inception of the hedge relationship the Group
documents the relationship between the hedging
instrument and hedged item, along with its risk
management objectives and its strategy for undertaking
and accumulated under the heading of cash flow hedging
reserve. The gain or loss relating to the ineffective
23.4.1. Interest Rate Risk
portion is recognised immediately in profit or loss and is
Interest rate risk is the risk that the Group will experience
included in the other expenses or other income line item.
deterioration in its financial position as interest rates
below.
change over time.
principal amounts. Such contracts enable the Group to
mitigate the risk of changing interest rates on the cash
flow exposures on the issued variable rate debt. The fair
value of interest rate swaps at the end of the reporting
period is determined by discounting the future cash flows
using the curves at the end of the reporting period and
the credit risk inherent in the contract, and is disclosed
various hedge transactions.
Amounts previously recognised in other comprehensive
Furthermore, at the inception of the hedge and on
profit or loss, in the same line as the recognised hedged
mismatches between assets and liabilities (i.e. borrowing
Derivative financial liabilities
income and accumulated in equity are reclassified to
Interest rate exposure is driven by interest rate
Fair value liability
FY20
$’000
3,277
FY19
$’000
1,565
an ongoing basis, the Group documents whether the
item.
hedging instrument that is used in a hedging relationship
is effective in offsetting changes in fair values or cash
Hedge accounting is discontinued when:
at floating interest rates and lending with fixed interest
rates). Interest rate risk is managed by entering into
The following table details the notional principal amounts
interest rate swaps subject to the Group’s hedging and
outstanding at the end of the reporting period:
§ the Group revokes the hedging relationship;
derivatives policies.
flows of the hedged item attributable to the hedged risk,
which is when the hedging relationships meet all of the
following hedge effectiveness requirements:
§ there is an economic relationship between the hedged
item and the hedging instrument;
§ the hedging instrument expires or is sold, terminated,
or exercised; or
§ the Group no longer qualifies for hedge accounting.
§ the effect of credit risk does not dominate the value
Any cumulative gain or loss recognised in other
changes that result from that economic relationship;
comprehensive income and accumulated in equity at
and
§ the hedge value is largely reflective of the hedged
item.
that time remains in equity and is recognised when the
forecast transaction is ultimately recognised in profit or
loss. When a forecast transaction is no longer expected
to occur, the gain or loss accumulated in equity is
Note 22.1 sets out the details of the fair values of the
recognised immediately in profit or loss.
derivative instruments used for hedging purposes.
23.3.2. Derivative Financial Assets & Liabilities
The carrying values are as follows:
Derivative financial assets
Cross currency swaps
Interest rate swaps
Derivative financial liabilities
Interest rate swaps
FY20
$’000
FY19
$’000
49,262
53,800
3,330
2,775
52,592
56,575
3,277
3,277
1,565
1,565
23.4.2. Interest Rate Risk – Sensitivity Analysis
Notional principal value
The majority of the Group’s liabilities are issued through
Less than 1 year
warehouse facilities and term securitisations in special
purpose and bankruptcy-remote entities. Under such
arrangements, the repayment profile of the bonds is
matched to the repayments collected from the loan
1 to 2 years
2 to 5 years
assets.
FY20
$’000
-
FY19
$’000
633
24,280
33,096
503,503
390,498
527,783
424,227
The Group has calculated the impact of a potential
increase or decrease in borrowing costs in limited
recourse entities for the year in the event of a +/- 10bps
change in interest rates as shown in the table below:
10bps +/-
FY20
$’000
FY19
$’000
Borrowing costs
12,669
10,402
23.4.3. Interest Rate Swap Contracts
The interest rate swaps settle and reset on a monthly
basis. The floating rate on the interest rate swaps is the
Bank Bill Swap Rate (BBSW) local interbank rate. The
Group will settle the difference between the fixed and
floating interest rate on a net basis.
All interest rate swap contracts exchanging floating
rate interest amounts for fixed rate interest amounts
are designated as cash flow hedges. The interest rate
swaps and the interest payments on the loan occur
simultaneously and the amount accumulated in equity
Under interest rate swap contracts, the Group agrees
is reclassified to profit or loss over the period that the
to exchange the difference between fixed and floating
floating interest rate payments on debt affect profit or
rate interest amounts calculated on agreed notional
loss.
RESIMAC GROUP LTD2020 ANNUAL REPORT 98
98
RESIMAC GROUP LTD
2020 ANNUAL REPORT
99
99
Notes to the Consolidated Financial Statements
Risk (for the year ended 30 June 2020)
23.4.4. Corporate Interest – Sensitivity Analysis
23.6. Credit Risk Management
The remainder of the Group’s loan portfolio and liabilities are held in corporate entities. The impact of a potential +/-
The Group’s primary credit risk exposures relate
10bps change in interest rates on interest revenue and borrowing costs on balances held by the Group for the year is set
to its lending activities in its principally-funded
The Group’s approach to credit management
utilises a credit risk framework to ensure that the
following principals are adhered to:
out in the table below:
10bps +/-
Impact on corporate interest revenue
Interest rate + 10bps
Interest rate - 10bps
Impact on corporate funding costs
Interest rate + 10bps
Interest rate - 10bps
FY20
$’000
366
(366)
(5)
5
FY19
$’000
225
(225)
(30)
30
23.4.5. Equity Price Risk
23.5. Foreign Currency Risk
Equity investments in listed and unlisted shares are held
23.5.1. Accounting Translation
for strategic rather than trading purposes. The Group
does not actively trade these investments.
As at reporting date the Group held cash assets
denominated in New Zealand dollars (NZD).
23.4.6. Equity Investment Valuation Risk – Sensitivity
Analysis
Fluctuations in the NZD are not expected to have
material impact on the consolidated statement of profit
If equity prices had been 10% higher / lower:
or loss or the consolidated statement of comprehensive
§ Net profit for the year ended 30 June 2020 would
increase / decrease by $500,000 as a result of the
changes in fair value of the investments in unlisted
shares (FY19: $200,000); and
23.5.2. Market Risk – Foreign Exchange on Monetary
Items
The Group obtains funding denominated in foreign
§ Other comprehensive income would increase /
currencies, consequently, exposures to exchange rate
decrease by $192,000 as a result of the changes in fair
fluctuations arise. These currencies include USD. The
value of investments in listed shares (FY 19: $286,000).
Group manages foreign currency risk through the use of
currency derivatives.
The carrying amounts of the Group’s foreign currency
denominated assets and liabilities are as follows:
Assets
FY20
$’000
FY19
$’000
USD liabilities (disclosed in AUD)
49,262
53,800
mortgage portfolio. The Group’s primary lending
§ independence from risk originators;
activities are concentrated in the Australian
and New Zealand residential mortgage market.
The underlying credit risk in the Group’s lending
activities is commensurate with a geographically-
diverse residential mortgage portfolio.
The Board of Directors is responsible for
determining the Group’s overall appetite for credit
§ recognition of the different risks in the various
Group businesses;
§ credit exposures are systematically controlled
and monitored;
§ credit exposures are regularly reviewed in
accordance with current up-to-date credit
procedures; and
risk and monitoring the quality and performance
§ credit exposures include such exposures arising
of the mortgage portfolio. The credit risk
from derivative transactions.
management operational framework and policy is
governed and managed by the Credit Committee.
Each of the divisions are responsible for
managing credit risks that arise in their own
The Group does not have any direct counterparty
areas with oversight from a centralised credit risk
credit exposure arising from its asset financing
management team. It is the policy of the Group to
and securitisation activities. Counterparty risk is
monitor the policies of all divisions to ensure that
governed, and mitigated where required, by ratings
the risk of the Group is monitored.
agency criteria within the bankruptcy-remote
funding SPVs and trusts including exposures to
23.6.2 Exposure to credit risk
banks, lender’s mortgage insurance providers and
Loans and advances consist of a large number of
derivative counterparties.
customers, spread across diverse demographic
and geographical areas. Ongoing credit evaluation
is performed on the financial condition of loans and
The Group has established lending policies and
advances and accounts receivable.
procedures to manage the credit risk inherent in
lending. The extent of credit risk in the Group’s
lending activities is managed within its two
origination and funding programmes, being ‘Prime’
and ‘Specialist Lending’. The Group maintains
separate credit policies for each programme and
regularly reviews and amends policies in line with
economic, operating and funding conditions.
There is no significant concentration of risk to any
single counterparty.
The credit risk on wholesale funding and derivative
financial instruments is limited because the
counterparties are banks with high credit-ratings
assigned by international credit-rating agencies.
income and equity of the Group.
23.6.1. Credit Risk in Lending
RESIMAC GROUP LTD2020 ANNUAL REPORT 100
2020 ANNUAL REPORT
101
101
Notes to the Consolidated Financial Statements
Risk (for the year ended 30 June 2020)
23.6.3. Maximum Exposure to Credit Risk
23.6.5. Credit Risk Management
The carrying amount of the Group’s financial assets represents the maximum credit exposure. The Group’s exposure to
The following table summarises the movement in expected credit loss for loans and advances for the reporting period:
Note
FY20
$’000
FY19
$’000
Maximum exposure to credit risk
4
365,987
224,790
Balance as at 30 June 2020
Stage 1 -
Collective
$'000
Stage 2 -
Collective
$'000
Stage 3 -
Collective
$'000
Stage 3 -
Impaired
$'000
Total
$’000
credit risk at the reporting date was:
Cash and cash equivalents
Trade and other receivables
Short-term investment
Derivative financial assets
5
7
5,974
10,699
260
260
23
52,592
56,575
424,813
292,324
Loans and advances at amortised cost – balances subject to credit risk
6
12,518,394
10,337,020
12,943,207
10,629,344
As at 30 June 2020, 100% of the Group’s cash and cash equivalents are held with banks or financial institutions with a
credit rating of AA- or better (FY19: 100%).
23.6.3.1. Residential Mortgage Borrowers
due from borrowers until securities are enforced or
The Group manages credit risk by obtaining security over
residential mortgage property for each loan.
an insurance claim has been paid and to purchase the
mortgage from the lender if the Group is in default. The
Group’s risk in this area is mitigated by insurance policies
In monitoring the credit risk, loans are grouped
and a rigorous credit assessment process.
according to their credit characteristics using credit
risk classification systems. This includes the use of the
23.6.4. Financial Guarantees
Loan to Value Ratio (LVR) to assess its exposure to credit
The Group is exposed to credit risk in relation to financial
risk from loans originated through the securitisation
guarantees given to banks. The Group's maximum
programme.
For white label loans, some agreements with lenders
exposure in this respect is the maximum amount the
Group could have to pay if the guarantees are called on.
The Group does not have any financial guarantees as at
contain provisions requiring the Group to pay instalments
30 June 2020 (FY19: $nil).
Loans and advances
§ Mortgage lending
§ Commercial lending
Total
Balance as at 1 July 2019
Loans and advances
§ Mortgage lending
§ Commercial lending
Total
Expected credit loss
Balance as at 30 June 2020
Loans and advances
§ Mortgage lending
§ Commercial lending
Total
Balance as at 1 July 2019
Loans and advances
§ Mortgage lending
§ Commercial lending
Total
12,433,112
45,248
22,826
16,571
12,517,757
637
-
-
-
637
12,433,749
45,248
22,826
16,571
12,518,394
10,237,618
50,406
24,334
23,170
10,335,528
676
-
-
816
1,492
10,238,294
50,406
24,334
23,986
10,337,020
25,864
2,441
2,335
6,057
36,697
1
-
-
-
1
25,865
2,441
2,335
6,057
36,698
7,016
1,750
2,103
-
-
-
7,016
1,750
2,103
5,122
454
5,576
15,991
454
16,445
RESIMAC GROUP LTD2020 ANNUAL REPORT 102
102
RESIMAC GROUP LTD
2020 ANNUAL REPORT
103
103
Notes to the Consolidated Financial Statements
Risk (for the year ended 30 June 2020)
In line with regulatory guidance, loans on a COVID-19 hardship payment moratorium at 30 June 2020 are not deemed in
23.6.7. Analysis of Loans & Advances by Past Due Status
arrears. This includes loans in arrears prior to the commencement of payment moratoriums. For Collective Provision ECL
purposes, arrears position at 31st March 2020 were used for loans in COVID-19 hardship payment moratoriums.
Collateral Held
The value of the collateral held as security for loans in
Loans are secured by the Group by having the property
stage 2 and stage 3 collective at 30 June 2020 is $94.5
titles registered as a financial interest that provide the
million (The value of collateral held as security for loans
Group first priority over any proceeds becoming available
Under the Group’s monitoring procedures, a significant
increase in credit risk is identified before the exposure has
defaulted and at the latest when exposure becomes 30 days
past due. The table below provides an analysis of the gross
carrying amount of loans and advances by past due status that
are over 30 days past due.
past due but not impaired at 30 Jun 2019: $102.4 million).
from the sale of the property. For Prime insured loans,
Loans and advances at amortised cost1
The value of the collateral held as security for loans in
stage 3 specific loans at 30 June 2020 is $12.0 million
(The value of collateral held as security for impaired loans
at 30 Jun 2019: $19.8 million).
LMI policies exist to cover 100% of the principal amount
at default plus interest.
23.6.6. Credit Risk Concentrations
An analysis of the Group’s credit risk concentrations on loans and advances is provided in the following table. The
amounts in the table represent gross carrying amounts:
Loans and advances at amortised cost
Concentration by region
New South Wales
Victoria
Queensland
Western Australia
South Australia
Tasmania
Northern Territory
New Zealand
Total
FY20
$’000
FY19
$’000
4,673,307
3,995,742
3,584,565
2,854,342
2,064,167
1,669,597
918,803
775,892
609,674
455,629
90,275
74,682
48,984
40,030
528,619
471,106
12,518,394
10,337,020
FY20
$’000
FY19
$’000
0 days and less than 30 days
12,438,670
10,242,482
30 days and less than 60 days
35,313
39,805
60 days and less than 90 days
10,038
11,995
90 days and less than 180 days
14,487
14,151
180 days and less than 270 days
270 days and less than 365 days
4,746
2,145
6,538
3,983
365 days and over
12,995
18,066
Total
12,518,394
10,337,020
1 Includes loans that are collectively and specifically provided for
RESIMAC GROUP LTD2020 ANNUAL REPORT 104
2020 ANNUAL REPORT
105
105
Notes to the Consolidated Financial Statements
Risk (for the year ended 30 June 2020)
23.6.8. Movement in Credit Exposures
Provision for impairment losses
Balance as at 1 July 2019
Net transfer between stages
Net re-measurement of opening balance
net of transfers
Impact of transfers between stages
and re-measurement
Net financial assets originated
Acquisition of IA Group
Movements in existing individually assessed
provisions and write-backs
Write-offs
COVID-19 overlay
Discharges/Other
Balance as at 30 June 2020
Credit exposure
Stage 1 -
Collective
$'000
Stage 2 -
Collective
$'000
Stage 3 -
Collective
$'000
Stage 3 -
Impaired
$'000
Total
$’000
7,016
1,143
1,750
(958)
2,103
(699)
5,576
16,445
514
-
(563)
1,342
1,465
1,470
3,714
580
384
766
1,984
3,714
2,789
200
-
-
15,882
(602)
25,865
112
44
-
-
-
475
(280)
2,441
-
-
-
23
(601)
2,335
-
295
384
2,945
495
384
(2,254)
(2,254)
-
72
16,380
(1,411)
6,057
36,698
Balance as at 1 July 2019
10,238,294
50,406
24,334
23,986
10,337,020
Net transfers between stages and
financial assets originated
2,195,455
(5,158)
(1,508)
(5,161)
2,183,628
Write-offs
-
-
-
(2,254)
(2,254)
Balance as at 30 June 2020
12,433,749
45,248
22,826
16,571
12,518,394
COVID-19 Overlay
Refer to note 6 for COVID-19 overlay methodology driving calculations in the following tables.
Table 1: CoreLogic stratified hedonic index (lower quartile, middle and upper quartile values and value movements by
capital city)
HVI Bandings
($)
Change in
value1, 12
months ending
April 2019 (%)
Lower
Mid
Upper
Lower
Mid
Upper
Sydney
Melbourne
Brisbane
Adelaide
Perth
Hobart
$664,872
$545,552
$379,042
$336,170
$344,977
$381,910
$885,158
$686,798
$508,386
$441,184
$443,669
$486,056
$1,345,850
$959,515
$681,657
$584,972
$598,483
$628,860
(9%)
(11%)
(12%)
(4%)
(8%)
(14%)
(2%)
(2%)
(2%)
1%
1%
0%
(9%)
(8%)
(8%)
8%
5%
1%
1 Canberra and Darwin change in value data not available in CoreLogic Hedonic Index.
Table 2: Resimac COVID-19 underlying security stress bands (by HVI Banding and State)
HVI Bandings
($)
Forecast
increase
(%)
Lower
Mid
Upper
Lower
Mid
Upper
NSW
VIC
QLD
SA
WA
TAS
NT
ACT
$664,872
$545,552
$379,042
$336,170
$344,977
$381,910
$283,314
$518,631
$885,158
$686,798
$508,386
$441,184
$443,669
$486,056
$393,939
$637,279
$1,345,850
$959,515
$681,657
$584,972
$598,483
$628,860
$505,513
$791,254
(10%)
(10%)
(10%)
(10%)
(10%)
(10%)
(10%)
(10%)
(15%)
(15%)
(15%)
(15%)
(15%)
(15%)
(15%)
(15%)
(20%)
(20%)
(20%)
(20%)
(20%)
(20%)
(20%)
(20%)
Table 3: Resimac Loans in COVID-19 hardship payment moratoriums – Stressed Security Values (by LVR)
Hardship Loans - Dynamic LVR (Stressed ) ($'000)
LVR Banding
<60%
60% - 70%
70% - 80%
80% - 90%
90% - 95%
95% - 100%
100% +
Total
Prime
LMI
17,838
14,441
13,290
26,244
20,243
29,327
90,763
Prime
No LMI
54,758
39,974
86,153
Specialist
LMI
Specialist
No LMI
7,924
3,169
1,514
71,038
61,043
116,071
114,942
590
175,555
49,256
33,004
74,521
-
-
99,684
82,032
2,737
191,351
NZ2
11,242
18,102
48,408
23,157
1,078
-
-
Legacy
LMI
Total
32,138
194,938
5,133
5,401
3,311
2,541
1,677
9,328
141,862
270,837
343,799
172,802
146,040
368,700
212,146
452,608
15,934
796,774
101,987
59,529
1,638,978
2 NZ LVRs based on most recent valuation, NZ securities were not stressed for the purpose of the COVID overlay.
RESIMAC GROUP LTD2020 ANNUAL REPORT 106
106
RESIMAC GROUP LTD
107
Notes to the Consolidated Financial Statements
Risk (for the year ended 30 June 2020)
Table 4: Resimac COVID-19 Provision Overlay – assuming 33% of loans with Stressed LVR >100% default
COVID-19 Overlay - By State and HVI Band ($'000)
Upper
No Banding
State
NSW
VIC
QLD
WA
SA
NT
ACT
TAS
New Zealand
Total
Lower
449
130
51
82
-
-
28
-
-
Mid
2,931
1,587
700
573
163
45
-
28
-
1,517
2,411
2,962
1,388
924
131
-
-
-
740
6,027
9,333
-
-
-
-
-
-
-
-
280
280
Total
4,897
4,128
3,713
2,043
1,087
176
28
28
280
16,380
Table 5: Resimac Loans in Hardship vs Overall Portfolio
Prime - LMI
Prime – No LMI
Specialist - LMI
Specialist – No LMI
NZ / Legacy / Other
Overall Portfolio ($'000)
AUM
Hardship
1,964,590
6,333,512
72,791
2,967,961
1,179,539
212,146
452,608
15,934
796,774
161,516
Total
12,518,394
1,638,978
%
11%
7%
22%
27%
14%
13%
The Group analysed the industry type of the primary borrower of loans in COVID-19 hardship moratoriums. A lack of
concentration risk exists in the portfolio industry type. Furthermore, it is difficult to predict probability of defaults for
each particular industry. Therefore, the Group has not segmented the book by industry type for the purpose of the
COVID-19 overlay.
The industry type of the primary borrower segmented by Prime and Specialist loans are detailed in table 6.
Table 6: Resimac COVID-19 Hardship Loans - Employment Industry Type (Primary Borrower)
Air
Building & Construction
Hospitality
Not identified
Legal, Projects, IT & Communications
Marketing, Media & Sales
Transport & Safety
Other professional services
Health, Medicine, Science & Research
Engineering, Plumbing & Electrical
Financial Services
Social Services
Agriculture, Mining, Machinery, Manufacturing
Leisure – Beauty, Events, Tourism, Arts
Other
Real Estate & Property
Retail, Textiles
Prime
LMI
1%
9%
4%
12%
16%
6%
6%
8%
7%
4%
5%
6%
5%
3%
3%
3%
2%
Prime
No LMI
Specialist
LMI
Specialist
No LMI
2%
8%
4%
3%
16%
11%
6%
8%
10%
4%
7%
6%
2%
3%
6%
2%
2%
1%
21%
7%
8%
13%
7%
7%
5%
4%
5%
4%
2%
2%
6%
3%
3%
2%
0%
17%
9%
7%
18%
6%
6%
4%
6%
4%
4%
2%
1%
7%
5%
2%
2%
100%
100%
100%
100%
23.7. Liquidity Risk Management
Ultimate responsibility for liquidity risk management
The majority of the Group’s liabilities represent bonds
rests with the Board of Directors, which has established
issued by special purpose trusts through warehouse
an appropriate liquidity risk management framework for
facilities and term securitisation transactions. Under
the management of the Group's short, medium and long-
such arrangements, bondholder recourse is limited to
term funding and liquidity management requirements.
the assets of the relevant special purpose trust to which
The Group’s funding platform currently comprises a mix
of:
§ warehouse facilities;
§ term securitisation;
§ a secured corporate debt facility; and
§ cash.
the liability relates and the repayment profile of the
bonds is matched to the repayments collected from the
loan assets. Given the limited recourse nature of these
borrowings, $12.42 billion at 30 June 2020 (FY19: $10.23
billion), they have not all been included in the table below.
RESIMAC GROUP LTD2020 ANNUAL REPORT 108
2020 ANNUAL REPORT
109
109
Notes to the Consolidated Financial Statements
Risk (for the year ended 30 June 2020)
The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities,
by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and
liabilities.
Note 23.7.2 below sets out details of additional undrawn facilities that the Group has at its disposal to further reduce
liquidity risk.
23.7.1. Liquidity Risk Tables
The following table shows the Group's remaining expected maturity for its non-derivative financial liabilities with agreed
repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on
the earliest date on which the Group can be required to pay and hence will not necessarily reconcile with the amounts
disclosed in the statement of financial position.
The tables include both interest and principal cash flows. To the extent that interest flows are floating rate, the
undiscounted amount is derived from interest rate curves at the end of the reporting period. The contractual maturity is
based on the earliest date on which the Group may be required to pay.
<6
months
or on
demand
$'000
6-12
months
$'000
1-3
years
$'000
3-5
years
$'000
>5
years
$'000
Total
cash
flows
$'000
Carrying
amount
$'000
Financial liabilities
FY20
Non-derivatives
Trade and other payables
25,891
Interest-bearing liabilities
§ Corporate debt facility
§ Issuance facilities
Present value of future trail
commissions payable
3,115
2,635
7,053
3,671
4,323
20,797
20,797
29,034
2,635
12,053
262,426
4,323
310,471
310,443
Derivatives
3,277
-
-
-
-
3,277
3,277
32,311
2,635
12,053
262,426
4,323
313,748
313,720
<6
months
or on
demand
$'000
6-12
months
$'000
1-3
years
$'000
3-5
years
$'000
>5
years
$'000
Total
cash
flows
$'000
Carrying
amount
$'000
FY19
Non-derivatives
Trade and other payables
25,294
-
Interest-bearing liabilities
§ Corporate debt facility
§ Issuance facilities
§ Loans from related parties
Present value of future trail
commissions payable
-
-
-
-
-
-
186,051
-
-
-
-
-
25,294
25,294
30,086
30,000
186,051
186,051
2,400
2,400
86
30,000
-
-
-
2,400
3,806
3,043
8,277
3,951
3,824
22,901
22,901
29,186
35,443
8,277
190,002
3,824
266,732
266,646
Derivatives
1,565
-
-
-
-
1,565
1,565
30,751
35,443
8,277
190,002
3,824
268,297
268,211
-
-
-
-
5,000
-
-
-
258,755
-
-
-
25,891
25,891
5,028
5,000
258,755
258,755
23.7.2. Financing Facilities
Secured corporate debt facility which may be extended by mutual agreement
§ Amount used
§ Amount unused
28
-
FY20
$’000
5,000
FY19
$’000
30,000
25,000
10,000
30,000
40,000
RESIMAC GROUP LTD2020 ANNUAL REPORT 110
110
RESIMAC GROUP LTD
Notes to the Consolidated
Financial Statements
Group Structure
for the year ended 30 June 2020
24. Subsidiaries
Details of the Group’s subsidiaries at the end of the reporting period are as follows:
Proportion of ownership
interest held and voting
power held by the Group
Place of
incorporation
and operation
FY20
%
FY19
%
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
100
100
100
100
99.9
100
100
100
100
100
100
100
100
100
100
100
60
60
60
100
100
100
100
99.9
100
100
100
100
100
-
-
100
100
100
100
-
-
-
Name of subsidiary
Controlled Companies
Access Network Management Pty Ltd
Auspack Financial Services Pty Ltd
Principal activity
Mortgage manager
Mortgage broker
Barnes Mortgage Management Pty Ltd
Mortgage originator and manager
Clarence Street Finance Pty Ltd
Holder of commission agreements
Clarence Street Funding No.1 Pty Ltd
Clarence Street Funding No.2 Pty Ltd
Clarence Street Funding No.3 Pty Ltd
Clarence Street Funding No.4 Pty Ltd
Clarence Street Funding No.6 Pty Ltd
Clarence Street Funding No.7 Pty Ltd
Clarence Street Funding No.8 Pty Ltd1
Clarence Street Funding No.9 Pty Ltd2
FAI First Mortgage Pty Ltd
Homeloans Pty Ltd
Housing Financial Services Pty Ltd
Independent Mortgage Corporation Pty Ltd
International Acceptance Investment Pty Limited3
International Acceptance Holdings Pty Limited3
Special purpose vehicle
Participation unit holder
Special purpose vehicle
Special purpose vehicle
Special purpose vehicle
Special purpose vehicle
Special purpose vehicle
Special purpose vehicle
Trust manager and servicer
Mortgage lender
Mortgage originator
Mortgage broker
Holding company
Holding company
International Acceptance Pty Limited3
Financial service management
1 Incorporated 21 August 2019.
2 Incorporated 18 October 2019.
3 Acquired 1 January 2020, Refer to Note 25.
111
Proportion of ownership
interest held and voting
power held by the Group
Place of
incorporation
and operation
FY20
%
FY19
%
Name of subsidiary (continued)
Principal activity
Controlled Companies
Evergreen Finance Company Pty Limited3
Financial service management
IA Structured Finance Pty Limited3
Consumer and commercial lending
Australia
Australia
International Acceptance (NZ) Limited3
Consumer and commercial lending
New Zealand
IASF (NZ) Limited3
Consumer and commercial lending
New Zealand
Parnell Road Funding No.1 Limited
Special purpose vehicle
New Zealand
Parnell Road Funding No.2 Limited
Special purpose vehicle
New Zealand
Prime Insurance Group Limited
RESIMAC Capital Markets Pty Ltd
LMI captive insurer
Trust manager
Bermuda
Australia
RESIMAC Financial Services Limited
NZ Holding company
New Zealand
RESIMAC Financial Securities Limited
NZ Trust manager and servicer
New Zealand
RESIMAC Home Loans Ltd
NZ Lender of record and trustee
New Zealand
RESIMAC Limited
Non-bank lender
Australia
RESIMAC NZ Home Loans Ltd
NZ Holding company
New Zealand
Unit Holder
Lender of record
Mortgage trustee
Trust servicer
Initial Trustee
Australia
Australia
Australia
Australia
Australia
Dormant
New Zealand
Dormant
New Zealand
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Australia
Australia
Australia
Australia
Australia
Australia
Dormant
New Zealand
Dormant
Dormant
Australia
Australia
Dormant
United Kingdom
Resimac Premier Warehouse No.1 Pty LTD4
RHG Mortgage Corporation Ltd4
RHG Mortgage Securities Pty Ltd (RMS)4
The Servicing Company Pty Ltd
RESIMAC EST PTY LTD5
0508 Home Loans Ltd
0800 Home Loans Ltd
Access Home Loans Pty Ltd
Clarence St Funding No.5 Pty Ltd
Fiduciary Services Pty Ltd
HLL Pty Ltd6
Loan Packaging Australia Pty Ltd
National Mutual Pty Ltd
RESIMAC Financial Securitisation Ltd
RESIMAC Financial Services Pty Ltd
RESIMAC Leasing Pty Ltd
RESIMAC (UK) Ltd7
3 Acquired 1 January 2020, Refer to Note 25.
4 Ownership interest is 0% but Board control.
5 Incorporated 12 February 2020.
6 Deregistered 17 November 2019.
7 Deregistered 17 September 2019.
60
60
60
60
100
100
100
100
100
100
100
100
100
-
-
-
100
100
100
100
100
99.9
100
-
100
100
100
100
100
-
-
-
-
-
100
100
100
100
100
100
100
100
100
-
-
-
100
-
100
100
100
99.9
100
100
100
100
100
100
100
100
RESIMAC GROUP LTD2020 ANNUAL REPORT 112
2020 ANNUAL REPORT
113
113
Notes to the Consolidated Financial Statements
Group Structure (for the year ended 30 June 2020)
Name of subsidiary (continued)
Principal activity
Place of
incorporation
and operation
FY20
%
FY19
%
Controlled Trusts
Avoca Master Trust
Issuer of RMBS
Australia
NZF Mortgages Warehouse A Trust
Warehouse mortgages
New Zealand
RESIMAC Bastille Master Trust8
RESIMAC Triomphe Master Trust8
RESIMAC Versailles Master Trust
RESIMAC Victoire Trust
RHG Mortgage Securities Trust
RMT Warehouse Trust No.2
RMT Securitisation Trust No.78
Issuer of RMBS
Issuer of RMBS
Australia
Australia
Issuer of RMBS
New Zealand
Warehouse mortgages
New Zealand
Issuer of RMBS
Warehouse mortgages
Issuer of RMBS
Australia
Australia
Australia
Australia
International Acceptance Trust11
Consumer and commercial lending
The Trustee for the Resimac Group Limited
Employee Share Trust9
Employee share trust
Australia
RESIMAC NIM Master Trust10
Dormant
Australia
8 This does not represent holding in capital units, percentage ownership represents control of these Trusts.
9 Incorporated 24 February 2020. Ownership interest is 0% however the Group have Board control.
10 Deregistered 21 November 2019.
11 Acquired 1 January 2020, Refer to Note 25.
100
100
100
100
100
100
100
100
100
60
-
100
100
100
100
100
100
100
100
100
100
-
-
100
Special purpose entities – securitised trusts and funding warehouses
Special purpose entities are those entities over which
§ conduct securitisation activities funded by short term
the Group has no ownership interest but in effect the
warehouse facilities provided by reputable lenders; and
substance of the relationship is such that the Group
controls the entity so as to obtain the majority of the
benefits from its operation.
The Group has established special purpose entities
to support the specific funding needs of the Group’s
securitisation programme with the aim to:
§ hold securitised assets and issue Residential Mortgage
Backed Securities.
The special purpose entities meet the criteria of being
controlled entities under AASB 10 – Consolidated
Financial Statements.
25. Acquisition of Subsidiary
25.1. Accounting for Business Combinations
The Group accounts for business combinations using the
acquisition method when control is transferred to the
The fair value of the purchase consideration is
$6.0m which resulted in the acquisition of two
instruments:
Group. The consideration transferred in the acquisition
§ 60% interest in the equity interest in the IA
is generally measured at fair value, as are the identifiable
Group; and
§ An option to acquire the remaining 40% for
additional consideration of $8.0m
Purchase Consideration
Base equity value for 60% of
issued shares
Option to acquire remaining 40%
Consideration paid for shares
and option
$'000
5,812
188
6,000
Consideration for Option
The option that entitles Resimac to acquire
40% for $8.0m is recognised within equity at
the fair value of the option in the consolidated
financial statements. The option does not give
rise to deferred or contingent consideration.
Refer to note 20.2 for further details.
net assets acquired. Any goodwill that arises is tested
annually for impairment. Any gain on bargain purchase
is recognised in profit or loss immediately. Transaction
costs incurred in connection with a business combination
are expensed as incurred, except if related to the issue of
debt or equity securities.
The consideration transferred does not include amounts
related to the settlement of pre-existing relationships.
Such amounts are generally recognised in profit or loss.
Any contingent consideration is measured at fair
value at the date of acquisition. If an obligation to pay
contingent consideration that meets the definition of
a financial instrument is classified as equity, then it is
not remeasured and settlement is accounted for within
equity. Otherwise, other contingent consideration is
remeasured at fair value at each reporting date and
subsequent changes in the fair value of the contingent
consideration are recognised in profit or loss.
25.2. Details of Acquisition
On 1 January 2020 Resimac acquired 60% of the issued
share capital of IA Group for $6.0m, with an option
to acquire the remaining 40% for $8.0m expiring on
31 December 2021. IA Group is a finance company
participating in both secured commercial and consumer
lending. IA Group has an on balance sheet portfolio
of over $50 million and is involved in all aspects of
the lending cycle including origination, underwriting,
servicing, treasury and collections. The investment is in
line with Resimac’s diversification strategy and facilitates
expansion into new secured asset classes.
RESIMAC GROUP LTD2020 ANNUAL REPORT 114
114
RESIMAC GROUP LTD
115
Notes to the Consolidated Financial Statements
Group Structure (for the year ended 30 June 2020)
The assets and liabilities recognised as a result of the acquisition
Acquired loans receivable
are as follows:
Assets
Cash at bank
Trade and other receivables
Loans and advances
Other assets
Plant and equipment
Right-of-use assets
Intangible assets
Total assets
Liabilities
Trade and other payables
Provisions
Interest-bearing liabilities
Lease liability
Deferred tax liability
Total liabilities
Fair value of identified net assets
Less: Non-controlling interest
Add: goodwill
Cash consideration
Fair value
$'000
1,087
175
54,085
73
494
191
114
56,219
(1,295)
(75)
(54,001)
(497)
(104)
(55,972)
247
(99)
5,664
5,812
Subsequent to the acquisition accounting, goodwill becomes
subject to impairment tests which are undertaken at least
annually, or if and when there are indicators that goodwill maybe
impaired.
The fair value of acquired loans
receivables is $54,085,000. The gross
contractual amount for loans receivable
due is $54,580,000, with a loan loss
provision of $495,000 recognised on
acquisition.
Accounting policy choice for non-
controlling interests
The Group recognises non-controlling
interests in an acquired entity either
at fair value or at the non-controlling
interest’s proportionate share of
the acquired entity’s net identifiable
assets. This decision is made on an
acquisition-by-acquisition basis. For
the non-controlling interests in IA
Group, the Group elected to recognise
the non-controlling interests at its
proportionate share of the acquired net
identifiable assets.
Revenue and profit contribution
IA Group contributed revenue of
$3,096,837 and net profit of $247,940
to the Group for the period from 1
January to 30 June 2020.
If the acquisition had occurred on 1 July
2019, consolidated pro-forma revenue
and profit for the year ended 30 June
2020 would have been $6,242,015 and
$747,263 respectively.
Acquisition-related costs
Acquisition-related costs of $134,975
not directly attributable to the
acquisition are included in other
expenses in the statement of profit or
loss, and in operating cash flows in the
statement of cash flows.
Notes to the Consolidated
Financial Statements
Unrecognised Items
for the year ended 30 June 2020
26. Commitments & Contingencies
Group as lessor
Operating and finance lease commitments
Within one year
Greater than one year but not more than five years
FY20
$’000
393
388
781
FY19
$’000
622
725
1,347
Recognition & Measurement
26.1. Capital Commitments
26.2. Contingent Liabilities
The Directors were not aware of any capital
Lease Guarantees
commitments as at the end of the financial year or arising
since balance date.
The Group has provided guarantees in respect of the
leases over its premises of $1,415,351 (FY19: $931,921).
The Directors were not aware of any other contingent
liabilities as at the end of the financial year or arising
since balance date.
RESIMAC GROUP LTD2020 ANNUAL REPORT 116
2020 ANNUAL REPORT
117
117
Notes to the Consolidated Financial Statements
Unrecognised Items (for the year ended 30 June 2020)
27. Subsequent Events
27.1. Final Dividend Declared
The Board of Resimac Group Ltd declared a fully franked final
dividend of $0.018 per share. The Record Date is 28 August 2020.
The payment date will be 25 September 2020. The dividend has not
been provided for in this financial report.
Other than the above, there have been no circumstances arising
since 30 June 2020 that have significantly affected or may
significantly affect:
a) The operations
b) The results of those operations, or
c) The state of affairs of Group in future financial years.
27.2. Funding Programmes
The RESIMAC Bastille 2020-1NC transaction was settled on 30 July
2020 and is a domestic non-conforming issue with a total issuance
size of $1 billion equivalent.
Notes to the Consolidated
Financial Statements
Other
for the year ended 30 June 2020
28. Auditor’s Remuneration
Fees of the auditors of the Company for:
Deloitte Touche Tohmatsu
Audit or review of the financial statements
FY20
$
FY19
$
915,864
995,729
Statutory assurance services required by legislation to be provided by the auditor
AFSL audit
13,650
7,350
Other assurance and agreed-upon procedures under other legislation or contractual arrangements
RMBS issuance services
Other services
Other advisory services
275,608
227,000
174,704
30,000
Total remuneration of Deloitte Touche Tohmatsu
1,379,826
1,260,079
Non Deloitte Touche Tohmatsu audit firms
Audit of the financial statements
Tax compliance
Other advisory services
Total remuneration of Non Deloitte Touche Tohmatsu audit firms
10,000
-
177,648
265,200
94,500
-
282,148
265,200
28.1. Non-Audit Services
The auditor of the Group is Deloitte Touche Tohmatsu
The total non-audit services fees of $450,312 represents
(Deloitte). It is the Group’s policy to employ Deloitte
32.6% of the total fees paid or payable to Deloitte and
on assignments additional to its statutory audit duties,
related practices for the year ended 30 June 2020 (FY19:
in compliance with the Group’s independence policies,
$257,000).
where Deloitte’s expertise and experience with the Group
are important.
RESIMAC GROUP LTD2020 ANNUAL REPORT 118
118
RESIMAC GROUP LTD
119
Notes to the Consolidated Financial Statements
Other (for the year ended 30 June 2020)
29. Related Party Transactions
Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have
been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and other
related parties are disclosed below.
Trading Transactions
During the year, Group entities entered into the following trading transactions with related parties that are not members
of the Group:
Associates of Resimac Group Ltd1
Amounts incurred to Director's related entities2
Revenue received
Expenses paid
FY20
$'000
-
-
-
FY19
$'000
-
-
-
FY20
$'000
FY19
$'000
-
(2,836)
(123)
(123)
(267)
(3,103)
1 Broker commission and sponsorship fees paid to Finsure Group, who ceased as an associate of the Group effective 17 September 2018.
2 Includes interest paid on debt securities on issue to Bermuda Commercial Bank Limited. This interest rate is charged at market related terms.
Sales to related parties occur at arm’s length on commercial terms in the ordinary course of business in accordance with
the terms and conditions outlined in the relevant commercial agreements with each party.
The following balances were outstanding at the end of the reporting period:
Other related parties of Resimac Group Ltd1
Amounts owing to Director's related entities2
Amounts owed by
related parties
Amounts owed to
related parties
FY20
$'000
13,176
-
FY19
$'000
5,780
-
13,176
5,780
FY20
$'000
-
-
-
FY19
$'000
-
2,400
2,400
1 Includes residential mortgages to KMP or related parties lent in ordinary course of business at arm’s lengths.
2 Debt securities on issue to Bermuda Commercial Bank Limited. Terms on this instrument are market related.
Amounts owed by related parties are secured and will be settled in cash. No guarantees have been given or received. No
expense has been recognised in the current or prior years for bad or doubtful debts in respect of the amount owed by
related parties.
Compensation of KMP
The remuneration disclosures of directors and other
members of KMP during the year are provided in sections
one to nine of the remuneration report on pages 12 to 23
of this financial report designated as audited and forming
part of the directors’ report.
The remuneration disclosures is for Resimac KMP only as
presented in the Remuneration report.
KMP compensation
FY20
$'000
FY19
$'000
Short-term benefits
2,422,142
2,577,944
Post-employment benefits
102,087
127,138
Long-term benefits
310,595
91,527
Termination benefits
-
302,058
Share-based payments
346,928
44,882
3,181,752
3,143,549
The remuneration of directors and KMP is determined
by the Remuneration and Nomination Committee having
regard to the performance of individuals and market
trends.
RESIMAC GROUP LTD2020 ANNUAL REPORT 120
2020 ANNUAL REPORT
121121
Notes to the Consolidated Financial Statements
Other (for the year ended 30 June 2020)
30. Parent Disclosures
31. Share-Based Payments
The parent Company of the Group, as at and throughout the financial year ended 30 June 2020, was Resimac Group Ltd.
31.1. Employee Share Option Plan of the Company
Presented below is supplementary information about the parent entity.
Statement of Financial Position
Assets
Current
Non-current
Liabilities
Current
Non-current
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Attributable to members of the parent
Profit after tax
Total comprehensive income for the period
FY20
$’000
FY19
$’000
39,745
28,175
201,385
188,475
241,130
216,650
34,946
13,841
65,876
47,462
100,822
61,303
140,308
155,347
182,072
180,545
485
88
(42,249)
(25,286)
140,308
155,347
(5,659)
(5,659)
6,797
6,797
30.1. Guarantees, Contingent Liabilities & Contingent Assets
At 30 June 2020, there are no financial guarantees, contingent assets or contingent liabilities (FY19: nil).
30.2. Accounting Policies
The accounting policies of the parent entity, which have been applied in determining the financial information shown
above, are the same as those applied in the consolidated financial statements except as set out above. The significant
accounting policies relating to the Group are used throughout this financial report.
The Company has a share option scheme (pursuant to the
The options were granted on 15 August 2019 and the
Resimac Group Employee Share Option and Rights Plan)
vesting date for all options is 31 August 2022, subject
for senior employees of the Company. In accordance with
to the Group achieving Net Profit After Tax (NPAT)
the terms of the Plan, as approved by shareholders at the
performance hurdles, digital transformation hurdles,
2017 Annual General Meeting, senior employees may be
compliance hurdles and remaining employed with the
granted options to purchase ordinary shares.
Group until the vesting date.
Each employee share option converts into one ordinary
Since the current reporting period, the LTI#1 and LTI#2
share of the Company on exercise. No amounts are paid
are administrated by The Trustee for the Resimac Group
or payable by the recipient on receipt of the option.
Limited Employee Share Trust. The trust is consolidated
The options carry neither rights to dividends nor voting
in accordance with note 24. The trustee subscribes for
rights. Options may be exercised at any time from the
the shares issued by the Group and allocates to the
date of vesting to the date of their expiry.
employees on exercise of options. Shares held by the
Long-Term Incentive (LTI#1) Share Options - CEOs
trust and not yet allocated to employees at the end of
the reporting period are shown as treasury shares in the
Resimac offered the joint CEOs Scott McWilliam and Mary
financial statements. No treasury shares were held at 30
Ploughman (ceased employment on 17 July 2019) the
June 2020.
opportunity to purchase 1,800,000 share options vesting
in three equal tranches on each anniversary of the grant
date. The options were granted on 18 August 2017 and all
options vest within 12 months, 24 months and 36 months
of respective grant date associated with each tranche.
The options expire within 36 months of their vesting, or
one month after resignation, whichever is the earlier. The
sole vesting condition of the options is the employees
remain employed with the Company to the respective
vesting date associated with each tranche.
The fair value of share options under LTI#1 and LTI#2
is recognised as an employee benefits expense with a
corresponding increase in equity. The total expense is
recognised over the vesting period, which is the period
over which all of the specified vesting conditions are to
be satisfied. At the end of each period, the Group revises
its estimates of the number of options that are expected
to vest based on the non-market vesting and service
conditions. It recognises the impact of the revision to
original estimates, if any, in the consolidated statement
The tranche 3 shares for Mary Ploughman expired due to
of profit or loss with a corresponding adjustment to
her cessation of employment on 17 July 2019. The expiry
equity.
dates of her tranche 1 and 2 were revised to 17 July 2020
by the Board.
The fair value of the amounts payable to CEO and GMs in
respect of cash component is recognised as an expense
Long-Term Incentive (LTI#2) Share Options – CEO and
with a corresponding increase in liabilities, over the
GMs
Under the Group’s LTI share options and rights plan, the
CEO and GMs receive options over ordinary shares and a
potential cash component of $2.4m.
vesting period. The liabilities are remeasured to fair value
at each reporting date and are presented as employee
benefit obligations in the consolidated statement of
financial position.
RESIMAC GROUP LTD2020 ANNUAL REPORT 122
122
RESIMAC GROUP LTD
2020 ANNUAL REPORT
123
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RESIMAC GROUP LTD2020 ANNUAL REPORT
124
2020 ANNUAL REPORT
125
125
Notes to the Consolidated Financial Statements
Other (for the year ended 30 June 2020)
31.3. Movements in Share Options During the Period
The following reconciles the share options outstanding at the beginning and the end of the period:
32. Other Accounting Policies
32.1. Application of New & Revised Accounting Standards
Number of LTI
options
LTI#1
Number of LTI
options
LTI#2
Number of LTI
options
Total
Weighted
average fair
value $
LTI#1
Weighted
average fair
value $
LTI#2
Unvested options at 1 July 2019
1,200,000
Vested options at 1 July 2019
600,000
Options held at 1 July 2019
1,800,000
-
-
-
1,200,000
600,000
1,800,000
Granted during the year
-
3,900,000
3,900,000
Exercised during the year
(600,000)
-
(600,000)
Forfeited during the year
(300,000)
(375,000)
(675,000)
Unvested options at 30 June 2020
300,000
3,525,000
3,825,000
Vested options at 30 June 2020
600,000
-
600,000
Options held at 30 June 2020
900,000
3,525,000
4,425,000
0.09
0.07
0.08
-
0.55
0.09
0.09
0.08
0.08
-
-
-
0.20
-
-
0.20
-
0.20
31.4. Share Options Exercised During the Period
The Trustee for the Resimac Group Limited Employee Share Trust subscribed for 600,000 fully paid ordinary shares
issued by the Group at a subscription price of $0.85 per share, being the volume weighted average price of shares at the
close of trading over a 5 day trading period up to and including 11 May. Shares held by the trustee were allocated to Mary
Ploughman on her exercise of tranche 1 and tranche 2 share options on 13 May 2020.
a) New and amended standards adopted by the Group
On 1 July 2019 (the date of initial application of AASB
(i) AASB 16 Leases
In the current year, the Group has applied AASB 16 Leases
(AASB 16) that is effective for annual periods that begin
on or after 1 July 2019.
AASB 16 introduces new or amended requirements with
respect to lease accounting. It introduces significant
changes to the lessee accounting by removing the
distinction between operating and finance leases
and requiring the recognition of a right-of-use asset
and a lease liability at the lease commencement for
all leases, except for short-term leases and leases of
low value assets. In contrast to lessee accounting, the
requirements for lessor accounting have remained largely
unchanged. Details of these requirements and the impact
of the adoption of AASB 16 on the Group’s consolidated
financial statements are described below.
16), the Group has applied AASB 16 using the modified
retrospective approach, under which the cumulative
effect of initial application is recognised in retained
earnings at 1 July 2019. Accordingly, the comparative
information presented for 2019 has not been restated i.e.
it is presented as previously reported, under AASB 117
and related Interpretations. The details of the changes in
accounting policies are disclosed below:
Impact on lessee accounting
AASB 16 changes how the Group accounts for leases
previously classified as operating leases under AASB 117,
which were off balance sheet.
Applying AASB 16, for all leases, the Group:
§ Recognise right-of-use assets and lease liabilities
in the consolidated statement of financial position,
initially measured at the present value of the future
Impact of the new definition of a lease
lease payments;
The Group has made use of the practical expedient
§ Recognise depreciation of right-of-use assets
available on transition of AASB 16 not to reassess
and interest on lease liabilities in the consolidated
whether a contract is or contains a lease. Accordingly,
statement of profit or loss;
the definition of a lease in accordance with AASB 117 and
IFRIC 4 will continue to be applied to leases entered into
or modified before 1 July 2019.
The change in definition of a lease mainly relates to
§ Separate the total amount of cash paid into a principal
portion (presented within financing activities) and
interest (presented within operating activities) in the
consolidated cash flow statement.
the concept of control. AASB 16 determines whether
Lease incentives (e.g. rent-free period) will be recognised
a contract contains a lease on the basis of whether the
as part of the measurement of the right-of-use assets
customer has the right to control the use of an identified
and lease liabilities whereas under AASB 117 they
asset for a period of time in exchange for consideration.
resulted in the recognition of a lease liability incentive,
amortised as a reduction of rental expenses on a
The Group applies the definition of a lease and related
straight-line basis.
guidance set out in AASB 16 to all lease contracts
entered into or modified on or after 1 July 2019. The
Under AASB 16, right-of-use assets are tested for
Group notes that the new definition in AASB 16 will not
impairment in accordance with AASB 136. This replaces
change significantly the scope of contracts that meet the
the previous requirements to recognise a provision for
definition of a lease for the Group.
onerous lease contracts.
RESIMAC GROUP LTD2020 ANNUAL REPORT 126
2020 ANNUAL REPORT
2020 ANNUAL REPORT
127
127127
Notes to the Consolidated Financial Statements
Other (for the year ended 30 June 2020)
For short-term leases (lease term of 12 months or less)
The weighted average borrowing rate applied is 4%. The
The Group did not need to make any adjustments
§ assess whether it is probable that a tax authority
and leases of low-value assets, the Group has opted to
Group has applied the approach of measuring right-
to the accounting for assets held as lessor under
will accept an uncertain tax treatment used, or
recognise a lease expense on a straight-line basis as
of-use assets at an amount equal to the lease liability,
operating leases as a result of the adoption of AASB
proposed to be used, by an entity in its income tax
permitted by AASB 16.
adjusted by the amount of any prepaid or accrued lease
16.
filings:
The right-of-use assets recognised under AASB 16 is an
In the current year, the Group has applied a
intangible asset, and hence excluded from the Group’s
The Group used the following practical expedients when
number of amendments to AASB Standards and
net tangible assets, despite the related lease liability
applying AASB 16 to leases previously classified as
Interpretations issued by the AASB that are
payments.
being included as reduction in the net tangible assets
operating leases under AASB 117.
calculation.
Transition
§ Excluded initial direct costs from measuring the right-
of-use asset at the date of initial application
The Group leases offices previously classified as
§ Used hindsight when determining the lease term if the
operating leases under AASB 117. The lease term is
contract contains options to extend or terminate the
between 3 to 8 years with, in some cases, options to
lease
extend. This has been accounted for in determining the
minimum lease payments. The Group’s obligations are
secured by the lessor’s title to the leased assets for such
§ Not to separate non-lease components from lease
components and instead account for each component
and any associated non-lease components as a single
leases.
lease component
At transition, for leases previously classified as operating
leases under AASB 117, lease liabilities were measured
at present value of the remaining lease payments,
§ Applied a single discount rate to a portfolio of leases
with reasonably similar characteristics
Below is the financial impact on transition to AASB 16 as
discounted at the Group’s incremental borrowing rate as
at 1 July 2019:
at 1 July 2019.
Right-of-use assets
Lease liabilities*
Tax effect of the above
Adjustment to opening retained earnings
*The 30 June 2019 lease liability is within trade and other payables.
Under ASSB 17
$'000
Under AASB 16
$'000
Financial impact
$'000
-
(276)
-
13,230
(13,990)
145
13,230
(13,714)
145
(339)
Impact on lessor accounting
AASB 16 does not change substantially how a lessor
The intermediate lessor is required to classify the
accounts for leases. Under AASB 16, a lessor continues to
sublease as a finance or operating lease by reference to
classify leases as either finance leases or operating leases
the right-of-use asset arising from the head lease (and
and account for those two types of leases differently.
not by reference to the underlying asset as was the case
Under AASB 16, an intermediate lessor accounts for the
head lease and the sublease as two separate contracts.
under AASB 117).
effective for an annual period that begins on or after
1 July 2019. Their adoption has not had any material
impact on the disclosures or on the amount reported
in these financial statements.
AASB 2017-6 Amendments to Australian
Accounting Standards - Prepayment Features with
Negative Compensation
The Group has adopted the amendments to
AASB 9 for the first time in the current year. The
amendments to AASB 9 clarify that for the purpose
of assessing whether a prepayment feature meets
the ‘solely payments of principal and interest’
(SPPI) condition, the party exercising the option
may pay or receive reasonable compensation for
the prepayment irrespective of the reason for
prepayment. In other words, financial assets with
prepayment features with negative compensation
do not automatically fail SPPI.
Interpretation 23 Uncertainty over Income Tax
Treatments
The Group has adopted IFRIC 23 for the first
time in the current year. IFRIC 23 sets out how to
determine the accounting tax position when there
is uncertainty over income tax treatments. The
Interpretation requires the Group to:
§ determine whether uncertain tax positions are
assessed separately or as a group; and
w If yes, the Group should determine its
accounting tax position consistently with the
tax treatment used, or proposed to be used, by
an entity in its income tax filings.
w If no, the entity should reflect the effect of
uncertainty in determining its accounting tax
position using either the most likely amount or
the expected value method.
AASB 2018-1 Amendments to Australian
Accounting standards – Annual Improvements
2015 – 2017 Cycle
AASB 112 Income Taxes
The amendments clarify that an entity should
recognise the income tax consequences of dividends
in profit or loss, other comprehensive income or
equity according to where the entity originally
recognised the transactions that generated the
distributable profits.
AASB 123 Borrowing Costs
The amendment clarifies that if any specific
borrowing remains outstanding after the related
asset is ready for its intended use or sale, that
borrowing becomes part of the funds that an entity
borrows generally when calculating the capitalisation
rate on general borrowing. This is the case
irrespective of whether different tax rates apply to
distributed and undistributed profits.
RESIMAC GROUP LTD2020 ANNUAL REPORT 128
128
RESIMAC GROUP LTD
129
Notes to the Consolidated Financial Statements
Other (for the year ended 30 June 2020)
b) New and revised accounting standards and interpretations on issue but not yet effective
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2020
reporting periods and have not been early adopted by the Group. The Group’s assessment of the impact of these new
standards and interpretations are set out below. These standards are not expected to have a material impact on the
financial statements of the Group in future periods.
Standard/amendment
AASB 2018-6 Amendments to Australian Accounting Standards –
Definition of a Business
AASB 2018-7 Amendments to Australian Accounting Standards –
Definition of Material
AASB 2019-1 Amendments to Australian Accounting Standards –
References to the Conceptual Framework
AASB 17 Insurance contracts
Effective for annual reporting
periods beginning on or after
1 January 2020
1 January 2020
1 January 2020
1 January 2021 (likely to be
extended to 1 January 2022)
AASB 2018-6 Amendments to Australian Accounting
§ Add guidance and illustrative examples to help entities
Standards – Definition of a Business
assess whether a substantive process has been
Amends AASB 3 Business Combinations to clarify the
acquired.
definition of a business, with the objective of assisting
§ Narrow the definitions of a business and outputs by
AASB 2018-7 Amendments to Australian
This amending Standard applies to for-profit sector
Accounting Standards – Definition of Material
entities that have public accountability and are
Make amendments intended to address concerns
that the wording in the definition of ‘material’ was
different in the Conceptual Framework for Financial
Reporting, AASB 101 Presentation of Financial
Statements and AASB 108 Accounting Policies,
Changes in Accounting Estimates and Errors.
The amendments address these concerns by:
§ Replacing the term ‘could influence’ with ‘could
reasonably be expected to influence’.
§ Including the concept of ‘obscuring information’
alongside the concepts of ‘omitting’ and
‘misstating’ information in the definition of
material.
§ Clarifying that the users to which the definition
refers are the primary users of general
purpose financial statements referred to in the
Conceptual Framework
§ Aligning the definition of material across
Australian Accounting Standards and other
publications.
required by legislation to comply with Australian
Accounting Standards and other for-profit entities
that elect to apply the Conceptual Framework.
The amendments are effective for annual periods
beginning on or after 1 January 2020 with early
application permitted.
AASB 17 Insurance Contracts
AASB 17 establishes the principles for the
recognition, measurement, presentation and
disclosure of insurance contracts and supersedes
AASB 4 Insurance contracts.
AASB 17 outlines a general model, which is modified
for insurance contracts with direct participation
features described as the variable fee approach. The
general model is simplified if certain criteria are met
by measuring the liability for remaining coverage
using the premium allocation approach.
The general model uses current assumptions to
estimate the amount, timing and uncertainty of
future cash flows and it explicitly measures the cost
entities to determine whether a transaction should be
focusing on goods and services provided to customers
The amendments are applied prospectively for
of that uncertainty. It takes into account market
accounted for as a business combination or as an asset
and by removing the reference to an ability to reduce
annual periods beginning or after 1 January 2020,
interest rates and the impact of policyholder’s
costs.
with earlier application permitted.
options and guarantees.
acquisition.
The amendments:
§ Clarify that to be considered a business, an acquired
set of activities and assets must include, at a minimum,
§ Add an optional concentration test that permits a
simplified assessment of whether an acquired set of
activities and assets is not a business.
an input and a substantive process that together
The amendments are applied prospectively to all business
significantly contribute to the ability to create outputs.
combinations and asset acquisitions for which the
§ Remove the assessment of whether market
participants are capable of replacing any missing inputs
or processes and continuing to produce outputs.
acquisition date is on or after the first annual reporting
Conceptual Framework for Financial Reporting.
period beginning on or after 1 January 2020, with early
This Standard updates references to, or quotations
application permitted.
from, previous versions of the Framework
contained in many Accounting Standards.
AASB 2019-1 Amendment to Australian
The Standard is effective for annual reporting
Accounting Standards – References to the
periods beginning or after 1 January 2021, with early
Conceptual Framework
Makes amendments to various Accounting
Standards to reflect the issue of the revised
application permitted. It is applied retrospectively
unless impracticable, in which case the modified
retrospective approach or the fair value approach is
applied. An exposure draft Amendments to AASB 17
addresses concerns and implementation challenges
that were identified after AASB 17 was published.
One of the main changes proposed is the deferral
of the date of initial application of AASB 17 by one
year to annual periods beginning or after 1 January
2022. The impact of the new standard on the Group’s
financial statements has not yet been determined.
RESIMAC GROUP LTD2020 ANNUAL REPORT 130
130
RESIMAC GROUP LTD
131
Notes to the Consolidated Financial Statements
Other (for the year ended 30 June 2020)
32.2. Goods & Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount
of GST except:
§ where the GST incurred on a purchase of goods and services
is not recoverable from the taxation authority, in which case
the GST is recognised as part of the costs of acquisition of the
asset or as part of the expense item as applicable; and
§ receivables and payables which are stated with the amount of
GST included.
The net amount of GST recoverable from, or payable to, the
taxation authority is included as part of receivables or payables in
the statement of financial position.
Cash flows are included in the statement of cash flows on a
gross basis and the GST component of cash flows arising from
investing and financing activities, which is recoverable from, or
payable to, the taxation authority is classified as operating cash
flows.
Commitments and contingencies are disclosed net of the amount
of GST recoverable from, or payable to, the taxation authority.
Directors'
Declaration
Resimac Group Ltd and its Controlled Entities
The directors declare that:
a. in the directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and
when they become due and payable
b. in the directors’ opinion, the attached financial statements are in compliance with Australian Accounting Standards as
stated in the financial statements;
c. in the directors’ opinion, the attached financial statements and notes thereto are in accordance with the
Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the financial
position and performance of the consolidated entity and the Company; and
d. the directors have been given the declarations required by s295.A of the Corporations Act 2001.
Signed in accordance with a resolution of the directors pursuant to s295(5) of the Corporations Act 2001.
On behalf of the Directors
Warren McLeland
Chairman
Sydney
25 August 2020
RESIMAC GROUP LTD2020 ANNUAL REPORT 132
2020 ANNUAL REPORT
133
133
Independent Auditor's Declaration
Resimac Group Ltd and its Controlled Entities
Independent Auditor's Report
Resimac Group Ltd and its Controlled Entities
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Grosvenor Place
225 George Street
Sydney NSW 2000
PO Box N250 Grosvenor Place
Sydney NSW 1220 Australia
Tel: +61 2 9322 7000
Fax: +61 2 9322 7001
www.deloitte.com.au
The Board of Directors
Delarey Nell
Partner
Chartered Accountants
25 August 2020
Dear Board Members
Auditor’s Independence Declaration to Resimac Group Limited
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the
following declaration of independence to the directors of Resimac Group Limited and its
controlled entities.
As lead audit partner for the audit of the financial report of Resimac for the year ended 30
June 2020, I declare that to the best of my knowledge and belief, there have been no
contraventions of:
(i) the auditor independence requirements of the Corporations Act 2001 in relation
to the audit; and
(ii) any applicable code of professional conduct in relation to the audit.
Yours faithfully
DELOITTE TOUCHE TOHMATSU
Delarey Nell
Partner
Chartered Accountants
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related
entities (collectively, the “Deloitte organisation”). DTTL (also referred to as “Deloitte Global”) and each of its member fir ms and
related entities are legally separate and independent entities, which cannot obligate or bind each other in respect of third parties.
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does not provide services to clients. Please see www.deloitte.com/about to learn more.
Deloitte is a leading global provider of audit and assurance, consulting, financial advisory, risk advisory, tax and related services.
Our global network of member firms and related entities in more than 150 countries and territories (collectively, the “Deloitte
organisation” serves four out of five Fortune Global 500® companies. Learn how Deloitte’s approximately 312,000 people make an
impact that matters at www.deloitte.com.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Grosvenor Place
225 George Street
Grosvenor Place
Sydney NSW 2000
225 George Street
PO Box N250 Grosvenor Place
Sydney NSW 2000
Sydney NSW 1220 Australia
PO Box N250 Grosvenor Place
Sydney NSW 1220 Australia
Tel: +61 2 9322 7000
Fax: +61 2 9322 7001
Tel: +61 2 9322 7000
www.deloitte.com.au
Fax: +61 2 9322 7001
www.deloitte.com.au
The Board of Directors
Delarey Nell
Partner
Chartered Accountants
Independent Auditor’s Report to the Members of Resimac Group Limited
Report on the Audit of the Financial Report
25 August 2020
Opinion
Dear Board Members
Auditor’s Independence Declaration to Resimac Group Limited
We have audited the financial report of Resimac Group Limited (the “Entity”) and its subsidiaries
(the “Group”) which comprises the consolidated statement of financial position as at 30 June 2020,
the consolidated statement of profit or loss, the consolidated statement of comprehensive income,
the consolidated statement of changes in equity and the consolidated statement of cash flows for
the year then ended, and notes to the financial statements, including a summary of significant
information, and the directors’ declaration.
accounting policies and other explanatory
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the
following declaration of independence to the directors of Resimac Group Limited and its
controlled entities.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
As lead audit partner for the audit of the financial report of Resimac for the year ended 30
June 2020, I declare that to the best of my knowledge and belief, there have been no
contraventions of:
giving a true and fair view of the Group’s financial position as at 30 June 2020 and of their
financial performance for the year then ended; and
(i)
(i) the auditor independence requirements of the Corporations Act 2001 in relation
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
to the audit; and
(ii) any applicable code of professional conduct in relation to the audit.
Basis for Opinion
Yours faithfully
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance
with the Code.
DELOITTE TOUCHE TOHMATSU
We confirm that the independence declaration required by the Corporations Act 2001, which has
been given to the directors of the Company, would be in the same terms if given to the directors as
at the time of this auditor’s report.
Delarey Nell
Partner
Chartered Accountants
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance
in our audit of the financial report for the current period. These matters were addressed in the
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Key Audit Matter
How the scope of our audit responded to the
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related
Key Audit Matter
entities (collectively, the “Deloitte organisation”). DTTL (also referred to as “Deloitte Global”) and each of its member fir ms and
Our procedures in conjunction with our specialists
related entities are legally separate and independent entities, which cannot obligate or bind each other in respect of third parties.
included, but were not limited to:
DTTL and each DTTL member firm and related entity is liable only for its own acts and omissions, and not those of each other. DTTL
does not provide services to clients. Please see www.deloitte.com/about to learn more.
Loan Loss Provisioning under AASB 9
Financial Instruments
As at 30 June 2020 the Group has
recognised provisions amounting to $36.7m
loans and
for
- Assessing whether the model adequately
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addresses the requirements of the relevant
Our global network of member firms and related entities in more than 150 countries and territories (collectively, the “Deloitte
organisation” serves four out of five Fortune Global 500® companies. Learn how Deloitte’s approximately 312,000 people make an
accounting standard;
impact that matters at www.deloitte.com.
impairment
losses on
Liability limited by a scheme approved under Professional Standards Legislation.
Liability Limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte Network.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
RESIMAC GROUP LTD2020 ANNUAL REPORT
134
134
RESIMAC GROUP LTD
135
Independent Auditor's Report
Independent Auditor's Report
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Grosvenor Place
225 George Street
Sydney NSW 2000
PO Box N250 Grosvenor Place
Sydney NSW 1220 Australia
advances held at amortised cost
in
accordance with the Expected Credit Loss
(ECL) model as disclosed in note 6.
Significant management judgement was
The Board of Directors
Delarey Nell
necessary in determining expected credit
Partner
losses, including:
Chartered Accountants
25 August 2020
Dear Board Members
- Assumptions used in the ECL model
such as the identification of exposures
with a significant movement in credit
quality to determine whether 12-month
or lifetime ECL should be recognised,
probability of default, loss given default
and other macroeconomic
factors
disclosed in Note 22 and 23; and
The application of the requirements of
AASB 9 as reflected in the Group’s ECL
model particularly in light of the current
economic environment following the
outbreak of COVID-19.
to the audit; and
-
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the
following declaration of independence to the directors of Resimac Group Limited and its
controlled entities.
As lead audit partner for the audit of the financial report of Resimac for the year ended 30
June 2020, I declare that to the best of my knowledge and belief, there have been no
contraventions of:
(i) the auditor independence requirements of the Corporations Act 2001 in relation
-
- Evaluating management’s assessment of the
Tel: +61 2 9322 7000
impact of COVID-19 on the loan portfolio and
Fax: +61 2 9322 7001
hence the estimate of ECL;
www.deloitte.com.au
Testing, on a sample basis,
individual
exposures to determine if they are classified
into appropriate default stages and aging
buckets
for the purpose of determining
impairment loss provision;
Independently develop a model, using inputs
and assumptions applied by management, to
assess the reasonableness of assumptions
driving probabilities of default (PD), Loss Given
Default (LGD) and Exposure at Default (EAD);
and
-
- Assessing reasonableness of management
overlays to the modelled collective provision by
taking
recent history and
performance of the relevant portfolios.
into account
We also assessed the appropriateness of the
disclosures within notes 6, 22 and 23 of the
financial statements.
(ii) any applicable code of professional conduct in relation to the audit.
Auditor’s Independence Declaration to Resimac Group Limited
Grosvenor Place
225 George Street
Sydney NSW 2000
PO Box N250 Grosvenor Place
Sydney NSW 1220 Australia
order to test the integrity and mathematical
accuracy of management’s model;
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Fax: +61 2 9322 7001
www.deloitte.com.au
We also assessed the appropriateness of the notes
1 and 15 of the financial statements
trailing
commissions
of
required
management to exercise judgement with
regard to the selection of the discount rate,
run off rates applied to the model.
The Board of Directors
Delarey Nell
Partner
Chartered Accountants
Other Information
25 August 2020
Dear Board Members
Auditor’s Independence Declaration to Resimac Group Limited
The directors are responsible for the other information. The other information comprises the
information included in the Group’s annual report for the year ended 30 June 2020 but does not
include the financial report and our auditor’s report thereon.
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the
following declaration of independence to the directors of Resimac Group Limited and its
controlled entities.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
As lead audit partner for the audit of the financial report of Resimac for the year ended 30
June 2020, I declare that to the best of my knowledge and belief, there have been no
contraventions of:
(i) the auditor independence requirements of the Corporations Act 2001 in relation
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If,
based on the work we have performed, we conclude that there is a material misstatement of this
other information; we are required to report that fact. We have nothing to report in this regard.
(ii) any applicable code of professional conduct in relation to the audit.
to the audit; and
In conjunction with our valuation specialists, our
procedures included, but were not limited to:
Responsibilities of the Directors for the Financial Report
Yours faithfully
Goodwill Impairment Assessment
Yours faithfully
As at 30 June 2020, the group has a goodwill
balance of $27.4 million as disclosed in note
11.
DELOITTE TOUCHE TOHMATSU
Delarey Nell
Partner
Chartered Accountants
In accordance with AASB 136 Impairment of
Non-Current Assets, cash-generating units
(CGU) to which goodwill is allocated are
required to be tested for impairment at least
annually by comparing the CGU’s carrying
value with its recoverable amount.
Significant management
is
required in determining recoverable amount
of the CGU including, but not limited to the:
judgement
- Evaluating
the
appropriateness
of
management’s identification of the Group’s
CGUs and testing of key controls over the
impairment assessment process, including the
identification of indicators of impairment such
as the carrying value exceeding the market
capitalisation;
- Assessing appropriateness of the valuation
the
in determining
methodology applied
recoverable amount of the CGU;
-
Identification of appropriate Cash
Generating Units (CGU)
to which
goodwill is allocated for the purpose of
impairment testing;
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related
entities (collectively, the “Deloitte organisation”). DTTL (also referred to as “Deloitte Global”) and each of its member fir ms and
related entities are legally separate and independent entities, which cannot obligate or bind each other in respect of third parties.
DTTL and each DTTL member firm and related entity is liable only for its own acts and omissions, and not those of each other. DTTL
does not provide services to clients. Please see www.deloitte.com/about to learn more.
- Assessing the reasonableness of the key
assumptions used by management in the
impairment model and whether they are
suitably adjusted
the current
economic environment especially in light of
COVID-19; and
Testing the mathematical accuracy of the
Deloitte is a leading global provider of audit and assurance, consulting, financial advisory, risk advisory, tax and related services.
methodology; and
Our global network of member firms and related entities in more than 150 countries and territories (collectively, the “Deloitte
impairment model.
organisation” serves four out of five Fortune Global 500® companies. Learn how Deloitte’s approximately 312,000 people make an
impact that matters at www.deloitte.com.
- Selection of appropriate valuation
to reflect
-
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
- Determination of assumptions and
estimates in the valuation methodology,
Liability limited by a scheme approved under Professional Standards Legislation.
in particular those affected by current
economic conditions
the
outbreak of COVID-19 such as control
premium and price-earnings multiples.
following
We also assessed the appropriateness of the
disclosures in note 11 in the financial statements.
Future trailing commissions
Our procedures included, but were not limited to:
As at 30 June 2020, the net present value
of future trailing commissions receivable
(contract asset) and payable by the Group
is $41.9 million and $20.8 million
respectively as disclosed in Note 1 and 15.
-
The determination of the net present value
- Challenging
the
reasonableness
of
management’s assumptions applied, including
discount rate and the run-off; and
Independently recalculating the NPV model
using the inputs and assumptions applied by
management, to recalculate the valuation of
trail commission receivable and payable. This
was compared to management’s valuation, in
DELOITTE TOUCHE TOHMATSU
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.
Delarey Nell
Partner
Chartered Accountants
In preparing the financial report, the directors are responsible for assessing the ability of the Group
to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either intend to liquidate the Group or to
cease operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related
entities (collectively, the “Deloitte organisation”). DTTL (also referred to as “Deloitte Global”) and each of its member fir ms and
related entities are legally separate and independent entities, which cannot obligate or bind each other in respect of third parties.
DTTL and each DTTL member firm and related entity is liable only for its own acts and omissions, and not those of each other. DTTL
does not provide services to clients. Please see www.deloitte.com/about to learn more.
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
Deloitte is a leading global provider of audit and assurance, consulting, financial advisory, risk advisory, tax and related services.
material if, individually or in the aggregate, they could reasonably be expected to influence the
Our global network of member firms and related entities in more than 150 countries and territories (collectively, the “Deloitte
organisation” serves four out of five Fortune Global 500® companies. Learn how Deloitte’s approximately 312,000 people make an
economic decisions of users taken on the basis of this financial report.
impact that matters at www.deloitte.com.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk
of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as
intentional omissions,
involve collusion,
fraud may
misrepresentations, or the override of internal control.
forgery,
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
RESIMAC GROUP LTD2020 ANNUAL REPORT
136
2020 ANNUAL REPORT
137137
Independent Auditor's Report
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Grosvenor Place
225 George Street
Sydney NSW 2000
PO Box N250 Grosvenor Place
Sydney NSW 1220 Australia
•
Conclude on the appropriateness of the directors’ use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Group’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the financial
report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Group to cease to continue as a going concern.
Tel: +61 2 9322 7000
Fax: +61 2 9322 7001
www.deloitte.com.au
The Board of Directors
Delarey Nell
Partner
Chartered Accountants
25 August 2020
•
Dear Board Members
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and
events in a manner that achieves fair presentation.
Auditor’s Independence Declaration to Resimac Group Limited
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the
• Obtain sufficient appropriate audit evidence regarding the financial information of the
following declaration of independence to the directors of Resimac Group Limited and its
controlled entities.
entities or business activities within the Group to express an opinion on the financial report.
We are responsible for the direction, supervision and performance of the Group’s audit. We
remain solely responsible for our audit opinion.
As lead audit partner for the audit of the financial report of Resimac for the year ended 30
June 2020, I declare that to the best of my knowledge and belief, there have been no
contraventions of:
(i) the auditor independence requirements of the Corporations Act 2001 in relation
We communicate with the directors regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
(ii) any applicable code of professional conduct in relation to the audit.
to the audit; and
Yours faithfully
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
DELOITTE TOUCHE TOHMATSU
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Delarey Nell
Partner
Chartered Accountants
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 12 to 24 of the Directors’ Report for
the year ended 30 June 2020.
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related
entities (collectively, the “Deloitte organisation”). DTTL (also referred to as “Deloitte Global”) and each of its member fir ms and
related entities are legally separate and independent entities, which cannot obligate or bind each other in respect of third parties.
DTTL and each DTTL member firm and related entity is liable only for its own acts and omissions, and not those of each other. DTTL
does not provide services to clients. Please see www.deloitte.com/about to learn more.
In our opinion, the Remuneration Report of the Resimac Group Limited, for the year ended 30 June
2020, complies with section 300A of the Corporations Act 2001.
Deloitte is a leading global provider of audit and assurance, consulting, financial advisory, risk advisory, tax and related services.
Our global network of member firms and related entities in more than 150 countries and territories (collectively, the “Deloitte
organisation” serves four out of five Fortune Global 500® companies. Learn how Deloitte’s approximately 312,000 people make an
impact that matters at www.deloitte.com.
Responsibilities
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
DELOITTE TOUCHE TOHMATSU
Delarey Nell
Partner
Chartered Accountants
Sydney, 25 August 2020
RESIMAC GROUP LTD2020 ANNUAL REPORTResimac has both independent internal and external audit functions to ensure the governance framework we are working towards is being followed. The Board has adopted a Risk Appetite Statement and operational risk register with key risk metrics to ensure appropriate controls are in place.
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2020 ANNUAL REPORT
139
139
Environment,
Social &
Governance
Policies & Activities
Resimac acknowledges that its approach to its Environmental,
Social and Governance responsibilities is a key factor for many
customers, investors and our employees.
As a business, we are and will continue to incorporate ESG into
our culture and our strategy; we will work together to enhance
our effectiveness; we will provide appropriate disclosures and
we will report our activities and progress.
Further details of our ESG practices can be found in our
Corporate Governance Statement and the Environmental,
Social and Governance Statement located on our website.
Environment
As a leading mortgage provider, we understand the
importance of supporting the environment and are committed
to this by:
Being Carbon Conscious. For every loan settled, Resimac
plants a Mallee Eucalypt tree. Since 2010 Resimac
has planted over 35,000 trees, contributing to a more
sustainable environment.
Using a digital and paperless loan origination process for
customers.
Reducing the number of printers and continually reducing
the need for paper and printable matter.
Recycling consumables and equipment in the office,
complemented by recycling facilities for employees. This
Annual Report has been printed on recycled paper.
Installing sensor lights and LED lighting within the office to
reduce power consumption.
Social
Our social responsibilities extend across a range of groups, including our
employees, customers, investors and the community.
It is paramount to the future of our business that our employees conduct
themselves in a way which allows us to deliver great service to our customers
and business partners, while displaying the Company’s values of quality, passion,
agility, respect, accountability, professionalism and integrity.
At Resimac, we recognise that an engaged team supports a successful business.
We encourage work/life balance and offer a number of benefits such as: study
support, a flexible day, “wellness” hours, an Employee Assistance Program, salary
continuance insurance, and a paid Community Day that enables employees to
participate in community activities with a charity of their choice.
With our customers, we strive to provide superior service throughout their
journey with Resimac. As an entity that holds six credit licences and an Australian
Financial Services Licence, we must ensure we comply with the Responsible
Lending Conduct obligations, which we do through our Credit Committee,
Board Risk and Compliance Committee, our Compliance Program, and Quality
Assurance.
Who we partner with at Resimac is also key to our sustainability performance.
Our responsible approach to procurement of suppliers allows us to manage and
mitigate risk.
Supporting charities that closely align with our values is important to Resimac.
We are proud to support multiple charities and community initiatives including:
§ The Station
§ Food Ladder
§ Local support within the Philippines
RESIMAC GROUP LTD2020 ANNUAL REPORTSince 2010, Resimac has planted over 35,000 trees, contributing to a more sustainable environment. 140
140
RESIMAC GROUP LTD
141
Food Ladder
Resimac is proud to support Food Ladder, a
not-for-profit and global pioneer in the use of
environmentally sustainable technologies to
create food and economic security for remote
communities. Food Ladder not only addresses
food security, but it also creates employment and
training opportunities for adults and education
outcomes for children. Food Ladder systems have
benefited 31,500 individuals, with 6,000 getting a
consistent, significant part of their diet from Food
Ladder. Furthermore, it has created 600 jobs.
Resimac offers both financial support and
assistance with promoting awareness for the
organisation. Additionally, we have launched a
new charity ambassador program, whereby two
employees will work closely with Food Ladder over
12 months to raise awareness and engagement
internally and throughout the broader community.
The Station Ltd
The Station is a not-for-profit drop-in centre
established in 1978, located in the heart of the
Sydney CBD. Its mission is to provide a range of
services to adults having difficulty obtaining and
sustaining accommodation as well as providing
food.
Resimac has a team of volunteers who help
with food service regularly, and we have a highly
successful annual collection of personal and
hygiene products. We have also supplied both
dryers and washing machines. Due to restrictions
imposed by COVID-19, we have been unable to
assist with food service since February 2020.
Philippines
Resimac, via a hosting company, employs 75
Governance
The Board, Risk Management and Compliance Framework
employees in Manila. We have undertaken various
Resimac has a strong governance framework in place to
community-focussed activities in recent years to
ensure all regulatory obligations are adhered to in line
engage with employees and support them being active
with our licence requirements and our position as an ASX
in their local communities. In 2020, we purchased
Listed entity.
masks, face shields and COVID-19 related matters.
Over the past few years, we have also participated in a
number of programs, including:
§ Operation Smile – a foundation that helps those
born with a cleft palate. Our support allowed for
two missions and 189 patients to be screened and
treated.
There are a number of committees, policies and
procedures in place to complement this framework
including:
§ Risk and Compliance Committee
§ Audit Committee
§ Assets and Liability Committee
§ Pricing Committee
§ Credit Committee
§ Christmas baskets – we prepared Christmas baskets
§ WHS Committee
containing rice, canned goods and groceries to help
§ AML Program
support the displaced Aetas indigenous tribe.
§ Compliance Framework
§ Gentle Hands & St Rita – our employees volunteered
their time to visit the orphanages, purchase food on
behalf of Resimac, provide educational materials and
organise activities with the children.
Our approach to
sustainability
commences with
the servicing of
our customers
front of mind.
§ Enterprise Risk Framework
§ Quality Assurance Program
Each Committee has a charter that sets out its
responsibility and accountability and this charter is
reviewed annually.
Resimac has both independent internal and external
audit functions to ensure the governance framework
we are working towards is being followed. The Board
has adopted a Risk Appetite Statement and operational
risk register with key risk metrics to ensure appropriate
controls are in place.
In addition, Quality Assurance Reviews are undertaken on
lending approvals by a team independent of the creditor
assessors, with control testing and quarterly obligation
attestations required by each department.
Tax Obligations
We are committed to ensuring we meet our multi
tax obligations which include income, fringe benefit,
goods and services, payroll, stamp duty, etc, and have
established a Board-approved Tax Risk Management
Policy. Best tax practice, tax risk appetite metrics have
been adopted.
RESIMAC GROUP LTD2020 ANNUAL REPORT 142
142
RESIMAC GROUP LTD
143
Shareholder
Information
Additional information required by the ASX and not disclosed elsewhere in this report is set out below. The
information is current as at 24 September 2020.
a) Number of Holders of Equity Securities
Ordinary Share Capital: 407,449,337 paid ordinary shares are held by 1,563 individual shareholders.
b) Voting Rights
All issued ordinary shares carry one vote for each member present at the meeting on a show of hands and on
a poll each member is entitled to one vote for every ordinary share held.
c) Distribution of Members & their Holdings
The number of equity securities by size of holding is set out below:
Range
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Total
Total Holders
349
550
202
363
99
Units
192,780
1,502,535
1,605,458
12,339,848
391,808,716
1,563
407,449,337
Unmarketable Parcel
Minimum Parcel Size
Holders
Minimum $500.00 parcel at $1.3700 per unit
365
100
% Units
0.05
0.37
0.39
3.03
96.16
100.00
Units
6,962
d) Substantial Shareholders
The names of the substantial shareholders of the Company and the number of equity securities in which they
have a relevant interest as disclosed in substantial shareholding notices given to the Company are set out
below:
Size of Holdings
Somers Limited, ICM Limited, UIL Limited, Permanent Investments Limited,
Somers Isles Private Trustee Company Limited, and each other entity controlled
by Duncan Saville
No. of Shares
246,757,304
%
61.91
e) Twenty Largest Shareholders
The 20 largest shareholders of ordinary shares on the Company’s register at 24 September 2020 were:
Size of Holdings
J P Morgan Nominees Australia Pty Limited
HSBC Custody Nominees (Australia) Limited
National Nominees Limited
Motrose Pty Ltd
Warren John McLeland
Redbrook Nominees Pty Ltd
Hartley Phillips Securities Pty Ltd (Hartley Phillips Inv Tst A/C)
Moat Investments Pty Ltd (Moat Investment A/C)
National Nominees Limited (DB A/C)
Westpac Banking Corporation
Citicorp Nominees Pty Limited
Peterlyn Pty Ltd (Salmon Family A/C)
Tico Pty Ltd (TA Holmes Family Fund A/C)
Torryburn Pty Ltd (Torryburn Super Fund A/C)
Redbrook Nominees Pty Ltd
RSJSDS Pty Ltd (Salmon Super Fund A/C)
Redbrook Nominees Pty Ltd
High Pass Holdings Pty Ltd (High Pass Hldgs P/L Sup A/C)
Mast Financial Pty Ltd (A to Z Investment A/C)
Michael Jefferies & Julie Jefferies (The Jefferies Super Fund A/C)
No. of Shares
154,206,997
125,891,131
14,793,724
14,700,000
11,958,122
10,463,499
5,031,373
4,048,624
3,522,285
2,493,130
2,462,439
2,068,000
1,623,944
1,612,119
1,539,183
1,385,100
1,258,355
1,191,687
1,068,558
1,055,667
%
37.85
30.90
3.63
3.61
2.93
2.57
1.23
0.99
0.86
0.61
0.60
0.51
0.40
0.40
0.38
0.34
0.31
0.29
0.26
0.26
Total
362,373,937
88.94
RESIMAC GROUP LTD2020 ANNUAL REPORT 144
144
RESIMAC GROUP LTD
2020 ANNUAL REPORT
145
145
Managing Your
Shareholding
The Company’s share registry is managed by
Securityholder Reference Number (SRN) or Holder
Computershare Investor Services Pty Limited
Identification Number (HIN) as shown on your
(Computershare).
Issuer Sponsored / CHESS statements.
The Investor Centre website is the fastest, easiest
You can also contact Computershare by:
and most convenient way to view and manage
your shareholding. Investor Centre enables a
shareholder to:
view the Company share price;
change your banking details;
change your address (for non-CHESS sponsored
holdings);
update your dividend instruction;
update your Tax File Number (TFN), Australian
Business Number (ABN) or exemption;
select your email and communication
preferences; and
view your transaction history.
When communicating with Computershare or
accessing your holding online you will need your
Address
Level 3, 60 Carrington Street
Sydney NSW 2000
p
f
e
+61 2 8234 5000
+61 2 8234 5050
web.queries@computershare.com.au
w
investorcentre.com.au
Tax File Number
While it is not compulsory to provide a Tax File
Number (‘TFN’), if shareholders have not provided
a TFN and Resimac pays an unfranked or partly
franked dividend, the Company will be required
to deduct tax from the unfranked portion of the
dividend at the top marginal rate plus the Medicare
Levy.
Information on Resimac Group
Resimac Group Website
Securities Exchange Listing
Up-to-date information on the Company can be
The Company’s shares are listed on the Australian
obtained from the Company’s website:
resimac.com.au
Securities Exchange (ASX) and the Home Exchange
is Sydney. Ordinary shares are traded under the
code, ASX: RMC.
Share prices can be accessed from major Australian
newspapers, the Resimac Group website or at:
asx.com.au
Corporate
Information
Registered Office & Corporate Office
Level 9, 45 Clarence Street
Sydney NSW 2000
p
f
+61 2 9248 0300
+61 2 9248 2304
e
info@resimac.com.au
w
resimac.com.au
Customer enquiries: 13 38 39
Non-Executive Directors
Warren McLeland, Chairman
Susan Hansen
Duncan Saville
Wayne Spanner
Company Secretary
Peter Fitzpatrick
Share Registry
Computershare Investor Services Pty Limited
To view the 2020 annual report,
shareholder and Company information,
new announcements, background
information on Resimac Group businesses
and historical information, visit the
Resimac website at resimac.com.au
RESIMAC GROUP LTD2020 ANNUAL REPORT Resimac Group Ltd
Level 9, 45 Clarence Street
Sydney NSW 2000
p
e
+61 2 9248 0300
info@resimac.com.au
w
resimac.com.au
ABN 55 095 034 003
Australian Credit Licence 247829
ASX: RMC